Q3 2023 Inpixon Earnings Call
Good afternoon, and welcome to and pitching business update presentation.
Participants are advised that this presentation is being broadcast live over the Internet and is also being recorded for playback purposes.
A webcast will be available on the company's Investor Relations page of its website. After the end of this call.
I would now like to turn the call over to Alexandra <unk>, Vice President of Crescendo Communications, LLC and <unk> Investor Relations firm. Please.
Please go ahead.
Thank you.
Good afternoon, everyone. Thank you for joining and Texan third quarter business update presentation for management intends to discuss business developments during the quarter as well as provide an update on our recently announced planned spin off of other infections U K business.
Operated through infection lemonade and the proposed business combination of its newly formed wholly owned subsidiary Griffey, holding and Damon Motors with US today are not a rally and pension Chief Executive Officer, and JJ, <unk>, Chief Executive Officer, and co founder of David No there.
Today infection released financial results for its 2023 third quarter ended September 30th 2023. If you have not received infections earnings release, please visit infections Investor Relations page at IR Dot infection dotcom.
During the course of this conference call the company will be making forward looking statements regarding expectations for future performance and business prospects.
Forward looking information involve risks and uncertainties and the stated expectations could differ materially from actual results or performance.
The company advises you to read and contemplate the information and disclaimer comments within our news release and presented on the slide which include detailed about forward looking statements risk factors and where to find more information about the proposed transaction.
In addition, the subject matter discussed in the following message is addressing preliminary proxy statement and prospectus that has been filed and the definitive proxy statement and prospectus that will be filed with the SEC shareholders and other interested persons are advised to read the preliminary proxy statement and prospectus and.
There too and the definitive proxy statement and perspective and documents incorporated by reference when filed in connection with the proposed transaction.
These materials will contain important information about infection.
Aircraft company and the proposed transaction.
Information regarding those persons who may under rules of the SEC be deemed to be participants in the solicitation of proxies from the shareholders of infection in connection with the proposed transaction will be included in the proxy statement and prospectus for the proposed transaction and be available at Ww SEC Doc.
Alright infections website at Www Dot <unk> dot com.
I will now turn the call over to not our Ali infection C. O Notter. Please go ahead.
Thanks, Alexandra Hello, everyone and thank you for joining our business update presentation.
We believe this is a transformational year for infection.
So I hate to be here with you today to discuss the future of intention and our efforts to maximize shareholder value.
While we will spend the majority of our time today to introduce you to gaming Motors I would like to start by providing a quick overview of our progress on the two recently announced transactions, which fall on our earlier strategic transaction, we'd feared job and Kim which closed in March of this year.
So specifically we have entered into two independent definitive merger agreement with transportation innovators <unk> aircraft and Damon Motors.
As announced on July 25th we entered into a definitive merger agreement with extra aircraft.
Connection with this transaction, which is subject to certain closing conditions and kitchen will be renamed ex yard aerospace and will trade under the new ticker symbol X T I E.
Developing <unk> 600 fixed wing vertical lift crossover plain wore VLT yet.
The combined company will be focused on continuing the development of a choice around 600, and we will also continue offering convictions real time location system products.
Independent of the proposed <unk> merger, we also announced the planned distribution or spin off to our security holders of 100% of the outstanding shares of our newly formed subsidiary graffiti holding.
And a definitive agreement to regain the motors.
Under the terms of these proposed transactions all of the outstanding shares of our subsidiary in pitching limited, which operates our U K sales business will be transferred to graffiti and after the completion of the spin off.
<unk> and game and Motors will complete a business combination transaction.
Following the closing of the proposed and watching the combined company for feeding and gaming will operate as a new independent public company and is expected to be listed on NASDAQ.
We believe this transaction will further gains initiatives and transforming the motorcycle getting the streets with an electric motorcycle containing innovative safety and technology features as well as best in class performance.
Now, let me touch on each transaction and why we believe they are so transformative for the company.
So first upon completion of the Sci merger.
And pension will be renamed <unk> Aerospace and we will continue to trade on NASDAQ under the new ticker symbol <unk> as I.
And I'll also be led by our new senior management team and a new board of directors.
<unk> aerospace will primarily be focused on continuing the development of the Troy found 600 potential disruptor within the aviation industry. While also continuing to offer our existing <unk> technology to support a wide array of industries, including aviation.
We believe the <unk> 601 commercially developed can bridge a gap in the aviation market, combining the speed comfort and range of our fixed wing airplane with the point to point convenience of a helicopter.
Addition to try fund can utilize existing airport airport runways, or Hello pods as well as non traditional lending areas due to its cross tag crossover takeoff and landing capabilities.
We believe this dual takeoff and landing capability will drive uptake and rapid market penetration.
<unk> has obtained over 700 conditional preorders and expressions of interest under a combination of your crop purchase agreement Nonbinding reservation deposit agreement options and letters of intent for its aircraft.
Collectively these preorders represent potential gross revenues of more than $7 billion.
Based on its current list price of $10 million per aircraft, assuming the company is of course able to execute on the development program for the Tryfan secure FAA certification and deliver these aircraft.
We believe this demonstrates the pent up demand in the market for a crossover aircrafts that has the potential to revolutionize each segment of the aircraft industry.
We did discuss Mci in great detail during our presentation, which we hosted on August 14th and I'd encourage investors to view the presentation again for more information.
But overall, we believe that this merger can maximize value for our shareholders over time.
We expect this transaction to close during the current quarter, assuming that we are able to satisfy the requisite conditions before year end, which of course include approval by our stockholders and NASDAQ listing approval.
I am pleased to share that the S. Four filed in connection with the ex U S. Gi transaction was declared effective by the SEC yesterday and the related shareholder meeting has been scheduled for December eight 2023.
Now I'd like to turn my focus to the planned spin off of our newly formed subsidiary graffiti, holding which will hold our UK <unk> business and its proposed subsequent business combination with <unk> and motors.
CEO Damon Motors will share specifics around the <unk> story with you shortly but first I'd like to take a moment to reflect on this transaction. There's a lot of moving parts here hopefully this slide will help you follow along with how this transaction works.
We believe Damon is changing the motorcycle industry with its hyper sport electric motorcycle.
<unk> is expected to be one of the safest smartest and most powerful motorcycles available in the market and Damien has already obtained over $85 million in preproduction consumer reservations towards motorcycle.
Damon products incorporate cutting edge technology designed to solve unaddressed safety problems in Motorcycling.
With an impressive 200 horsepower 200 miles per hour and 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.
Upon completion of the merger graffiti will be renamed two of named selected by Damon.
Damon's management team and board of director Designees will continue to serve as the management and board of directors of the combined company with one board designee appointed by graffiti.
We expect this transaction to close during the first quarter of 2024. However, it does remain subject to the satisfaction of certain closing conditions, including clearance of a registration statement with the SEC in connection with our planned spinoff of graffiti holding and NASDAQ listing approval for the resulting combined company.
In fiction shareholders as of a to be determined record date.
We'll be able to participate in this spinoff.
These participating shareholders will be able to continue to retain their infection shares and also receive shares of graffiti holding and thereby having ownership and Damon.
The registration statement in connection with the spinoff was confidentially filed with the SEC yesterday.
As we've discussed before we believe that in pension isn't being adequately valued in the market. As a result, we have taken steps to execute strategic alternatives. This year that we believe will aid in maximizing value for our shareholders over time.
Please keep in mind. These are two separate independent transactions, we are pursuing which we believe provide upside potential for infection shareholders as they have the ability to become part of two separate publicly traded companies.
Now, let's get into the Daymond story.
I'm, so pleased to introduce <unk> CEO and co founder of Damon.
Jay.
Perfect. Thanks, Cotter, So hello, everybody my name is <unk> and I'm, the founder and CEO at Damon Motors.
For the last handful of years, we've been hard at work defining ended by designing what we believe will become the future of Motorcycling.
The company idea really began in the summer of 2016, when I spent several days riding a motorcycle in downtown Jakarta, Indonesia I was there for my best friend's wedding and the crowd of about 10 million people many riding a motorcycle everyday.
Cities like Jakarta, like many people there I had a little motorcycle accident, but thankfully I wasn't injured.
Not too much just by ego, mainly and I spent the next several days of my trip in Jakarta thinking very differently about the everyday citizens of that city as a road around everyday on a motorbike is everyone's out there I realized how strange it was to me that the card companies that make millions of safe cars also make millions of unsafe motorcycle.
And that the technology used to make those cars safer has not really trickled down in any way into the motorcycle industry at large.
So into my research then I started to learn that $1 5 billion people every single day depend on our powered motorcycle to get from <unk> in the cities that are so congested in many ways. They really have no other alternative and how to get around.
So how do we make motorcycling safer and how do we improve air quality for this group of competitors that exist in these.
These cities that are generally have a pretty poor air quality.
I learned quickly on that motorcycles than outsell cards two to one every single year annually in fact, they're the second largest emitter of greenhouse gas emissions in the world right behind heavy duty trucks.
So all of that really led me to realize it was time to set a new standard in Motorcycling. So I set a goal for Dana to become the world leader for safer smarter motorcycles.
Now I know that what youre looking at on the screen doesn't exactly it looked like the average motorcycle for someone living in Jakarta, or Mexico City. So it's important here to understand that just like the mini EV companies before Tesla there have been many EV motorbike companies before Damon that failed to take flight and that could be for many reasons, but I'll I'll argue it's for one.
Reason alone and Thats, because nobody wants to trade down in life Tesla was the first card company to make an EV that was better than what ever car you already have in your driveway.
Aid Ev's aspirational and by developing an entirely new powertrain system and by solving real world problems inherent in Motorcycling today, we believe we've done the same thing so because of the high cost of developing new technology that requires us to start at the top of the market like Tesla did making us the high highly aspirational player in this space as well.
And so very much like Tesla, we're taking the approach where we can revolutionize motorcycling by first developing the fastest most powerful and longest range and safest motorcycle. We can that is intended to meet the needs of everyday western enthusiast. We've also built an exciting brand that we believe can cause a transformation from the west Alpha.
To the east and eventually around the world.
So and to present to you the Damon Hyperscore, our flagship product is capable of outperforming.
Really any other kind of motorcycles, we've seen in the world today.
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Our mission is to unleash the full potential of Motorcycling tour of the world.
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Alright, so thats the demo video of our flagship product that Damon hyper sport the bike as its been designed from the ground up almost every answer. This thing has been engineered to deliver some of the highest performance ever achieved of any motorcycle in the world The Dana and Hydro sport delivers 200 horsepower 200 Newton meters of torque and maintained over to her.
Wondered miles of combined city highway range per charge. It also is DC fast charge capability built in and will also be compatible with Tesla supercharger.
In 2023 Wired magazine became the first media outlet to right on the track back to back against the best Bmw's Super bike you can buy and they said the Damon effectively screams that full acceleration a high pitched shriek from the hyperdrive electric motor and internal gear set it sounds like nothing more or less in the future and you can read that article in wired Meg.
<unk> from the July issue of 2043 goes on with lots of detail about how great the buckets.
So these points on the left of the slide here that have made the company really special our bike is 100% electric and is capable of meeting or exceeding the performance of the best Ducati BMW and Honda Superbikes you could buy we've also developed copilot.
One of the world's first collision warning systems for motorcycles for the team and I have been working on it to a level of production readiness, having tested it with over 100 local riders with the chief of police of LAPD and 12 of their officers in downtown La traffic and with Chief Engineers, and <unk> Honda Suzuki of all testing of our co pilot system.
It really makes a difference we will talk about more of that in a little bit. We've also so far received over $85 million a consumer credit card back to reservations for the hydro sport that you see on the screen here we.
<unk> and raised over $70 million to date, and we have 34 patents or patents pending across 13 jurisdictions around the world and we have $1 14 Major Awards awards like the best of the best of automotive innovation by CES CNET Robb report SaaS company popular science, the Thomas Edison Award for innovation and so on.
Okay.
And we have a pretty fantastic group of people on our team that I'm very lucky to be surrounded by a little bit about myself I've been in the automotive industry now for 15 years in 2003, I decided that I wanted to spend the rest of my life, helping to get the world off oil. So in 2008 I figure the best way to do that was to build it.
Electric vehicles and I founded a company called <unk> technologies, we made high performance electric Suvs and pickup trucks on Ford chassis. Some of our major customers included U S and Canadian municipalities utility companies. We also won several Dod contracts funded by <unk> in partnership with major military contractors such as <unk>.
ICEE and Honeywell aerospace than in 2012, I founded a company called <unk>, making internet connected hardware software platform that grew to become one of the largest platform for consumers in the automotive industry today.
<unk> now has millions of subscribers in nine countries around the world in partnership with seven wireless carriers like Deutsche Telekom T Mobile and Metro PCF tell us Rogers in Bell and has taken significant investment from quite a few strategic investors like pellet ventures T mobile Deutsche Telekom, Boston and many others.
To my right is there a door <unk>, our CTO and a champion motorcycle racer. He has decades of experience designing and developing high voltage high performance electric motorcycles and dirt bike under the name also motors Amber Spencer to his right was our fifth higher who joined Damon also a motorcycle racer. She built all of our marketing systems that drove the order book.
What it is today and to her right is Michael Galbraith, He's our CFO. He has decades of experience growing Blackberry from 200 to 20000 people as SVP of operations and finance over a course of about 13 years and the rest of the team or is the 50. Some odd more of US has collectively 300 years' experience designing <unk>.
Developing and manufacturing a whole line of vehicles from electric and gas dirt bikes to electric and gas rates cars fuel cell cars for Honda to high performance cars like Mclaren to electric cars like Tesla electric buses and even vertical take off aircraft for Uber elevate so really a diverse set of combustion hydrogen fuel cell and <unk>.
Trick vehicle design development and manufacturing experience, even setting up automotive factory than manufacturing plants around the world.
So all of that Knowhow really lends itself to some pretty successful innovations that will talk about shortly.
Now on the board, we have myself of course, and then Alex Spiro to my right Who's been on the board now for about two years. Mr. Spyros is Elon musk personal lawyer, and we have Greg Cappelli inject clarity onto a decades of family office and public equity and private equity experience as well as decades.
A experienced running public companies, how we were joined the company during our series eight he has decades of consumer electronic experience with companies that quantity Sony Ericsson startups the development.
Now below that some of our more notable financial investors include Franklin Templeton. There was an early investor in Tesla afford Motorcars family Office Fund's analysis, and two prolific Canadian BCS round 13, and health of lithium some of our strategic investors include in Deca, which is the power utility for Indonesia, They signed on to become the National National does.
Tributary for David motorcycles in Indonesia, which is the third largest motorcycle market in the world.
Now <unk> is the largest manufacturer of motorcycles in Latin America, and they too have signed on to become a distributor for data in five countries of Latin America thin bond is one of our components manufacturers in Taiwan and the Daily group is the family office that arent Harley Davidson, Canada for 100 years, so some pretty significant strategic experience and support to help the comp.
<unk> become successful.
Yeah.
Now you can probably appreciate as many of you are probably thinking that motor.
Motorcycling to huge market and it certainly is there's about 180 million motorcycles sold annually. That's nearly twice the volume of cars, but as you would expect many of those motorcycles are pretty low cost commodity vehicles and thats not a market that Damian wants to play and we're going to stay in a highly capable motorcycle market, which is in the $3000 price.
And up.
And for us so for us that's about a $43 billion market, which we believe is absolutely primed for disruption totally underserved in terms of really showing off on electric vehicle leader that we would we expect to become.
Right.
So we're going to serve that market with two platforms based upon this design. These are the core pillars that as a system. We call Hyperdrive Hyperdrive is novel and quite a few ways. Its a 500 volt liquid cooled structural battery. So the battery itself acts as the frame of the bike and is engineered in the shape of a motorcycle.
Everything you see between the tires. This reverse fee shape, it's filled with over 1000 lithium ion batteries that we get from our world class supplier and our liquid cooled and reps and this aluminum Michele So you don't see a motorcycle frame because the battery is the frame all of this results in higher power less weight and lower cost the proprietary.
150 kilowatt motor in the middle spends up to 18000, RPM generating over 200 horsepower and its bolted right into the middle of as you can see we've wrapped the shape of the pack around the motor for optimal weight balancing and performance.
The result of this is astounding hyperscore delivers three five times the power to weight ratio of the Tesla model three performance and it handles like a Moto GP supervisory now the charger sits right on top and the high power inverter system. The front for easy service and repair key features of this is that we've written all of our own code. So all of the onboard soft.
Where the firm where even the cloud as Damon work together as one seamless intelligence system that means we can update all of our bike over the air and fix any software issues before they become a problem.
So as a single platform hyperdrive is completely modular so the Piper drive on the left here, we can rapidly enter more and more market segments and a lower price point simply by changing the bodywork by reducing the number of sales in the pack by reducing the <unk>.
With software and by changing the way it looks and feels with different suspension of plastic all at a fraction of the cost of building hyperdrive itself. So none of this is possible in the combustion motors.
Cycle industry today, where it typically they have to build new frame, new transmission and new engines that have to be rebuilt and retooled to make different sized motorbikes. So that makes the redeem in a much more capital efficient way of testing and developing a whole new range of motorcycles, and allowing us to rapidly take over more market share and maybe and motorcycle segments hybrids.
<unk> is going to serve the 19 to $40000 price point with the average price so far being around $28000, which is on par with the top of the line Ducati.
And now that we're ready to wear readiness designed for production. We are working on the early design for hyper light over on the right to serve the world's segment. This is the system that in <unk> and <unk> were filed assemble in their domestic regions to serve the world market under the name of me again wrapping hyper light in different sizes and styles of bike so that we can penetrate.
Market very quickly as well.
Now as I mentioned earlier, David really stands apart from the motorcycle industry by having focused on making motorcycling safer. So copilot has really special copilot as a novel array of collision warning sensors and proprietary software, we have a radar and a camera in the front of the bike and we've.
A radar and a camera on the back of that is seamlessly integrated into the motorbike.
Now motorcycles don't move anything like a car, which is the main reason why we've never seen intelligent warranty systems on motorbikes before unlike cars motorcycles lead to a very steep degree as they pass through return and they float between the white lines of a lane because there are so narrow and they can also pitch forward during heartbreaking. So these collision warning senses on a motorbike are often.
Pointed at the ground appointed Scott So our copilot software is designed to adjust to what the sensors are seeing in real time, which allows us to keep a level field around the bike regardless of what the bank is doing so if you can imagine this gray SUV in the picture here is braking hard while youre looking over your shoulder at the White car plenty of lane change what Youre going.
Get is a forward collision warning delivered to the rider with a haptic vibration in the handlebar and Red led light at the top of the seven inch display that you see below giving you that one extra second you need to react.
This warning alert the rider to react with more tend to react the rider has more time to break or sort of to avoid danger now we've collected over 40000 miles of this data and as I said before we've had dozens of people from the LAPD and over 100 local writers test the system and it just works it's really effective.
Okay.
So in addition to the vibrating Hello bars are red.
Led light illuminate and augments the haptic forward collision warning now copilot also delivers lifestyle warnings on the right and left of the seven inch proprietary display and I can show you everything behind you. While you are right as well using the rear facing camera.
Copilot also has built in GPS LTE, Bluetooth and Wi Fi. So we can ingest and store up to 500 gigabytes of data onboard and transmit it to the <unk> cloud to build a safer and deliver safer smarter algorithms back to all Damon bikes over the year. This means the more you writer Damon motorcycle the safer smarter all.
Damon writers become in the future will also have pay per month features that we're really excited to launch. So it is really game changing and nothing like this has been developed before for motorcycles before as far as we know.
The other thing that you motorcyclists out there will appreciate is that we all know that motorcycling it gets pretty pretty uncomfortable after awhile. So daymond bikes adjust in real time to the traffic conditions at the push of a button. So while you're riding the bike you could be at highway speed bent over going fast leaning and having lots of fun and then as you get into.
Heavy dense traffic you can push a button.
And your hydro Boswell electronically lift up and your feet footpace or dropped putting in a more upright junior writing position. So for riders. This is like having two bikes in one and it really just changes the game, it's tremendously exciting when you experienced an adjustable motorcycle for the first time.
Especially if it was riders up there who are constantly I'm comfortable on a bike.
Okay.
Now all of these novel features including our AI cloud our co pilot system are adjustable ergonomics will all be available at a whole line of motorcycles ranging from the sport by category that we plan to enter into first and then into the largest segment the commuter category category.
Finally into the fastest growing segment, which is the adventure bike category, our bikes will be priced between 19% and $40000 as I said with the average price point of our reservations being at 28000 now it's important to note that the cost of building electric motorbike is a small fraction of the cost of building a car, but because but we're generating price similar to that of <unk>.
Car Company for example, these Ducati BMW that you see below our price between 20 and $45000 BMW for example sells more than 40000 units a year of some of these bikes.
It's also worth noting that the capital intensity of building a bike is many times more capital efficient than the capital intensive intensity of building a car company.
Isn't burdened by the heavy cost of crash testing or building out a half mile of robots that car manufacturing requires.
Also unlike car manufacturing motorcycle Doty certification is a self certification process. So even.
Very streamlined path towards production in front of us now.
Written for the slides here. We go so now about 73% of our order book is generated out of the U S or sorry in the U S. I should say, mainly in California, Florida, and Texas over the course of 2025, 44% to 25, we expect to be doing most of our shipments.
And the California <unk>, we also have signed agreements with <unk> in India that could generate potentially another $250 million in revenue in the coming years.
And then we do have orders outside of the U S. As you can see in Canada.
Europe, UK and the rest of the world, but we're really going to focus our priority shipments into the U S. First.
Now this is the most important slide if you ask me surveys of our reservation holders show that the people ordering daymond bikes are on average 20 years younger than the American average motorcyclists, which means all of our competitors from Yamaha Ducati Honda et cetera are still selling to people in a $40 $50 60, whereas we're selling.
People in their 2030 40 people who are entering motorcycling today, many don't learn how to change gears in a car that's gone with the past, making it much more intimidating to think about getting a motorbike and learned having to learn how to change gears on one of those and electric motor bike with no gears that safer collision warning system that doesn't generate emissions.
It's cheaper to operate is all really exciting which is why we're seeing such demand in our reservations now in the bottom left here, 39% of people ordering and Dana advice, a pretty serious writers they own two or more bikes interestingly, though a quarter of them don't own a bike at all and some of them don't even have a license. So we are obviously feeling on it.
<unk> in the market, that's never been drilled before and Thats really a big deal secondly, we see that 55% of people ordering our bikes are coming up for much cheaper community rights. So we're drawing customers up from lower cost segment in order to get where you can't find anywhere else in the industry right. Now this has happened once before in the auto industry and Thats, a tesla what's been called the test.
The effect, which is thoroughly talked about and studied on the internet showing that the most economy trade. It in the most of the car most commonly traded in for a $55000 Tesla model Y is a Toyota that's worth $20000 to such an extent that the model Y dethroned. The corolla is the best selling car in the world.
Now when you look at that kind of a kind of bikes are customer zone over in the pie on the right. The top nine out of 10 of them are combustion engine motorcycle brands. So we're really excited about the opportunities to take real market share away from the legacy players like Yamaha Ducati Honda and so on.
So our design is done and the major technological risks are behind US now the next stages production as part of this financing is use of funds, we're going to kick off the tools purchasing for production start initially in San Rafael, California, We're setting.
It up as our new product introduction center, where we plan to build out the first thousand motorcycles before duplicating that manufacturing process into a higher volume Assembly plant in 2025.
So as we've discussed earlier and summarized here, we believe our performance safety features reservations patents and thought leadership all position us really strongly for the future.
And beyond Wired magazine tests, right, we plan to be running major resets right events and customer insights rather than next year as well as part of our process are generating more reservations and converting them. This isn't all of our award because it just some of them we kind of did.
One across too many onto the screen here, but you can check out some of our notable awards that we're pretty excited to have won.
And we're really excited about the potential to become publicly traded motorcyclists are intensely passionate about writing, it's like a religion for them and for as long as motorcycles have existed writers have dreamed of owning a piece of motorcycle history, but besides Harley Davidson and live wire, there really arent any publicly traded motorcycle companies to compare us to as a <unk>.
Companies, so focused on building up the industry's future, we think the dream of being part of our growth and success has finally arrived by becoming a publicly traded company, we're giving millions of people access a chance to own a part of the motive for the future of Motorcycling and allowing their passion to have a voice that gets hurt so together, we get to make motorcycle history as we make two wheeler.
Ability cleaner smarter and safer for the world and I'm really looking forward to sharing this journey with all of you as well and with that I'll turn it back to <unk>. Thank you.
Alright, Thanks, Jay that was a great presentation I'm sorry, it's very helpful for our shareholders to understand Damian vision and business plan.
And now that you've seen and heard Jay and Damon's incredible story, and how real and impressive as you can see why we're doing this transaction.
Given the market cap challenges infection has been facing we needed to do something we had to think outside the box and Thats why we pursued the strategy and strategic transactions our goal with both the <unk> and payment transactions is to transform infection and maximize shareholder value over time, which we believe these can achieve.
So with that I'll hand, it back to Alexandra to lead us through the Q&A discussion.
Yeah.
Thanks, now, they're like last quarter in our conference call announced that press release, you suggested interested parties submit their questions in advance we'd like to address those questions for you know some questions were duplicative. So we get our best of reconciling those where possible.
If you have any further questions. After the call. Please feel free to follow up with Investor Relations and we'll be sure to respond as quickly as possible.
Let's start with some transaction related questions for another.
Why is infection pursuing these transactions.
Yeah, So I'll just touch on that.
As I've mentioned on several occasions in the past, we don't believe infection is being properly reflected in the stock price or market cap and share the frustration with our shareholders. So we've expressed a goal of pursuing strategic transactions that we believe will maximize value for our shareholders and further and so those objectives earlier. This year, we completed the spin off of.
Our enterprise apps business with Kim.
And we believe these two additional transactions with X gene <unk> gaming are meaningful for the company by allowing us to enter new markets with upside potential for two separate public companies.
Can impact our shareholders.
Thanks, and our next question remain kicks in shares be automatically converted into shares of any company.
Yes, so just to clarify Alexandra we're talking about two separate transactions right. So in fixing shareholders shareholders at the time of the closing of the <unk> transaction will essentially become shareholders of X Gi aerospace as a result of that merger transaction, our ticker will change to <unk> our name will change.
<unk> aerospace.
Actually I am management will become management of <unk> Aerospace and the majority of our board of directors will be designees of X Gi.
Separately for the graffiti spinoff transaction.
Our shareholders as a record date to be determined we will participate in the graffiti distribution.
<unk> shareholders will be able to retain their infection shares and also receive shares of <unk> holding the proposed transaction with Damon and graffiti holding <unk> anticipated to close following that spin off and subsequent satisfaction of certain closing conditions, which we touched upon earlier.
Thank you now that we are now going to shift to some Damon related question. So Jay. Our first question is how do you plan to service the bikes.
Great question, Yes, there is a few things about that it's important to kind of know that first of all we.
Been in the electric vehicle industry for a long time and seen that.
Really about 90% of electric vehicles servicing is software related in fact, Tesla had a huge recall and before the media even put up the notice I think 500000 cars got a software update and that was all it took.
And that we expect to be quite true for diamond as well, while we will expect to be servicing hardware on the bike.
In addition to doing the software updates.
We have.
Active dialog going with a nationwide electric vehicles servicing partner that services electric bike electric cars and the like in your driveway there'll be able provide a concierge service for customers. Initially in those first three states, California, Florida, Texas and then we can expand nationwide with this surface partner in the U S as well.
Okay.
Thank you J. Our next question isn't it true that the EV supply chain is challenged right now.
So actually there has been a decent drop in the demand of evs predominantly because we've seen.
The major Oems like Ford and Chrysler and General Motors getting pretty beat up in the markets recently related to two.
The auto Union issues.
Let's put a pretty big help on the production and sale of electric vehicles and a lot of their dealerships and they're really not set up with electric cars. The way Tesla is with sell them online, which is exactly what Damon does.
And that's resulted in quite a surplus in the EV industry with batteries and with components and with electronics.
And in Silicon and the like and it's actually been really favorable for us because it's given us quite a bit better pricing advantages that we've been getting that our cost on a lot of our components.
We have our supply chain in place predominantly in northern Europe, Taiwan and in the U S. We have no suppliers in China.
And we're ready to start placing orders for production components with our suppliers now.
Thank you next question do motorcycle manufacturers had as many production and regulatory hurdles to deal with an automotive manufacturer is down.
That's a really important question I touched on it earlier and I just wanted to stress it motorcycle manufacturing well for us. It's a motorcycle assembly to all of the major components of our motor gearbox, our inverter charger or major battery components, they're all produced by World class suppliers as I mentioned and they ship out these finished sub.
<unk> that we assembled by hand, so it's about eight hours of manual labor to assemble a Damon motorbike. We don't have to have a half mile of robots. We don't have to crash tests, we don't have to go through rigorous emissions testing because opex electric.
And that all results in a very streamlined process for certification, which for US is a self certification process in the U S. So we only self certify the bike and really that means theres no regulatory hurdles in front of us to start production.
Oh.
Alright, well. Thank you gentlemen that does conclude the Q&A.
And the opening of this call you are advised to read and contemplate the information regarding forward looking statements risk factors and where to find more information about the proposed transaction.
This information has been published on <unk> website, and our definitive merger announcement.
That's release and in this conference call date announcement press release, now I will turn it back over to not after the close.
Thanks Alexandra and thank you all for joining today, we hope you found this call informative and helpful and as always we appreciate the support of all of our shareholders and look forward to providing more updates as developments unfold. Thank you and take care everyone.
Yeah.
Thank you. This concludes today's call and you may disconnect at this time, we thank you for your participation.
Okay.