Damon Inc(DMN) - 2025 Q3 - Quarterly Report

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$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].