GRAPHJET TECHNOLOGY SEC 10-K Report

Graphjet Technology, a company specializing in the production of artificial graphene and graphite through a patented biomass conversion process, has released its Form 10-K report. The report provides a comprehensive overview of the company's financial performance, business operations, strategic initiatives, and the challenges it faces in the competitive graphene and graphite industry.

Financial Highlights

Revenues: $0 million. The company has not commenced commercial sales and plans to strategically sample its products to gain market acceptance.

Gross Profit: $0 million. As there were no sales, there was no gross profit reported.

Loss from Operations: $(17.4) million. Operating expenses included only general and administrative expenses with a significant increase due to a provision for bonuses and other costs associated with the Business Combination.

Net Loss: $(17.8) million. The net loss increased significantly due to the reasons discussed above, including the provision for bonuses and increased professional fees.

Loss per Share Ordinary Share: $(0.12). Reflects the increased net loss and the number of shares outstanding post-recapitalization.

Business Highlights

Graphjet Technology Overview: Graphjet Technology specializes in the production of artificial graphene and graphite using a patented process that converts palm kernel shells, a renewable waste product, into high-quality materials. This innovative approach allows for lower production costs and reduced carbon emissions compared to traditional methods.

Market Opportunity: The global graphite market is expected to grow significantly, driven by demand from the lithium-ion battery industry. Graphjet aims to fill the supply gap for graphite and graphene, particularly for electric vehicle (EV) batteries, which predominantly use graphite as an anode material.

Supply Agreement with Toyoda: On December 27, 2022, Graphjet entered into a supply agreement with Toyoda to provide $30 million worth of graphite and graphene annually for their carbon-neutral mobility products. However, production was delayed due to export restrictions from China.

Production Facility Plans: Graphjet plans to construct its first main production facility in Malaysia to mass-produce high-quality graphite and graphene. Additionally, a commercial artificial graphite production facility is planned in Nevada, capable of recycling palm kernel material to produce battery-grade graphite.

Manufacturing Process: Graphjet's manufacturing process involves converting palm kernel shells into graphite and graphene through a series of steps including drying, crushing, catalyzation, pyrolysis, and graphitization. This process ensures high purity and quality of the final products.

Research and Development: Graphjet collaborates with institutions like the National University of Malaysia and University Teknikal Malaysia Melaka for research and development. The company is also a member of the Industrial Liaison Program at MIT, emphasizing its commitment to innovation.

Future Outlook: Graphjet aims to become a leader in cost-efficient production of premium artificial graphite and graphene. The company plans to expand its manufacturing capabilities and secure long-term supply agreements to support the growing demand in various industries, including EVs and energy storage.

Strategic Initiatives

Strategic Initiatives: Graphjet Technology is positioning itself as a leader in cost-efficient production of premium artificial graphite and graphene by leveraging its patented biomass conversion process. The company is focused on securing strategic partnerships and enhancing its business development and marketing strategies to reach multinational companies and gain market acceptance. Additionally, Graphjet is committed to sustainability practices, aiming to reduce carbon emissions and production costs significantly.

Capital Management: The company completed a reverse recapitalization with Energem, resulting in Graphjet becoming a wholly-owned subsidiary and raising approximately $1.2 million in proceeds. Graphjet has also secured a $2.5 million PIPE investment and completed a fundraising exercise amounting to approximately $1.4 million. The company has issued ordinary shares to settle debts and has a provision for a $13.8 million bonus to reward senior management for the successful business combination. The company has not paid any dividends to date and has reserved shares for issuance under its 2023 Equity Incentive Plan.

Future Outlook: Graphjet plans to commence production by the end of August 2025 and aims to displace high-cost suppliers with its competitively priced, eco-friendly alternatives. The company is exploring additional equity and debt financing to support its working capital requirements and construction plans. Graphjet is also focused on diversifying its sourcing strategy to mitigate risks associated with geopolitical tensions and trade restrictions, particularly in the graphite and graphene markets.

Challenges and Risks

Challenges and Risks: Graphjet Technology faces several significant risks that could impact its business operations and financial performance. Key risks include:

• Limited Operating History: The company has a very limited operating history, making it difficult to evaluate its success and future viability. This uncertainty is compounded by the introduction of a new product in the industry, which complicates revenue prediction and expense budgeting.
• Going Concern Doubts: The independent registered public accounting firm’s report expresses substantial doubt about the company's ability to continue as a going concern due to significant net losses and liabilities exceeding assets.
• Graphene/Graphite Manufacturing Risks: The proposed manufacturing business carries risks such as unanticipated liabilities, the need for additional capital, and competition from better-funded companies. The company may also face challenges in producing commercially viable products and attracting customers.
• Competitive Industry: The graphene and graphite industry is highly competitive, with competition based on price, performance, and innovation. This could lead to price reductions and increased spending on R&D, adversely affecting profitability.
• Intellectual Property Risks: The company faces risks related to protecting its intellectual property, which is crucial for maintaining a competitive edge. There is also the risk of litigation to enforce these rights, which could be costly and resource-intensive.
• Regulatory and Compliance Risks: Compliance with health, safety, and environmental regulations in Malaysia is complex and costly. Failure to comply could result in significant liabilities and adversely affect operations.
• International Market Risks: Expanding into international markets introduces risks such as economic instability, regulatory challenges, and currency fluctuations, which could impact sales and operations.
• Supply Chain and Raw Material Dependence: The company is dependent on the palm oil industry for raw materials, exposing it to price volatility and supply disruptions, which could materially affect business operations.
• Cybersecurity Threats: The company is vulnerable to cyber-attacks that could result in data breaches, operational disruptions, and significant legal and financial repercussions.
• Financial Reporting and Compliance: As a public company, Graphjet Technology faces challenges in maintaining effective internal controls over financial reporting, which could impact investor confidence and stock price.

Management is focused on addressing these challenges by investing in research and development, enhancing production capabilities, and strengthening intellectual property protections. However, the success of these strategies is uncertain and subject to various external factors.

SEC Filing: GRAPHJET TECHNOLOGY [ GTI ] - 10-K - Jul. 15, 2025