E-bike maker Damon in seriously stormy waters

Damon Inc., the Canadian electric motorcycle startup once promising a 200 mph superbike with 200 miles of range, is facing a storm of lawsuits while clinging to a skeleton crew of employees. 

Once hailed as a disruptive force in motorcycling, the company now looks increasingly like a cautionary tale.

Buried in Damon’s latest 10-K filings is a disclosure that the firm is tied up in multiple legal battles, including claims from former executives. One of the most striking suits comes, according to RideApert, from financier Andrew DeFrancesco, who says Damon owes him more than $3.2 million in stock compensation for advisory services. DeFrancesco, a controversial figure with a history of SEC sanctions (enforcement actions imposed by the U.S. Securities and Exchange Commission [SEC]), has longstanding ties to the company through investments made via his House of Lithium fund. The fund pumped tens of millions into Damon during its expansion phase. He also linked the brand to IndyCar through a sponsorship deal with his son, Devlin. 

Now, though, that relationship has soured in court.

And DeFrancesco isn’t alone. Damon is also being sued over unpaid rent and, according to filings, faces action from none other than its ousted founder and former CEO, Jay Giraud. It’s a tangled mess that speaks to deep fractures at the once-hyped startup, which nearly collapsed last year before co-founder Dominique Kwong was brought back to steady the ship.

If the legal fights weren’t enough, Damon’s filings revealed a shocking figure: just 13 people remain on its payroll, two of whom are contractors. That’s a steep fall from a claimed 100-plus employees during its growth phase, when the firm was boasting of a $100 million reservation book and hyping up a new manufacturing facility. Today, that factory doesn’t seem to exist. Production plans remain vapour, and the company is pivoting toward AI safety software in what looks like a desperate attempt to stay afloat.

The question is whether Damon can survive at all. Building complex electric motorcycles at scale with just over a dozen staff sounds like fantasy, particularly with creditors, investors, and ex-executives circling in court.

For reservation holders still waiting on their HyperSport or HyperFighter, the outlook is grim. Damon has yet to comment on the lawsuits or the brand’s future direction, but as the walls close in, it’s becoming harder to believe the bikes will ever reach the road.

Find the latest motorcycle news on Visordown.com