Dragonfly Energy SPAC Presentation Deck
Risk Considerations (3/5)
Risks Related to Dragonfly's Financial Position and Capital Requirements
Our business is capital intensive, and we may not be able to raise additional capital on attractive terms, if at all. Any further indebtedness we incur, including pursuant to the
commitment letter with Energy Impact Credit Fund I LP, may limit our operational flexibility in the future.
Restrictions imposed by our outstanding indebtedness and any future indebtedness, including pursuant to the commitment letter with Energy Impact Credit Fund I LP, may
limit our ability to operate our business and to finance our future operations or capital needs or to engage in acquisitions or other business activities necessary to achieve
growth.
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Risks Related to Ownership of CNTQ Securities and the Business Combination
The Sponsor, certain members of the CNTQ Board and certain CNTQ officers have interests in the Business Combination that are different from or are in addition to the CNTQ
stockholders in recommending that stockholders vote in favor of approval of the Business Combination Proposal and approval of the other transaction proposals.
The Sponsor may have interests in the Business Combination different from the interests of CNTQ's public stockholders.
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The Sponsor, CNTQ's directors and affiliates of CNTQ's management team may receive a positive return on the 3,162,500 Founder Shares and 4,627,858 private placement
warrants even if CNTQ's public stockholders experience a negative return on their investment after consummation of the Business Combination.
The Nasdaq may not continue to list our securities, which could limit investors' ability to make transactions in our securities and subject us to additional trading restrictions.
Future resales of our outstanding securities, including the registration of securities for resale under the Registration Rights Agreement, may cause the market price of our
securities to drop significantly, even if our business is doing well.
The Sponsor is liable to ensure that proceeds of the trust are not reduced by vendor claims in the event an initial business combination is not consummated. It has also agreed
to pay for any liquidation expenses if an initial business combination is not consummated. Such liability may have influenced the Sponsor's decision to approve the Business
Combination.
The exercise of CNTQ's directors' and officers' discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when
determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in CNTQ's stockholders' best interest.
If CNTQ is unable to complete the Business Combination or another initial business combination by August 13, 2022 (unless this deadline is extended pursuant to CNTQ's
covenant to extend such deadline under the Merger Agreement and pursuant to the CNTQ organizational documents), CNTQ will cease all operations except for the purpose of
winding up, redeeming 100% of the outstanding public shares and, subject to the approval of its remaining stockholders and the CNTQ Board, dissolving and liquidating. In
such event, third parties may bring claims against CNTQ and, as a result, the proceeds held in the trust account could be reduced and the per-share liquidation price received
by stockholders could be less than $10.00 per share.
CNTQ's stockholders may be held liable for claims by third parties against CNTQ to the extent of distributions received by them.
We may not have sufficient funds to satisfy indemnification claims of our directors and officers.
CNTQ's stockholders will experience immediate dilution as a consequence of, among other transactions, the issuance of CNTQ common stock as consideration in the Business
Combination, the PIPE Investment and the debt and equity line facilities. Having a minority share position may reduce the influence that CNTQ's current stockholders have on
the management of CNTQ.
The Sponsor and the PIPE Investor will beneficially own a significant equity interest in CNTQ and may take actions that conflict with the interests of other CNTQ stakeholders.
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