Damon Inc. Files 8-K: Acquisition, Debt, Equity Sales & Control Changes

Ticker: DMNIF · Form: 8-K · Filed: Nov 18, 2024 · CIK: 2000640

Sentiment: neutral

Topics: acquisition, debt, equity-sale, change-of-control

TL;DR

Damon Inc. (fka Grafiti) dropped an 8-K detailing acquisitions, debt, equity sales, and control shifts. Big moves happening.

AI Summary

Damon Inc. (formerly Grafiti Holding Inc.) filed an 8-K on November 18, 2024, reporting several material events. These include entering into a definitive agreement, completing an acquisition, creating a financial obligation, and changes in control. The company also reported unregistered sales of equity securities and modifications to security holder rights. The filing also notes the departure of directors or officers and compensatory arrangements.

Why It Matters

This 8-K filing indicates significant corporate actions by Damon Inc., including acquisitions and financial obligations, which could impact its financial health and stock performance.

Risk Assessment

Risk Level: medium — The filing details multiple significant events including acquisitions, financial obligations, and equity sales, which inherently carry risk.

Key Players & Entities

FAQ

What material definitive agreement did Damon Inc. enter into?

The filing indicates Damon Inc. entered into a Material Definitive Agreement, but the specific details of this agreement are not provided in the provided text.

What was the nature of the acquisition or disposition of assets?

The filing states that Damon Inc. completed an acquisition or disposition of assets, but the specifics of the transaction are not detailed in the provided text.

What financial obligation did Damon Inc. create?

The filing mentions the creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement, but the details are not specified in the provided text.

Were there any unregistered sales of equity securities by Damon Inc.?

Yes, the filing explicitly lists 'Unregistered Sales of Equity Securities' as an item of information.

What changes occurred regarding Damon Inc.'s control or officers?

The filing indicates 'Changes in Control of Registrant' and 'Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers,' suggesting significant shifts in leadership or ownership.

Filing Stats: 4,708 words · 19 min read · ~16 pages · Grade level 14.1 · Accepted 2024-11-18 08:26:24

Key Financial Figures

Filing Documents

01 Entry into

Item 1.01 Entry into a Material Definitive Agreement. The information contained in the Introductory Note of this Current Report on Form 8-K is incorporated by reference herein to the extent required to be disclosed under this Item 1.01. Financing Agreements Streeterville June 2024 Note – Amended Security Agreements On November 13, 2024, prior to the closing of the Business Combination, (a) the Company entered into an amendment to the Security Agreement, dated June 26, 2024 by and between the Company and Streeterville Capital LLC (the "Streeterville Security Agreement") delivered in connection with that certain secured promissory note in an aggregate principal amount of $6,470,000 (the "Streeterville Note"), whereby the Company granted to Streeterville a security interest in all right, title, interest, claims and demands to its assets (the "Amended Streeterville Security Agreement"), and (b) Damon entered into a security agreement with Streeterville (the "DMI-Streeterville Security Agreement"), whereby Damon granted to Streeterville a security interest in all right, title, interest, claims and demands to its assets, and (c) Damon entered into an IP security agreement with Streeterville (the "DMI-Streeterville IP Security Agreement"), whereby Damon granted to Streeterville a security interest in certain of its intellectual property. Streeterville's security over the Company's assets ranks pari passu with the security granted under the November 2024 Debt Financing (as described in greater detail below) pursuant to an intercreditor agreement dated as of November 13, 2024 (the "Intercreditor Agreement"). The foregoing descriptions of the Amended Streeterville Security Agreement, DMI-Streeterville Security Agreement, DMI-Streeterville IP Security Agreement and Intercreditor Agreement do not purport to be complete and are qualified in their entirety by the full text of each referenced agreement, which are filed as Exhibits 10.1, 10.2, 10.3 and 10.4 to this current

01 Completion

Item 2.01 Completion of Acquisition or Disposition of Assets. The information contained in the Introductory Note of this current report on Form 8-K is incorporated by reference herein to the extent required to be disclosed under this Item 2.01. Financial Information The unaudited condensed consolidated financial statements of the Company as of and for three months ended September 30, 2024 and 2023 are attached hereto as Exhibit 99.1 and incorporated herein by reference. The unaudited condensed interim consolidated financial statements of Damon as of and for three months ended September 30, 2024 and 2023 are attached hereto as Exhibit 99.2 and incorporated herein by reference. The unaudited pro forma condensed combined financial information of the Company and Damon for the year ended June 30, 2024 and three months ended September 30, 2024 is attached hereto as Exhibit 99.3 and incorporated herein by reference. Management's Discussion and Analysis of Financial Condition and Results of Operations Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company for the three months ended September 30, 2024 and 2023 is attached hereto as Exhibit 99.4.

Management's Discussion and Analysis of Financial Condition and

Management's Discussion and Analysis of Financial Condition and Results of Operations of Damon for the three months ended September 30, 2024 and 2023 is attached hereto as Exhibit 99.5. 5 Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information contained in Item 1.01 of this current report on Form 8-K is incorporated by reference herein to the extent required to be disclosed under this Item 2.03.

02 Unregistered

Item 3.02 Unregistered Sales of Equity Securities. The information contained in the Introductory Note and Item 1.01 of this current report on Form 8-K is incorporated by reference herein to the extent required to be disclosed under this Item 3.02. The Amalgamation Consideration was issued pursuant to the exemption from registration provided by Section 3(a)(10) of the Securities Act of 1933, as amended (the "Securities Act"), on the basis that these securities were issued pursuant to the Plan of Arrangement, the fairness of which was approved by the Supreme Court of British Columbia. The East West Note and the BHI Note were issued pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act, on the basis that these notes have been issued to institutional accredited investors and the Company did not engage in any general solicitation in connection with such offer and sale. Any common shares to be issued to Peikin as described under the heading "Fees to be Paid to Former Financial Advisor" in Item 8.01 of this Current Report on Form 8-K below will be issued pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act, on the basis that these shares will be issued to an accredited investor and the Company did not engage in any general solicitation in connection with such offer and sale.

03 Material

Item 3.03 Material Modifications to Rights of Security Holders To the extent required by Item 3.03 of Form 8-K, the information contained in Item 1.01 (under "Coattail Agreement and Founder Agreement") and Item 5.03 of this current report on Form 8-K is incorporated by reference herein.

01 Changes

Item 5.01 Changes in Control of Registrant. The information contained in the Introductory Note, Item 1.01 and Item 5.02 of this current report on Form 8-K is incorporated by reference herein to the extent required to be disclosed under this Item 5.01. As a result of the closing of the Business Combination, a change in control of the Company has occurred, and Damon became a wholly owned subsidiary of the Company. Following the issuance of the Amalgamation Consideration pursuant to the Plan of Arrangement, Grafiti security holders immediately prior to the Effective Time retained beneficial ownership of approximately 18.5% of the outstanding common shares of the Company on a fully-diluted basis and Damon security holders immediately prior to the Effective Time acquired beneficial ownership of common shares amounting to approximately 81.5% of the outstanding common shares of the Company on a fully-diluted basis. Immediately following the closing, on a fully diluted basis, Jay Giraud beneficially owns, or controls or directs, directly or indirectly, 1,391,181 Multiple Voting Shares and 525,854 common shares (assuming exercise of his options), representing 100% of the outstanding Multiple Voting Shares and 2.6% of the outstanding common shares (in the aggregate equal to approximately 33% of the aggregate voting power of the voting shares of the Company). 6

02 Departure

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers Director and Officer Appointments; Board Composition In connection with the consummation of the Business Combination and as contemplated by the Business Combination Agreement, as of the Effective Time, Mr. Nadir Ali resigned as the sole officer and director of the Company. The following table sets forth the names, ages and positions of the directors and executive officers of the Company appointed as of the Effective Time, following Mr. Ali's resignation. Name Age Position Da

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