AN OFFERING STATEMENT PURSUANT TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. INFORMATION CONTAINED IN THIS PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE PRELIMINARY OFFERING STATEMENT FILED WITH THE COMMISSION IS QUALIFIED. THIS OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR MAY THERE BE ANY SALES OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION UNDER THE LAWS OF ANY SUCH STATE. WE MAY ELECT TO SATISFY OUR OBLIGATION TO DELIVER A FINAL OFFERING CIRCULAR BY SENDING YOU A NOTICE WITHIN TWO BUSINESS DAYS AFTER THE COMPLETION OF OUR SALE TO YOU THAT CONTAINS THE URL WHERE THE OFFERING CIRCULAR WAS FILED MAY BE OBTAINED.

PRELIMINARY OFFERING CIRCULAR

SUBJECT TO COMPLETION, DATED AUGUST 26, 2025

DAMON INC.

Up to 300,000,000 Units

Consisting of an Aggregate of

Up to 300,000,000 Common Shares

And

Up to 300,000,000 Warrants to Purchase One Common Share

300,000,000 Common Shares Issuable upon the Exercise of the Warrants

And

Up to 30,000,000 Bonus Units

Consisting of an Aggregate of

Up to 30,000,000 Bonus Shares

And

Up to 30,000,000 Bonus Warrants to Purchase One Common Share

30,000,000 Bonus Shares Issuable upon the Exercise of the Bonus Warrants

Damon Inc., a British Columbia corporation referred to herein as the “Company”, “Damon”, “we”, “us” or “our” and similar terms, is conducting a best-efforts offering of up to 300,000,000 units (each, a “Unit”) at a price of $0.10 per Unit with an aggregate amount of $30,000,000 (the “Maximum Offering”) pursuant to Tier 2 of Regulation A (the “Offering”). Each Unit consists of one common share in the capital of the Company (each, a “Common Share”), without par value, and one common share purchase warrant to purchase one Common Share (each, a “Warrant”). Each Warrant is immediately exercisable for one Common Share at an exercise price of $0.12 per Common Share and will expire three years from the date of issuance. The Units will not be certificated and the Common Shares and Warrants comprising the Units are immediately separable and will be issued separately in this Offering. Pursuant to this offering circular, we are also offering the 300,000,000 Common Shares issuable from time to time upon the exercise of the Warrants offered hereby.

The minimum amount you may invest in this Offering is $1,000.00 for 10,000 Units, and any additional purchases must be made in increments of at least $1,000.00. However, we reserve the right to waive this minimum in our sole discretion. See “Plan of Distribution” on page 150 herein for more information.

Investors who invest $2,500 or more in this offering will receive additional Units (“Bonus Units”), with the amount of Bonus Units to be received to be based on the amount invested. Each Bonus Unit consists of one common share in the capital of the Company (each, a “Bonus Share”), without par value, and one common share purchase warrant to purchase one Common Share (each, a “Bonus Warrant”). Each Bonus Warrant is immediately exercisable for one Bonus Share at an exercise price of $0.12 per Bonus Share and will expire three years from the date of issuance. The Bonus Units will not be certificated and the Bonus Shares and Bonus Warrants comprising the Bonus Units are immediately separable and will be issued separately in this Offering. Pursuant to this offering circular, we are also offering the 30,000,000 Bonus Shares issuable from time to time upon the exercise of the Bonus Warrants offered hereby. Fractional Bonus Units will not be distributed, and Bonus Shares and Bonus Warrants will be determined by rounding down to the nearest whole Bonus Share and Bonus Warrant, as applicable. Bonus Units will be issued as follows:

The maximum number of Bonus Units that the Company will issue cannot be determined at this time; however, if the Company were to issue the maximum number of Bonus Units possible, the Company would issue 30,000,000 Bonus Shares and 30,000,000 Bonus Warrants in this Offering.

Our Common Shares are traded on the OTCID Basic Market under the symbol “DMNIF. On August 25, 2025, the last reported sale price of our Common Shares was $0.065 per Common Share.

We refer to the Common Shares, Warrants, Bonus Shares and Bonus Warrants to be issued in this Offering collectively as the “Securities”.

We are offering our Units and Bonus Units on a best-efforts basis, meaning there is no guarantee that we will receive any proceeds from the sale of our Units in this Offering. We have engaged DealMaker Securities LLC (the “Broker”), a registered broker-dealer and member of the Financial Industry Regulatory Authority (“FINRA”), and its affiliates to provide broker-dealer compliance services, technology, and marketing support in connection with this Offering. See “Plan of Distribution” herein for more information.

We estimate that this Offering will commence within two days of SEC qualification; this Offering will terminate at the earliest of (a) the date on which the Maximum Offering has been sold, (b) one year from the date of SEC qualification or (c) the date on which this Offering is earlier terminated by us, in our sole discretion. See “Plan of Distribution.”

To participate in this Offering, you must complete a subscription agreement available through our offering page at www.invest.damon.com, and deposit your investment funds in our non-interest-bearing escrow account with Enterprise Bank & Trust, who we refer to as the Escrow Agent. If we reject your subscription, in whole or in part, or if we accept it but do not conduct a closing of this Offering thereafter due to the termination of the Offering for any reason, the Escrow Agent will promptly return your investment funds without interest or deduction, in accordance with Rule 10b-9 under the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”). Until a closing of the Offering occurs, your subscription agreement will remain revocable and your investment funds will be refundable. Once a closing has occurred, your subscription will become irrevocable, your funds will no longer be refundable and your Common Shares, Warrants, and Bonus Shares and Bonus Warrants, if applicable, will be issued. This Offering is continuous and ongoing within the meaning of Rule 251(d)(3) of Regulation A, and closings, each of which we refer to as a “Closing”, and collectively, the “Closings”, may occur from time to time throughout the term of the Offering to maximize economic efficiency. Notwithstanding the foregoing, we intend to conduct a Closing at least every four to eight weeks following the first Closing.

Investing in the Units involves a high degree of risk. These are speculative securities. You should purchase these securities only if you can afford a complete loss of your investment. See “Risk Factors” starting on page 13 for a discussion of certain risks that you should consider in connection with an investment in the Units.

THE U.S. SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE SEC; HOWEVER, THE SEC HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.

GENERALLY, IF YOU ARE NOT AN ACCREDITED INVESTOR, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(d)(2)(i) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV.

We are an “emerging growth company,” as defined under the federal securities laws, and, as such, we have elected to comply with certain reduced public company reporting requirements for this Offering Circular and future filings.

This Offering Circular follows the disclosure format of Form S-1, pursuant to the General Instructions of Part II(a)(1)(ii) of Form 1-A.

Broker-Dealer

DEALMAKER SECURITIES LLC

TABLE OF CONTENTS

about this offering circular

We are offering our Common Shares, and soliciting offers to purchase them, only in jurisdictions where such offers and sales are permitted under a continuing offering pursuant to Rule 251(d)(3)(i)(F) of Regulation A. You should rely solely on the information contained in this Offering Circular. We have not authorized anyone to provide information different from or in addition to that contained in this Offering Circular. The information presented herein is accurate only as of the date on the cover, regardless of the time of delivery or any sale of our securities. Neither the delivery of this Offering Circular nor any sale of our securities implies that there has been no change in our affairs since the date of this Offering Circular. This Offering Circular will be updated and delivered as required by applicable federal securities laws. From time to time, we may provide offering circular supplements that update, modify or replace information included in this Offering Circular. Any statement contained herein will be deemed modified or superseded to the extent that a subsequent offering circular supplement contains an inconsistent statement. This Offering Circular includes exhibits that provide additional details about the matters discussed in this Offering Circular. You should read this Offering Circular, any related amendments or supplements, and the exhibits to this Offering Circular together with the information contained in our periodic filings, including annual, semi-annual and other reports filed with the SEC. All such documents are available on the SEC’s website at www.sec.gov.

We are responsible for the information contained in this Offering Circular. This document includes industry and market data derived from third-party studies, surveys, and industry publications. These sources typically indicate that the information was obtained from sources believed to be reliable; however, they do not guarantee the accuracy or completeness of such information. The forecasts and projections contained in these materials are based on historical market data and assumptions, and there can be no assurance that any such forecasts will be realized. Industry and market data may be inaccurate or incomplete due to the methodologies used by the original sources and the inherent limitations in collecting and verifying such data. These limitations include the voluntary nature of data collection, gaps in raw data, and the inability to verify all information with absolute certainty. Market and industry information used in this Offering Circular is subject to risks and uncertainties that may change over time and could materially affect actual outcomes. See the section titled “Risk Factors” herein for more information on these uncertainties. Additionally, other parties applying different methods of data collection or analysis may reach different conclusions.

We use, and may continue to use, various trademarks, trade names, and service marks in our business. For convenience, this Offering Circular may omit the ™, ®, or ℠ symbols when referring to our trademarks or those of others. Such omissions are not intended to indicate any waiver of rights, and we will assert our intellectual property rights to the fullest extent permitted by law. This Offering Circular may also reference trademarks, trade names, or service marks owned by third parties. All such marks are the property of their respective owners, and our use or display of them does not imply any affiliation with, or endorsement or sponsorship by, those owners.

Cautionary Statement Regarding Forward-Looking Statements

This Offering Circular, and the information incorporated by reference herein, contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, ability to improve and expand our capabilities, competition, expected activities and expenditures as we pursue our business plan, the adequacy of our available cash resources, regulatory compliance, plans for future growth and future operations, the size of our addressable market, market trends, and the effectiveness of the Company’s internal control over financial reporting. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Actual results may differ materially from the projections discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. These risks and other factors include, but are not limited to, those listed under “Risk Factors.” Additional factors that could materially affect these forward-looking statements and/or projections include, among other things:

Management has included projections and estimates in this Offering Circular, which are based primarily on management’s experience in the industry, assessments of our results of operations, discussions and negotiations with third parties, and a review of information filed by our competitors with the SEC or otherwise publicly available.

In some cases, you can identify forward-looking statements by terms such as “may”, “could”, “will”, “should”, “would”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “project” or “continue”, or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the heading “Risk Factors” and elsewhere in this Offering Circular. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance.

The forward-looking statements made in this Offering Circular relate only to events or information as of the date on which the statements are made in this Offering Circular. We do not intend to update or otherwise revise the forward-looking statements in this Offering Circular, whether as a result of new information, future events or otherwise.

This summary highlights selected information that is presented in greater details elsewhere, or incorporated by reference in this Offering Circular. This summary is not complete and does not contain all the information that you should consider before deciding whether to invest in our Units. You should carefully read the entire Offering Circular, including the risks associated with an investment in the Company discussed in the section titled “Risk Factors” herein before making an investment decision. Some of the statements in this Offering Circular are forward-looking statements. See the section titled “Cautionary Statement Regarding Forward-Looking Statements” herein. Unless the context otherwise indicates, when used in this Offering Circular, the terms the “Company”, “Damon”, “we”, “us” and “our” and similar terms refer to Damon Inc. and our wholly owned subsidiaries.

Risk Factors

You should carefully consider the risks and uncertainties described below and the other information in this Offering Circular before making an investment in our Securities. Our business, financial condition, results of operations or prospects could be materially and adversely affected if any of these risks occurs, and as a result, the market price of our Common Shares could decline and you could lose all or part of your investment. This Offering Circular also contains forward-looking statements that involve risks and uncertainties. See “Cautionary Statement Regarding Forward-Looking Statements” herein. Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain factors, including those set forth below.

Risks Related to this Offering and Ownership of Our Common Shares

We have broad discretion in the use of the net proceeds from this Offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds, including for any of the purposes described in the section of this Offering Circular entitled “Use of Proceeds.” You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the net proceeds are being used appropriately. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our securities to decline and delay the development of our product candidates. Pending the application of these funds, we may invest the net proceeds from this Offering in a manner that does not produce income or that loses value.

The public offering price will be set by our Board and does not necessarily indicate the actual or market value of our Common Shares.

Our Board, or a committee designated by the Board, will approve the public offering price and other terms of this Offering after considering, among other things: the current market price of our Common Shares; trading prices of our Common Shares over time; the volatility of our Common Shares; our current financial condition and the prospects for our future cash flows; the availability of and likely cost of capital of other potential sources of capital; the characteristics of interested investors; and market and economic conditions at the time of the Offering. The public offering price is not intended to bear any relationship to the book value of our assets or our past operations, cash flows, losses, financial condition, net worth or any other established criteria used to value securities. The public offering price may not be indicative of the fair value of the Common Shares.

Our stock price is volatile and there is a limited market for our shares.

Our Common Shares have only recently become publicly traded. The market price of our Common Shares has been volatile and could continue to fluctuate widely in price in response to various factors, many of which are beyond our control. In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of publicly traded companies. While these fluctuations have often been unrelated to the operating results of such companies and in recent times have been exacerbated by investors’ concerns stemming from geopolitical issues and changes in macroeconomic conditions, factors that may affect the volatility of our stock price include the following:

Our Common Shares were recently delisted from Nasdaq and began trading on the OTC Pink Current Market (now the OTCID Basic Market) on May 20, 2025, where trading volumes has historically been limited. See further discussion under the risk factors “Our common shares have recently been delisted from Nasdaq and are currently traded on the OTCID Basic Market, which may adversely affect the market price and liquidity of our shares and limit our ability to raise additional capital” below. The public trading market for our Common Shares depends on a marketplace of willing buyers and sellers at any given time, which in turn depends on factors outside of the Company’s control, including general economic and market conditions and the decisions of individual investors. As such, a holder of our Common Shares who wishes to sell his or her shares may not be able to do so immediately or at a price acceptable to them.

Investors in our securities could experience immediate and substantial dilution after this Offering.

The public offering price of our Common Shares and the Common Shares underlying the Warrants is higher than the pro forma net tangible book value per share of the outstanding Common Shares immediately after this Offering. As a result of this dilution, investors purchasing Units in this Offering could receive significantly less than the full purchase price that they paid for the Common Shares purchased in this Offering in the event of a liquidation. Further, we are offering Bonus Shares to certain investors. Investors who invest $2,500 or more will be issued Bonus Shares, thereby diluting any investor who is not issued Bonus Shares or any investor who is issued Bonus Shares at a lower percentage than other investors.

We have a history of operating losses and we will need to raise capital in addition to capital raised in this Offering to fund our planned operations and, additionally, there is no assurance that we will be able to achieve profitability, raise additional financing or continue as a going concern.

Our financial statements have been prepared on a going-concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. However, the audited consolidated financial statements of Grafiti Holding for the years ended June 30, 2024, 2023, and 2022 and Damon Motors for the years ended June 30, 2024, 2023 and 2022 include a going concern explanatory paragraph in the independent auditor reports.

We have a history of operating losses and have accumulated a deficit of $142,962,099 as of March 31, 2025, and expect to incur additional future losses. The ability of our company to continue as a going concern is dependent upon our attaining and maintaining profitable operations and raising additional capital as needed, but there can be no assurance that we will be able to raise sufficient financing. After completion of this Offering, we will need to raise additional funds to continue our planned operations.

Our ability to generate positive cash flow from operations is dependent upon sustaining targeted cost reductions and generating sufficient revenues. While we have implemented measures to reduce non-essential costs, these reductions alone are insufficient to offset our operating losses. Our management is evaluating options and strategic transactions and continuing to market and promote our product and service offerings to increase revenues, however, there is no guarantee that these efforts will be successful or that we will be able to achieve or sustain profitability. We have funded our operations primarily with private offerings and debt financing. Our history of operating losses and cash uses, our projections of the level of cash that will be required for our operations to reach profitability, may impair our ability to raise capital on terms that we consider reasonable and at the levels that we will require over the coming months. We cannot provide any assurance that we will be able to secure additional funding from public or private offerings or debt financings on terms acceptable to us, if at all. If we are unable to obtain the requisite amount of financing needed to fund our planned operations, it would have a material adverse effect on our business and ability to continue as a going concern, and we may have to curtail, or even to cease, certain operations. If additional funds are raised through the issuance of equity securities or convertible debt securities, it will be dilutive to our shareholders and could result in a decrease in our share price.

If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.

The trading market for our Common Shares will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts or the content that they publish about us. At present, there may be few or no securities or industry analysts providing coverage of our Common Shares. If our financial performance fails to meet any available analyst estimates, or one or if any analysts who cover us downgrade our Common Shares or change their opinion of our Common Shares, our share price would likely decline.

We are eligible to be treated as an “emerging growth company” as defined in the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Common Shares less attractive to investors.

We are an “emerging growth company”, as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including (1) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (2) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and (3) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In addition, as an emerging growth company, we are only required to provide two years of audited financial statements and two years of selected financial data in this Offering Circular. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our common shares held by non-affiliates exceeds $700.0 million as of any June 30 before that time or if we have total annual gross revenue of $1.07 billion or more during any fiscal year before that time, in which cases we would no longer be an emerging growth company as of the following December 31 or, if we issue more than $1.0 billion in non-convertible debt during any three-year period before that time, we would cease to be an emerging growth company immediately. Even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company” which would allow us to take advantage of many of the same exemptions from disclosure requirements, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, not being required to provide selected financial data in the registration statements and periodic reports that we file with the SEC, and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We cannot predict if investors will find our common shares less attractive because we may rely on these exemptions. If some investors find our common shares less attractive as a result, and if our common shares become publicly traded, such trading market may be less active than it otherwise could be if we were not to take advantage of such exemptions, and our share price may be more volatile.

Our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting until the later of our second annual report or the first annual report required to be filed with the SEC following the date we are no longer an “emerging growth company” as defined in the JOBS Act. We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal controls in the future.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected to take advantage of this extended transition period, and therefore, our financial statements may not be comparable to those of companies that comply with such new or revised accounting standards.

As a foreign private issuer, we are exempt from certain U.S. securities laws and regulations that apply to U.S. domestic issuers, which may afford less protection to shareholders.

Although we have voluntarily chosen to file periodic reports, current reports, and registration statements using U.S. domestic issuer forms, we will maintain our status as a foreign private issuer under U.S. securities laws. As a result, we are exempt from certain requirements applicable to U.S. domestic issuers, including:

As a result of these exemptions, shareholders may not have the same rights, access to information, and protections as they would if were subject to all of the obligations of a U.S. domestic issuer.

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to the Company on the last business day of December 2025. If the Company loses its foreign private issuer status on this determination date, then, beginning on the first day of the fiscal year following the determination date, it would have to comply with U.S. federal proxy rules and Regulation FD, and its officers, directors and principal shareholders would become subject to the reporting and short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. As a U.S. listed public company that is not a foreign private issuer, the Company may incur significant additional legal, accounting and other expenses that it would not incur as a foreign private issuer.

We have identified material weaknesses in our internal control over financial reporting. If we are unable to remediate these weaknesses, or otherwise fail to maintain proper and effective internal controls, our ability to produce timely and accurate financial statements could be impaired, which could adversely affect our operating results, our ability to operate our business, our share price and access to the capital markets.

We have identified material weaknesses in our internal control over financial reporting, leading to the conclusion that our internal control over financial reporting and disclosure controls and procedures were not effective as of March 31, 2025. We recently amended and restated our quarterly financial statements for the three and six months ended December 31, 2024, due to an accounting error in which transaction costs incurred in connection with the Business Combination were understated by $2,300,000. Upon re-evaluation, management concluded that the error arose from material weaknesses in our internal control over financial reporting, including ineffective controls over period-end financial disclosure, inadequate monitoring activities to assess the operation of internal controls, insufficient controls for financial information processing and reporting, and a lack of resources with the requisite skills for financial reporting under U.S. GAAP. Our inability to remediate these material weaknesses, the discovery of additional weaknesses, or failure to establish and maintain effective disclosure controls and internal control over financial reporting could adversely affect our results of operations, share price, and investor confidence in our company.

Section 404 of the Sarbanes-Oxley Act of 2002 requires that companies evaluate and report on the effectiveness of their internal control over financial reporting. As previously disclosed in more detail, we have identified material weaknesses as of March 31, 2025. Due to the material weaknesses in our internal control over financial reporting, we have also concluded our disclosure controls and procedures were not effective as of March 31, 2025.

Failure to have effective internal control over financial reporting and disclosure controls and procedures can impair our ability to produce accurate financial statements on a timely basis and has led and could again lead to a restatement of our financial statements. If, as a result of the ineffectiveness of our internal control over financial reporting and disclosure controls and procedures, we cannot provide reliable financial statements, our business decision processes may be adversely affected, our business and results of operations could be harmed, investors could lose confidence in our reported financial information and our ability to obtain additional financing, or additional financing on favorable terms, could be adversely affected.

Our management has taken action to begin remediating the material weaknesses; however, certain remedial actions have not started or have only recently been undertaken, and while we expect to continue to implement our remediation plans throughout the fiscal year ending June 30, 2025, we cannot be certain as to when remediation will be fully completed. In addition, we could in the future identify additional internal control deficiencies that could rise to the level of a material weakness or uncover other errors in financial reporting. During the course of our evaluation, we may identify areas requiring improvement and may be required to design additional enhanced processes and controls to address issues identified through this review. In addition, there can be no assurance that such remediation efforts will be successful, that our internal control over financial reporting will be effective as a result of these efforts or that any such future deficiencies identified may not be material weaknesses that would be required to be reported in future periods.

If we fail to remediate these material weaknesses and maintain effective disclosure controls and procedures or internal control over financial reporting, we may not be able to rely on the integrity of our financial results, which could result in inaccurate or additional late reporting of our financial results, as well as delays or the inability to meet our future reporting obligations or to comply with SEC rules and regulations. This could result in claims or proceedings against us, including by shareholders or the SEC. The defense of any such claims could cause the diversion of the Company’s attention and resources and could cause us to incur significant legal and other expenses even if the matters are resolved in our favor.

We do not intend to pay cash dividends to our shareholders.

We do not intend to pay cash dividends to our shareholders. We currently intend to retain any future earnings for funding growth and, therefore, do not expect to pay any cash dividends in the foreseeable future.

Indemnification of our officers and directors may cause us to use corporate resources to the detriment of our shareholders.

Our Articles eliminate the personal liability of our directors for monetary damages arising from a breach of their fiduciary duty as directors to the fullest extent permitted by British Columbia law. This limitation does not affect the availability of equitable remedies, such as injunctive relief or rescission. Until October 17, 2028, our Articles require us to indemnify our directors and officers to the fullest extent permitted by British Columbia law, including in circumstances in which indemnification is otherwise discretionary under British Columbia law.

Under British Columbia law, we may indemnify our directors or officers or other persons who were, are or are threatened to be made a named defendant or respondent in a proceeding because the person is or was our director, officer, employee or agent, if we determine that the person:

These persons may be indemnified against expenses, including attorneys’ fees, judgments, fines, excise taxes and amounts paid in settlement, actually and reasonably incurred by the person in connection with the proceeding. If the person is found liable to the corporation, no indemnification will be made unless the court in which the action was brought determines that the person is fairly and reasonably entitled to indemnity in an amount that the court will establish.

Reporting company compliance may make it more difficult to attract and retain officers and directors.

The Sarbanes-Oxley Act and rules implemented by the SEC have required changes in corporate governance practices of public companies. As a reporting company, these rules and regulations will increase our compliance costs and make certain activities more time consuming and costly. As a reporting company, these rules and regulations may make it more difficult and expensive for us to maintain our director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers, and to maintain insurance at reasonable rates, or at all.

Our Common Shares have recently been delisted from Nasdaq and are currently traded on the OTCID Basic Market, which may adversely affect the market price and liquidity of our shares and limit our ability to raise additional capital.

On May 20, 2025, our Common Shares were delisted from the Nasdaq Global Market and began trading on the OTC Pink Current Market maintained by OTC Markets Group Inc., where trading volume has historically been limited and may remain so. The OTC Pink Current Market became the OTCID Basic Market effective as of July 1, 2025.

The delisting from Nasdaq has made trading in our Common Shares more difficult for investors, which may result in reduced liquidity and increased price volatility. Without a Nasdaq listing, investors may have difficulty obtaining current price quotations, and trading may be limited, sporadic, and occur at depressed prices. Additionally, the loss of a national exchange listing has negatively impacted our visibility and reputation in the capital markets, making it more challenging to attract investor interest and raise additional capital. The absence of an exchange listing may also adversely affect the valuation and acceptance of our common shares in connection with potential business combinations, strategic transactions, or future financing activities.

Additionally, following the delisting and given our current stock price, our Common Shares are deemed “penny stock” under Rule 15g-9 of the Exchange Act. This designation imposes additional sales practice requirements on broker-dealers, which could further limit the liquidity and marketability of our shares and restrict the ability of investors to resell their shares in the secondary market. We are also subject to increased compliance burdens under state securities laws in connection with any sales of our securities, further limiting our access to capital markets and increasing compliance costs.

While our Common Shares are currently quoted on the OTCID Basic Market, there can be no assurance that an active and liquid trading market will develop or be sustained. If we are unable to establish and maintain a robust trading market on a market operated by OTC Markets, our ability to raise capital, continue as a going concern, and maintain investor confidence could be materially and adversely affected. In addition, failure to maintain a trading market for our common shares may trigger events of default or acceleration under our existing financing arrangements, including those with Streeterville. Such defaults could result in immediate cash payment obligations, placing further strain on our liquidity and potentially jeopardizing our ability to continue operations.

Our stock price has been volatile, and the issuance of shares upon the exercise of Series A Warrants has resulted in significant dilution. Additional issuances under our current financing arrangements with Streeterville or other new issuances could further depress the market price of our Common Shares.

Following the closing of the March Offering, investors began exercising their Series A Warrants on an alternate cashless basis, resulting in the issuance of 18,347,300 (pre-reverse split - 2,293,412,544) Common Shares by the Company. As of August 26, 2025, 19 Series A Warrants (pre-reverse split – 2,352 Series A Warrants) remain outstanding, which may result in the issuance of up to 19 additional Common Shares (pre-reverse split – 2,352 additional Common Shares) having an exercise price of $24.38 per Common Share (pre-reverse split - $0.195).

In connection with the March Offering, the floor price under the June 2024 Note was adjusted to $0.0251, however, as a result of the reverse stock split on July 3, 2025, the adjusted floor price is $3.1375. We expect that the Floor Price will be further adjusted to $0.10 upon the first closing of any Units sold under this Offering. As of August 26, 2025, the outstanding principal amount was partially repaid and reduced to $4,491,700, with an additional $720,381 in accrued unpaid interest, which may result in an issuance of 52,120,810 Common Shares, assuming a conversion price equal to $0.10 upon the first closing of any Common Shares sold under this Offering.

Additionally, as of August 26, 2025, the outstanding principal balance under the December 2024 SPA was $3,158,000, with an additional $173,916 in accrued unpaid interest. Streeterville may make purchases of Common Shares in satisfaction of outstanding pre-paid purchases pursuant to the pricing formula set forth in the December 2024 SPA. If the Company receives additional funding under the total $10,000,000 commitment or if Streeterville elects to purchase Common Shares in satisfaction of the outstanding balance under the December 2024 SPA, further issuances of Common Shares may occur.

In addition to these financing arrangements, the Company may issue additional Common Shares to settle outstanding obligations, raise capital or compensate employees and service providers. The Company is generally not restricted from issuing additional Common Shares or securities convertible into or exchangeable for Common Shares. Under our Articles and the BCBCA we are authorized to issue an unlimited number of Common Shares. Any actual or anticipated future issuances, particularly those at prices below the current market price, could significantly dilute existing shareholders, depress our share price, and impair our ability to raise capital.

Our Articles designate the Supreme Court of British Columbia, Canada and the appellate Courts therefrom as the exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders, which would limit such shareholders ability to choose the judicial forum for disputes with us or our directors, officers or other employees.

Our Articles provide that unless the Company consents in writing to the selection of an alternative forum, the Supreme Court of British Columbia, Canada and the appellate Courts therefrom, shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company; (ii) any action or proceeding asserting a claim of breach of fiduciary duty owed by any director, officer, or other employee of the Company to the Company; (iii) any action or proceeding asserting a claim arising pursuant to any provision of the Business Corporations Act or the Articles (as either may be amended from time to time); or (iv) any action or proceeding asserting a claim otherwise related to the relationships among the Company, its affiliates and their respective shareholders, directors and/or officers, but this clause (iv) does not include claims related to the business carried on by the Company or such affiliates. The forum selection provision also provides that the Company’s securityholders are deemed to have consented to personal jurisdiction in the Province of British Columbia and to service of process on their counsel in any foreign action initiated in violation of the Articles.

However, since the Company is a registrant under the Exchange Act, the above provision of our Articles shall not apply to any causes of action arising under the Securities Act or the Exchange Act. Unless the Company consents in writing to the selection of an alternative forum, the United States District Court of the Southern District of New York (or, if the United States District Court for the Southern District of New York lacks subject matter jurisdiction over a particular dispute, the state courts in New York County, New York) shall be the sole and exclusive forum for resolving any complaint filed in the United States asserting a cause of action arising under the Securities Act and the Exchange Act.

Any person or entity purchasing or otherwise acquiring any interest in our Common Shares is deemed to have received notice of and consented to the foregoing provisions. Although we believe this choice of forum provision benefits us by providing increased consistency in the application of British Columbia law in the types of lawsuits to which it applies, and U.S. federal securities law as interpreted by the United States District Court of the Southern District of New York or the state courts in New York County, New York with respect to any complaint filed in the United States asserting a cause of action arising under the Securities Act and the Exchange Act, the provision of which may have the effect of discouraging lawsuits against us and our directors and officers, including but not limited to increased costs to bring a claim and that these provisions can discourage claims or limit investors’ ability to bring a claim in a judicial forum that they may find favorable. The enforceability of similar choice of forum provisions in other companies' Articles or similar governing documents has been challenged in legal proceedings and it is possible that in connection with any action a court could find the choice of forum provisions contained in our Articles to be inapplicable or unenforceable in such action. If a court were to find this choice of forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition and results of operations.

Risks Relating to Our Business

The Company has incurred significant costs associated with the Business Combination and will continue to incur significant costs associated with operating as a public reporting company.

The Company has incurred substantial, non-recurring costs related to the consummation of the Business Combination and expects to continue incurring significant expenses as it operates as a public reporting company. These costs include legal, financial advisory, accounting and auditing, banking, and consulting fees, as well as expenses for regulatory filings, SEC fees, printing, and mailing. Additionally, the Company may incur further costs to retain key employees and engage new employees to support its transition to operating as a public reporting entity. These expenses are either the responsibility of the party incurring them during the Business Combination or will be paid by the Company following the Closing.

The Company is an early-stage company with a history of losses and expects to incur significant expenses and continuing losses for the foreseeable future. There is no guarantee that the Company will achieve or sustain profitability.

The Company has incurred losses since its inception and expects to continue to incur operating and net losses each quarter until such time as it achieves sufficient sales and production capacity at an assembly facility, which is not expected until 2026. Even if the Company is able to successfully develop, produce and sell its vehicles, there can be no assurance that they will be commercially successful. The Company’s potential profitability is dependent upon the successful development, production, commercialization and acceptance of its vehicles, which has not yet occurred, and may never occur.

Prior to the closing, Grafiti Holding incurred a net loss of approximately US$1.3 million for the fiscal year ended June 30, 2024 and approximately US$1.6 million during the quarter ended September 30, 2024, and had an accumulated deficit of approximately US$3.3 million as of September 30, 2024. Damon Motors incurred a net loss of approximately US$34.0 million for the fiscal year ended June 30, 2024 and approximately $7.4 million during the quarter ended September 30, 2024, and had an accumulated deficit of approximately $148.0 million as of September 30, 2024. Following the closing, we have continued to incur loss and anticipate generating a significant loss for the current fiscal year, due to the factors discussed below. As of March 31, 2025, we have accumulated a deficit of $142,962,099.

The Company expects to continue to incur significant expenditures in connection with the execution of its business strategy, including, without limitation, as a result of: continuing to design and develop and beginning to manufacture its existing and planned vehicles; equipping and expanding its pilot, support research and development and mass-production manufacturing facilities to produce its vehicles potentially in the US and international locations, and subsequently ramping-up production capacity at such facilities; building up inventories of parts and components for its vehicles; developing or securing personal mobility charging partnerships; expanding its design, research, development, maintenance and repair capabilities; increasing its sales and marketing activities and developing its distribution infrastructure; designing and implementing a show room network; expanding its general and administrative functions to support its growing operations.

Because it will incur the costs and expenses from these efforts before it receives any incremental revenues with respect thereto, the Company’s losses in future periods may be significant. In addition, the Company may find that these efforts are more expensive than currently anticipated, including by reason of delays in product development and commercialization, or that these efforts may not result in revenues, which would further increase its losses. The Company’s ability to produce revenues will depend, in part, on its ability to finalize and begin commercial start of production of its HyperSport vehicle, which is not expected to occur until 2026.

Management does not expect its SAVES distribution business to greatly expand. The Company’s ability to generate positive cash flow from operations in this business is dependent upon sustaining certain cost reductions and generating sufficient revenues. Our ability to achieve profitability with respect to the SAVES distribution business is more challenging when sales slow due to adverse economic conditions, notwithstanding our cost reduction efforts, because our cost reduction efforts may not be sufficient to offset declining gross profit.

For the reasons discussed above, there is no guarantee that the Company will reach profitability in the near term or at all, which could materially and adversely affect its business, financial condition, and results of operations.

The Company has a limited operating history which makes it difficult to evaluate its future business prospects and may increase investment risk.

The Company’s limited operating history makes evaluating its business and future prospects difficult. Damon Motors began operations in 2017 and has not yet begun mass production or the commercial delivery of its first motorcycle. If the Company does not successfully address these risks, its business, financial condition, operating results and prospects will be materially and adversely harmed. The Company has a very limited operating history and, as it attempts to transition from research and development activities to production and sales, it is difficult, if not impossible, to forecast its future results, and management has limited insight into trends that may emerge and affect its business. The Company intends to derive a substantial portion of its revenue from the sale of its electric motorcycles, none of which have reached commercialization stage to date. If actual results differ materially from management’s estimates in future periods, the Company’s business, financial condition, operating results and prospects may be materially adversely affected.

The Company is currently in concept phase of second vehicle, the HyperFighter, which is scheduled for delivery in 2028. The Company’s motorcycles require significant investment prior to commercial introduction and may never be successfully developed, produced, commercialized or accepted. There are no assurances that the Company will be able to successfully develop its models in a timely manner, or secure future business from recreational customers.

The Company has encountered, and expects to continue to encounter, risks and uncertainties frequently experienced by early-stage companies in rapidly changing markets, including risks related to its ability to, among other things:

If the Company fails to address any or all of these risks and challenges, its business, financial condition, operating results and prospects may be materially adversely affected.

The Company will initially depend on revenue generated from a single model of vehicle and in the foreseeable future will be significantly dependent on a limited number of models.

The Company’s personal mobility business will initially depend substantially on the sales and success of its HyperSport motorcycles, which we expect will be our only volume manufactured vehicle in the market for an extended period of time, and in the foreseeable future will be significantly dependent on a limited number of vehicles. The Company will rely on sales from the HyperSport motorcycles, among other sources of financing, for the capital that will be required to develop and commercialize those subsequent models. To the extent that (i) production of the Company’s motorcycles is delayed, interrupted or reduced, (ii) the Company’s product variety and motorcycles do not meet customer expectations or do not align with projected timelines, cost and volume targets or (iii) any of the Company’s vehicles are not well- received by the market for any reason, the Company’s revenue and cash flow would be adversely affected. In any such case, the Company may need to seek additional financing earlier than it expects, which financing may not be available to it in a timely manner and on commercially reasonable terms, or at all, and the Company’s business, financial condition, operating results and prospects may be materially adversely affected.

The Company’s success will depend on its ability to economically produce its vehicles at scale, and its ability to produce vehicles of sufficient quality and appeal to customers on schedule and at a scale that is unproven.

The Company’s business success will depend in large part on its ability to economically produce, market and sell its motorcycles at sufficient capacity to meet the demands of its customers. The Company will need to scale its production capacity in order to successfully implement its business strategy, and plans to do so in the future by, among other things, establishing development and ramp-up capacity at one or more assembly facilities. The Company has no experience in mass-production of its motorcycles. The Company does not know whether it will be able to develop efficient, automated, low-cost production capabilities and processes, or whether it will be able to secure reliable sources of supply from suppliers and manufacturers, in each case that will enable it to meet the quality, price, engineering, design and production standards, as well as the production volumes, required to successfully mass market its motorcycles and meet its business objectives and customer needs.

Even if the Company is successful in developing mass-production capability and processes and can reliably source supplies in sufficient volume, it does not know whether it will be able to do so in a manner that avoids significant delays and cost overruns, including as a result of factors beyond its control, such as problems with suppliers and manufacturers, or in time to meet the commercialization schedules of future vehicles or to satisfy the requirements of its customers. The Company’s ability to effectively reduce its cost structure over time is limited by the fixed nature of many of its planned expenses in the near-term, and its ability to reduce long-term expenses is constrained by its need to continue investment in its business strategy.

If the Company fails to develop and scale such mass-production capability and processes within its projected costs and timelines, the Company’s business, financial condition, operating results and prospects may be materially adversely affected.

The Company may be unable to reduce and adequately control the costs associated with operating its business.

The Company will require significant capital to develop and grow its business and it expects to incur significant costs which will impact its profitability, including research and development expenses as new models are rolled out and existing models improved, raw material procurement costs, selling and distribution expenses as it builds its brand and markets its vehicles and general and administrative expenses as it scales its operations. In addition, the Company may incur significant costs in connection with its services and honoring its commitments under its service and warranty packages. The Company’s ability to become profitable in the future will not only depend on its ability to successfully market its vehicles and other products and services, but also its ability to control its costs. If the Company is unable to design, manufacture, market, sell and distribute and service its vehicles and services in a cost-efficient manner, its business, financial condition, operating results and prospects may be materially adversely affected.

To carry out its proposed business plan to develop, manufacture, sell and service electric motorcycles and other potential personal mobility products, the Company will require a significant amount of capital.

The Company’s capital expenditures will continue to be significant in the foreseeable future as it expands its business and its level of capital expenditures will be significantly affected by customer demand for its products and services. The fact that the Company has a limited operating history means it has limited historical data on the demand for its products and services. As a result, its future capital requirements are uncertain and actual capital requirements may be materially different from those it currently anticipates. The Company expects that it will ultimately need to seek additional equity or debt financing to finance its capital expenditures, though the timing or amount of any such capital expenditures cannot be predicted with certainty at this time. The sale of additional equity or equity-linked securities would dilute the Company’s shareholders, while the incurrence of indebtedness would result in increased debt service obligations and covenants that potentially restrict its operations.

There is no assurance that such additional financings will be available to the Company in a timely manner or on terms that are favorable, or at all. The Company’s ability to obtain the necessary financing to carry out its business plan is subject to a number of factors, including general market conditions and investor acceptance of its business plan. These factors may cause the timing, amount, terms and conditions of such financing to be unattractive or unavailable to the Company. If the Company is unable to secure sufficient financing if and when needed or desired, it may have to significantly reduce its spending, delay or cancel its planned activities or substantially change its current corporate structure and its business, financial condition, operating results and prospects may be materially adversely affected.

The Company may experience significant delays in the design, manufacture, finance, regulatory approval, launch, transportation and delivery of its motorcycles and other potential personal mobility products.

The Company’s will depend in large part on its ability to execute on its plans to design, manufacture, finance, obtain regulatory approval for, launch, transport and deliver its vehicles, and any delay associated therewith could materially adversely affect the Company’s business, financial condition, operating results and prospects, and could cause liquidity constraints and reputational damage.

Vehicle manufacturers often experience delays in the design, manufacture and commercial launch of new products. The Company has no experience to date in high volume manufacturing of its vehicles. Even if it is successful in developing high-volume manufacturing capability and processes and in reliably sourcing its component supply, the Company cannot guarantee that it will be able to do so in a manner that avoids significant delays and cost overruns or in time to meet its vehicle commercialization schedules or in satisfaction of customer expectations or requirements. Further, the Company will also rely on third-party suppliers for the provision and development of the key components and materials used in its vehicles. To the extent the Company’s suppliers experience any delays in providing it with or developing necessary components, it could experience delays in delivering on its timelines. Further, prior to mass production of its vehicles, the Company will need such vehicles to be fully designed, engineered and approved for sale according to differing requirements, including, but not limited to, regulatory requirements, in the different jurisdictions in which it intends to commercialize them.

The Company does not currently have arrangements in place that will allow it to fully execute its business plan.

To sell its motorcycles and other potential personal mobility products as envisioned, the Company will need to enter into agreements and arrangements that are not currently in place. These include entering into manufacturing agreements for the Company’s current and future electric personal mobility products not yet in development and acquiring or developing additional manufacturing capability, arranging for the transportation of HyperSport motorcycles, and obtaining battery and other essential supplies in the quantities that the Company requires. If the Company is unable to enter into such agreements or is only able to do so on terms that are unfavorable, the Company may not be able to fully carry out its business plans as currently contemplated or at all.

If the Company is unable to design, develop, manufacture and sell new electric motorcycles and other potential personal mobility products and services that address additional market opportunities, its business, financial condition, operating results and prospects may suffer.

The Company may not be able to successfully design, develop, manufacture and sell new electric motorcycles and other potential personal mobility products and services, address new market segments or develop a significantly broader customer base. To date, the Company has focused its business on the development and sale of the HyperSport HS motorcycles, which have targeted mainly affluent super sport motorcycle market. The Company will need to address additional markets and expand its customer demographic to further grow its business. If the Company fails to address additional market opportunities, its business, financial condition, operating results and prospects may be materially adversely affected.

The Company may not be able to accurately estimate the supply and demand for its vehicles, which could result in a variety of inefficiencies in its business and hinder its ability to generate revenue. If the Company fails to accurately predict its manufacturing requirements, the Company could incur additional costs or experience delays.

It is difficult for management to predict the Company’s future revenues and appropriately budget for its expenses, and management has limited insight into trends that may emerge and affect the Company’s business. The Company will be required to provide forecasts of its demand to its suppliers several months prior to the scheduled delivery of vehicles to its prospective customers. Currently, there is no historical basis for making judgments about the demand for the Company’s vehicles or its ability to design, develop, manufacture and sell vehicles, or its profitability in the future. If the Company overestimates its requirements, its suppliers may have excess inventory, which indirectly would increase its costs. If the Company underestimates its requirements, its suppliers may have inadequate inventory, which could interrupt manufacturing of its vehicles and result in delays in deliveries and revenues or negatively impact its ongoing relationships with its suppliers. In addition, lead times for materials and components that its suppliers order may vary significantly and depend on factors such as the specific supplier, contract terms and demand for each component at a given time. If the Company fails to order sufficient quantities of product components in a timely manner, the delivery of vehicles to its customers could be delayed, and its business, financial condition, operating results and prospects may be materially adversely affected.

The Company has received only a limited number of reservations for its vehicles, all of which may be cancelled and are fully refundable, and there is no assurance that such reservations will be converted into sales.

As of August 26, 2025, Damon had 3,153 reservations for HyperSport and HyperFighter motorcycles, which were placed with fully refundable deposits. The Company’s customers may cancel their reservations without penalty and for any reason until they place an order for their motorcycle, at which point the deposit becomes non-refundable and the customer is required to pay an additional non-refundable deposit. The Company has experienced cancellations in the past, and further customers may cancel their reservations for many reasons outside of its control, including changes in government subsidies and economic incentives. The potentially long wait from the time a reservation is made until the time the vehicle is delivered could also impact user decisions on whether to ultimately make a purchase, due to potential changes in preferences, competitive developments and other factors. In addition, any further delays in the expected start of production of the HyperSport line of motorcycles or other upcoming models could result in significant reservation cancellations. No assurance can be given that reservations will not be cancelled and will ultimately result in the final purchase, delivery and sale or lease of motorcycles. Accordingly, the number of reservations has significant limitations as a measure of demand for the Company’s products, including demand for particular body styles, models or trim levels, or for future motorcycle sales.

If the Company fails to manage future growth effectively, it may not be able to produce, market, service and sell (or lease) its motorcycles successfully.

The Company plans to expand its operations in the near future in connection with the planned production of its motorcycles, which will require it to hire and train new personnel, accurately forecast production and revenue, control expenses and investments in anticipation of expanded operations, establish new or expand current design, production and sales and service facilities, implement and enhance administrative infrastructure, systems and processes, address new markets and establish international operations. If the Company fails to efficiently manage its growth, its business, financial condition, operating results and prospects may be materially adversely affected.

The Company expects to experience significant and rapid growth in the scope and complexity of its business, which may place a significant strain on the Company’s senior management team and its financial and other resources. Such growth, if experienced, may expose the Company to greater costs and other risks associated with growth and expansion. The Company may be required to hire a broad range of additional employees, including other support personnel, among others, in order to successfully advance its operations. The Company may be unsuccessful in these efforts or may be unable to project accurately the rate or timing of these increases.

The Company’s ability to manage its growth effectively will require the Company to continue to improve its operations, to improve financial and management information systems, and to train, motivate, and manage future employees. This growth may place a strain on the Company’s management and operational resources. The failure to develop and implement effective systems, or to hire and retain sufficient personnel for the performance of all of the functions necessary to effectively service and manage the Company’s business, or the failure to manage growth effectively, could have a materially adverse effect on the Company’s business, financial condition, and results of operations. In addition, difficulties in effectively managing the budgeting, forecasting, and other process control issues presented by such a rapid expansion could harm the Company’s business, financial condition, and results of operations.

The Company has very limited experience servicing its motorcycles. If it is unable to address the service requirements of its future customers, the Company’s business may be materially and adversely affected.

The Company has limited experience in servicing its motorcycles, and it expects to be required to increase its servicing capabilities as it scales its operations and continues to grow, including by building the Company experience centers in the U.S. and Canada. Servicing electric vehicles is different than servicing vehicles with internal combustion engines and requires specialized skills, including high voltage training and servicing techniques. Although the Company believes the experience it has gained developing and operating prototypes of its motorcycles positions it well to service its motorcycles and future products, the Company has no after-sale experience of maintaining and servicing motorcycles for its customers at scale, and there is no guarantee Damon will be able to do so. There can be no assurance that the Company’s service arrangements will adequately address the service requirements of the Company’s customers to their satisfaction, or that the Company and its partners will have sufficient resources to timely meet ongoing service requirements at scale. In addition, the Company anticipates the level and quality of the services it plans to provide its customers will have a direct impact on the success of its brand, reputation and ongoing sales. Failure to address the servicing requirements of its customers could harm the Company’s reputation or materially adversely affect its business, financial condition, operating results and prospects.

The Company’s customers will also depend on the Company’s customer support team to resolve technical and operational issues relating to the software integrated in its vehicles. The Company’s ability to provide effective customer support is largely dependent on its ability to attract, train and retain qualified personnel with experience in supporting customers on platforms such as the Company’s platform. As it continues to grow, additional pressure may be placed on the Company’s customer support team, and the Company may be unable to respond quickly enough to accommodate short-term increases in customer demand for technical support. The Company may also be unable to modify the future scope and delivery of its technical support to compete with changes in the technical support provided by its competitors. Increased customer demand for support, without corresponding revenue, could increase costs and negatively affect the Company’s results of operation. If the Company is unable to successfully address the servicing requirements of its customers or establish a market perception that it maintains high-quality support, it may be subject to claims from its customers, including for breach of warranties, loss of revenue or damages, and its business, financial condition, operating results and prospects may be materially adversely affected.

The Company’s motorcycles may not perform in line with customer expectations.

The Company’s vehicles, including the HyperSport line of motorcycles, may not perform in line with customers’ expectations. For example, the Company’s vehicles may not have the durability or longevity of other vehicles in the market and may not be as easy and convenient to repair as other vehicles in the market. Any product defects or any other failure of the Company’s vehicles to perform as expected could harm its reputation and result in adverse publicity, harm to the Damon brand and reputation, lost revenue, delivery delays, product recalls, product liability claims, significant warranty and other expenses, and could have a material adverse impact on the Company’s business, financial condition, operating results and prospects. Additionally, problems and defects experienced by other electric consumer vehicles could by association have a negative impact on perception and customer demand for the Company’s vehicles.

Further, the Company’s vehicles may contain defects in components, software, design and manufacture that may cause them not to perform as expected or that may require repairs, recalls or design changes, any of which would require significant financial and other resources to successfully navigate and resolve. The Company initially plans to deliver its vehicles without CoPilot ADAS, and thereafter to deliver its vehicles with CoPilot ADAS with limited functionality, with the goal to activate additional features over time. There is no guarantee that the CoPilot ADAS will ultimately perform in line with expectations. The Company’s vehicles use a substantial amount of software code to operate and software products are inherently complex and often contain defects and errors when first introduced. Efforts to remedy any issues the Company observes in its products could significantly distract management’s attention from other important business objectives, may not be timely, may hamper production or may not be to the satisfaction of its customers. Further, while extensive internal testing has been performed on the Company’s vehicles’ software and hardware systems, the Company’s limited operating history and limited field data reduce its ability to evaluate and predict the long-term quality, reliability, durability and performance characteristics of its vehicles. There can be no assurance that the Company will be able to detect and resolve any defects in its vehicles prior to their sale to customers. If any of the Company’s vehicles fail to perform as expected, deliveries may have to be delayed, product recalls initiated and servicing or updates under warranty provided at the Company’s expense, which could adversely affect the Company’s brand in its target markets and its business, financial condition, operating results and prospects may be materially adversely affected.

Sales will depend in part on the Company’s ability to establish and maintain confidence in its business prospects among customers, analysts and others within its industry.

Consumers may be less likely to purchase the Company’s products if they do not believe that its business will succeed or that its operations, including service and customer support operations, will continue for many years. Similarly, suppliers and other third parties will be less likely to invest time and resources in developing business relationships with the Company if they are not convinced that its business will succeed. Accordingly, to build, maintain and grow its business, the Company must establish and maintain confidence among customers, suppliers, analysts and other parties with respect to its liquidity and business prospects. Maintaining such confidence may be particularly difficult as a result of many factors, including the Company’s limited operating history, others’ unfamiliarity with its products, uncertainty regarding the future of electric vehicles, any prior or future delays in scaling production, delivery and service operations to meet demand, competition and the Company’s production and sales performance compared with market expectations. Some of these factors are outside of the Company’s control, and any negative perceptions about the Company’s business prospects, even if exaggerated or unfounded, would likely harm its business and make it more difficult to raise additional capital in the future. In addition, a significant number of new electric vehicle companies have recently entered the automotive industry, which is an industry that has historically been associated with significant barriers to entry and a high rate of failure. If these new entrants or other manufacturers of electric vehicles go out of business, produce vehicles that do not perform as expected or otherwise fail to meet expectations, such failures may have the effect of increasing scrutiny of others in the industry, including the Company, and further challenging customer, supplier and analyst confidence in the Company’s business prospects.

The Company’s business and prospects depend significantly on its ability to build its brand. The Company may not succeed in continuing to establish, maintain and strengthen the Damon brand, and its brand and reputation could be harmed by negative publicity regarding its company or products.

The Company’s business and prospects are heavily dependent on its ability to develop, maintain and strengthen the “Damon” brand. If the Company fails to establish, maintain and strengthen its brand, it may lose the opportunity to build a critical mass of customers. Promoting and positioning the “Damon” brand will likely depend significantly on the Company’s ability to provide high quality vehicles and services and engage with its customers as intended and the Company has limited experience in these areas. In addition, the Company expects that its ability to develop, maintain and strengthen the “Damon” brand will also depend heavily on the success of its user development and branding efforts. Such efforts mainly include building a community of online and offline users engaged with the Company through its mobile application and the Company stores as well as other branding initiatives and events. Such efforts may be non-traditional and may not achieve the desired results. To promote the “Damon” brand, the Company may be required to change its user development and branding practices, which could result in substantially increased expenses, including the need to use traditional media such as television, radio and print. If the Company does not develop and maintain a strong brand, its business, financial condition, operating results and prospects may be materially and adversely impacted.

In addition, if incidents with the Company’s business, vehicles or services occur or are perceived to have occurred, whether or not such incidents are the Company’s fault, the Company could be subject to adverse publicity. In particular, given the popularity of social media, posts and opinions regarding Damon, whether true or not, could quickly proliferate and harm consumer perceptions and confidence in the “Damon” brand. Further, there is the risk of potential adverse publicity related to the Company’s manufacturing or other partners, whether or not such publicity is related to their collaboration with the Company. The Company’s ability to successfully position its brand could also be adversely affected by perceptions about the quality of its partners’ vehicles. In addition, from time-to-time, the Company’s vehicles are evaluated and reviewed by third parties. Any negative reviews or reviews which compare Damon unfavorably to competitors could adversely affect consumer perception about the Company’s vehicles.

The motorcycle and personal mobility market is highly competitive, and the Company may not be successful in competing in this industry.

The motorcycle and personal mobility market is highly competitive, and the Company expects it will become even more so in the future. Currently, the Company’s principal competition for its vehicles comes principally from manufacturers of motorcycles with internal combustion engines powered by gasoline, including in the premium and other segments of its business. The Company cannot assure that customers will choose its vehicles over those of its competitors’ internal combustion-engine motorcycles. Although the Company intends to strategically enter into the market in the premium electric vehicle segment, it similarly expects this segment will become more competitive in the future as additional competitors enter into it, both from established brands and new entrants from various regions of the globe.

Many of the Company’s current and potential competitors have significantly greater financial, technical, manufacturing, marketing and other resources than the Company and may be able to devote greater resources to the design, development, manufacturing, distribution, promotion, sale and support of their products. Based on publicly available information, a number of the Company’s competitors already have displayed prototype electric motorcycles and have announced target availability and production timelines, while others have launched pilot programs or full commercial offerings in certain markets.

Notably, the Company expects competition in its industry to intensify in the future in light of increased demand and regulatory push for alternative fuel vehicles, continuing globalization and consolidation in the worldwide motorcycle industry. Factors affecting competition include, among others, product quality and features, innovation and development time, pricing, reliability, safety, fuel and energy economy, customer service (including breadth of service network) and financing terms.

The Company’s ability to successfully compete in the motorcycle industry will be fundamental to its future success in existing and new markets and its market share. There can be no assurance that the Company will be able to compete successfully in the markets in which it operates. If the Company’s competitors introduce new models or services that successfully compete with or surpass the quality, price, performance or availability of the Company’s vehicles or services, the Company may be unable to satisfy existing customers or attract new customers at the prices and levels that would allow it to generate attractive rates of return on its investment. Increased competition could result in lower vehicle unit sales, price reductions and revenue shortfalls, loss of customers and loss of market share, which may materially adversely affect the Company’s business, financial condition, operating results and prospects.

There may be unanticipated obstacles to the execution of the Company’s business model.

The Company’s business plans may change significantly. The Company’s business model is capital intensive. The Company believes that its chosen activities and strategies are achievable in light of current economic and legal conditions with the skills, background, and knowledge of the Company’s principals and advisors. The Company’s management reserves the right to make significant modifications to its stated strategies depending on future events.

The Company’s proposed plan of operation and prospects will depend largely upon its ability to successfully establish the Company’s presence in a timely fashion, retain and continue to hire skilled management, technical, marketing, and other personnel, and attract and retain significant numbers of quality business partners and corporate clients. There can be no assurance that the Company will be able to successfully implement its business plan or develop or maintain future business relationships, or that unanticipated expenses, problems or technical difficulties which would result in material delays in implementation will not occur.

Demand in the motorcycle and personal mobility industry is highly volatile.

Volatility of demand in the motorcycle and personal mobility industry may materially and adversely affect the Company’s business, financial condition, operating results and prospects. The markets in which the Company will be competing have been subject to considerable volatility in demand in recent periods. Demand for motorcycle and other potential personal mobility product sales depends to a large extent on general, economic, political and social conditions in a given market and the introduction of new motorcycles and technologies. As an early state company in the personal mobility industry, the Company has fewer financial resources than more established motorcycle and other personal mobility product manufacturers to withstand changes in the market and disruptions in demand.

The Company’s ability to generate meaningful product revenue will depend upon consumer’s willingness to adopt electric motorcycles and other potential personal mobility products.

The Company’s growth will greatly depend upon the adoption by consumers of, and the Company is subject to an elevated risk of any reduced demand for, alternative fuel motorcycles in general and electric motorcycles and other potential personal mobility products in particular. If the market for electric motorcycles and other personal mobility products does not develop as expected or develops more slowly than expected, the Company’s business, financial condition, operating results and prospects may be materially adversely affected. The market for alternative fuel motorcycles is relatively new, rapidly evolving, characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standards, frequent new motorcycle announcements and changing consumer demands and behaviors. Factors that may influence the adoption of alternative fuel motorcycles, and specifically electric motorcycles, include:

The influence of any of the factors described above may cause potential customers not to purchase the Company’s electric motorcycles and other potential personal mobility products, which would materially adversely affect the Company’s business, operating results, financial condition and prospects.

The transportation industry has significant barriers to entry that the Company must overcome in order to manufacture and sell its electric motorcycles and other personal mobility products at scale.

The transportation industry is characterized by significant barriers to entry, including large capital requirements, investment costs of developing, designing, manufacturing and distributing vehicles, long lead times to bring vehicles to market from the concept and design stage, the need for specialized design and development expertise, regulatory requirements, establishing a brand name and image and the need to establish sales and service locations. Since the Company is focused on electric motorcycles and other potential personal mobility products, it faces a variety of added challenges to entry that a traditional motorcycle manufacturer would not encounter, including additional costs of developing and producing an electric powertrain that has comparable performance to a traditional internal combustion engine in terms of range and power, inexperience with servicing electric vehicles, regulations associated with the transport of batteries, the need to establish or provide access to sufficient charging locations and unproven high-volume customer demand for fully electric motorcycles. If the Company is not able to overcome these barriers, its business, financial condition, operating results and prospects may be materially adversely affected, and its ability to grow its business may be harmed.

The Company’s planned distribution model is different from the predominant current distribution model for motorcycle manufacturers, which makes evaluating its business, financial condition, operating results and prospects difficult.

The Company’s planned distribution model is not common in the automotive industry today, particularly in North America. The Company plans to conduct vehicle sales directly to customers rather than through dealerships, primarily through the Company’s website, subject to obtaining applicable dealer licenses and equivalent permits in such jurisdictions. Further, generally all of the Company’s vehicles will be made to order. This model of vehicle distribution is relatively new and unproven, and subjects the Company to substantial risk as it requires, in the aggregate, significant expenditures and provides for slower expansion of distribution and sales systems than may be possible by utilizing the traditional dealer franchise system. For example, the Company may not be able to utilize long established sales channels developed through a franchise system to increase its sales volume. Moreover, the Company will be competing with companies with well established distribution channels. The Company’s success will depend in large part on the Company’s ability to effectively develop its own sales channels and marketing strategies.

Implementing such distribution model is subject to numerous significant challenges, including obtaining licenses or equivalent permits and approvals from government authorities, and there is no assurance that the Company will be able to obtain such licenses, permits and approvals. Further, there are substantial automotive franchise laws in place in many jurisdictions around the world and the Company may be exposed to significant franchise dealer litigation risks.

If the Company’s direct sales and leasing model does not develop as expected or develops more slowly than expected, it may be required to modify or abandon its sales and leasing model, which could materially and adversely affect its business, financial condition, operating results and prospects.

The Company’s marketing programs may not be successful.

The Company believes its brand is critical to its business. The Company will incur costs and expend other resources in its marketing efforts to raise brand awareness and attract and retain customers. These initiatives may not be successful, resulting in expenses incurred without the benefit of revenues or growth. Additionally, most, if not all, of the Company’s competitors have greater financial resources, which enable them to spend significantly more than the Company is able to on marketing and advertising. Should the Company’s competitors increase spending on marketing and advertising or the Company’s marketing funds decrease for any reason, or should its advertising and promotions be less effective than its competitors, there could be a material adverse effect on Company’s results of operations and financial condition.

The Company is dependent on its suppliers, some of which are single or limited source suppliers, and the inability of these suppliers to deliver necessary components of the Company’s vehicles at prices and volumes acceptable to the Company would have a material adverse effect on its business, financial condition, operating results and prospects.

The Company is dependent on third-party suppliers and manufacturers to supply and manufacture parts and components, sub-assemblies and assemblies included in its vehicles, and it expects to continue to rely on third parties to supply and manufacture such parts and components, sub-assemblies and assemblies in the future. While the Company obtains parts and components, sub-assemblies and assemblies from multiple sources whenever possible, some of the parts and components, sub- assemblies and assemblies used in its vehicles are purchased from a single source.

The Company intends to mitigate supply chain risk by entering into long-term supply agreements with key manufacturers and suppliers where appropriate, including where there is a single source supplier, but has not secured such long-term supply agreements to date, and there can be no assurance that it will be able to do so on terms that are acceptable to the Company, or at all. Further, the supplier agreements the Company may enter into with key suppliers in the future may contain provisions where such agreements can be terminated in various circumstances, including potentially without cause. While the Company believes that it may be able to establish alternate supply relationships and can obtain or potentially engineer replacement components for some of its single source components, it may be unable to do so in the short-term or at all, or at prices, volumes or quality levels that are acceptable to it. Changes in business conditions, pandemics, governmental changes, political conflict and other factors beyond the Company’s control, or that it does not presently anticipate, could affect its ability to receive components from its suppliers.

Any disruption in the supply of parts and components, sub-assemblies and assemblies, whether or not from a single source supplier, could temporarily disrupt manufacturing of the Company’s vehicles until an alternative supplier is able to supply the required material. Changes in business conditions, unforeseen circumstances, governmental changes, and other factors beyond the Company’s control or which it does not presently anticipate, could also affect Damon’s suppliers’ ability to deliver components to the Company on a timely basis and ultimately, the Company’s ability to economically produce and distribute its vehicles.

In particular, the Company’s vehicles contain electronics, microprocessors control modules, and other computer chips.

The Company is dependent on its suppliers to deliver many components that contain these microchips, and a shortage of microchips could disrupt the Company’s operations and its ability to timely deliver vehicles to customers. Damon is closely monitoring the availability of these components, assessing the supply chain and production impacts and seeking potential alternatives.

Also, if any of the Company’s suppliers become economically distressed or go bankrupt, the Company may be required to provide substantial financial support or take other measures to ensure supplies of components or materials, which could increase its costs, affect its liquidity or cause production disruptions.

The inability of any of the Company’s suppliers to deliver necessary parts and components, sub-assemblies and assemblies according to the Company’s schedule and at prices, volumes or quality levels acceptable to the Company, the Company’s inability to efficiently manage these parts and components, sub-assemblies and assemblies, or the termination or interruption of any material supply arrangement could materially adversely affect the Company’s business, financial condition, operating results or prospects. Further, as the scale of the Company’s vehicle production increases, the Company will need to accurately forecast, purchase, warehouse and transport components to its manufacturing facilities and servicing locations internationally and at much higher volumes. If it is unable to accurately match the timing and quantities of component purchases to its actual needs or successfully implement automation, inventory management and other systems to accommodate the increased complexity in its supply chain, the Company may incur unexpected production disruption, storage, transportation and write-off costs.

Any of the foregoing may materially adversely affect the Company’s business, financial condition, operating results or prospects.

If the Company’s suppliers fail to use ethical business practices and comply with applicable laws and regulations, the Company’s brand image could be harmed due to negative publicity.

The Company’s core values, which include developing high quality electric motorcycles and other personal mobility products while operating with integrity, are an important component of the Damon brand image, which makes the Company’s reputation sensitive to allegations of unethical business practices. The Company does not control its suppliers or their business practices. Accordingly, there is no assurance of compliance on the part of the Company’s suppliers with ethical business practices, such as environmental responsibilities, fair wage practices, and compliance with child labor laws, among others. A lack of demonstrated compliance could lead the Company to seek alternative suppliers, which could increase its costs and results in delayed delivery of its products, product shortages or other disruptions of its operations.

Violation of labor or other laws by the Company’s suppliers or the divergence of a supplier’s labor or other practices from those generally accepted as ethical in the markets in which the Company operates could also attract negative publicity for Damon and its brand. If Damon, or other manufacturers in the industry in which the Company operates, encounters similar problems in the future, the Damon brand and the Company’s business, financial condition, operating results and prospects may be materially adversely affected.

The Company could experience cost increases or disruptions in supply of raw materials or other components used in its vehicles.

The Company incurs significant costs related to procuring raw materials required to manufacture and assembling its vehicles. The Company uses various raw materials in its vehicles including aluminum, steel, carbon fiber, non-ferrous metals such as copper, lithium, nickel, and cobalt. The prices for these raw materials fluctuate depending on factors beyond the Company’s control including market conditions and global demand for these materials and could adversely affect the Company’s business, financial condition, operating results and prospects. The Company’s business will also depend on the continued supply of battery cells for its vehicles. Battery cell manufacturers may refuse to supply electric vehicle manufacturers to the extent they determine that their vehicles are not sufficiently safe. The Company is exposed to multiple risks related to availability and pricing of quality lithium-ion battery cells. These risks include:

Further, currency fluctuations, tariffs or shortages in petroleum and other economic or political conditions may result in significant increases in freight charges and raw material costs. Substantial increases in the prices for the Company’s raw materials or components would increase its operating costs and could reduce its margins. In addition, a growth in popularity of electric vehicles without a significant expansion in battery cell production capacity could result in shortages which would result in increased materials costs to the Company, and its business, financial condition, operating results and prospects may be materially adversely affected.

Increased freight and shipping costs or disruptions in transportation and shipping infrastructure could materially adversely affect the Company’s business, financial condition, operating results and prospects.

The Company intends to utilize air, sea and ground freight via third-party freight services for the transportation of supplies to its facilities and assembled vehicles to its customers. Adverse fluctuations in freight costs, limitations on shipping and receiving capacity, and other disruptions in the transportation and shipping infrastructure at important shipping and delivery points for the Company’s products, as well as for parts and components, sub-assemblies and assemblies used in the Company’s vehicles could materially adversely affect the Company’s business, financial condition, operating results and prospects. For example, delivery delays or increases in transportation costs (including through increased energy costs, increased carrier rates or driver wages as a result of driver shortages, a decrease in transportation capacity, or work stoppages or slowdowns) could significantly decrease the Company’s ability to make vehicle sales and earn revenues. Labor shortages or work stoppages in the transportation industry or long-term disruptions to the national and international transportation infrastructure that lead to delays or interruptions of deliveries or which would necessitate the Company securing alternative shipping suppliers could also increase the Company’s costs or otherwise materially adversely affect its business, financial condition, operating results and prospects.

The Company depends on certain key personnel, and its success will depend on its continued ability to retain and attract qualified management, technical and vehicle engineering and sales personnel.

The Company’s success will depend on the efforts, abilities, continued service and performance of the Company’s senior management team and key management, technical, vehicle engineering and sales personnel, and in particular from Dom Kwong, Chief Executive Officer and Bal Bhullar, Chief Financial Officer. A number of these key employees have significant experience in the motorcycle and electric vehicle manufacturing industry. If any key personnel were to terminate their employment with, or cease providing services to, the Company, the risks described in this section may be heightened and the Company may have difficulty or may not be able to locate and hire a suitable replacement. The Company has not obtained any “key person” insurance on certain key personnel at this time.

The Company’s directors and executive officers may have other business interests and obligations to other entities.

None of the Company’s directors or officers will be required to manage the Company as their sole and exclusive function and they may have other business interests and may engage in other activities in addition to those relating to the Company, provided that such activities do not compete with the business of Damon or otherwise breach their agreements with the Company. The Company is dependent on its directors and officers to successfully operate Damon. Their other business interests and activities could divert time and attention from operating Damon’s business.

Potential conflicts of interest may arise in the course of the Company’s operations involving any member of management’s interest, or an affiliate company’s interest, as well as their respective interests in other potential unrelated activities. While the Company does have processes and procedures in place to identify, analyze or monitor conflicts of interest, there is no assurance that such processes and procedures will identify or disclose every conflict of interest that may arise.

The Company’s business may be adversely affected by labor and union activities.

Although none of the Company’s employees are currently represented by a labor union, it is common throughout the motorcycle industry generally for many employees at motorcycle companies to belong to a union, which can result in higher employee costs and increased risk of work stoppages. The Company also directly and indirectly depends upon other companies with unionized work forces, such as parts suppliers and trucking and freight companies. If a work stoppage occurs within the Company’s business or that of the Company’s key suppliers, it could delay the manufacture and sale of Damon’s electric motorcycles and may have a material adverse effect on the Company’s business, financial condition, operating results and prospects. Additionally, if the Company expands its business to include full in-house manufacturing of motorcycles or other potential personal mobility products, the Company’s employees might join or form a labor union and the Company may be required to become a union signatory.

The Company has undergone recent reductions in force and may undergo additional reductions in force in the future. However, any headcount reduction may not result in anticipated cost savings and could have negative or unanticipated impacts on the Company’s business.

To reduce operating expenses, the Company reduced its headcount, approximately 50% in early 2023 to late 2024, and the Company may seek to undergo additional workforce restructurings in the future. The Company may not realize the anticipated benefits, savings and improvements in its cost structure from such restructurings because of unforeseen difficulties, delays or unexpected costs. In particular, headcount reductions could lead to disruptions to operations, material delays in research and development, attrition beyond planned layoffs and increased challenges to hire and retain qualified personnel. If the Company is unable to realize the expected operational efficiencies and cost savings from past or future restructurings, the Company’s operating results and financial condition would be adversely affected.

The Company is or may be subject to risks associated with strategic alliances and acquisitions.

The Company has entered into and may in the future enter into strategic alliances, including joint ventures or minority equity investments, with various third parties to further the Company’s business purpose from time-to-time. These alliances could subject the Company to a number of risks, including risks associated with sharing proprietary information, non-performance by the third party and increased expenses in establishing new strategic alliances, any of which may materially and adversely affect its business. The Company may have limited ability to monitor or control the actions of these third parties and, to the extent any of these strategic third parties suffer negative publicity or harm to their reputation from events relating to their business, the Company may also suffer negative publicity or harm to its reputation by virtue of its association with any such third party.

In addition, although the Company does not have any current acquisition plans, if appropriate opportunities arise, the Company may acquire additional assets, products, technologies or businesses that are complementary to its existing business. In addition to a potential requirement for shareholder approval, the Company may also have to obtain approvals and licenses from relevant government authorities for the acquisitions and to comply with any applicable laws and regulations, which could result in increased delay and costs, and may derail its business strategy if the Company fails to do so. Further, past and future acquisitions and the subsequent integration of new assets and businesses into the Company (including the Business Combination) may require significant attention from the Company’s management and could result in a diversion of resources from its existing business, which in turn could have an adverse effect on the Company’s business operations. Acquired assets or businesses may not generate the expected financial results. Acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities, the occurrence of significant goodwill impairment charges, amortization expenses for other intangible assets and exposure to potential unknown liabilities of the acquired business. Moreover, the costs of identifying and consummating acquisitions may be significant.

We may not be able to successfully integrate the business and operations of entities that we have acquired or may acquire in the future into our ongoing business operations, which may result in our inability to fully realize the intended benefits of these acquisitions, or may disrupt our current operations, which could have a material adverse effect on our business, financial position and results of operations.

Integrating the technology and operations acquired in connection with the Business Combination and any potential future acquisitions involves complex operational, technological and personnel-related challenges, which are time-consuming and expensive and may disrupt our ongoing business operations. Furthermore, integration involves a number of risks, including, but not limited to:

These factors could cause us to not fully realize the anticipated financial or strategic benefits of future acquisitions which could have a material adverse effect on our business, financial condition and results of operations.

Even if we are able to successfully operate the acquired businesses, we may not be able to realize the revenue and other synergies and growth that we anticipate from these acquisitions in the time frame that we currently expect, and the costs of achieving these benefits may be higher than what we currently expect, because of certain risks:

As a result of these risks, the acquisitions and integration may not contribute to our earnings as expected, we may not achieve expected revenue synergies or return on invested capital when expected, or at all, and we may not achieve the other anticipated strategic and financial benefits of such acquisitions.

Manufacturing in collaboration with partners is subject to risks.

The Company has agreed to a partnership with Auteco, for the manufacture of a lower-cost global electric motorcycle (HyperLite) in the future. The Company intends to be paid by Auteco for each vehicle it assembles and sells on a per-vehicle basis monthly for the first five years of production. In addition, the Company has established a strategic partnership with Indika Energy for manufacturing, licensing and distribution in Indonesia, with the ability to expand that partnership to all of Southeast Asia. The Company may enter into similar with third party manufacturers in the future for its vehicles. Collaboration with third parties for the manufacturing of vehicles is subject to risks with respect to operations that are outside the Company’s control. The Company could experience delays to the extent its partners do not meet agreed upon timelines or experience capacity constraints. There is a risk of potential disputes with manufacturing partners, and the Company could be affected by adverse publicity related to its partners whether or not such publicity is related to their collaboration with the Company. The Company’s ability to successfully build a premium brand could also be adversely affected by perceptions about the quality of its manufacturing partners’ vehicles. In addition, although the Company is involved in each step of the supply chain and manufacturing process, given the Company’s reliance on its partners to meet the Company’s quality standards, there can be no assurance that the Company will be able to successfully maintain such quality standards if outsourced manufacturing is adopted.

The Company may be unable to enter into new agreements or extend existing agreements with third-party manufacturing partners on terms and conditions acceptable to the Company and therefore may need to contract with other third parties or significantly add to its own production capacity. There can be no assurance that in such an event the Company would be able to partner with other third parties or establish or expand its own production capacity to meet its needs on acceptable terms or at all. The expense and time required to complete any transition, and to assure that vehicles manufactured at facilities of new third-party partners comply with the Company’s quality standards and regulatory requirements, may be greater than anticipated. The occurrence of any of the foregoing may materially adversely affect the Company’s business, financial condition, operating results and prospects.

Manufacturing Capacity, if and when established by the Company, will present inherent risks.

While the Company expects to be ready for initial production in 2026, there can be no assurance that the Company will be able to commence initial production on schedule and within budget, and more generally that the Company will be able to establish and expand production capacity to satisfy current reservations or future anticipated demand. This risk extends to supply chain and manufacturing quality risk, which could lead to lower volumes or lower quality than expected by customers. Further, if the Company is able to scale its manufacturing capacity to meet demand, the Company may need to incur greater facility costs, and there is no guarantee that the Company will be able to do so.

The delivery of HyperSport and subsequent motorcycles and other potential personal mobility products to the Company’s future customers and the revenue derived therefrom depends on the Company’s ability to source and fulfill the required vehicle manufacturing capacity, and it will depend on the ability of a future lessor to build and outfit future manufacturing facility. A future lessor’s ability to fulfill its obligations is outside of the Company’s control and depends on a variety of factors including the lessor’s operations, financial condition and geopolitical and economic risks. If a future lessor is unable to fulfill its obligations or is only able to partially fulfill its obligations, the Company will not be able to manufacture and sell its HyperSport and other motorcycles in the volumes anticipated within the timeframe that the Company anticipates, if at all.

The Company is and will be dependent on its manufacturing facilities. If one or more of its current or future manufacturing facilities become inoperable, capacity constrained or if operations are disrupted, its business, financial condition, operating results and prospects may be materially adversely affected.

The Company’s future revenue will be dependent on its manufacturing facilities. To the extent that the Company experiences any operational risk including, among other things, natural or man-made disasters, including earthquakes, flooding, fire and power outages, or by health epidemics or pandemics, and labor work force and work stoppages, resulting in any of its current or future manufacturing facilities becoming inoperable or capacity constrained, the Company will be required to make capital expenditures even though it may not have available resources at such time. Additionally, there is no guarantee that the proceeds available from the Company’s insurance policies would be sufficient to cover such capital expenditures. As a result, the Company’s insurance coverage and available resources may prove to be inadequate for events that may cause any of its current or future manufacturing facilities to become inoperable or capacity constrained, or any significant disruption to its operations. Any disruption in the Company’s manufacturing processes could result in delivery delays, scheduling problems, increased costs, or production interruption, which, in turn, may result in its customers deciding to purchase products from its competitors. Damon is and will be dependent on its current and future manufacturing facilities which will in the future require a high degree of capital expenditures. If the Company’s current or future assembly facilities becomes inoperative, capacity constrained or if operations are disrupted, its business, financial condition, operating results and prospects may be materially adversely affected.

The Company relies on complex machinery for its operations, and production of its vehicles involves a significant degree of risk and uncertainty in terms of operational performance, safety, security and costs.

The Company relies heavily on complex machinery for its operations and its production will involve a significant degree of uncertainty and risk in terms of operational performance, safety, security, and costs. The Company’s contemplated and its partners’ manufacturing facilities make use of large-scale machinery combining many components. The manufacturing plant components are likely to suffer unexpected malfunctions from time-to-time and will depend on repairs and spare parts to resume operations, which may not be available when needed. Unexpected malfunctions of the manufacturing facility components may significantly affect operational efficiency. Operational performance and costs can be difficult to predict and are often influenced by factors outside of the Company’s control, including, but not limited to, scarcity of natural resources, environmental hazards and remediation, costs associated with decommissioning of machines, labor disputes and strikes, difficulty or delays in obtaining governmental permits, damages or defects in electronic systems, industrial accidents, pandemics, fire, seismic activity, and natural disasters. There is no guarantee that adverse events will not occur in the future, or that Damon will be able to contain such events without damage or delay. Should operational risks materialize, it may result in the personal injury to or death of workers, the loss of production equipment, damage to manufacturing facilities, vehicles, supplies, tools and materials, monetary losses, delays and unanticipated fluctuations in production, environmental damage, administrative fines, increased insurance costs, and potential legal liabilities, all which could have a material adverse effect on the Company’s business, financial condition, operating results or prospects. Although the Company generally carries insurance to cover such operational risks, there is no assurance that such insurance coverage will be sufficient to cover potential costs and liabilities arising therefrom. A loss that is uninsured or exceeds policy limits may require the Company to pay substantial amounts, which could adversely affect the Company’s business, financial condition, operating results and prospects.

The Company’s business may be negatively impacted by depreciation of equipment.

The Company expects to continue to invest significantly in what it believes is state of the art tooling, machinery and other manufacturing equipment for the product lines where the HyperSport and subsequent HyperDrive powertrain platforms-based vehicles are manufactured/assembled, and Damon will depreciate the cost of such equipment over its expected useful life. Additionally, the Company expects manufacturing partners will be investing in their production lines in support of the Company’s vehicle delivery goals. However, manufacturing technology may evolve rapidly, and the Company or its partners may decide to update its manufacturing process with cutting-edge equipment more quickly than expected. Moreover, as the Company ramps the commercial production of its vehicles, The Company’s experience may cause it to discontinue the use of already installed equipment in favor of different or additional equipment. The useful life of any equipment that would be retired early as a result would be shortened, causing the depreciation on such equipment to be accelerated, and to the extent such equipment is owned by us, the Company’s results of operations could be negatively impacted.

Misconduct by employees of the Company or third-party service providers could cause significant losses to the Company.

Misconduct by employees of the Company or third-party service providers could cause significant losses to the Company. Losses could also result from actions by third party service providers, including, without limitation, failing to recognize trades and misappropriating assets. In addition, employees and third-party service providers may improperly use or disclose confidential information, which could result in litigation or serious financial harm, including limiting the Company’s business prospects or future marketing activities. No assurances can be given that the due diligence performed by the Company will identify or prevent any such misconduct.

Dependence on a single licensor for our SAVES products and potential adverse changes to terms could negatively impact our financial condition and results of operations.

All of our revenues from the SAVES distribution business have been derived from the sale of product licenses we purchase from the licensor. The Parent acquired an exclusive license to use, market, distribute and develop the SAVES products pursuant to an exclusive software license and distribution agreement, by and among the Parent, Cranes Software International Ltd. and Systat Software, Inc., as amended on June 30, 2020 and February 22, 2021, and has licensed the SAVES products to us. In connection with the spin out and as reported in the current report on Form 8-K filed by the Parent on February 23, 2024, the Parent sold 100% of the equity interest in Grafiti LLC, then a wholly-owned subsidiary of the Parent which holds the exclusive license to develop and sell the SAVES products, along with other assets and businesses, to an entity controlled by Nadir Ali, the former Chief Executive Officer and former sole director of the Company prior to the consummation of the Business Combination.

As the licensor, Grafiti LLC has and its successors will have significant negotiating power over us and rapid, significant or adverse changes in sales terms and conditions, such as competitive pricing as well as reducing the level of purchase discounts and rebates this or any new vendor makes available to us, may reduce the profit we can earn on these vendors’ products and result in loss of revenue and profitability. Our gross profit could be negatively impacted if we are unable to pass through the impact of these changes to our distributors, resellers and customers. Additionally, significant changes in vendor payment terms or payment arrangements could negatively impact our liquidity and financial condition.

Our competitors in the technology distribution industry can take more market share by reducing prices on our most profitable vendor products, causing us to reduce prices on such products.

The technology distribution industry is characterized by intense competition, based primarily on product availability, credit terms and availability, price, effectiveness of information systems and e-commerce tools, speed of delivery, ability to tailor specific solutions to customer needs, quality and depth of product lines and training, service and support. Our customers are not required to purchase any specific volume of products from us and may move business if pricing is reduced by competitors, resulting in lower sales. As a result, we must be extremely flexible in determining when to reduce prices to maintain market share and sales volumes and when to allow our sales volumes to decline to maintain our desired level of profitability for our products. We compete with a variety of regional, national and international distributors and resellers, some of which may have greater financial resources than us. Many of our competitors compete principally on the basis of price and may have lower costs or accept lower selling prices than we do and, therefore, we may need to reduce our prices. In addition, vendors may choose to market their products directly to end-users, rather than through distributors such as us, and this could adversely affect our business, financial condition and results of operations.

Our competitiveness in the technology distribution industry depends significantly on our ability to keep pace with the rapid changes in our industry. Failure by us to anticipate and meet our customers’ technological needs could adversely affect our competitiveness and growth prospects.

We operate and compete in the technology distribution industry which is characterized by rapid technological innovation, changing customer needs, evolving industry standards and frequent introductions of new products, product enhancements, services and distribution methods. Our success depends on our ability to develop expertise with these new products, product enhancements, services and distribution methods and to implement solutions that anticipate and respond to rapid changes in technology, the industry, and customer needs. The introduction of new products, product enhancements and distribution methods could decrease demand for current products or render them obsolete. Sales of products and services can be dependent on demand for specific product categories, and any change in demand for or supply of such products could have a material adverse effect on our net sales if we fail to adapt to such changes in a timely manner.

We offer one vendor’s product offerings and are dependent on our customers demand for this vendor’s products. There can be no assurances that consumer or commercial demand for our future products will meet, or even approach, our expectations. In addition, our pricing and marketing strategies may not be successful. Lack of customer demand, a change in marketing strategy and changes to our pricing models could dramatically alter our financial results. Unless we are able to release location-based products that meet a significant market demand, we will not be able to improve our financial condition or the results of our future operations.

The growth of our SAVES distribution business is dependent on increasing sales to our existing customers and obtaining new customers, which, if unsuccessful, could limit our financial performance.

Our ability to increase revenues from existing customers by identifying additional opportunities to sell more of our products and services and our ability to obtain new customers depends on a number of factors, including our ability to offer high quality products and services at competitive prices, meeting customers’ needs and expectations, the strength of our competitors and the capabilities of our sales and marketing departments. If we are not able to continue to increase sales of our products and services to existing customers or to obtain new customers in the future, we may not be able to increase our revenues and could suffer a decrease in revenues as well.

If our SAVES products fail to satisfy customer demands or to achieve increased market acceptance, our results of operations, financial condition and growth prospects could be materially adversely affected.

The market acceptance of our products is critical to our continued success. Demand for our SAVES products is affected by a number of factors beyond our control, including continued market acceptance, the timing of development and release of new products by competitors, technological change, and growth or decline in the statistical analytics and visualization market. If we are unable to continue to meet customer demands or to achieve more widespread market acceptance of our products, our business operations, financial results and growth prospects will be materially and adversely affected.

Defects, errors, or vulnerabilities in our SAVES products or services that we sell or the failure of such products or services to prevent a security breach, could harm our reputation and adversely affect our results of operations.

Because the SAVES products we sell are complex, they have contained and may contain software design errors or software bugs that are not detected until after their commercial release and deployment by customers. Defects may cause such products to be vulnerable to security attacks, cause them to fail to help secure information or temporarily interrupt customers’ networking traffic. Because the techniques used by hackers to access sensitive information change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques and provide a solution in time to protect customers’ data. In addition, defects or errors in our subscription updates or products could result in a failure to effectively update customers’ products and thereby leave customers vulnerable to advanced persistent threats (APTs) or security attacks.

Any defects, errors or vulnerabilities in the products we sell could result in:

Our SAVES business relies on a limited number of key customers, the importance of which may vary dramatically from year to year, and a loss of one or more of these key customers may adversely affect our operating results.

During the year ended June 30, 2024 and prior to the Business Combination, Grafiti Limited had one customer that accounted for 11% of revenue of Grafiti Limited and during the year ended June 30, 2023, Grafiti Limited had one customer that accounted for 16% of revenue. During the six-month period ended December 31, 2024, Grafiti Limited had one customer that accounted for a of 16% of revenue of Grafiti Limited. During the nine-month period revenue of the Company. Each of these customers may or may not continue to be a significant contributor to revenue from our SAVES business in the remainder of fiscal 2025 and beyond. No customer accounted for more than 10% of our gross revenue from the SAVES business during the fiscal year ended June 30, 2022. The loss of a significant amount of business from one of our major customers could materially and adversely affect our results of operations until such time, if ever, as we are able to replace the lost business. Significant customers or projects in any one period may not continue to be significant customers or projects in other periods. To the extent that we are dependent on any single customer, we are subject to the risks faced by that customer to the extent that such risks impede the customer’s ability to stay in business and make timely payments to us.

A delay in the completion of our customers’ budget processes could delay purchases of our SAVES products and services and have an adverse effect on our business, operating results and financial condition.

We rely on our customers to purchase products and services from us to maintain and increase our earnings, however, customer purchases are frequently subject to budget constraints, multiple approvals, and unplanned administrative, processing and other delays. If sales expected from a specific customer are not realized when anticipated or at all, our results could fall short of public expectations and our business, operating results and financial condition could be materially adversely affected.

If we cannot collect our receivables or if payment is delayed, our SAVES distribution business may be adversely affected by our inability to generate cash flow, provide working capital or continue our business operations.

Our SAVES distribution business depends on our ability to successfully obtain payment from our customers of the amounts they owe us for products received from us and any work performed by us. The timely collection of our receivables allows us to generate cash flow, provide working capital and continue our business operations. Our customers may fail to pay or delay the payment of invoices for a number of reasons, including financial difficulties resulting from macroeconomic conditions or lack of an approved budget. An extended delay or default in payment relating to a significant account will have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. If we are unable to timely collect our receivables from our customers for any reason, our business and financial condition could be adversely affected.

If our SAVES products fail to satisfy customer demands or to achieve increased market acceptance, our results of operations, financial condition and growth prospects could be materially adversely affected.

The market acceptance of our SAVES products are critical to our continued success. Demand for our products is affected by a number of factors beyond our control, including continued market acceptance, the timing of development and release of new products by competitors, technological change, and growth or decline in the statistical analytics and visualization market. If we are unable to continue to meet customer demands or to achieve more widespread market acceptance of our products, our business operations, financial results and growth prospects will be materially and adversely affected.

Insurance and contractual protections related to our SAVES distribution business may not always cover lost revenue, increased expenses or liquidated damages payments, which could adversely affect our financial results.

Although we maintain insurance and intend to obtain warranties from suppliers, obligate subcontractors to meet certain performance levels and attempt, where feasible, to pass risks we cannot control to our customers, the proceeds of such insurance or the warranties, performance guarantees or risk sharing arrangements may not be adequate to cover lost revenue, increased expenses or liquidated damages payments that may be required in the future.

Risks Related to Economic Conditions

Global economic conditions, including inflation, could materially adversely impact demand for the Company’s products and services.

Damon’s operations and performance depend significantly on economic conditions. Motorcycles are generally considered discretionary items for consumers. Many factors impact discretionary spending, including general economic conditions, inflation, unemployment, credit markets and consumer confidence in future economic conditions. Global economic conditions continue to be uncertain, particularly in light of high inflation and U.S. growing international trade tensions. Consumer purchases of discretionary items tend to be suppressed during recessionary periods when disposable income is lower, or during periods of economic instability or uncertainty when consumer confidence is low, which may make potential customers more likely to forgo or to postpone purchasing Damon’s vehicles, or to purchase less expensive product offerings, which may be less profitable to Damon.

Any financial or economic crisis, or perceived threat of such a crisis, including a significant decrease in consumer confidence, may materially and adversely affect the Company’s business, financial condition, results of operations and prospects.

The global financial markets experienced significant disruptions in 2008 and the Canadian, United States, European and other economies went into recession. The recovery from the lows of 2008 and 2009 was uneven and the global financial markets are facing new challenges, including and supply chain shortages or disruptions, and future potential economic slowdowns. It is unclear whether these challenges will be contained and what effects they each may have. There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies that have been adopted by the central banks and financial authorities of some of the world’s leading economies. Economic conditions in China are sensitive to global economic conditions. Recently there have been signs that the rate of China’s economic growth is declining. Any prolonged slowdown in China’s economic development might lead to tighter credit markets, increased market volatility, sudden drops in business and consumer confidence and dramatic changes in business and consumer behaviors.

Sales of high-end and luxury consumer products, such as the Company’s performance electric motorcycles or other personal mobility products, depend in part on discretionary consumer spending and are even more exposed to adverse changes in general economic conditions. In response to their perceived uncertainty in economic conditions, consumers might delay, reduce or cancel purchases of the Company’s electric vehicles and the Company’s business, financial condition, operating results and prospects may be materially adversely affected.

The Company faces risks related to natural disasters, health epidemics and other outbreaks, which could significantly disrupt its operations.

The Company’s business could be adversely affected by the effects of local or global outbreaks, and epidemics or pandemics. The Company’s business operations could be disrupted if any of its employees are suspected of having contracted any contagious and virulent viruses or other diseases, since it could require its employees to be quarantined or its offices to be disinfected. In addition, to the extent that any such outbreak, epidemic or pandemic would have detrimental effects on general economic conditions the Company’s business, financial condition, operating results or prospects may be materially adversely affected.

The Company’s headquarters and the Company operated locations, as well as certain of the Company’s vendors and customers, are located in areas which have been and could be subject to natural disasters such as floods, hurricanes, tornadoes, fires or earthquakes. Adverse weather conditions or other extreme changes in the weather, including resulting electrical and technological failures, may disrupt the Company’s business and may adversely affect the Company’s ability to continue its operations. These events also could have indirect consequences such as increases in the costs of insurance if they result in significant loss of property or other insurable damage. Any of these factors, or any combination thereof, could adversely affect the Company’s operations.

Although the Company has data hosted in offsite locations, the Company’s backup system does not capture data on a real-time basis and the Company may be unable to recover certain data if a server fails. the Company cannot assure that any backup systems will be adequate to protect it from the effects of fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks or similar events. Any of the foregoing events may give rise to interruptions, breakdowns, system failures, technology platform failures or internet failures, which could cause the loss or corruption of data or malfunctions of software or hardware as well as adversely affect the Company’s ability to provide services on its platform.

The Company’s risk management efforts may not be effective which could result in unforeseen losses.

The Company could incur substantial losses and its business operations could be disrupted if the Company is unable to effectively identify, manage, monitor, and mitigate financial risks, such as credit risk, interest rate risk, prepayment risk, liquidity risk, and other market-related risks, as well as operational risks related to its business, assets and liabilities. Damon’s risk management policies, procedures, and techniques, including its scoring methodology, may not be sufficient to identify all of the risks the Company is exposed to, mitigate the risks the Company has identified or identify additional risks to which the Company may become subject in the future.

The Company is subject to risks related to customer credit.

The Company has partnered to offer leasing and financing of its vehicles to potential customers within the U.S. and is working to establish partnerships outside the U.S. through other third-party financing partners, the Company currently has no agreements in place with any potential financing partners. The Company cannot provide any assurance that such third-party financing partners would be able or willing to provide such services on terms acceptable to the Company or its customers, or to provide such services at all. Further, because the Company has not yet sold any vehicles and no secondary market for its vehicles exists, the future resale value of its vehicles is difficult to predict, and the possibility that resale values could be lower than expected increases the difficulty of providing leasing terms that appeal to potential customers through such third-party financing partners. The Company believes that the ability to offer attractive leasing and financing options is particularly relevant to customers in the luxury motorsport vehicle segments in which the Company will compete, and if the Company is unable to offer its customers an attractive option to finance the purchase of or lease HyperSport motorcycles or planned future models, such failure could substantially reduce the pool of potential customers and decrease demand for the Company’s vehicles.

Further, offering leasing and financing alternatives to customers could expose the Company to risks commonly associated with the extension of consumer credit. Competitive pressure and challenging markets could increase credit risk through leases and loans to financially weak customers, extended payment terms, and leases and loans into new and immature markets, and any such credit risk could be further heightened in light of the economic uncertainty and any economic recession or other downturn, including by reason of a disease outbreak. If the Company is unable to provide leasing and financing arrangements that appeal to potential customers, or if the provision of such arrangements exposes it to excessive consumer credit risk, the Company’s business, financial condition, operating results and prospects may be materially adversely affected.

Motorcycle retail sales depend heavily on affordable interest rates and availability of credit for financing and a substantial increase in interest rates could materially and adversely affect the Company’s business, financial condition, operating results and prospects.

In certain regions, including North America and Europe, financing for new vehicle sales was available at relatively low interest rates in recent years due to, among other things, expansive government monetary policies. Interest rates began to rise sharply in early 2022, and market rates for new vehicle financing have increased as well. Higher interest rates make the Company’s vehicles less affordable to customers and could steer customers to less expensive vehicles that would be less profitable for the Company compared to premium vehicles. Additionally, if consumer interest rates remain high or increase further, or if financial service providers further tighten lending standards or restrict their lending to certain classes of credit, customers may not desire or be able to obtain financing to purchase or lease the Company’s vehicles.

Fluctuations in exchange rates could have a material and adverse effect on the Company’s results of operations.

The Company reports its financial results in U.S. dollars and anticipates that a material portion of its sales and operating costs will be realized in currencies other than the U.S. dollar. If the value of any of said currencies depreciates relative to the U.S. dollar, the Company’s foreign currency revenue will decrease when translated to U.S. dollar for reporting purposes. Alternatively, if the value of any of these currencies appreciates relative to the U.S. dollar, the Company’s operating costs will increase when translated to U.S. dollar for reporting purposes. Although these risks may sometimes be naturally hedged by a match in the Company’s sales and operating costs denominated in the same currency, fluctuations in foreign currency exchange rates could create discrepancies between the Company’s sales and its operating costs in a given currency which may have a material adverse effect on the Company’s business, financial condition, operating results and prospects.

Fluctuations in foreign currency exchange rates could also have a material adverse effect on the relative competitive position of the Company’s products in markets where they face competition from manufacturers who are less affected by such fluctuations in exchange rates. The value of the U.S. dollar against the Canadian dollar and other currencies is affected by changes in various political and economic conditions. It is difficult to predict how market forces or government policy may impact the exchange rate between U.S. dollars and other currencies in the future. Changes in currency exchange rates can have impacts on the costs of imported goods for motorcycle or other personal mobility products assembly, and it can change the relative value or demand for motorcycles or such other personal mobility products abroad.

The Company’s sales and operating results may fluctuate from quarter-to-quarter and from year-to-year as they are affected, among other things, by the seasonal nature of the Company’s products, fluctuation in the Company’s operating costs and prevailing market conditions.

The Company’s future sales and operating results may experience substantial fluctuations from quarter-to-quarter and year-to-year. It is anticipated that sales for motorcycles in the principal markets in which the Company operates will be highest in spring and summer. In addition, the Company’s revenues and operating costs will fluctuate from period-to-period with the pace at which it increases its production capacity and designs, develops and produces new vehicles. As a result of these fluctuations in revenues and expenses, along with other factors that are beyond the Company’s control, including general economic conditions, changes in consumer preferences, weather conditions, vehicle sales mix, changes in the cost or availability of raw materials or labor, discretionary spending habits and currency exchange rate fluctuations, the Company may not be able to accurately predict its quarterly and annual sales and operating results, which are likely to fluctuate significantly from period- to-period. Sales and operating results in any period should not be considered indicative of the results to be expected for any future period.

Risks Related to Technology

The Company’s motorcycles rely on software and hardware that is highly technical, and if these systems contain errors, bugs or vulnerabilities, or if the Company is unsuccessful in addressing or mitigating technical limitations in its systems, its business, financial condition, operating results and prospects could be materially adversely affected.

The Company’s vehicles rely on software and hardware, including software and hardware developed or maintained by third parties, that is highly technical and complex and will require modification and updates over the life of the vehicles. In addition, the performance of the software solutions included in the Company’s vehicles depends on the ability of such software and hardware to store, retrieve, process and manage immense amounts of data. The Company’s software and hardware may contain errors, bugs or vulnerabilities, and its systems are subject to certain technical limitations that may compromise the Company’s ability to meet its objectives. Some errors, bugs or vulnerabilities inherently may be difficult to detect and may only be discovered after the code has been released for external or internal use. Errors, bugs, vulnerabilities, design defects or technical limitations may be found within the Company’s software and hardware. Although the Company attempts to remedy any issues it observes in its vehicles and software as effectively and rapidly as possible, such efforts may not be timely, may hamper production or may not be to the satisfaction of the Company’s customers. Additionally, if the Company is able to deploy updates to the software addressing any issues, but such updates cannot or are not installed by its customers, such customers’ software will be subject to these vulnerabilities until they install such updates. If the Company is unable to prevent or effectively remedy errors, bugs, vulnerabilities or defects in its software and hardware, the Company may suffer damage to its reputation, loss of customers, loss of revenue or liability for damages, any of which may materially adversely affect the Company’s business, financial condition, operating results and prospects.

There are complex software and technology systems that need to be developed by the Company and in coordination with vendors and suppliers to reach production for its vehicles, and there can be no assurance such systems will be successfully developed or integrated.

The Company’s vehicles and operations will use a substantial amount of complex third-party and in-house software and hardware. The development and integration of such advanced technologies are inherently complex, and the Company will need to coordinate with its vendors and suppliers to reach production for its vehicles. Defects and errors may be revealed over time and the Company’s control over the performance of third-party services and systems may be limited. Thus, the Company’s potential inability to develop and integrate the necessary software and technology systems may harm its competitive position.

The Company relies on third-party suppliers to develop a number of emerging technologies for use in its products, including battery technology and the use of different battery cell chemistries. Certain of these technologies and chemistries are not today, and may not ever be, commercially viable. There can be no assurances that the Company’s suppliers will be able to meet the technological requirements, production timing, and volume requirements to support the Company’s business plan. In addition, the technology may not comply with the cost, performance useful life and warranty characteristics that are anticipated. As a result, the Company’s business plan could be significantly impacted, and the Company may incur significant liabilities under warranty claims which may materially adversely affect the Company’s business, financial condition, operating results and prospects.

The Company’s industry and its technology are rapidly evolving and may be subject to unforeseen changes. Developments in alternative technologies or improvements in the internal combustion engine may materially and adversely affect the demand for its electric vehicles.

The Company will operate in the electric vehicle industry, which is rapidly evolving and may not develop as anticipated. The regulatory framework governing the industry is currently uncertain and may remain uncertain for the foreseeable future. As the industry in which the Company operates and the Company’s business develop, the Company may need to modify its business model or change its vehicles and services. These changes may be costly and may not achieve expected results, which could have a material adverse effect on the Company’s business, financial condition, operating results and prospects.

Further, the Company may be unable to keep up with changes in electric vehicle technology or alternatives to electricity as a fuel source and, as a result, its competitiveness may suffer. The Company’s research and development efforts may not be sufficient to adapt to changes in electric vehicle technology. As technologies change, the Company plans to upgrade or adapt its vehicles and introduce new models in order to continue to provide vehicles with the latest technology, in particular safety technology and battery technology, which could involve substantial costs and lower its return on investment for existing vehicles. There can be no assurance that the Company will be able to compete effectively with alternative vehicles or source and integrate the latest technology into its vehicles, against the backdrop of the Company’s rapidly evolving industry. Even if the Company is able to keep pace with changes in technology and develop new models, the Company is subject to the risk that its prior models will become obsolete more quickly than expected, potentially reducing its return on investment.

Developments in alternative technologies, such as advanced diesel, ethanol, fuel cells or compressed natural gas, or improvements in the fuel economy of the internal combustion engine, may materially and adversely affect the Company’s business, financial condition, operating results and prospects in ways not currently anticipated. For example, relatively inexpensive fuel, such as compressed natural gas, may emerge as consumers’ preferred alternative to petroleum-based propulsion.

The Company may face challenges providing charging solutions.

Demand for the Company’s vehicles will depend in part on the availability of charging infrastructure. While the prevalence of charging stations has been increasing, charging station locations are significantly less widespread than gas stations. Some potential customers may choose not to purchase an electric vehicle because of the lack of a more widespread service network or charging infrastructure at the time of sale. Although the Company intends to offer the ability to use alternative current and direct current charging infrastructure, allowing customers to use existing charging infrastructure and standards to charge their motorcycles, the Company has very limited experience in the actual provision of charging solutions to customers and providing these services is subject to challenges, which include dependence on existing charging networks and installation providers in appropriate areas. The Company’s ability to generate customer loyalty and grow its business could be impaired by a lack of satisfactory access to charging infrastructure. To the extent the Company is unable to meet customer expectations or experiences difficulties in providing charging solutions, demand for its vehicles may suffer, and the Company’s business, financial condition, operating results and prospects may be materially and adversely affected.

If the Company were to pursue development of a proprietary charging solution, the Company would face significant challenges and barriers, including successfully navigating the complex logistics of rolling out a network and teams in appropriate areas, resolving issues related to inadequate capacity or overcapacity in certain areas, addressing security risks and risks of damage to vehicles, securing agreements with third-party providers to roll out and support a network of charging solutions in appropriate areas, obtaining any required permits and land use rights and filings, and providing sufficient financial resources to successfully roll out the proprietary charging solution, which could require diverting such resources from the Company’s other important business initiatives. In addition, the Company’s limited experience in providing charging solutions could contribute to additional unanticipated challenges that would hinder its ability to provide such solutions or make the provision of such solutions costlier than anticipated.

The range of the Company’s electric motorcycles on a single charge decline over time, which may negatively influence potential customers’ decisions whether to purchase its motorcycles.

The battery life and range of the Company’s motorcycles may vary or decline over time, like other vehicles that use current battery technology, including due to factors outside of the Company’s control. Factors such as rider behaviour, usage, speed, terrain, time and stress patterns may also impact the battery’s ability to hold a charge, which may decrease the Company’s motorcycles’ range before needing to recharge or could require the Company to limit vehicles’ battery charging capacity, including via over-the-air or other software updates, for safety reasons or to protect battery capacity, which could further decrease the Company’s vehicles’ range between charges. Such decreases in or limitations of battery capacity and therefore range, whether imposed by deterioration, software limitations or otherwise, could also lead to customer complaints or warranty claims, including claims that prior knowledge of such decreases or limitations would have affected customers’ purchasing decisions. In addition, the Company cannot guarantee that battery life and range deterioration will not be greater than what is currently anticipated, nor that the Company will be able to improve the performance of its battery packs, or increase its vehicles’ range, in the future. Any deterioration above the expected level could affect the Company’s reputation or could materially adversely affect its business, financial condition, operating results and prospects.

The Company’s vehicles make use of lithium-ion battery cells, which have been observed to catch fire or vent smoke and flame.

The battery packs that the Company produces make use of lithium-ion cells. On rare occasions, lithium-ion cells can rapidly release the energy they contain by venting smoke and flames in a manner that can ignite nearby materials as well as other lithium-ion cells. While the battery pack has been designed to passively contain any single cell’s release of energy without spreading to neighboring cells, a field or testing failure of the Company’s vehicles or other battery packs that it produces could occur, which could result in bodily injury or death and could subject the Company to lawsuits, product recalls, or redesign efforts, all of which would be time consuming and expensive. Also, negative public perceptions regarding the suitability of lithium-ion cells for automotive applications or any future incident involving lithium-ion cells such as a vehicle or other fire, even if such incident does not involve the Company’s vehicles, could materially adversely affect the Company’s business, financial condition, operating results and prospects.

In addition, once the Company begins mass manufacturing of its vehicles, it will be required to store a significant number of lithium-ion cells at its facilities. While safety procedures related to the handling of the cells have been implemented, any mishandling of battery cells, or safety issue or fire related to cells, may cause damage, injury and disruption to the operation of its facilities. Such damage or injury could lead to adverse publicity and potentially a safety recall.

The Company may be subject to risks associated with assisted driving technology.

The Company’s vehicles are being designed to offer some assisted driving functionality through the Company’s CoPilot ADAS, including forward crash warning functionalities. Through research and development, the Company plans to continue to update and improve its assisted driving technology. Assisted driving technologies are subject to risks and there have been accidents and fatalities associated with such technologies. The safety of such technologies depends in part on driver interactions, and drivers may not be accustomed to using or adapting to such technologies. To the extent accidents associated with the Company’s assisted driving systems occur, the Company could be subject to liability, negative publicity, government scrutiny, and further regulation. Moreover, any incidents related to assisted driving systems of the Company’s competitors could adversely affect the perceived safety and adoption of the Company’s vehicles and assisted driving technology more broadly. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, operating results and prospects.

Risks Related to Intellectual Property

The Company’s patent applications may not result in issued patents, which may have a material adverse effect on its ability to prevent others from interfering with the commercialization of the Company’s products.

The registration and enforcement of patents involves complex legal and factual questions, and the breadth and effectiveness of patented claims is uncertain. The Company cannot be certain that it is the first to file patent applications on the inventions it wishes to protect, nor can it be certain that its pending patent applications will result in issued patents or that any of its issued patents will afford sufficient protection against someone creating competing products, or as a defensive portfolio against a competitor who claims that the Company is infringing such competitor’s patents. In addition, patent applications filed in foreign countries are subject to laws, rules and procedures that may differ from those of applicable in Canada or the U.S., and thus there is no certainty that foreign patent applications, if any, will result in issued patents in those foreign jurisdictions or that such patents can be effectively enforced, even if they relate to patents issued in Canada or the U.S.

The Company may need to defend itself against patent or trademark infringement claims, which may be time-consuming and would cause the Company to incur substantial costs.

Companies, organizations or individuals, including the Company’s competitors, may hold or obtain patents, trademarks or other proprietary rights that would prevent, limit or interfere with the Company’s ability to make, use, develop, sell or market its motorcycles or components, which could make it more difficult for Damon to operate its business. From time-to-time, the Company may receive communications from third parties that allege its products are covered by their patents or trademarks or other intellectual property rights. Companies holding patents or other intellectual property rights may bring suits alleging infringement of such rights or otherwise assert their rights.

In addition, various “non-practicing entities” that own patents and other intellectual property rights often attempt to aggressively assert their rights in order to extract value from technology companies. Furthermore, from time-to-time the Company may introduce or acquire new products and services, including in areas where Damon historically has not competed, which could increase the Company’s exposure to patent and other intellectual property claims from competitors and non-practicing entities.

The Company may receive notice letters from patent holders alleging that certain of its products and services infringe their patent rights. Defending patent and other intellectual property litigation is costly and can impose a significant burden on management and employees, and there can be no assurances that favourable final outcomes will be obtained in all cases. In addition, plaintiffs may seek, and the Company may become subject to, preliminary or provisional rulings in the course of any such litigation, including potential preliminary injunctions requiring the Company to cease some or all of its operations. The Company may decide to settle such lawsuits and disputes on terms that are unfavorable to it. Similarly, if any litigation to which the Company is a party is resolved adversely, the Company may be subject to an unfavorable judgment that may not be reversed upon appeal. The terms of such a settlement or judgment may require the Company to cease some or all of its operations or pay substantial amounts to the other party. In addition, the Company may have to seek a license to continue practices found to be in violation of a third party’s rights, which may not be available on reasonable terms, or at all, and may significantly increase the Company’s operating costs and expenses. As a result, the Company may also be required to develop alternative non-infringing technology or practices or discontinue the practices. The development of alternative non-infringing technology or practices could require significant effort and expense or may not be feasible. The Company’s business, financial condition, and results of operations could be adversely affected as a result of an unfavorable resolution of the disputes and litigation referred to above.

If the Company is determined to have infringed upon a third party’s intellectual property rights, the Company may be required to do things that include one or more of the following:

In the event of a successful claim of infringement against the Company and its failure or inability to obtain a license to the infringed technology or other intellectual property right, its business, financial condition, operating results and prospects may be materially adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management attention.

Risks Related to Regulation and Taxation

Our international business exposes us to geo-political and economic factors, legal and regulatory requirements, public health and other risks associated with doing business in foreign countries.

We currently provide, and plan to continue providing, our products and services to customers internationally. These risks differ from and potentially may be greater than those associated with our domestic business.

Our international business is sensitive to changes in the priorities and budgets of international customers and geo-political uncertainties, which may be driven by changes in threat environments and potentially volatile worldwide economic conditions, various regional and local economic and political factors, risks and uncertainties, as well as Canadian, U.S., and UK foreign policy.

Our international sales are also subject to local government laws, regulations and procurement policies and practices, which may differ from the UK Government regulations, including regulations relating to import-export control, investments, foreign exchange controls and repatriation of earnings, as well as to varying currency, geo-political and economic risks. Our international contracts may include industrial cooperation agreements requiring specific in- country purchases, manufacturing agreements or financial support obligations, known as offset obligations, and provide for penalties if we fail to meet such requirements. Our international contracts may also be subject to termination at the customer’s convenience or for default based on performance, and may be subject to funding risks. We also are exposed to risks associated with using foreign representatives and consultants for international sales and operations and teaming with international subcontractors, partners and suppliers in connection with international programs. As a result of these factors, we could experience award and funding delays on international programs and could incur losses on such programs, which could negatively affect our results of operations and financial condition.

We are also subject to a number of other risks including:

In addition, our international operations (or those of our business partners) could be subject to natural disasters such as earthquakes, tsunamis, flooding, typhoons and volcanic eruptions that disrupt manufacturing or other operations. There may be conflict or uncertainty in the countries in which we operate, including public health issues (for example, an outbreak of a contagious disease such as 2019-Novel Coronavirus (2019-nCoV), avian influenza, measles or Ebola), safety issues, natural disasters, fire, disruptions of service from utilities, nuclear power plant accidents or general economic or political factors. For example, as a result of the Coronavirus outbreak, our ability to source internal connection cables for certain of our sensors has been delayed, which will require us to source these components from other vendors at a higher price that may result in an increase in our costs to produce our products In the event our customers are materially impacted by these events, it may impact anticipated orders and planned shipments for our products. With respect to political factors, the United Kingdom’s 2016 referendum, commonly referred to as “Brexit,” has created economic and political uncertainty in the European Union. Also, the European Union’s General Data Protection Regulation imposes significant new requirements on how we collect, process and transfer personal data, as well as significant fines for non-compliance. Any of the above risks, should they occur, could result in an increase in the cost of components, production delays, general business interruptions, delays from difficulties in obtaining export licenses for certain technology, tariffs and other barriers and restrictions, longer payment cycles, increased taxes, restrictions on the repatriation of funds and the burdens of complying with a variety of foreign laws, any of which could ultimately have a material adverse effect on our business.

The lack of availability, reduction or elimination of government and economic incentives or government policies which are favorable for electric vehicles and Canadian produced vehicles could have a material adverse effect on the Company’s business, financial condition, operating results and prospects.

Any reduction, elimination or discriminatory application of government subsidies and economic incentives because of policy changes, the reduced need for such subsidies and incentives due to the perceived success of electric motorcycles, fiscal tightening or other reasons may result in the diminished competitiveness of the alternative fuel motorcycle industry generally or the Company’s electric motorcycles or other personal mobility products in particular. This could materially adversely affect the growth of the alternative fuel motorcycle markets and the Company’s business, financial condition, operating results and prospects.

The Company’s vehicles also benefit from government policies including tariffs on imported motorcycles to both Europe and the U.S. However, trade dynamics can change quickly between regions, and this advantage could become a disadvantage with new regulations or duties. Additionally, the amount of subsidies provided for purchasers of certain new energy motorcycles in various regions (both at national and local levels) could be reduced in the future, increasing the net cost experienced by customers. These policies are subject to change and are beyond the Company’s control. There is no assurance that any changes would be favourable to the Company’s business. Any of the foregoing could materially adversely affect the Company’s business, financial condition, operating results and prospects.

The Company’s business could be adversely affected by trade tariffs or other trade barriers.

The Company initially plans to potentially build Damon motorcycles in the US and/or Europe and will be shipping those motorcycles globally. It is not clear what impact changes to tariffs may have or what actions other governments may take in the future. In the future, tariffs could potentially impact the Company’s raw material prices. In addition, changes in tariffs could have a material adverse effect on global economic conditions and the stability of global financial markets. Any of these factors could have a material adverse effect on the Company’s business, financial condition, operating results and prospects.

The construction and operation of one or more potential assembly facilities that the Company may seek to establish in the future, are or will be subject to regulatory approvals, and may be subject to delays, cost overruns or may not produce expected benefits.

The Company’s establishment of one or more potential manufacturing facilities could be subject to broad and strict government supervision and approval procedures, including, but not limited to, the project approvals and filings, construction land and project planning approval, environment protection approval, pollution discharge permits, work safety approvals, fire protection approvals, and the completion of inspection and acceptance by relevant authorities. As a result, the Company may be subject to administrative uncertainty regarding the construction within a specified time frame, fines or the suspension of work. The Company may face similar challenges with respect to any additional facilities it seeks to establish in the future to scale manufacturing capacity or otherwise. Any of the foregoing may have a material adverse impact on the Company’s business, financial condition, operating results or prospects.

The Company’s vehicles are subject to motor vehicle standards and the failure to satisfy such mandated safety standards would have a material adverse effect on the Company’s business, financial condition, operating results and prospects.

All vehicles sold must comply with various standards of the market where the vehicles were sold. Rigorous testing and the use of approved materials and equipment are among the requirements for achieving such standards. Vehicles must pass various tests and undergo a certification process, before receiving delivery from the factory, being sold, or being used in any commercial activity, and such certification is also subject to periodic renewal. The Company expects to begin the process of obtaining certifications for the HyperSport in 2025/2026. If the Company’s certification efforts fail, or a certified vehicle has a defect resulting in quality or safety accidents, or consistent failure of compliance with certification requirements is discovered, the approval can be withheld, suspended or even revoked. With effect from the date of revocation or during suspension of certification, any vehicle that fails to satisfy the requirements for certification may not continue to be delivered, sold, exported or used in any commercial activity. Failure by the Company to have the HyperSport or any future model electric vehicle satisfy motor vehicle standards would have a material adverse effect on the Company’s business, financial condition, operating results and prospects.

The Company is subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws, and noncompliance with such laws can subject the Company to administrative, civil and criminal fines and penalties, collateral consequences, remedial measures and legal expenses, all of which could materially adversely affect the Company’s business, results of operations, financial condition and reputation.

The Company is subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws and regulations in various jurisdictions in which the Company conducts activities, including the United States Foreign Corrupt Practices Act (“FCPA”), the Corruption of Foreign Public Officials Act (Canada) (“CFPOA”), the UK Bribery Act 2010 and other similar anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions, laws and regulations. The FCPA, the CFPOA and the UK Bribery Act 2010 prohibit the Company and its officers, directors, employees and business partners acting on the Company’s behalf, including agents, from corruptly offering, promising, authorizing or providing anything of value to a “foreign official” for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment. The FCPA also requires companies to make and keep books, records and accounts that accurately reflect transactions and dispositions of assets and to maintain a system of adequate internal accounting controls. The UK Bribery Act also prohibits non-governmental “commercial” bribery and soliciting or accepting bribes. A violation of these laws or regulations could harm the Damon brand and adversely affect the Company’s business, financial condition, operating results and prospects.

The Company has direct or indirect interactions with officials and employees of government agencies and state-owned affiliated entities in the ordinary course of business. These interactions subject the Company to an increased level of compliance-related concerns. The Company is in the process of implementing policies and procedures designed to ensure compliance by it and its directors, officers, employees, representatives, consultants, agents and business partners with applicable anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws and regulations. However, the Company’s policies and procedures may not be sufficient, and its directors, officers, employees, representatives, consultants, agents, and business partners could engage in improper conduct for which the Company may be held responsible.

Non-compliance with anti-corruption, anti-bribery, anti-money laundering or financial and economic sanctions laws and regulations could subject the Company to whistleblower complaints, adverse media coverage, investigations, and severe administrative, civil and criminal sanctions, collateral consequences, remedial measures and legal expenses, all of which could harm the Damon brand and materially adversely affect the Company’s business, financial condition, operating results and prospects. In addition, changes in economic sanctions laws in the future could adversely impact the Company’s business and investments in the Company s securities.

The Company is subject to numerous environmental, health and safety laws and any breach of such laws may have a material adverse effect on the Company’s business, financial condition, operating results and prospects.

The Company is subject to numerous environmental, health and safety laws, including statutes, regulations, bylaws and other legal requirements. These laws relate to the generation, use, handling, storage, transportation and disposal of regulated substances, including hazardous substances (such as batteries), dangerous goods and waste, emissions or discharges into soil, water and air, including noise and odors (which could result in remediation obligations), and occupational health and safety matters, including indoor air quality. These legal requirements vary by location and can arise under federal, provincial, state or municipal laws. Any breach of such laws, regulations, directives or requirements would have a material adverse effect on the Company’s business, financial condition, operating results and prospects.

The Company may be adversely affected by the complexity, uncertainties and changes in automotive or internet related Canadian regulations or similar regulations of any countries it is selling motorcycles into.

The Company operates in the motorcycle and internet industry, both of which are extensively regulated by various governments. Regulations on vehicle homologation requirements may change over time, and potentially diverge in various regions, driving the need for increased vehicle variants, or discontinuation (temporary or permanent) of existing vehicle models.

In addition, the Company’s mobile applications are also regulated by various regulations, for example there are regulations related to the collection and sharing of data. If the Company’s mobile applications were found to be violating the regulations, the Company may be subject to administrative penalties, including warning, service suspension or removal of the Company’s mobile applications from the relevant mobile application store, which may materially adversely affect the Company’s business, financial condition, operating results and prospects.

Risks Related to Cybersecurity and Privacy

The Company’s inability to leverage vehicle and customer data could impact the servicing of its products, its software algorithms and impact research and development.

The Company will rely on data collected from the use of its vehicles, including vehicle data and data related to battery usage statistics. The Company will use this data in connection with the servicing and normal course software updates of its products, its software algorithms and the research, development and analysis of its motorcycles. The Company’s inability to obtain this data or the necessary rights to use this data or the Company’s inability to properly analyze or use this data could result in the Company’s inability to adequately service its vehicles or delay or otherwise negatively impact its research and development efforts. Any of the foregoing could materially adversely affect the Company’s business, financial condition, operating results and prospects.

Failure of information security and privacy concerns could subject the Company to penalties, damage its reputation and brand, and harm its business, financial condition, operating results and prospects.

The Company faces significant challenges with respect to information security and privacy, including the storage, transmission and sharing of confidential information. The Company collects, transmits and stores confidential and private information of its customers, such as personal information, including names, accounts, user IDs and passwords, and payment or transaction related information. In certain jurisdictions, the Company is also subject to certain laws and regulations, such as “Right to Repair” laws, which require the Company to provide third-party access to its network or vehicle systems.

The Company is required by the laws of its various operating regions to ensure the confidentiality, integrity, availability and authenticity of the information of its customers and suppliers, which is also essential to maintaining their confidence in its vehicles and services. The Company intends to implement strict information security policies and deploy advanced measures to implement the policies, including, among others, advanced encryption technologies. However, advances in technology, an increased level of sophistication and diversity of the Company’s vehicles and services, an increased level of expertise of hackers, new discoveries in the field of cryptography or others can still result in a compromise or breach of the measures that are used by the Company. If the Company is unable to protect its systems, and hence the information stored in its systems, from unauthorized access, use, disclosure, disruption, modification or destruction, such problems or security breaches could cause a loss, give rise to the Company’s liabilities to the owners of confidential information or even subject the Company to fines and penalties. In addition, complying with various laws and regulations could cause Company to incur substantial costs or require Company to change its business practices, including its data practices, in a manner adverse to its business.

Any unauthorized control or manipulation of the Company’s vehicles’ systems could result in loss of confidence in the Company and its vehicles and harm its business.

The Company’s vehicles contain complex information technology systems and built-in data connectivity to accept and install periodic remote updates to improve or update functionality. The Company has designed, implemented and tested security measures intended to prevent unauthorized access to its information technology networks and its vehicles and related systems. However, hackers may attempt to gain unauthorized access to modify, alter and use such networks, vehicles and systems to gain control of or to change Company’s solutions’ functionality, user interface and performance characteristics, or to gain access to data stored in or generated by the vehicles. Future vulnerabilities could be identified and Company’s efforts to remediate such vulnerabilities may not be successful. Any unauthorized access to or control of Company’s vehicles, or any loss of customer data, could result in legal claims or proceedings and remediation of such problems could result in significant, unplanned capital expenditures. In addition, regardless of their veracity, reports of unauthorized access to its technology systems or data, as well as other factors that may result in the perception that Company’s vehicles, technology systems or data are capable of being “hacked,” could materially adversely affect Company’s brand and its business, financial conditions, operating results and prospects.

The Company is subject to information technology and cybersecurity risks to operational systems, security systems, infrastructure, integrated software in its motorcycles and customer data processed by it, and any material failure, weakness, interruption, cyber event, incident or breach of security could prevent the Company from effectively operating its business, harm its reputation or materially adversely affect its business, financial condition, operating results and prospects.

The Company is at risk for interruptions, outages and breaches of: (i) operational systems, including business, financial, accounting, product development, data processing or production processes, owned by it or its third-party vendors or suppliers; (ii) facility security systems, owned by it or its third-party vendors or suppliers; (iii) transmission control modules or other in-product technology, owned by it or its third-party vendors or suppliers; (iv) the integrated software in Company’s vehicles; or (v) customer or driver data that Company processes or Company’s third-party vendors or suppliers process on its behalf. Such cyber incidents could materially disrupt operational systems; result in loss of intellectual property, trade secrets or other proprietary or competitively sensitive information; compromise certain information of customers, employees, suppliers or others; jeopardize the security of the Company’s facilities; or affect the performance of transmission control modules or other in-product technology and the integrated software in the Company’s vehicles. A cyber incident could be caused by disasters, insiders (through inadvertence or with malicious intent) or malicious third parties (including nation-states or nation-state supported actors) using sophisticated, targeted methods to circumvent firewalls, encryption and other security defenses, including hacking, fraud, trickery, social engineering or other forms of deception. The techniques used by cyber attackers change frequently and may be difficult to detect for long periods of time.

Although the Company maintains information technology measures designed to protect it against intellectual property theft, data breaches and other cyber incidents, such measures will require updates and improvements, and there is no guarantee that such measures will be adequate to detect, prevent or mitigate cyber incidents. Any implementation, maintenance, segregation and improvement of the Company’s systems may require significant management time, support and cost. Moreover, there are inherent risks associated with developing, improving, expanding and updating current systems, including the disruption of the Company’s data management, procurement, production execution, finance, supply chain and sales and service processes. These risks may affect the Company’s ability to manage its data and inventory, procure parts or supplies or produce, sell, deliver and service its vehicles, adequately protect its intellectual property or achieve and maintain compliance with, or realize available benefits under, applicable laws, regulations and contracts. The Company cannot be sure that these systems upon which it relies, including those of its third-party vendors or suppliers, will be effectively implemented, maintained or expanded as planned. If the Company does not successfully implement, maintain or expand these systems as planned, its operations may be disrupted, the Company’s ability to accurately and timely report its financial results could be impaired, and deficiencies may arise in the Company’s internal control over financial reporting, which may impact the Company’s ability to certify its financial results. Moreover, the Company’s proprietary information or intellectual property could be compromised or misappropriated, and its reputation may be adversely affected. If these systems do not operate as expected, Damon may be required to expend significant resources to make corrections or find alternative sources for performing these functions.

A significant cyber incident could impact the Company’s manufacturing capacity or production capability, harm its reputation, cause the Company to breach its contractual arrangements with other parties or subject Damon to regulatory actions or litigation, any of which could materially adversely affect its business, financial condition, operating results or prospects. In addition, the Company’s insurance coverage for cyberattacks may not be sufficient to cover all the losses it may experience as a result of a cyber incident.

The Company also collects, uses, discloses, stores, transmits and otherwise processes customer and employee and others’ data as part of its business and operations, which may include personal data or confidential or proprietary information. The Company uses its vehicles’ electronic systems to log information about each vehicle’s use, such as charge time, battery usage, mileage and rider behavior, in order to aid it in vehicle diagnostics, repair and maintenance, as well as to help it customize and optimize the riding experience. The Company’s users may object to the use of this data, which may harm the Company’s business. The Company also works with partners and third-party service providers or vendors that may in the course of their business relationship with the Company collect, store and process such data on the Company’s behalf and in connection with Damon’s vehicles and services. There can be no assurance that any security measures that Damon or its third-party service providers, vendors, or suppliers have implemented will be effective against current or future security threats. While the Company has developed systems and processes designed to protect the availability, integrity, confidentiality and security of the Company’s, the Company’s customers’, and employees’ and others’ data, such security measures or those of its third-party service providers, vendors or suppliers could fail and result in unauthorized access to or disclosure, acquisition, encryption, modification, misuse, loss, destruction or other compromise of such data. If a compromise of such data were to occur, the Company may become liable under its contracts with other parties and under applicable law for damages and incur penalties and other costs to respond to, investigate and remedy such an incident. Laws in all 50 states of the U.S., in Canada and in Europe require the Company to provide notice to individuals, customers, regulators, credit reporting agencies and others when certain sensitive information has been compromised as a result of a security breach or where a security breach creates a real risk of significant harm to an individual. Such laws are inconsistent and compliance if there is a widespread data breach could be costly. Depending on the facts and circumstances of such an incident, these damages, penalties, fines and costs could be significant. Any such event could harm the Company’s reputation and result in litigation against it, or otherwise materially adversely affect its business, financial condition, operating results and prospects.

Risks Related to Litigation, Product Warranty and Recalls

Adverse judgments or settlements in legal proceedings, including the claim brought by Jay Giraud or those that may arise relating to the Business Combination, could materially harm our business, financial condition, operating results, and cash flows.

We may be a party to claims that arise from time to time in the ordinary course of our business, which may include those related to, for example, contracts, sub-contracts, protection of confidential information or trade secrets, adversary proceedings arising from customer bankruptcies, employment of our workforce and immigration requirements, or compliance with any of a wide array of state and federal statutes, rules, and regulations that pertain to different aspects of our business. In addition, we may deem it advisable to initiate expensive litigation to protect our business interests. We also face litigation risk related to the Business Combination. Business combinations often give rise to claims and legal proceedings, including shareholder lawsuits. Any shareholder claims or lawsuits alleging inadequate disclosure, breach of fiduciary duty, adequacy of consideration or other claims in connection with the Business Combination could lead to costly litigation and diversion of management’s time and attention from our business.

For example, on March 7, 2025, we were served with a civil claim in the Supreme Court of British Columbia by a former director and CEO, alleging, among other things, that the Company and its Board of Directors failed to honor agreed-upon settlement terms related to his resignation. Please refer to the disclosure under “Business – Legal Proceedings” for details regarding this proceeding. While we deny the allegations, there is no guarantee that we will prevail in this matter, that additional claims will not arise, or that this or other litigation will not result in substantial costs, penalties, or other liabilities that could have a material adverse effect on our business, financial condition, or results of operations.

Furthermore, while we maintain insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject to various exclusions as well as deductibles and caps on amounts of coverage. Even if we believe a claim is covered by insurance, insurers may dispute our entitlement to coverage for a variety of potential reasons, which may affect the timing and, if the insurers prevail, the amount of our available insurance coverage for a particular claim.

There is a risk that we will not be successful or otherwise be able to satisfactorily resolve any such claims or litigation. In addition, litigation and other legal claims are subject to inherent uncertainties. Those uncertainties include, but are not limited to, litigation costs and attorneys’ fees, unpredictable judicial or jury decisions, and the differing laws and judicial proclivities regarding damage awards among the jurisdictions in which we operate. Unexpected outcomes in such legal proceedings, or changes in management’s evaluation or predictions of the likely outcomes of such proceedings (possibly resulting in changes in established reserves), could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

The Company may become subject to product liability claims, which could harm the Company’s financial condition and liquidity if it is not able to successfully defend or insure against such claims.

The Company may become subject to product liability claims, which could harm the Company’s business, financial condition, operating results and prospects. The motorcycle industry experiences significant product liability claims and the Company faces inherent risk of exposure to claims if its motorcycles do not perform as expected or malfunction resulting in personal injury or death. The Company’s risks in this area are particularly pronounced given the limited field experience of its motorcycles. A successful product liability claim against the Company could require it to pay a substantial monetary award. Moreover, a product liability claim could generate substantial negative publicity about the Company’s motorcycles, other personal mobility products and its business in general and inhibit or prevent commercialization of other future motorcycle candidates which could harm the Damon brand and have a material and adverse effect the Company’s business, financial condition, operating results and prospects. The Company plans to seek adequate product liability insurance for all its motorcycles, but any such insurance might not be sufficient to cover all potential product liability claims and may not be available on terms satisfactory to the Company. Any lawsuit seeking significant monetary damages either in excess of such liability coverage, or outside of such liability coverage, may harm the Damon brand and have a material adverse effect on the Company’s business, financial condition, operating results and prospects. The Company may not be able to secure additional product liability insurance coverage on commercially acceptable terms or at reasonable costs when needed, particularly if it faces liability for its products and is forced to make a claim under its product liability insurance policy(ies).

The Company’s warranty reserves may be insufficient to cover future warranty claims which could adversely affect its business, financial condition, operating results and prospects.

As the Company’s vehicles enter production, the Company will need to maintain warranty reserves to cover warranty-related claims. If the Company’s warranty reserves are inadequate to cover future warranty claims on its vehicles, the Company’s business, financial condition, operating results and prospects could be materially and adversely affected. The Company expects to record and adjust warranty reserves based on changes in estimated costs and actual warranty costs. However, the Company has limited operating experience with its vehicles, and therefore no experience with warranty claims for these vehicles or with estimating warranty reserves, which renders necessary reserves hard to predict. In the future, the Company may become subject to significant and unexpected warranty expenses. There can be no assurances that then-existing warranty reserves will be sufficient to cover all claims.

The Company may be compelled to undertake product recalls or take other actions, which could adversely affect its brand image and financial performance.

If the Company’s vehicles are subject to recalls in the future, the Company may be subject to adverse publicity, damage to its brand and liability for costs. In the future, the Company may at various times, voluntarily or involuntarily, initiate a recall if any of its vehicles, including any systems or parts sourced from its suppliers, prove to be defective or noncompliant with applicable laws and regulations. Such recalls, whether voluntary or involuntary or caused by systems or components engineered or manufactured by the Company or its suppliers, could involve significant expense and could materially adversely affect the Damon brand image in the target markets of the Company, as well as the Company’s business, financial condition, operating results and prospects.

Damon Motors was previously involved in a dispute with the lessor of Damon Motors’ former manufacturing facility in Surrey, British Columbia, which has since been settled.

In April 2023, Damon Motors received a notice of default from a property management company related to Damon Motors’ lease of a facility in Surrey, British Columbia. The notice of default asserts a breach of the lease and seeks approximately CAD$4.1 million in damages, in addition to accruing interest and other costs. Damon Motors executed a settlement agreement effective on June 30, 2023, whereby it subsequently settled the amount owing with an issuance of convertible notes and instalments of cash payments. Should Damon Motors default under the terms of the settlement agreement, Damon Motors could be forced to pay a substantial monetary sum to the property management company and may also suffer reputational or other harm.

Damon Motors was in compliance with the settlement and has agreed with the lessor to extend the terms of the agreement on any further payments as follows: (a) 1/3 of the remaining settlement amount on or before the date that is 30 days following completion of the Business Combination; (b) 1/3 of the remaining settlement amount on or before the date that is 60 days following completion of the Business Combination; and (c) 1/3 of the remaining settlement amount on or before the date that is 90 days following completion of the Business Combination. Damon Motors has not yet made any of the three scheduled payments under the agreement. The parties are negotiating ways to mitigate damages to the lessor and reduce Damon Motors’ liability; however, there is no guarantee that a resolution will be reached soon or at all.

Use of Proceeds

Assuming a maximum raise of $30,600,000 which includes the Investor Processing Fee, we estimate that the net proceeds from the sale of the Units in this Offering will be approximately $27,900,000, after deducting underwriting commissions and estimated Offering expenses. The following table sets forth a breakdown of our estimated use of our gross proceeds as we currently expect to use them, assuming the sale of, respectively, 25%, 50%, 75% and 100% of the Units.

We intend to use the net proceeds from this Offering for working capital and general corporate purposes, including research and development, as well as marketing and sales of our products. Additionally, unless otherwise waived, we expect to use 15% of the net proceeds from this Offering to pay towards the outstanding balance of the Streeterville Note, as required in accordance with the terms of such Note. As of August 26, 2025, the total outstanding balance under the Streeterville June 2024 Note consists of $4,491,700 in principal and $720,381 in accrued interest. Please refer to the section “Management’s Discussion and Analysis of Financial Conditions and Results of Operations – Recent Transactions – Second Amendment to June 2024 Secured Promissory Note” herein for a more detailed discussion of the terms of the Streeterville Note.

The foregoing represents our current intentions to use and allocate the net proceeds of this Offering based upon our present plans and business conditions. Our management, however, will have broad discretion in the way that we use the net proceeds of this Offering. Pending the final application of the net proceeds of this Offering, we intend to invest the net proceeds of this Offering in short-term, interest-bearing, investment-grade securities. See “Risk Factors” herein for more information.

We believe that the expected net proceeds from this Offering and our existing cash and cash equivalents, will be sufficient to fund our operations for at least the next 12 months, although we cannot assure you that this will occur.

DIVIDEND POLICY

We have never declared or paid cash dividends on our Common Shares. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any cash dividends in the near future. We may also enter into credit agreements or other borrowing arrangements in the future that will restrict our ability to declare or pay cash dividends. Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements, contractual restrictions, general business conditions and other factors that our board of directors may deem relevant. See “Risk Factors — We do not intend to pay cash dividends to our shareholders” herein for more information.

Market INFORMATION

Our Common Shares are traded on the OTCID Basic Market under the symbol “DMNIF”. As of the date of this filing, there were approximately 339 holders of record of our Common Shares. This includes Cede & Co., which holds shares on behalf of the beneficial owners of the Company’s Common Shares. Because brokers and other institutions hold many of our shares on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders.

CAPITALIZATION

The following table sets forth our cash and cash equivalents and consolidated capitalization as of March 31, 2025:

The pro forma as adjusted information in the balance sheet data below is illustrative only. You should read this table together with the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” herein and our unaudited interim condensed consolidated financial statements and related notes as of March 31, 2025.

The above discussion is based on 4,030,127 (pre-reverse split - 503,766,493)   Common Shares issued and outstanding as of March 31, 2025, and excludes, as of that date, the following:

Dilution

Investors will incur immediate dilution in the net tangible book value of their Common Shares. Net tangible book value per share is calculated by subtracting our total liabilities from our total tangible assets and dividing the result by the number of outstanding Common Shares.

Our net tangible book value is determined by dividing our total tangible assets, less total liabilities, by the number of our Common Shares outstanding as of March 31, 2025. Our net tangible book value as of March 31, 2025, was negative $20,507,457 or negative $5.09 (pre-reverse split - $0.04) per Common Share. Dilution in net tangible book value per share represents the difference between the amount per share paid by purchasers of Units in this Offering and the net tangible book value per share of our Common Shares immediately after this Offering. On a pro forma basis, giving effect to the issuance of an aggregate of 15,573,684 (pre-reverse split - 1,946,710,549) Common Shares after March 31, 2025 and as of the date of this filing, in connection with shares issued upon exercise of the Series A Warrants, our historical net tangible book value as of March 31, 2025 would have been negative $20,507,457, or negative $1.05 (pre-reverse split - $0.008) per Common Share.

The following table illustrates the approximate per share dilution to new investors discussed above, assuming the sale of respectively, 100%, 75%, 50% and 25% of the Units offered for sale in this Offering (after deducting our estimated offering expenses $1,323,000   and DealMaker commissions of $1,377,000 being proportionately reduced for 75%, 50% and 25% of the Units offered for sale in this Offering and assuming no issuance of Bonus Units):

The above discussion is based on 4,030,127 (pre-reverse split - 503,766,493)   Common Shares issued and outstanding as of March 31, 2025, and excludes, as of that date, the following:

To the extent that convertible and exercisable securities discussed above have been or may be converted or exercised or we issue other Common Shares or securities convertible or exercisable into Common Shares, investors purchasing Units in this Offering may experience further dilution. In addition, we may seek to raise additional capital in the future through the sale of equity or convertible debt securities. To the extent we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result in further dilution to our shareholders.

UNAUDITED PRO FORMA CONDENSED COMBINED
AND CONSOLIDATED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined and consolidated financial information presents the combination of the financial information of Damon Inc. (f/k/a Grafiti Holding Inc.) and Subsidiaries (the “Company”, “Damon”, “Legacy Grafiti” or “Pubco”) and Damon Motors Inc. (“Legacy Damon”) adjusted to give effect to the Business Combination and related transactions. The following unaudited pro forma condensed combined and consolidated financial information has been prepared in accordance with Article 11 of Regulation S-X. Defined terms included below have the same meaning as terms defined and included elsewhere in this Offering Statement.

The historical financial information of Damon was derived from the unaudited financial statements of Damon Inc. for the nine months ended March 31, 2025, and the audited consolidated financial statements of Damon Inc. as of and for the year ended June 30, 2024, included elsewhere in this Offering Cicrular. This historical financial information reflects Legacy Damon’s activity for the period from July 1, 2024 to November 12, 2024, and the combined Company’s activity from November 13, 2024 to March 31, 2025. The pro forma financial information is adjusted for acquisition of Legacy Grafiti which reflects Legacy Grafiti’s activity for the period July 1, 2024 to November 12, 2024. As the Business Combination is reflected in the balance sheet of the Damon as of March 31, 2025, and therefore, a pro forma balance sheet was not included in the unaudited pro forma condensed combined financial information in accordance with Article 11 of Regulation S-X.

The historical financial information of Legacy Grafiti in the condensed combined and consolidated statement of operations for the year ended June 30, 2024 consists of carve-out financial statements of Grafiti limited (“Grafiti UK”), as Legacy Grafiti was the parent non-operating holding company of Grafiti UK, and the operations of Legacy Grafiti following the carve-out from XTI (defined below). The unaudited pro forma financial information has been prepared utilizing the unaudited carve-out financial statements of Grafiti UK, adjusted to reflect the equity structure of Legacy Grafiti and the reorganization as a result of the spin-off of Legacy Grafiti from XTI Aerospace, Inc., (“XTI”, formerly known as Inpixon) for all operating results prior to December 27, 2023, as incorporated in the financial statements of Legacy Grafiti as of and for the year ended June 30, 2024. The historical financial information of Legacy Grafiti was derived from the books and records of Legacy Grafiti for the period between July 1, 2024 to November 12, 2024, and the audited consolidated financial statements of Legacy Grafiti as of and for the year ended June 30, 2024, included elsewhere in this Offering Circular. The unaudited pro forma financial information has been prepared on a basis consistent with the financial statements of Legacy Damon and Legacy Grafiti, respectively. This information should be read together with the financial statements of Legacy Damon and Legacy Grafiti and related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this Offering Circular, as applicable. The unaudited pro forma condensed combined and consolidated financial information is prepared using the reporting currency of the United States Dollar.

The unaudited pro forma condensed combined and consolidated statement of operations for the nine months ended March 31, 2025, and for the year ended June 30, 2024 gives pro forma effect to the Business Combination and related transactions as if they had occurred on July 1, 2023, the beginning of the earliest period presented.

These unaudited pro forma condensed combined and consolidated financial statements are for informational purposes only. They do not purport to indicate the results that would have been obtained had the Business Combination and related transactions actually been completed on the assumed date or for the period presented. The pro forma adjustments are based on the information currently available and the assumptions and estimates underlying the pro forma adjustments are described in the accompanying notes. Actual results may differ materially from the assumptions within the accompanying unaudited pro forma condensed combined and consolidated financial information.

Description of the Business Combination Agreement

On October 23, 2023, a Business Combination Agreement was entered into by and among XTI Aerospace, Inc. (then parent company of Grafiti), Grafiti, 1444842 B.C. Ltd., a British Columbia corporation and a newly formed wholly-owned subsidiary of Grafiti (“Amalco Sub”), and Legacy Damon, pursuant to which Legacy Damon combined and merged with Amalco Sub with Legacy Damon continuing as the surviving entity.

On November 13, 2024, Legacy Damon and Amalco Sub amalgamated to continue as a wholly-owned subsidiary of Grafiti (the “Amalgamation”). Following the Amalgamation, Legacy Damon became a wholly-owned subsidiary of Legacy Grafiti and Legacy Grafiti was immediately renamed to “Damon Inc.”.

Following the consummation of the Business Combination, the holders of the historical outstanding capital stock of Legacy Damon owned approximately 77.8% of the outstanding capital stock of Pubco and approximately 81.5% on a fully diluted basis. Following the consummation of the Business Combination, the holders of the historical outstanding capital stock of Legacy Grafiti owned approximately 22.2% of the outstanding capital stock of Pubco and approximately 18.5% on a fully dilutive basis.

Grafiti Promissory Note - Streeterville Capital, LLC

On June 26, 2024, Grafiti and Streeterville Capital, LLC (“Streeterville”) entered into a promissory note agreement (the “Grafiti Promissory Note”) for an amount up to $6,470,000 bearing an interest rate of 10% per annum and due 18 months after the issue date. In connection with the close of the Business Combination, Streeterville will pay an aggregate amount of $5,000,000 in consideration for the Promissory Note of which $3,500,000 was initially sent to an escrow account. Of the remaining $1,470,000 under the Promissory Note, $1,450,000 relates to original issue discount (“OID”) and $20,000 relates to issuance costs to cover legal, accounting, due diligence, monitoring and other transaction costs. Streeterville will be unconditionally obligated to release to Pubco the amount held in escrow upon completion of the certain Business Combination Agreement, and listing of the combined company on a national securities exchange. On September 23, 2024, an additional $350,000 was released to Grafiti from the escrow account. The remaining $3,150,000 in escrow was released to the combined Company following the consummation of the Business Combination. The unaudited pro forma condensed combined and consolidated financial statements include a pro forma adjustment for the $3,150,000 in escrow as if it had occurred on July 1, 2023 (see adjustments D in Note 4).

UNAUDITED PRO FORMA CONDENSED COMBINED AND CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 2025

UNAUDITED PRO FORMA CONDENSED COMBINED AND CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 2024

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED AND CONSOLIDATED

FINANCIAL INFORMATION

Note 1. Basis of Presentation

The unaudited pro forma condensed combined and consolidated financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings, or cost savings that may be associated with the spin-off and the Business Combination. The unaudited pro forma condensed combined and consolidated financial information is not necessarily indicative of what the actual results of operations and financial position would have been had the spin-off and the Business Combination and related transactions taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of the post-combination company. They should be read in conjunction with the historical financial statements and notes thereto of Legacy Damon and Legacy Grafiti.

Unaudited Pro Forma Condensed Combined and Consolidated Statements of Operations

The historical financial information of Damon was derived from the unaudited financial statements of Damon Inc. for the nine months ended March 31, 2025, and the audited consolidated financial statements of Legacy Damon for the year ended June 30, 2024, included elsewhere in this Offering Circular. The historical financial information of Damon for the nine months ended March 31, 2025, reflects Legacy Damon’s activity for the period from July 1, 2024 to November 12, 2024, and the combined Company’s activity from November 13, 2024 to March 31, 2025. The historical financial information of Grafiti for the nine months ended March 31, 2025 is adjusted for acquisition of Legacy Grafiti and consists of Legacy Grafiti’s activity for the period July 1, 2024 to November 12, 2024 derived from Legacy Grafiti’s historical books and records. The historical financial information of Legacy Grafiti for the year ended June 30, 2024, consists of the carve-out financial statements of Grafiti UK, as Legacy Grafiti was the parent non-operating holding company of Grafiti UK and the operations of Grafiti following the carve-out from XTI on December 27, 2023, and was derived from the audited financial statements of Legacy Grafiti for the year ended June 30, 2024, included elsewhere in this Offering Circular.

Note 2. Accounting Policies

Following the consummation of the Business Combination, management performed a comprehensive review of the two entities’ accounting policies. As a result of the review, management did not identify any differences that would have a material impact on the unaudited pro forma condensed combined and consolidated financial information. As a result, the unaudited pro forma condensed combined and consolidated financial information does not assume any differences in accounting policies.

Note 3. Estimated Purchase Price Consideration

Estimated purchase price of $11,123,075 related to the Business Combination is comprised of the following components:

The estimated fair value of common stock of $11,123,075 included in the total equity consideration is based on 36,923 (pre-reverse split - 4,615,384) shares of common stock of the post-merger Damon Inc. common stock. The fair value of each share was determined to be $301 (pre-reverse split - $2.41), which was the closing price after one day of trading on November 18, 2024 of the combined company (Damon Inc.). Management notes that the closing price after one day of trading was determined to be the level 1 input for fair market value since the listing agent determined the beginning of day share price at $500 (pre-reverse split - $4) per share and active trading on Nasdaq resulted in the observable market participant impact to result in $301 (pre-reverse split - $2.41) per share.

The Business Combination is considered a reverse acquisition. As such, the acquisition-date fair value of the consideration transferred is calculated based on the number of equity interests Damon would have had to issue to shareholders of Grafiti to obtain the same ownership interest in Pubco. Any excess of the consideration transferred was allocated to goodwill.

Note 4. Adjustments to Unaudited Pro Forma Condensed Combined and Consolidated Financial Information

The unaudited pro forma condensed combined and consolidated financial information has been prepared to illustrate the effect of the Business Combination and related transactions and has been prepared for informational purposes only.

The following unaudited pro forma condensed combined and consolidated financial information has been prepared in accordance with Article 11 of Regulation S-X. The unaudited pro forma condensed combined and consolidated financial information has been prepared to illustrate the effect of the Business Combination and related transactions and has been prepared for informational purposes only. The Company includes subsequent financing transactions and transaction accounting adjustments in the unaudited pro forma condensed combined and consolidated financial information as if they had occurred as of July 1, 2023.

The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined and consolidated statement of operations are based upon the number of shares of Pubco Common Stock outstanding, assuming the Business Combination and related transactions occurred on July 1, 2023.

Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined and Consolidated Statement of Operations

The transaction accounting adjustments included in the unaudited pro forma condensed combined and consolidated statement of operations for the year ended June 30, 2024 and for the nine months ended March 31, 2025 are as follows:

Note 5 Net Loss per Share

Net loss per share was calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the Business Combination and the related transactions, assuming the shares were outstanding since July 1, 2023. As the Business Combination and the related transactions are being reflected as if they had occurred at the beginning of the earliest period presented, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares issuable relating to the Business Combination and related transactions have been outstanding for the entirety of all periods presented.

The unaudited pro forma condensed combined and consolidated financial information has been prepared for the nine months ended March 31, 2025 and for the year ended June 30, 2024:

Management’s Discussion and Analysis of Financial Condition
and Results of Operations

The following discussion and analysis of the financial condition and results of operations of Damon should be read in conjunction with the accompanying interim unaudited condensed consolidated financial statements of Damon as of March 31, 2025, consolidated financial statements of Damon Motors for the fiscal years ended June 30, 2024, 2023 and 2022, and related notes included elsewhere in this Offering Circular. Some of the information contained in this discussion and analysis or set forth elsewhere, including information with respect to its plans and strategy for our business and related financing, includes forward-looking statements that involve risks, uncertainties and assumptions. You should read the “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Unless otherwise noted, all historical information prior to the quarter ended December 31, 2024, in which the Business Combination occurred, as discussed in this section reflects the operations of Damon Motors, which is deemed the accounting acquirer in the Business Combination.

“Fiscal 2024,” “Fiscal 2023” and “Fiscal 2022” are to Damon Motors’s fiscal years ended June 30, 2024, 2023 and 2022, respectively.

Business Overview

Our Personal Mobility Products Development Business Through Damon Motors

Damon Inc, through its wholly-owned subsidiary, Damon Motors, is developing electric motorcycles and other personal mobility products that seek to empower the personal mobility industry through innovation, data intelligence and strategic partnerships. Damon Motors is developing technology and investing in the capabilities to lead an integrated personal mobility ecosystem from individual travels to last mile delivery. With decades of combined management and engineering experience across the team’s careers, and a commitment to low carbon personal mobility solutions, Damon Motors is seeking to introduce existing enthusiasts to high-performance electric products while bringing new riders to the motorcycle community with first of its kind advances in zero emissions motorcycle performance, safety, connectivity and AI.

Founded in 2017, Damon Motors started reimagining the future of motorcycling by means of advanced safety design, electric vehicle powertrain technology and user experience. In 2019, Damon Motors took its first alpha prototype motorcycles and safety systems into the field to test the concept. In 2021, Damon Motors expanded its operations and research and development expertise to accelerate the engineering and development of its HyperDrive platform drive unit and the HyperSport motorcycle. Through core technology advancements, Damon Motors electric motorcycles are in prototype phase of product validation.

Damon Motors’ electric vehicles are developed with a set of proprietary design principles that elevate the brand, deliver differentiated riding experiences and bring emotion to electric propulsion. The initial product portfolio of motorcycle models will be built upon and utilize a single powertrain platform called HyperDrive™. As a patented, monocoque-constructed battery-chassis, HyperDrive houses a proprietary 150 kW 6-phase liquid cooled IPM motor-gearbox and proprietary electronics. This platform approach establishes a capital-efficient path to grow the product line to meet a wide range of future segments and price points, while also supporting a wide range of future motorcycle models and power sizes that share as much as 85 percent common parts. By using the frame of the battery as the motorcycle’s chassis, HyperDrive also achieves valuable weight and cost reduction advantages. With 150 kW of power at its disposal, HyperDrive has been specifically designed to compete with the performance of market leaders in the high-performance motorcycle market, whether internal combustion or electric. Thanks to the energy modularity designed into it, HyperDrive-based motorcycles can be detuned in power, energy and thus cost to support 500 – 1500cc power equivalent classes of motorcycles in both the North American and European markets, with price points ranging from $20,000 - $80,000.

The HyperDrive platform is contrasted by the smaller, less powerful and lower cost HyperLite platform, currently in its early design phase. HyperLite will be developed using a very similar design architecture as HyperDrive, enabling the production of a range of light weight, low to medium cost motorcycles and scooters with milder levels of horsepower that are more common in overseas and developing markets. With these two platforms paired with Damon Motors’ three patented cornerstone technologies, CoPilot™, Shift™ and its AI-enabled cloud platform. Damon Motors’ long-term objective is to build a premium, high-tech, electric motorcycle company that rivals the largest incumbents in both profit and annual volume, by providing a technologically enhanced riding experience that is not currently available from other manufacturers.

CoPilot provides a novel rider assistance and warning system integrated into the motorcycle. Shift allows the handlebars and foot pegs to mechatronically adjust on the fly, addressing issues of ergonomic comfort and allowing users to select different riding positions for changing conditions such as a lower, more aerodynamic position for highway use or a more upright position for urban use. Its AI-enabled cloud will collect environmental and situational data that, paired with over-the-air software updates, can drive a continual loop of collision warning improvements, with an aim to further reduce accident probability over time.

The commercial production of Damon Motors’ motorcycles is expected to commence after passing various internal and external tests and undergoing a self-certification process required for US-bound vehicle homologation. These tests include: the completion of Damon Motors’ ride quality and long-term durability testing, completion of FCC Title 47 certification for the onboard charger, completion of UN 38.3 battery testing, completion of Damon Motors’ internal battery testing, extreme temperature operation verification, brake testing per FMVSS, and an internal and external review of FMVSS compliance with Damon Motors engineering subcontractor TUV of Germany.

Our SAVES Distribution Business Through Grafiti Limited

Damon, through its wholly-owned subsidiary, Grafiti Limited, distributes in the UK and certain other European countries data analytics and visualization software products referred to as SAVES primarily for scientists and engineers. Grafiti Limited products can be downloaded to a user’s desktop. These products help scientific research in the health and life sciences domain in the discovery of new drugs, in the study of the efficacy of established drugs and therapies, and in epidemic propagation research, among other applications. Engineers use our products for a multitude of applications which include, but are not limited to, conducting surface modelling analysis and curve fitting in order to design new engineering processes, studying signal attenuation and propagation in radio engineering. Potential automobile and motorcycle applications could include surface panel design for aerodynamics, aesthetic symmetry, and calculated asymmetry among others. We believe the Grafiti Limited regression analysis product could also be used for predicting vehicle sharing demand and pricing trends in various markets based on a wide range of variables.

Grafiti Limited’s strategy is to build a broader, long term customer base by increasing its sales of Grafiti Limited’s product offerings which will include cloud and Macintosh compatible data analytics and statistical visualization software products. We believe this will enable the Grafiti Limited business to focus on generating more recurring revenues in the future.

Grafiti Limited was formed by the Parent on May 13, 2020, as a distribution arm for its SAVES products in the UK market and part of the European market.

Our Corporate Strategy

We are pursuing a corporate strategy focused on developing a business offering of end-to-end solutions ranging from personal mobility products to the collection of data to delivering insights from that data to our customers with a focus on safety and data intelligence and engineering services. In connection with such strategy and to facilitate our long-term growth, we continue to evaluate various strategic transactions, including acquisitions of companies with personal mobility products, technologies and IP that complement those goals by adding technology, differentiation, customers and/or revenue. We are primarily looking for accretive acquisitions that have business value and operational synergies, but will be opportunistic for other strategic and/or attractive transactions. We believe these complementary technologies will add value to the Company and allow us to provide a comprehensive integrated personal mobility ecosystem to our customers. In addition, we may seek to expand our capabilities around safety, security, artificial intelligence, augmented reality and virtual reality or other high growth sectors. Candidates with proven technologies and personal mobility products that complement our overall strategy may come from anywhere in the world, as long as there are strategic and financial reasons to make the acquisition. We are also exploring opportunities that will supplement our revenue growth. We are primarily looking for accretive acquisitions that have business value and operational synergies, yet also opportunistic for other strategic and/or attractive transactions that we believe may increase overall shareholder value, which may include, but not be limited to, other alternative investment opportunities, such as minority investments and joint ventures. If we make any acquisitions in the future, we expect that we may pay for such acquisitions using our equity securities and/or cash and debt financings in combinations appropriate for each acquisition.

Recent Transactions

Trust Shares Distribution in connection with Spin-Off of Grafiti Holding

On October 23, 2023, Parent and Grafiti Holding entered into a Separation and Distribution Agreement, pursuant to which all of the outstanding shares of Grafiti Limited were transferred to Grafiti Holding, such that on December 26, 2023, Grafiti Limited became a wholly-owned subsidiary of Grafiti Holding. Grafiti Limited was formed by the Parent on May 13, 2020 as a distribution arm for its SAVES products in the United Kingdom market and part of the European market. Following the reorganization, and in connection with the spin-off of Grafiti Holding from Parent, on December 27, 2023 (the “record date”), all of the outstanding common shares of the Company (the “Trust Shares”) were transferred to the Trust, to be held for the benefit of holders of the Parent’s common stock, preferred stock and those outstanding warrants that are contractually entitled to participate in the distribution, on a pro rata basis as of the record date (collectively, the “participating Parent securityholders”). On November 12, 2024, the Trust Shares were delivered to participating Parent securityholders, on a pro rata at a ratio of 1 for 50 resulting in the distribution of 28,293 (pre-reverse split - 3,536,746) Trust Shares to participating Parent securityholders.

Completion of Business Combination

On October 23, 2023, the Company, Parent, Damon Motors, and 1444842 B.C. LTD (“Amalco Sub”) entered into 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”). On November 13, 2024, Damon Motors and Amalco Sub amalgamated, with Damon Motors continuing 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”). Pursuant to the Plan of Arrangement under the laws of British Columbia, as contemplated in the Damon Business Combination Agreement, securityholders of Damon Motors exchanged their securities of Damon Motors for amalgamation consideration consisting of:

The exchanges are based on an exchange ratio determined according to the formula in the Damon Business Combination Agreement.

The combined company commenced trading on the Nasdaq Global Market on November 18, 2024, under the symbol “DMN”. The Company’s common shares have been delisted from Nasdaq recently and began trading on the OTC Pink Current Market on May 20, 2025. The OTC Pink Current Market became the OTCID Basic Market effective as of July 1, 2025.

As a result of the closing of the Business Combination, a change in control of the Company has occurred, and Damon Motors became a wholly owned subsidiary of the Company. Following the issuance of the amalgamation consideration pursuant to the Plan of Arrangement, the Company’s security holders immediately prior to the effective time of the Amalgamation (the “Effective Time”) retained beneficial ownership of approximately 18% of the outstanding Common Shares of the Company on a fully-diluted basis and Damon Motors security holders immediately prior to the Effective Time acquired beneficial ownership of Common Shares amounting to approximately 82% of the outstanding common shares of the Company on a fully-diluted basis.

Following the resignation of Jay Giraud from all officer and director positions with the Company as of December 4, 2024, all the multiple voting shares held by Mr. Giraud and his wholly-owned company were converted automatically into Common Shares on a one-for-one basis. After giving effect to the conversion and as of the date of this filing, the Company has only common shares outstanding, with no multiple voting shares remaining outstanding.

Financing Agreements

Streeterville June 2024 Note and Second Amendment to Note

On June 26, 2024, Grafiti Holding and Streeterville entered into the Note Purchase Agreement, pursuant to which Grafiti Holding sold a secured promissory note in an aggregate original principal amount of $6,470,000 in a private offering in reliance on exemptions from registration under applicable securities laws. The Note and the Note Purchase Agreement were amended by Amendment No. 1 as of October 31, 2024.

The 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, Streeterville paid the purchase price of $5,000,000 as follows: (a) $1,150,000 to Grafiti Holding; (b) $350,000 to Damon Motors as a loan from Grafiti Holding to Damon Motors, and (c) $3,500,000 into escrow, which was distributed to Grafiti Holding upon satisfaction of certain conditions including the consummation of the Business Combination and the listing of the post-closing company’s common shares on Nasdaq. Additionally, starting on the earlier of 13 months after the closing of the Business Combination or January 1, 2026, Streeterville may require the borrower to redeem up to one-sixth of the note’s initial principal and accrued interest monthly, and any unexercised redemption amounts can be carried over to future months.

In connection with the Streeterville loan transaction, Damon Motors Corporation, a Delaware corporation, Damon Subsidiary, and Damon Motors, each entered into a Guaranty, dated as of June 26, 2024, whereby Damon Motors and the Damon Subsidiary guaranteed the performance of Grafiti Holding’s obligations under the Note. Additionally, Grafiti Holding’s obligations under the Note are secured by a lien on the promissory note issued by Damon Motors to Grafiti Holding and all related claims, rights, and interests in such note issued by Damon Motors, pursuant to a Security Agreement between Streeterville and Grafiti Holding, dated June 26, 2024.

On February 27, 2025, the Company and Streeterville entered into the Note Amendment to the Note originally issued by the Company to Streeterville on June 26, 2024, in an original principal amount of $6,470,000.

Pursuant to the Note Amendment, the parties have agreed to amend the Note to grant Streeterville the right to convert from time to time at its election, all or any portion of the outstanding balance of the Note into Conversion Shares. The number of Conversion Shares deliverable under a conversion notice will be equal to the amount of the outstanding balance of the Note being converted, divided by the conversion price, which is 90% of the lowest daily volume weighted average price of the Company’s Common Shares reported by Bloomberg during the ten trading days preceding the delivery date of a conversion notice. This is subject to the Floor Price, which will be adjusted accordingly in the event of a share split or combination. If the Company issues any securities with a floor price less than $0.20 per share in the future, the Floor Price will automatically adjust to be equal to such lower floor price.

The Note Amendment contains an ownership limitation, pursuant to which the Company shall not effect any issuance of Conversion Shares to the extent that such issuance would cause Streeterville, together with its affiliates, to beneficially own a number of common shares exceeding 9.99% of the number of Common Shares outstanding on such date, including the Common Shares issuable upon such issuance.

In connection with the March Offering, the floor price under the June 2024 Note was adjusted to $0.0251, however, as a result of the reverse stock split on July 3, 2025, the adjusted floor price is $3.1375. We expect that the Floor Price will be further adjusted to $0.10 upon the first closing of any Common Shares sold under this Offering. As of August 26, 2025, the outstanding principal amount was partially repaid and reduced to $4,491,700, with an additional $720,381 in accrued unpaid interest, which may result in an issuance of 52,120,810 Common Shares, assuming a conversion price equal to $0.10 upon the first closing of any Common Shares sold under this Offering.

Additionally, as of August 26, 2025, the outstanding principal balance under the December 2024 SPA was $3,158,000, with an additional $173,916 in accrued unpaid interest. Streeterville may make purchases of Common Shares in satisfaction of outstanding pre-paid purchases pursuant to the pricing formula set forth in the December 2024 SPA. If the Company receives additional funding under the total $10,000,000 commitment or if Streeterville elects to purchase Common Shares in satisfaction of the outstanding balance under the December 2024 SPA, further issuances of Common Shares may occur.

December 2024 Securities Purchase Agreement with Streeterville

On December 20, 2024, we entered into the Streeterville Securities Purchase Agreement with Streeterville, as amended by the Amendment No. 1 to the Securities Purchase Agreement dated February 27, 2025. Under such agreement, the Company agreed to issue and sell to Streeterville one or more pre-paid purchases at an aggregate purchase price of up to the Total Commitment Amount ($10,000,000) for the purchase of the Company’s common shares. As consideration for Streeterville’s commitment, the Company also agreed to issue to Streeterville the Commitment Shares (2,744 (pre-reverse split - 343,053) Common Shares).

Each pre-paid purchase includes an original issue discount of 7% and accrues interest at an annual rate of 8%. For the initial pre-paid purchase, which closed on the Initial Closing Date, Streeterville paid $2,000,000, creating in an initial principal balance of $2,140,000.

Pursuant to the Streeterville Securities Purchase Agreement and a registration rights agreement entered into on the same date, the Company agreed to file the Registration Statement under the Securities Act, to register the resale of 144,000 (pre-reverse split - 18,000,000) Common Shares, including the Commitment Shares and Common Shares issuable pursuant to the pre-paid purchases. If the Registration Statement is declared effective within 90 days of the Initial Closing Date, which it was, and no default has occurred, and if requested by the Company, Streeterville will fund $1,000,000 for a second pre-paid purchase.

Within a committed two-year period, and subject to certain specified conditions, the Company may request the issuance of additional pre-paid purchases to Streeterville, with each purchase amount no less than $250,000, provided that the total outstanding balance of all pre-paid purchases does not exceed $3,000,000.

The proceeds from the pre-paid purchases are expected to be used for working capital and other corporate purposes. However, $100,000 from the initial pre-paid purchase funding, and 15% of the funding from subsequent pre-paid purchases, shall be used to repay the indebtedness under the Note issued to Streeterville in June 2024 with an original principal amount of $6,470,000.

Following the funding of each pre-paid purchase, Streeterville has the right, but not the obligation, to purchase from the Company its common shares not exceeding (i) the outstanding balance of the funded amount, and (ii) 9.99% beneficial ownership of the Company’s outstanding Common Shares. The purchase price of the Common Shares will be the lower of (i) $187.50 (pre-reverse split - $1.50) or (ii) 90% of the lowest daily VWAP during the ten consecutive trading days immediately prior to the purchase notice date, but not less than the floor price, which is equal to 20% of the “Minimum Price” as defined under Nasdaq Listing Rule 5635(d) prior to the applicable closing. Under the Streeterville Securities Purchase Agreement, the Company agreed that, if applicable, it will seek the Required Shareholder Approval, and until such approval is obtained, the Company will not request additional pre-paid purchases that may cause the total amount of Common Shares issuable to exceed the Exchange Cap. However, since the Company is no longer listed on Nasdaq, the Required Shareholder Approval and Exchange Cap no longer apply.

The outstanding pre-paid purchases, unless reduced by the Company’s sale of Common Shares to Streeterville as described, will remain outstanding and may be repaid in cash at the Company’s option. There is no maturity date for the outstanding balance of the pre-paid purchases. Additionally, if certain triggering events occur, including (a) the VWAP of the Company’s Common Shares falling below the floor price for at least five trading days within a seven-trading-day period, or (b) the Company having issued 75% of the shares under the Exchange Cap if an Exchange Cap applies, the Company must make monthly cash repayments of $350,000 in principal plus any accrued unpaid interest until the outstanding balance is fully repaid or the triggering event conditions are resolved. In an event of default as specified in the pre-paid purchase, Streeterville may accelerate repayment, requiring the outstanding balance to become immediately due, with a 10% increase to the principal and interest accruing at a rate of 18% per annum.

Under the Streeterville Securities Purchase Agreement, the Company has received an aggregate of $4,400,000 from Streeterville out of the Total Commitment Amount of $10,000,000, resulting in an outstanding principal balance of $4,708,000, excluding any accrued interest and prior to any purchase of common shares discussed below. Of the $4,400,000 received, a total of $460,000 has been used to repay the indebtedness under the secured promissory note issued to Streeterville in June 2024 with an original principal amount of $6,470,000.

As of August 26, 2025, Streeterville has purchased, and the Company has issued, a total of 65,068 (8,133,614 pre-reverse split 8,133,614) Common Shares to satisfy pre-paid purchases made through this date, based on the pricing formula described in the Streeterville Securities Purchase Agreement, and the outstanding principal balance has been reduced to $3,158,000, with an additional $173,916 in accrued interest.

Termination of East West and Braebeacon Loan Documents

On March 29, 2025, the Company entered into a letter agreement with Braebeacon Holdings Inc. (“Braebeacon”) to formally terminate the following loan agreements, under which the Company received no loan funds prior to such termination: (i) the Note Purchase Agreement, dated November 13, 2024, between the Company and Braebeacon; (ii) the Secured Promissory Note, dated November 13, 2024, issued by the Company to Braebeacon; (iii) the Security Agreement, dated November 13, 2024, executed by the Company in favor of Braebeacon; (iv) the Security Agreement, dated November 13, 2024, executed by Damon Motors, Inc., a wholly owned subsidiary of the Company, in favor of Braebeacon; (v) the Intellectual Property Security Agreement, dated November 13, 2024, executed by Damon Motors, Inc. in favor of Braebeacon; (vi) the Guaranty, dated November 13, 2024, executed by Damon Motors, Inc. in favor of Braebeacon; and (vii) the Guaranty, dated November 13, 2024, executed by Damon Motors Corporation, a wholly owned subsidiary of the Company, in favor of Braebeacon.

Completion of Registered Underwritten Offering 

On March 20, 2025, in connection with the March Offering, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Maxim Group LLC, as the sole underwriter (the “Underwriter”), pursuant to which the Company sold and issued: (i) 1,015,200 (pre-reverse split - 126,900,000) units (each a “Unit” and, collectively, the “Units”) at a public offering price of $16.25 (pre-reverse split - $0.130) per Unit, with each Unit consisting of (A) one Common Share and (B) one Series A Warrant (each a “Series A Warrant” and collectively, the “Series A Warrants”) to purchase one Common Share for cash or otherwise acquire such greater number of Common Shares as determined in accordance with the provisions of the Series A Warrant upon an alternate cashless exercise option; and (ii) 50,760 (pre-reverse split - 6,345,000) warrants to purchase Common Shares to the Underwriter (each a “Underwriter’s Warrant” and, collectively, the “Underwriter’s Warrants”) for cash or otherwise acquire such greater number of Common Shares as determined in accordance with the provisions of the Underwriter’s Warrant upon an alternate cashless exercise option. The Underwriter’s Warrants are identical to the Series A Warrants except that the Underwriter’s Warrants are subject to a 180-day lock-up pursuant to Rule 5110(e)(1) of FINRA.

Each Series A Warrant is exercisable at an initial exercise price of $24.375 (pre-reverse split - $0.195) per share (150% of the public offering price per Unit). The Series A Warrants will be exercisable from issuance and will expire two and one-half (2.5) years after issuance. Additionally, under the alternate cashless exercise option of the Series A Warrants, during the period of 90 calendar days following the issue date of the Series A Warrants, a holder of the Series A Warrant has the right to receive, without payment of any additional cash to the Company, an aggregate number of shares equal to the product of (x) the aggregate number of Common Shares that would be issuable upon a cash exercise of the Series A Warrant and (y) two and a half (2.5). Accordingly, the Company believed it was highly unlikely that a holder of the Series A Warrants would pay an exercise price in cash to receive one Common Share when the holder could instead choose the alternate cashless exercise option and pay no cash to receive 2.5 Common Shares. As a result, the Company will likely not receive any additional funds and does not expect to receive any additional funds upon the exercise of the Series A Warrants.

In addition, at 4:01 p.m. Eastern time on the 7^th trading day after the date of issuance (the “First Reset Date”), the exercise price of the Series A Warrants was reset to $6.275 (pre-reverse split - $0.0502) per share, which equaled the initial floor price based on the first reset formula provided in the Series A Warrants; and the number of shares issuable upon exercise was increased such that the aggregate exercise price of the Series A Warrants on the issuance date for the Common Shares underlying the Series A Warrants then outstanding remained unchanged. Subsequently, at 4:01 p.m. Eastern time on the 15^th trading day after the date of issuance (the “Second Reset Date”), the exercise price of the Series A Warrants was further reset to $3.1375 (pre-reverse split - $0.0251) per share, which equaled the second floor price based on the second reset formula provided in the Series A Warrants; and the number of shares issuable upon exercise was further increased such that the aggregate exercise price of the Series A Warrants on the issuance date for the Common Shares underlying the Series A Warrants then outstanding remained unchanged.

Under the Underwriting Agreement, the Company granted the Underwriter an option to purchase from the Company either up to an additional 152,280 (pre-reverse split - 19,035,000) Common Shares at a price of $16.125 (pre-reverse split - $0.129) per share or up to 152,280 (pre-reverse split - 19,035,000) Series A Warrants to purchase Common Shares at a price of $0.125 (pre-reverse split - $0.001) per warrant, or a combination of the two (the “Overallotment Option”). On March 21, 2025, the Underwriter exercised its Overallotment Option with respect to 152,280 (pre-reverse split - 19,035,000) Series A Warrants.

The Underwriter received a cash fee of six and a half percent (6.5%) of the aggregate gross proceeds raised in the March Offering as underwriting discounts and commissions. The Company paid $100,000 of the Underwriter’s out-of-pocket accountable expenses in connection with the March Offering.

The March Offering closed on March 21, 2025. The net proceeds to the Company from the March Offering were approximately $15 million, after deducting underwriting discounts and commissions and other offering expenses payable by the Company. The Company intends to use the net proceeds for working capital and general corporate purposes, including research and development as well as marketing and sales of the Company’s products. Additionally, the Company used approximately 14% of the net proceeds to repay the outstanding balance of the June 2024 Note.

The March Offering was made pursuant to a registration statement on Form S-1 (File No. 333-285872), which was initially filed with the SEC on March 18, 2025, and declared effective by the SEC on March 20, 2025, and a registration statement on Form S-1 (File No. 333- 285981), which was filed with the SEC on March 20, 2025 and became effective upon filing. The final prospectus relating to the March Offering was filed with the SEC on March 21, 2025.

Subsequent Exercise of Series A Warrants

Subsequent to March 31, 2025, the Company has issued an aggregate of 15,573,684 (pre-reverse split - 1,946,710,549) Common Shares upon exercise of the Series A Warrants pursuant to the alternate cashless exercise provision. The fair value of the exercised warrants in the amount of $14,396,075 were recorded to equity. As of August 26, 2025, 19 Series A Warrants (pre-reverse split – 2,352 Series A Warrants) remain outstanding, which may result in the issuance of up to 19 additional Common Shares (pre-reverse split – 2,352 additional Common Shares).

Technical Design Agreement

On April 4, 2025, the Company entered into a Technical Design Agreement (the “Agreement”) with Engines Engineering S.p.a. (“EE”), an Italian corporation specializing in vehicle engineering, design and development, to provide such services for development of the Company’s HyperSport Race electric motorcycle (the “Project”).

Under the Agreement, EE will be responsible for delivering services in multiple areas including technical compliance, component selection, development and validation testing, and prototyping. The Project is structured into nine development phases continuing through March 2026, with specific milestones and deliverables required at each phase.

The total contract value of the Agreement is €1,581,670, with half of the amount invoiced on the date of the Agreement, and the remaining half tied to milestone-based deliverables for each phase of the Project, to be invoiced in installments following the Company’s acceptance of the corresponding phase.

Pursuant to the Agreement, all work product developed under the Agreement will be owned by the Company upon full payment for the applicable phase, while EE retains ownership of its pre-existing intellectual property and grants the Company an irrevocable, perpetual, nonexclusive, worldwide and paid-up license to use such intellectual property and create derivative works from it when used as part of or in support of the work product developed under the Agreement.

Critical Accounting Estimates

Our unaudited condensed consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). In connection with the preparation of our financial statements, we are required to make assumptions and estimates about future events, and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures. We evaluate our critical accounting estimates and assumptions on an ongoing basis. Our estimates are based on historical experience, current trends, and various other assumptions that we believe to be reasonable under the circumstances to ensure that our financial statements are presented fairly and in accordance with GAAP. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows may be affected. Because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

There have been no significant changes to our critical accounting estimates as compared to those disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the year ended June 30, 2024 and 2023 included in the information statement filed as Exhibit 99.1 to the amended registration statement on Form 10-12B filed with the SEC on September 26, 2024, except as disclosed below.

Revenue Recognition

The Company recognizes revenue when control of the promised products or services is transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services. Our licenses are sold as perpetual or term licenses and the arrangements may include maintenance services which are accounted for as separate performance obligations. In determining how revenue should be recognized, a five-step process is used, which requires judgment and estimates within the revenue recognition process. The most critical judgements required in applying ASC 606 Revenue Recognition from Customers, and our revenue recognition policy relate to the determination of distinct performance obligations.

We also consider whether an arrangement has any discounts, material rights, or specified future upgrades that may represent additional performance obligations. Discounts have not historically been significant, but we continue to monitor and evaluate these estimates based on historical experience, anticipated performance, and our best judgment. Renewals or extensions of licenses are evaluated as distinct licenses (i.e., a distinct good or service), and revenue attributed to the distinct service cannot be recognized until (1) the entity provides the distinct license (or makes the license available) to the customer and (2) the customer is able to use and benefit from the distinct license. If any of these judgments were to change it could cause a material increase or decrease in the amount of revenue we report in a particular period.

Long-Lived Assets - Impairment Assessments

Long-lived assets are grouped for recognition and measurement of impairment at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets. The impairment test for long-lived assets requires us to assess the recoverability of our long-lived assets by comparing their net carrying value to the sum of undiscounted estimated future cash flows directly associated with and arising from our use and eventual disposition of the assets. If the net carrying value of a group of long-lived assets exceeds the sum of related undiscounted estimated future cash flows, we would be required to record an impairment charge equal to the excess, if any, of net carrying value over fair value.

When assessing the recoverability of our long-lived assets, which include property and equipment, we make assumptions regarding estimated future cash flows and other factors. Some of these assumptions involve a high degree of judgment and bear a significant impact on the assessment conclusions. Included among these assumptions are estimating undiscounted future cash flows, including the projection of comparable sales, operating expenses, capital requirements for maintaining property and equipment and residual value of asset groups. We formulate estimates from historical experience and assumptions of future performance, based on business plans and forecasts, recent economic and business trends, and competitive conditions. In the event that our estimates or related assumptions change in the future, we may be required to record an impairment charge.

We evaluate the remaining useful lives of long-lived assets whenever events or circumstances indicate that a revision to the remaining period of amortization is warranted. Such events or circumstances may include (but are not limited to): the effects of obsolescence, demand, competition, and/or other economic factors including the stability of the industry in which we operate, known technological advances, legislative actions, or changes in the regulatory environment. If the estimated remaining useful lives change, the remaining carrying amount of the long-lived assets would be amortized prospectively over that revised remaining useful life. We have determined that there were no events or circumstances during the years ended June 30, 2024, 2023 or 2022, which would indicate a revision to the remaining amortization period related to any of our long-lived assets. Accordingly, we believe that the current estimated useful lives of long-lived assets reflect the period over which they are expected to contribute to future cash flows and are therefore deemed appropriate.

Based on its assessments, the Company has not recorded any impairment of long-lived assets during the years ended June 30, 2024, 2023 and 2022.

Deferred Income Taxes

In accordance with ASC 740 “Income Taxes” (“ASC 740”), management routinely evaluates the likelihood of the realization of its income tax benefits and the recognition of its deferred tax assets. In evaluating the need for any valuation allowance, management will assess whether it is more likely than not that some portion, or all, of the deferred tax asset may not be realized on a jurisdictional basis. Ultimately, the realization of deferred tax assets is dependent upon the generation of future taxable income during those periods in which temporary differences become deductible and/or tax credits and tax loss carry-forwards can be utilized. In performing its analyses, management considers both positive and negative evidence including historical financial performance, previous earnings patterns, future earnings forecasts, tax planning strategies, economic and business trends and the potential realization of net operating loss carry-forwards within a reasonable timeframe. To this end, management considered (i) that we have had historical losses in the prior years and cannot anticipate generating a sufficient level of future profits in order to realize the benefits of our deferred tax asset; (ii) tax planning strategies; and (iii) the adequacy of future income as of June 30, 2024, June 30, 2023 and June 30, 2022, based upon certain economic conditions and historical losses through June 30, 2024, June 30, 2023 and June 30, 2022. After consideration of these factors, management deemed it appropriate to establish a full valuation allowance with respect to the deferred tax assets for the Company.

A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax filings that do not meet these recognition and measurement standards. As of June 30, 2024, June 30, 2023 and June 30, 2022, no liability for unrecognized tax benefits was required to be reported. The guidance also discusses the classification of related interest and penalties on income taxes. The Company’s policy is to record interest and penalties on uncertain tax positions as a component of income tax expense. No interest or penalties were recorded during the years ended June 30, 2024, 2023 and 2022.

Warrant Liabilities

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in the FASB Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter.

Results of Operations

The following financial information is for the three and nine months ended March 31, 2025 and 2024:

Revenue

The Company derives revenue from the sale of software and software as a service. Revenue for the three and nine months ended March 31, 2025 was $81,411 and $130,934, respectively, compared to $nil for the three and nine months ended March 31, 2024. The increase of revenue was due to the Company having consolidated the newly acquired subsidiary, Grafiti Limited. Grafiti Limited generates revenue from providing scientific software products and services. All the revenue post to the acquisition date has been consolidated by the Company.

Cost of Revenue and Gross Profits

Cost of revenues for the three and nine months ended March 31, 2025 were $40,161 and $61,493, respectively, compared to $nil for the three and nine months ended March 31, 2024. The gross profit margin for the three and nine months ended March 31, 2025 were 51% and 53%, respectively.

Research and Development Expenses

Research and development expenses were $959,672 for the three months ended March 31, 2025, compared to $1,805,747 for the three months ended March 31, 2024. The decrease of $846,075 was primarily due to the following:

Research and development expenses were $2,014,226 for the nine months ended March 31, 2025, compared to $3,760,318 for the nine months ended March 31, 2024. The decrease of $1,746,092 was primarily due to the following:

The Company anticipates research and development expenses will increase as the Company entered into a Technical Design Agreement for the development of the Company’s HyperSport Race electric motorcycle.

General and Administrative Expenses

For the three months ended March 31, 2025, general and administrative expenses were $3,702,113, compared to $1,531,065 for the three months ended March 31, 2024. The increase of $2,171,048 was primarily due to the following:

For the nine months ended March 31, 2025, general and administrative expenses were $6,674,473, compared to $4,895,715 for the nine months ended March 31, 2024. The increase of $1,778,758 was primarily due to the following:

The Company anticipates that general and administrative expenses will be consistent with previous quarters to year end.

Sales and Marketing Expenses

Sales and marketing expenses were $185,776 for the three months ended March 31, 2025, compared to $201,509 for the three months ended March 31, 2024. Sales and marketing expenses were $538,321 for the nine months ended March 31, 2025, compared to $774,481 for the nine months ended March 31, 2024. The decrease in sales and marketing expenses was primarily attributable to the decreased sales and marketing activities.

The Company anticipates sales and marketing expenses will re increase in the coming months as we launch our HyperSport Race marketing campaigns.

Transaction Costs

Transaction costs were $203,000 and $5,620,436 for the three and nine months ended March 31, 2025, respectively, compared to $nil for the three and nine months ended March 31, 2024. Transaction costs were legal, professional and consulting fees related to the business combination transaction completed in November 2024.

Impairment

For the three months and nine months ended March 31, 2025, the Company recorded 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, reducing the carrying value of goodwill and intangible assets to $nil.

Oher Non-Operating Income/(Loss)

For the three months ended March 31, 2025, other non-operating loss were $5,857,606, compared to $9,621,158 for the three months ended March 31, 2024. The decrease of other non-operating loss of $3,763,552 was primarily due to the following:

For the nine months ended March 31, 2025, other non-operating income were $26,600,259, compared to other non-operating loss of $16,121,402 for the nine months ended March 31, 2024. The increase of other non-operating income of $42,721,661 was primarily due to the following:

Net Loss

During the three months ended March 31, 2025, the Company incurred a net loss of $25,163,438, compared to a net loss of $13,096,933 for the three months ended March 31, 2024. The increase in net loss is mainly due to the Company recognized impairment of goodwill and intangible assets of $14,119,955 for the three months ended March 31, 2025. The increase in net loss was partially offset by the $nil fair value loss recognized in the three months ended March 31, 2025, compared to a fair value loss of $8,201,000 for the three months ended March 31, 2024.

During the nine months ended March 31, 2025, the Company incurred a net loss of $2,354,505, compared to a net loss of $25,604,984 for the nine months ended March 31, 2024. The decrease in net loss is mainly due to the income from change in fair value of financial liabilities of $34,333,573 for the nine months ended March 31, 2025, compared to the loss from change in fair value of financial liabilities of $12,939,830 for the nine months ended March 31, 2024. Upon the completion of Business Combination, the convertible notes were mandatorily converted into 16,496,750 Damon Motor’s common shares. Upon conversion, the carrying value of the convertible debt approximates fair value of the shares issued.

Comparison of Annual Results

The Company’s results of operations for the year ended June 30, 2024, 2023 and 2022 are presented below:

Research and Development, Net

Fiscal 2024 compared to Fiscal 2023

For the year ended June 30, 2024, the research and development, net amounted to $4.6 mil compared to $17.5 mil for the year ended June 30, 2023. The decrease was primarily due to reduced R&D activities as Damon Motors managed its cashflow and spend on key operational items as analyzed below and recognition of Canadian Scientific Research & Development tax credit (“SR&ED “) of $2.1 mil received in year ended June 30, 2024 compared to $nil received in year ended June 30, 2023.

For the year ended June 30, 2024, salaries and wages decreased from $8.4 mil for the year ended June 30, 2023, to $5.1 mil mainly due to decrease in headcount, from 39 as of June 30, 2023, to 18 by June 30, 2024. Similarly, the lab supplies and materials decreased from $5.1 mil for the year ended June 30, 2023 to just $0.5 mil for the year ended June 30, 2024 as development activities in 2024 were reduced significantly as the development of motorcycle models were mostly completed largely in 2022 and 2023. The fees paid to outside contractors and consultants decreased from $1.1 mil for the year ended June 30, 2023 compared $0.05 mil for the year ended June 30, 2024 with development and testing work being carried out by Damon Motors employees instead of out-sourcing to third party. Stock-based compensation decreased from $0.8 mil for the year ended June 30, 2023, to $0.1 mil in line with decrease in headcount, expiry of unexercised stock options for terminated employees and no new stock options granted for the year ended June 30, 2024 compared to the year ended June 30, 2023. The decrease in rent and insurance from $1.4 mil for the year ended June 30, 2023 to $0.7 mil for the year ended June 30, 2024 is mainly due to the surrender of Surrey manufacturing facility lease effective June 30, 2023. Overall decrease in travel, meals and entertainment, subscriptions and dues, and general and other expenses were in line with Damon Motors’s managing costs.

Fiscal 2023 compared to Fiscal 2022

For the year ended June 30, 2023, the research and development, net amounted to $17.5 mil, compared to $18.2 mil for the year ended June 30, 2022. The decrease was due to scaling down of R&D activities in the second half of 2023 due to tight cash position as explained below.

For the year ended June 30, 2023, salaries and wages increased from $7.4 mil for the year ended June 30, 2022 to $8.4 mil for the year ended June 30, 2023 mainly due to higher headcount in the first half of the Fiscal 2023 and severance payment made to terminated employees. With development of HyperDrive and HyperSport, the research and development team headcount continued to increase from 78 as of June 30, 2022, peaking at 85 team members in August 2022 but dwindling down to 39 by June 30, 2023 as Damon Motors under-go two rounds of headcount reduction in February and April 2023. Stock-based compensation decreased from $1.3 mil for the year ended June 30, 2023 to $0.8 mil for the year ended June 30, 2022 as stock options granted to the R&D team during the year were more than off-set by forfeiture or cancellation of unexercised stock options for terminated employees. The fees paid to outside contractors and consultants of $3.7mil for the year ended June 30, 2022 has decreased to $1.1 mil for the year ended June 30, 2023 as some of the contractors converted to full-time employees of Damon Motors, and due to slowing down of non-critical research and development activities as funds were tight. The decrease was also reflected in overall decrease in travel, meals and entertainment, subscriptions and dues and in general and other expenses in line with overall headcount decrease. The decrease was, however, partially off-set by increase in rent and insurance due to commencement of lease of Surrey manufacturing facility and 101 Glacier on September 29, 2022 and October 1, 2022 respectively.

Also included in research and development, net are SR&ED tax credits and government grant funding totaling $nil and $0.1 mil respectively the year ended June 30, 2023 and $0.6 mil and $0.1 mil respectively for the year ended June 30, 2022. The decrease in SR&ED tax credits for the year ended June 30, 2023 was because the tax credit claimed during the year was not finalized as of June 30, 2023. 

General and Administrative