PART I Business Graphjet Technology produces artificial graphene and graphite from renewable palm kernel shells using a patented, low-cost process and plans a major manufacturing facility in Malaysia - The company owns a patented technology to manufacture artificial graphene and graphite from renewable palm kernel shells, positioning itself as a low-cost, high-quality producer363739 Product Cost and Pricing Advantage | Product | Graphjet's Production Cost/Price | Traditional Market Price | Savings | | :--- | :--- | :--- | :--- | | Graphite | Approx. $4,500 per ton | $8,000 - $20,000 per ton | Significant | | Graphene | $15 per gram | $167 - $450 per gram | Over 80% | - Graphjet has a supply agreement with Toyoda Trike Inc to provide $30 million worth of graphite and graphene annually, though no revenue was generated in 2023 due to export issues4157 - The company plans to build its first manufacturing plant in Kuantan, Malaysia, with a projected annual capacity of 10,000 tons of graphite and 60 tons of graphene5875 Risk Factors The company faces significant risks from its limited operating history, reliance on new technology, substantial capital needs, and a "going concern" warning from its auditor Risks Related to Business and Industry Key business risks include a limited operating history, a "going concern" warning due to a working capital deficit, and dependence on the palm oil industry - The company has a limited operating history since its formation in 2019, making it difficult to evaluate its business and future prospects80 - The independent registered public accounting firm's report expresses substantial doubt about the company's ability to continue as a "going concern" due to a working capital deficit of $2,007,327 and cash of only $5,503 as of December 31, 202382 - The business is dependent on the palm oil industry for its raw material, palm kernel shells, and any disruption could materially affect operations126 - The company has not yet generated any sales and its projections are subject to significant uncertainty, having produced no revenue in 2023 from its supply agreement with Toyoda Trike111 Risks Related to Intellectual Property The company's success depends on protecting its intellectual property, facing risks from unauthorized technology use and uncertainty over its pending graphene patent - The company relies on patents, trade secrets, and contractual agreements to protect its technology, but these measures may not be sufficient132 - There is no certainty that the company's pending patent application for its process of producing palm-based graphene will be approved134135 Risks Related to the Regulatory Environment Operations are subject to complex Malaysian environmental regulations and international risks including import/export controls and political instability - Compliance with numerous health, safety, and environmental laws in Malaysia is complex and costly, and failure to comply could result in significant liabilities145 - The business is subject to import and export control laws, which could impair its ability to compete in international markets147 Risks Related to Organization and Structure As a newly public entity, the company faces risks from increased compliance costs and management's limited experience operating a U.S-listed company - The management team has limited experience managing a U.S.-listed public company, which could pose challenges in navigating regulatory oversight149153 - The company qualifies as an "emerging growth company" under the JOBS Act, allowing it to take advantage of reduced reporting requirements154 Risks Related to Ownership of Securities Investment risks include potential share price volatility, lack of an active trading market, possible delisting from Nasdaq, and future shareholder dilution - An active trading market for the company's securities may not develop or be sustained, which would adversely affect liquidity and price162 - The company's share price is likely to be volatile, and failure to meet Nasdaq's continued listing requirements could result in delisting163166 - Shareholders may experience future dilution due to equity issuances for acquisitions, capital raising, or employee compensation plans172 Unresolved Staff Comments The company reports that it has no unresolved staff comments from the SEC - Not applicable194 Cybersecurity The company is establishing its cybersecurity framework post-merger, with oversight from the Audit Committee, and has experienced no material incidents to date - The company is currently developing its cybersecurity risk management strategy post-merger and is engaging with external experts for evaluation196197 - The Board of Directors' Audit Committee has primary responsibility for overseeing cybersecurity risks200 - To date, the company has not experienced any cybersecurity challenges that have materially impaired its operations or financial standing198 Properties The company leases its executive offices and is constructing a $400 million manufacturing facility in Kuantan, Malaysia, expected to begin production in Q1 2025 - The company plans to construct a manufacturing facility on 20 acres of land in Kuantan, Pahang State, Malaysia, at an estimated cost of $400 million205 - The new facility is designed to produce 10,000 tons of graphite and 60 tons of graphene annually, with first production expected in Q1 2025205 Legal Proceedings The company is not currently a party to any material legal proceedings - Management believes there are currently no pending claims or actions against the company that would have a material adverse effect on its results206 Mine Safety Disclosures This item is not applicable to the company's business - Not Applicable207 PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's shares trade on Nasdaq under "GTI," it does not plan to pay dividends, and it has approved an equity incentive plan Securities Trading Information | Security | Trading Symbol | Exchange | | :--- | :--- | :--- | | Class A ordinary shares | GTI | Nasdaq Global Market | | Public Warrants | GTIWW | OTC | - The company has never paid cash dividends on its Class A ordinary shares and has no current plans to do so210 - The 2023 Omnibus Equity Incentive Plan was approved, reserving 13,800,000 Class A ordinary shares for future issuance211 [Reserved] This item is reserved and contains no information Management's Discussion and Analysis of Financial Condition and Results of Operations This section presents the pre-merger financial results of Energem Corp, a SPAC with no operations, highlighting a net loss in 2023 and a going concern warning - The financial information presented is that of Energem Corp prior to the business combination and does not reflect the operations of Graphjet219220 Results of Operations (Pre-Merger SPAC) | Metric | For the year ended Dec 31, 2023 | For the year ended Dec 31, 2022 | | :--- | :--- | :--- | | Formation and Operating Costs | $904,790 | $1,294,712 | | Interest Earned on Trust Account | $858,423 | $1,348,596 | | Net Income (Loss) | ($46,367) | $53,884 | - As of December 31, 2023, the company had a working capital deficit of $2,007,327 and cash of $5,503, raising substantial doubt about its ability to continue as a going concern226227 - The underwriter is entitled to a deferred commission of $4,025,000, which became payable upon the completion of the Business Combination234 Quantitative and Qualitative Disclosures About Market Risk The company reports no material exposure to interest rate risk as its funds were held in short-term U.S. government treasury securities - The company's exposure to market risk is considered minimal as proceeds from the IPO were invested in U.S. government treasury bills241 Financial Statements and Supplementary Data This section incorporates by reference the company's audited financial statements and supplementary data included at the end of the report - This item refers to the audited financial statements of Energem Corp for the years ended December 31, 2023 and 2022, which are included from page F-1 onwards242376 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None reported243 Controls and Procedures Management concluded that disclosure controls were not effective as of year-end 2023 due to a material weakness in internal control over financial reporting - Management determined that the company's disclosure controls and procedures were not effective as of December 31, 2023244 - A material weakness was identified in internal controls due to inadequate segregation of duties, limited personnel, and insufficient written policies247 - The company plans to implement remediation steps, including enhancing the board's composition and potentially hiring additional staff248 Other Information The company reports no other information under this item - None251 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to the company - Not applicable252 PART III Directors, Executive Officers and Corporate Governance This section details the post-merger board and management, which includes a majority of independent directors and established audit, remuneration, and nominating committees Executive Officers and Directors | Name | Position | | :--- | :--- | | Aiden Lee Ping Wei | Chief Executive Officer and Executive Director | | Boh Woan Yun | Senior Finance Manager | | Lim Seh Jiang | General Manager | | Liu Yu | Head of Research and Chief Scientific Officer | | Aw Jeen Rong | Executive Director | | Hoo Swee Guan | Executive Director | | Wong Kok Seong | Independent Director | | Ng Keok Chai | Independent Director | | Doris Wong Sing Ee | Independent Director | | Ng Ah Lek | Independent Director | - The Board of Directors is divided into three staggered classes (Class I, II, and III) with members serving three-year terms273 - The company has established Audit, Remuneration, and Nominating and Corporate Governance committees, each composed of independent directors278 Executive Compensation Post-merger, the company established new executive employment agreements with base salaries and adopted a new Equity Incentive Plan - Prior to the merger, Energem's Sponsor received $10,000 per month for administrative services, totaling $120,000 for the year ended December 31, 2023297298 Post-Merger Executive Base Salaries | Executive | Title | Annual Base Salary (USD) | | :--- | :--- | :--- | | Aiden Lee Ping Wei | Chief Executive Officer | $250,000 | | Aw Jeen Rong | Executive Director | $125,000 | | Liu Yu | Head of Research and Chief Scientific Officer | $93,750 | | Hoo Swee Guan | Executive Director | $62,500 | | Lim Seh Jiang | General Manager | $31,250 | | Boh Woan Yun | Senior Finance Manager | $12,500 | - The company adopted the Equity Incentive Plan, which reserves 13,800,000 Class A Ordinary Shares for future equity awards310 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters This section details the beneficial ownership of the company's shares, listing all directors, officers, and owners with stakes greater than 5% Beneficial Ownership (as of April 18, 2024) | Name of Beneficial Owner | Number of Shares | % of Class | | :--- | :--- | :--- | | Liu Yu | 35,195,150 | 25.55% | | Suria Suskes Engineering Sdn Bhd | 27,550,000 | 19.0% | | Lim Hooi Beng | 19,973,612 | 14.5% | | Aiden Lee Ping Wei | 8,884,850 | 6.14% | | Aw Jeen Rong | 8,609,306 | 5.9% | Certain Relationships and Related Transactions, and Director Independence This section discloses pre-merger related party transactions, including founder share purchases and working capital loans provided by Energem's Sponsor - Energem's Sponsor purchased 2,875,000 founder shares for $25,000 and 528,075 placement units for $10.00 per unit340342 - The Sponsor provided loans to Energem, and as of Dec 31, 2023, the outstanding balance under the Working Capital Loan and Extension Agreement was $1,396,037354 - Post-business combination, the company has adopted a written policy for reviewing and approving related party transactions exceeding $120,000361 Principal Accountant Fees and Services This section details fees paid to the independent accounting firm Adeptus Partners LLC for audit services in fiscal years 2023 and 2022 Accountant Fees (Adeptus Partners LLC) | Fee Type | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Audit Fees | $62,500 | $94,500 | | Audit-Related Fees | $0 | $0 | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 | - The audit committee's policy is to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm372 PART IV Exhibits and Financial Statement Schedules This section lists all exhibits filed with the Form 10-K, including key corporate and operational agreements, and incorporates financial statements by reference - This item lists all exhibits filed with the annual report, including the Share Purchase Agreement, Warrant Agreement, Equity Incentive Plan, and various employment agreements380381 Form 10-K Summary The company indicates that no summary is provided under this item - None509
Energem (ENCP) - 2023 Q4 - Annual Report