ENGLEWOOD, Colo., May 28, 2024
/PRNewswire/ -- XTI Aerospace, Inc. (NASDAQ: XTIA) ("XTI" or the
"Company") today provided an update on the previously
announced spin-off (the "Spin-off") and proposed business
combination between its former subsidiary Grafiti Holding Inc.
("Grafiti") and Damon Motors, Inc. ("Damon"), 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 with 200 hp, speeds of up to 200 mph, and a range of 200
miles. Additional information about Damon is available at:
https://damon.com/.
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As previously announced, the Company's board of directors set
December 27th, 2023 as the record
date ("Record Date") for determining the holders of the Company's
outstanding capital stock and certain other securities (the "Record
Date Securityholders") entitled to the distribution of all the
outstanding shares of Grafiti owned by the Company as of the Record
Date (the "Spin-off Shares"). The registration statement that
was confidentially submitted by Grafiti with the Securities and
Exchange Commission ("SEC") in connection with the distribution of
Spin-off Shares (the "Registration Statement") is progressing
through the SEC review process. The closing of the Business
Combination is also subject to the clearance of a non-offering
prospectus to be filed by Grafiti with the British Columbia
Securities Commission relating to the issuance of Grafiti shares to
Damon securityholders in connection with the Business Combination,
among other conditions contained in the previously reported
business combination agreement between Grafiti and Damon. Upon the
completion of the Business Combination, the combined company
expects to list on the Nasdaq Stock Market ("Nasdaq"), subject to
the approval of an initial listing application which has been
submitted to Nasdaq. The transaction is currently expected to close
in the coming months, subject to obtaining the necessary regulatory
approvals and satisfaction of other closing conditions described
below and in our filings with the SEC.
On the Record Date, the Company transferred all of the Spin-off
Shares to a liquidating trust for the benefit of the Record Date
Securityholders. As a result, the Spin-off Shares are no longer
held by the Company and are currently held by the trust pending the
effectiveness of the Registration Statement.
Following the effectiveness of the Registration Statement, the
trust will deliver the Spin-off Shares to the Record Date
Securityholders on a pro rata basis. During the period that the
trust remains in possession of the Spin-off Shares, and during the
period from their delivery to the Record Date Securityholders until
the closing of the Business Combination, the beneficial interests
in such shares will not be certificated or tradable and will not be
transferrable. After the consummation of the Business
Combination, 80% of the Spin-off Shares will be subject to lock-up
restrictions, subject to release in two equal tranches at 90 days
and 180 days after consummation of the Business Combination,
subject to earlier release of all the locked-up shares if the
shares sustain a specified trading threshold on Nasdaq.
For U.S. federal and applicable state income tax purposes, the
Record Date Securityholders have been deemed to receive a
distribution of the Spin-off Shares from XTI as of the Record
Date.
The Record Date Securityholders and certain members of Grafiti's
current management and XTI's former management holding Grafiti
common 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.
The Record Date Securityholders do not need to take any action.
Following the closing of the Business Combination, Record Date
Securityholders will continue to hold, along with their new common
shares of Grafiti, the same number of shares of the Company's
common stock that they held immediately prior to the closing of the
Business Combination.
Factors that May Affect the Distribution and Spin-off
The distribution of the Spin-off Shares to the Record Date
Securityholders is conditioned upon the effectiveness of the
Registration Statement. In addition, the Business Combination is
subject to the satisfaction or waiver of certain closing
conditions, including approval of the Business Combination by Damon
securityholders, approval by the Supreme Court of British Columbia of a 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, as well as 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 distribution
and the Business Combination or that all conditions to the Spin-off
or the Business Combination will be satisfied. XTI and Grafiti
expect that there will be no public trading market for the shares
of Grafiti until or unless the Business Combination is
consummated.
About XTI Aerospace, Inc.
XTI Aerospace (XTIAerospace.com) is the parent company of XTI
Aircraft Company (XTIAircraft.com), an aviation business based near
Denver, Colorado, currently
developing the TriFan 600, a fixed-wing business aircraft
designed to have the vertical takeoff and landing (VTOL) capability
of a helicopter, speeds of 345 mph and a range of 700 miles,
creating an entirely new category – the vertical lift crossover
airplane (VLCA). Additionally, the Inpixon (inpixon.com) business
unit of XTI Aerospace is a leader in RTLS technology with customers
around the world who use the Company's location intelligence
solutions in factories and other industrial facilities to help
optimize operations, increase productivity, and enhance safety. For
more information about XTI Aerospace, please
visit XTIAerospace.com.
About Damon Motors, Inc.
Damon Motors seeks to disrupt 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 Grafiti Holdings, Inc.
Grafiti Holding is the holding company of Grafiti Limited
(collectively, Grafiti"), which is based in the United Kingdom and offers a comprehensive set
of powerful and versatile data analytics and statistical
visualization solutions for engineers and scientists. Grafiti's
mission is to revolutionize data analysis and visualization for
students and science and engineering professionals, providing them
with the next generation tools to transform complex data into
meaningful insights and groundbreaking results. These products
help: scientific research in the health and life sciences domain in
the discovery of new drugs; engineers in connection with a
multitude of applications including but not limited to, studying
signal attenuation and propagation in radio engineering and surface
panel design for automobile and motorcyle aerodynamics, curve
fitting, and calculated asymmetry among others. For more
information about Grafiti please visit https://grafiti.co.uk/.
Cautionary Statement Regarding Forward-Looking
Statements
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 Securities Exchange Act of 1934, as amended,
including forward-looking statements regarding the proposed
business combination between Grafiti and Damon (the "Proposed Damon
Transaction"). All statements other than statements of historical
fact contained in this press release, including statements
regarding the anticipated benefits of the Proposed Damon
Transaction, the anticipated timing of the completion of the
Proposed Damon Transaction, the anticipated Nasdaq listing of
shares of the combined company following 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 XTI and Grafiti
and their respective management, and Damon and its management, 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 Damon Transaction may not be
completed in a timely manner or at all;
- the risk that the public market valuation of the combined
company following the consummation of the Proposed Damon
Transaction could be lower than the valuation range ascertained by
the parties to the Proposed Damon Transaction and their respective
financial advisors, and that the bid price valuation to be
ascertained by an independent financial advisor to Grafiti in
connection with the application for listing of the Spinoff Shares
on Nasdaq could be lower than the valuation ascertained by XTI's
independent financial advisor in connection with the Proposed Damon
Transaction;
- the failure to satisfy the conditions to the consummation of
the Proposed Damon 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 inability to satisfy the initial listing criteria of Nasdaq
or obtain Nasdaq approval of the initial listing of the combined
company shares on Nasdaq;
- the occurrence of any event, change or other circumstance that
could give rise to the termination of the Proposed Damon
Transaction;
- the effect of the announcement or pendency of the Proposed
Damon Transaction on XTI, Grafiti and Damon's business
relationships, performance, and business generally;
- risks that the Proposed Damon Transaction disrupts current
plans of Grafiti and Damon and potential difficulties in their
employee retention as a result of the Proposed Damon
Transaction;
- the outcome of any legal proceedings that may be instituted
against Damon, Grafiti or XTI related to the Proposed Damon
Transaction;
- failure to realize the anticipated benefits of the Proposed
Damon Transaction;
- 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 Damon
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 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 XTI's Annual Report on Form 10-K for
the year ended December 31, 2023,
which was filed with the SEC on April 16,
2024, and Quarterly Report on Form 10-Q for the quarterly
period thereafter, as such factors may be updated from time-to-time
in XTI's filings with the SEC, and the registration statement to be
filed with the SEC 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 XTI, Grafiti
nor Damon gives any assurance that any of XTI, Grafiti or Damon or
the combined company resulting from the Proposed Damon Transaction
will achieve its expected results. Neither XTI, Grafiti nor Damon
undertakes any duty to update these forward-looking statements,
except as otherwise required by law.
Important Information About the Proposed Damon Transaction
and Where to Find It
In connection with the Spin-off, Grafiti has confidentially
submitted with the SEC the Registration Statement for the purpose
of registering Grafiti's common shares. Grafiti will also file a
preliminary and final non-offering prospectus with the British
Columbia Securities Commission relating to the Proposed Damon
Transaction. This press release does not contain all the
information that should be considered concerning
the Spin-off and the Proposed Damon Transaction and is
not a substitute for any other documents that Grafiti may file with
the SEC, or that Damon may file with the British Columbia
Securities Commission or transmit to securityholders in connection
with the Proposed Damon Transaction. It is not intended to form the
basis of any investment decision or any other decision in respect
to the Proposed Damon Transaction. Damon's securityholders and the
Record Date Securityholders and other interested persons are
advised to read, when available, the Registration Statement
together with its exhibits, as these materials will contain
important information about Grafiti, Damon, and the Proposed Damon
Transaction.
The Registration Statement, upon effectiveness, 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/edgar, or by directing a request to: Grafiti Holding
Inc., 169 Bath Road, Slough, United
Kingdom.
Contacts
General inquiries:
Email: contact@xtiaerospace.com
Web: https://xtiaerospace.com/contact/
Investor Relations:
Crescendo Communications
Tel: +1 212-671-1020
Email: XTIA@crescendo-ir.com
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SOURCE XTI Aerospace, Inc.