Damon Inc. Liquidation Value

Damon Inc. (DMNIF) is a pre-revenue electric motorcycle development company (primary segment) combined with a small UK-based scientific software distribution subsidiary (Grafiti Limited). Under a liquidation lens as of September 30, 2025, recovery to equity is deeply negative. The company reports stockholders' equity of negative $13.2 million, and MFFAIS liquidation estimates range from approximately negative $14.3 million to negative $14.4 million, consistent with this filing's balance sheet structure.

Liquidatable assets are minimal. Cash of $682k (100% recovery) is the dominant recoverable asset. Accounts receivable of $80.5k (90-95% recoverable) and other current assets of $406k (mostly prepaid expenses: zero recovery in liquidation) provide negligible additional recovery. PP&E net of $65.7k applies a 50-70% haircut, yielding at most ~$46k. Operating lease ROU assets ($405k book) recover zero in liquidation. Total tangible asset recovery is roughly $800-850k at best.

The liability stack is substantially larger and stays at face value. Current liabilities of $14.9 million include: accounts payable and accrued liabilities of $5.3 million (trade payables $4.2M, accrued liabilities $0.75M); the convertible promissory note (Streeterville Note) classified current at $4.98 million net of $286k unamortized discount — face value gross obligations are approximately $5.26 million principal + $772k accrued interest + $238k monitoring fee; the pre-paid security purchase facility at $3.03 million net carrying value (principal $3.16M + interest $200k, net of $327k discount); WSGR promissory note in default at $478k; operating lease liabilities current $230k; finance lease liabilities $173k; deferred revenue $238k; and customer deposits $435k. Non-current liabilities are $118k (operating lease long-term portion). Total liabilities at face: $14.99 million.

Key deterioration from the prior period (June 30, 2025): cash declined from $2.48M to $682k — a $1.80M drawdown in one quarter — driven by $1.76M operating cash burn with no new debt or equity financing proceeds received in Q1 FY2026 (financing activities were negative $37k, solely debt repayments). The Streeterville Note balance grew from $4.55M to $4.98M as $423k of interest accrued unpaid and the convertible promissory note is in technical default. The pre-paid security purchase facility is also in technical default. Working capital deficiency is approximately $13.7 million per MD&A. The company carries $903.8k in unfunded purchase obligations (Engines Engineering Technical Design Agreement installments) and a $1.0M investment obligation to a strategic partner — both callable within one year. Three active civil claims in British Columbia (former CEO, DeFrancesco alleging $3.2M in shares, and Moz Holdings claiming $376.5k unpaid rent) represent unquantified contingent liabilities. Management's going concern doubt has not been alleviated. The filing does not separately tag the accumulated deficit of $149.3M in XBRL context beyond the balance sheet line, nor does it tag the contingent litigation exposures. The Regulation A Tier II offering ($30M maximum, $0.10/unit) has raised minimal proceeds as of the filing date (1.44M shares issued).