Chardan NexTech Acquisition 2 Wants up to 3 Months More to Seal Dragonfly Deal

Chardan NexTech Acquisition 2 filed a prospectus asking shareholders to grant a merger deadline extension of up to three months beyond Aug. 13. The shareholder meeting is scheduled for Aug. 5.

In return, the SPAC said its sponsor would sweeten the trust with a $100,000 deposit.

The business combination values Dragonfly at an implied $500 million pro forma enterprise value. Terms include an earn-out provision for up to an additional 40 million shares.

Dragonfly is engaged in energy storage and production of deep cycle lithium-ion storage batteries.

As announced in May, estimated cash proceeds are expected to consist of CNTQ’s approximately $128 million of cash in trust (assuming no redemptions) and an additional $230 million consisting of $75 million senior secured term loan (used in part to refinance approximately $45 million of outstanding Dragonfly indebtedness), a $5 million equity investment from CNTQ’s sponsor, Chardan NexTech Investments 2, and a $150 million Chardan Equity Facility from Chardan, an affiliate of the SPAC’s sponsor.

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