Dragonfly recharges with US$55m equity
A week after tapping investors for US$25m, lithium battery pack maker and former SPAC Dragonfly Energy secured another US$55.4m early Thursday from an accelerated stock sale to help clean up its balance sheet.
Sole bookrunner Canaccord Genuity made fast work of placing 41m shares at US$1.35 in a deal that launched and priced ahead of Thursday's opening bell. The bank circled back after leading a smaller offering of 20m shares at US$1.25 a week prior.
Ahead of pricing, Dragonfly shares were trading 57.6% above the previous offering price on positive news flow, allowing for a roughly one-third capital raise at a 31.4% discount to Wednesday's US$1.97 closing price.
The stock closed Thursday's session just below issue at US$1.33.
Dragonfly is using the money to prepay US$45m of borrowings on a US$75m loan due next year.
As part of the refinancing agreement, lender Alter Domus is converting US$25m of the remaining principal into a new convertible preferred stock and forgiving the remaining US$5m unpaid balance.
The CB is expensive, maturing at a 10% coupon (broken into an 8% cash dividend and the other 2% payable in-kind) and converting into stock at US$3.15 a share.
After a tough time as a public company, Dragonfly is on the verge of a turnaround after stringing together some good news in October.
The stock has rallied since Dragonfly upped its third-quarter revenue projection to US$16m from previous guidance of US$15.9m, a 26% improvement from a year ago.
That news paved the way for Dragonfly’s previous US$25m raise on October 6.
Since then, Dragonfly was awarded a US$300,000 development grant from the state of Nevada. Ahead of last week's raise, Dragonfly announced its patent application for its smart battery system was approved, enhancing the value of its IP.