NOTES
TO UNAUDITED FINANCIAL STATEMENTS
Note
1 — Description of Organization and Business Operations
Energem
Corp. (the “Company”) is a blank check company incorporated in the Cayman Islands on August 6, 2021. The Company was formed
for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation with, purchasing all or substantially
all of the assets of, entering into contractual arrangements with, or engaging in any other similar business combination with one or
more businesses or entities (the “Business Combination”). While the Company may pursue a business combination target in any
business or industry, it intends to focus on opportunities across the oil and gas and other potential
renewable energy business, as well as other adjacent services, industrials and technologies, while remaining opportunistic across the
energy value chain, including select opportunities within the traditional power generation and energy production verticals, which
complements the expertise of its management team.
The
Financing
As
of March 31, 2023, the Company had not commenced any operations. All activity for the period from August 6, 2021 through March 31, 2023,
relates to the Company’s formation and the Offering (as defined below). The Company will not generate any operating revenues until
after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form
of interest income on cash and cash equivalents from the proceeds derived from the Offering. The Company has selected December 31 as
its fiscal year end.
The
Company’s sponsor is Energem LLC, a Cayman Island limited liability company (the “Sponsor”). The registration statement
for the Company’s Initial Public Offering was declared effective on November 15, 2021. On November 16, 2021, the Company consummated
its Initial Public Offering of 10,000,000 units (the “Units” and, with respect to the Class A ordinary shares included in
the Units being offered, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $100,000,000, and incurring
offering costs of $8,304,871, of which $4,025,000 was for deferred underwriting commissions (see Note 6) at the Initial Public Offering
closing occurring on November 18, 2021. The Company granted the underwriter a 45-day option to purchase up to an additional 1,500,000
Units at the Initial Public Offering price to cover over-allotments.
Simultaneously
with the consummation of the closing of the Offering, the Company consummated the private placement of an aggregate of 475,575 units
(the “Placement Units”) to the Sponsor at a price of $10.00 per Private Placement Unit, generating total gross proceeds of
$4,755,750 (the “Private Placement”) (see Note 4).
On
November 18, 2021, the underwriters purchased an additional 1,500,000 Units pursuant to the exercise of the over-allotment option. The
Units were sold at an offering price of $10.00 per Unit, generating additional gross proceeds to the Company of $15,000,000. Also, in
connection with the partial exercise of the over-allotment option, the Sponsor purchased an additional 52,500 Placement Units at a purchase
price of $10.00 per unit generating total Private Placement proceeds of $5,280,750.
A
total of $116,725,000, comprised of the proceeds from the IPO and the proceeds of private placements that closed on November 18, net
of the underwriting commissions, discounts, and offering expenses, was deposited in a trust account (“Trust Account”) which
may be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940,
as amended, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund
meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation
of a Business Combination or (ii) the distribution of the Trust Account to the Company’s shareholders, as described below.
Following
the closing of the Initial Public Offering, $1,002,730 of cash was held outside of the Trust Account available for working capital purposes.
As of March 31, 2023, we have available to us $19,338 of cash on our balance sheet and a working capital deficit of $741,134.
ENERGEM
CORP.
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
Note
1 — Description of Organization and Business Operations (Continued)
Trust
Account
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and the sale of the Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating
a Business Combination. NASDAQ rules provide that the Business Combination must be with one or more target businesses that together have
a fair market value equal to at least 80% of the balance in the Trust Account (less any deferred underwriting commissions and taxes payable
on interest earned on the Trust Account) at the time of the signing of a definitive agreement to enter a Business Combination. The Company
will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting
securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register
as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect
a Business Combination.
Upon
the closing of the Initial Public Offering, management has agreed that an amount equal to at least $10.15 per Unit sold in the Initial
Public Offering, including proceeds of the Placement Units, will be held in a trust account (“Trust Account”), located in
the United States and invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment
Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund
selected by the Company meeting certain conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the
earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds held in the Trust Account, as described
below.
Shareholder
Approval
If,
however, shareholder approval of the transaction is required by applicable law or stock exchange listing requirements, or the Company
decides to obtain shareholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy
solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks shareholder approval in connection
with a Business Combination, the Sponsor has agreed to vote its founder shares (as defined in Note 5) and any Public Shares purchased
during or after the Public Offering in favor of approving a Business Combination. Additionally, each Public Shareholder may elect to
redeem their Public Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.
Notwithstanding
the foregoing, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the
tender offer rules, the Certificate of Incorporation will provide that a Public Shareholder, together with any affiliate of such shareholder
or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more
than an aggregate of 20% of the Public Shares, without the prior consent of the Company.
The
holders of the founder shares have agreed (a) to waive their redemption rights with respect to the founder shares and Public Shares held
by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Certificate of Incorporation
(i) to modify the substance or timing of the Company’s obligation to allow redemptions in connection with a Business Combination
or to redeem 100% of its Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined
below) or (ii) with respect to any other provision relating to shareholders’ rights or pre-business combination activity, unless
the Company provides the Public Shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
ENERGEM
CORP.
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
Share
Purchase Agreement
On
August 1, 2022, the Company, entered into a share purchase agreement (the “Share Purchase Agreement”) with Graphjet Technology
Sdn. Bhd., a Malaysian private limited company, Swee Guan Hoo, in his capacity as the representative for the shareholders of Energem
after the closing of the sale and purchase of the Graphjet Shares (the “Closing”) for Energem’s shareholders (the “Purchaser
Representative”), the individuals listed on the signature page of the Share Purchase Agreement under the heading “Selling
Shareholders” (each, a “Selling Shareholder” and together, the “Selling Shareholders”), and Lee Ping Wei
solely in his capacity as representative for the Selling Shareholders (the “Shareholder Representative”).
Pursuant
to the Share Purchase Agreement, subject to the terms and conditions therein, Energem will purchase 100% of the issued and outstanding
shares of Graphjet for Graphjet Class A Ordinary Shares (the “Consideration Shares”) such that Graphjet will become a wholly-owned
subsidiary of Energem (the “Business Combination”). The Share Purchase Agreement contains customary representations, warranties
and covenants by the parties thereto and the Closing is subject to certain conditions as further described in the Share Purchase Agreement.
Graphjet
converts palm kernel shells to essential raw materials such as graphene and graphite used to produce
batteries in the electric vehicle space among other products. The aggregate value of the Consideration Shares to be paid pursuant
to the Share Purchase Agreement to the Selling Shareholders, as of immediately prior to the Closing, for the purchase of all issued and
outstanding Graphjet Shares, shall be that number of Energem Class A ordinary shares equal to (i)
One Billion Three Hundred and Eighty Million U.S. Dollars ($1,380,000,000), minus (ii) the amount, if any, by which $30,000 (i.e.,
the target net working capital amount) exceeds the Net Working Capital Amount (but not less than zero) (as defined in the Share Purchase
Agreement), minus (iii) the Closing Net Indebtedness amount (as defined in the Share Purchase Agreement), minus (iv) the amount of any
Transaction Expenses (as defined in the Share Purchase Agreement), divided by ten dollars ($10.00).
Each
Selling Shareholder shall receive a number of Energem Class A ordinary shares equal to the aggregate Consideration Shares divided by
the number of Graphjet Shares outstanding immediately prior to the Closing, multiplied by the number of Graphjet Shares held by such
Selling Shareholder (the “Conversion Ratio”). The total consideration payable to the Selling Shareholders in accordance with
the Share Purchase Agreement is also referred to herein as the “Transaction Consideration”.
Charter
Amendment and Termination Date
On
November 16, 2022, the Company held an extraordinary general meeting of its pursuant to due notice (the “Extraordinary General
Meeting”). At the Extraordinary General Meeting, Company shareholders entitled to vote at the Extraordinary General Meeting cast
their votes and approved the Trust Amendment Proposal, pursuant to which the Trust Agreement was amended to extend the date on which
Continental must liquidate the Trust Account established in connection with the IPO if the Company has not completed its initial business
combination, from November 18, 2022 to August 18, 2023.
The
shareholders of the Company approved the Second Amended and Restated Memorandum and Articles of Association of the Company at the November
16, 2022, Extraordinary General Meeting, giving the Company the right to extend the date by which the Company must (i) consummate a merger,
capital share exchange, asset acquisition, share purchase, reorganization or similar business combination involving the Company and one
or more businesses (a “business combination”), (ii) cease its operations if it fails to complete such business combination,
and (iii) redeem or repurchase 100% of the Company’s Class A ordinary shares included as part of the units sold in the Company’s
IPO that closed on November 18, 2021 from November 18, 2022 (the “Termination Date”) by up to nine (9) one-month extensions
to August 18, 2023 (the “Extension Amendment Proposal”).
In
connection with the voting on the Extension Amendment Proposal and the Trust Amendment Proposal at the Extraordinary General Meeting,
holders of 9,604,519 shares of Class A ordinary shares exercised their right to redeem those shares for cash at an approximate price
of $10.21 per share, for an aggregate of approximately $98,062,139. Following the payment of the redemptions, the Trust Account had a
balance of approximately $20,172,591 as of March 31, 2023.
The
holders of the founder shares have agreed to waive their liquidation rights with respect to the founder shares if the Company fails to
complete a Business Combination within the Combination Period. However, if the holders of founder shares acquire Public Shares in or
after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company
fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred
underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within
the Combination Period, and, in such event, such amounts will be included with the other funds held in the Trust Account that will be
available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of
the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).
The
Company will have until August 18, 2023 in connection to the Extension Amendment Proposal to consummate a Business Combination. In
connection with approval of the Extension Amendment Proposal and the Trust Amendment Proposal, the Company caused $0.045 per outstanding
share of the Company’s Class A ordinary shares, giving effect to the redemptions disclosed above, or approximately $85,296.65 for
the remaining 1,895,481 Class A ordinary shares to be deposited in the Trust Account in connection with the exercise of the first monthly
extension of the Extended Date on November 17, 2022 in advance of the November 18, 2022 due date.
In
connection with the third monthly extension of the Termination Date, the Company caused $0.045 per outstanding share of Energem’s
Class A ordinary shares or approximately $85,297 for 1,895,481 Class A ordinary shares to be paid to the Trust Account on January 13,
2023, in advance of the January 18, 2023 due date.
In
connection with the fourth monthly extension of the Termination Date, the Company caused $0.045 per outstanding share of Energem’s
Class A ordinary shares or approximately $85,297 for 1,895,481 Class A ordinary shares to be paid to the Trust Account on February 10,
2023, in advance of the February 18, 2023 due date.
In
connection with the fifth monthly extension of the Termination Date, the Company caused $0.045 per outstanding share of Energem’s
Class A ordinary shares or approximately $85,297 for 1,895,481 Class A ordinary shares to be paid to the Trust Account on March 10, 2023,
in advance of the March 18, 2023 due date to extend the period to consummate the period to complete a business combination to April 18,
2023. In connection with the sixth monthly extension of the Termination Date, the Company caused $0.045 per outstanding
share of Energem’s Class A ordinary shares or approximately $85,297 for 1,895,481 Class A ordinary shares to be paid to the Trust
Account on April 10, 2023, in advance of the April 18, 2023 due date to extend the period to consummate the period to complete a business
combination to May 18, 2023.
ENERGEM
CORP.
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
Note
1 — Description of Organization and Business Operations (Continued)
In
order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims
by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed
entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.15 per Public Share or (ii) such
lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.15
per Public Share due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn
to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account
and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities,
including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, if an executed waiver
is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party
claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors
by endeavoring to have all vendors, service providers (except for the Company’s independent registered accounting firm), prospective
target businesses and other entities with which the Company does business, execute agreements with the Company waiving any right, title,
interest or claim of any kind in or to monies held in the Trust Account.
Liquidity
and Capital Resources
As
of March 31, 2023, the Company had $19,338 of
cash in its operating bank account. The Company’s liquidity needs prior to the consummation of the Initial Public Offering were
satisfied through the payment of $25,000
from the Sponsor to cover for certain offering
costs on the Company’s behalf in exchange for issuance of Founder shares (as defined in Note 4). After the consummation of the
Initial Public Offering, the Company’s liquidity has been satisfied through the net proceeds from the consummation of the Initial
Public Offering and the Private Placement held outside of the Trust Account.
In
order to fund working capital deficiencies or finance transaction costs in connection with our initial Business Combination, our Sponsor
or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required
(“Working Capital Loans”). As of March 31, 2023, there are $209,682 outstanding for Working Capital Loan. If we complete our
initial Business Combination, we would repay such loaned amounts. In the event that our initial Business Combination does not close, we
may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account
would be used for such repayment. Up to $1,500,000 of such loans may be convertible into
units, at a price of $10.00 per unit at the option of the lender, upon consummation of our initial Business Combination. The units would
be identical to the placement units.
We
do not believe we will need to raise additional funds following the IPO in order to meet the expenditures required for operating our business.
However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial
Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business
prior to our initial Business Combination. Moreover, we may need to obtain additional financing either to complete our initial Business
Combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial Business
Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. In addition,
we intend to target businesses larger than we could acquire with the net proceeds of the IPO and the sale of the placement units and may
as a result be required to seek additional financing to complete such proposed initial Business Combination. Subject to compliance with
applicable securities laws, we would only complete such financing simultaneously with the completion of our initial Business Combination.
If we are unable to complete our initial Business Combination because we do not have sufficient funds available to us, we will be forced
to cease operations and liquidate the trust account. In addition, following our initial Business Combination, if cash on hand is insufficient,
we may need to obtain additional financing in order to meet our obligations.
In connection with our assessment of going concern considerations in accordance with FASB ASU 2014-15, “Disclosures
of Uncertainties about an Entity’s ability to Continue as a Going Concern,” we have determined that if we are unable to raise
additional funds to alleviate liquidity needs as well as complete a Business Combination by the Termination Date, then we will cease
all operations except for the purpose of liquidating. The liquidity condition and the date for mandatory liquidation and subsequent dissolution
raises substantial doubt about our ability to continue as a going concern. We plan to consummate a Business Combination prior to the
mandatory liquidation date. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate
after the Termination Date.
Going
Concern Consideration
The
Company expects to incur significant costs in pursuit of its financing and acquisition plans. In connection with the Company’s
assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures
of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that if the Company
is unsuccessful in consummating an initial business combination within the prescribed period of time from the closing of the Initial
Public Offering, the requirement that the Company cease all operations, redeem the public shares and thereafter liquidate and dissolve
raises substantial doubt about the ability to continue as a going concern. The balance sheet does not include any adjustments that might
result from the outcome of this uncertainty. Management has determined that the Company has funds that are sufficient to fund the working
capital needs of the Company until the consummation of an initial business combination or the winding up of the Company as stipulated
in the Company’s amended and restated memorandum of association. The accompanying financial statement has been prepared in conformity
with generally accepted accounting principles in the United States of America (“GAAP”), which contemplate continuation of
the Company as a going concern.
ENERGEM
CORP.
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
Note
2 — Summary of Significant Accounting Policies (Continued)
Basis
of Presentation
The
accompanying unaudited financial statements are presented in U.S. Dollars and conformity with accounting principles generally accepted
in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging
Growth Company
The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our
Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding
executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory
vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Securities Exchange Act of 1934 (the “Exchange Act”)) are required to
comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended
transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.
The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it
has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised
standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements
with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the
extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use
of Estimates
The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Making
estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of
a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating
its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ
significantly from those estimates.
Cash
and Cash Equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company had no cash equivalents as of March 31, 2023 and December 31, 2022.
Marketable
Securities Held in Trust Account
As
of March 31, 2023, substantially all of the assets held in the Trust Account were held in government securities (United States Treasury
Bills). As of March 31, 2023 and December 31, 2022, the balance in the Trust Account was $20,172,591 and $19,706,540 respectively.
Income
Taxes
The
Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset
and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed
for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible
amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC
Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax
positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not
to be sustained upon examination by taxing authorities. The Company’s management determined the Cayman Islands is the Company’s
only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income
tax expense. There were no unrecognized tax benefits as of December 31, 2022, and no amounts accrued for interest and penalties. The
Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from
its position.
The
Company is an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income
taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero
from inception to March 31, 2023.
ENERGEM
CORP.
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
Note
2 — Summary of Significant Accounting Policies (Continued)
Net
loss per share
The
Company complies with accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share.” Net loss per share is
computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares
subject to forfeiture. As of March 31, 2023, the Company did not have any dilutive securities and other contracts that could, potentially,
be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted loss per share is
the same as basic loss per share for the periods presented.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial
institution which, at times may exceed the Federal depository insurance coverage of $250,000.
On March 31, 2023 and December 31, 2022, the Company had not experienced losses on
this account and management believes the Company is not exposed to significant risks on such account.
Fair
Value of Financial Instruments
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value
Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to
their short-term nature.
Risks
and Uncertainties
Management
is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that
the virus could have a negative effect on the Company’s financial position, results of its operations, close of the Initial Public
Offering, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements.
The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
ENERGEM
CORP.
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
Note
3 —Public Offering
On
November 16, 2021, the Company consummated the IPO of 10,000,000 units (the “Units”). Each Unit consists of one Class A ordinary
share, $0.0001 par value per share (the “Class A Ordinary Shares”), and one warrant (the “Public Warrants”),
each whole Public Warrant entitling the holder thereof to purchase one Class A Ordinary Share at an exercise price of $11.50 per share.
The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $100,000,000.
Pursuant
to the Initial Public Offering and full exercise underwriter’s overallotment option, the Company sold 11,500,000 Units at a purchase
price of $10.00 per Unit. Each Unit consists of one ordinary share and one redeemable warrant (“Public Warrant”). Each Public
Warrant will entitle the holder to purchase one ordinary share at an exercise price of $11.50 per whole share.
All
of the Class A ordinary shares sold as part of the Units in the IPO contain a redemption feature which allows for the redemption of such
Public Shares in connection with the Company’s liquidation if there is a shareholder vote or tender offer in connection with the
Business Combination and in connection with certain amendments to the Company’s second amended and restated memorandum
and articles of association.
Note
4 — Private Placement
Simultaneously
with the Initial Public Offering and full exercise underwriter’s overallotment option, the Sponsor purchased an aggregate of 528,075
Private Placement Units at a price of $10.00 per Private Placement Unit for an aggregate purchase price of $5,280,750.
A
total of $116,725,000, comprised of the $111,444,250 of the net proceeds from the IPO (which amount includes $4,025,000 of the underwriters’
deferred discount) and a portion of the $5,280,750 proceeds of the sale of the Private Placement Units, was placed in a U.S.-based trust
account, maintained by Continental Stock Transfer & Trust Company, acting as trustee, on November 18, 2021. The
Placement Units are identical to the Units sold in the Proposed Offering, except for the placement warrants (“Placement Warrants”),
as described in Note 7. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the
sale of the Placement Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law)
and the Placement Warrants underlying the Placement Units will expire worthless.
Note
5 — Related Party Transactions
Class
B Ordinary Shares (Founder Shares)
On
August 16, 2021, the Sponsor purchased founder shares for an aggregate purchase price of $. The number of founder shares
equaled, on an as-converted basis, approximately % of the Company’s issued and outstanding shares after the Initial Public Offering.
On
September 7, 2021, the Sponsor transferred 5,000 ordinary shares to Cu Seng Kiu, our Chief Financial Officer, and 2,500 ordinary shares
to each of Li Sin Tan, our former independent director, Kok Seong Wong and Chong Kwang Fock. Following Ms. Tan’s resignation, the
2,500 ordinary shares were assigned to Ms. Doris Wong Sing Ee, leaving 2,862,500 founder shares held by our Sponsor.
The
initial shareholders have agreed not to transfer, assign or sell any of the Class B ordinary shares (except to certain permitted transferees)
until, with respect to 50% of the Class B ordinary shares, the earlier of (i) six months after the date of the consummation of a Business
Combination, or (ii) the date on which the closing price of the Company’s ordinary shares equals or exceeds $12.00 per share (as
adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day
period commencing after a Business Combination, with respect to the remaining 50% of the Class B ordinary shares, upon six months after
the date of the consummation of a Business Combination, or earlier, in each case, if, subsequent to a Business Combination, the Company
consummates a subsequent liquidation, merger, share exchange or other similar transaction which results in all of the Company’s
shareholders having the right to exchange their ordinary shares for cash, securities or other property.
Promissory
Note — Related Party
On
August 6, 2021, the Sponsor issued an unsecured promissory note to the Company, pursuant to which the Company may borrow up to an
aggregate principal amount of $,
to be used for payment of costs related to the Proposed Offering. The note is non-interest bearing and payable on the earlier of (i)
December 31, 2021, or (ii) the consummation of the Proposed Offering. As of March 31, 2023 and December 31, 2022, the Company had
borrowed $88,542
under the promissory note with our sponsor.
On
November 1, 2022, the Sponsor and the Company entered into a Working Capital Loan and Extension Agreement, pursuant to which the Company
may borrow up to an aggregate principal amount of $ to fund the monthly extension payments (up
to nine (9) one-month extensions) through August 18, 2023 pursuant to the Extension Amendment Proposal. As of quarter end on March 31,
2023, was outstanding under the Working Capital Loan and Extension Agreement.
Related
Party Loans
To
finance transaction costs in connection with a Business Combination, the Company’s Sponsor or an affiliate of the Sponsor, or the
Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital
Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummation
of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon consummation
of a Business Combination into additional Placement Units at a price of $10.00 per Unit. If a Business Combination does not close, the
Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the
Trust Account would be used to repay the Working Capital Loans.
No
compensation of any kind, including any finder’s fee, reimbursement, consulting fee or monies in respect of any payment of a loan,
will be paid by us to our sponsor, officers or directors or any affiliate of our sponsor, officers or directors prior to, or in connection
with any services rendered to effectuate, the consummation of an initial business combination (regardless of the type of transaction
that it is). However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our
behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee
will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates and will
determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket
expenses incurred by such persons in connection with activities on our behalf. As of March 31, 2023, there are $ borrowed under
Working Capital Loan.
ENERGEM
CORP.
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
Note
5 — Related Party Transactions (Continued)
Administrative
Support Agreement
Commencing
on the date of the prospectus and until completion of the Company’s Business Combination or liquidation, the Company may reimburse
Energem LLC, the Sponsor, up to an amount of $10,000 per month for office space, secretarial and administrative support.
Note
6 — Commitments and Contingencies
Registration
Rights
The
holders of the insider shares and Placement Units that may be issued upon conversion of Working Capital Loans (and any shares of Ordinary
Shares issuable upon the exercise of the Placement Units or units issued upon conversion of the Working Capital Loans and upon conversion
of the Insider shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on
the effective date of Initial Public Offering requiring the Company to register such securities for resale. The holders of these securities
will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In
addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed after completion
of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities
Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or
cause any registration statement to become effective until the securities covered thereby are released from their lock-up restrictions.
The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting
Agreement
The
Company granted the underwriter a 45-day option to purchase up to 1,500,000 additional Units to cover over-allotments at the Initial
Public Offering price, less the underwriting discounts and commissions. The aforementioned option was exercised on November 18, 2021.
The
underwriter was paid a cash underwriting discount of two percent (2.00%) of the gross proceeds of the Initial Public Offering, or $2,300,000.
In addition, the underwriter is entitled to a deferred fee of three point five percent (3.50%) of the gross proceeds of the Initial Public
Offering, or $4,025,000. The deferred fee was placed in the Trust Account and will be paid in cash upon the closing of a Business Combination,
subject to the terms of the underwriting agreement.
ENERGEM
CORP.
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
Note
7 – Shareholders’ Equity
Preferred
Shares — The Company is authorized to issue 1,000,000 preferred shares with a par value of $0.0001 per share with such
designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors. On March 31, 2023,
and December 31, 2022 there were no preferred shares issued or outstanding.
Class
A Ordinary shares — The Company is authorized to issue 479,000,000 shares of Class A ordinary shares with a par value of
$0.0001 per share. Holders of the Company’s Class A ordinary shares are entitled to one vote for each share. On March 31, 2023,
and December 31, 2022, there were 528,075 Class A ordinary shares issued and outstanding excluding 1,895,481 and 11,500,000 shares of Class
A ordinary shares subject to possible redemption respectively.
Class
B Ordinary shares — The Company is authorized to issue 20,000,000 shares of Class B ordinary shares with a par value of
$0.0001 per share. Holders of the Company’s Class B ordinary shares are entitled to one vote for each share. On August 16, 2021,
the Sponsor purchased founder shares for an aggregate purchase price of $, or approximately $ per share. On September
7, 2021, our sponsor assigned 5,000 ordinary shares to Cu Seng Kiu, our Chief Financial Officer,
and 2,500 ordinary shares to each of Li Sin Tan, our former independent director, Kok Seong Wong and Chong Kwang Fock. Following Ms.
Tan’s resignation, the 2,500 ordinary shares were assigned to Ms. Doris Wong Sing Ee.
On
March 31, 2023, and December 31, 2022, there were 2,875,000 shares of Class B ordinary shares issued and outstanding, so that the Initial
Shareholders will own at least % of the issued and outstanding shares after the Proposed Offering (assuming the Initial Shareholders
do not purchase any Public Shares in the Proposed Offering and excluding the Placement Units). Class B ordinary shares will automatically
convert into Class A ordinary shares at the time of our initial Business Combination on a one-for-one basis.
Warrants
— Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the
Warrants. The Warrants will become exercisable on the later of (a) the consummation of a Business Combination or (b) 12 months from the
effective date of the registration statement relating to the initial public offering. No Warrants will be exercisable for cash unless
the Company has an effective and current registration statement covering the ordinary shares issuable upon exercise of the Warrants and
a current prospectus relating to such ordinary shares. Notwithstanding the foregoing, if a registration statement covering the ordinary
shares issuable upon the exercise of the Warrants is not effective within 90 days from the consummation of a Business Combination, the
holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed
to maintain an effective registration statement, exercise the Warrants on a cashless basis pursuant to an available exemption from registration
under the Securities Act. If an exemption from registration is not available, holders will not be able to exercise their Warrants on
a cashless basis. The Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation.
ENERGEM
CORP.
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
Note
7 – Shareholders’ Equity (Continued)
The
Company may call the Warrants for redemption, in whole and not in part, at a price of $0.01 per warrant:
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at any time while the Warrants
are exercisable, |
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upon not less than 30 days’
prior written notice of redemption to each Warrant holder, |
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if, and only if, the reported
last sale price of the ordinary shares equals or exceeds $18 per share, for any 20 trading days within a 30-trading day period ending
on the third trading day prior to the notice of redemption to Warrant holders, and |
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if, and only if, there
is a current registration statement in effect with respect to the ordinary shares underlying such warrants at the time of redemption
and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption. |
The
Placement Warrants are identical to the Public Warrants underlying the Units sold in the initial public offering, except that so long
as the Placement Warrants are held by our sponsor or its permitted transferees, (i) the Placement
Warrants will not be redeemable by us, (ii) they (including the Class A ordinary shares issuable
upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until
30 days after the completion of our initial business combination, (iii) they may be exercised by the holders on a cashless basis and
(iv) the holders thereof (including with respect to Class A ordinary shares issuable upon exercise of such warrants) are entitled to
registration rights.
If
the Company calls the Warrants for redemption, management will have the option to require all holders that wish to exercise the Warrants
to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable
upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend
or recapitalization, reorganization, merger, or consolidation. However, the warrants will not be adjusted for issuances of ordinary shares
at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company
is unable to complete a Business Combination within the Combination Period, subject to extension, as provided in our registration statement,
and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to
their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect
to such warrants. Accordingly, the warrants may expire worthless.
The
exercise price is $11.50 per share, subject to adjustment as described herein. In addition, if (x) the Company issues additional shares
of Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial Business
Combination at an issue price or effective issue price of less than $9.20 per share of Class A ordinary shares (with such issue price
or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor
or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as applicable, prior to such
issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the
total equity proceeds, and interest thereon, available for the funding of our initial Business Combination on the date of the consummation
of our initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of our Class A ordinary shares
during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial Business Combination
(such price, the “Market Value”) is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the
nearest cent) to be equal to 115% of the greater of the Market Value and the Newly Issued Price, and the $18.00 per share redemption
trigger price described below under “Redemption of warrants” will be adjusted (to the nearest cent) to be equal to 180% of
the greater of the Market Value and the Newly Issued Price.
Note
8 – Subsequent Events
In
accordance with ASC Topic 855, “Subsequent Events,” which establishes general standards of accounting for and disclosure
of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events
or transactions that occurred subsequent to the balance sheet date. Based
upon this review, the Company identified the following subsequent event:
In connection with the sixth monthly extension of the Termination Date,
the Company caused $0.045 per outstanding share of Energem’s Class A ordinary shares or approximately $85,297 for 1,895,481 Class
A ordinary shares to be paid to the Trust Account on April 10, 2023, in advance of the April 18, 2023 due date to extend the period to
consummate the period to complete a business combination to May 18, 2023.