Commercial Production and Sales - Graphjet Technology plans to commence commercial production by the end of February 2026 after securing a production facility in Malaysia [218]. - The company has not yet started commercial sales but aims to sample products to multinational companies for market acceptance [217]. - The qualification process for Graphjet's products typically spans 12 to 18 months, involving comprehensive testing and compliance checks [238]. - The company is currently in its early commercialization phase and relies heavily on external funding to support operations, R&D, and compliance commitments [269]. Financial Performance - Revenues increased by approximately $92,776, or 100% for the year ended September 30, 2025, due to selling side products since June 2025 [293]. - Cost of revenues also increased by approximately $192,941, or 100% for the year ended September 30, 2025, consistent with the increase in product revenue [294]. - Gross loss was approximately $100,165 for the year ended September 30, 2025, primarily due to low productivity and discounted sales of side products [295]. - General and administrative expenses decreased by approximately $14.2 million, or 81.5%, from approximately $17.4 million for the year ended September 30, 2024, to approximately $3.2 million for the year ended September 30, 2025 [298]. - Net loss reduced by approximately $1.4 million, or 8%, from approximately $17.8 million for the year ended September 30, 2024, to approximately $16.4 million for the year ended September 30, 2025 [301]. - Net cash used in operating activities was $(2,119,350) for the year ended September 30, 2025, compared to $(3,026,529) in 2024 [309]. - The Company has an accumulated deficit of $42.2 million as of September 30, 2025 [305]. Funding and Investment - The company has funded its operations primarily through equity investments from current shareholders [217]. - The Company plans to pursue a diversified funding structure, including strategic partnerships and institutional investors, to support its growth plan [288]. - Net cash provided by financing activities for the year ended September 30, 2025 was approximately $2.3 million, mainly from proceeds of short-term loans with related-party of approximately $1.3 million and issuance of ordinary shares of $0.9 million [313]. - Net cash provided by financing activities for the year ended September 30, 2024 was approximately $4.7 million, primarily from proceeds of long-term debt with related-party of approximately $2.9 million and PIPE investment of $2.5 million [314]. Market and Industry Challenges - Graphite prices have declined approximately 20% for fine-flake graphite in the first ten months of 2024, with a 2.7% decrease in Q3 2025 due to subdued demand [226]. - The ongoing US-China trade tensions and China's ban on graphite exports pose significant risks to the company's supply chain and operational costs [232]. - The competitive landscape in the graphene and graphite industry remains fierce, driven by price, performance, and customer service factors [234]. - Stringent import and export regulations in key markets pose significant operational challenges, potentially delaying shipments and increasing costs [242]. - Geopolitical tensions and supply chain disruptions have led to operational halts among industry leaders, highlighting the fragility of current supply chains [249]. - The company faces significant uncertainty due to changing political landscapes and green energy policies, which can impact revenue projections and investment decisions [239]. Operational Efficiency and Technology - The company is positioned as a leader in cost efficiency, producing high-quality graphene and graphite at lower costs compared to conventional methods [214]. - Graphjet's proprietary manufacturing technology achieved up to an 83% reduction in carbon footprint and up to an 80% reduction in production costs [277]. - The company must invest significantly in eco-friendly technologies to comply with evolving environmental regulations, which can increase operating costs [240]. - The loss of key technical personnel could disrupt operations and delay project milestones, adversely affecting technology development efforts [270]. Stock and Market Status - Graphjet's Class A ordinary shares were suspended from trading on The Nasdaq Global Market and are now quoted on the OTC Pink Limited marketplace [307]. - The transition of Graphjet's common stocks to the OTC market has resulted in significantly lower trading liquidity, impacting the ability to raise capital for expansion plans [272]. Financial Reporting and Compliance - The company’s financial statements are prepared in accordance with U.S. GAAP, requiring estimates and judgments that affect reported amounts of assets, liabilities, revenues, and expenses [316]. - Long-lived assets are reviewed for impairment whenever events indicate that the carrying value may not be recoverable, based on undiscounted future cash flows [317]. - Fair value of financial instruments is measured based on a three-tier hierarchy, with Level 1 being the highest priority for observable inputs [319]. - Upon completion of the Business Combination, all of Graphjet's outstanding public and private warrants were replaced by the company's public and private warrants, treated as a warrant modification [323].
Energem (ENCP) - 2025 Q4 - Annual Report