2024 Q4 Form 10-Q Financial Statement

#000121390024109877 Filed on December 18, 2024

View on sec.gov

Income Statement

Concept 2024 Q4 2024 Q3 2024 Q2
Revenue $102.0K $0.00
YoY Change
Cost Of Revenue $39.65K
YoY Change 66.55%
Gross Profit $62.32K
YoY Change -15.9%
Gross Profit Margin 61.12%
Selling, General & Admin $267.9K $10.53M
YoY Change -92.04% -41.2%
% of Gross Profit 429.92%
Research & Development $1.554M
YoY Change -82.99%
% of Gross Profit
Depreciation & Amortization $253.00 $223.3K
YoY Change -99.68% -39.75%
% of Gross Profit 0.41%
Operating Expenses $1.483M $10.14M
YoY Change -62.41% -62.96%
Operating Profit -$1.420M
YoY Change 38373.62%
Interest Expense -$2.204M
YoY Change 102.41%
% of Operating Profit
Other Income/Expense, Net -$144.1K -$19.26M
YoY Change -87.4% 346.4%
Pretax Income -$1.565M -$33.97M
YoY Change -70.9% -8.23%
Income Tax
% Of Pretax Income
Net Earnings -$1.565M -$33.97M
YoY Change -70.9% -8.23%
Net Earnings / Revenue -1534.33%
Basic Earnings Per Share -$0.39
Diluted Earnings Per Share -$0.39 -$1.64
COMMON SHARES
Basic Shares Outstanding 20.77M shares 4.007M shares
Diluted Shares Outstanding 4.007M shares

Balance Sheet

Concept 2024 Q4 2024 Q3 2024 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $395.6K
YoY Change
Cash & Equivalents $175.3K $1.149M
Short-Term Investments
Other Short-Term Assets $24.61K $90.92K
YoY Change
Inventory
Prepaid Expenses $76.72K $70.49K
Receivables $55.87K $30.57K
Other Receivables
Total Short-Term Assets $1.240M $486.5K
YoY Change
LONG-TERM ASSETS
Property, Plant & Equipment $2.276K $1.138M
YoY Change
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $265.00 $126.4K
YoY Change
Total Long-Term Assets $2.541K $1.265M
YoY Change
TOTAL ASSETS
Total Short-Term Assets $1.240M $486.5K
Total Long-Term Assets $2.541K $1.265M
Total Assets $1.243M $1.751M
YoY Change
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $972.1K $3.172M
YoY Change
Accrued Expenses $104.5K $3.195M
YoY Change
Deferred Revenue $151.4K $144.4K
YoY Change
Short-Term Debt $40.63M
YoY Change
Long-Term Debt Due $1.107M
YoY Change
Total Short-Term Liabilities $1.228M $51.79M
YoY Change
LONG-TERM LIABILITIES
Long-Term Debt $177.4K
YoY Change
Other Long-Term Liabilities $235.5K
YoY Change
Total Long-Term Liabilities $412.9K
YoY Change
TOTAL LIABILITIES
Total Short-Term Liabilities $1.228M $51.79M
Total Long-Term Liabilities $412.9K
Total Liabilities $3.202M $52.20M
YoY Change
SHAREHOLDERS EQUITY
Retained Earnings -$3.319M -$1.755M
YoY Change
Common Stock $1.371M $1.307M
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity -$1.959M -$50.45M
YoY Change
Total Liabilities & Shareholders Equity $1.243M $1.751M
YoY Change

Cashflow Statement

Concept 2024 Q4 2024 Q3 2024 Q2
OPERATING ACTIVITIES
Net Income -$1.565M -$33.97M
YoY Change -70.9% -8.23%
Depreciation, Depletion And Amortization $253.00 $223.3K
YoY Change -99.68% -39.75%
Cash From Operating Activities -$799.5K -$8.569M
YoY Change -81.41% -59.35%
INVESTING ACTIVITIES
Capital Expenditures $0.00
YoY Change -100.0%
Acquisitions
YoY Change
Other Investing Activities $0.00
YoY Change -100.0%
Cash From Investing Activities -$596.0K $0.00
YoY Change -100.0%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $41.64K
YoY Change -97.93%
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities $414.3K 6.270M
YoY Change -91.59% -54.67%
NET CHANGE
Cash From Operating Activities -$799.5K -8.569M
Cash From Investing Activities -$596.0K 0.000
Cash From Financing Activities $414.3K 6.270M
Net Change In Cash -$973.6K -2.300M
YoY Change -255.52% -71.36%
FREE CASH FLOW
Cash From Operating Activities -$799.5K -$8.569M
Capital Expenditures $0.00
Free Cash Flow -$8.569M
YoY Change -59.36%

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Note 1 - Organization and Nature of Business</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Damon Inc. (formerly known as Grafiti Holding Inc. (“Grafiti Holding”)) (collectively with its subsidiaries, as appropriate, “Damon”, the “Company,” “we,” “us” or “our”) was incorporated in British Columbia, Canada on October 17, 2023.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Grafiti Limited (formerly known as “Inpixon Limited”) was incorporated in England and Wales on May 13, 2020. Grafiti Limited provides specialized scientific software products and services for the environmental sciences, life sciences, behavioral sciences, medical research and engineering domains. Grafiti Limited provides effective solutions to the scientific and engineering community to compress the time intensive process of data analysis and presentation, thus enhancing productivity. Users of Grafiti Limited’s products include government organizations, academic institutions and leading corporations. Grafiti Limited’s headquarters are located in Slough, United Kingdom, and operations for Grafiti Limited are primarily performed in the United Kingdom.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October 23, 2023, a Business Combination Agreement (as amended by the First Amendment to the Business Combination Agreement dated June 18, 2024 and the Second Amendment to the Business Combination Agreement dated September 26, 2024, the “Damon Business Combination Agreement”) was entered into by and among XTI Aerospace Inc., formerly known as “Inpixon” (“Inpixon,” or “Parent”), the Company, 1444842 B.C. LTD (“Amalco Sub”), and Damon Motors, Inc. (“Damon Motors”), pursuant to which Damon Motors will amalgamate with Amalco Sub, a British Columbia corporation and a wholly-owned subsidiary of the Company, with Damon Motors continuing as the surviving entity and a wholly-owned subsidiary of the Company (the “Business Combination”).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Additionally, pursuant to a Separation and Distribution Agreement, dated October 23, 2023, between Inpixon and the Company, Inpixon contributed the assets and liabilities of Grafiti Limited, a wholly owned subsidiary of Inpixon, to the Company, the then Inpixon wholly owned subsidiary. As a result, the Company became the parent non-operating holding company of Grafiti Limited. In connection with the spin-off of the Company from Inpixon as contemplated by the Business Combination Agreement (“Grafiti Holding Spin-off”), on December 27, 2023 (the “record date”), Inpixon transferred the Company’s common shares to a newly-created liquidating trust, titled the Grafiti Holding Inc. Liquidating Trust (the “Trust”), which holds the Company’s common shares for the benefit of the holders of Inpixon common stock, preferred stock and those outstanding warrants that are contractually entitled to participate in the distribution of the Company’s common shares, on a pro rata basis as of the record date (the “participating Inpixon securityholders”).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 26, 2023, pursuant to the Separation and Distribution Agreement, Grafiti Limited was assigned by Inpixon to the Company. The Company consolidates Grafiti Limited via the voting interest model, as Grafiti Limited is wholly owned by the Company. This transaction between entities under common control resulted in a change in reporting entity and required retrospective combination of the entities for all periods presented, as if the combination had been in effect since the inception of common control. Accordingly, the financial statements of the Company reflect the accounting of the combined acquired subsidiary at historical carrying values except that equity reflects the equity of the Company. This change in reporting entity did not impact net income for the periods presented. Pursuant to a Liquidating Trust Agreement, dated December 27, 2023, among Inpixon, the Company and the initial trustee of the Trust, the Company common shares were to be held by the Trust until the registration statement on Form 10-12B filed for the spin-off (the “Registration Statement”) had been declared effective by the Securities and Exchange Commission (the “SEC”). Promptly following the effective time of the Registration Statement, the Trust will deliver the Company’s common shares to the participating Inpixon security holders, as beneficiaries of the Trust, pro rata in accordance with their ownership of shares or underlying shares of Inpixon common stock as of the record date.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On November 12, 2024, the Trust shares were delivered to participating Parent securityholders, and on November 13, 2024, Damon Motors and Amalco Sub amalgamated to continue as a wholly owned subsidiary of the Company (the “Amalgamation”). Following the Amalgamation, the Company was renamed “Damon Inc.” (also referred to herein as the “combined company”). The common shares of the combined company are listed on the Nasdaq Global Market under the ticker symbol “DMN”. The Company incurred $1,085,297 of acquisition related costs related to the Damon Business Combination Agreement during the three months ended September 30, 2024. These costs are included in the acquisition-related costs line in the condensed consolidated statements of operations. See Note 14.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying condensed consolidated financial statements of the Company, show the historical financial position, results of operations, changes in stockholders’ deficit and cash flows of the Company. Prior to December 27, 2023, the Company operated as a segment of Inpixon and not as a separate entity. The operating results of the Company prior to December 27, 2023 have been specifically identified by Inpixon’s management based on the Company’s existing divisional organization and are presented on a carve-out basis. The historical costs and expenses reflected in our condensed consolidated financial statements prior to December 27, 2023 include an allocation by time spent for certain corporate and shared service functions. See Note 11 for further additional information regarding the Investments by Inpixon prior to December 27, 2023.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Management believes the assumptions underlying our condensed consolidated financial statements are reasonable but may not necessarily be indicative of the costs that would have incurred if the Company had been operated on a standalone basis for the entire periods presented. Actual costs that would have been incurred if we had operated as a standalone company for the entirety of the periods presented would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. The Company also may incur additional costs associated with being a standalone, publicly listed company that were not included in the expense allocations, prior to December 27, 2023, and therefore, would result in additional costs that are not reflected in our historical results of operations, financial position and cash flows.</p>
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The Streeterville Note carries an original issue discount of $1,450,000 and $20,000 of issuance costs to cover legal, accounting, due diligence, monitoring and other transaction costs. On the same day, the Investor paid the purchase price of $5,000,000 as follows: (a) $1,150,000 to the Company; (b) $350,000 to Damon Motors as a senior secured loan from the Company to Damon Motors (the “Grafiti Holding Note”), and (c) $3,500,000 into escrow, which will be distributed to the Company upon satisfaction of certain conditions including
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