Graphjet Technology(GTI) - 2022 Q4 - Annual Report

Part I Business Energem Corp. is a Cayman Islands blank check company (SPAC) focused on renewable energy and zero-emission technology, aiming to acquire Graphjet Technology Sdn. Bhd. - Energem Corp. is a blank check company formed to effect an initial business combination, focusing on the renewable energy sector[11][46] - On August 1, 2022, the Company entered into a Share Purchase Agreement to acquire Graphjet Technology Sdn. Bhd. ("Graphjet"), a company that converts palm kernel shells into graphene and graphite[17] Graphjet Business Combination Transaction Details | Metric | Value | | :--- | :--- | | Aggregate Transaction Consideration | $1,380,000,000 (payable in Energem Class A ordinary shares) | | Target Net Working Capital | $30,000 | - On November 16, 2022, shareholders approved an extension for the company to complete its initial business combination from November 18, 2022, to August 18, 2023[42][43] - In connection with the extension vote, holders of 9,604,519 Class A ordinary shares exercised their redemption rights, for an aggregate payment of approximately $98.5 million, reducing the trust account balance to approximately $19.4 million[44] Risk Factors As a smaller reporting company, Energem Corp. provides a partial list of material risks primarily related to its status as an early-stage blank check company with no operating history - The company identifies itself as an early-stage entity with no operating history, which is a primary risk factor[144] - Key operational and financial risks include dependence on key personnel, potential conflicts of interest involving the sponsor and officers, the possibility of Nasdaq delisting, and the risk of warrants becoming worthless if a business combination is not completed[145] Unresolved Staff Comments The company reports no unresolved staff comments from the SEC as of the filing date - Not applicable; the company has no unresolved staff comments[147] Properties The company's principal executive offices are located in Kuala Lumpur, Malaysia, under a monthly administrative support services agreement - The company's executive offices are located at Level 3, Tower 11, Avenue 5, No. 8, Jalan Kerinchi, Bangsar South, Wilayah Persekutuan Kuala Lumpur, Malaysia 59200[148] - The company pays an affiliate of its sponsor $10,000 per month for office space and administrative support services[148] Legal Proceedings To the knowledge of its management, there is no current or contemplated litigation against Energem Corp., its officers, or its directors - There is no litigation currently pending or contemplated against the company or its officers and directors[149] Mine Safety Disclosures This section is not applicable to the company's business operations - Not applicable[149] Part II Market for Registrant's Ordinary Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Energem Corp.'s units, public shares, and public warrants are traded on Nasdaq, and the company has not paid cash dividends - The company's securities trade on Nasdaq: Units (ENCPU), Class A ordinary shares (ENCP), and public warrants (ENCPW)[150] - The company has not paid any cash dividends and does not plan to before its initial business combination[152] - From the IPO and private placement, gross proceeds of $116,725,000 were placed in a Trust Account[159] Management's Discussion and Analysis of Financial Condition and Results of Operations The company, a blank check entity with no operations, reported a net income of $53,884 for 2022, primarily from trust account interest offsetting costs Results of Operations | Period | Net Income / (Loss) | Key Components | | :--- | :--- | :--- | | Year ended Dec 31, 2022 | $53,884 | Interest Income: $1,348,596; Operating Costs: $1,294,712 | | Period from Aug 6, 2021 to Dec 31, 2021 | ($307,949) | Interest Income: $1,349; Operating Costs: $309,298 | Liquidity Position (as of Dec 31, 2022) | Metric | Value | | :--- | :--- | | Cash | $47,789 | | Working Capital | ($723,893) | - The company has a promissory note with its sponsor for up to $300,000 to cover expenses, with $88,542 outstanding as of December 31, 2022[186] - Contractual obligations include a $10,000 per month administrative support fee to the sponsor and a deferred underwriting commission of $4,025,000 payable upon completion of a business combination[188][189] Quantitative and Qualitative Disclosures About Market Risk The company has minimal interest rate risk as its trust account funds are invested in short-term U.S. government treasury securities - The company's funds held in the Trust Account are invested in short-term U.S. government treasury bills, notes, or bonds, which are believed to have minimal interest rate risk[190] Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. The company reported no changes in or disagreements with its accountants on any accounting or financial disclosure matters - None reported[191] Controls and Procedures. Management concluded that disclosure controls were ineffective due to a material weakness in internal control over financial reporting, citing inadequate segregation of duties and limited personnel - Management concluded that the company's disclosure controls and procedures were not effective as of the end of the reporting period[191] - A material weakness was identified in internal controls over financial reporting due to inadequate segregation of duties, limited personnel, and insufficient written policies for accounting and financial reporting[195] - Management's remediation plan includes enhancing the board's size and composition, consulting with third-party professionals, and considering additional experienced staff[196] Other Information. The company intends to deposit approximately $85,297 into the trust account for the sixth monthly extension of its termination date - The company details the monthly deposits of approximately $85,297 ($0.045 per share) into the trust account to facilitate the extension of its termination date for completing a business combination[199] Part III Directors, Executive Officers and Corporate Governance. This section provides information on the company's leadership team, board committees, and adopted Code of Ethics - The management team is led by Swee Guan Hoo (CEO), Kok Seong Wong (Chairman), and Cu Seng Kiu (CFO)[203] - The Board of Directors has three standing committees: Audit, Compensation, and Corporate Governance and Nominating[214] - The Board has determined that Kok Seong Wong, Doris Wong Sing Ee, and Kwang Fock Chong are independent directors, satisfying Nasdaq's majority independence requirement[213] - The company has adopted a Code of Ethics for its directors, officers, and employees[225] Executive Compensation. Prior to a business combination, executive officers and directors receive no cash compensation, only reimbursement for out-of-pocket expenses - No executive officers or directors have received cash compensation for services rendered; they are only reimbursed for out-of-pocket expenses[227] - The company's CFO and certain directors received founder shares from the sponsor at their original purchase price as a form of non-cash compensation[228] - After an initial business combination, members of the management team who remain may be paid consulting or management fees, to be determined by the post-combination board[230] Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters This section details the beneficial ownership of the company's shares as of March 30, 2023, with the sponsor, Energem LLC, as the principal shareholder Outstanding Shares as of March 30, 2023 | Share Class | Shares Outstanding | | :--- | :--- | | Class A Ordinary Shares | 2,423,556 (including 1,895,481 subject to redemption) | | Class B Ordinary Shares | 2,875,000 | - The sponsor, Energem LLC, is the record holder of 528,075 Class A shares and 2,875,000 Class B shares, owned 50:50 by CEO Swee Guan Hoo and Executive Director Doris Wong Sing EE[237] Certain Relationships and Related Transactions, and Director Independence The report outlines several related party transactions, primarily with the sponsor, Energem LLC, and reaffirms the independence of certain directors - The sponsor, Energem LLC, purchased 2,875,000 founder shares for $25,000 and 528,075 placement units for $5,280,750[240][243] - The company pays the sponsor $10,000 per month for office space, utilities, and administrative support[243][252] - The sponsor or its affiliates may provide working capital loans up to $1,500,000, which can be converted into units at $10.00 per unit upon completion of a business combination[245][253] - The board of directors has determined that Kok Seong Wong and Kwang Fock Chong are independent directors as defined by Nasdaq listing standards[259] Principal Accountant Fees and Services. This section summarizes the fees paid to the company's independent registered public accounting firm, Adeptus Partners LLC Fees Paid to Adeptus Partners LLC | Fee Type | FY 2022 | FY 2021 (Inception to Dec 31) | | :--- | :--- | :--- | | Audit Fees | $94,500 | $77,000 | | Audit-Related Fees | $0 | $0 | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 | Part IV Exhibits, Financial Statement Schedules This section lists the documents filed as part of the Form 10-K report, including financial statements and an index of exhibits - The report includes the company's audited financial statements for the years ended December 31, 2022 and 2021[266] - Key exhibits filed with the report include the Share Purchase Agreement with Graphjet, the Underwriting Agreement, the company's Memorandum and Articles of Association, and various officer certifications[361] Financial Statements Report of Independent Registered Public Accounting Firm The independent auditor, Adeptus Partners, LLC, issued an unqualified opinion on the company's financial statements for 2022 and 2021, affirming their fair presentation in conformity with U.S. GAAP - The auditor, Adeptus Partners, LLC, expressed an unqualified opinion on the financial statements[267] - The financial statements are deemed to be presented fairly in accordance with U.S. Generally Accepted Accounting Principles (GAAP)[267] Financial Statements Data The financial statements reflect the company's status as a pre-business combination SPAC, showing a significant decrease in trust assets due to redemptions and a net income for 2022 Balance Sheet Summary (Audited) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Assets | $19,897,384 | $117,449,581 | | Cash and marketable securities held in trust | $19,535,946 | $116,726,349 | | Total Liabilities | $5,110,331 | $4,177,413 | | Deferred Underwriting Commission | $4,025,000 | $4,025,000 | | Total Shareholders' Deficit | ($4,919,487) | ($3,452,832) | Statement of Operations Summary (Audited) | Account | Year Ended Dec 31, 2022 | Period Ended Dec 31, 2021 | | :--- | :--- | :--- | | Formation and Operating costs | ($1,294,712) | ($309,298) | | Interest earned on trust account | $1,348,596 | $1,349 | | Net Income (Loss) | $53,884 | ($307,949) | | Basic and diluted net income (loss) per share | $0.02 | ($0.10) | Notes to the Financial Statements The notes provide critical context on the company's SPAC formation, IPO, pending Graphjet acquisition, shareholder redemptions, and a going concern uncertainty - The company is a blank check company that consummated its IPO on November 16, 2021, and entered into a Share Purchase Agreement with Graphjet on August 1, 2022[282][296] - Shareholder redemptions of 9,604,519 shares reduced the trust account balance to approximately $19.5 million as of December 31, 2022[302] - Management has identified a substantial doubt about the company's ability to continue as a going concern if it fails to complete a business combination by the August 18, 2023 deadline[307] - Related party transactions include the sponsor's purchase of 2,875,000 founder shares for $25,000 and a promissory note for up to $300,000 to cover offering costs[331][334]