Damon Inc(DMN) - 2025 Q1 - Quarterly Report

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$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$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].