Filing summary
Entity mismatch: The supplied 10-Q is for Chardan NexTech Acquisition 2 Corp., a blank-check company—not Dragonfly Energy Holdings Corp. The figures and disclosures below describe Chardan’s filing.
Business context and reporting period
This unaudited Form 10-Q reports the quarter and six months ended June 30, 2021. Chardan was a pre-business-combination SPAC and had not commenced operations; it was formed to seek a merger or similar transaction. Its August 2021 IPO occurred after the reporting date.
Financial condition and results
- Revenue and margins: No operating revenue; the company had not begun operations. Margin measures are not applicable.
- Profit/loss: Net loss was $834 for both the three and six months ended June 30, 2021, entirely from formation and operating costs. Basic and diluted loss per share were reported as $(0.00).
- Cash flow: Six-month operating cash use was $834; financing cash use was $7,239, reflecting $150,000 of related-party note proceeds and $157,239 of offering costs paid. Cash declined by $8,073 to $16,927.
- Liquidity and debt: At June 30, cash was $16,927, deferred offering costs were $157,239, and total liabilities were $151,000, including a $150,000 non-interest-bearing note payable to the Sponsor by September 30, 2021. Stockholders’ equity was $23,166.
Comparison and subsequent events
The six-month 2021 net loss of $834 compares with a $1,000 loss from inception on June 23, 2020 through June 30, 2020. This is not a like-for-like six-month comparison. The filing reports no material operating activity or revenue to compare.
After quarter-end, Chardan completed an IPO of 11 million units at $10 each on August 13, 2021, raising $110 million gross, and raised a further $16.5 million gross when the underwriters exercised the full over-allotment on August 18. Related private-warrant sales generated $4.052 million and $247,500, respectively. The filing states that $111.65 million was placed in the trust account after the IPO and over-allotment; it also reports $1.906 million held outside the trust account after those closings.
Outlook, risks, and unusual items
- Management expected no operating revenue before completion of a business combination. The SPAC had 12 months from the IPO closing to complete one, with possible three-month extensions, up to 18 months, subject to insider funding; otherwise, public shares would be redeemed and warrants would expire worthless.
- Management said it did not expect to need additional funds after the IPO for ordinary operating expenditures, but warned that higher-than-estimated search and diligence costs or substantial redemptions could require additional financing or debt.
- The filing says COVID-19 could negatively affect the company’s financial position, operations, or search for a partner, but the impact was not determinable. No adjustment was recorded.
- There were no reported legal proceedings, defaults, or off-balance-sheet arrangements. Management concluded disclosure controls were effective and reported no material change in internal control.
Important facts for investors to verify
- Confirm the intended company: this filing belongs to Chardan NexTech Acquisition 2 Corp., not Dragonfly Energy Holdings Corp.
- Check the IPO proceeds, trust-account balance, outside-trust cash, offering costs, and any subsequent uses of funds in later filings.
- Verify repayment of the $150,000 Sponsor note and any related-party payments or extension loans.
- Confirm the business-combination deadline, any extensions, redemption terms, and the status of any proposed transaction.