Share Capital and Other Components of Equity

9 Months Ended

Mar. 31, 2025

Share Capital and Other Components of Equity [Abstract]

Share capital and other components of equity

12. Share capital and other components of equity

Share capital

a) Authorized

The authorized share capital of the Company consists of the following:

● An unlimited number of common shares without par value;

● An unlimited number of multiple voting shares without par value.

b) Issued and outstanding

● As of March 31, 2025, the Company had 503,766,493 (June 30, 2024 – 2,594,850) common shares outstanding;

● As of March 31, 2025, the Company had nil (June 30, 2024 – nil) multiple voting shares outstanding;

● As of March 31, 2025, the Company had nil (June 30, 2024 – 3,528,407) preferred shares outstanding.

March 2025 financing

On March 21, 2025, the Company completed public offering of 126,900,000 units at a price of $0.13 per unit. Each unit consisted of one common share and one Series A warrant to purchase one common shares. The Company also issued 6,345,000 Series A warrants to the underwriters. In addition, the Company granted the underwriters a 45-day option to purchase up to an additional 19,035,000 common shares at a price per share equal to the public offering price per unit (net of discounts and commissions) minus $0.001, and/or 19,035,000 Series A warrants at a price of $0.001 per warrant, to cover over-allotments. On March 21, 2025, the underwriters partially exercised its overallotment option with respect to 19,035,000 Series A warrants.

Transaction costs consisted of legal, accounting, underwriting discount and other costs incurred that were directly related to the issuance of the units. Pursuant to the terms of the Underwriting Agreement, the underwriters received a cash fee of six and a half percent (6.5%) of the aggregate gross proceeds as underwriting discounts and commissions. The Company also paid the Underwriter’s out-of-pocket accountable expenses of $100,000. The Company incurred other transaction costs in the amount of $594,167.

Gross proceeds to the Company, before deducting underwriting commissions and other offering expenses, were $16,516,035. The Company allocated the proceeds first to the warrants based on their fair values as determined at initial measurement, with the remaining proceeds allocated to common shares. Transaction costs are allocated to the separable financial instruments based on a relative fair value basis, compared to total proceeds received. Transaction costs allocated to warrant liabilities are expensed as incurred, presented as non-operating expenses in the accompanying unaudited condensed statements of operations. Transaction costs allocated to the common stocks were charged against the carrying value of the common shares.

At the closing of the financing, the Company issued 126,900,000 common shares, 126,900,000 Series A warrants, 6,345,000 underwriters warrants, and 19,035,000 overallotment warrants. The gross proceeds from the offering, excluding the over allotment proceeds, of $16,497,000 was first allocated to the fair value of the Series A Warrants of $15,689,207 and the remaining $807,793 allocated to the fair value of the common stock, net of allocated issuance costs of $108,642, resulting in net proceed allocated to the common stock of $699,151. The Company also recognized warrant liabilities of $18,023,553 and mezzanine equity of $784,000. See Note 11.

As of March 31, 2025, 346,701,995 common shares were issued for 35,716,270 warrants exercised.

Other activities

On July 1, 2024, the Company issued 302,552 common shares in connection with the conversion of SAFE with an estimated fair value of $3,200,000 (Note 10).

On November 13, 2024, in connection with the reverse acquisition treatment of the Business Combination, the Company effectively issued 4,615,384 new common shares. At the closing of the Business Combination, the Company also issued 9,760,738 new common shares for the conversion of all 3,528,407 issued and outstanding preferred shares and issued 3,473,256 new common shares for the conversion of convertible notes. For clarification, these issuances occurred at the Damon Motors level prior to the exchange of Damon Motors securities into Pubco securities at the closing of the Business Combination.

Immediately following the Business Combination, the Company (i.e., Pubco) had 19,380,187 common shares outstanding without par value and 1,391,181 multiple voting shares outstanding. The holder of each common share is entitled to one vote. Subsequent to the closing of the Business Combination, the 1,391,181 multiple voting shares were converted to common shares.

During the nine months ended March 31, 2025, the Company issued 24,590 common shares for the service fee in connection with the Business Combination, 401,884 common shares for investor relationship service received, and 514,579 common shares for advisory service received.

During the nine months ended March 31, 2025, the Company issued 343,053 common shares in connection with entering the Securities Purchase Agreement with Streeterville. Also, the Company issued 8,133,614 in connection with the share purchase made by Streeterville under the Securities Purchase Agreement. Also see Note 7.

During the nine months ended March 31, 2025 and 2024, no preferred shares were issued.

Stock options

On August 30, 2017 (and amended on September 24, 2021), the Board adopted a Stock Option Plan which provides that the Board may from time to time, in its discretion, grant to directors, officers, employees, and consultants, non-transferable stock options to purchase common shares of the Company. As per the terms of the Stock Option Plan, the requisite vesting period of the employees is generally four years.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. During the nine months ended March 31, 2025 and 2024, the Company issued nil stock options.

A summary of the changes in the Company’s stock options is as follows:

	Stock options (#)
Outstanding, June 30, 2024		1,948,260
Expired/cancelled		(618,010	)
Outstanding, March 31, 2025		1,330,250

Details of stock options outstanding at March 31, 2025 were as follows:

Exercise price	Weighted average contractual life		Number of options outstanding		Number of options exercisable
$0.57		0.71		551,695		551,695
$0.95		0.49		669,545		669,371
$1.23		1.58		23,580		23,580
$12.73		4.95		85,430		67,412
				1,330,250		1,312,058

During the three and nine months ended March 31, 2025, the Company recognized stock-based compensation expense of $15,839 and $50,735, respectively (three and nine months ended March 31, 2024 – $27,140 and $385,199, respectively).

Cash received by the Company upon the exercise of stock options during the nine months ended March 31, 2025 amounted to $nil (nine months ended March 31, 2024 – $59,694).

Warrants

For warrants that meet the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance.

During the nine months ended March 31, 2025, in connection with the issuance of convertible promissory notes to arms-length parties (Note 8), the Company issued 203,986 common share purchase warrants to the noteholders. At inception, these warrants were assessed to meet the equity classification requirements and fair value of the warrants of $875,127 was recorded as a component of additional paid-in capital.

Warrants of the Company classified as equity are composed of the following as at March 31, 2025:

Date of issuance	Number of warrants outstanding		Number of warrants exercisable		Exercise price	Expiry date
June 16, 2023		332,915		332,915	7.81	June 15, 2028
August 10, 2023		136,494		136,494	7.81	August 9, 2028
September 13, 2023		135,828		135,828	7.81	September 12, 2028
September 26, 2023		360,211		360,211	7.81	September 25, 2028
September 30, 2023		25,609		25,609	7.81	September 29, 2028
October 26, 2023		569,280		569,280	7.81	October 25, 2028
December 15, 2023		46,608		46,608	7.81	December 14, 2028
April 5, 2024		40,606		40,606	7.81	April 4, 2029
April 26, 2024		19,975		19,975	7.81	April 25, 2029
March 12, 2024		99,261		99,261	7.81	March 11, 2029
March 26, 2024		11,318		11,318	7.81	March 25, 2029
April 15, 2024		192,065		192,065	7.81	April 14, 2029
May 1, 2024		9,761		9,761	7.81	April 30, 2029
May 29, 2024		2,561		2,561	7.81	May 28, 2029
July 20, 2024		32,011		32,011	7.81	July 19, 2029
July 22, 2024		12,804		12,804	7.81	July 21, 2029
July 30, 2024		2,561		2,561	7.81	July 29, 2029
August 30, 2024		23,688		23,688	7.81	August 29, 2029
October 8, 2024		64,022		64,022	7.81	October 7, 2029
October 18, 2024		6,402		6,402	7.81	October 17, 2029
November 12, 2024		62,498		62,498	7.81	November 11, 2029
		2,186,478		2,186,478