FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to _______________ Commission File Number 001-42190 DAMON INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Exact name of registrant as specified in its charter) British Columbia N/A (State or o ...

[Special Note Regarding Forward-Looking Statements and Other Information Contained in This Report](index=5&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS%20AND%20OTHER%20INFORMATION%20CONTAINED%20IN%20THIS%20REPORT) This section highlights forward-looking statements, subject to inherent risks and uncertainties, which the company will not update - The report contains forward-looking statements, identifiable by specific terminology such as 'may,' 'will,' 'expects,' 'plans,' 'intends,' 'anticipates,' 'believes,' 'estimates,' 'predicts,' 'potential,' or 'continue'[20](index=20&type=chunk)[22](index=22&type=chunk) - These forward-looking statements are inherently subject to risks and uncertainties, including potential volatility in common share prices, inability to implement business plans, achieve sales and production capacity at scale, or sustain profitability, and challenges in raising additional capital[20](index=20&type=chunk)[24](index=24&type=chunk) - The company does not intend to update or revise these forward-looking statements, whether due to new information, future events, or otherwise[23](index=23&type=chunk) [PART I](index=7&type=section&id=PART%20I) This part covers the company's business, risk factors, properties, legal proceedings, and cybersecurity disclosures [ITEM 1: Business](index=7&type=section&id=ITEM%201%3A%20Business) Damon Inc. develops smart electric motorcycles and personal mobility products with AI, distributes data analytics software, and pursues strategic growth - Damon Inc. was spun off by its former parent company, XTI Aerospace Inc., on **December 27, 2023**, and subsequently completed a business combination with Damon Motors Inc. on **November 13, 2024**, changing its corporate name from Grafiti Holding Inc. to Damon Inc.[12](index=12&type=chunk)[13](index=13&type=chunk) - The company's material business operates through Damon Motors, aiming to commercialize smart, technologically advanced electric motorcycles and other personal mobility products with zero emissions, incorporating connectivity and artificial intelligence[28](index=28&type=chunk)[29](index=29&type=chunk) - Damon Motors' electric motorcycles are currently in the prototype phase of product validation, with core technology advancements in its HyperDrive platform drive unit and HyperSport motorcycle[30](index=30&type=chunk) - Through its wholly-owned subsidiary, Grafiti Limited, Damon distributes data analytics and visualization software products (SAVES) primarily for scientists and engineers in the United Kingdom and certain other European countries[31](index=31&type=chunk) - The corporate strategy focuses on building end-to-end solutions for personal mobility, evaluating strategic opportunities including partnerships with OEMs, providers of complementary technologies and intellectual property, and accretive acquisitions[33](index=33&type=chunk) - The global two-wheel industry is valued at **$127 billion**, with the medium and heavy motorcycle segments, where Damon's core capabilities lie, totaling **$11.2 billion** and growing at a **CAGR of 7.2%** in North America and Europe[36](index=36&type=chunk)[38](index=38&type=chunk) - Damon's competitive strengths include a highly qualified management team, best-in-class strategic partners and suppliers (e.g., Continental, Brembo), a significant head start in applying multiple new technologies, a patent portfolio of **33 national and international patents**, and a planned direct-to-customer distribution model[45](index=45&type=chunk)[46](index=46&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk) - Damon's electric vehicles are built on the proprietary HyperDrive™ platform (**150 kW**, monocoque battery-chassis) for high-performance models (**$20,000-$80,000**) and the smaller, lower-cost HyperLite platform (early design phase) for mass markets[57](index=57&type=chunk)[58](index=58&type=chunk) - Key patented technologies include CoPilot™ (rider assistance and warning system), Shift™ (mechatronically adjustable handlebars and foot pegs), and an AI-enabled cloud platform for collision warning improvements and over-the-air software updates[59](index=59&type=chunk) - Commercial production of Damon's motorcycles is expected to commence after passing various internal and external tests and undergoing a self-certification process for US-bound vehicle homologation, with HyperSport pre-production anticipated by **Q4 FY2026** and HyperFighter concept stage by **Q3-Q4 FY2026**[60](index=60&type=chunk)[61](index=61&type=chunk) - Damon I/O is a Software-as-a-Solution (SaaS) platform designed for motorcycle and personal mobility OEMs and fleet operators, offering real-time diagnostics, over-the-air software updates, predictive maintenance alerts, and branded mobile apps[74](index=74&type=chunk)[75](index=75&type=chunk) - The SAVES business offers a comprehensive suite of data analytics and statistical visualization software, including SigmaPlot, SYSTAT, and the next-generation, platform-independent Sigmaplot NG, with a cloud version anticipated for release later this year[76](index=76&type=chunk) - Damon has partnerships with Auteco Mobility for HyperLite assembly, distribution, and sales in Latin America, and with PT Ilectra Motor Group and PT Solusi Mobilitas Indonesia for similar activities in Indonesia and Southeast Asia[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) - The company holds **33 utility patents** (**19 in the United States** and **14 foreign counterparts**) expiring between **2037 and 2043**, and registered trademarks including 'DAMON,' 'HYPERSPORT,' and 'HYPERFIGHTER'[94](index=94&type=chunk) - As of the date of the report, the company has a total of **13 employees and contractors**, with **11 dedicated to the motorcycle business** and **2 supporting the SAVES business**[99](index=99&type=chunk) - Damon's electric vehicles are subject to numerous regulatory requirements, including NHTSA safety standards and EPA emissions standards in the United States, and Type Approval in Europe, with battery packs tested against industry safety standards[101](index=101&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) - The company is subject to stringent environmental, health, and safety laws and regulations, particularly concerning hazardous substances like lithium-ion batteries, in the US and EU[110](index=110&type=chunk)[113](index=113&type=chunk)[116](index=116&type=chunk) - Damon's planned direct-to-consumer distribution model faces challenges from state laws regulating vehicle sales and service, potentially limiting its ability to sell directly in certain jurisdictions and exposing it to franchise dealer litigation risks[118](index=118&type=chunk)[119](index=119&type=chunk) - The company collects, uses, and stores customer data, making it subject to various data privacy and cybersecurity laws globally (e.g., CCPA, CPRA, GDPR) and has implemented a cybersecurity program based on the NIST Cybersecurity Framework[121](index=121&type=chunk)[123](index=123&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) [ITEM 1A: Risk Factors](index=27&type=section&id=ITEM%201A%3A%20Risk%20Factors) This section details significant risks, including early stage, losses, capital needs, production scaling, competition, and internal control weaknesses - The company is an early-stage company with a history of operating losses and an accumulated deficit of **$145,958,256** as of **June 30, 2025**, raising substantial doubt about its ability to continue as a going concern[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk) - The company's success depends on its ability to economically produce vehicles at scale, create additional revenue from SaaS solutions (Damon I/O), and manage significant capital requirements and operating costs, which remain unproven[159](index=159&type=chunk)[161](index=161&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk) - The company faces risks of significant delays in the design, manufacture, regulatory approval, launch, transportation, and delivery of its motorcycles, and will initially depend on revenue generated from a single model (HyperSport)[157](index=157&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk) - The motorcycle and personal mobility market is highly competitive, with established internal combustion engine (ICE) manufacturers and new electric vehicle (EV) entrants, many of whom have significantly greater financial and technical resources than Damon[182](index=182&type=chunk)[183](index=183&type=chunk)[185](index=185&type=chunk) - Demand in the motorcycle and personal mobility industry is highly volatile and depends on consumer willingness to adopt electric vehicles, perceptions of quality and safety, availability of charging infrastructure, and government incentives[188](index=188&type=chunk)[189](index=189&type=chunk) - The company is dependent on third-party suppliers, some of which are single or limited sources, and disruptions in supply or cost increases for raw materials (e.g., lithium, nickel, cobalt for batteries) could materially adversely affect its business[197](index=197&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk) - The company's success depends on its ability to retain and attract qualified management, technical, vehicle engineering, and sales personnel, including key individuals like the CEO and CFO[210](index=210&type=chunk) - Manufacturing in collaboration with partners (e.g., Auteco Mobility, Indika Energy) is subject to risks such as delays, capacity constraints, potential disputes, and maintaining quality standards outside of direct control[222](index=222&type=chunk)[223](index=223&type=chunk) - The company's motorcycles rely on highly technical software and hardware systems that may contain errors, bugs, or vulnerabilities, potentially leading to performance issues, recalls, or reputational damage[257](index=257&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk) - The electric vehicle industry and its technology are rapidly evolving, and the company may be unable to keep up with changes in electric vehicle technology or compete effectively with alternative fuel technologies or improvements in internal combustion engines[260](index=260&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk) - The company's vehicles use lithium-ion battery cells, which have been observed to catch fire or vent smoke and flame, posing risks of bodily injury, death, lawsuits, product recalls, and negative public perception[266](index=266&type=chunk) - The assisted driving technology (CoPilot ADAS) in Damon's vehicles is subject to risks, including accidents and fatalities, which could lead to liability, negative publicity, government scrutiny, and further regulation[268](index=268&type=chunk) - The company's patent applications may not result in issued patents, and it may need to defend itself against costly patent or trademark infringement claims from competitors or non-practicing entities, potentially leading to substantial costs or operational disruptions[269](index=269&type=chunk)[270](index=270&type=chunk)[271](index=271&type=chunk)[272](index=272&type=chunk) - The SAVES distribution business is dependent on a single licensor (Grafiti LLC), and rapid, significant, or adverse changes in sales terms and conditions could negatively impact the company's financial condition and results of operations[230](index=230&type=chunk)[231](index=231&type=chunk) - The company is subject to numerous environmental, health, safety, anti-corruption (e.g., FCPA, UK Bribery Act), and data privacy laws and regulations (e.g., GDPR) in various jurisdictions, with non-compliance potentially leading to administrative, civil, and criminal penalties, and reputational harm[274](index=274&type=chunk)[276](index=276&type=chunk)[286](index=286&type=chunk)[289](index=289&type=chunk)[293](index=293&type=chunk)[294](index=294&type=chunk) - Ongoing legal proceedings, including civil claims from former CEO Jay Giraud and Andy DeFrancesco, could result in adverse judgments, substantial costs, and diversion of management's time and attention[301](index=301&type=chunk)[302](index=302&type=chunk)[304](index=304&type=chunk) - The company's common shares were recently delisted from Nasdaq and are currently traded on the OTCID Basic Market, which may adversely affect the market price and liquidity of its shares and limit its ability to raise additional capital[311](index=311&type=chunk)[331](index=331&type=chunk)[332](index=332&type=chunk)[334](index=334&type=chunk) - The company has identified material weaknesses in its internal control over financial reporting, which could impair its ability to produce timely and accurate financial statements, adversely affect operating results, share price, and access to capital markets[320](index=320&type=chunk)[321](index=321&type=chunk)[322](index=322&type=chunk) [ITEM 1B: Unresolved Staff Comments](index=71&type=section&id=ITEM%201B%3A%20Unresolved%20Staff%20Comments) As a smaller reporting company, Damon Inc. is not required to provide information on unresolved staff comments - The company is a smaller reporting company and is not required to provide information on unresolved staff comments[342](index=342&type=chunk) [ITEM 1C: Cybersecurity](index=71&type=section&id=ITEM%201C%3A%20Cybersecurity) Damon maintains a NIST CSF and GDPR-based cybersecurity program with Board oversight, acknowledging potential future material incidents - Damon maintains a cybersecurity risk management program integrated into its overall enterprise risk management framework, based on recognized standards and best practices including the NIST Cybersecurity Framework (CSF) and GDPR requirements[343](index=343&type=chunk)[344](index=344&type=chunk) - The program includes annual third-party assessments to identify and prioritize risks, internal policies for information security and incident response, external partnerships for vulnerability testing and data protection, and a structured third-party risk management program[345](index=345&type=chunk)[346](index=346&type=chunk)[347](index=347&type=chunk) - Oversight of the cybersecurity program rests with the Vice President of IT Operations, supported by third-party specialists, and the Audit Committee of the Board of Directors, with regular briefings and at least annual reviews by the full Board[348](index=348&type=chunk)[349](index=349&type=chunk) - While past cybersecurity incidents have not had a material adverse effect, the company acknowledges that future incidents could have a material impact despite existing safeguards and is committed to continuous enhancement of cybersecurity controls and monitoring capabilities[350](index=350&type=chunk)[351](index=351&type=chunk) - Increasing regulatory requirements regarding cybersecurity, including mandatory incident reporting and disclosure obligations, may subject the company to additional costs, liabilities, or reputational impact[352](index=352&type=chunk) [ITEM 2: Properties](index=72&type=section&id=ITEM%202%3A%20Properties) Damon Motors' principal executive offices are located in Burnaby, British Columbia, Canada, under a 3-year lease - Damon Motors' principal executive offices are located at 4601 Canada Way, Suite 402, Burnaby, British Columbia, Canada[353](index=353&type=chunk) - The company operates its principal executive offices under a **3-year lease** that commenced in **May 2025**[353](index=353&type=chunk) [ITEM 3: Legal Proceedings](index=72&type=section&id=ITEM%203%3A%20Legal%20Proceedings) Damon Inc. is involved in several legal proceedings, including claims from former executives and a landlord, which the company denies - A civil claim was filed on **March 7, 2025**, by former director and CEO Damon Jay Mercredi Giraud, alleging the company failed to honor agreed-upon settlement terms for a listing bonus and backpay following his resignation[355](index=355&type=chunk) - Andy DeFrancesco filed a civil claim on **April 11, 2025**, alleging a verbal agreement for the issuance of **$3.2 million** worth of common shares in exchange for past and future services, which the company has refused to issue[356](index=356&type=chunk) - Moz Holdings Canada Inc. served a notice of civil claim on **September 9, 2025**, alleging Damon Motors Inc. has unpaid rent of **$376,527** for a previously occupied manufacturing facility[357](index=357&type=chunk) - The company denies the allegations of wrongdoing in these legal proceedings and has filed or will file responses to the notices of civil claim[355](index=355&type=chunk)[356](index=356&type=chunk)[357](index=357&type=chunk) [ITEM 4: Mine Safety Disclosures](index=72&type=section&id=ITEM%204%3A%20Mine%20Safety%20Disclosures) This item is not applicable to Damon Inc. - The company is not required to provide mine safety disclosures[358](index=358&type=chunk) [PART II](index=73&type=section&id=PART%20II) This part details market information, financial condition, management's discussion, and controls and procedures [ITEM 5: Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=73&type=section&id=ITEM%205%3A%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Damon Inc.'s common shares trade on the OTCID Basic Market, with no cash dividends paid or share repurchases in FY2025 - The company's common shares are currently quoted on the OTCID Basic Market under the symbol **'DMNIF'** following its delisting from Nasdaq[360](index=360&type=chunk) - As of the date of this report, there were approximately **442 holders of record** of the company's common shares[360](index=360&type=chunk) - The company has not declared or paid any cash dividends on its common shares and intends to retain future earnings, if any, to finance the expansion of its business[361](index=361&type=chunk)[326](index=326&type=chunk) - During the period covered by this Annual Report on Form 10-K, no equity securities were sold that were not registered under the Securities Act and not previously reported[363](index=363&type=chunk) - The company had no share repurchase activity for the year ended **June 30, 2025**[364](index=364&type=chunk) [ITEM 6: [Reserved]](index=73&type=section&id=ITEM%206%3A%20%5BReserved%5D) This item is reserved and contains no information - This item is reserved and contains no information[365](index=365&type=chunk) [ITEM 7: Management's Discussion and Analysis of Financial Condition and Results of Operations](index=74&type=section&id=ITEM%207%3A%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Damon Inc. reported FY2025 revenue of $222,736, a net loss of $5.35 million, and a working capital deficiency, raising going concern doubts - Damon Inc. (formerly Grafiti Holding Inc.) completed a business combination with Damon Motors Inc. in **November 2024**, with Damon Motors treated as the accounting acquirer for financial reporting purposes[367](index=367&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk) - The company's core business involves developing electric motorcycles (HyperDrive and HyperLite platforms) and a Software-as-a-Solution (SaaS) platform called Damon I/O, alongside distributing SAVES software products[368](index=368&type=chunk)[371](index=371&type=chunk)[374](index=374&type=chunk)[375](index=375&type=chunk) Revenue and Gross Profit (FY2025 vs. FY2024) | Metric | FY2025 | FY2024 | | :---------------- | :------- | :------- | | Revenue | $222,736 | $0 | | Cost of Revenue | $107,394 | $0 | | Gross Profit | $115,342 | $0 | | Gross Profit Margin | 52% | N/A | Operating Expenses (FY2025 vs. FY2024) | Expense Category | FY2025 | FY2024 | | :-------------------------- | :--------- | :--------- | | Research and development, net | $3,045,949 | $4,550,229 | | General and administrative | $8,551,784 | $4,296,231 | | Sales and marketing | $667,300 | $986,137 | | Transaction costs | $4,945,436 | $1,626,519 | | Depreciation | $217,443 | $303,424 | | Impairment | $14,119,955 | $0 | - The net loss for the year ended **June 30, 2025**, was **$5,350,662**, a significant decrease from **$33,968,248** in the prior year, primarily due to a **$34,333,573** income from changes in fair value of financial liabilities[394](index=394&type=chunk)[404](index=404&type=chunk)[405](index=405&type=chunk)[407](index=407&type=chunk) Liquidity and Cash Flows (FY2025 vs. FY2024) | Metric | June 30, 2025 | June 30, 2024 | | :-------------------------------- | :-------------- | :-------------- | | Cash | $2,479,283 | $395,580 | | Working Capital Deficiency | $(10,400,000) | N/A | | Cash flows used in operating activities | $(19,634,512) | $(12,869,374) | | Cash flows provided by investing activities | $77,270 | $0 | | Cash flows provided by financing activities | $21,692,469 | $11,195,898 | - The company's expected future losses and a working capital deficiency of approximately **$10.4 million** as of **June 30, 2025**, cast substantial doubt upon its ability to continue as a going concern[408](index=408&type=chunk)[409](index=409&type=chunk) - A non-recurring impairment of goodwill in the amount of **$14,045,955** and an impairment of intangible assets in the amount of **$74,000** were recorded for the year ended **June 30, 2025**, reducing their carrying value to **$nil**[403](index=403&type=chunk)[391](index=391&type=chunk) [ITEM 7A: Quantitative and Qualitative Disclosures About Market Risk](index=82&type=section&id=ITEM%207A%3A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Damon Inc. is not required to provide quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[417](index=417&type=chunk) [ITEM 8: Financial Statements and Supplementary Data](index=82&type=section&id=ITEM%208%3A%20Financial%20Statements%20and%20Supplementary%20Data) This item refers to the financial statements and supplementary data included elsewhere in the annual report - The financial statements and supplementary data are presented following Item 15 of this annual report and are included herein by reference[418](index=418&type=chunk) [ITEM 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=83&type=section&id=ITEM%209%3A%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) Marcum LLP resigned as auditor, replaced by CBIZ CPAs P.C., with no disagreements on accounting principles but noted material weaknesses - Marcum LLP resigned as the independent registered public accounting firm on **June 17, 2025**, as a result of CBIZ CPAs P.C. acquiring its attest business[420](index=420&type=chunk) - CBIZ CPAs P.C. was engaged as the company's new independent registered public accounting firm on the same date, **June 17, 2025**[420](index=420&type=chunk) - Marcum LLP's audit report for the fiscal year ended **June 30, 2024**, did not contain an adverse opinion or disclaimer, and was not qualified or modified, except for an explanatory paragraph regarding the company's ability to continue as a going concern[421](index=421&type=chunk) - During Marcum's engagement, there were no disagreements on accounting principles or practices, financial statement disclosure, or auditing scope or procedures[422](index=422&type=chunk) - Material weaknesses in the company's internal control over financial reporting were previously disclosed, relating to ineffective controls over period-end financial disclosure and reporting processes, and a lack of sufficient personnel with requisite U.S. GAAP financial reporting skills[422](index=422&type=chunk) [ITEM 9A: Controls and Procedures](index=83&type=section&id=ITEM%209A%3A%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were ineffective due to identified material weaknesses - As of **June 30, 2025**, the chief executive officer and chief financial officer concluded that the company's disclosure controls and procedures were not effective[425](index=425&type=chunk) - Management concluded that the company's internal control over financial reporting was not effective as of **June 30, 2025**, due to identified material weaknesses[426](index=426&type=chunk) - Material weaknesses identified include a lack of adequate controls for identifying and accounting for material contracts/agreements, and information technology deficiencies in the design, implementation, and operation of controls over program change management and vendor management[430](index=430&type=chunk) - Remediation plans include educating control owners, developing documentation, enhancing controls related to financial reporting systems, performing in-depth access analysis, and implementing additional levels of internal review of financial statements[427](index=427&type=chunk) - The material weaknesses will not be considered remediated until the remediation efforts are fully concluded and the controls are operating effectively, with no assurance that all errors or fraud will be prevented or detected[427](index=427&type=chunk)[428](index=428&type=chunk) [ITEM 9B: Other Information](index=85&type=section&id=ITEM%209B%3A%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements in Q4 FY2025 - None of the company's directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the fiscal quarter ended **June 30, 2025**[432](index=432&type=chunk) [ITEM 9C: Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=85&type=section&id=ITEM%209C%3A%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20That%20Prevent%20Inspections) This item is not applicable to Damon Inc. - This item is not applicable to the company[433](index=433&type=chunk) [PART III](index=86&type=section&id=PART%20III) This part covers directors, executive compensation, security ownership, related party transactions, and accounting fees [ITEM 10: Directors, Executive Officers and Corporate Governance](index=86&type=section&id=ITEM%2010%3A%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The Board consists of five members, including independent directors, with established committees and a Code of Business Conduct and Ethics Directors and Executive Officers | Name | Age | Position | | :-------------------- | :-- | :--------------------------------- | | Dominique Kwong | 50 | Chief Executive Officer and Director | | Baljinder Kaur Bhullar | 56 | Chief Financial Officer and Director | | Karan Sodhi | 33 | Director | | Shashi Tripathi | 48 | Chairman of the Board | | Melanie Figueroa | 43 | Director | - Karan Sodhi and Shashi Tripathi are determined to be independent directors in accordance with Nasdaq listing requirements[446](index=446&type=chunk) - The Board has established an Audit Committee (chaired by Karan Sodhi, an 'audit committee financial expert'), a Compensation Committee (chaired by Shashi Tripathi), and a Nominating and Corporate Governance Committee (chaired by Shashi Tripathi)[448](index=448&type=chunk)[449](index=449&type=chunk)[452](index=452&type=chunk)[453](index=453&type=chunk) - The Board is responsible for the oversight of the company's risk management processes, with committees regularly discussing major risk exposures and mitigation strategies with management[458](index=458&type=chunk)[459](index=459&type=chunk) - The company adopted a written Code of Business Conduct and Ethics that applies to its directors, officers, and employees, and an Insider Trading Policy prohibiting hedging activities and holding securities in margin accounts[463](index=463&type=chunk)[467](index=467&type=chunk) - The company qualifies as a 'foreign private issuer' and, while voluntarily filing U.S. domestic issuer forms, avails itself of exemptions from certain Exchange Act provisions, including proxy rules, Regulation FD, and Section 16 reporting and short-swing profit recovery[464](index=464&type=chunk)[465](index=465&type=chunk)[466](index=466&type=chunk) [ITEM 11: Executive Compensation](index=92&type=section&id=ITEM%2011%3A%20Executive%20Compensation) This section details compensation for NEOs and directors, new executive employment agreements, and the Stock Incentive Plan Summary Compensation Table (FY2025 vs. FY2024) | Name and Principal Position | Year | Salary ($) | Bonus ($) | All Other Compensation ($) | Total ($) | | :-------------------------- | :--- | :--------- | :-------- | :------------------------- | :-------- | | Dominique Kwong, CEO | 2025 | 107,159 | - | - | 107,159 | | | 2024 | - | - | - | - | | Baljinder Bhullar, CFO | 2025 | 312,948 | 1,000,000 | - | 1,312,948 | | | 2024 | 121,473 | - | - | 121,473 | | Nadir Ali, Former CEO | 2025 | 325,000 | - | 400,000 | 725,000 | | | 2024 | - | - | 45,000 | 264,627 | | Damon Jay Giraud, Former CEO | 2025 | 140,739 | - | 137,454 | 278,193 | | | 2024 | 270,188 | - | 7 | 270,195 | | Derek Dorresteyn, Former CTO | 2025 | 162,500 | - | 144,231 | 306,731 | | | 2024 | 234,163 | - | 7 | 234,170 | - New executive employment agreements for CEO Dominique Kwong and CFO Baljinder Bhullar, effective **July 16, 2025**, include monthly salaries (**CAD$39,947** for Kwong, **CAD$37,035.75** for Bhullar), potential yearly cash bonuses up to **100% of salary**, short-term incentive payments, and equity awards (stock options and RSUs)[474](index=474&type=chunk)[476](index=476&type=chunk)[481](index=481&type=chunk)[483](index=483&type=chunk) - Termination provisions in the Kwong and Bhullar agreements include severance payments (up to **18 months of salary**), benefits extension, and options extension, depending on the reason for termination[477](index=477&type=chunk)[478](index=478&type=chunk)[479](index=479&type=chunk)[480](index=480&type=chunk)[484](index=484&type=chunk)[485](index=485&type=chunk)[486](index=486&type=chunk)[487](index=487&type=chunk) - Nadir Ali's consulting agreement includes a **$325,000 fee** upon Business Combination closing and a monthly fee of **$54,167** for **six months**, with payment continuing if terminated without cause during this period[488](index=488&type=chunk)[489](index=489&type=chunk)[490](index=490&type=chunk)[491](index=491&type=chunk) - Melanie Figueroa's consulting agreement includes a **$175,000 fee** upon Business Combination closing and a monthly fee of **$29,167** for **six months**, with similar termination provisions[551](index=551&type=chunk)[552](index=552&type=chunk) - The Stock Incentive Plan, adopted **June 11, 2024**, provides flexibility to grant equity-based incentive awards (Options, RSUs, Restricted Shares, PSUs, DSUs) to attract, retain, and motivate qualified directors, employees, and consultants[511](index=511&type=chunk)[512](index=512&type=chunk)[520](index=520&type=chunk) Securities Authorized for Issuance under Equity Compensation Plans (as of June 30, 2025) | Plan Category | Number of securities to be issued upon exercise of outstanding options (a) | Weighted average exercise price of outstanding options (b) | Number of securities remaining available for future issuance (c) | | :------------------------------------------ | :------------------------------------------------------- | :------------------------------------------------------- | :------------------------------------------------------------- | | Equity compensation plans approved by security holders | 5,781 | $186.74 | 13,282,097 | | Equity compensation plans not approved by security holders | - | - | - | | Total | 5,781 | $186.74 | 13,282,097 | - The maximum aggregate number of common shares that may be issued pursuant to awards granted under the Stock Incentive Plan is initially **10,000,000**, with automatic annual increases, but not exceeding **40,000,000 shares** over the term[514](index=514&type=chunk) - The Plan Administrator (Compensation Committee) determines eligibility, grant timing, conditions, number of shares, exercise price, and restrictions for awards, and has the authority to interpret the plan and adopt related rules[516](index=516&type=chunk)[517](index=517&type=chunk) - The company has an anti-hedging policy that restricts participants from purchasing financial instruments designed to hedge or offset a decrease in the market value of awards granted to them[543](index=543&type=chunk) Director Compensation (FY2025) | Name | Fees Earned or paid in cash ($) | Stock awards ($) | Option awards ($) | Non-equity Incentive plan compensation ($) | Nonqualified deferred compensation earnings ($) | All other compensation ($) | Total ($) | | :---------------------- | :------------------------------ | :--------------- | :---------------- | :----------------------------------------- | :-------------------------------------------- | :------------------------- | :-------- | | Karan Sodhi | 39,796 | - | - | - | - | - | 39,796 | | Shashi Tripathi | 52,500 | - | - | - | - | - | 52,500 | | Melanie Figueroa | 227,500 | - | - | 175,000 | - | - | 402,500 | [ITEM 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=109&type=section&id=ITEM%2012%3A%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section provides beneficial ownership information for executives, directors, and major shareholders as of September 29, 2025 Beneficial Ownership of Common Shares (as of September 29, 2025) | Name of Beneficial Owner | Amount and nature of beneficial ownership | Percent of Class | | :------------------------------------------ | :---------------------------------------- | :--------------- | | Dominique Kwong | 5,991 | * | | Baljinder Bhullar | - | - | | Karan Sodhi | - | - | | Shashi Tripathi | 529 | * | | Melanie Figueroa | 2,538 | * | | All current executive officers and directors as a group (5 persons) | 9,058 | * | | Nadir Ali - former chief executive officer | 1,138 | * | | Jay Giraud - former chief executive officer | 11,129 | * | | Derek Dorresteyn – former chief technology officer | - | - | | Streeterville Capital LLC | 1,958,421 | 9.99% | | Maxim Partners LLC | 985,876 | 5.03% | - As of **September 29, 2025**, there were **19,603,815 shares** of the registrant's common shares outstanding[6](index=6&type=chunk)[557](index=557&type=chunk) - Streeterville Capital LLC's current ownership is capped at **9.99%** under various agreements, despite having rights to convert a promissory note into up to approximately **52,615,320 common shares**[557](index=557&type=chunk)[558](index=558&type=chunk)[336](index=336&type=chunk) [ITEM 13: Certain Relationships and Related Transactions, and Director Independence](index=111&type=section&id=ITEM%2013%3A%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This section outlines related party transactions, including agreements with Grafiti LLC, spin-off related agreements, and former executive arrangements - Grafiti Limited, a wholly-owned subsidiary, has a Distributor Agreement and an Administrative Support Service Agreement with Grafiti LLC, an entity controlled by Nadir Ali, the company's former Chief Executive Officer[560](index=560&type=chunk)[561](index=561&type=chunk) - The company entered into a Separation and Distribution Agreement and a Liquidating Trust Agreement in connection with its spin-off from XTI Aerospace Inc. and the subsequent distribution of shares to participating Parent securityholders[562](index=562&type=chunk)[564](index=564&type=chunk) - Consulting agreements were in place with Melanie Figueroa (director) and Wendy Loundermon (who owned more than **5%** of outstanding common shares prior to the Business Combination) for advisory services, with specified monthly fees and payments upon the Business Combination closing[565](index=565&type=chunk)[566](index=566&type=chunk)[567](index=567&type=chunk) - Former CEO Jay Giraud was issued **1,391,181 multiple voting shares** at the Business Combination closing, subject to a Coattail Agreement and Founder Agreement, which were converted to common shares upon his resignation on **December 4, 2024**[568](index=568&type=chunk)[569](index=569&type=chunk)[574](index=574&type=chunk)[575](index=575&type=chunk) - The company's Articles contain provisions limiting the liability of directors and provide for indemnification of directors and officers to the fullest extent permitted by British Columbia law, supplemented by individual indemnification agreements[578](index=578&type=chunk)[327](index=327&type=chunk)[328](index=328&type=chunk) [ITEM 14: Principal Accounting Fees and Services](index=114&type=section&id=ITEM%2014%3A%20Principal%20Accounting%20Fees%20and%20Services) This section details audit fees paid to CBIZ CPAs P.C. and Marcum LLP for FY2025 and FY2024, with Audit Committee pre-approval Principal Accountant Fees and Services (FY2025 vs. FY2024) | Fee Type | 2025 | 2024 | | :--------------- | :------- | :------- | | Audit Fees | $691,798 | $297,670 | | Audit Related Fees | $0 | $0 | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 | - Audit fees increased from **$297,670** in fiscal year **2024** to **$691,798** in fiscal year **2025**, covering professional services for annual audits and quarterly reviews[580](index=580&type=chunk) - The Audit Committee is responsible for reviewing and approving in advance the retention of independent auditors for all audit and lawfully permitted non-audit services and their associated fees[582](index=582&type=chunk) [PART IV](index=115&type=section&id=PART%20IV) This part lists exhibits and financial statement schedules, and addresses the Form 10-K Summary [ITEM 15: Exhibits, Financial Statement Schedules](index=115&type=section&id=ITEM%2015%3A%20Exhibits%2C%20Financial%20Statement%20Schedules) This item lists financial statements and provides an index of exhibits, omitting schedules not applicable or included elsewhere - The financial statements filed as part of this report are listed and indexed in the table of contents[584](index=584&type=chunk) - Financial statement schedules have been omitted because they are not applicable or the required information has been included elsewhere in this report[585](index=585&type=chunk) - An Exhibit Index is provided, listing exhibits including management contracts and compensation plans, as required by Item 15(a)(3) of Form 10-K[586](index=586&type=chunk)[590](index=590&type=chunk) [ITEM 16: Form 10-K Summary](index=115&type=section&id=ITEM%2016%3A%20Form%2010-K%20Summary) This item is not applicable to Damon Inc. - This item is not applicable to the company[587](index=587&type=chunk) [SIGNATURE](index=121&type=section&id=SIGNATURE) The report is signed by the CEO, CFO, and directors, who also appoint attorneys-in-fact for amendments - The report is signed on **September 29, 2025**, by Dominique Kwong (Chief Executive Officer and Director), Baljinder Bhullar (Chief Financial Officer), Karan Sodhi (Director), Shashi Tripathi (Chairman of the Board), and Melanie Figueroa (Director)[600](index=600&type=chunk)[601](index=601&type=chunk) - Each signatory appoints Dominique Kwong and Baljinder Bhullar as true and lawful attorneys-in-fact and agents for signing and filing any amendments to this Annual Report on Form 10-K and related documents with the Securities and Exchange Commission[600](index=600&type=chunk)

Group 1 - Spectrum Health Science has transitioned into a life sciences organization focusing on next-generation solutions in Oral, Functional, and Women's Health [1] - The company announced the appointment of Damon Silvestry as the Chief Executive Officer of SimplyTest, its flagship salivary testing company [1] - Damon Silvestry brings over 20 years of leadership experience to the role [1]

Core Insights - Damon Inc. has launched Damon I/O, a comprehensive rider intelligence and connected services platform aimed at transforming personal mobility experiences into smarter and safer rides [1][2][3] - The platform addresses critical gaps in the personal mobility industry, such as fragmented data systems and limited rider insights, enabling manufacturers to deploy advanced digital experiences quickly [3][5] Industry Overview - The global last-mile delivery market exceeds $100 billion, and the personal mobility sector is rapidly electrifying, creating a demand for enhanced digital infrastructure [2][4] - Damon I/O provides recurring revenue opportunities through software, addressing the industry's need for improved rider safety and operational efficiency [2][9] Company Strategy - Damon I/O is designed to help personal mobility manufacturers and fleet operators transition into data-driven companies, offering tools for predictive diagnostics and fleet intelligence [7][10] - The platform includes innovative features like Emergency Last Mile Responder functionality, which allows delivery riders to take on critical roles during emergencies [5][6] Product Features - Damon I/O offers a suite of connected vehicle capabilities, including real-time diagnostics, over-the-air updates, predictive maintenance alerts, and branded mobile applications [3][7] - The platform is built specifically for vehicles and personal mobility, differentiating itself from generic IoT solutions that require extensive customization [6][10] Market Potential - Damon I/O introduces a high-margin SaaS layer to a traditionally hardware-dominated market, creating scalable business models that extend beyond one-time vehicle sales [9][10] - The company aims to capture a significant share of the $40 billion global electric two-wheeler market by 2030, leveraging its integrated ecosystem approach [12]

Electric Motorcycle Development - Damon Motors is developing electric motorcycles and personal mobility products, focusing on innovation and strategic partnerships [176]. - The HyperDrive platform features a 150 kW motor and is designed to compete in the high-performance motorcycle market, with price points ranging from $20,000 to $80,000 [178]. - The company aims to build a premium electric motorcycle brand that rivals major competitors in both profit and annual volume [179]. - Damon Motors is in the prototype phase of product validation for its electric motorcycles, with commercial production expected to commence after passing various tests [181]. Financial Performance - Revenue for the three months ended March 31, 2025, was $81,411, and for the nine months ended March 31, 2025, it was $130,934, compared to $nil for the same periods in 2024, attributed to the consolidation of Grafiti Limited [213]. - Gross profit margin for the three and nine months ended March 31, 2025, was 51% and 53%, respectively [214]. - Net loss for the three months ended March 31, 2025, was $25,163,438, compared to a net loss of $13,096,933 for the same period in 2024, primarily due to the impairment recognized [225]. - The Company incurred a net loss of $2,354,505 for the nine months ended March 31, 2025, a significant decrease from a net loss of $25,604,984 for the same period in 2024 [226]. - Income from change in fair value of financial liabilities increased by approximately $47,273,000 for the nine months ended March 31, 2025, compared to a loss of $12,939,830 for the same period in 2024 [227]. Expenses and Impairments - Research and development expenses decreased to $959,672 for the three months ended March 31, 2025, from $1,805,747 in 2024, and to $2,014,226 for the nine months ended March 31, 2025, from $3,760,318 in 2024 [215][216]. - General and administrative expenses increased to $3,702,113 for the three months ended March 31, 2025, from $1,531,065 in 2024, and to $6,674,473 for the nine months ended March 31, 2025, from $4,895,715 in 2024 [217]. - The Company recorded a non-recurring impairment of goodwill of $14,045,955 and an impairment of intangible assets of $74,000 for the three months ended March 31, 2025 [223]. - Transaction costs amounted to $203,000 for the three months and $5,620,436 for the nine months ended March 31, 2025, compared to $nil for the same periods in 2024 [222]. Cash Flow and Financing - Cash used in operating activities increased to $14,676,985 for the nine months ended March 31, 2025, up from $10,746,591 in 2024, primarily due to increased operating expenses [231]. - The Company had cash of $7,555,820 and a working capital deficiency of approximately $21.1 million as of March 31, 2025 [228]. - Cash provided by financing activities was $21,774,284 for the nine months ended March 31, 2025, compared to $8,701,545 in 2024, reflecting an increase of $13,072,739 [233]. - The Company received approximately $14,767,000 from recent financing completed in March 2025 [234]. - The Company expects to continue incurring operating losses and negative cash flows in the short term as it executes its growth strategy [228]. Strategic Acquisitions and Partnerships - Grafiti Limited distributes data analytics software for scientific and engineering applications, aiming to increase recurring revenues through expanded product offerings [183][184]. - The company is pursuing strategic acquisitions to enhance its technology and product offerings, focusing on operational synergies and complementary technologies [185]. Future Expectations - The Company anticipates an increase in research and development expenses due to a Technical Design Agreement for the development of the HyperSport Race electric motorcycle [216]. - The Company expects sales and marketing expenses to increase in the coming months as it launches marketing campaigns for the HyperSport Race [221].

Core Viewpoint - Damon Inc. is focused on enhancing its financial position and diversifying its business model to accelerate revenue generation, transitioning from a motorcycle company to a broader personal mobility solutions provider [2][5]. Financial Performance - For FY25 Q3, the net loss was approximately $2.4 million, or $0.11 per diluted share, a significant improvement from a net loss of $25.6 million, or $2.11 per diluted share, in the same period last year [9]. - Total cash increased to $7.56 million at March 31, 2025, compared to $396,000 at the end of June 2024 [13]. - Total liabilities decreased to $29.1 million at March 31, 2025, down from $52.2 million at the end of June 2024 [13]. - Stockholders' deficit reduced to $21.3 million at March 31, 2025, compared to $50.4 million at the end of June 2024 [13]. - Operating expenses for the quarter were approximately $29.0 million, compared to $9.5 million in the same period last year, largely due to a Goodwill Impairment [13]. Business Model and Strategy - The company completed a $16.5 million underwritten public offering and established a $10 million prepaid equity line of credit facility [8]. - Damon has redefined its mission to focus on four core revenue verticals: Data Intelligence, Personal Mobility, Licensing and Engineering Services, and Special Projects [8]. - The company is implementing an asset-light business model through strategic partnerships to optimize operational efficiency [9]. Product Development and Innovation - Damon is advancing the development of the HyperSport Race Motorcycle in collaboration with Engines Engineering, with an expected product delivery timeline of within 12 months and reduced development costs to under $10 million [8]. - The company holds over 38 patents and patents pending, with proprietary safety systems and electrification technology as key differentiators in the market [6]. Market Position - Damon aims to capture a significant share of the $40 billion global electric two-wheeler market by 2030, leveraging its integrated ecosystem approach and advanced data analytics [11].

Group 1 - Trading in Damon Inc. will resume on May 19, 2025, at 9:00 a.m. Eastern Time [1] - Trading was previously halted on April 29, 2025, at 2:01:07 p.m. Eastern Time [1] - For further information, stakeholders are encouraged to contact the company directly or check its symbol on the Nasdaq website [1]

Core Viewpoint - Damon Inc. has decided to forego its right to appeal Nasdaq's delisting determination, allowing its common shares to trade on an alternative market starting May 20, 2025 [1] Company Overview - Damon Inc. designs and develops electric motorcycles and personal mobility products, focusing on innovation, data intelligence, and strategic collaborations [1] - The company operates across four revenue verticals: Data Intelligence & Services, Engineering Services, Personal Mobility Products, and Special Projects [3] - Damon aims to capture a significant share of the $40 billion global electric two-wheeler market by 2030 [3] Market Transition - Damon’s common shares will resume trading on Nasdaq for one day on May 19, 2025, before being suspended [1] - The company expects to begin trading on the OTC Pink Current Market on May 20, 2025, and will pursue an application to trade on the OTCQB [2] Compliance and Standards - As a SEC reporting company, Damon exceeds the minimal current information standard required for the OTCID Basic Market [2] - The OTCID Basic Market will be effective as of July 1, 2025, and is designed for companies that meet minimal current information standards without the qualitative standards of higher OTC markets [2]

Electric Motorcycles Development - Damon Motors is developing electric motorcycles with a proprietary 150 kW motor-gearbox and a patented HyperDrive platform, aiming for price points between $20,000 and $80,000[146] - The HyperDrive platform allows for a modular approach, supporting motorcycles equivalent to 500 – 1500cc, with 85% common parts across models[146] - Damon Motors plans to commence commercial production after completing various internal and external tests, including FCC and UN battery testing[149] Business Combination and Subsidiaries - On October 23, 2023, the company completed a business combination with Damon Motors, resulting in Damon Motors becoming a wholly-owned subsidiary[154] - Following the business combination, securityholders of Damon Motors acquired approximately 82% of the outstanding common shares of the combined company[159] - Grafiti Limited, a subsidiary, distributes data analytics software for scientific research, aiming to increase recurring revenues through cloud-compatible products[150][151] Financial Performance - Revenue for the three and six months ended December 31, 2024, was $49,523, compared to $0 for the same periods in 2023, attributed to the consolidation of Grafiti Limited[185] - Cost of revenue for the three and six months ended December 31, 2024, was $21,332, resulting in a gross profit margin of 60%[186] - Research and development expenses for the three months ended December 31, 2024, were $997,333, an increase of $979,989 compared to $17,344 in the same period of 2023[187] - General and administrative expenses for the three months ended December 31, 2024, were $2,182,333, an increase of $368,194 compared to $1,814,139 in the same period of 2023[188] - The company reported a net income of $32,521,108 for the three months ended December 31, 2024, compared to a net loss of $7,130,860 for the same period in 2023[184] - Total operating expenses for the three months ended December 31, 2024, were $5,477,187, compared to $2,223,073 in the same period of 2023[184] - Other non-operating income for the three months ended December 31, 2024, was $37,970,099, compared to a loss of $4,907,787 in the same period of 2023[184] Financing Activities - The company entered into a secured promissory note agreement with Streeterville Capital for $6,470,000, granting security interests in its assets[162] - An additional note purchase agreement with East West for $8,385,000 includes an original issue discount of $1,885,000, with funding scheduled in tranches[163] - The company has entered into a Securities Purchase Agreement with Streeterville for up to $10,000,000, with an initial pre-paid purchase of $2,000,000[174] - The BHI Note has an original principal amount of $8,385,000, with an original issue discount of $1,885,000 and bears interest at 10% per annum[168] - Cash provided by financing activities for the six months ended December 31, 2024, was $6,962,852, down from $8,706,142 in the same period in 2023, reflecting a decrease of $1,743,290[199] Cash Flow and Working Capital - Cash used in operating activities for the six months ended December 31, 2024, was $6,636,484, a decrease from $8,854,640 for the same period in 2023, reflecting efforts to preserve cash[198] - As of December 31, 2024, the company had cash of $788,561 and a working capital deficiency of approximately $10 million, raising concerns about its ability to continue as a going concern[194] - The company experienced negative cash flows from operating activities of approximately $6.6 million for the six months ended December 31, 2024, primarily due to ongoing operating costs and transaction costs related to the business combination[194] Changes in Financial Liabilities - The company incurred a change in the fair value of financial liabilities that increased by approximately $42,903,000 for the six months ended December 31, 2024[195] - For the three months ended December 31, 2024, the company reported a net income of $32,521,108, compared to a net loss of $7,130,860 for the same period in 2023, primarily due to changes in the fair value of financial liabilities[193] - Other non-operating income for the three months ended December 31, 2024, was $37,970,099, an increase of $42,877,886 compared to a loss of $4,907,787 in the same period in 2023[192] Strategic Acquisitions and Growth Strategy - The company is pursuing strategic acquisitions to enhance its personal mobility ecosystem, focusing on technologies that complement its existing offerings[152] - The company’s accumulated deficit and expected future losses may lead to continued operating losses and negative cash flows in the short term as it executes its growth strategy[194] - Proceeds from convertible notes decreased by approximately $8,470,000, while proceeds from other financing sources increased, indicating a mixed funding environment[200] Sales and Marketing Expenses - Sales and marketing expenses decreased to $178,379 for the three months ended December 31, 2024, from $196,660 for the same period in 2023, attributed to reduced sales and marketing activities[191] Trading Information - The combined company commenced trading on the Nasdaq Global Market under the symbol "DMN" on November 18, 2024[158]

Business Development - Damon Motors is developing high-performance electric motorcycles using the proprietary HyperDrive platform, which features a 150 kW motor and is designed to compete with market leaders in both internal combustion and electric segments [149]. - The HyperDrive platform allows for a range of motorcycle models with price points between $20,000 and $80,000, targeting 500 – 1500cc power equivalent classes in North America and Europe [149]. - Damon Motors plans to commence commercial production after completing various internal and external tests, including FCC Title 47 certification and FMVSS compliance [152]. - The company aims to build a premium electric motorcycle brand that rivals major incumbents by leveraging patented technologies like CoPilot and Shift for enhanced rider experience [150][151]. - Damon Motors has undergone a business combination, resulting in a change of control, with securityholders of Damon Motors acquiring approximately 82% of the outstanding common shares of the combined company [159]. - The combined company commenced trading on the Nasdaq Global Market under the symbol "DMN" on November 18, 2024 [158]. - Damon Motors is also developing the HyperLite platform for lower-cost motorcycles aimed at overseas and developing markets [150]. Financial Performance - Revenues for the three months ended September 30, 2024, were $101,969, an increase of $4,061 or approximately 4% compared to $97,908 for the same period in 2023 [177]. - Cost of revenues increased to $39,647 for the three months ended September 30, 2024, from $23,805 in the prior year, representing a 67% increase [178]. - Gross profit margin decreased to 61% for the three months ended September 30, 2024, down from 76% in the same period of 2023 [179]. - Operating expenses surged to $1,482,768 for the three months ended September 30, 2024, compared to $77,795 in the prior year, marking an increase of 1,804% [180]. - Net loss for the three months ended September 30, 2024, was $1,564,540, compared to a net loss of $3,692 for the same period in 2023, reflecting a significant increase in losses [176]. - EBITDA for the three months ended September 30, 2024, was a loss of $1,420,193, compared to a loss of $3,476 for the prior year period [183]. - Adjusted EBITDA for the three months ended September 30, 2024, was a loss of $334,896, compared to a loss of $3,476 for the same period in 2023 [183]. Cash Flow and Working Capital - The company reported a working capital surplus of $12,374 as of September 30, 2024 [192]. - Cash balance as of September 30, 2024, was $175,292 [192]. - Net cash used in operating activities during the three months ended September 30, 2024, was $799,535, primarily due to the net loss [190]. - The Company secured a commitment for additional financing totaling $13,000,000 on November 13, 2024, and released $3,150,000 from escrow on November 20, 2024, ensuring sufficient working capital for at least the next 12 months [193]. - For the three months ended September 30, 2024, the net cash used in operating activities was approximately $799,535, compared to a net cash provided of $57,285 for the same period in 2023 [194][197]. - The net loss for the three months ended September 30, 2024 was $1,564,540, while the net loss for the same period in 2023 was $3,692 [195][197]. - Net cash used in investing activities for the three months ended September 30, 2024 was $596,000, attributed to a loan to Damon Motors, with no investing activities reported in the same period of 2023 [199]. - Net cash provided by financing activities for the three months ended September 30, 2024 was $414,335, which included $350,000 from a note payable and $64,335 from stock option exercises, compared to $32,193 in 2023 [200]. - As of September 30, 2024, the Company had cash of $175,292, a significant decrease from $1,148,904 as of June 30, 2023 [194]. - The working capital surplus as of September 30, 2024 was $12,374, down from $1,046,944 as of June 30, 2023 [194]. - The net change in operating assets and liabilities for the three months ended September 30, 2024 was $491,123, primarily due to a $528,078 increase in accounts payable [196]. - The non-cash income and expenses for the three months ended September 30, 2024 totaled $273,882, mainly from depreciation and amortization expenses [195]. - The Company does not have any off-balance sheet guarantees or trading activities involving non-exchange traded contracts [201].