GTI
Graphjet Technology
NASDAQ
10-Q: Graphjet Technology Reports First Quarter 2024 Results Following Business Combination
Sentiment:
Quarterly Report
18 June 2024 8:24 PM
Graphjet Technology reports a net loss of $11.594 million for the quarter ended March 31, 2024, following its merger with Energem Corp.
Worse than expected
The company reported a significant net loss of $11.594 million for the quarter, which is a substantial increase compared to the previous year.
The company's general and administrative expenses have increased significantly, indicating higher operating costs.
The company's auditor has expressed substantial doubt about the company's ability to continue as a going concern, which is a major concern.
Capital raise
The company may seek to raise additional funds through equity and debt financing or from other sources.
The company's future is dependent upon its ability to obtain financing to continue operations and attain profitable operations.
Summary
- Graphjet Technology, formerly Energem Corp., reported its financial results for the quarter ended March 31, 2024, following a business combination with Graphjet Technology Sdn. Bhd.
- The company incurred a net loss of $11.594 million for the three-month period and $12.018 million for the six-month period ended March 31, 2024.
- General and administrative expenses significantly increased to $11.588 million for the quarter and $12.006 million for the six months, primarily due to increased staff costs, marketing, audit, consulting, and legal fees, as well as amortization of intangible assets.
- The company's total assets stood at $8.513 million, with current assets exceeding current liabilities by $378,000.
- Graphjet Technology is focused on producing high-quality artificial graphite and graphene from palm kernel shells, a renewable agricultural waste product.
- The company has not yet generated any revenue from product sales but plans to sample its products to multinational companies.
- The company's operations are currently funded through equity investments from shareholders.
- The company has a patent on its bio-mass process for graphite production and a patent pending for graphene production.
- The company has secured loans of $475, with interest, from external parties to fund the acquisition of a Graphene Patent.
- The company has also entered into debt to equity conversion agreements with directors and shareholders to partially settle outstanding balances.
Sentiment
Score: 3
Explanation: The document highlights significant losses, increased expenses, and a going concern warning, which are major negatives. While the technology is promising, the financial situation is concerning, leading to a low sentiment score.
Highlights
- Graphjet Technology reported a net loss of $11.594 million for the three months ended March 31, 2024, and $12.018 million for the six months ended March 31, 2024.
- General and administrative expenses increased significantly to $11.588 million for the quarter and $12.006 million for the six months, driven by increased staff costs, marketing, audit, consulting, and legal fees, and amortization of intangible assets.
- The company's total assets were $8.513 million as of March 31, 2024.
- The company has a working capital surplus of $378,000 as of March 31, 2024.
- The company has secured loans of $475 from external parties to fund the acquisition of a Graphene Patent.
- The company has issued 775,000 ordinary shares at $4.00 per share amounting $3.1 million to partially settle the outstanding balance with a director.
- The company has issued 1,275,000 ordinary shares at $4.00 per share amounting $5.1 million to partially settle the outstanding balance with a shareholder for intellectual property.
- The company has a patent on its bio-mass process for graphite production and a patent pending for graphene production.
- The company believes it is the only producer currently capable of using biomass to produce graphite and graphene in mass production scale.
Positives
- The company has a unique technology for producing graphite and graphene from palm kernel shells.
- The company has a patent on its bio-mass process for graphite production and a patent pending for graphene production.
- The company has a working capital surplus of $378,000 as of March 31, 2024.
- The company has secured $5.705 million in financing activities during the six months ended March 31, 2024.
- The company has completed a business combination with Energem Corp. and is now publicly listed.
Negatives
- The company incurred a significant net loss of $11.594 million for the quarter ended March 31, 2024.
- The company has not yet generated any revenue from product sales.
- The company's general and administrative expenses have increased substantially.
- The company's auditor has expressed substantial doubt about the company's ability to continue as a going concern.
- The company is reliant on additional capital investment and debt to fund its operations.
Risks
- The company's ability to continue as a going concern is dependent on its ability to operate profitably and receive adequate financial support from shareholders.
- The company is subject to risks related to geopolitical tensions, which could affect its ability to procure raw materials and raise financing.
- The company faces competition in the graphene and graphite industry.
- The company's ability to obtain, maintain, and enforce intellectual property protection is critical to its success.
- The company's future is dependent upon its ability to obtain financing to continue operations and attain profitable operations.
Future Outlook
Graphjet Technology believes it will have sufficient working capital for 9-12 months and can begin construction on its manufacturing facility. The company intends to sample its products to multinational companies for market acceptance and procurement purposes. The company may seek to raise additional funds through equity and debt financing or from other sources.
Management Comments
- Management believes that the net impact of the Business Combination along with cash balances will be sufficient to fund the current operating plan for at least the next 12 months.
- Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives.
- Management believes that the unaudited condensed consolidated financial statements fairly present, in all material respects, the company's financial condition, results of operations and cash flows for the fiscal period presented in conformity with GAAP.
Industry Context
The company is operating in the graphene and graphite industry, which is characterized by competition based on market acceptance, material differentiation, quality, delivery reliability, and customer service. The company's technology offers a potential alternative to traditional artificial graphite production methods that rely on coal or petroleum coke.
Comparison to Industry Standards
- Graphjet's technology uses palm kernel shells, a renewable resource, unlike most artificial graphite producers who use petroleum coke or coal, which are subject to supply chain issues.
- The company claims its graphite and graphene have at least 98% similarity and are more consistent compared to other synthetic graphite and graphene.
- The company aims to be a low-cost producer of high-quality artificial graphite and graphene, which could give it a competitive edge against established players like Syrah Resources, a major natural graphite producer, and companies like GrafTech International, which produces synthetic graphite from petroleum coke.
- The company's lack of revenue and significant losses are typical for early-stage companies in the materials technology sector, but the going concern warning from the auditor is a significant concern.
Stakeholder Impact
- Shareholders face the risk of dilution if the company raises additional capital through equity.
- Employees may benefit from the Equity Incentive Plan.
- Customers may benefit from the company's low-cost, high-quality graphite and graphene products.
- Suppliers of palm kernel shells may benefit from increased demand.
- Creditors face the risk of non-payment if the company is unable to continue as a going concern.
Next Steps
- The company plans to sample its products to multinational companies for market acceptance and procurement purposes.
- The company intends to begin construction on its manufacturing facility.
- The company may seek to raise additional funds through equity and debt financing or from other sources.
Legal Proceedings
- The company is not party to any material legal proceedings.
Related Party Transactions
- The company has related party transactions with ZhongHe Industries Sdn Bhd (ZHI), an entity owned by a shareholder and director, for commission processing and tenancy agreements.
- The company has working capital loans and extension loans from its sponsor.
- The company has payables to directors and a shareholder for intellectual property, some of which have been partially settled through debt-to-equity conversions.
Key Dates
- August 6, 2021: Energem Corp. was incorporated in the Cayman Islands.
- November 18, 2021: Energem Corp. completed its initial public offering (IPO).
- March 10, 2022: Graphjet entered into an Intellectual Property Sales Agreement with Mr. Liu Yu.
- March 14, 2024: The merger between Energem Corp. and Graphjet Technology Sdn. Bhd. was consummated, and Energem changed its name to Graphjet Technology.
- February 28, 2024: Energem shareholders approved the Equity Incentive Plan.
- June 18, 2024: Date of the quarterly report.
Keywords
graphene, graphite, palm kernel shells, biomass, artificial graphite, battery material, business combination, reverse recapitalization, net loss, intellectual property
GTI
Graphjet Technology
NASDAQ
Sector: TBD
Filings with Classifications
Capital raise
30 April 2025 4:01 PM
8-K Filing
- The document mentions the risk that Graphjet will need to raise additional capital to execute its business plans.
- It also notes that such capital may not be available on acceptable terms or at all.
Worse than expected
30 April 2025 4:01 PM
8-K Filing
- The company received a delisting notice from Nasdaq due to its market value falling below the required threshold.
Worse than expected
6 March 2025 9:30 PM
8-K Filing
- The company received notices from Nasdaq for failing to meet listing requirements due to delayed financial filings and a low market value.
Delay expected
6 March 2025 9:30 PM
8-K Filing
- The company delayed filing its Quarterly Report on Form 10-K for the period ended September 30, 2024.
- The company delayed filing its Annual Report on Form 10-Q for the period ended December 31, 2024.
Capital raise
6 March 2025 9:30 PM
8-K Filing
- The company may need to raise additional capital to execute its business plans.
- There is a risk that additional capital may not be available on acceptable terms or at all.
Worse than expected
27 February 2025 9:30 PM
8-K Filing
- The company received a delisting notice from NASDAQ due to the share price falling below $1 for 32 consecutive days.
Worse than expected
14 January 2025 6:03 PM
SEC Form 4
- The complete divestment by a 10% owner is generally viewed negatively by the market.
Worse than expected
10 January 2025 7:25 PM
SEC Form 4
- The sale of a large number of shares by a major shareholder is generally viewed negatively by the market.
Worse than expected
8 January 2025 5:03 PM
SEC Form 4 Filing
- A major shareholder selling a significant number of shares is generally viewed negatively by the market.
Worse than expected
8 January 2025 4:30 PM
Director Resignation Announcement
- The resignation of three directors, including an executive and two independent members, is a negative development that could impact investor confidence.
Worse than expected
6 January 2025 2:23 PM
SEC Form 4
- The sale of shares by a major shareholder is generally viewed negatively by the market.
Worse than expected
30 December 2024 1:14 PM
SEC Form 4 Filing
- The document indicates that a major shareholder is selling a significant portion of their shares, which is generally considered a negative signal.
Worse than expected
20 December 2024 7:25 PM
SEC Form 4 Filing
- The significant sale of shares by a major shareholder is generally viewed negatively by the market.
- The decreasing weighted average sale price over the three days suggests a lack of confidence in the stock.
Worse than expected
17 December 2024 5:15 PM
SEC Form 4
- The sale of a significant number of shares by a major shareholder is generally viewed negatively by the market.
Capital raise
5 December 2024 5:27 PM
Personnel Change Announcement
- The document mentions the risk that Graphjet will need to raise additional capital to execute its business plans.
- It also states that this capital may not be available on acceptable terms or at all.
Worse than expected
1 November 2024 4:06 PM
S-1/A Filing
- The company has incurred significant losses and has not recorded any revenue to date.
- The company's auditor has expressed substantial doubt about its ability to continue as a going concern.
- The company's current liabilities exceed its current assets.
Delay expected
1 November 2024 4:06 PM
S-1/A Filing
- The document mentions that the company was unable to export graphite from China in 2023, therefore it did not produce any revenue pursuant to the supply agreement in 2023.
- The document states that Graphjet expects to open its first manufacturing plant in the first quarter of fiscal year 2025.
Capital raise
1 November 2024 4:06 PM
S-1/A Filing
- The document details a best efforts offering of 718,390 Class A Ordinary Shares at $2.088 per share.
- The company aims to raise approximately $1,450,000, after deducting estimated expenses of $50,000, for working capital and general corporate purposes.
Capital raise
25 October 2024 4:46 PM
S-1/A Filing
- The filing pertains to the offer and sale of Class A Ordinary Shares, with no minimum offering amount.
- The offering is a best efforts offering, with officers and directors using their best efforts to sell the shares at a fixed price of $ per share for 180 days.
- Proceeds from the sale will be used for working capital and general corporate purposes.
Worse than expected
25 October 2024 4:46 PM
S-1/A Filing
- The company's auditor has expressed substantial doubt about its ability to continue as a going concern.
- The company has a limited operating history and has not recorded any revenue since inception.
- The company faces intense competition in the graphene and graphite industry.
Delay expected
25 October 2024 4:46 PM
S-1/A Filing
- Currently, Graphjet Technology believes its first production from this plant will be in the first quarter of fiscal year 2025.
- We were unable to export graphite from China in 2023, therefore we did not produce any revenue pursuant to the supply agreement in 2023.
Delay expected
3 October 2024 4:28 PM
Registration Statement
- Graphjet Technology believes its first production from its manufacturing plant in Kuantan will be in the first quarter of fiscal year 2025.
Capital raise
3 October 2024 4:28 PM
Registration Statement
- Graphjet Technology is conducting a best efforts offering to sell Class A Ordinary Shares to raise up to $1.5 million.
- The offering price is fixed at $ per share, and the offering period is 180 days after the effective date of the registration statement.
- The company intends to use the proceeds for working capital and general corporate purposes.
Worse than expected
3 October 2024 4:28 PM
Registration Statement
- The company has a very limited operating history, which may make it difficult for investors to evaluate the success of its business.
- The company's independent registered public accounting firm's report contains an explanatory paragraph that expresses substantial doubt about its ability to continue as a going concern.
Worse than expected
28 August 2024 5:30 PM
S-1/A Filing
- The Public Warrants and the Sponsor Warrants are out of the money, which means that the trading price of the Class A Ordinary Shares underlying the Warrants is below the $11.50 exercise price of the Warrants.
- The sale of the securities being registered in this prospectus, or the perception in the market that such sales may occur, could result in a significant decline in the public trading price of our Class A Ordinary Shares.
Worse than expected
27 August 2024 4:15 PM
Current Report
- The resignation of the auditor and the going concern note in the audit report are both negative indicators.
Worse than expected
12 August 2024 4:15 PM
Quarterly Report
- The company's net loss of $14.157 million for the nine months ended June 30, 2024, is significantly worse than the $1.429 million loss for the same period in 2023.
- The company's general and administrative expenses have increased substantially, indicating higher operational costs.
- The company's current liabilities exceed its current assets by $2.054 million, raising concerns about its financial stability.
Delay expected
12 August 2024 4:15 PM
Quarterly Report
- The company has deferred its plans to open a manufacturing plant in Kuantan, Malaysia.
- The company's production start date has been delayed to late August 2024.
Capital raise
12 August 2024 4:15 PM
Quarterly Report
- The company states that it may seek to raise additional funds through equity and debt financing or from other sources.
- The company acknowledges that its future is dependent upon its ability to obtain financing to continue operations and attain profitable operations.
- The company's auditor has expressed substantial doubt about the company's ability to continue as a going concern, which may make it more difficult to attract investors.
Worse than expected
19 July 2024 4:16 PM
S-1/A Filing
- The current market price of the Class A Ordinary Shares is significantly below the exercise price of the warrants.
- The current market price is significantly below the price at the time of the Company's initial public offering.
Capital raise
19 July 2024 4:16 PM
S-1/A Filing
- The document details a primary offering of up to 12,028,075 Class A Ordinary Shares, including shares issuable upon exercise of Public and Sponsor Warrants.
- The company expects to continue efforts to raise additional capital to support its long-term business objectives.
Worse than expected
25 June 2024 4:06 PM
Registration Statement
- The company has not had any sales of its products to date.
- The company's Public Warrants and the Sponsor Warrants are out of the money, which means that the trading price of the Class A Ordinary Shares underlying the Warrants is below the $11.50 exercise price of the Warrants.
Delay expected
25 June 2024 4:06 PM
Registration Statement
- We were unable to export graphite from China in 2023, therefore we did not produce any revenue pursuant to the supply agreement in 2023.
Capital raise
25 June 2024 4:06 PM
Registration Statement
- The filing covers a primary offering of up to 12,028,075 Class A Ordinary Shares, including shares issuable upon exercise of public and sponsor warrants.
- It also includes a secondary offering for the resale of up to 108,848,493 Class A Ordinary Shares and 528,075 warrants by selling securityholders.
- The primary offering could generate up to approximately $138.3 million if all warrants are exercised for cash.
Capital raise
18 June 2024 8:24 PM
Quarterly Report
- The company may seek to raise additional funds through equity and debt financing or from other sources.
- The company's future is dependent upon its ability to obtain financing to continue operations and attain profitable operations.
Worse than expected
18 June 2024 8:24 PM
Quarterly Report
- The company reported a significant net loss of $11.594 million for the quarter, which is a substantial increase compared to the previous year.
- The company's general and administrative expenses have increased significantly, indicating higher operating costs.
- The company's auditor has expressed substantial doubt about the company's ability to continue as a going concern, which is a major concern.
Worse than expected
4 June 2024 4:16 PM
8-K Filing
- The company failed to file its quarterly report on time, resulting in a delinquency notice from Nasdaq, which is worse than expected.
Delay expected
4 June 2024 4:16 PM
8-K Filing
- The company's quarterly report for the period ended March 31, 2024, was not filed on time, leading to the Nasdaq delinquency notice.
Better than expected
2 April 2024 5:24 PM
Investor Presentation
- The company's production costs are significantly lower than industry standards.
- The company's carbon footprint is significantly lower than industry standards.
- The company's use of a renewable waste product is a significant advantage.
Capital raise
2 April 2024 5:24 PM
Investor Presentation
- The new manufacturing facility is subject to capital funds being raised.
Capital raise
20 March 2024 5:03 PM
Merger Announcement
- The document mentions a private financing (PIPE) that raised $2.5 million.
- The document also indicates that the company may need to raise additional capital in the future to execute its business plans.
Better than expected
4 March 2024 12:30 PM
Press Release
- The company is accelerating its production timeline, expecting commissioning by Q2 2024 and revenue generation in 2024, which is faster than previously anticipated.
Delay expected
20 February 2024 3:30 PM
Meeting Postponement Announcement
- The extraordinary general meeting of shareholders has been delayed from February 23, 2024, to February 28, 2024.
Delay expected
20 February 2024 9:00 AM
Material Definitive Agreement Update
- The document details a delay in the business combination deadline from February 18, 2024 to August 18, 2024.
Delay expected
23 January 2024 3:52 PM
Current Report
- The business combination deadline has been extended to February 18, 2024.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.