Inpixon Announces Planned Spin-Off And Merger Of SAVES UK Business With Damon Motors, And Plans For Nasdaq Listing Of Combined Company; Enterprise Value Of Damon Within $224M-$284M

 Transaction in Addition to XTI Aircraft Merger Provides Opportunity to Maximize Shareholder Value for Inpixon ShareholdersDamon Reports Approximately $85 Million in Pre-Production Consumer Reservations for its

 

Transaction in Addition to XTI Aircraft Merger Provides Opportunity to Maximize Shareholder Value for Inpixon Shareholders

Damon Reports Approximately $85 Million in Pre-Production Consumer Reservations for its Motorcycles

Inpixon® (NASDAQ:INPX) today announced that it has signed a definitive agreement under which its wholly owned subsidiary, Inpixon Ltd., a division of Inpixon’s statistical analytics and visualization for engineering and sciences (SAVES) business based in the United Kingdom (“Inpixon UK”), will be acquired by private Canadian company, Damon Motors Inc. (“Damon”), a British Columbia company, and the maker of the acclaimed HyperSport electric motorcycle (the “Business Combination”). The Damon HyperSport is expected to be one of the safest, smartest, and most powerful motorcycles available in the market. Damon concurrently announced that it has obtained approximately $85 million in pre-production consumer reservations for its motorcycles. The enterprise value of Damon was ascertained by Inpixon’s independent financial advisory firm to be within the range of $224 million and $284 million.

This transaction is in addition to and independent of the pending merger transaction between Inpixon and XTI Aircraft, Inc. (the “XTI Transaction”), which remains on track for an anticipated closing this quarter. Inpixon has established October 24, 2023, as the record date for stockholders entitled to vote for the XTI Transaction at the special meeting, in lieu of the 2023 annual meeting of shareholders of Inpixon.

 

Inpixon plans to contribute all the outstanding capital stock of Inpixon UK to Inpixon’s newly formed British Columbia subsidiary, Grafiti Holding Inc. (“Grafiti”), followed by a spinoff (“Spin-off”) of all the outstanding capital stock of Grafiti (“Grafiti Shares”) owned by Inpixon to the holders of Inpixon’s outstanding capital stock, and certain other securities as of a record date to be determined (“Inpixon Securityholders”).

Following the merger between Grafiti and Damon, holders of Grafiti Shares, including Inpixon Securityholders and management holding Grafiti Shares immediately prior to the closing of the Business Combination, are anticipated to retain approximately 18.75% of the outstanding capital stock of the combined company determined on a fully diluted basis, which includes up to 5% in equity incentives, which may be issued to Inpixon management. Inpixon will also purchase a convertible promissory note from Damon in the principal amount of $3 million and warrants to purchase common shares of Damon (“Damon Note and Warrants”) for an aggregate purchase price of $3 million.

Upon the closing of the Business Combination, the Damon Note and Warrants will be exchanged for common shares of the combined company and warrants to purchase common shares of the combined company in accordance with the terms of the definitive agreements. No securities of Inpixon will be issued in connection with the Business Combination.

Following the completion of the Business Combination, Inpixon UK and Damon will be wholly owned subsidiaries of Grafiti, Grafiti will adopt a new name to be determined by Damon, and the combined company will be listed on the Nasdaq Stock Market, subject to Nasdaq approval of an initial listing application. The transaction has been approved unanimously by the Boards of Directors of both Inpixon and Damon subject to necessary approvals and the satisfaction of customary closing conditions.

Inpixon will retain its Industrial Internet of Things (IIOT) business line and continue to work towards the completion of the XTI Transaction. Inpixon believes that pursuing these opportunities will offer multiple opportunities for its shareholders to maximize the value of their investment in Inpixon.

Founded in 2017, Damon is committed to unleashing the full potential of motorcycling for the world. Its products incorporate cutting-edge technology designed to solve unaddressed safety problems in motorcycling. With an impressive 200 hp / 200 mph / 200 miles of range, Damon motorcycles are at the forefront of electric two-wheelers, holding the potential to displace combustion motorcycles, and poised to lead the industry into a safer, more sustainable future.

“You can’t be the future of anything if you’re not better than the past,” said Jay Giraud, founder and CEO of Damon. “It is necessary for us to target performance metrics as good as or better than anything achieved before, otherwise we won’t see masses of people giving up their gas motorbikes for electric ones — people want to trade up in life.”

“We’re thrilled to partner with Damon on their journey and to provide our shareholders an additional opportunity to maximize shareholder value,” said Nadir Ali, CEO of Inpixon. “Damon has achieved some remarkable innovations and generated an impressive level of demand and enthusiasm. We’re excited for Damon and its growing community of future Damon riders.”

The Spin-off is subject to conditions including the filing of a registration statement for the distributed shares of Grafiti with the U.S. Securities and Exchange Commission (the “SEC”) and the effectiveness of such registration statement. The Business Combination between Grafiti and Damon is also subject to conditions, including approval of the Business Combination by Damon securityholders, approval by the Supreme Court of British Columbia, the Plan of Arrangement for purposes of compliance with the exemption from registration provided by Section 3(a)(10) under the Securities Act of 1933, as amended, in connection with the issuance by Grafiti of the merger consideration to Damon securityholders, and approval by Nasdaq to list the shares of the combined company. No assurance can be provided as to the timing of the completion of the Spin-off and the Business Combination or that all conditions to the Spin-off or the Business Combination will be satisfied. Inpixon expects that there will be no public trading market for the shares of Grafiti until or unless the Business Combination is consummated. The shares of Grafiti distributed to Inpixon shareholders in the Spin-off, and issued to Damon securityholders in the Business Combination, will be subject to lock-up restrictions for 180 days after the closing of the Business Combination, with the following release schedule: 20% at the closing, 40% at 90 days following the closing, 40% at 180 days following the closing, subject to accelerated release from lock-up restrictions if, following closing, the public share price of Grafiti reaches a certain threshold.

Joseph Gunnar Bespoke Advisors acted as exclusive M&A advisor to Damon Motors, Inc.

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