Energem (ENCP) - 2023 Q3 - Quarterly Report

PART I Financial Statements Presents Energem Corp.'s unaudited financial statements, detailing balance sheets, operations, and cash flows, highlighting net income and a widening shareholders' deficit Balance Sheets Total assets decreased to $13.8 million due to redemptions, liabilities increased, and shareholders' deficit widened to $(6.0) million Balance Sheet Summary (Unaudited) | Metric | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Assets | $13,766,895 | $19,897,384 | | Cash and marketable securities in trust | $13,613,146 | $19,535,946 | | Total Liabilities | $6,186,076 | $5,110,331 | | Deferred Underwriting Commission | $4,025,000 | $4,025,000 | | Total Shareholders' Deficit | $(6,032,327) | $(4,919,487) | Statements of Operations Net income for the nine months ended September 30, 2023, increased to $270,481, driven by trust account interest, with $0.08 basic and diluted net income per share Statements of Operations Highlights (Unaudited) | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Formation and Operating costs | $406,241 | $544,013 | | Interest earned on trust account | $676,722 | $696,180 | | Net Income | $270,481 | $152,167 | | Basic and diluted net income per share | $0.08 | $0.04 | Statements of Cash Flows Net cash used in operations was $295,402, with significant cash movements from investing and financing activities driven by share redemptions - Significant cash movements were driven by share redemptions, with $7.48 million withdrawn from the trust account (investing activities) and paid out to shareholders (financing activities)[19] Cash Flow Summary (Unaudited) | Metric | Nine Months Ended Sep 30, 2023 | | :--- | :--- | | Net cash used in operating activities | $(295,402) | | Net cash provided by investing activities | $6,770,117 | | Net cash used in financing activities | $(6,435,560) | | Net change in cash | $39,155 | Notes to Unaudited Financial Statements Details Energem Corp.'s status as a blank check company pursuing a business combination with Graphjet Technology, with an extended deadline to February 2024, highlighting share redemptions and going concern - The company is a blank check company formed to effect a business combination, with a focus on the oil, gas, and renewable energy sectors[21] - On August 1, 2022, the company entered into a Share Purchase Agreement to acquire Graphjet Technology Sdn. Bhd. for a consideration of approximately $1.38 billion in shares[37][39] - The deadline to consummate a business combination has been extended to February 18, 2024, following shareholder meetings in November 2022 and August 2023. These extensions were accompanied by significant share redemptions, reducing the trust account balance to $13.6 million[41][44][47] - Management has determined that there is substantial doubt about the company's ability to continue as a going concern due to the requirement to liquidate if a business combination is not completed within the prescribed time[66] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Energem's financial condition and operations as a blank check company, focusing on the Graphjet business combination, extended deadline, and liquidity challenges including a working capital deficit and reliance on sponsor loans - The company is a blank check company with no operations or revenue, focused on completing its initial business combination with Graphjet Technology[125][129] - The deadline for completing a business combination was extended to February 18, 2024, requiring monthly deposits of $0.045 per share into the Trust Account[135][136] Results of Operations Summary | Period | Net Income/(Loss) | Key Drivers | | :--- | :--- | :--- | | Nine Months Ended Sep 30, 2023 | $270,481 | Interest income of $676,722 offset by operating costs of $406,241 | | Nine Months Ended Sep 30, 2022 | $152,167 | Interest income of $696,180 offset by operating costs of $544,013 | - As of September 30, 2023, the company had a working capital deficit of $2,007,327 and cash of $86,944. Management believes it may not have sufficient working capital to meet its needs for the next year[154][155] - The company is reliant on loans from its Sponsor to fund operations and transaction costs, with $334,557 outstanding under a Working Capital Loan as of September 30, 2023[158][159] Quantitative and Qualitative Disclosures About Market Risk The company has minimal exposure to market or interest rate risk as Trust Account funds are invested in short-term U.S. government securities - The company has minimal exposure to market and interest rate risk as proceeds in the Trust Account are invested in short-term U.S. government securities with maturities of 185 days or less[166] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal control over financial reporting - Based on an evaluation as of September 30, 2023, the principal executive and financial officers concluded that the company's disclosure controls and procedures were effective[169] - There were no material changes to the company's internal control over financial reporting during the most recently completed fiscal quarter[170] PART II - OTHER INFORMATION Legal Proceedings The company reports no legal proceedings - The company has no legal proceedings to report[173] Risk Factors No material changes to risk factors from the previously filed Form 10-K have been reported - No material changes to risk factors from the previously filed Form 10-K have been reported[174] Unregistered Sale of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities - The company reports none[175] Defaults Upon Senior Securities The company reports no defaults upon senior securities - The company reports none[176] Mine Safety Disclosures This item is not applicable to the company - Not Applicable[177] Other Information The company reports no other information - The company reports none[178] Exhibits Lists exhibits filed with the Quarterly Report, including officer certifications and XBRL data files - Exhibits filed include certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Sarbanes-Oxley Act Sections 302 and 906, as well as Inline XBRL documents[180]