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
PALO
ALTO, Calif., Oct. 23,
2023 /PRNewswire/ -- 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.
About Damon Motors
Damon Motors is a global technology leader disrupting urban
mobility, led by entrepreneurs and executives from
world-class EV and technology companies. With its offices in
San Rafael, California and
headquartered in Vancouver,
Canada, Damon is on a mission to cause a paradigm shift for
safer, smarter motorcycling. Anchored by its proprietary electric
powertrain, HyperDrive™, Damon has captured the attention of the
motorcycling world by delivering 200 hp, a top speed of 200 mph,
200 miles of range, innovative design, and new safety features,
including CoPilot™ and Shift™, which are attracting an entirely new
generation of motorcycle riders. With strong consumer interest in
the US and abroad, Damon aims to set a new standard for motorcycle
safety and sustainability worldwide. For more information on how
Damon technology is defining the new industry standard, please
visit damon.com.
About Inpixon
Inpixon® (Nasdaq: INPX) is the innovator of Indoor
Intelligence®, delivering actionable insights for
people, places, and things. Combining the power of mapping,
positioning, and analytics, Inpixon helps to create smarter, safer,
and more secure environments. The company's Indoor Intelligence and
industrial real-time location system (RTLS) technology are
leveraged by a multitude of industries to optimize operations,
increase productivity, and enhance safety. Inpixon customers can
take advantage of industry-leading location awareness, analytics,
sensor fusion, IIoT and the IoT to create exceptional experiences
and to do good with indoor data. For the latest insights, follow
Inpixon on LinkedIn, and X, and visit inpixon.com.
Important Information About the Proposed Transaction and
Where to Find It
In connection with the Spin-off, Grafiti will file with the SEC
a registration statement, registering Grafiti common shares.
Grafiti will also file a preliminary and final non-offering
prospectus with the British Columbia Securities Commission relating
to the Business Combination. This press release does not contain
all the information that should be considered concerning the
Spin-off and the Business Combination (the "Proposed Transaction")
and is not a substitute for any other documents that Inpixon or
Grafiti may file with the SEC, or that Damon may send to
stockholders in connection with the Business Combination. It is not
intended to form the basis of any investment decision or any other
decision in respect to the Proposed Transaction. Damon's
stockholders and Inpixon's stockholders and other interested
persons are advised to read, when available, the registration
statement of Grafiti together with its exhibits, as these materials
will contain important information about Inpixon, Grafiti, Damon,
the Proposed Transaction.
The registration statement and other documents to be filed by
Grafiti with the SEC will also be available free of charge, at the
SEC's website at www.sec.gov, or by directing a request to: Grafiti
Holding Inc., 2479 E. Bayshore Road, Suite 195, Palo Alto, CA 94303.
Forward-Looking Statements Regarding the Proposed
Transaction
This press release contains certain "forward-looking statements"
within the meaning of the United States Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act,
and Section 21E of the Exchange Act. All statements other than
statements of historical fact contained in this press release,
including statements regarding the benefits of the Proposed Damon
Transaction, the anticipated timing of the completion of the
Proposed Damon Transaction, the products under development by Damon
and the markets in which it plans to operate, the advantages of
Damon's technology, Damon's competitive landscape and positioning,
and Damon's growth plans and strategies, are forward-looking
statements. Some of these forward-looking statements can be
identified by the use of forward-looking words, including "may,"
"should," "expect," "intend," "will," "estimate," "anticipate,"
"believe," "predict," "plan," "targets," "projects," "could,"
"would," "continue," "forecast" or the negatives of these terms or
variations of them or similar expressions. All forward-looking
statements are subject to risks, uncertainties, and other factors
which could cause actual results to differ materially from those
expressed or implied by such forward-looking statements. All
forward-looking statements are based upon estimates, forecasts, and
assumptions that, while considered reasonable by Inpixon and its
management, and Damon and its management, as the case may be, are
inherently uncertain and many factors may cause the actual results
to differ materially from current expectations which include, but
are not limited to:
- the risk that the Proposed Transaction may not be completed in
a timely manner or at all, which may adversely affect the price of
Inpixon's securities;
- the risk that the public market valuation of the combined
company following the consummation of the Business Combination may
differ from the valuation range ascertained by the parties to the
Business Combination and their respective financial advisors, and
that the valuation to be ascertained by an independent financial
advisor to Damon in connection with the Business Combination may
differ from the valuation ascertained by Inpixon's independent
financial advisor;
- the failure to satisfy the conditions to the consummation of
the Proposed Transaction, including receiving the necessary
approvals from the Damon securityholders and the Supreme Court of
British Columbia with respect to
the Plan of Arrangement;
- the occurrence of any event, change or other circumstance that
could give rise to the termination of the Proposed
Transaction;
- the effect of the announcement or pendency of the Proposed
Transaction on Inpixon, Grafiti and Damon's business relationships,
performance, and business generally;
- risks that the Proposed Transaction disrupts current plans of
Inpixon, Grafiti and Damon and potential difficulties in their
employee retention as a result of the Proposed Transaction;
- the outcome of any legal proceedings that may be instituted
against Damon, Grafiti or Inpixon related to the Proposed
Transaction;
- failure to realize the anticipated benefits of the Proposed
Transaction;
- the inability to satisfy the initial listing criteria of Nasdaq
or obtain Nasdaq approval of the initial listing of the combined
company on Nasdaq;
- the risk that the price of the securities of the combined
company may be volatile due to a variety of factors, including
changes in the highly competitive industries in which Grafiti and
Damon operate, variations in performance across competitors,
changes in laws, regulations, technologies that may impose
additional costs and compliance burdens on Grafiti and Damon's
operations, global supply chain disruptions and shortages, and
macro-economic and social environments affecting Grafiti and
Damon's business and changes in the combined capital
structure;
- the inability to implement business plans, forecasts, and other
expectations after the completion of the Proposed Transaction, and
identify and realize additional opportunities;
- the risk that Damon has a limited operating history, has not
achieved sufficient sales and production capacity at a
mass-production facility, and Damon and its current and future
collaborators may be unable to successfully develop and market
Damon's motorcycles or solutions, or may experience significant
delays in doing so;
- the risk that the combined company may never achieve or sustain
profitability;
- the risk that Damon and the combined company may be unable to
raise additional capital on acceptable terms to finance its
operations and remain a going concern;
- the risk that the combined company experiences difficulties in
managing its growth and expanding operations;
- the risk that Damon's $85 million
of non-binding reservations are canceled, modified, delayed or not
placed and that Damon must return the refundable deposits and such
reservations are not converted to sales;
- the risks relating to Damon's ability to satisfy the conditions
and deliver on the orders and reservations, its ability to maintain
quality control of its motorcycles, and Damon's dependence on third
parties for supplying components and manufacturing the
motorcycles;
- the risk that other motorcycle manufacturers develop
competitive electric motorcycles or other competitive motorcycles
that adversely affect Damon's market position;
- the risk that Damon's patent applications may not be approved
or may take longer than expected, and Damon may incur substantial
costs in enforcing and protecting its intellectual property;
- the risk that Damon's estimates of market demand may be
inaccurate; and
- other risks and uncertainties set forth in the sections
entitled "Risk Factors" and "Cautionary Note Regarding
Forward-Looking Statements" in Inpixon's Annual Report on Form 10-K
for the year ended December, 31, 2022, which was filed with the SEC
on April 17, 2023, and Quarterly
Report on Form 10-Q for the quarterly period thereafter, as such
factors may be updated from time to time in Inpixon's filings with
the SEC, and the registration statement to be filed by Grafiti in
connection with the Spin-off. These filings identify and address
other important risks and uncertainties that could cause actual
events and results to differ materially from those contained in the
forward-looking statements.
Nothing in this press release should be regarded as a
representation by any person that the forward-looking statements
set forth herein will be achieved or that any of the contemplated
results of such forward-looking statements will be achieved. You
should not place undue reliance on forward-looking statements,
which speak only as of the date they are made. Neither Inpixon nor
Damon gives any assurance that either Inpixon or Damon or the
combined company will achieve its expected results. Neither Inpixon
nor Damon undertakes any duty to update these forward-looking
statements, except as otherwise required by law.
Important Information About the Proposed XTI Transaction and
Where to Find It
This press release, in part, relates to the previously announced
proposed transaction between XTI Aircraft, Inc. ("XTI") and Inpixon
pursuant to the agreement and plan of merger, dated as of
July 24, 2023, by and among Inpixon,
Superfly Merger Sub Inc. and XTI (the "proposed XTI transaction").
Inpixon filed a registration statement on Form S-4 with the U.S.
Securities and Exchange Commission ("SEC") on August 14, 2023, as amended by Amendment No. 1 on
October 6, 2023, which included a
preliminary prospectus and proxy statement of Inpixon in connection
with the proposed XTI transaction, referred to as a proxy
statement/prospectus. The registration statement on Form S-4 has
not yet become effective. A proxy statement/prospectus will be
delivered to all Inpixon stockholders as of the applicable record
date established for voting on the transaction and to the
stockholders of XTI. Inpixon also will file other documents
regarding the proposed XTI transaction with the SEC.
Before making any voting decision, investors and security
holders are urged to read the registration statement, the proxy
statement/prospectus, any amendments thereto, and all other
relevant documents filed or that will be filed with the SEC in
connection with the proposed XTI transaction as they become
available because they will contain important information about
Inpixon, XTI and the proposed XTI transaction.
Investors and securityholders will be able to obtain free copies
of the registration statement, the proxy statement/prospectus and
all other relevant documents filed or that will be filed with the
SEC by Inpixon through the website maintained by the SEC at
www.sec.gov.
The documents filed by Inpixon with the SEC also may be obtained
free of charge at Inpixon's website at www.inpixon.com or upon
written request to: Inpixon, 2479 E. Bayshore Road, Suite 195,
Palo Alto, CA 94303.
NEITHER THE SEC NOR ANY STATE SECURITIES REGULATORY AGENCY HAS
APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS
COMMUNICATION, PASSED UPON THE MERITS OR FAIRNESS OF THE
TRANSACTION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR
ACCURACY OF THE DISCLOSURE IN THIS COMMUNICATION. ANY
REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.
Forward-Looking Statements about the Proposed XTI
Transaction
This press release contains certain "forward-looking statements"
within the meaning of the United States Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act,
and Section 21E of the Exchange Act. All statements other than
statements of historical fact contained in this press release,
including statements regarding the benefits of the proposed XTI
transaction and the anticipated timing of the completion of the
proposed XTI transaction, are forward-looking statements.
Some of these forward-looking statements can be identified by
the use of forward-looking words, including "may," "should,"
"expect," "intend," "will," "estimate," "anticipate," "believe,"
"predict," "plan," "targets," "projects," "could," "would,"
"continue," "forecast" or the negatives of these terms or
variations of them or similar expressions. All forward-looking
statements are subject to risks, uncertainties, and other factors
which could cause actual results to differ materially from those
expressed or implied by such forward-looking statements. All
forward-looking statements are based upon estimates, forecasts, and
assumptions that, while considered reasonable by Inpixon and its
management, and XTI and its management, as the case may be, are
inherently uncertain and many factors may cause the actual results
to differ materially from current expectations which include, but
are not limited to:
- the risk that the proposed XTI transaction may not be completed
in a timely manner or at all, which may adversely affect the price
of Inpixon's securities;
- the failure to satisfy the conditions to the consummation of
the proposed XTI transaction, including the adoption of the merger
agreement by the shareholders of Inpixon;
- the occurrence of any event, change or other circumstance that
could give rise to the termination of the merger agreement;
- the adjustments permitted under the merger agreement to the
exchange ratio that could result in XTI shareholders or Inpixon
shareholders owning less of the post-combination company than
expected;
- the effect of the announcement or pendency of the proposed XTI
transaction on Inpixon's and XTI's business relationships,
performance, and business generally;
- the risks that the proposed XTI transaction disrupts current
plans of Inpixon and XTI and potential difficulties in Inpixon's
and XTI's employee retention because of the proposed XTI
transaction;
- the outcome of any legal proceedings that may be instituted
against XTI or against Inpixon related to the merger agreement or
the proposed XTI transaction;
- failure to realize the anticipated benefits of the proposed XTI
transaction;
- the inability to meet and maintain the listing of Inpixon's
securities (or the securities of the post-combination company) on
Nasdaq;
- the risk that the price of Inpixon's securities (or the
securities of the post-combination company) may be volatile due to
a variety of factors, including changes in the highly competitive
industries in which Inpixon and XTI operate;
- the inability to implement business plans, forecasts, and other
expectations after the completion of the proposed XTI transaction,
and identify and realize additional opportunities;
- variations in performance across competitors, changes in laws,
regulations, technologies that may impose additional costs and
compliance burdens on Inpixon and XTI's operations, global supply
chain disruptions and shortages;
- national security tensions, and macro-economic and social
environments affecting Inpixon and XTI's business and changes in
the combined capital structure;
- the risk that XTI has a limited operating history, has not yet
manufactured any non-prototype aircraft or delivered any aircraft
to a customer, and XTI and its current and future collaborators may
be unable to successfully develop and market XTI's aircraft or
solutions, or may experience significant delays in doing so;
- the risk that XTI is subject to the uncertainties associated
with the regulatory approvals of its aircraft including the
certification by the Federal Aviation Administration, which is a
lengthy and costly process;
- the risk that the post-combination company may never achieve or
sustain profitability;
- the risk that XTI, Inpixon and the post-combination company may
be unable to raise additional capital on acceptable terms to
finance its operations and remain a going concern;
- the risk that the post-combination company experiences
difficulties in managing its growth and expanding operations;
- the risk that XTI's conditional pre-orders (which include
conditional aircraft purchase agreements, non-binding reservations,
and options) are canceled, modified, delayed or not placed and that
XTI must return the refundable deposits;
- the risks relating to long development and sales cycles, XTI's
ability to satisfy the conditions and deliver on the orders and
reservations, its ability to maintain quality control of its
aircraft, and XTI's dependence on third parties for supplying
components and potentially manufacturing the aircraft;
- the risk that other aircraft manufacturers develop competitive
VTOL aircraft or other competitive aircraft that adversely affect
XTI's market position;
- the risk that XTI's future patent applications may not be
approved or may take longer than expected, and XTI may incur
substantial costs in enforcing and protecting its intellectual
property;
- the risk that XTI's estimates of market demand may be
inaccurate;
- the risk that XTI's ability to sell its aircraft may be limited
by circumstances beyond its control, such as a shortage of pilots
and mechanics who meet the training standards, high maintenance
frequencies and costs for the sold aircraft, and any accidents or
incidents involving VTOL aircraft that may harm customer
confidence; and
- other risks and uncertainties set forth in the sections
entitled "Risk Factors" and "Cautionary Note Regarding
Forward-Looking Statements" in Inpixon's Annual Report on Form 10-K
for the year ended December, 31, 2022, which was filed with the SEC
on April 17, 2023 (the "2022 Form
10-K"), the Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 2023, filed on
May 16, 2023, the Current Report on
Form 8-K filed on July 25, 2023, the
Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2023, filed on August 18, 2023, and in the section entitled
"Risk Factors" in XTI's periodic reports filed pursuant to
Regulation A of the Securities Act including XTI's Annual Report on
Form 1-K for the year ended December 31,
2022, which was filed with the SEC on July 13, 2023 (the "2022 Form 1-K"), as such
factors may be updated from time to time in Inpixon's and XTI's
filings with the SEC, the registration statement on Form S-4 and
the proxy statement/prospectus contained therein. These filings
identify and address other important risks and uncertainties that
could cause actual events and results to differ materially from
those contained in the forward-looking statements.
Nothing in this press release should be regarded as a
representation by any person that the forward-looking statements
set forth herein will be achieved or that any of the contemplated
results of such forward-looking statements will be achieved. You
should not place undue reliance on forward-looking statements,
which speak only as of the date they are made. Neither Inpixon
nor XTI gives any assurance that either Inpixon or XTI or the
post-combination company will achieve its expected results. Neither
Inpixon nor XTI undertakes any duty to update these forward-looking
statements, except as otherwise required by law.
Participants in the Solicitation
XTI and Inpixon and their respective directors and officers and
other members of management may, under SEC rules, be deemed to be
participants in the solicitation of proxies from Inpixon's
stockholders with the proposed XTI transaction and the other
matters set forth in the registration statement. Information about
Inpixon's and XTI's directors and executive officers is set forth
in Inpixon's filings and XTI's filings with the SEC, including
Inpixon's 2022 Form 10-K and XTI's 2022 Form 1-K. Additional
information regarding the direct and indirect interests, by
security holdings or otherwise, of those persons and other persons
who may be deemed participants in the proposed XTI transaction may
be obtained by reading the proxy statement/prospectus regarding the
proposed XTI transaction when it becomes available. You may obtain
free copies of these documents as described above under "Important
Information About the Proposed Transaction and Where to Find
It."
No Offer or Solicitation
This press release is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the proposed transactions and is not intended to and
does not constitute an offer to sell or the solicitation of an
offer to buy, sell or solicit any securities or any proxy, vote or
approval, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be deemed to be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act.
Inpixon Contacts
General inquiries:
Email: marketing@inpixon.com
Web: inpixon.com/contact-us
Investor relations:
Crescendo Communications for Inpixon
Tel: +1 212-671-1020
Email: INPX@crescendo-ir.com
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