Dragonfly Energy Stock Drops 12% Despite Dakota Lithium Acquisition

Dragonfly Energy Holdings Corp. (NASDAQ:DFLI) shares fell sharply on Friday, even as the company announced its acquisition of the Dakota Lithium brand's operating assets for $4 million. The market's negative reaction overshadowed the strategic move aimed at expanding the company's market presence and driving future profitability.

Deal Details

The purchase price consists of $1 million in cash and $3 million in Dragonfly Energy common stock, according to the company's announcement. The stock portion involves 1,500,000 shares valued at $2.00 per share, representing a premium to recent trading levels. These shares are subject to a 12-month contractual lock-up period.

The acquired assets include:

• The Dakota Lithium brand and related intellectual property
• Product inventory and a complementary battery portfolio
• Established customer and distributor relationships

Strategic Rationale and Outlook

Dragonfly Energy stated the acquisition will expand its reach across the marine, outdoor recreation, powersports, and other specialty battery markets. The company plans to operate Dakota Lithium as a distinct brand alongside its Battle Born Batteries, leveraging its existing commercial, operational, and fulfillment infrastructure.

Ad

Dakota Lithium generated approximately $12 million in net revenue in 2025, which was down from prior years due to what Dragonfly cited as working-capital limitations and inventory constraints. Dragonfly expects the acquisition to begin contributing meaningful revenue and be accretive to Adjusted EBITDA in the fourth quarter of 2026.

"By supporting the Dakota Lithium brand through infrastructure we already have in place, we believe we can restore availability, reconnect with customers and grow the business efficiently," said Dr. Denis Phares, Chief Executive Officer of Dragonfly Energy. He added that the deal is expected to support the company's goal of achieving positive Adjusted EBITDA in Q4 2026.

Market Reaction and Liquidity Measures

Despite the strategic rationale, shares of Dragonfly Energy plunged 12% in Friday's trading. The sell-off may reflect investor concern over the company's near-term financial position.

In connection with the transaction, Dragonfly's lenders amended certain debt terms. The amendments include a reduction of the company's minimum cash covenant and allow the next two quarters of interest to be paid in kind (PIK) rather than in cash. These changes are expected to preserve approximately $1 million in near-term liquidity.