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As filed with the Securities and Exchange Commission on January 29, 2024

 

Registration No. 333-268716

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

AMENDMENT No. 13

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

 

Energem Corp.*

(Exact name of registrant as specified in its charter)

 

 

 

Cayman Islands   6770   N/A

(State or Other Jurisdiction of

Incorporation or Organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification No.)

 

Level 3, Tower 11, Avenue 5, No. 8,

Jalan Kerinchi, Bangsar South

Wilayah Persekutuan Kuala Lumpur, Malaysia

+ (60) 3270 47622

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

Swee Guan Hoo

Chief Executive Officer

Energem Corp.

Level 3, Tower 11, Avenue 5, No. 8,

Jalan Kerinchi, Bangsar South

Wilayah Persekutuan Kuala Lumpur, Malaysia

+ (60) 3270 47622

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

 

Copies to:

 

Debbie A. Klis, Esq.

Rimon P.C.
1990 K. Street, NW

Suite 420
Washington, DC 20006
(202) 935-3390

Andrew Tucker, Esq.

Nelson Mullins Riley & Scarborough LLP
101 Constitution Avenue, NW
Suite 900
Washington, DC 20001
(202) 689-2987

 

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective and after all conditions under the share purchase agreement to consummate the proposed business combination are satisfied or waived.

 

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: ☐

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ☐

 

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer     Accelerated filer
Non-accelerated     Smaller reporting company
        Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.

 

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

 

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐

 

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐

 

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

* The Registrant is currently named Energem Corp. Upon closing of the transactions described herein, the Registrant will change its name to Graphjet Technology.

 

 

 

 
 

 

The information in this preliminary proxy statement/prospectus is not complete and may be changed. These securities may not be issued until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary proxy statement/prospectus is not an offer to sell these securities and does not constitute the solicitation of offers to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

Preliminary— Subject To Completion, Dated January 29, 2024

 

    

 

PROXY STATEMENT FOR EXTRAORDINARY GENERAL MEETING
AND
PROSPECTUS FOR 138,000,000 CLASS A ORDINARY SHARES OF
ENERGEM CORP.

 

 

 

To the Shareholders of Energem Corp.:

 

We are very pleased to provide this proxy statement/prospectus relating to the proposed purchase (the “Purchase”) by Energem Corp., a Cayman Islands exempted company (“Energem” or “Purchaser”) of all of the issued and outstanding shares (the “Graphjet Pre-Transaction Shares”) of Graphjet Technology Sdn. Bhd., a Malaysian private limited company (“Graphjet” or the “Company”), pursuant to a Share Purchase Agreement dated as of August 1, 2022, as amended on September 4, 2023, by Energem, Graphjet, Purchaser Representative and Shareholder Representative by to the first amendment to the Share Purchase Agreement (the “First Amendment”), pursuant to which Article XIII of the Share Purchase Agreement was amended to add additional lock-up language, as it may be further amended or supplemented from time to time (the “Share Purchase Agreement” or “SPA”).

 

The board of directors of Energem has unanimously approved the Share Purchase Agreement, which is by and among Energem, Graphjet, Swee Guan Hoo, solely in his capacity as the representative for the shareholders of Purchaser after the closing of the sale and purchase of the Graphjet Pre-Transaction Shares (the “Closing”) for Energem’s shareholders (other than the Company Security Holders (as defined below), and their successors and assignees) (the “Purchaser Representative”), the individuals listed on the signature page of the SPA under the heading “Selling Shareholders” (each, a “Selling Shareholder” and together, the “Selling Shareholders”), and Lee Ping Wei in his additional capacity as representative for the Selling Shareholders (the “Shareholder Representative”).

 

Energem, Graphjet, the Purchaser Representative, the Selling Shareholders and the Shareholder Representative are sometimes referred to herein individually as a “Party” and, collectively, as the “Parties.” Capitalized terms used but not defined herein shall have the meanings ascribed to them in the SPA. The “Company Security Holders” are the holders of the Graphjet Pre-Transaction Shares and any other Graphjet convertible securities, as further described in the SPA and this proxy statement/prospectus. The Business Combination implies a $1.49 billion pro forma post-closing enterprise value, assuming no redemptions by the shareholders of Energem.

 

If the Share Purchase Agreement is approved by Energem’s shareholders (the “Energem Shareholders”) and the transactions contemplated by the Share Purchase Agreement are consummated, (i) Energem will acquire all of the issued and outstanding Graphjet Pre-Transaction Shares from the Selling Shareholders and Graphjet will become a wholly-owned subsidiary of Energem, and (ii) Energem will change its name to Graphjet Technology (the “Business Combination” and together with the other transactions contemplated by the Share Purchase Agreement, the “Transactions”) and each Selling Shareholder shall receive a number of Purchaser’s Class A Ordinary Shares (the “Energem Class A Ordinary Shares”) subject to a formula set forth below.

 

The SPA computes the consideration that each Selling Shareholder is entitled to receive at the Closing of the Business Combination as such number of Energem Class A Ordinary Shares equal to the aggregate Consideration Shares (as defined below) divided by the number of Graphjet Pre-Transaction Shares outstanding immediately prior to the Closing, multiplied by the number of Graphjet Pre-Transaction 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.”

 

 
 

 

The Transaction Consideration to be paid pursuant to the Share Purchase Agreement to the Selling Shareholders for the purchase of all issued and outstanding Graphjet Pre-Transaction 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 SPA and herein), minus (iii) the Closing Net Indebtedness amount (as defined in the SPA and herein), minus (iv) the amount of any Transaction Expenses (as defined in the SPA), divided by ten dollars ($10.00) (in the aggregate, the “Consideration Shares”). See the section entitled “Proposal No. 2 - The Business Combination Proposal - The Share Purchase Agreement” on page 81 of the accompanying proxy statement/prospectus for further information on the consideration being paid in the Business Combination.

 

Energem’s units, Class A Ordinary Shares and Public Warrants are traded on the Nasdaq Capital Market (“Nasdaq”) under the symbols “ENCPU,” “ENCP” and “ENCPW,” respectively. Pursuant to the Share Purchase Agreement, Energem shall apply to list the ordinary shares of the Combined Entity (the “Combined Entity Ordinary Shares”) and the warrants of the Combined Entity on the Nasdaq Capital Market under the symbols “GTI” and “GTIW,” respectively, upon the closing of the Business Combination. Energem will not have units traded following the Closing of the Business Combination. At the Closing, each unit will separate into its component securities. Also following the Closing of the Business Combination, Energem intends to change its name to Graphjet Technology. Energem has determined to transfer its securities to the Nasdaq Capital Market and, on September 27, 2023, submitted a Nasdaq Transfer Application to Nasdaq. This transfer to the Nasdaq Capital Market should not affect the trading of the Energem Ordinary Shares or the Public Warrants. The Nasdaq Capital Market is a continuous trading market that operates in substantially the same manner as the Nasdaq Global. Energem anticipates complying with the listing requirements of Nasdaq Capital Market, however, there can be no assurance that Energem will qualify for the Nasdaq Capital Market and that Nasdaq will approve its Nasdaq Transfer Application. If Nasdaq does approve Energem’s Nasdaq Transfer Application, there is no certainty that Energem or the Combined Entity will be able to maintain compliance with the Market Value of Listed Securities requirement or maintain compliance with the other Nasdaq listing requirements applicable to the Nasdaq Capital Market, which would result in the delisting of Energem’s securities and could have a material adverse effect on the value of Energem’s ordinary shares thereby materially reduce the value of your investment.

 

Proposals to approve the Share Purchase Agreement and the other matters discussed in this proxy statement/prospectus, in order to obtain the shareholder approvals necessary to complete the Business Combination, will be presented at the office of Energem Corp. located at Level 3, Tower 11, Avenue 5, No. 8, Jalan Kerinchi, Bangsar South, Wilayah Persekutuan Kuala Lumpur, Malaysia and via a live audio webcast on __________, 2024 at 10:00 a.m., Eastern Time (the “Extraordinary General Meeting”), unless postponed or adjourned to a later date. At the Energem Extraordinary General Meeting, Energem will ask its shareholders to adopt the Share Purchase Agreement and the related transactions thereby approving the Business Combination and to approve the other proposals described in this proxy statement/prospectus.

 

To participate in the Extraordinary General Meeting via the live video webcast, an Energem Shareholder of record will need the 12-digit control number included on such shareholder’s proxy card or instructions that accompanied such shareholder’s proxy materials. If an Energem Shareholder holds his, her or its shares in “street name,” which means his, her or its shares are held of record by a broker, bank or other nominee, such Energem Shareholder should contact his, her or its broker, bank or nominee to ensure that votes related to the shares he, she or it beneficially owns are properly counted. In this regard, such Energem Shareholder must provide the record holder of his, her or its shares with instructions on how to vote his, her or its shares or, if such Energem Shareholder wishes to attend the Extraordinary General Meeting and vote in person, obtain a proxy from his, her or its broker, bank or nominee.

 

Energem Shareholders are encouraged to attend the Extraordinary General Meeting in person and arrive prior to the start time or via the live webcast and access the webcast prior to the start time. If you encounter any difficulties accessing the live audio webcast of the Extraordinary General Meeting during the Extraordinary General Meeting time, please call the technical support number that will be posted on the live audio webcast login page for the Extraordinary General Meeting.

 

If you have any questions or need assistance with voting your Energem Ordinary Shares, please contact Laurel Hill Advisory Group, LLC, Energem’s proxy solicitor, by calling 855-414-2266 or send an email to Energem@LaurelHill.com. Banks and brokers can also call 855-414-2266 or send an email to Energem@LaurelHill.com. This proxy statement/prospectus and the notice of the Extraordinary General Meeting relating to the Business Combination will be available at www.sec.gov.

 

 
 

 

This proxy statement/prospectus provides you with detailed information about the Business Combination and other matters to be considered at the Extraordinary General Meeting of Energem’s Shareholders. We encourage you to carefully read this entire proxy statement/prospectus, including all annexes attached hereto.

 

Graphjet Technology will be an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, and is therefore eligible to take advantage of certain reduced reporting requirements otherwise applicable to other public companies.

 

The accompanying proxy statement/prospectus provides Energem Shareholders with detailed information about the Business Combination and other matters to be considered at the Extraordinary General Meeting. We encourage you to read the entire accompanying proxy statement/prospectus, including the Annexes and other documents referred to therein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 42 of the accompanying proxy statement/prospectus.

 

None of the SEC, the Cayman Islands Monetary Authority, or any state securities commission has approved or disapproved of the securities to be issued in connection with the Business Combination, or determined if this proxy statement/prospectus is accurate or adequate. Any representation to the contrary is a criminal offense.

 

This proxy statement/prospectus is dated _______, 2024, and is first being mailed to Energem Shareholders on or about _______, 2024.

 

Very truly yours,

 

Swee Guan Hoo

Chief Executive Officer

Energem Corp.

 

 
 

 

ENERGEM CORP.

Level 3, Tower 11, Avenue 5, No. 8

Jalan Kerinchi, Bangsar South Wilayah Persekutuan

Kuala Lumpur, Malaysia

 

NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS

OF ENERGEM CORP.

To Be Held on _______, 2024

 

To the Shareholders of Energem Corp.:

 

NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of shareholders of Energem Corp. (“Energem”), a Cayman Islands exempted company, will be held at 10:00 a.m. Eastern Time, on _________, 2024 at the offices of Energem Corp. located at Level 3, Tower 11, Avenue 5, No. 8, Jalan Kerinchi, Bangsar South, Wilayah Persekutuan Kuala Lumpur, Malaysia. The Extraordinary General Meeting will also be available via a live webcast. You are cordially invited to attend and participate in the Extraordinary General Meeting in person or online via a live webcast by visiting https://www.cstproxy.com/energemcorp/2024 with Conference ID: 4758727# and to vote at the Extraordinary General Meeting and any adjournments or postponements of the Extraordinary General Meeting.

 

At the Extraordinary General Meeting, Energem Shareholders (the “Energem Shareholders) will be asked to consider and vote upon:

 

  (1)

Proposal No. 1A proposal to approve, as a Special Resolution, amendments (the “NTA Amendments”) to Energem’s current memorandum and articles of association, which amendments shall be effective, if adopted and implemented by Energem, immediately prior to the consummation of the proposed Business Combination, to remove the requirements limiting Energem’s ability to consummate an initial business combination if Energem would have less than $5,000,001 in net tangible assets prior to or upon consummation of such initial business combination (the “NTA Proposal”). The NTA Proposal is conditioned upon the approval of the Business Combination Proposal. For purposes of the laws of the Cayman Islands, the full text of the special resolution is as follows:

 

“RESOLVED, as a special resolution, that subject to the approval of the Business Combination Proposal and with effect prior to the consummation of the proposed Business Combination, the current memorandum and articles of association of the Energem be amended by deleting Article 36.5(c) in its entirety”;

     
  (2) Proposal No. 2 — A proposal to approve, as an Ordinary Resolution, the Business Combination, including the Share Purchase Agreement (a copy of which is included as Annex A to the attached proxy statement/prospectus) (the “Business Combination Proposal”);
     
  (3)Proposal No. 3 — Proposals to approve, each as a Special Resolution, assuming the NTA Proposal, the Business Combination Proposal, the Share Issuance Proposal and the Equity Incentive Plan Proposal are each approved and adopted, the following changes to Energem’s then current memorandum and articles of association which, if approved, would take effect on and from the Closing Date:
    
  (A)

Energem’s change of post-Business Combination corporate name from “Energem Corp.” to “Graphjet Technology.” For the purposes of the laws of the Cayman Islands, the full text of the special resolution is as follows:

 

“RESOLVED, as a special resolution, that, subject to the passing of the NTA Proposal, the Business Combination Proposal, the Share Issuance Proposal and the Equity Incentive Plan Proposal, Energem Corp. change its name from “Energem Corp.” to “Graphjet Technology” and, subject to the provisions of the Companies Act (Revised), the change of name shall take effect on and from the Closing Date”; and

    
  (B)

The amendment and restatement of Energem’s current memorandum and articles of association to reflect the change of name, remove certain provisions related to Energem’s status as a special purpose acquisition company and status as a blank check company that will no longer be applicable following consummation of the Business Combination, and make the post-Business Combination company’s corporate existence perpetual. For the purposes of the laws of the Cayman Islands, the full text of the special resolution is as follows:

 

“RESOLVED, as a special resolution, that, subject to the passing of the NTA Proposal, Business Combination Proposal, the Share Issuance Proposal and the Equity Incentive Plan Proposal, the amended and restated memorandum of association and the articles of association, copies of which are attached to the accompanying proxy statement/prospectus, be and are hereby adopted as the memorandum and articles of association of Energem in substitution for and to the exclusion of the entirety of Energem’s then current memorandum of association and articles of association with effect on and from the Closing Date”.

    
   (collectively, the “Energem M&A Proposals”). The Energem M&A Proposals are conditioned upon the approval of the NTA Proposal, the Business Combination Proposal, the Share Issuance Proposal and the Equity Incentive Plan Proposal. A copy of the proposed amended and restated memorandum and articles of association is attached as Annex B to this proxy statement/prospectus;

 

(4)Proposal No. 4 — A proposal to approve, as an Ordinary Resolution, assuming the Business Combination Proposal is approved and adopted, a proposal to approve, for purposes of complying with Nasdaq Listing Rules 5635(a) and (b), the issuance of more than 20% of the issued and outstanding Energem’s Ordinary Shares, in connection with the Business Combination, and the resulting change in control in connection with the Business Combination (the “Share Issuance Proposal”);
   
(5)Proposal No. 5 — A proposal to approve, as an Ordinary Resolution, assuming the Business Combination Proposal is approved and adopted, the 2023 Graphjet Equity Incentive Plan (the “Equity Incentive Plan”) (a copy of which is included as Annex C to the attached proxy statement/prospectus) which will become effective on and from the Closing Date and will be used by the Combined Entity following the Closing (the “Equity Incentive Plan Proposal”);
   
(6)Proposal No. 6 — A proposal to approve, as an Ordinary Resolution of the holders of the Energem Class B Ordinary Shares only, assuming the NTA Proposal, the Business Combination Proposal, the Share Issuance Proposal and the Equity Incentive Plan Proposal are each approved and adopted, the appointment of new directors until each such director’s successor has been duly elected and qualified, or until each such director’s earlier death, resignation, retirement, or removal, which if approved would take effect on and from the Closing Date (the “Director Appointment Proposal”);
   
(7)Proposal No. 7 — A proposal to approve, as an Ordinary Resolution, the adjournment of the Extraordinary General Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if Energem is unable to consummate the Business Combination (the “Adjournment Proposal”).

 

 
 

 

Consummation of each of the Energem M&A Proposals and the Director Appointment Proposal is conditioned on the approval of the NTA Proposal, the Business Combination Proposal, the Share Issuance Proposal and the Equity Incentive Plan Proposal (collectively, the “Condition Precedent Proposals”). If each of the Condition Precedent Proposals are passed, Energem Shareholders will be asked to vote upon the Energem M&A Proposals and the Director Appointment Proposal. Each of these proposals is more fully described in the accompanying proxy statement/prospectus, which Energem encourages you to read carefully and in its entirety before voting. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

 

We also will transact any other business as may properly come before the Extraordinary General Meeting or any adjournment or postponement thereof. The items of business listed above are more fully described elsewhere in the proxy statement/prospectus. Whether or not you intend to attend the Extraordinary General Meeting, we urge you to read the attached proxy statement/prospectus in its entirety, including the annexes and accompanying financial statements, before voting. IN PARTICULAR, WE URGE YOU TO CAREFULLY READ THE SECTION IN THE PROXY STATEMENT/PROSPECTUS ENTITLED “RISK FACTORS.

 

The board of directors of Energem (the “Energem Board”) has set [_____], 2024 as the record date for the Extraordinary General Meeting. Only holders of record of Energem Ordinary Shares at the close of business on [_____], 2024 will be entitled to notice of and to vote at the Extraordinary General Meeting and any adjournments or postponements thereof. Any shareholder entitled to attend and vote at the Extraordinary General Meeting may attend the Extraordinary General Meeting live or virtually and is entitled to appoint a proxy to attend and vote on such shareholder’s behalf. Such proxy need not be a holder of Energem Ordinary Shares. A complete list of Energem Shareholders of record entitled to vote at the Extraordinary General Meeting will be available for ten days before the Extraordinary General Meeting at the principal executive office of Energem for inspection by Energem Shareholders during ordinary business hours for any purpose germane to the Extraordinary General Meeting. The eligible Energem Shareholder list will also be available at that time on the Extraordinary General Meeting website for examination by any shareholder attending the Extraordinary General Meeting via live audio webcast.

 

Pursuant to Energem’s current amended and restated memorandum and articles of association (“Energem M&A”), Energem will provide Public Shareholders with the opportunity to redeem their Energem Class A Ordinary Shares included as part of the units sold in Energem’s initial public offering for cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account, calculated as of two business days prior to the consummation of the transactions contemplated by the Share Purchase Agreement, including interest earned on the funds held in the Trust Account (net of taxes payable) and not previously released to Energem to pay taxes, upon the closing of the transactions contemplated by the Share Purchase Agreement.

 

For illustrative purposes, based on funds in the Trust Account of approximately $[13,667,908] (net of taxes payable) on [●], 2024, the record date for the Extraordinary General Meeting, the estimated per share redemption price would have been approximately [$11.23], excluding additional interest earned on the funds held in the Trust Account and not previously released to Energem to pay taxes. Public Shareholders may elect to redeem their shares even if they vote for the Business Combination Proposal. A Public Shareholder, together with any of his, her or its affiliates or any other person with whom he, she or it is acting in concert or as a “group” (as defined in Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the Energem Class A Ordinary Shares.

 

Energem LLC, a Cayman Islands limited liability company (the “Sponsor”), and Energem’s directors and officers who hold Energem Class B Ordinary Shares (collectively, “initial shareholders”), have agreed to waive their redemption rights in connection with the consummation of the Business Combination with respect to any Energem Ordinary Shares they may hold.

 

Approval of each of the Business Combination Proposal, the Share Issuance Proposal, the Equity Incentive Plan Proposal and the Director Appointment Proposal requires an ordinary resolution, being the affirmative vote of a simple majority of the votes cast by the holders of the issued and outstanding Energem Ordinary Shares that are present in person or represented by proxy and are entitled to vote thereon at the Extraordinary General Meeting. Under the terms of the Energem M&A, only the holders of Energem Class B Ordinary Shares are entitled to vote on the election of directors to the board of directors of Energem prior to the closing of a business combination. Therefore, only holders of the Energem Class B Ordinary Shares will vote on the Director Appointment Proposal at the Extraordinary General Meeting.

 

The NTA Proposal and the Energem M&A Proposals must each be approved by Special Resolution, being the affirmative vote of at least two-thirds of such holders of the issued and outstanding Energem Ordinary Shares as, being entitled to do so, vote in person or by proxy at the Extraordinary General Meeting. Additionally, certain of the amendments contemplated by the amendment and restatement of the memorandum and articles of association may only be approved by a Special Resolution of holders representing at least 90% of the issued and outstanding Energem Class B Ordinary Shares.

 

Following the recent redemptions by Energem’s Public Shareholders, leaving 1,216,932 issued and outstanding Energem Class A Ordinary Shares, because the Initial Shareholders agreed to vote their aggregate 2,875,000 issued and outstanding Energem Class B ordinary shares in favor of each of the NTA Proposal, the Business Combination Proposal, the Energem M&A Proposals, the Share Issuance Proposal, the Equity Incentive Plan Proposal and the Director Appointment Proposal, each of the NTA Proposal, the Business Combination Proposal, the Energem M&A Proposals, the Share Issuance Proposal, the Equity Incentive Plan Proposal and the Director Appointment Proposal will be approved even if none of the Public Shares are voted in favor of any of NTA Proposal, the Business Combination Proposal, the Energem M&A Proposals, the Share Issuance Proposal, the Equity Incentive Plan Proposal and the Director Appointment Proposal.

 

If presented, approval of the Adjournment Proposal requires an ordinary resolution, being the affirmative vote of a simple majority of the votes cast by the holders of the issued and outstanding Energem Ordinary Shares that are present in person or represented by proxy and are entitled to vote thereon at the Extraordinary General Meeting.

 

 
 

 

Each redemption of Energem Class A Ordinary Shares by its Public Shareholders will decrease the amount in the Trust Account. Energem will not consummate the Business Combination if the redemption of Energem Class A Ordinary Shares would result in Energem’s failure to have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) (or any successor rule) unless the NTA Proposal is approved.

 

If the Business Combination Proposal is not approved, the Adjournment Proposal will not be presented to the Energem Shareholders for a vote. The consummation of the Energem M&A Proposals and the Director Appointment Proposal are conditioned on the approval of the NTA Proposal, the Business Combination Proposal, the Share Issuance Proposal and the Equity Incentive Plan Proposal. Thus, the Energem M&A Proposals and the Director Appointment Proposal will not be presented if the NTA Proposal, the Business Combination Proposal, the Share Issuance Proposal and the Equity Incentive Plan Proposal are not all approved. It is important for you to note that in the event that the Business Combination Proposal, the NTA Proposal, the Energem M&A Proposals, and the Share Issuance Proposal do not receive the requisite votes for approval, then the Business Combination may not be consummated.

 

If Energem does not consummate the Business Combination with Graphjet and fails to complete an initial business combination with another target company by August 18, 2023 (or pursuant to up to six (6) one-month extensions to February 18, 2024 by depositing additional funds into the Company’s Trust Account, as described in more detail in this proxy statement/prospectus), Energem will be required to liquidate its Trust Account by returning the then remaining funds in such account to the Public Shareholders and then proceed to liquidate and dissolve. The proxy statement/prospectus accompanying this notice explains the Share Purchase Agreement and the transactions contemplated thereby, as well as the proposals to be considered at the Extraordinary General Meeting. Please review the accompanying proxy statement/prospectus carefully.

 

In connection with the first monthly extension of the Termination Date under the Third Amended and Restated Articles of Association, Energem caused $0.045 per outstanding share of Energem’s Class A Ordinary Shares or approximately $54,761.94 for 1,216,932 Class A Ordinary Shares to be paid to the Trust Account on August 15, 2023 in advance of the August 18, 2023 due date.

 

In connection with the second monthly extension of the Termination Date under the Third Amended and Restated Articles of Association, Energem caused $0.045 per outstanding share of Energem’s Class A Ordinary Shares or approximately $54,761.94 for 1,216,932 Class A Ordinary Shares to be paid to the Trust Account on September 14, 2023 in advance of the September 18, 2023 due date.

 

In connection with the third monthly extension of the Termination Date under the Third Amended and Restated Articles of Association, Energem caused $0.045 per outstanding share of Energem’s Class A Ordinary Shares or approximately $54,761.94 for 1,216,932 Class A Ordinary Shares to be paid to the Trust Account on October 16, 2023 in advance of the October 18, 2023 due date.

 

In connection with the fourth monthly extension of the Termination Date under the Third Amended and Restated Articles of Association, Energem caused $0.045 per outstanding share of Energem’s Class A Ordinary Shares or approximately $54,761.94 for 1,216,932 Class A Ordinary Shares to be paid to the Trust Account on November 17, 2023 in advance of the November 18, 2023 due date.

 

In connection with the fifth monthly extension of the Termination Date under the Third Amended and Restated Articles of Association, Energem caused $0.045 per outstanding share of Energem’s Class A Ordinary Shares or approximately $54,761.94 for 1,216,932 Class A Ordinary Shares to be paid to the Trust Account on December 15, 2023 in advance of the December 18, 2023 due date.

 

Your vote is very important to us, regardless of the number of shares you own. Whether you plan to attend the Extraordinary General Meeting live or virtually or not all, please complete, sign, date and return the enclosed proxy card as soon as possible in the envelope provided.

 

If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly voted and counted.

 

The Energem Board unanimously approved the Share Purchase Agreement and the transactions contemplated thereby, and recommends that you vote “FOR” each of the NTA Proposal, the Business Combination Proposal, the Energem M&A Proposals, the Share Issuance Proposal, the Equity Incentive Plan Proposal, the Director Appointment Proposal (collectively, the “Required Proposals”) and, if presented, the Adjournment Proposal.

 

If you have any questions or need assistance voting your Energem Ordinary Shares, please call 855-414-2266. Questions can also be sent by email to Energem@LaurelHill.com. This notice of Extraordinary General Meeting is, and the proxy statement/prospectus relating to the Business Combination will be, available at https://sec.gov.

 

On behalf of the Energem Board, I sincerely thank you for your time and support and look forward to the successful completion of the Business Combination.

 

By Order of the Board of Directors,

 

Swee Guan Hoo,

Chief Executive Officer

____________, 2024

 

 
 

 

YOUR VOTE IS IMPORTANT. IF YOU RETURN YOUR SIGNED PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR PROXY WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the Extraordinary General Meeting in person or virtually, the effect will be, among other things, that your Energem Ordinary Shares will not be counted for purposes of determining whether a quorum is present at the Extraordinary General Meeting and will not be voted. An abstention or broker non-vote will be counted towards the quorum requirement but will not count as a vote cast at the Extraordinary General Meeting. If you are an Energem Shareholder of record and you attend the Extraordinary General Meeting and wish to vote in person or virtually, you may withdraw your proxy and vote in person. Your attention is directed to the remainder of the proxy statement/prospectus following this notice for a more complete description of the proposed Business Combination and related transactions and each of the proposals. You are encouraged to read the entire proxy statement/prospectus, including the financial statements and annexes attached hereto and the documents referred to therein.

 

ALL REMAINING HOLDERS (THE “PUBLIC SHAREHOLDERS”) OF ENERGEM CLASS A ORDINARY SHARES ISSUED IN ENERGEM’S INITIAL PUBLIC OFFERING (THE “PUBLIC SHARES”) HAVE THE RIGHT TO HAVE THEIR PUBLIC SHARES REDEEMED FOR CASH IN CONNECTION WITH THE PROPOSED BUSINESS COMBINATION. PUBLIC SHAREHOLDERS ARE NOT REQUIRED TO AFFIRMATIVELY VOTE FOR OR AGAINST THE BUSINESS COMBINATION PROPOSAL OR TO BE HOLDERS OF RECORD ON THE RECORD DATE IN ORDER TO HAVE THEIR SHARES REDEEMED FOR CASH. THIS MEANS THAT ANY PUBLIC SHAREHOLDER HOLDING PUBLIC SHARES MAY EXERCISE REDEMPTION RIGHTS REGARDLESS OF WHETHER THEY ARE EVEN ENTITLED TO VOTE ON THE BUSINESS COMBINATION PROPOSAL.

 

TO EXERCISE REDEMPTION RIGHTS, HOLDERS MUST TENDER THEIR SHARE CERTIFICATES TO CONTINENTAL STOCK TRANSFER & TRUST COMPANY, ENERGEM’S TRANSFER AGENT, NO LATER THAN TWO (2) BUSINESS DAYS PRIOR TO THE EXTRAORDINARY GENERAL MEETING. YOU MAY TENDER YOUR SHARE CERTIFICATES BY EITHER DELIVERING YOUR SHARE CERTIFICATES TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DEPOSIT WITHDRAWAL AT CUSTODIAN SYSTEM.

 

IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. SEE “EXTRAORDINARY GENERAL MEETING OF ENERGEM SHAREHOLDERS—REDEMPTION RIGHTS” FOR MORE SPECIFIC INSTRUCTIONS. PLEASE ALSO AFFIRMATIVELY CERTIFY IN YOUR REQUEST TO CONTINENTAL STOCK TRANSFER & TRUST COMPANY FOR REDEMPTION IF YOU “ARE” OR “ARE NOT” ACTING IN CONCERT OR AS A “GROUP” (AS DEFINED IN SECTION 13(D)(3) OF THE EXCHANGE ACT) WITH ANY OTHER SHAREHOLDER WITH RESPECT TO ORDINARY SHARES.

 

YOU MUST ACT IN ACCORDANCE WITH THE PROCEDURES AND DEADLINES DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS. IF THE BUSINESS COMBINATION IS NOT CONSUMMATED, THEN THE PUBLIC SHARES WILL NOT BE REDEEMED FOR CASH.

 

THIS PROXY STATEMENT/PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND FINANCIAL INFORMATION ABOUT ENERGEM AND GRAPHJET THAT IS NOT INCLUDED IN OR DELIVERED HEREWITH. THIS INFORMATION IS AVAILABLE WITHOUT CHARGE TO ENERGEM SHAREHOLDERS UPON WRITTEN OR ORAL REQUEST. IF YOU WOULD LIKE TO MAKE SUCH REQUEST, YOU SHOULD CONTACT ENERGEM IN WRITING AT SWEE GUAN HOO, ENERGEM CORP., LEVEL 3, TOWER 11, AVENUE 5, NO. 8, JALAN KERINCHI, BANGSAR SOUTH WILAYAH PERSEKUTUAN KUALA LUMPUR, MALAYSIA OR BY TELEPHONE AT + (60) 3270 47622. TO OBTAIN TIMELY DELIVERY, YOU MUST REQUEST THE INFORMATION NO LATER THAN [___________], 2024, WHICH IS FIVE BUSINESS DAYS BEFORE THE DATE YOU MUST MAKE YOUR INVESTMENT DECISION.

 

Holders of outstanding Energem units must separate the underlying Public Shares and Public Warrants prior to exercising redemption rights with respect to the Public Shares. Energem LLC, the sponsor of Energem (the “Sponsor”), and Energem’s officers and directors have agreed to waive their redemption rights with respect to any Energem Ordinary Shares they may hold in connection with the consummation of the Business Combination (the “Founder Shares”). Currently, the Sponsor and the Energem Board and officers beneficially own approximately 73.7% of the issued and outstanding Energem Ordinary Shares. The Sponsor and Energem’s directors and officers have agreed to vote any Energem Ordinary Shares owned by them in favor of the Business Combination, which would include the Business Combination Proposal and the other Proposals.

 

 
 

 

TABLE OF CONTENTS

 

  Page
   
ABOUT THIS PROXY STATEMENT/PROSPECTUS 1
CONVENTIONS WHICH APPLY TO THIS PROXY STATEMENT/PROSPECTUS 1
INDUSTRY AND MARKET DATA 2
TRADEMARKS 3
SELECTED DEFINITIONS 4
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS 8
QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION AND THE EXTRAORDINARY GENERAL MEETING 11
SUMMARY OF THE PROXY STATEMENT/PROSPECTUS 22
SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION 39
RISK FACTORS 42
EXTRAORDINARY GENERAL MEETING OF ENERGEM SHAREHOLDERS 76
PROPOSAL NO. 1 —THE NTA PROPOSAL 80
PROPOSAL NO. 2 —THE BUSINESS COMBINATION PROPOSAL 81
PROPOSAL NO. 3 – THE ENERGEM M&A PROPOSALS 103
PROPOSAL NO. 4 — THE SHARE ISSUANCE PROPOSAL 105
PROPOSAL NO. 5 —THE EQUITY INCENTIVE PLAN PROPOSAL 107
PROPOSAL NO. 6 – THE DIRECTOR APPOINTMENT PROPOSAL 111
PROPOSAL NO. 7—THE ADJOURNMENT PROPOSAL 115
MANAGEMENT FOLLOWING THE BUSINESS COMBINATION 116
DIRECTOR AND OFFICER COMPENSATION 123
BENEFICIAL OWNERSHIP OF SECURITIES 126
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS 127
DESCRIPTION OF GRAPHJET’S SHARE CAPITAL AND ARTICLES OF ASSOCIATION 130
THE SHARE PURCHASE AGREEMENT 134
AGREEMENTS ENTERED INTO IN CONNECTION WITH THE SHARE PURCHASE AGREEMENT 143
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS 144
INFORMATION ABOUT THE COMPANIES 150
ENERGEM’S BUSINESS 151
GRAPHJET’S BUSINESS 156
ENERGEM’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 163
SELECTED HISTORICAL FINANCIAL INFORMATION OF GRAPHJET 166
GRAPHJET’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 167
Overview 167
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION 172
SHAREHOLDER PROPOSALS AND NOMINATIONS 179
APPRAISAL RIGHTS 179
SHAREHOLDER COMMUNICATIONS 179
LEGAL MATTERS 179
EXPERTS 179
DELIVERY OF DOCUMENTS TO SHAREHOLDERS 180
INDEX TO FINANCIAL STATEMENTS F-1
   
ANNEX A - SHARE PURCHASE AGREEMENT A-1
ANNEX B - AMENDED AND RESTATED MEMORANDUM AND ARTICLES OF ASSOCIATION B-1
ANNEX C - GRAPHJET TECHNOLOGY 2023 OMNIBUS EQUITY INCENTIVE PLAN C-1
ANNEX D - OPINION OF BAKER TILLY D-1

 

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ABOUT THIS PROXY STATEMENT/PROSPECTUS

 

This document, which forms part of a registration statement on Form S-4 filed with the U.S. Securities and Exchange Commission (the “SEC”), by Energem, constitutes a prospectus of Energem under Section 5 of the U.S. Securities Act of 1933, as amended (the “Securities Act”), with respect to the Energem Class A Ordinary Shares to be issued to the Selling Shareholders in connection with the Business Combination. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to the Extraordinary General Meeting at which Energem Shareholders will be asked to consider and vote upon a proposal to approve the Business Combination by the approval and adoption of the Share Purchase Agreement, among other matters.

 

The registration statement and the accompanying proxy statement/prospectus is available without charge to Energem Shareholders upon written or oral request. This document and Energem’s other filings with the SEC may be obtained by either written or oral request to Energem Corp., Level 3, Tower 11, Avenue 5, No. 8, Jalan Kerinchi, Bangsar South Wilayah Persekutuan Kuala Lumpur, Malaysia or by telephone at +(60) 3270 47622. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. You may obtain copies of the materials described above at the commission’s internet site at www.sec.gov.

 

In addition, if you are an Energem Shareholder and have questions about the proposals to be considered at the Extraordinary General Meeting or the accompanying proxy statement/prospectus, would like additional copies of the accompanying proxy statement/prospectus, or need to obtain proxy cards or other information related to the proxy solicitation, please contact Laurel Hill Advisory Group, LLC, Energem’s proxy solicitor, by calling 855-414-2266 or send an email to Energem@LaurelHill.com. Banks and brokers can also call 855-414-2266 or send an email to Energem@LaurelHill.com. This proxy statement/prospectus and the notice of the Extraordinary General Meeting relating to the Business Combination will be available at www.sec.gov. You will not be charged for any of the documents that you request. See also the section entitled “Where You Can Find More Information” of the accompanying proxy statement/prospectus for additional information.

 

Information contained on any website is expressly not incorporated by reference into the accompanying proxy statement/prospectus.

 

To obtain timely delivery of the documents, you must request them no later than five business days before the date of the Extraordinary General Meeting, or no later than [●], 2024.

 

CONVENTIONS WHICH APPLY TO THIS PROXY STATEMENT/PROSPECTUS

 

In this proxy statement/prospectus, unless otherwise specified or the context otherwise requires:

 

“$,” “USD” and “U.S. dollar” each refer to the United States dollar;
   
“MYR” and “RM” refers to the Malaysian ringgit, the currency of Malaysia; the currency abbreviation is RM, and the currency code is MYR.

 

Malaysian Ringgit to US Dollar conversion is based on XE.com Inc.

 

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INDUSTRY AND MARKET DATA

 

This proxy statement/prospectus includes market and industry data and forecasts that Graphjet has derived from publicly available information, industry publications and surveys, reports from government agencies, reports by market research firms or other independent sources and Graphjet’s internal data and estimates based on its management’s knowledge of and experience in the market sectors in which it competes.

 

Certain monetary amounts, percentages and other figures included in this proxy statement/prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables or charts may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.

 

The industry and market position information that appears in this proxy statement/prospectus involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates.

 

Such information is supplemented where necessary with Graphjet’s internal estimates and information obtained from discussions with its platform users, taking into account publicly available information about other industry participants and Graphjet’s management’s judgment where information is not publicly available.

 

Industry reports, publications, research, studies and forecasts generally state that the information they contain has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. In some cases, we do not expressly refer to the sources from which this data is derived. While we have compiled, extracted, and reproduced industry data from these sources, we have not independently verified the data. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and uncertainties as the other forward-looking statements in this proxy statement/prospectus. These forecasts and forward-looking information are subject to uncertainty and risk due to a variety of factors, including those described under the headings “Risk Factors,” “Cautionary Statement Regarding Forward-Looking Statements” and “Graphjet’s Management’s Discussion and Analysis of Financial Condition and Results of Operations”. These and other factors could cause results to differ materially from those expressed in any forecasts or estimates.

 

The industry in which Graphjet operates is subject to a high degree of uncertainty and risk. As a result, the estimates and market and industry information provided in this proxy statement/prospectus are subject to change based on various factors, including those described in the section entitled “Risk Factors — Risks Related to the Business Combination” and elsewhere in this proxy statement/prospectus.

 

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TRADEMARKS

 

This document contains references to trademarks, trade names and service marks belonging to other entities. Solely for convenience, trademarks, trade names and service marks referred to in this proxy statement/prospectus may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

 

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SELECTED DEFINITIONS

 

Unless otherwise stated or unless the context otherwise requires, the terms “we,” “us,” “our,” and “Energem” refer to Energem Corp.

 

Adeptus” means Adeptus Partners LLC, Energem’s independent registered public accounting firm and Graphjet’s independent registered public accounting firm.

 

Amended M&A” means the further amended and restated memorandum and articles of association of Energem to be adopted by Energem pursuant to the Energem M&A Proposals and the NTA Proposal.

 

Ancillary Agreements” means the Subscription Agreements, the Registration Rights Agreement, Executive Employment Agreements, Indemnification Agreements, and each other agreement, document, instrument and/or certificate contemplated by Share Purchase Agreement executed or to be executed in connection with the transactions contemplated thereby.

 

Board” or “Energem Board” means the board of directors of Energem.

 

Business Combination” means the acquisition of 100% of the issued and outstanding Graphjet Pre-Transaction Shares which will cause Graphjet to become a wholly-owned direct subsidiary of Energem, and the other transactions contemplated by the Share Purchase Agreement.

 

Closing” means the closing of the Business Combination.

 

Code” means the Internal Revenue Code of 1986, as amended.

 

Combined Entity” or “Graphjet Technology” means Energem after giving effect to the Business Combination, which will include Graphjet as Energem’s wholly-owned direct subsidiary and Energem to change its name to Graphjet Technology.

 

Combined Entity Ordinary Shares” refers to the Combined Entity’s post-transaction class A ordinary shares, par value $0.0001 per share, as of the time after the Closing of the Business Combination.

 

Companies Act” means the Companies Act (as Revised) of the Cayman Islands, as amended, modified, re-enacted or replaced.

 

Condition Precedent Proposals” means the consummation of the Energem M&A Proposals and the Director Appointment Proposal are conditioned on the approval occurring first of the NTA Proposal, the Business Combination Proposal, the Share Issuance Proposal and the Equity Incentive Plan Proposal.

 

Effective Time” means the effective time of the Business Combination in accordance with the SPA.

 

Energem” means Energem Corp., a Cayman Islands exempted company, which will be renamed Graphjet Technology in connection with the Closing.

 

Energem Class A Ordinary Shares” means Class A Ordinary Shares of Energem, par value $0.0001 per share.

 

Energem Class B Ordinary Shares” means Class B Ordinary Shares of Energem, par value $0.0001 per share.

 

Energem IPO,” “IPO” or “Initial Public Offering” means Energem’s initial public offering of Energem units that closed on November 18, 2021, raising total gross proceeds of approximately $116,725,000 (including $15,000,000 in gross proceeds from the underwriters’ exercise of their over-allotment option in full).

 

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Energem IPO Prospectus” means the final prospectus of Energem, dated as of November 15, 2021, and filed with the SEC pursuant to Rule 424(b) under the Securities Act on November 17, 2021 (File No. 333-259443).

 

Energem M&A” or “M&A” means Energem’s amended and restated memorandum of association adopted by special resolution passed on November 16, 2023 and third amended and restated articles of association adopted by special resolution passed on August 10, 2023.

 

Energem Ordinary Shares” means Energem Class A Ordinary Shares and Energem Class B Ordinary Shares, collectively.

 

Energem Securities” means the Energem units, Energem Ordinary Shares, and Energem Warrants.

 

Energem Public Share” or “Energem Public Shares” means the Energem Class A Ordinary Shares held by Public Shareholders also referred to as the “Public Shares” herein.

 

Energem Shareholders” means holders of Energem Ordinary Shares.

 

Energem units” means units consisting of one Energem Class A Ordinary Share and one Energem Warrant.

 

Energem Warrants” means warrants exercisable for Energem Class A Ordinary Shares.

 

Equity Incentive Plan” means the 2023 Graphjet Equity Incentive Plan proposed to be adopted by Energem upon approval of the Equity Incentive Plan Proposal and to become effective upon the Closing of the Business Combination, a copy of which is affixed at Annex C.

 

Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

Extension Meeting” means the Energem extraordinary general meeting of shareholders held on November 16, 2022 and/or the Energem extraordinary general meeting of shareholders held on August 10, 2023, depending on the context, at which shareholders voted upon, among other items, a proposal to amend Energem’s amended and restated memorandum and articles of association to extend the date by which Energem must consummate an initial business combination, most recently from August 18, 2023 by up to six (6) one-month extensions to February 18, 2024 by depositing additional funds into the Company’s Trust Account, as described in more detail in this proxy statement/prospectus.

 

Extension Redemption” means the redemption of 9,604,519 Energem Class A Ordinary Shares in connection with the Extension Meeting.

 

Extension Units” means any Energem units issued to the Sponsor or its affiliates or designees in connection with additional funds deposited by the Sponsor to the Trust Account to extend the period of time to consummate a Business Combination up to nine times, each by an additional one month (for a total of up to nine months to complete a Business Combination).

 

Extraordinary General Meeting” means the extraordinary general meeting of the shareholders of Energem, to be held at 10:00 a.m., Eastern Time, on ____________, 2024, at the office of Energem Corp. located at Level 3, Tower 11, Avenue 5, No. 8, Jalan Kerinchi, Bangsar South, Wilayah Persekutuan Kuala Lumpur, Malaysia and virtually via live webcast at https://www.cstproxy.com/energemcorp/2024.

 

fairness opinion” means the fairness analysis and opinion issued by Baker Tilly (Malaysia) by request of Energem to opine on the fairness of the proposed acquisition of 100% of the equity interests in Graphjet for the purchase consideration of US$1.38 billion (the “Transaction Consideration”). See the Baker Tilly fairness opinion attached to this proxy statement/prospectus as Annex D.

 

FA Shares” means the Class A Ordinary Shares held by Arc Group Limited, Energem’s financial advisor on the Business Transaction.

 

Founder Shares” means the Class B Ordinary Shares initially purchased by the Sponsor on August 16, 2021, some of which were transferred to certain officers and directors of the Company.

 

GAAP” means generally accepted accounting principles in the United States;

 

Graphjet” means Graphjet Technology Sdn. Bhd., a Malaysian private limited company, which is the target of the Share Purchase Agreement.

 

Graphjet Pre-Transaction Shares” means the ordinary shares, par value $0.0001 per share, of Graphjet prior to the Closing of the Business Combination.

 

Graphjet Shareholders” refers to holders of the issued and outstanding share capital, options and other convertible securities of Graphjet as of the time immediately before the Closing of the Business Combination, which shall not include the PIPE Investor.

 

Graphjet securities” means collectively, the Graphjet Pre-Transaction Shares, the Convertible Securities and any other securities of Graphjet.

 

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Initial Shareholders” means the Sponsor and any other holders of the Founder Shares prior to the Energem IPO (or their permitted transferees), if any.

 

NTA Proposal” means a proposal to remove the requirements limiting Energem’s ability to consummate an initial business combination if Energem would have less than $5,000,001 in net tangible assets prior to or upon consummation of such initial business combination.

 

Ordinary Resolution” means an ordinary resolution under Cayman Islands law and in accordance with the Energem M&A, being the affirmative vote of a simple majority of the votes cast by the holders of the issued and outstanding Energem Ordinary Shares that are present in person or represented by proxy and entitled to vote thereon at the Extraordinary General Meeting;

 

PIPE Investment” means that $2.5 million private placement investment by the PIPE Investor into Graphjet to purchase 4,530 Graphjet Pre-Transaction Shares before the Closing of the Business Combination, which Graphjet Pre-Transaction Shares will be exchanged for 250,000 Combined Entity Ordinary Shares at the Closing of the Business Combination. The number of Combined Entity Ordinary Shares is fixed, the number of Graphjet Pre-Transaction Shares to be purchased is subject to adjustment depending on the final consideration paid to the Graphjet shareholders.

 

PIPE Investment Purchase Agreement” means that executed purchase agreement, effective as of December 20, 2023, as amended and restated as of January 10, 2024, and as amended and restated on January 24, 2024 between Energem, Graphjet and the PIPE Investor governing the $2.5 million PIPE Investment into Graphjet to purchase a number of Graphjet Pre-Transaction Shares, which Graphjet Pre-Transaction Shares will be exchanged for 250,000 Combined Entity Ordinary Shares at the Closing of the Business Combination, which PIPE Investment Purchase Agreement is attached as Exhibit 10.25 and the amended and restated PIPE Investment Purchase Agreement of January 10, 2024 is attached at Exhibit 10.32.

 

PIPE Investor” means Dato’ Sri Pang Chow Huat and/or investment vehicles directly managed by such investor, in connection with the $2.5 million PIPE Investment.

 

Placement Shares” means the Energem Class A Ordinary Shares included within the Placement Units purchased by the Sponsor in the Private Placement.

 

Placement Units” means 528,075 units issued to the Sponsor in the Private Placement (including the additional units purchased after the Energem IPO in connection with the over-allotment securities issued to Energem’s underwriters). Each Placement Unit consists of one Placement Share and one Placement Warrant.

 

Placement Warrant” or “Placement Warrants” means the warrants included within the Placement Units being purchased by the Sponsor in the Private Placement. Each Placement Warrant entitles the holder thereof to purchase one Energem Class A Ordinary Share for $11.50 per share. The Placement Warrants have terms and provisions that are identical to those of the Public Warrants, including as to exercise price, exercisability and exercise period except that the Placement Warrants (i) are non-redeemable so long as they are held by the Sponsor or its permitted transferees, and (ii) may be exercised by the Sponsor and its permitted transferees for cash or on a cashless basis.

 

Preference Shares” means the preference shares of par value of $0.0001 per share in the share capital of Energem.

 

Private Placement” means the private placement consummated simultaneously with the Energem IPO in which Energem issued to the Sponsor the Placement Units.

 

Proposals” means the NTA Proposal, the Business Combination Proposal, Energem M&A Proposals, Share Issuance Proposal, Equity Incentive Plan Proposal, Director Appointment Proposal and Adjournment Proposal.

 

proxy statement/prospectus” means the proxy statement/prospectus included in the Registration Statement on Form S-4 filed with the SEC.

 

Public Shareholders” means the holders of Public Shares.

 

Public Shares” or “public shares” means the “Energem Public Shares” which are the Energem Class A Ordinary Shares included in the Public Units and Class A Ordinary Shares underlying the Public Warrants.

 

Public Units” means units issued in the Energem IPO, including any over-allotment securities acquired by Energem’s underwriters, consisting of one Public Share and one Public Warrant.

 

Public Warrants” means warrants underlying the Units issued in the Energem IPO. Each whole Public Warrant entitles the holder thereof to purchase one Class A Ordinary Share for $11.50 per share.

 

Record Date” means ______, 2024, which is the date of Energem Class A Ordinary Shares is required to be entitled to notice of the Extraordinary General Meeting and to vote and have their votes counted at the Extraordinary General Meeting and any adjournments or postponements of the Extraordinary General Meeting.

 

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Redemption” means the right of the holders of Energem Class A Ordinary Shares to have their shares redeemed in accordance with the procedures set forth in this proxy statement/prospectus and the Energem M&A.

 

Required Proposals” means the NTA Proposal, the Business Combination Proposal, the Energem M&A Proposals, the Share Issuance Proposal, the Director Appointment Proposal and the Equity Incentive Plan Proposal.

 

SEC” means the U.S. Securities and Exchange Commission.

 

Securities Act” means the Securities Act of 1933, as amended.

 

Share Purchase Agreement” or “SPA” means the Share Purchase Agreement, dated August 1, 2022, as amended on September 4, 2023, by Energem, Graphjet, Purchaser Representative and Shareholder Representative pursuant to the first amendment to the Share Purchase Agreement (the “First Amendment”), as it may be further amended or supplemented from time to time, by and among Energem, Graphjet, the Purchaser Representative, the Selling Shareholders and the Shareholder Representative.

 

Special Resolution” means a special resolution under Cayman Islands law and the Energem M&A, being the affirmative vote of at least two-thirds of the holders of the issued and outstanding Energem Ordinary Shares who, being entitled to do so, vote in person or by proxy at the Extraordinary General Meeting.

 

Sponsor” means Energem LLC.

 

Third Amended and Restated Articles of Association” means Energem’s third amended and restated articles of association adopted by special resolution passed on August 10, 2023 pursuant to the extraordinary general meeting of the shareholders of Energem.

 

Transaction Consideration” means the purchase consideration of US$1.38 billion to acquire 100% of the equity interests in Graphjet.

 

Trust Account” means the trust account of Energem, which holds the net proceeds of the Energem IPO, including from over-allotment securities sold by Energem’s underwriters, and the sale of the Placement Units, together with interest earned thereon, less amounts released to pay tax obligations and up to $100,000 for dissolution expenses, and amounts paid pursuant to redemptions.

 

USD” or “US$” means U.S. dollars.

 

U.S. GAAP” means generally accepted accounting principles in the United States.

 

Units” means any of the Public Units, Placement Units, the Working Capital Units (if any), and the Extension Units (if any).

 

VWAP” or “10-day VWAP” means as of any date, the volume weighted average price of the Combined Entity Ordinary Shares during the ten (10) trading day period ending on the trading day prior to such date.

 

Warrants” means any of the Public Warrants, the Placement Warrants and the warrants underlying the Working Capital Units (if any) and Extension Units (if any), excluding any warrants of Graphjet.

 

Working Capital Units” means any units issued to the Sponsor or its affiliates or Energem’s officers or directors in connection with any loans made by them to Energem prior to the closing of Energem’s initial business combination in accordance with the Energem IPO Prospectus. As described in the Energem IPO Prospectus, initially up to $1,500,000 of such loans could have been converted at the election of the applicable lender into units at a price of $10.00 per unit, which units would be identical to the Placement Units.

 

Unless specified otherwise, “$,” “USD,” “US$” and “U.S. dollar” each refers to the United States dollar and “RM” refers to Ringgit Malaysia, the official currency of Malaysia.

 

Defined terms in the financial statements contained in this proxy statement/prospectus have the meanings ascribed to them in the financial statements.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This proxy statement/prospectus (including the documents incorporated by reference herein) contains forward-looking statements regarding, among other things, the plans, strategies and prospects, both business and financial, of Energem and Graphjet. These statements are based on the beliefs and assumptions of the management of Energem and Graphjet. Although Energem and Graphjet believe that their respective plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, neither Energem nor Graphjet can assure you that either will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements.

 

These statements may be preceded by, followed by or include the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” or similar expressions, but the absence of these words does not mean that a statement is not forward-looking. Adeptus, Graphjet’s independent auditor and Energem’s independent auditor, has not examined, compiled or otherwise applied procedures with respect to the accompanying forward-looking financial information presented herein and, accordingly, expresses no opinion or any other form of assurance on it. The report of Adeptus for Graphjet included in this proxy statement/prospectus relates to historical financial information of Graphjet, and the report of Adeptus for Energem included in this proxy statement/prospectus relates to historical financial information of Energem. Neither report extends to the forward-looking information nor should be read as if it does.

 

Forward-looking statements contained in this proxy statement/prospectus include, but are not limited to, statements about:

 

the ability of Energem and Graphjet prior to the Business Combination to meet the Closing conditions to the Business Combination, including approval by Energem Shareholders and Graphjet of the Business Combination and related Proposals, and the availability of at least $5,000,001 in net tangible assets, after giving effect to redemptions of Public Shares, if any, unless the NTA Proposal is approved;
   
the ability of Graphjet Technology, which is the Combined Entity following the Business Combination, to realize the benefits from the Business Combination;
   
the ability of Energem to complete the Business Combination;
   
the occurrence of any event, change or other circumstances that could give rise to the termination of the Share Purchase Agreement;
   
the ability of Energem prior to the Business Combination, and the Combined Entity following the Business Combination, to maintain the listing of Graphjet Technology’s public Class A Ordinary Shares on Nasdaq under the ticker symbol “GTI” following the Business Combination;
   
future financial performance following the Business Combination;
   
the Combined Entity’s public securities’ potential liquidity and trading;
   
the use of proceeds not held in the Trust Account or available to Energem from interest income on the Trust Account balance;
   
the impact from the outcome of any known and unknown litigation;
   
the ability of the Combined Entity to forecast and maintain an adequate rate of revenue growth and appropriately plan its expenses;
   
expectations regarding future expenditures of the Combined Entity following the Business Combination;

 

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the future mix of revenue and effect on gross margins of the Combined Entity following the Business Combination;
   
the attraction and retention of qualified directors, officers, employees and key personnel of Energem and Graphjet prior to the Business Combination, and the Combined Entity following the Business Combination;
   
accuracy of projections and assumptions used in projections;
   
performance by counterparties, including suppliers of palm kernel shells and transportation providers of Graphjet’s products;
   
the ability of the Combined Entity to compete effectively in a competitive industry;
   
the ability to protect and enhance Graphjet’s corporate reputation and brand;
   
expectations concerning the relationships and actions of Graphjet and its affiliates with third parties;
   
the impact from future regulatory, judicial, and legislative changes in Graphjet’s or the Combined Entity’s industry;
   
the ability to produce its products successfully and to meet requirements integrate the production and development into the Combined Entity’s business;
   
future arrangements with, or investments in, other entities or associations;
   
intense competition and competitive pressures from other companies in the industries in which the Combined Entity will operate; and
   
other factors detailed under the section entitled “Risk Factors.”

 

These forward-looking statements are based on information available as of the date of this proxy statement/prospectus, and current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

 

In addition, statements that Energem or Graphjet “believes” and similar statements reflect such party’s beliefs and opinions on the relevant subject. These statements are based upon information available to such party as of the date of this proxy statement/prospectus, and while such party believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and these statements should not be read to indicate that either Energem or Graphjet has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

 

You should not place undue reliance on these forward-looking statements in deciding how to grant your proxy or instruct how your vote should be cast or vote your shares on the proposals set forth in this proxy statement/prospectus. As a result of a number of known and unknown risks and uncertainties, the actual results or performance of Energem, Graphjet and/or the Combined Entity may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause Energem’s, Graphjet’s or the Combined Entity’s actual results to differ include:

 

the occurrence of any event, change or other circumstances that could give rise to the termination of the Share Purchase Agreement;

 

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the outcome of any legal or regulatory proceedings that have been, or may be, instituted in the future against Energem, Graphjet, the Combined Entity or others following announcement of the Share Purchase Agreement and the transactions contemplated therein or following consummation of the Business Combination;
   
the inability to complete the transactions contemplated by the Share Purchase Agreement due to the failure to obtain approval of the Energem Shareholders or Graphjet or other conditions to closing in the Share Purchase Agreement;
   
the risk that the proposed transaction disrupts current plans and operations as a result of the announcement and consummation of the Business Combination;
   
the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, the ability of the Combined Entity to grow and manage growth profitably, maintain relationships with customers, compete within its industry and retain its key employees;
   
costs related to the proposed Business Combination;
   
the possibility that Energem, Graphjet or the Combined Entity may be adversely impacted by other economic, business, and/or competitive factors;
   
risks related to the global COVID-19 pandemic and other macroeconomic or geopolitical developments;
   
future exchange and interest rates;
   
the risk that Energem, or the Combined Entity fails to maintain an effective system of disclosure controls and internal controls over financial reporting, Energem’s or the Combined Entity’s ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired; and
   
other risks and uncertainties indicated in this proxy statement/prospectus, including those under “Risk Factors” herein, and other filings that have been made or will be made with the SEC by Energem or the Combined Entity.

 

These and other factors that could cause actual results to differ from those implied by the forward-looking statements in this proxy statement/prospectus are more fully described under the heading “Risk Factors” and elsewhere in this proxy statement/prospectus. The risks described under the heading “Risk Factors” are not exhaustive. Other sections of this proxy statement/prospectus describe additional factors that could adversely affect the business, financial condition or results of operations of Energem and Graphjet prior to the Business Combination, and the Combined Entity following the Business Combination. New risk factors emerge from time to time, and it is not possible to predict all such risk factors, nor can Energem or Graphjet assess the impact of all such risk factors on the business of Energem and Graphjet prior to the Business Combination, and the Combined Entity following the Business Combination, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements are not guarantees of performance. This is particularly true for a company like Graphjet that has a limited operating history to reference. All forward-looking statements attributable to Energem or Graphjet or persons acting on their behalf are expressly qualified in their entirety by the foregoing cautionary statements.

 

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QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION AND THE EXTRAORDINARY GENERAL MEETING

 

The questions and answers below highlight only selected information set forth elsewhere in this proxy statement/prospectus and only briefly address some commonly asked questions about the Extraordinary General Meeting and the proposals to be presented at the Extraordinary General Meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that may be important to Energem Shareholders. Shareholders are urged to carefully read this entire proxy statement/prospectus, including the annexes and the other documents referred to herein, to fully understand the proposed Business Combination and the voting procedures for the Extraordinary General Meeting.

 

Q:Why am I receiving this proxy statement/prospectus?
  
A:Energem and Graphjet have agreed to a business combination under the terms of the Share Purchase Agreement that is described in this proxy statement/prospectus. A copy of the Share Purchase Agreement is attached to this proxy statement/prospectus as Annex A and Energem encourages its shareholders to read it in its entirety. Energem Shareholders are being asked to consider and vote upon a proposal to approve the Share Purchase Agreement, which, among other things, provides for (i) Energem to acquire 100% of the equity of Graphjet at which point Graphjet will become a wholly-owned subsidiary of Energem, (ii) Energem to be renamed Graphjet Technology, and (iii) the other Transactions contemplated by the Share Purchase Agreement. See “Proposal No. 1—The NTA Proposal,”Proposal No. 2—The Business Combination Proposal” and “Proposal No. 3—The Energem M&A Proposal.” You are being asked to vote on the Business Combination. This proxy statement/prospectus and its annexes contain important information about the Business Combination and the other matters to be acted upon at the Extraordinary General Meeting.

 

Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement/prospectus, including the financial statements and annexes attached hereto and the other documents referred to herein.

 

Q:Are there any other matters being presented to shareholders at the Extraordinary General Meeting?
  
A:In addition to voting on the Business Combination Proposal, the Energem Shareholders will vote on the NTA Proposal, the Energem M&A Proposals, the Share Issuance Proposal, the Director Appointment Proposal (which is just presented to the holders of the Energem Class B Ordinary Shares), the Equity Incentive Plan Proposal and the Adjournment Proposal, if presented. Energem will hold the Extraordinary General Meeting of its shareholders to consider and vote upon these Proposals. This proxy statement/prospectus contains important information about the proposed Business Combination and the other Proposals to be acted upon at the Extraordinary General Meeting. Shareholders should read it carefully.

 

The vote of each Energem Shareholder is important regardless of how many shares are owned. You are encouraged to vote as soon as possible after carefully reviewing this proxy statement/prospectus and its annexes hereto.

 

Q:Why is Energem providing shareholders with the opportunity to vote on the Business Combination?
  
A:

Pursuant to the Share Purchase Agreement, the approval of the Energem Shareholders is a condition to Closing. Pursuant to the Energem M&A, Energem is required to provide Energem Shareholders with an opportunity to have their Class A Ordinary Shares redeemed for cash, either through a shareholder meeting or a tender offer. Due to the structure of the Transactions, Energem is providing this opportunity through a shareholder vote. In addition, the Energem Shareholders are being asked to vote upon the Share Issuance Proposal and the Equity Incentive Plan Proposal. If each of the NTA Proposal, the Business Combination Proposal, Share Issuance Proposal and Equity Incentive Plan Proposal are passed, Energem Shareholders are being asked to vote upon the Energem M&A Proposals and the Director Appointment Proposal. The Adjournment Proposal will only be presented to the holders of the issued and outstanding Energem Ordinary Shares in the event that based upon the tabulated vote at the time of the Extraordinary General Meeting there are insufficient votes for, or otherwise in connection with, the approval of the NTA Proposal, the Business Combination Proposal, the Energem M&A Proposals, the Share Issuance Proposal, the Director Appointment Proposal or the Equity Incentive Plan Proposal. Thus, discretionary authority may not be exercised to vote in favor of the Adjournment Proposal.

  
Q:

I am an Energem Warrant holder. Why am I receiving this proxy statement/prospectus?

 

A:The Energem Warrants will become exercisable following the Business Combination and will entitle holders to purchase Combined Entity Ordinary Shares, with the number of shares and the exercise price adjusted in accordance with the Share Purchase Agreement, as described in more detail herein. This proxy statement/prospectus includes important information about Energem and Graphjet as they are presently as well as the projected business of the Combined Entity and its subsidiary following the Closing of the Business Combination.

 

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Because holders of Energem Warrants will be entitled to purchase Combined Entity Ordinary Shares after the Closing of the Business Combination, we urge holders of Energem Warrants to read the information contained in this proxy statement/prospectus carefully.

 

Q:What will happen to Energem’s securities upon consummation of the Business Combination?
  
A:Energem’s units, Class A Ordinary Shares and Energem Warrants are currently listed on Nasdaq under the symbols “ENCPU,” “ENCP” and “ENCPW,” respectively. Energem intends to apply to list the Combined Entity Ordinary Shares and its warrants on Nasdaq Capital Market under the symbols “GTI” and “GTIW,” respectively, upon the closing of the Business Combination. Energem will not have units traded following the closing of the Business Combination, at which time each unit will separate into its component securities.

 

Following the Closing of the Business Combination, Energem intends to change its name to Graphjet Technology. While trading on Nasdaq is expected to begin on the first business day following the consummation of the Business Combination, there can be no assurance that the Combined Entity Ordinary Shares or warrants will be listed on Nasdaq or it they are, that a viable and active trading market will develop. See “Risk Factors” for more information.

 

Q:Why is Energem proposing the Business Combination?
  
A:Energem was organized to effect a merger, capital share exchange, asset acquisition or other similar business combination with one or more businesses or entities.

 

On November 18, 2021, Energem closed its initial public offering of units, with each unit consisting of one Energem Class A Ordinary Share and one Energem Warrant, which raised gross proceeds of approximately $115,000,000 (including $15,000,000 from the underwriters’ exercise of their over-allotment option in full). Since the Energem IPO, Energem’s activity has been limited to the evaluation of business combination candidates.

 

Graphjet is a Malaysian private limited company that is the owner of state of the art technology for the manufacture of graphene and graphite, a valuable and critical raw material used in a variety of industries, that was developed through its collaboration with National University of Malaysia and Universiti Teknikal Malaysia Melaka. Graphjet’s breakthrough technology transforms an abundant and renewable waste product, palm kernel shells, into highly valued artificial graphene and graphite. Graphjet received approval of its patent application for a palm-based synthetic graphite and the preparation method thereof on September 22, 2022. In addition, Graphjet currently has a pending patent application for its process for producing palm-based graphene.

 

Graphjet expects to build a carbonization plant in Phase 3 of Malaysia-China Kuantan Industrial Park in Pahang with an annual output of 10,000 tons of graphite and 60 tons of graphene and processing of estimated 50,300 tons of palm waste. The new 20-acre plant integrated plant (upstream and downstream) is expected to be completed within 18 to 20 months after the Closing of Business Combination and is expected to generate up to 700 jobs over the next four years. Graphjet has acquired the land underlying the new carbonization plant and local permission to commence construction has been secured. Currently, Graphjet believes its first production from that plant will be in the first quarter of fiscal year 2025.

 

Based on its due diligence investigations of Energem and the industry in which it operates, including the financial projections and other information provided by Graphjet in the course of their negotiations in connection with the Share Purchase Agreement, as well as the conclusions of Baker Tilly (Malaysia) in its Opinion about the fairness of the Transaction Consideration from a financial point of view to Energem’s Shareholders, Energem believes that Graphjet is positioned to take advantage of anticipated continued growth in the graphite markets and take a sizable portion of the market share.

 

As a result, Energem believes that a business combination with Graphjet will provide Energem’s shareholders with an opportunity to participate in the ownership of a company with significant growth potential. See the section entitled “Proposal No. 2 — The Business Combination Proposal—Energem’s Reasons for the Business Combination and Recommendation of the Board of Directors.

 

Q. Why is Energem proposing the NTA Proposal?
   

A. The adoption of the proposed amendments to remove the net asset test limitation from Energem’s amended and restated memorandum and articles of association is being proposed in the NTA Proposal in order to facilitate the consummation of the Business Combination, by removing the limitation on its ability to consummate an initial business combination if Energem would have less than $5,000,001 in net tangible assets prior to or upon consummation of such initial business combination. The purpose of the net asset test limitation was initially to ensure that the Energem Ordinary Shares are not deemed to be a “penny stock” pursuant to Rule 3a51-1 under the Exchange Act. Because the Energem Ordinary Shares and Combined Entity Ordinary Shares would not be deemed to be a “penny stock” pursuant to other applicable provisions of Rule 3a51-1 under the Exchange Act, Energem is presenting the NTA Proposal so that the parties may consummate the Business Combination even if Energem does not have at least $5,000,001 in net tangible assets prior to or upon consummation of the Business Combination.

 

Energem shareholders are being asked to adopt a proposed amendment to the Energem M&A prior to the Business Combination, which, in the judgement of the Energem Board, may be necessary to facilitate the Business Combination. Net tangible assts are calculated as total assets, less intangible assets and total liabilities. Graphjet’s financial statements reflect material intangible assets, that consist of graphene and graphite patents, which are included in the non-current assets to Graphjet’s Balance Sheet intangible assets, net. In addition, Graphjet’s financial statements reflect substantial liabilities, including pursuant to research and development. Although the calculation of net tangible assets offers limited utility to understanding the operations of a business such as Graphjet’s, the calculation of net tangible assets may be used by investors to determine the value of a company’s shares. Accordingly, the removal of the net tangible asset requirement, if there are significant redemptions coupled with the lower tangible assets of Graphjet may adversely affect the stock price of the Combined Entity following the Business Combination.

 

As an alternative from being exempt from penny stock classification by having minimum net tangible assets of $5,000,001, a company can meet the requirements of SEC Rule 3a51-1(a)(ii), which generally require that a company (a) have either $5 million of stockholders equity or listed securities with a market value of $50 million or net income of at least $750,000 in its last fiscal year or two out of three of its most recent fiscal years, (b) either a one year operating history or listed securities with a market value of $50 million, (c) a minimum bid price of $4 per share, (d) at least 300 round lot holders of its listed securities and (e) at least one million publicly held shares with a $5 million market value. Energem and Graphjet believe that the combined companies will meet these criteria; however, there can be no assurance to this effect.

   
Q:What is the “PIPE Investment”?
  
A:Energem and Graphjet entered into a purchase agreement (the “PIPE Investment Purchase Agreement”) with the PIPE Investor on December 20, 2023, as amended by the amended and restated PIPE Investment Purchase Agreement of January 24, 2024 (the “Revised PIPE Agreement”), which is attached at Exhibit 10.32, pursuant to which the PIPE Investor and/or investment vehicles directly managed by such investor, has agreed to purchase, and Graphjet has agreed to sell to them, 4,530 Graphjet Pre-Transaction Shares before the Closing of the Business Combination, which Graphjet Pre-Transaction Shares will be exchanged for 250,000 Combined Entity Ordinary Shares at the Closing of the Business Combination, for an aggregate purchase price of $2,500,000. The number of Combined Entity Ordinary Shares is fixed, the number of Graphjet Pre-Transaction Shares to be purchased is subject to adjustment depending on the final consideration paid to the Graphjet shareholders. In accordance with the Revised PIPE Agreement, Graphjet has agreed to file, within 60 calendar days after the Closing, a registration statement with the SEC registering the resale or transfer of the Combined Entity Ordinary Shares.

 

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Q:Did the Energem Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?
  
A:Yes. The Energem Board obtained a third-party fairness opinion from Baker Tilly (Malaysia), which is attached hereto at Annex D, to opine on the fairness of the proposed acquisition of 100% of the equity interests in Graphjet for the Transaction Consideration of US$1.38 billion. In addition to a team from the Energem Board traveling to Johor, Malaysia to visit the Zhong He Industry’s factory, a team from Baker Tilly (Malaysia) travelled to Johor, Malaysia to visit the Zhong He Industry’s factory utilized by Graphjet as well as its manufacturing facilities and reviewed its letters of intent and financial projections. In addition, Energem’s officers, directors and advisors met visited Graphjet’s offices and met with its officers and directors. Moreover, Energem’s officers, directors and advisors have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries as well as mergers and acquisitions experience which was utilized whilst undergoing extensive due diligence on Graphjet. In addition, Energem’s financial and legal advisors bring substantial experience and sector expertise to support the Energem Board to make the necessary analyses and determinations regarding the Business Combination. Accordingly, investors will be benefiting from a variety of industry experience and time vetting Graphjet and its technology, business potential and financial projections including the third-party fairness opinion of the Transaction Consideration as part of the Energem Board’s determination to approve the Business Combination.
  
Q:Do I have redemption rights?
  
A:If you are a holder of Energem Class A Ordinary Shares, you have the right to demand that Energem redeem such shares for a pro rata portion of the cash held in Energem’s Trust Account, calculated as of two (2) business days prior to the consummation of the Business Combination. We sometimes refer to these rights to demand redemption of the Energem Class A Ordinary Shares as “redemption rights.”

 

Notwithstanding the foregoing, a holder of Energem Class A Ordinary Shares, together with any affiliate of his or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to 15% or more of Energem Class A Ordinary Shares. Accordingly, all Energem Class A Ordinary Shares in excess of 15% held by a Public Shareholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be converted.

 

Under the current Energem M&A, the Business Combination may not be consummated if Energem has net tangible assets of less than $5,000,001 unless the NTA Proposal is approved.

 

Q:How do I exercise my redemption rights?
  
A:A holder of Energem Public Shares may exercise redemption rights regardless of whether it votes for or against the Business Combination Proposal or does not vote on such proposal at all, or if it is a holder of Energem Class A Ordinary Shares on the record date. If you are a holder of Energem Public Shares and wish to exercise your redemption rights, you must demand that Energem convert your Energem Public Shares into cash and deliver your Energem Public Shares to Energem’s transfer agent physically or electronically using The Depository Trust Company’s Deposit/Withdrawal at Custodian (“DWAC”) System no later than two (2) business days prior to the Extraordinary General Meeting. Any holder of Energem Public Shares seeking redemption will be entitled to a full pro rata portion of the amount then in the Trust Account (which, for illustrative purposes, was $[13,667,908] or $[11.23] per share, as of the record date), less any owed but unpaid taxes on the funds in the Trust Account. Such amount will be paid promptly upon consummation of the Business Combination. There are currently no owed but unpaid income taxes on the funds in the Trust Account.

 

Any request for redemption, once made by a holder of Energem Public Shares, may be withdrawn at any time prior to the time the vote is taken with respect to the Business Combination Proposal at the Extraordinary General Meeting. If you deliver your shares for redemption to Energem’s transfer agent and later decide prior to the Extraordinary General Meeting not to elect redemption, you may request that Energem’s transfer agent return the shares (physically or electronically). You may make such request by contacting Energem’s transfer agent at the address listed at the end of this section.

 

Any written demand of redemption rights must be received by Energem’s transfer agent at least two (2) business days prior to the vote taken on the Business Combination Proposal at the Extraordinary General Meeting. No demand for redemption will be honored unless the holder’s share certificates have been delivered (either physically or electronically) to the transfer agent.

 

13
 

 

If you are a holder of Energem Class A Ordinary Shares (including through the ownership of Energem units) and you exercise your redemption rights, it will not result in the loss of any Energem Warrants that you may hold (including those contained in any units you hold). Your Energem Warrants will become exercisable to purchase one Combined Entity Ordinary Share following consummation of the Business Combination.

 

Q:Do I have appraisal rights if I object to the proposed Business Combination?
  
A:No, appraisal rights are not available to holders of Energem Ordinary Shares in connection with the Business Combination under Cayman Islands law.
  
Q:What happens to the funds deposited in the Trust Account after consummation of the Business Combination?
  
A:

The net proceeds of the Energem IPO of $116,725,000, inclusive of a substantial amount of the sum raised from the simultaneous private placement of Energem placement units of $5,280,750, were placed in the Trust Account immediately following the Energem IPO. On November 16, 2022, Energem held an extraordinary general meeting of shareholders, at which shareholders voted upon, among other items, a proposal to amend Energem’s then current amended and restated memorandum and articles of association to extend the date by which Energem must consummate an initial business combination. In connection with the Extension Meeting and subsequent redemption, certain Energem shareholders elected to redeem an aggregate of 9,604,519 public shares. Following the Extension Redemption, Energem had approximately $19,360,390.01 remaining in its Trust Account, all of which is held in U.S. treasury securities.

 

On August 10, 2023, Energem held an extraordinary general meeting of shareholders, at which shareholders voted upon, among other items, a proposal to amend Energem’s then current amended and restated memorandum and articles of association to further extend the date by which Energem must consummate an initial business combination. In connection with the Extension Meeting and subsequent redemption, certain Energem shareholders elected to redeem an aggregate of 678,549 public shares. Following the 2023 Extension Redemption, Energem had approximately $13,389,668.57 remaining in its Trust Account, which has increased to approximately $13,667,908, all of which is held in U.S. treasury securities.

 

After consummation of the Business Combination, the funds in the Trust Account will be used to pay, on a pro rata basis, holders of Energem Public Shares who exercise redemption rights, to pay fees and expenses incurred in connection with the Business Combination (including aggregate fees of 3.5% of the gross proceeds from the sale of Energem Class A Ordinary Shares in the IPO totaling $4,025,000 to the underwriters of the Energem IPO, as deferred underwriting commissions, which will be paid in cash and equity, pursuant to the Satisfaction and Discharge of Indebtedness Agreement (the “Satisfaction Agreement”) effective as of December 21, 2023 (and attached hereto as Exhibit 10.29), by and between Energem, Graphjet and EF Hutton, on behalf of the underwriters, as follows: (i) $2,000,000 in cash at Closing; and (ii) the balance of $2,025,000 to be paid in equity for a total of 202,500 Combined Entity Ordinary Shares at $10/share at the Closing.

 

Pursuant to the Satisfaction Agreement, no later than 30 days from the Closing of the Business Combination, the Combined Entity shall register under the Securities Act all of 202,500 Ordinary Shares. If the aggregate VWAP value of the 202,500 Ordinary Shares that EF Hutton, as of the effectiveness date of that registration statement, is lower than $2,025,000 (the “Original Aggregate Share Value”), with the difference between the VWAP value on any given date and the Original Aggregate Share Value (the “Difference in Amount”), then the Combined Entity shall compensate EF Hutton either in cash or by issuing additional Ordinary Shares at a new value of Ordinary Shares (the “New Share Price”) in an amount equal to the Difference in Amount on the effectiveness date of the registration statement. If the Combined Entity decides to compensate EF Hutton for the Difference in Amount in issuing additional Ordinary Shares, then the New Share Price shall equal an amount that is the lowest of the VWAP for a period of five (5) trading days immediately prior to the effectiveness date of that registration statement.

 

The Satisfaction Agreement provides further that if after twelve months from the Business Combination (the “Twelve Month Period Date”), the Combined Entity fails to register EF Hutton’s Ordinary Shares on an effective registration statement, then the Combined Entity will confirm in writing that such unregistered Ordinary Shares are freely sellable under Rule 144. No later than the Twelve-Month Period Date, the Combined Company shall provide EF Hutton a valid legal opinion that its Ordinary Shares are eligible for resale pursuant to Rule 144. Furthermore, if five (5) trading days prior to the day such Ordinary Shares are eligible for release pursuant to Rule 144, in the event that this provision governs because the Combined Entity fails to register EF Hutton’s Ordinary Shares on an effective registration statement, the aggregate VWAP value of such Ordinary Shares is less than the Original Aggregate Share Value, then the Combined Entity shall compensate EF Hutton either in cash or issuing additional Ordinary Shares at a New Share Price in an amount equal to the Difference in Amount on such date. If the Combined Entity decides to compensate EF Hutton for the Difference in Amount in issuing additional Ordinary Shares, then the New Share Price of such additional Ordinary Shares shall equal an amount that is the lowest of the VWAP for a period of five (5) trading days immediately prior to the Twelve-month Period Date.

 

Pursuant to the Satisfaction Agreement, “VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities market on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg through its “VAP” function (set to 09:30 start time and 16:00 end time) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices). If the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.

 

Any proceeds from the Trust Account which are not required to be used in order to satisfy redemption rights or the fees and expenses incurred in connection with the Business Combination will be made available to Graphjet Technology for use in the conduct of its business (whether for working capital purposes or otherwise).

 

Deferred Underwriting Commissions as a
Percentage of Post-Redemption Shares
     no redemption  33.3% of max redemption  50% of max redemption  66.7% of max
redemption
  maximum redemption
Public Shares (without public warrants)       

1,216,932

    

811,288

    

608,466

    

405,644

    - 
Deferred underwriting commission*        4,025,000    4,025,000    4,025,000    4,025,000    4,025,000 
Deferred underwriting commission at $10 per share        402,500    402,500    402,500    402,500    402,500 
Deferred underwriting commission as a percentage of post-redemption shares        33.1%   49.6%   66.2%   99.2%   -
                               
Current underwriting fee per share   3.31                          

 

* The underwriting agreement does not provide for an adjustment to reflect redemptions of Public Shares. The deferred underwriting commission is to be paid as follows: (i) $2,000,000 in cash at the Closing; and (ii) the balance of $2,025,000 to be paid in equity for a total of 202,500 Combined Entity Ordinary Shares at $10/share pursuant to the Satisfaction and Discharge of Indebtedness Agreement (the “Satisfaction Agreement”) effective as of December 21, 2023 (and attached hereto as Exhibit 10.29), by and between Energem, Graphjet and EF Hutton, on behalf of the underwriters. Pursuant to the Satisfaction Agreement, no later than 30 days from the Closing of the Business Combination, the Combined Entity shall register under the Securities Act all of 202,500 Ordinary Shares. If the aggregate VWAP value of the 202,500 Ordinary Shares that EF Hutton, as of the effectiveness date of that registration statement, is lower than $2,025,000 (the “Original Aggregate Share Value”), with the difference between the VWAP value on any given date and the Original Aggregate Share Value (the “Difference in Amount”), then the Combined Entity shall compensate EF Hutton either in cash or by issuing additional Ordinary Shares at a new value of Ordinary Shares (the “New Share Price”) in an amount equal to the Difference in Amount on the effectiveness date of the registration statement. If the Combined Entity decides to compensate EF Hutton for the Difference in Amount in issuing additional Ordinary Shares, then the New Share Price shall equal an amount that is the lowest of the VWAP for a period of five (5) trading days immediately prior to the effectiveness date of that registration statement, as discussed in greater detail elsewhere in this proxy statement/prospectus.

 

Q:What happens if a substantial number of Public Shareholders vote in favor of the Business Combination Proposal and exercise their redemption rights?
  
A:Energem’s Public Shareholders may vote in favor of the Business Combination and still exercise their redemption rights, although they are not required to vote in any way to exercise such redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the Trust Account and the number of Public Shareholders are substantially reduced as a result of redemptions by Public Shareholders.

 

However, the Business Combination will not be consummated if the levels of redemption give rise to a failure of a condition to Closing of the Business Combination that is not waived. Such conditions to Closing include Energem’s requirement under the Energem M&A and the Share Purchase Agreement that Energem shall not have less than $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) either immediately prior to or upon consummation of the Business Combination unless the NTA Proposal is approved.

 

On November 16, 2022, Energem held an extraordinary general meeting of shareholders, at which shareholders voted upon, among other items, a proposal to amend Energem’s then current amended and restated memorandum and articles of association to extend the date by which Energem must consummate an initial business combination. In connection with the Extension Meeting and subsequent redemption, Energem shareholders elected to redeem an aggregate of 9,604,519 public shares. Following the Extension Redemption, Energem had approximately $19,360,390.01 left in its Trust Account.

 

On August 10, 2023, Energem held an extraordinary general meeting of shareholders, at which shareholders voted upon, among other items, a proposal to amend Energem’s then current amended and restated memorandum and articles of association to further extend the date by which Energem must consummate an initial business combination. In connection with the Extension Meeting and subsequent redemption, certain Energem shareholders elected to redeem an aggregate of 678,549 public shares. Following the 2023 Extension Redemption, Energem had approximately $13,389,668.57 remaining in its Trust Account, which amount has increased to approximately $13,667,908, all of which is held in U.S. treasury securities.

 

In no event will Energem redeem public shares in an amount that would cause our net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001 after giving effect to the transactions contemplated by the Share Purchase Agreement unless the NTA Proposal is approved.

 

In the event such conditions to Closing are satisfied or waived, redemptions may result in fewer Energem Public Shares and Public Shareholders. In such event, the trading market for the Combined Entity Ordinary Shares may be less liquid than the market was for Energem prior to the consummation of the Transactions, which may result in adverse consequences such as depressed trading value and the Combined Entity’s inability to meet the listing standards of a national securities exchange. In addition, to the extent of any redemptions, fewer funds from the Trust Account would be available to Graphjet Technology to be used in its business following the consummation of the Business Combination.

 

The table below presents the trust value per share to a public shareholder that elects not to redeem across a range of redemptions scenarios. For purposes of calculating the redemption scenarios, the trust account amount $13,389,668.57 following the redemptions coinciding with the 2023 Energem annual meeting, which has increased to approximately $13,667,908 is used because such date is the date the redemption requests in connection with the Extension Meeting were effectuated.

 

The maximum redemption amount reflects the maximum number of the Energem’s Public Shares that can be redeemed with the assumption that Energem’s M&A is amended such that Energem will not be required to maintain a minimum net tangible asset value of at least $5,000,001 prior to or upon consummation of the Business Combination after giving effect to the payments to redeeming shareholders. Should the NTA Proposal not be approved, Energem would not be permitted to proceed with the Business Combination in the event of a maximum redemption.

 

  

Assuming No

Redemptions

  

Assuming 50%

Redemptions

  

Assuming Maximum

Redemptions

 
Percentage Share Ownership in Combined Entity               
Graphjet Stockholders   94.75%   95.15%   95.55%
Initial Shareholders   2.34%   2.35%   2.36%
Former Energem public shareholders   0.84%   0.42%   0.00%
FA Shares***   1.90%   1.91%   1.91%
PIPE Investor Shares****   0.17%   0.17%   0.17%
Value of the Shares Owned by Non-Redeeming Shareholders*               
Total Shares Outstanding Excluding Warrants   145,380,007    144,771,541    144,163,075 
Total Equity Value Post-Redemptions ($’000)   1,555,566    1,549,055    1,542,545 
Per Share Value**   0.09    0.09    0.09 

 

* Calculations utilized the Class A Ordinary Shares’ closing price of $10.70 per share on August 10, 2023.
** Calculations of the trust value per share utilized the trust account amount $13,389,668.57 following the redemptions coinciding with the 2023 Energem annual meeting, which has increased to approximately $13,667,908, divided by the total outstanding shares.
*** FA Shares are an estimated 2,760,000 Combined Entity Ordinary Shares at the Closing of the Business Combination to be held by Arc Group Limited, Energem’s financial advisor in the Business Combination.
**** Represents the 250,000 Combined Entity Ordinary Shares at the Closing of the Business Combination.

 

Q: What happens if the Business Combination is not consummated?
   
A:

There are certain circumstances under which the Share Purchase Agreement may be terminated. If Energem does not complete the Business Combination with Graphjet for whatever reason, Energem would search for another target business with which to complete a business combination. If Energem does not complete the Business Combination with Graphjet or another business combination by August 18, 2023 (or pursuant to up to six (6) one-month extensions to February 18, 2024 by depositing additional funds into the Company’s Trust Account, as described in more detail in this proxy statement/prospectus), Energem must redeem 100% of the issued and outstanding Energem Public Shares, at a per-share price, payable in cash, equal to an amount then held in the Trust Account (net of taxes payable and less up to $100,000 of interest to pay dissolution expenses) divided by the number of outstanding Energem Public Shares.

 

In connection with the first monthly extension of the Termination Date under the Third Amended and Restated Articles of Association, Energem caused $0.045 per outstanding share of Energem’s Class A ordinary shares or approximately $54,761.94 for 1,216,932 Class A ordinary shares to be paid to the Trust Account on August 15, 2023 in advance of the August 18, 2023 due date. In connection with the second monthly extension of the Termination Date under the Third Amended and Restated Articles of Association, Energem caused $0.045 per outstanding share of Energem’s Class A ordinary shares or approximately $54,761.94 for 1,216,932 Class A ordinary shares to be paid to the Trust Account on September 14, 2023 in advance of the September 18, 2023 due date.

 

In connection with the third monthly extension of the Termination Date under the Third Amended and Restated Articles of Association, Energem caused $0.045 per outstanding share of Energem’s Class A Ordinary Shares or approximately $54,761.94 for 1,216,932 Class A Ordinary Shares to be paid to the Trust Account on October 16, 2023 in advance of the October 18, 2023 due date. In connection with the fourth monthly extension of the Termination Date under the Third Amended and Restated Articles of Association, Energem caused $0.045 per outstanding share of Energem’s Class A Ordinary Shares or approximately $54,761.94 for 1,216,932 Class A Ordinary Shares to be paid to the Trust Account on November 17, 2023 in advance of the November 18, 2023 due date. In connection with the fifth monthly extension of the Termination Date under the Third Amended and Restated Articles of Association, Energem caused $0.045 per outstanding share of Energem’s Class A Ordinary Shares or approximately $54,761.94 for 1,216,932 Class A Ordinary Shares to be paid to the Trust Account on December 15, 2023 in advance of the December 18, 2023 due date.

 

The Sponsor and Energem’s officers and directors have waived their redemption rights with respect to their Energem Class B Ordinary Shares acquired (the “Founder Shares”) in the event a business combination is not effected in the required time period, and, accordingly, their Founder Shares will be worthless. Additionally, in the event of such liquidation, there will be no distribution with respect to our outstanding warrants. Accordingly, the Energem Warrants will expire worthless.

 

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Energem expects that the amount of any distribution its Public Shareholders will be entitled to receive upon its dissolution will be approximately the same as the amount they would have received if they had redeemed their shares in connection with the Business Combination, subject in each case to Energem’s obligations under Cayman Islands law to provide for claims of creditors and other requirements of applicable law. Holders of Founder Shares have waived any right to any liquidation distribution with respect to those shares. In the event of liquidation, there will be no distribution with respect to Energem’s outstanding Warrants Accordingly, the Warrants will expire worthless.

 

Q:How do the Sponsor and the officers and directors of Energem intend to vote on the proposals?
  
A:

Following the recent redemptions by Energem’s Public Shareholders, leaving 1,216,932 issued and outstanding Class A Ordinary Shares, because the Initial Shareholders agreed to vote their aggregate 2,875,000 issued and outstanding Class B ordinary shares in favor of each of the NTA Proposal, the Business Combination Proposal, the Energem M&A Proposals, the Share Issuance Proposal, the Equity Incentive Plan Proposal and the Director Appointment Proposal, each of NTA Proposal, the Business Combination Proposal, the Energem M&A Proposals, the Share Issuance Proposal, the Equity Incentive Plan Proposal and the Director Appointment Proposal will be approved even if none of the public shares are voted in favor of any of NTA Proposal, the Business Combination Proposal, the Energem M&A Proposals, the Share Issuance Proposal, the Equity Incentive Plan Proposal and the Director Appointment Proposal.

  
Q:What interests do the Sponsor and the current officers and directors of Energem have in the Business Combination that may differ from or be in addition to the interests of Energem Shareholders?
  
A:In considering the recommendation of the Energem Board to vote in favor of the Business Combination, shareholders should be aware that, aside from their equity interests as shareholders, the Sponsor and certain of our directors and officers have interests in the Business Combination that are different from, or in addition to, those of other shareholders generally. Our directors were aware of and considered these interests, among other matters, in evaluating the Business Combination, in recommending to shareholders that they approve the Business Combination and in agreeing to vote their shares in favor of the Business Combination. Shareholders should take these interests into account in deciding whether to approve the Business Combination. These interests include, among other things, the fact that:

 

If the Business Combination with Graphjet or another business combination is not consummated by August 18, 2023 (or pursuant to up to six (6) one-month extensions to February 18, 2024 by depositing additional funds into the Company’s Trust Account, as described in more detail in this proxy statement/prospectus), Energem will cease all operations except for the purpose of winding up, redeeming 100% of the issued and outstanding Energem Public Shares for cash and, subject to the approval of its remaining shareholders and the Energem Board and in accordance with the requirements of applicable law, dissolving and liquidating. In such event, the Founder Shares held by the Sponsor and Energem’s directors and officers, which were acquired for an aggregate purchase price of $25,000 or approximately $0.009 per share prior to the Energem IPO, would be worthless because the holders are not entitled to participate in any redemption or distribution with respect to such Founder Shares. Such Founder Shares had an aggregate market value of $[32,918,750] based upon the closing price of $[11.45] per share on Nasdaq on the record date. On the other hand, if the Business Combination is consummated, each outstanding Energem Ordinary Share will remain a Combined Entity Ordinary Share pursuant to the Share Purchase Agreement.
   

The Sponsor purchased 528,075 Placement Units at a price of $10.00 per unit, for an aggregate purchase price of $5,280,750 in a private placement that closed simultaneously with the closing of Energem’s initial public offering. Each placement unit consisted of one Energem Class A Ordinary Share and one Energem Warrant. Each Energem Warrant is exercisable to purchase one whole Energem Class A Ordinary Share at $11.50 per share. These securities will also be worthless if Energem does not consummate the Business Combination by August 18, 2023 (or pursuant to up to six (6) one-month extensions to February 18, 2024 by depositing additional funds into the Company’s Trust Account, as described in more detail in this proxy statement/prospectus). On the other hand, if the Business Combination is consummated, each outstanding Energem Warrant will become a Warrant exercisable to purchase one Combined Entity Ordinary Share following consummation of the Business Combination and each outstanding Energem Ordinary Share will become a Combined Entity Ordinary Share pursuant to the Share Purchase Agreement.

 

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If Energem is unable to complete the Business Combination within the required time period, the Sponsor will be personally liable under certain circumstances described herein to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Energem for services rendered or contracted for or products sold to Energem. If Energem consummates a business combination, on the other hand, Energem will be liable for all such claims however the Founder Shares of the Sponsor will also have a significantly higher value at the time of the Business Combination. The Founder Shares had an aggregate market value of approximately $32,918,750 based upon the closing price of Energem’s Class A Ordinary Shares of $11.45 per share on Nasdaq on December 15, 2023. The Founder Shares do not include any Energem Warrants or Placement Warrants.

   

The Sponsor and Energem’s officers and directors and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on Energem’s behalf, such as identifying and investigating possible business targets and business combinations. However, if Energem fails to consummate a business combination within the required period, they will not have any claim against the Trust Account for reimbursement. Accordingly, Energem may not be able to reimburse these expenses if the Business Combination with Graphjet Technology or another business combination is not completed by August 18, 2023 (or pursuant to up to six (6) one-month extensions to February 18, 2024 by depositing additional funds into the Company’s Trust Account, as described in more detail in this proxy statement/prospectus). As of the record date, the Sponsor and Energem’s officers and directors and their affiliates had incurred approximately $950,000 of unpaid reimbursable expenses.

   
The Share Purchase Agreement provides that the parties will take all necessary action, so that effective at the Closing, the board of directors of Graphjet Technology (the “Post-Closing Board”) will consist of seven individuals, three (3) persons designated by Energem prior to the Closing and four (4) persons designated by Graphjet prior to the Closing. At least four (4) of the designees to the Post-Closing Board shall be independent directors in accordance with Nasdaq requirements.
   
At or prior to Closing, Energem will provide each member of the Post-Closing Board with a customary director indemnification agreement, in form and substance reasonably acceptable to Energem, Graphjet and such director. The parties also agreed to take all action necessary, including causing Energem’s executive officers to resign, so that the individuals serving as the chief executive officer and chief financial officer, respectively, of Graphjet Technology immediately after the Closing will be the same individuals as that of Graphjet immediately prior to the Closing.
   

Energem’s officers and directors (or their affiliates) may make loans from time to time to Energem to fund certain capital requirements including to fund the extension payments to the Trust Account. 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 Sponsor, upon consummation of our initial business combination. The units would be identical to the placement units. As of the date of this proxy statement/prospectus, no such loans have been made, but loans may be made after the date of this proxy statement/prospectus. However, under the promissory note entered into between Energem and the Sponsor before the Energem IPO, $88,542 is due to the Sponsor and payable at Closing of the Business Combination under the promissory note and $877,193 is due under the working capital loans for a total of $965,735 due as of September 30, 2023. If the Business Combination is not consummated, the loans will not be repaid and will be forgiven except to the extent there are funds available to Energem outside of the Trust Account.

   
 

Pursuant to the Administrative Support Agreement entered into between Energem and the Sponsor contemporaneous to the Energem IPO, Energem agreed to reimburse the Sponsor $10,000 per month commencing after the IPO through the Business Combination. These amounts are accruing and remain unpaid and payable at the time of the Closing of the Business Combination. Presently, approximately $120,000 is due under the Administrative Support Agreement. If the Business Combination is not consummated, these outstanding payments owed and loans will not be repaid and will be forgiven except to the extent there are funds available to Energem outside of the Trust Account.

 

Q:When do you expect the Business Combination to be completed?
  
A:

It is currently anticipated that the Business Combination will be consummated promptly following the Extraordinary General Meeting, which is set for [_______], 2024; however, such meeting could be adjourned or postponed to a later date, as described above. The Closing of the Business Combination is also subject to the approval of the Graphjet Shareholders, as well as other customary closing conditions. For a description of the conditions for the completion of the Business Combination, see the section entitled “The Share Purchase Agreement—Conditions to Closing of the Transactions.

  
Q:What do I need to do now?
  
A:Energem urges you to read and consider the information contained in this proxy statement/prospectus, including the financial statements and annexes attached hereto carefully and the other documents referred to herein, and to consider how the Business Combination will affect you as an Energem Shareholder and/or warrant holder of Energem. Energem Shareholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or other nominee.

 

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Q: Are the Proposals conditioned on one another?
   
A: Unless the NTA Proposal, the Business Combination Proposal, the Share Issuance Proposal and the Equity Incentive Plan Proposal are approved (the “Condition Precedent Proposals”), then the Energem M&A Proposals and the Director Appointment Proposal will not be presented to the Energem Shareholders at the Extraordinary General Meeting. The NTA Proposal is conditioned on the approval of the Business Combination Proposal. The Adjournment Proposal is not conditioned on the approval of any other Proposal set forth in this proxy statement/prospectus. It is important for you to note that in the event that the Business Combination Proposal does not receive the requisite vote for approval, then we will not consummate the Business Combination. If Energem does not consummate the Business Combination with Graphjet and fails to complete an initial business combination with another target company by August 18, 2023 (or pursuant to up to six (6) one-month extensions to February 18, 2024 by depositing additional funds into the Company’s Trust Account, as described in more detail in this proxy statement/prospectus), Energem will be required to (i) cease all operations except for the purpose of winding up, (ii) no more than ten business days thereafter redeem the issued and outstanding Public Shares at a per-share price payable in cash, and (iii) subject to the approval of its remaining shareholders and its board of directors, dissolve and liquidate.

 

Q:What will happen if I abstain from voting?
  
A:At the Extraordinary General Meeting, abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, are not treated as votes cast and will have no effect on any of the proposals.
  
Q:What will happen if I sign and return my proxy card without indicating how I wish to vote?
  
A:Signed and dated proxies received by Energem without an indication of how the shareholder intends to vote on a Proposal will be voted “FOR” each Proposal presented to the shareholders. The proxyholders may use their discretion to vote on any other matters which properly come before the Extraordinary General Meeting.
  
Q:If I am not going to the Extraordinary General Meeting, should I return my proxy card instead?
  
A:Yes. Whether you plan to attend the Extraordinary General Meeting or not, please read the enclosed proxy statement carefully, and vote your shares by completing, signing, dating, and returning the enclosed proxy card in the postage-paid envelope provided.
  
Q:When and where will the Extraordinary General Meeting take place?
  
A:The Extraordinary General Meeting will be held at the office of Energem Corp. located at Level 3, Tower 11, Avenue 5, No. 8, Jalan Kerinchi, Bangsar South, Wilayah Persekutuan Kuala Lumpur, Malaysia and via a live audio webcast on _____, 2024 at 10:00 a.m., Eastern Time. Energem Shareholders are encouraged to attend the Extraordinary General Meeting in person or via the live webcast. Please plan to arrive or access the webcast prior to the start time. If you encounter any difficulties accessing the live audio webcast of the Extraordinary General Meeting or during the meeting time, please call the technical support number that will be posted on the live audio webcast login page for the Extraordinary General Meeting located at https://www.cstproxy.com/energemcorp/2024. Shareholders participating in the Extraordinary General Meeting will be able to listen only and will not be able to speak. However, in order to maintain the interactive nature of the Extraordinary General Meeting, virtual attendees will be able to:

 

vote via the web portal during the Extraordinary General Meeting webcast; and
   
submit questions or comments to Energem’s directors and officers during the Extraordinary General Meeting via the Extraordinary General Meeting webcast.

 

Shareholders may submit questions or comments during the meeting through the Extraordinary General Meeting webcast by typing in the “Submit a question” box.

 

Q:How do I attend the Extraordinary General Meeting?
  
A:The Extraordinary General Meeting will be held at the office of Energem Corp. located at Level 3, Tower 11, Avenue 5, No. 8, Jalan Kerinchi, Bangsar South, Wilayah Persekutuan Kuala Lumpur, Malaysia and via a live audio webcast on ____, 2024 at 10:00 a.m., Eastern Time. Any shareholder wishing to attend the Extraordinary General Meeting must register in advance to receive the instructions to participate. To register for and attend the Extraordinary General Meeting, please follow these instructions as applicable to the nature of your ownership of Energem Class A Ordinary Shares:

 

Shares Held of Record. If you are a holder of record of Energem Ordinary Shares as of the Record Date, you may attend the Extraordinary General Meeting. If you encounter any difficulties accessing the live audio webcast of the Extraordinary General Meeting or during the meeting time, please call the technical support number that will be posted on the live audio webcast login page for the Extraordinary General Meeting go to https://www.cstproxy.com/energemcorp/2024 with Conference ID: 4758727#, enter the control number you received on your proxy card or notice of the meeting and click on the “Click here to preregister for the online meeting” link at the top of the page. Immediately prior to the start of the Extraordinary General Meeting, you will need to log back into the meeting site using your control number. You must register before the meeting starts.

 

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Shares Held in Street Name. If you hold your shares in “street” name, which means your shares are held of record by a broker, bank or nominee, and you who wish to attend the Extraordinary General Meeting, you must obtain a legal proxy from the shareholder of record and e-mail a copy (a legible photograph is sufficient) of your proxy to Energem@LaurelHill.com. Holders should contact their bank, broker or other nominee for instructions regarding obtaining a proxy. Holders who e-mail a valid legal proxy will be issued an Extraordinary General Meeting control number that will allow them to register to attend and participate in the Extraordinary General Meeting. You will receive an e-mail prior to the Extraordinary General Meeting with a link and instructions for entering the Extraordinary General Meeting. “Street” name holders should contact Continental on or before [__], 2024.

 

Energem Shareholders will also have the option to listen to the Extraordinary General Meeting by telephone by calling:

 

Within the United States and Canada: 1 800-450-7155 (toll-free)
   
Outside of the United States and Canada: +1 857-999-9155 (standard rates apply)

 

The passcode for telephone access: 8675126#. You will not be able to vote or submit questions unless you register for and log in to the Extraordinary General Meeting webcast as described above.

 

Q:How do I vote?
  
A:If you are a holder of record of Energem Ordinary Shares on the record date, you may vote by attending the Extraordinary General Meeting live in person or by a live webcast and submitting a ballot via the Extraordinary General Meeting webcast or by submitting a proxy for the Extraordinary General Meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. If you hold your shares in “street name,” you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly voted and counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares whether you attend the live session or the online live webcast and to obtain a legal proxy from your broker, bank or nominee.
  
Q:If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?
  
A:No. Your broker cannot vote for you automatically. Your broker, bank or nominee may vote your shares only with your instructions unless the matter involves “routine” proposals. Your broker, bank or nominee cannot vote your shares with respect to “non-routine” proposals unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee.

 

Energem believes the Proposals presented to the shareholders will be considered non-routine and therefore your broker, bank or nominee cannot vote your shares without your instruction. Your bank, broker or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.

 

If you are an Energem Shareholder holding your shares in “street name” and you do not instruct your broker, bank or other nominee on how to vote your shares, your broker, bank or other nominee will not vote your shares on the NTA Proposal, the Business Combination Proposal, the Energem M&A Proposals, the Share Issuance Proposal, the Equity Incentive Plan Proposal, the Director Appointment Proposal or the Adjournment Proposal. The failure of your broker to vote will not count as votes cast at the Extraordinary General Meeting and, therefore, will not have any impact on the proposals presented at the Extraordinary General Meeting.

 

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Q:May I change my vote after I have mailed my signed proxy card?
  
A:Yes. Energem Shareholders of record may send a later-dated, signed proxy card to Energem’s transfer agent at the address set forth below so that it is received prior to the Extraordinary General Meeting and submit a ballot through the web portal during the Extraordinary General Meeting webcast. Shareholders of record also may revoke their proxy by sending a notice of revocation to Energem’s transfer agent, which must be received prior to the vote at the Extraordinary General Meeting. If you hold your shares in “street name,” you should contact your broker, bank or nominee to change your instructions on how to vote. If you hold your shares in “street name” and wish to view the live video webcast of the Extraordinary General Meeting and vote through the web portal, you must obtain a legal proxy from your broker, bank or nominee.
  
Q:What constitutes a quorum for the Extraordinary General Meeting?
  
A:A quorum is the minimum number of Energem Ordinary Shares that must be present to hold a valid meeting. A quorum will be present at the Extraordinary General Meeting if a majority of all the issued and outstanding Energem Ordinary Shares entitled to vote at the Extraordinary General Meeting are represented at the Extraordinary General Meeting or by proxy. Abstentions and broker non-votes will count as present for the purposes of establishing a quorum. The Energem Class A Ordinary Shares and Energem Class B Ordinary Shares are entitled to vote together as a single class on all matters to be considered at the Extraordinary General Meeting other than the Director Appointment Proposal. Under the terms of the Energem M&A, only the holders of Energem Class B Ordinary Shares are entitled to vote on the Director Appointment Proposal.
  
Q:What shareholder vote thresholds are required for the approval of each proposal brought before the Extraordinary General Meeting?

 

  (1)

Proposal No. 1 — A proposal to consider and vote upon a proposal, as a Special Resolution, to approve amendments (the “NTA Amendments”) to Energem’s current memorandum and articles of association, which amendments shall be effective, if adopted and implemented by Energem, immediately prior to the consummation of the proposed Business Combination, to remove the requirements limiting Energem’s ability to consummate an initial business combination if Energem would have less than $5,000,001 in net tangible assets prior to or upon consummation of such initial business combination. We refer to this proposal as the “NTA Proposal”. The NTA Proposal is conditioned upon the approval of the Business Combination Proposal. Therefore, if the Business Combination Proposal is not approved, then the NTA Proposal will not be presented to Energem’s shareholders at the Extraordinary General Meeting. The NTA Proposal is described in more detail in the accompanying proxy statement/prospectus under the heading “The NTA Proposal”;

     
  (2) Proposal No. 2—A proposal to approve, as an Ordinary Resolution, the Business Combination, including the Share Purchase Agreement (the “Business Combination Proposal”), which is the affirmative vote of a simple majority of the votes cast by the holders of the issued and outstanding Energem Ordinary Shares represented in person or by proxy and entitled to vote thereon at the Extraordinary General Meeting. Brokers are not entitled to vote on the Business Combination Proposal absent voting instructions from the beneficial holder. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, are not treated as votes cast and will have no effect on any of the proposals.
     
(3)Proposal No. 3—A proposal to approve the change of name from “Energem Corp.” to “Graphjet Technology” and certain amendments to the Energem M&A, each of which require shareholder approval by Special Resolution (the “Energem M&A Proposals”) under the Companies Act, being the affirmative vote of at least two-thirds of the holders of the issued and outstanding Energem Ordinary Shares who, being entitled to do so, vote in person or by proxy at the Extraordinary General Meeting. Certain amendments to the Energem M&A may only be made by a Special Resolution passed by holders representing at least 90% of the outstanding Class B Ordinary Shares. Unless the NTA Proposal, the Business Combination Proposal, the Share Issuance Proposal and the Equity Incentive Plan Proposal are approved, then the Energem M&A Proposals (along with the Director Appointment Proposal) will not be presented to the Energem Shareholders at the Extraordinary General Meeting. Therefore, if the NTA Proposal, the Business Combination Proposal, the Share Issuance Proposal and the Equity Incentive Plan Proposal are not approved, the Energem M&A Proposals will have no effect. If approved, the Energem M&A Proposals would take effect on and from the Closing Date. Brokers are not entitled to vote on the Energem M&A Proposals absent voting instructions from the beneficial holder. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, are not treated as votes cast and will have no effect on any of the proposals.
   
(4)Proposal No. 4—A proposal to approve for purposes of complying with applicable listing rules of Nasdaq, the issuance of more than 20% of Energem’s Ordinary Shares, in connection with the Business Combination (the “Share Issuance Proposal”). The Share Issuance Proposal will require the approval of an Ordinary Resolution, which is the affirmative vote of a simple majority of the votes cast by the holders of the issued and outstanding Energem Ordinary Shares represented in person or by proxy and entitled to vote thereon at the Extraordinary General Meeting. Unless the Business Combination Proposal is approved, the approval of the Share Issuance Proposal will have no effect. Brokers are not entitled to vote on the Share Issuance Proposal absent voting instructions from the beneficial holder. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, are not treated as votes cast and will have no effect on any of the proposals.
   
(5)Proposal No. 5— A proposal to approve the Equity Incentive Plan (the “Equity Incentive Plan”), which will become effective on the Closing Date and will be used by Graphjet Technology following the Closing (the “Equity Incentive Plan Proposal”), will require the passage of an Ordinary Resolution which is the affirmative vote of a simple majority of the votes cast by the holders of the issued and outstanding Energem Ordinary Shares represented in person or by proxy and entitled to vote thereon at the Extraordinary General Meeting. The Equity Incentive Plan Proposal is conditioned on the approval of the Business Combination Proposal. Therefore, if the Business Combination Proposal is not approved, the Equity Incentive Plan Proposal will have no effect. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, are not treated as votes cast and will have no effect on any of the proposals.

 

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(6)Proposal No. 6— A proposal to approve the appointment of new directors (the “Director Appointment Proposal”), which requires an Ordinary Resolution of the holders of the Energem Class B Ordinary Shares which is the affirmative vote of a simple majority of the votes cast by the holders of the issued and outstanding Class B Ordinary Shares represented in person or by proxy and entitled to vote thereon at the Extraordinary General Meeting. Unless the NTA Proposal, the Business Combination Proposal, the Share Issuance Proposal and the Equity Incentive Plan Proposal are approved, then the Director Appointment Proposal (along with the Energem M&A Proposals) will not be presented to the Energem Shareholders at the Extraordinary General Meeting. Therefore, if the NTA Proposal, the Business Combination Proposal, Share Issuance Proposal and the Equity Incentive Plan Proposal are not approved, the Director Appointment Proposal will have no effect. If approved, the Director Appointment Proposal would take effect on and from the Closing Date. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, are not treated as votes cast and will have no effect on any of the proposals.
   
(7)Proposal No. 7—A proposal to approve the adjournment of the Extraordinary General Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if Energem is unable to consummate the Business Combination (the “Adjournment Proposal”), which requires an ordinary resolution which is the affirmative vote of a simple majority of the votes cast by the holders of the issued and outstanding Energem Ordinary Shares represented in person or by proxy and entitled to vote thereon at the Extraordinary General Meeting. The Adjournment Proposal is not conditioned upon any other proposal. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, are not treated as votes cast and will have no effect on any of the proposals. Discretionary authority may not be exercised to vote in favor of the Adjournment Proposal.
   
Q:What happens if I fail to take any action with respect to the Extraordinary General Meeting?
   
A:If you fail to take any action with respect to the Extraordinary General Meeting and the Business Combination is approved by Energem Shareholders and consummated, you will become a shareholder or warrant holder of the Combined Entity.

 

If you fail to take any action with respect to the Extraordinary General Meeting and the Business Combination is not approved, you will continue to be an Energem Shareholder and/or warrant holder of Energem, as applicable, and Energem will continue to search for another target business with which to complete an initial business combination. If Energem does not complete an initial business combination by August 18, 2023 (or pursuant to up to six (6) one-month extensions to February 18, 2024 by depositing additional funds into the Company’s Trust Account, as described in more detail in this proxy statement/prospectus), Energem must cease all operations except for the purpose of winding up, redeem 100% of the issued and outstanding Energem Public Shares, at a per-share price, payable in cash, equal to an amount then held in the Trust Account (net of taxes payable and less up to $100,000 of interest to pay dissolution expenses), and as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, dissolve and liquidate.

 

Q:What should I do with my share and/or warrant certificates?
  
A:Warrant holders and those shareholders who do not elect to have their Energem Class A Ordinary Shares redeemed for a pro rata share of the Trust Account should wait for instructions from Energem’s transfer agent regarding what to do with their certificates. Energem Shareholders who exercise their redemption rights must deliver their share certificates to Energem’s transfer agent (either physically or electronically) no later than two (2) business days prior to the Extraordinary General Meeting as described above.

 

Upon consummation of the Transactions, the Energem Warrants, by their terms, will entitle holders to purchase the Combined Entity Ordinary Shares. Therefore, warrantholders need not deliver their warrants to Energem at this time.

 

Q:

How many votes do I have at the Extraordinary General Meeting?

 

A:Energem Shareholders are entitled to one vote on each of the proposals at the Extraordinary General Meeting (other than the Director Appointment Proposal) for each Energem Ordinary Share held of record as of the Record Date for the Extraordinary General Meeting. Under the terms of the Energem M&A, only the holders of Energem Class B Ordinary Shares are entitled to vote on the Director Appointment Proposal.
  
Q:What should I do if I receive more than one set of voting materials?
  
A:Energem Shareholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your Energem Ordinary Shares.

 

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Q:What happens if I sell my Energem Class A Ordinary Shares before the Meeting?
  
A:The Record Date for the Extraordinary General Meeting is earlier than the date of the Extraordinary General Meeting and earlier than the date the Business Combination is expected to be completed. If you transfer your Energem Class A Ordinary Shares after the applicable Record Date, but before the Extraordinary General Meeting date, unless you grant a proxy to the transferee, you shall retain your right to vote at the Extraordinary General Meeting. However, you will not be able to seek redemption of your Energem Class A Ordinary Shares because you will no longer be able to deliver them for cancellation upon consummation of the Business Combination. If you transfer your Energem Class A Ordinary Shares prior to the Record Date, you will have no right to vote those shares at the Extraordinary General Meeting or redeem those shares for a pro rata portion of the proceeds held in our Trust Account.
  
Q:Who can help answer my questions?
  
A:If you have questions about the Business Combination or if you need additional copies of this proxy statement/prospectus or the enclosed proxy card, you should contact:

 

Energem Corp.

Level 3, Tower 11, Avenue 5, No. 8,

Jalan Kerinchi, Bangsar South

Wilayah Persekutuan Kuala Lumpur, Malaysia

Tel: +(60) 3270 47622

Attn: Mr. Swee Guan Hoo, Chief Executive Officer

Email: sghoo@energemcorp.com

 

or the proxy solicitor at:

 

Laurel Hill Advisory Group, LLC

2 Robbins Lane

Jericho, NY 11753

Toll-Free: 855-414-2266

Email: energem@laurelhill.com

 

To obtain timely delivery, Energem Shareholders must request the materials no later than five (5) business days prior to the Extraordinary General Meeting.

 

You may also obtain additional information about Energem from documents filed with the SEC by following the instructions in the section titled “Where You Can Find More Information.”

 

If you are a holder of Energem Class A Ordinary Shares and you intend to seek redemption of your shares, you will need to deliver your shares (either physically or electronically) to Energem’s transfer agent at the address below at least two (2) business days prior to the vote at the Extraordinary General Meeting. If you intend to seek redemption of your Energem Class A Ordinary Shares, you will need to send a letter demanding redemption and deliver your share certificates (either physically or electronically) to Energem’s Transfer Agent prior to the Extraordinary General Meeting in accordance with the procedures detailed under the question “How do I exercise my redemption rights?

 

If you have questions regarding the certification of your position or delivery of your share certificates, please contact:

 

Continental Stock Transfer & Trust Company

One State Street Plaza, 30th Floor

New York, New York 10004-1561

Attn: SPAC Redemptions

E-mail: spacredemptions@continentalstock.com

 

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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

 

This summary highlights selected information from this proxy statement/prospectus. It may not contain all of the information that is important to you. You should read the entire proxy statement/prospectus and the other documents referred to in this proxy statement/prospectus carefully, including the annexes and exhibits, to understand the Share Purchase Agreement, the Business Combination and the other matters fully before voting on the Proposals being considered at the Extraordinary General Meeting of Energem Shareholders. Unless otherwise specified, all share calculations assume (i) no exercise of redemption rights by Energem’s Public Shareholders; and (ii) no inclusion of any Class A Ordinary Shares issuable upon the exercise of Energem’s warrants or any shares to be issued pursuant to the Equity Incentive Plan at or following the closing of the Business Combination. The terms and conditions of the Business Combination are contained in the Share Purchase Agreement, which is attached as Annex A to this proxy statement/prospectus. We encourage you to read the Share Purchase Agreement and the exhibits thereto carefully, as it is the legal document that governs the Business Combination. see the section entitled “Where You Can Find More Information” in this proxy statement/prospectus.

 

Parties to the Business Combination

 

Graphjet Technology Sdn. Bhd.

 

Graphjet Technology Sdn. Bhd. (formerly Zhonghe Graphene Sdn. Bhd. and renamed on March 7, 2022), a Malaysian private limited company (“Graphjet”), founded in 2019, is the owner of state-of-the-art technology for the manufacture of artificial graphene and graphite, a critical raw material used in a variety of industries, such as biomedical, automobile composition and coating, electronics and home appliances, food and beverage processing, energy storage, batteries in electric vehicles, mechanical strength enhancement, sensors, semiconductors and digital products. Graphjet uses their breakthrough cutting-edge technology to transform an abundant renewable waste product, palm kernel shells, to the highly valued artificial graphene and artificial graphite.

 

According to a study by Insight Partners released in April 2022, the global graphene market size was USD $821.2 million in 2021, projected to increase to USD $7,555.8 million by 2028 and register a CAGR of 37.3% from 2021 to 2028. The growing usage of graphite in green technologies and the popularity of graphene are projected to offer growing opportunities for the manufacturers of these products according to a July 2022 study by ReportLinker.

 

Upon completion of its initial manufacturing facility, Graphjet expects to produce 10,000 tons of graphite and 60 tons of graphene using its processing technology from 30,000 tons of dried palm kernel shell waste annually. Palm kernel shells are generated from the production of palm seed oil. Graphjet enjoys a geographic advantage for application of its recycling technology with a readily available feedstock in-region as Malaysia is the second largest supplier of palm seed oil, and the resulting palm kernel shells, in the world.

 

Graphjet is an early stage, emerging growth company and has limited operating history, lack of revenues or sales, and net losses to date. Based on Graphjet’s financial history since inception, Graphjet’s auditor has expressed substantial doubt about Graphjet’s ability to continue as a going concern. Graphjet received approval of its patent application for a palm-based synthetic graphite and the preparation method thereof on September 22, 2022. In addition, Graphjet currently has a pending patent application for its process for producing palm-based graphene.

 

The mailing address of Graphjet’s headquarters and principal executive office is No L4-E-8 Enterprise 4 Technology Park Malaysia, Bukit Jalil, 57000 Kuala Lumpur, Malaysia and Graphjet’s telephone number is +60 3-8991 2828.

 

Energem Corp.

 

Energem Corp. is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities. Energem was incorporated under the laws of the Cayman Islands on August 6, 2021.

 

On November 18, 2021, Energem closed its initial public offering of 11,500,000 units (after taking into account the full exercise of the over-allotment option by Energem’s underwriters), with each unit consisting of one Energem Class A Ordinary Share and one redeemable warrant, with each Energem Warrant entitling the holder to purchase one Energem Class A Ordinary Share at a price of $11.50 commencing 30 days after the consummation of an initial business combination.

 

Energem’s units, the Energem Class A Ordinary Shares and the Energem Warrants are listed on Nasdaq under the symbols “ENCPU,” “ENCP” and “ENCPW,” respectively. Based on Energem’s financial history since inception, Energem’s auditor has expressed substantial doubt about Energem’s ability to continue as a going concern. The mailing address of Energem’s principal executive office is Level 3, Tower 11, Avenue 5, No. 8, Jalan Kerinchi, Bangsar South, 59200 Wilayah Persekutuan Kuala Lumpur, Malaysia, and its telephone number is +(60) 3270 47622. After the consummation of the Business Combination, Energem’s principal executive office will be that of Graphjet and Energem will change its name to Graphjet Technology.

 

As reported on November 18, 2022 on Form 8-K, Energem Shareholders approved the Second Amended and Restated Articles of Association at the November 16, 2022, Extraordinary General Meeting, giving Energem the right to extend the date to consummate a merger, capital share exchange, asset acquisition, share purchase, reorganization or similar business combination before it must cease its operations if it fails to complete such business combination, and redeem or repurchase 100% of the Energem Class A Ordinary Shares by up to nine one-month extensions to August 18, 2023 (the “Extension Date”). In connection with the approval of the new Extension Date at the Extraordinary General Meeting, holders of 9,604,519 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 $98,062,138.99. Following the payment of the redemptions, the Trust Account had a balance of approximately $19,360,390.01.

 

Energem caused $0.045 per outstanding Class A ordinary share, giving effect to the redemptions disclosed above, or approximately $85,296.45 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.

 

Further, as reported on December 16, 2022 on Form 8-K, Energem caused $0.045 per outstanding Class A ordinary share or approximately $85,296.45 for 1,895,481 Class A ordinary shares to be paid to the Trust Account on December 15, 2022 in advance of the December 18, 2022 due date for the second monthly extension of the Termination Date.

 

In addition, as reported on January 17, 2023 on Form 8-K, Energem caused $0.045 per outstanding share of its 1,895,481 Class A ordinary shares totaling $85,296.45 to be paid to the Trust Account on January 13, 2023 in advance of the January 18, 2023 due date for the third monthly extension of the Termination Date.

 

As reported on February 13, 2023 on Form 8-K, Energem caused $0.045 per outstanding share of its 1,895,481 Class A Ordinary Shares totaling $85,296.45 to be paid to the Trust Account on February 10, 2023 in advance of the February 18, 2023 due date for the fourth monthly extension of the Termination Date.

 

As reported on March 14, 2023 on Form 8-K, Energem caused $0.045 per outstanding share of its 1,895,481 Class A Ordinary Shares totaling $85,296.45 to be paid to the Trust Account on March 10, 2023 in advance of the March 18, 2023 due date for the fifth monthly extension of the Termination Date.

 

As reported on April 14, 2023 on Form 8-K, Energem caused $0.045 per outstanding share of its 1,895,481 Class A Ordinary Shares totaling $85,296.45 to be paid to the Trust Account on April 14, 2023 in advance of the April 17, 2023 due date for the sixth monthly extension of the Termination Date.

 

As reported on May 16, 2023 on Form 8-K, Energem caused $0.045 per outstanding share of its 1,895,481 Class A Ordinary Shares totaling $85,296.45 to be paid to the Trust Account on May 15, 2023 in advance of the May 18, 2023 due date for the seventh monthly extension of the Termination Date.

 

As reported on June 14, 2023 on Form 8-K, Energem caused $0.045 per outstanding share of its 1,216,932 Class A Ordinary Shares totaling $85,296.45 to be paid to the Trust Account on June 14, 2023 in advance of the June, 2023 due date for the eighth monthly extension of the Termination Date, to extend the term through July 18, 2023.

 

As reported on July 13, 2023 on Form 8-K, Energem caused $0.045 per outstanding share of its 1,216,932 Class A Ordinary Shares totaling $85,296.45 to be paid to the Trust Account on July 12, 2023 in advance of the July18, 2023 due date for the ninth monthly extension of the Termination Date, to extend the term through August 18, 2023.

 

On August 10, 2023, at 8.30 a.m. ET, the Company held a duly convened extraordinary general meeting of its shareholders (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 August 18, 2023 to February 18, 2024.

 

In connection with the first monthly extension of the Termination Date under the Third Amended and Restated Articles of Association, Energem caused $0.045 per outstanding share of Energem’s Class A ordinary shares or approximately $54,761.94 for 1,216,932 Class A ordinary shares to be paid to the Trust Account on August 15, 2023 in advance of the August 18, 2023 due date.

 

In connection with the second monthly extension of the Termination Date under the Third Amended and Restated Articles of Association, Energem caused $0.045 per outstanding share of Energem’s Class A ordinary shares or approximately $54,761.94 for 1,216,932 Class A ordinary shares to be paid to the Trust Account on September 14, 2023 in advance of the September 18, 2023 due date. In connection with the third monthly extension of the Termination Date under the Third Amended and Restated Articles of Association, Energem caused $0.045 per outstanding share of Energem’s Class A Ordinary Shares or approximately $54,761.94 for 1,216,932 Class A Ordinary Shares to be paid to the Trust Account on October 16, 2023 in advance of the October 18, 2023 due date.

 

In connection with the fourth monthly extension of the Termination Date under the Third Amended and Restated Articles of Association, Energem caused $0.045 per outstanding share of Energem’s Class A Ordinary Shares or approximately $54,761.94 for 1,216,932 Class A Ordinary Shares to be paid to the Trust Account on November 17, 2023 in advance of the November 18, 2023 due date.

 

In connection with the fifth monthly extension of the Termination Date under the Third Amended and Restated Articles of Association, Energem caused $0.045 per outstanding share of Energem’s Class A Ordinary Shares or approximately $54,761.94 for 1,216,932 Class A Ordinary Shares to be paid to the Trust Account on December 15, 2023 in advance of the December 18, 2023 due date.

 

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The Share Purchase Agreement

 

The terms and conditions of the acquisition of 100% of the issued and outstanding Graphjet Pre-Transaction Shares, owned by the Selling Shareholders of Graphjet, by Energem Corp, with Graphjet becoming a wholly-owned subsidiary of Energem (the “Business Combination”) are contained in the Share Purchase Agreement, which is attached as Annex A to this proxy statement/prospectus. We encourage you to read the Share Purchase Agreement carefully, as it is the legal document that governs the Business Combination and the Transactions contemplated thereby.

 

Structure of the Business Combination

 

Pursuant to the Share Purchase Agreement, Energem will acquire 100% of the equity of Graphjet at which point Graphjet will become a wholly-owned subsidiary of Energem. Energem, as a holding company of Graphjet, will be renamed Graphjet Technology at the Closing of the Business Combination if approved by Energem Shareholders as set forth in detail in this proxy statement/prospectus.

 

Simplified Pre-Business Combination Structure

 

The following diagram illustrates in simplified terms of the structure of Energem and Graphjet at the time of the announcement of the Share Purchase Agreement:

 

 

 

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Simplified Post-Business Combination Structure

 

The following diagram illustrates in simplified terms the expected structure of the Combined Entity upon the Closing of the Business Combination:

 

 

 

Transaction Consideration

 

The Business Combination implies a pro forma post-closing enterprise value of $1.49 billion and a current fair market value of Graphjet in a range from $2.2 to $2.6 billion according to the analysis of Baker Tilley. Due to the fair market value in excess of the Transaction Consideration of $1.38 billion, Baker Tilley deemed the transaction “fair” to Energem shareholders. If the Share Purchase Agreement is approved by Energem’s shareholders and the transactions contemplated by the Share Purchase Agreement are consummated, Energem will acquire all of the issued and outstanding shares of Graphjet and, thereafter, Graphjet will become a wholly-owned subsidiary of Energem. Each Selling Shareholder shall receive a number of Energem Class A Ordinary Shares subject to a formula set forth below.

 

The Share Purchase Agreement computes the number of Consideration Shares each Selling Shareholder shall receive as the right to receive at the Closing of the Business Combination, a number of Energem Class A Ordinary Shares equal to the aggregate Consideration Shares divided by the number of Graphjet Pre-Transaction Shares outstanding immediately prior to the Closing, multiplied by the number of Graphjet Pre-Transaction 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.”

 

The Transaction Consideration 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 Pre-Transaction 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 and herein), minus (iii) the Closing Net Indebtedness amount (as defined in the Share Purchase Agreement and herein), minus (iv) the amount of any Transaction Expenses (as defined in the Share Purchase Agreement), divided by ten dollars ($10.00) (in the aggregate, the “Consideration Shares”). See a copy of the Share Purchase Agreement attached to this proxy statement/prospectus as Annex A.

 

The Energem Board’s Reasons for the Business Combination

 

In evaluating the Business Combination, the Energem Board consulted with Energem’s management and legal and financial advisors. The Energem Board reviewed various industry and financial data and consulted with advisors and the fairness opinion from Baker Tilly (Malaysia) when it calculated the Transaction Consideration and determined that such amount to be paid was reasonable and that the Business Combination was in the best interests of Energem Shareholders. The financial data reviewed included the historical and projected consolidated financial statements of Graphjet, comparable publicly traded company analyses and an analysis of pro forma capital structure and trading multiples prepared by management and Energem’s advisors.

 

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Energem’s management conducted a due diligence review of Graphjet that included an industry analysis, an analysis of the existing business model of Graphjet and historical and projected financial results. Energem’s management, including its directors and advisors, have many years of experience in mergers and acquisitions, finance, operational management and investment and analysis and, in the opinion of the Energem Board, were suitably qualified to conduct the due diligence and other investigations and analyses required in connection with the search for a business combination partner. Nevertheless, the Energem Board retained Baker Tilly (Malaysia) for the fairness opinion and legal and financial advisors to advise them on all aspects of due diligence and valuations. A detailed description of the experience of Energem’s executive officers and directors is included in the section of this proxy statement/prospectus entitled “Energem’s Business—Directors and Executive Officers.”

 

In reaching its unanimous resolution (i) that the terms and conditions of the Share Purchase Agreement, including the proposed Business Combination, are advisable, fair to and in the best interests of Energem and its shareholders and (ii) to recommend that its shareholders adopt and approve the Share Purchase Agreement and approve the Business Combination contemplated therein, the Energem Board considered a range of factors, including but not limited to, the factors discussed below. In light of the number and wide variety of factors, the Energem Board did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors it considered in reaching its determination. The Energem Board viewed its position as being based on all of the information available and the factors presented to and considered by it. In addition, individual directors may have given different weight to different factors. This explanation of Energem’s reasons for the Business Combination and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the section of this proxy statement/prospectus entitled “Cautionary Statement Regarding Forward-Looking Statements.”

 

In considering the Business Combination, the Energem Board gave considerable weight to the following factors:

 

Graphjet will be the Key Supplier of Raw Materials for Toyoda’s Carbon Neutral Mobility Products. Graphjet was founded in Malaysia in 2019 as an innovative graphene and graphite producer. It has the world’s first patent-pending technology to recycle palm kernel shells1 generated in the production of palm seed oil to produce single layer graphene and a patent issued for artificial graphite. Graphjet’s sustainable production methods utilize palm kernel shells, a waste agricultural product that is common in Malaysia, and will set a new shift in the Graphite and Graphene supply chain of the world. Japan’s developer and manufacturer of pure electric vehicle and electric motorcycles, Toyoda Trike Inc. (“Toyoda”) will work together with Graphjet to ensure the supply of raw materials for its electric bicycle rollout in Malaysia would be sufficient.

 

Toyoda is a private company in Japan specializing in carbon neutral mobility solutions such as electric vehicles and motorcycles. Its largest shareholder is the Toyoda family, the fourth generation of the founder of Toyota Corporation, one of the largest automobile manufacturers in the world. Together with Asia Development Capital Co. Ltd., which is a public listed company on the Tokyo Stock Exchange that has a market capitalisation of JPY9.4 billion (or about RM320 million), they own more than 80% of the company. The Energem Board based this opinion on its own determination.

 

Graphjet has a World Class Management and Technical Team. Graphjet is managed by its Chairman, Mr. Lim Hooi Beng, its Managing Director, Mr. Aw Jeen Rong, its Executive Director, Mr. Lee Ping Wei and its Chief Technology Officer Mr Liu Yu. Graphjet’s management team has a deep understanding of the company’s technology, the graphene and graphite market and the needs of their customers and bring more than a century of collective experience in finance and technology, have the drive and competency to grow the business and its manufacturing ability to meet demand. Importantly, in a space like electric vehicles (“EV”), with high-demand for material sourcing, entrenched incumbents and relatively high barriers to entry, Energem believes it is critical to combine the experience, competency and drive of a qualified and accomplished management team like Graphjet’s, which is made up of proven entrepreneurial leaders. The Energem Board based this opinion on its own determination.
   
Graphjet’s revenue projections. Graphjet’s pro forma gross revenue projections for years 2023 through 2027 are estimated at RM3800,000,000 (approximately USD $839,408,600) annually with net profits projected at RM2,606,000,000 (approximately USD $575,657,582) for 2023 and RM3,187,000,000 (approximately USD $703,998,739) net revenue projected annually for years 2023 through 2027. The Energem Board based this opinion on its own determination of Graphjet’s gross and net revenue projections that are based principally on projected sales of the graphite and graphene, which amounts were calculated based on the following formula: estimated quantity of graphite and graphene (per ton) multiplied by estimated prices of graphite and graphene. The revenue assumptions used by Graphjet management for the 2023 through 2027 are summarized in the following table:

 

 

1 Palm kernel shell (PKS) is a by-product in the production of palm oil and is commonly used in the natural biomass energy industry. PKS is a fibrous material, brownish-yellow in color and with particle sizes normally ranging between 5 mm and 40 mm.

 

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Products  Ton   Price/ Ton 

Revenue

USD/million

 
Graphene Monolayer   60   RM60,000,000
(USD $15 per gram)
   758 
Graphite   10,000   RM20,000(USD $4,216)   43 
Total   10,060       801 

 

To support the sales projections of RM3,800 million (USD $801) for years 2023 through 2027, Graphjet management relied on its four letters of intent in hand from key market players that are summarized in the following table:

 

Letter Date   Potential Customers   Content of Letters of Intent to Graphjet
8 June 2022   AG Power Solutions Co. Ltd.   To purchase initial amount of 50,000 ton of graphite at RM27,000 (USD $5,692) per ton and 5 ton of graphene at USD $15 per gram.
         
12 May 2022   Toyoda Trike2   To explore the possibility of purchasing 100,000 tons of graphite ranging from RM25,000 to RM30,000 (USD $5,270 to $6,324) per ton and 30 tons of graphene ranging from RM40 to RM60 (USD $8 to $13) per gram.
         
Undated   Chemrex Corporation Sdn. Bhd.   To explore and discuss the graphite price, range from RM 15,000 to RM 25,000 (USD $3,162 to $5,270) per tons and graphene price, range from RM 40 to RM 60 (USD $8 to $13) per gram.
         
27 April 2022   Ann Joo Steel Berhad   To explore and discuss the graphite price as per the grades ranging from RM15,000 to RM25,000 (USD $3,162 to $5,270) per tons and graphene ranging from RM40 to RM60 (USD $8 to $13) per gram.

 

While Graphjet is currently producing graphite and graphene on a small-scale industry basis by beginning the first part of the process at a facility in Malaysia and then completing the process at a contract manufacturing facility in China, Graphjet does have the capability to meet targeted production volumes under its current contract manufacturing facilities regardless of Graphjet constructing its own facility. Upon the Closing of the Business Combination, Graphjet expects to begin construction on its manufacturing plant in Kuantan, Pahang, Malaysia, which it anticipates 16-18 months to complete. For years 2023 to 2027, Graphjet expects to produce 10,000 tons of graphite and 60 tons of graphene, including at its contracted manufacturing facility until construction of its own manufacturing plant is complete. The land underlying the new facility has been acquire and local permission to commence construction has been secured. Currently, Graphjet believes its first production from that plant will be in the first quarter of fiscal year 2025. The Energem Board based this opinion on its own determination in reliance on Graphjet management’s assumptions that the maximum capacity for graphite and graphene to fulfil customer contracts to increase to approximately 100,000 tons and 1,000 tons per annum, respectively.

 

Revenue in the Graphene market. The graphene nanoplatelets material segment led the market in 2020 with a revenue share of more than 42% from the sale, in large part, of lightweight, mechanical properties, and superior thermal and electrical conductivities, coupled with low cost and easy manufacturing process are likely to benefit the segment growth. Further, Asia Pacific dominated the market and accounted for over 35% share of global revenue in 2020 owing to the high product demand across industries, such as automotive, marine, defense and aerospace. In addition, the booming industrial sector in the region is projected to fuel the market growth in Asia Pacific. The growth of the manufacturing sector in China is another major driving the regional market which drives up demand for these products in manufacturing. Rising product demand from this sector is expected to lead to growth of the market according to many experts. In contrast, the North American region is characterized by the presence of a number of small- and medium-scale manufacturers. The Energem Board based this opinion on its own determination of the global studies cited in this proxy statement/prospectus on the strength and demand of the graphene and graphite market.
   
Favorable Fairness Opinion. Following the execution of the LOI with Graphjet, the Energem Board retained Baker Tilly (Malaysia) to opine on the fairness of the proposed acquisition of 100% of the equity interests in Graphjet for the Transaction Consideration of US$1.38 billion. Baker Tilly concluded that the fair market value of the entire equity interest in Graphjet ranges from USD $2.20 billion to $2.65 billion using the Relative Valuation Approach (“RVA”) methodology followed by the application of a fifty percent (50%) Start-Up Discount to Graphjet’s valuation. The Relative Valuation Approach uses a “relative valuation model,” which is a business valuation method that compares a company’s value to that of its competitors or industry peers to assess the company’s financial worth. In the present case, once that worth was determined using the relative valuation approach by analyzing Graphjet’s competitors, Baker Tilly applied the Start-up Discount of 50% to the fair market value to account for uncertainties related to Graphjet’s pre-revenue start-up status. In view of the negotiated exchange of Graphjet Pre-Transaction Shares for the Energem Ordinary Shares to comprise the Transaction Consideration, the Energem Board believed that Energem Shareholders would benefit from a significant and immediate 37.2% premium on the purchase price, assuming a USD $2.20 billion fair market value of Graphjet and an immediate 48.0% premium on the purchase price, assuming a USD $2.65 billion fair market value of Graphjet from Baker Tilley’s fairness opinion relative to the Transaction Consideration of USD $1.38 billion. Due to the fair market value in excess of the Transaction Consideration of $1.38 billion, Baker Tilley deemed the transaction “fair” to Energem shareholders. The Energem Board relied on the Baker Tilly fairness opinion regarding the fairness of the Transaction Consideration to acquire Graphjet. See the Baker Tilly fairness opinion at Annex D.

 

 

2 On December 27, 2022, Graphjet entered into a supply agreement with Toyoda. Pursuant to the supply agreement, Graphjet will supply Toyoda with graphite and graphene in an aggregate amount of revenue of $30 million to Toyoda for their carbon neutral mobility product.

 

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Large market opportunity. The graphite market accounted for approximately 2,700 kilo metric ton in 2021, and it is expected to register a CAGR of more than 5% during the forecast period, 2022-2027. Over the short term, the major factors driving the growth of the graphite market include the augmenting demand from the burgeoning lithium-ion battery industry and the rise in steel production in Asia and the Middle East. The growing usage of graphite in green technologies and the popularity of graphene are projected to offer tremendous opportunities for the manufacturers of these products, like Graphjet, over the next decade and beyond. Graphite is also used in pencils, steel manufacturing, and electronics such as smartphones. Perhaps its most important application is the lithium-ion battery, where graphite ranks above even lithium as the key ingredient. There is actually more graphite than lithium in a lithium-ion battery. An EV requires about 10 to 15 times more graphite in a battery than lithium, which means that graphite will be used to manufacture all of the estimated 9.5 million EVs sold in 2022. Graphene and graphite are both used in a variety of industries, such as biomedical, automobile composition and coating, electronics and home appliances, food and beverage processing, energy storage, batteries in electric vehicles, mechanical strength enhancement, sensors, semiconductors and digital products. With sales of EVs growing rapidly, demand for graphite is expected to climb from 140,000 tons in 2020 to more than 3.5 megatonne in 2040, according to the International Energy Agency. The global EV market was valued at USD 246.70 billion in 2020 and USD 287.36 billion in 2021 and projected to rise to USD 1,318.22 billion by 2028 at a CAGR of 24.3% during the forecast period 2021-2028. The explosion in demand has shoved the oft-overlooked mineral into the spotlight as one of the more energy-intensive battery materials to produce, especially in its high-purity synthetic form. Downstream companies, under pressure from consumers to address climate impacts along EV supply chains, are starting to scour the globe for low-carbon sources of graphite to keep emissions at bay, which creates a large market opportunity for Graphjet’s products. The Energem Board based this opinion on its own determination of the global studies cited in this proxy statement/prospectus on the strength and demand of the graphene and graphite market.
   
Disruptors. Graphjet is paving the way in the market for manufactured graphene and graphite. Graphene is one of the high-profile new materials in the world often referred to as “black gold” and the “king of new materials” that will change the 21st century. Graphene is a two-dimensional carbon nanomaterial with a hexagonal honeycomb lattice composed of carbon atoms and SP2 hybrid orbitals. With the characteristics of high conductivity, high strength, ultra-light and thin it is considered to be a revolutionary material. Graphene is used in a variety of industries, such as biomedical, automobile composition and coating, electronics and home appliances, food and beverage processing, energy storage, batteries in electric vehicles, mechanical strength enhancement, sensors, semiconductors and digital products. At current levels of palm oil production, Malaysia is predicted to generate enough palm kernel shells annually to supply about 5 million tons of dried palm kernel shells. Therefore, the resources or supply of palm kernel shell is the guarantee of sustainable green and recyclable regeneration for the production of graphite and graphene. In Energem’s view, Graphjet can manufacture graphene that is higher quality than currently available and at a price that is substantially lower than the current market price. As a disruptor in its field, the Energem Board believes Graphjet can manufacture graphene that is higher quality than currently available and at a price that is substantially lower than the current market price.
   
Next generation technology. Graphjet’s patent-pending state-of-the art technology means that graphene will no longer be exclusively accessible by high budget industries and the increased availability of the material will enable worldwide technology advancement. The global graphene market size was estimated at USD 94.4 million in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 43.2% from 2021 to 2028. Growing product demand in application industries including electronics, biomedical technologies, energy storage, composites & coatings, and water & wastewater treatment is likely to fuel the market growth. Graphene exhibits an ability to improve the charge rate and energy capacity of modern-day rechargeable batteries. In addition, graphene is highly beneficial in improving the lifespan of lithium-ion batteries and helps reduce the overall weight of the battery assembly. Thus, the growing use of graphene in the EV industry is expected to propel market growth, and represents what the Energem Board believes is the cutting edge of green technology to propel Graphjet above industry incumbents and others seeking to enter the market and further demand for Graphjet’s product.

 

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Scalable, durable business model. Graphjet’s production model is highly scalable and enables it to produce higher quality graphene, which allows its customers to use it in more applications and improve their products by providing higher capacity density, longer product life cycle and quality with its graphene. Energem expects graphene and graphite spending to continue rising globally as the demand for EV and other end products benefiting from such material like those offered by Graphjet continues. The Energem Board believes Graphjet’s technology advantages can enable it to grow revenues by expanding its supply, existing markets and customers, expanding to new markets with new and existing customers, pursuing strategic partnership and inorganic growth through acquisitions and continuing to invest in technology and infrastructure to improve capabilities.
   
Organic and inorganic growth potential. Graphjet sees significant addressable market expansion opportunities, with potential expansion in the United States and other new geographies, as well as potential opportunities for inorganic growth through acquisitions. Notably, the potential for market expansion and inorganic growth is not contemplated in the current growth projections of Graphjet. The Energem Board based this opinion on Graphjet management’s projections of its growth potential.
   
Attractive Valuation. The Business Combination implies a $1.49 billion pro forma post-closing enterprise value and a current equity value of Graphjet at $1.38 billion, which Transaction Consideration represents a sizeable discount to estimated fair market value of Graphjet of between $2.20 billion to $2.65 billion determined by Baker Tilly. The set of three comparable companies to Graphjet was selected by Baker Tilly (Malaysia) in the preparation of its market valuation using the Relative Valuation Approach to compare Graphjet’s fair market value to that of its competitors to assess its financial worth at the time of the report. The market approach determines the fair market value of a company by reviewing and comparing a company’s implied trading multiple to that of comparable companies to determine the company’s financial worth. The Relative Valuation Approach is widely used within the market approach, commonly used multiples include price-to-earnings, enterprise value/earnings as well as price-to-book multiples. Additionally, the valuation discount of 50%, which depressed the fair market value of Graphjet, represents a sizeable discount of Graphjet relative to its peers, which we believe positions the Business Combination as an attractive opportunity for Energem Shareholders. The Energem Board relied on the Baker Tilly fairness opinion regarding matters pertaining to the valuation of Graphjet.

 

The Energem Board also considered a variety of uncertainties and risks and other potentially negative factors concerning the Business Combination, including, but not limited to, the following discussion points.

 

Potential Inability to Complete the Transaction. The Energem Board considered the possibility that the Business Combination may not be completed and the potential adverse consequences to Energem if the Business Combination is not completed, in particular the expenditure of time and resources in pursuit of the Business Combination and the loss of the opportunity to participate in the transaction. They considered the uncertainty related to factors outside of the control of the parties to the transaction. The Share Purchase Agreement also includes an exclusivity provision that prohibits Energem from soliciting other initial business combination proposals, which restricts the Energem Board’s ability to consider other potential initial business combinations until the earlier of the termination of the Share Purchase Agreement or the consummation of the Business Combination.
   
The Risk that Energem’s Public Shareholders Would Vote Against the Business Combination Proposal or Exercise Their Redemption Rights. The Energem Board considered the risk that some of the current Public Shareholders would vote against the Business Combination Proposal or decide to exercise their redemption rights, thereby depleting the amount of cash available in the Trust Account to an amount below the minimum required to consummate the Business Combination. Further, the fact that Public Shareholders may vote for the Business Combination Proposal while also exercising their redemption rights mitigates against any incentive a Public Shareholder might have to vote against the Business Combination proposal, especially to the extent that they hold Public Warrants which would be worthless if the Business Combination is not completed. The Energem Board relied on its own understanding of the business risks associated with the Transaction. Following the recent redemptions by Energem’s Public Shareholders at the August 10, 2023 Extraordinary General Meeting, leaving 1,216,932 issued and outstanding Class A Ordinary Shares, because the Initial Shareholders agreed to vote their aggregate 2,875,000 issued and outstanding Class B ordinary shares in favor of each of the NTA Proposal, the Business Combination Proposal, the Energem M&A Proposals, the Share Issuance Proposal, the Equity Incentive Plan Proposal and the Director Appointment Proposal, each of the NTA Proposal, the Business Combination Proposal, the Energem M&A Proposals, the Share Issuance Proposal, the Equity Incentive Plan Proposal and the Director Appointment Proposal will be approved even if none of the public shares are voted in favor of any of the NTA Proposal, the Business Combination Proposal, the Energem M&A Proposals, the Share Issuance Proposal, the Equity Incentive Plan Proposal and the Director Appointment Proposal.
   
Graphjet’s Business Risks. The Energem Board considered that Energem Shareholders would be subject to the execution risks associated with Graphjet if they retained their public shares following the Closing, which were different from the risks related to holding Energem Class A Ordinary Shares prior to the Closing. In this regard, the Energem Board considered that there were risks associated with successful implementation of Graphjet’s long-term business plan and strategy and Graphjet realizing the anticipated benefits of the Business Combination on the timeline expected or at all. The Energem Board considered that the failure of any of these activities to be completed successfully may decrease the actual benefits of the Business Combination and that Energem Shareholders may not fully realize these benefits to the extent that they expected to retain the public shares following the completion of the Business Combination. For additional description of these risks, please see “Risk Factors.”

 

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Post-Business Combination Corporate Governance. The Energem Board considered the corporate governance provisions of the Share Purchase Agreement and Graphjet’s anticipated organizational documents and the effect of those provisions on the governance of Graphjet Technology following the Closing. In particular, they considered that, assuming no redemptions by Energem Shareholders, the Sponsor and the Energem officers and directors as a group will beneficially own and control shares representing approximately 2.34% of the Combined Entity’s voting power upon completion of the Business Combination, assuming no further redemptions by Energem Shareholders and including the Placement Warrants. Energem will have the right to designate three of the seven directors to the board of directors of the Combined Entity pursuant to the Share Purchase Agreement.

   
No Survival of Remedies for Breach of Representations, Warranties or Covenants by Graphjet. The Energem Board considered that the terms of the Share Purchase Agreement provide that neither Energem nor its shareholders will have any recourse against Graphjet or its current shareholders after the Closing of the Business Combination to recover for losses as a result of any inaccuracies or breaches of the Graphjet representations, warranties or covenants set forth in the Share Purchase Agreement.
   
Litigation. The Energem Board considered the possibility of litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could enjoin consummation of the Business Combination.
   
Fees and Expenses. The Energem Board considered the fees and expenses associated with completing the Business Combination.
   
Diversion of Management. The Energem Board considered the potential for diversion of management and employee attention during the period prior to the completion of the Business Combination, and the potential negative effects on Graphjet’s business.
   
Energem’s Management and Directors May Have Different Interests in the Business Combination Than the Public Shareholders. The Energem Board also considered the fact that members of Energem’s management and board of directors may have interests that are different from, or are in addition to, the interests of its shareholders generally, including the matters described under “Extraordinary General Meeting of Energem ShareholdersInterests of Energem’s Officers and Directors in the Transactions” below. However, the Energem Board concluded that the potentially disparate interests would be mitigated because (i) these interests were disclosed in the Energem IPO prospectus and (ii) these disparate interests would exist or may be even greater with respect to a business combination with another target company.
   
Other Risks. Various other risks associated with Graphjet’s business, as described in the section entitled “Risk Factors” appearing elsewhere in this proxy statement/prospectus.

 

The Energem Board concluded that the potential benefits that it expected Energem and its shareholders to achieve as a result of the Business Combination outweighed the potentially negative factors associated with the Business Combination. Accordingly, the Energem Board unanimously determined that the Share Purchase Agreement and the Business Combination contemplated therein were advisable, fair to and in the best interests of Energem and its shareholders.

 

Interests of Energem’s Officers and Directors in the Business Combination

 

In considering the recommendation of the Energem Board to vote in favor of approval of the Business Combination Proposal, Energem Shareholders should keep in mind that the Sponsor and Energem’s directors and executive officers have interests in such proposal that are different from, or in addition to, those of Energem Shareholders generally. In particular:

 

If the Business Combination with Graphjet or another business combination is not consummated by August 18, 2023 (or pursuant to up to six (6) one-month extensions to February 18, 2024 by depositing additional funds into the Company’s Trust Account, as described in more detail in this proxy statement/prospectus), Energem will cease all operations except for the purpose of winding up, redeeming 100% of the issued and outstanding Energem Public Shares for cash and, subject to the approval of its remaining shareholders and its board of directors, dissolving and liquidating. In such event, the Founder Shares held by the Sponsor and Energem’s directors and officers, which were acquired for an aggregate purchase price of $25,000 prior to the Energem IPO, would be worthless because the holders are not entitled to participate in any redemption or distribution with respect to such shares. Such shares had an aggregate market value of $[32,918,750] based upon the closing price of $[11.45] per share on Nasdaq on the record date. On the other hand, if the Business Combination is consummated, each outstanding Energem Ordinary Share will remain a Combined Entity Ordinary Share pursuant to the Share Purchase Agreement.

 

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The Sponsor and Energem’s officers and directors and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on Energem’s behalf, such as identifying and investigating possible business targets and business combinations. However, if Energem fails to consummate a Business Combination within the required period, they will not have any claim against the Trust Account for reimbursement. Accordingly, Energem may not be able to reimburse these expenses if the Business Combination or another business combination is not completed by August 18, 2023 (or pursuant to up to six (6) one-month extensions to February 18, 2024 by depositing additional funds into the Company’s Trust Account, as described in more detail in this proxy statement/prospectus).

   
 The Sponsor purchased 528,075 placement units from Energem for $10.00 per unit raising $5,280,750. Each placement unit consists of one Class A Ordinary Share and one warrant. Each Energem Warrant is exercisable to purchase one Class A Ordinary Share at $11.50 per share. This purchase took place on a private placement basis simultaneously with the consummation of the Energem IPO. All of the proceeds Energem received from the Energem IPO and substantially all of the proceeds from the sale of the placement units were placed in the Trust Account. The private placement units and the Energem Class A Ordinary Shares underlying the private placement units and warrants will become worthless if Energem does not consummate a business combination by August 18, 2023 (or pursuant to up to six (6) one-month extensions to February 18, 2024 by depositing additional funds into the Company’s Trust Account, as described in more detail in this proxy statement/prospectus). On the other hand, if the Business Combination is consummated, each outstanding Energem Warrant will become a Combined Entity warrant exercisable to purchase one Combined Entity Ordinary Share following consummation of the Business Combination and each outstanding Energem Ordinary Share will become a Combined Entity Ordinary Share pursuant to the Share Purchase Agreement.
   
If Energem is unable to complete a business combination within the required time period, the Sponsor will be personally liable under certain circumstances described herein to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Energem for services rendered or contracted for or products sold to Energem. If Energem consummates a business combination, on the other hand, Energem will be liable for all such claims.
   

The Sponsor and Energem’s officers and directors and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on Energem’s behalf, such as identifying and investigating possible business targets and business combinations. However, if Energem fails to consummate a business combination within the required period, they will not have any claim against the Trust Account for reimbursement. Accordingly, Energem may not be able to reimburse these expenses if the Business Combination or another business combination is not completed August 18, 2023 (or pursuant to up to six (6) one-month extensions to February 18, 2024 by depositing additional funds into the Company’s Trust Account, as described in more detail in this proxy statement/prospectus). As of the record date, the Sponsor and Energem’s officers and directors and their affiliates had incurred approximately $950,000 of unpaid reimbursable expenses.

   

The Share Purchase Agreement provides that the post-Closing Board of Directors of the Combined Entity will consist of seven individuals across three classes; three (3) persons designated by Energem prior to the Closing and four (4) persons designated by Graphjet prior to the Closing. At least four (4) of the designees to the Post-Closing Board shall be independent directors in accordance with Nasdaq requirements. The seven Post-Closing Board of Directors are expected to be:

 

1.Class I: Wong Kok Seong (Independent Director); Doris Wong Sing Ee (Independent Director); Hoo Swee Guan (Executive Director);
   
2.Class II: Ng Keok Chai (Independent Director); Ng Ah Lek (Independent Director); and
   
3.Class III: Aiden Lee Ping Wei (CEO, Executive Director); and Aw Jeen Rong (Executive Director).

 

The Share Purchase Agreement provides for the continued indemnification of Energem’s current directors and officers and the continuation of directors and officers liability insurance covering Energem’s current directors and officers for a period of up to six (6) years from and after the Closing of the Business Combination.
   
Energem’s officers and directors (or their affiliates) may make loans from time to time to Energem to fund certain capital requirements. As of the date of this proxy statement/prospectus, no such loans have been made, but loans may be made after the date of this proxy statement/prospectus. However, under the promissory note entered into between Energem and the Sponsor before the Energem IPO, $88,542 is due to the Sponsor and payable at Closing of the Business Combination and $877,193 is due under the working capital loans for a total of $965,735 due as of September 30, 2023. If the Business Combination is not consummated, the loans will not be repaid and will be forgiven except to the extent there are funds available to Energem outside of the Trust Account.
   
 Pursuant to the Administrative Support Agreement entered into between Energem and the Sponsor contemporaneous to the Energem IPO, Energem agreed to reimburse the Sponsor $10,000 per month commencing after the IPO through the Business Combination. These amounts are accruing and remain unpaid and payable at the time of the Closing of the Business Combination. Presently, approximately $120,000 is due under the Administrative Support Agreement. If the Business Combination is not consummated, these outstanding payments owed and loans will not be repaid and will be forgiven except to the extent there are funds available to Energem outside of the Trust Account.

 

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Interests of Energem’s and Graphjet’s Directors and Officers in the Business Combination

 

In considering the recommendation of the Energem Board in favor of the approval of the Business Combination Proposal, shareholders should keep in mind that Graphjet’s directors and officers may have interests in such proposal that are different from, or in addition to, those of Energem Shareholders and warrant holders generally. These interests include, among other things, the interests listed below:

 

unless Energem consummates the Business Combination, Energem’s officers and directors and the Sponsor will not receive reimbursement for any out-of-pocket expenses incurred by them to the extent that such expenses exceed the amount of available proceeds not deposited in the Trust Account;
   

the Sponsor paid an aggregate of $25,000 for its Founder Shares on August 6, 2021, or approximately $0.009 per share, and on September 7, 2021, the Sponsor assigned 5,000 Founder Shares to Cu Seng Kiu, our Chief Financial Officer, and 2,500 ordinary shares to each of our three independent directors, and such securities will have a significantly higher value at the time of the Business Combination. Such shares, including the shares underlying the units, had an aggregate market value of approximately [$32,918,750] based upon the closing price of Energem’s Class A Ordinary Shares of [$11.45] per share on Nasdaq on December 15, 2023, the record date;

   
as a condition to the Energem IPO, the Founder Shares became subject to a six-month lock-up, which was amended by the First Amendment to the Share Purchase Agreement (attached at Exhibit 10.27) with respect to 85.5% of the 2,875,000 Founder Shares entered into as of September 4, 2023 to six (6) months from the Closing of the Business Combination or such earlier date (x) if the closing price of the Class A Shares equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing of the Company’s initial Business Combination or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Class A Shares for cash, securities or other property. The lock-up was increased to a nine-month lock up with respect to 15.5% of the Founder Shares held by Arc Group Limited, financial adviser to the Purchaser, and its nominees and transferees, as set forth in that certain Lock-Up Agreement (attached at Exhibit 10.28) entered into as of September 4, 2023 between Energem, ARC Group Limited and certain of its nominees and transferees;
   

an aggregate of 528,075 Placement Units were issued to the Sponsor simultaneously with the consummation of the IPO and the underwriters’ exercise of its over-allotment option. Such units had an aggregate market value of approximately $[6,046,458.75] based upon the closing price of Energem’s Class A Ordinary Shares of $[11.45] per share on Nasdaq on the record date, which 528,075 Placement Units include Placement Warrants to purchase an aggregate of 528,075 Class A Ordinary Shares at $11.50 per share;

   
the Sponsor has agreed that the Placement Units, and all of their underlying securities, will not be sold or transferred by it until 30 days after Energem has completed a business combination, subject to limited exceptions. If the Company does not complete the Business Combination, the proceeds from the sale of the Placement Units will be used to fund the redemption of the Energem Class A Ordinary Shares while the Placement Warrants underlying the Placement Units will expire worthless;
   
the Sponsor and directors and officers of Energem have agreed not to redeem any Energem Ordinary Shares they hold in connection with an Energem Shareholder vote to approve a proposed initial business combination. If the Company does not complete the Business Combination, the proceeds from the sale of the Placement Units will be used to fund the redemption of the Energem Class A Ordinary Shares while the Placement Warrants underlying the Placement Units will expire worthless;
   
the Sponsor may loan to Energem additional funds for working capital purposes prior to the Business Combination. There are no working capital loans from the Sponsor currently outstanding. If the Business Combination is not consummated and Energem does not otherwise consummate another business combination prior to August 18, 2023 (or pursuant to up to six (6) one-month extensions to February 18, 2024 by depositing additional funds into the Company’s Trust Account, as described in more detail in this proxy statement/prospectus), then there will likely be insufficient funds to pay the working capital loan;
   
in the Sponsor’s discretion, funds used by the Company to extend the date to complete the initial business combination may be loaned by the Sponsor or its affiliates or designees to be deposited in the Trust Account, which loan amount from the Sponsor or its affiliates may be converted into Extension Units, at the price of $10.00 per unit. Up to $1,500,000 of such loans may be converted 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; and
   
certain of Graphjet’s directors and executive officers will serve as officers of the Combined Entity following the consummation of the Business Combination. Namely, Aiden Lee Ping Wei, Aw Jeen Rong, Ng Keok Chai, and Ng Ah Lek are expected to be appointed as directors of the Combined Entity after the consummation of the Business Combination and may in the future receive cash fees, options or share awards that the Combined Entity determines to pay to its directors. As such, in the future they will receive any cash or equity-based compensation that the Graphjet Technology board determines to pay to such officers.

 

For additional information, see the section entitled “Management Following the Business Combination.”

 

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Agreements Entered Into in Connection with the Share Purchase Agreement

 

Registration Rights Agreement

 

At the Closing, Energem, the Sponsor, the Sponsor’s founders and the Selling Shareholders (the “Subject Parties”) will enter into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which, among other things, Energem will be obligated to file a registration statement to register the resale of certain securities, as soon as practicable, but in any event within 30 days after the Closing, to file a registration statement to permit the public resale of all the registrable securities held by any party to the Registration Rights Agreement and the existing Energem registration rights agreement with the Sponsor entered into at the time of the Energem IPO will terminate. The Registration Rights Agreement will also provide the Subject Parties and the Sponsor with “piggy-back” registration rights, subject to certain requirements and customary conditions.

 

Equity Incentive Plan

 

Prior to the Closing, Energem will adopt an equity incentive plan (the “Equity Incentive Plan”) that will provide for the grant of equity incentives of Combined Entity Ordinary Shares to the directors, officers, employees, consultants and advisors (and prospective directors, officers, employees, consultants and advisors) following the Closing. Within 30 days after the Closing, Combined Entity will file a registration statement on Form S-8 with respect to the Combined Entity Ordinary Shares issuable under the Equity Incentive Plan, and Combined Entity will use reasonable efforts to maintain the effectiveness of the registration statement and maintain the current status of the prospectus contained therein for so long as awards granted pursuant to the Equity Incentive Plan remain outstanding.

 

PIPE Investment

 

Energem and Graphjet entered into a term sheet (the “Walleye Term Sheet”) with Walleye Opportunities Master Fund Ltd. (the “Potential PIPE Investor”) on September 16, 2023, pursuant to which the Potential PIPE Investor agreed to purchase, and Graphjet agreed to sell to the Potential PIPE Investor, Graphjet Pre-Transaction Shares before the Closing of the Business Combination. The Term Sheet was terminated on November 1, 2023 by mutual agreement of the parties when they could not agree on mutually acceptable final terms.

 

Following the termination of the Walleye Term Sheet, Energem and Graphjet negotiated and entered into a definitive purchase agreement for a PIPE investment (the “PIPE Investment Purchase Agreement”) with Dato’ Sri Pang Chow Huat and/or investment vehicles directly managed by such investor (the “PIPE Investor”) on December 20, 2023, as amended and restated on January 10, 2024, pursuant to which the PIPE Investor and/or investment vehicles directly managed by such investor, has agreed to purchase, and Graphjet has agreed to sell to the PIPE Investor, 4,530 Graphjet Pre-Transaction Shares before the Closing of the Business Combination that will be exchanged for 250,000 Combined Entity Ordinary Shares for a total of $2,500,000. The number of Combined Entity Ordinary Shares is fixed, the number of Graphjet Pre-Transaction Shares to be purchased is subject to adjustment depending on the final consideration paid to the Graphjet shareholders. The PIPE Investment Purchase Agreement is attached to this proxy statement/prospectus as Exhibit 10.25, as amended by the amended and restated PIPE Investment Purchase Agreement of January 24, 2024 (the “Revised PIPE Agreement”), which is attached at Exhibit 10.32, pursuant to which Graphjet has agreed to file, within 60 calendar days after the Closing, a registration statement with the SEC registering the resale or transfer of the Combined Entity Ordinary Shares.

 

Amendment to the Share Purchase Agreement

 

As previously announced by Energem on Form 8-K, on September 4, 2023, Energem, Graphjet, Purchaser Representative and Shareholder Representative entered into the first amendment to the Share Purchase Agreement (the “First Amendment”), pursuant to which Article XIII of the Share Purchase Agreement was amended to add the following two subsections:

 

Section 13.1(i): Purchaser Class B Ordinary Shares Lock-up Period. The parties acknowledge and agree that notwithstanding anything to the contrary contained in this Article XIII, with respect to certain of the Purchaser Class B Ordinary Shares that convert to Class A Shares at the Closing of the Business Combination, the Lock-Up Period shall terminate, as follows, 2,427,908 Purchaser Class B Ordinary Shares that convert to Class A Shares at the Closing of the Business Combination held by certain shareholders or officers and directors of Purchaser terminate six (6) months from the Closing of the Business Combination or such earlier date (x) if the closing price of the Class A Shares equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing of the Company’s initial Business Combination or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Class A Shares for cash, securities or other property; and (B) 447,092 Purchaser Class B Ordinary Shares that convert to Class A Shares at the Closing of the Business Combination held by Arc Group Limited, financial adviser to the Purchaser, and its nominees and transferees, as set forth in that certain Lock-Up Agreement executed as of the date hereof between the Purchaser, ARC Group Limited and certain of its nominees and transferees (the “Lock-Up Agreement”), terminate nine (9) months from the Closing of the Business Combination or such earlier date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Class A Shares for cash, securities or other property.

 

Section 13.1(j): Purchaser Class A Ordinary Shares Lock-up Period. The parties acknowledge and agree that notwithstanding anything to the contrary contained in this Article XIII, with respect to certain of the Purchaser Class A Ordinary Shares, the Lock-Up Period shall terminate, as follows: (A) 27,600,000 Class A Ordinary Shares held by Suria Sukses Engineering Sdn. Bhd. terminate six (6) months from the Closing of the Business Combination or such earlier date (x) if the closing price of the Class A Shares equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing of the Company’s initial Business Combination or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Class A Shares for cash, securities or other property; (B) 2,760,000 Purchaser Class A Ordinary Shares held by Arc Group Limited, financial adviser to Purchaser, and certain of its nominees and transferees, terminate nine (9) months from the Closing of the Business Combination or such earlier date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Class A Shares for cash, securities or other property, as set forth in that certain Lock-Up Agreement; (C) 528,075 Purchaser Class A Ordinary Shares held by certain shareholders or officers and directors of Purchaser terminate six (6) months from the Closing of the Business Combination or such earlier date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Class A Shares for cash, securities or other property; and (D) 107,640,000 Purchaser Class A Ordinary Shares held by the Selling Shareholders terminate nine (9) months from the Closing of the Business Combination, or such earlier date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Class A Shares for cash, securities or other property.

 

Lock-Up Agreement

 

As previously announced by Energem on Form 8-K, on September 4, 2023, in connection with the Business Combination and the First Amendment to the Share Purchase Agreement, Energem and its consultant, Arc Group Limited (the “Consultant”), entered into a lock-up agreement (the “Lock-Up Agreement”) that provides that, subject to certain exceptions, Consultant shall not transfer any of the Class A Ordinary Shares and the Class B Ordinary Shares (the “Restricted Securities” beneficially owned or owned of record by such Consultant until with respect to the Class A Ordinary Shares and the Class B Ordinary Shares (including, but not limited to, with respect to the Class B Ordinary Shares, as set forth on the signature page hereto) and not to (i) lend, offer, pledge, hypothecate, encumber, donate, assign, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise dispose of, directly or indirectly, any Restricted Securities, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Restricted Securities, or (iii) publicly disclose the intention to do any of the foregoing, whether any such transaction described in clauses (i), (ii), or (iii) above is to be settled by delivery of Restricted Securities or other securities, in cash or otherwise (any of the foregoing described in clauses (i), (ii), or (iii), a “Prohibited Transfer”) for the duration of the Lock-Up Period, in relation to 100% of the Restricted Securities, for the period commencing on and from the Closing and ending nine (9) months after the date of the Closing.

 

The foregoing shall not apply to the transfer of any or all of the Restricted Securities (I) to any Permitted Transferee or (II) pursuant to a court order or settlement agreement related to the distribution of assets in connection with the dissolution of marriage or civil union; provided, however, that in either of cases (I) or (II), it shall be a condition to such transfer that such transfer complies with the Securities Act of 1933, as amended, and other applicable law, and that the transferee executes and delivers to the Purchaser an agreement stating that the transferee is receiving and holding the Restricted Securities subject to the provisions of the Lock-Up Agreement applicable to the Consultant, and there shall be no further transfer of such Restricted Securities except in accordance with the Lock-Up Agreement.

 

As used in the Lock-Up Agreement, the term “Permitted Transferee” shall mean: (1) the members of the Consultant’s immediate family, (2) any trust for the direct or indirect benefit of the Consultant or the immediate family of the Consultant, (3) if the Consultant is a trust, to the trustor or beneficiary of such trust or to the estate of a beneficiary of such trust, (4) in the case of an entity, officers, directors, general partners, limited partners, members, or shareholders of such entity that receive such transfer as a distribution, or related investment funds or vehicles controlled or managed by such persons or their respective affiliates, (5) to any affiliate of the Consultant, and (6) any transferee whereby there is no change in beneficial ownership, and (6) Consultant’s nominees or transferees with respect to Consultant’s Class A Ordinary Shares and the Class B Ordinary Shares. The Consultant and its nominees or transferees further agree to be bound by the provisions of the Lock-Up Agreement and further, to execute such agreements as may be reasonably requested by the Purchaser that are consistent with the foregoing or that are necessary to give further effect thereto.

 

Executive Employment Agreements

 

1. Executive Employment Agreement with Aiden Lee Ping Wei. Simultaneously with the Closing, the Combined Entity intends to enter into an executive employment agreement with Aiden Lee Ping Wei as Chief Executive Officer. Pursuant to the Employment Agreement, the Combined Entity shall employ Mr. Lee as its Chief Executive Officer responsible for (i) communicating, on behalf of the Combined Entity, with shareholders, government entities, and the public; (ii) leading the development of the Combined Entity’s short- and long-term strategy; (iii) creating and implementing the Combined Entity’s vision and mission; (iv) evaluating the work of other executive leaders within the Combined Entity; (v) maintaining awareness of the competitive market landscape, expansion opportunities, industry developments; (vi) ensuring that the Combined Entity maintains high social responsibility wherever it does business; (vii) assessing risks to the Combined Entity and ensuring they are monitored and minimized; and (viii) setting strategic, goals and making sure they are measurable and describable. Mr. Lee agreed to devote all of his professional time and attention to the business and affairs of the Combined Entity.

 

In exchange for these services, the Combined Entity shall pay Mr. Lee an annual salary of US$250,000, which may be increased or decreased by the Compensation Committee of the Board. An annual cash bonus and a transaction incentive bonus may also be granted as determined by the Compensation Committee. Further, the Combined Entity will make necessary statutory contributions to the Employees Provident Fund (EPF), the Social Security Organisation (SOCSO) and the Employee’s Insurance Scheme (EIS) in accordance with the prevailing statutory requirements, and Mr. Lee shall be eligible to participate in the Combined Entity’s long-term incentive plan, on terms and conditions as determined by the Compensation Committee. Mr. Lee will also be entitled to participate in such health, group insurance, welfare, pension, and other employee benefit plans, programs, and arrangements as are made generally available to other employees and shall be eligible for up to 14 days of Annual Leave per calendar year.

 

The Employment Agreement may be terminated by the Combined Entity and by Mr. Lee subject to at least 60 days’ written notice of intent to terminate employment. For a period of five years following the date of termination of the Employment Agreement, Mr. Lee will be subject to non-solicitation provisions, and for an indefinite period during the term of the Employment Agreement or thereafter, Mr. Lee will be subject to restrictions on the disclosure of confidential information relating to the Combined Entity. The Employment Agreement is governed by Malaysian law.

 

2. Executive Employment Agreement with Lim Hooi Beng as Non-Executive Chairman. Simultaneously with the Closing, the Combined Entity intends to enter into an executive employment agreement with Lim Hooi Beng as Non-Executive Chairman. Pursuant to the Employment Agreement, the Combined Entity shall employ Mr. Lim as its Non-Executive Chairman responsible for (i) providing leadership to the Board of Directors; (ii) providing support and advice to the CEO of the Combined Entity, formulating (with the CEO and company secretary) the yearly work plan for the Board against agreed objectives, and playing an active part in setting the agenda for Board meetings; (iii) maintaining the authority to call meetings of the Board and meetings of the independent directors; (iv) presiding over board meetings and ensuring that time in meetings is used productively; (v) upholding rigorous standards of preparation for meetings, and ensuring that decisions by the Board are executed; (vi) coordinating and chairing the annual Board performance review of the CEO and communicating results to the CEO; and (vii) chairing meetings of shareholders. Mr. Lim agreed to devote all of his professional time and attention to the business and affairs of the Combined Entity.

 

In exchange for these services, the Combined Entity shall pay Mr. Lim an annual salary of US$125,000, which may be increased or decreased by the Compensation Committee of the Board. An annual cash bonus and a transaction incentive bonus may also be granted as determined by the Compensation Committee. Further, the Combined Entity will make necessary statutory contributions to the Employees Provident Fund (EPF), the Social Security Organisation (SOCSO) and the Employee’s Insurance Scheme (EIS) in accordance with the prevailing statutory requirements, and Mr. Lim shall be eligible to participate in the Combined Entity’s long-term incentive plan, on terms and conditions as determined by the Compensation Committee. Mr. Lim will also be entitled to participate in such health, group insurance, welfare, pension, and other employee benefit plans, programs, and arrangements as are made generally available to other employees and shall be eligible for up to 14 days of Annual Leave per calendar year.

 

The Employment Agreement may be terminated by the Combined Entity and by Mr. Lim subject to at least 60 days’ written notice of intent to terminate employment. For a period of five years following the date of termination of the Employment Agreement, Mr. Lim will be subject to non-solicitation provisions, and for an indefinite period during the term of the Employment Agreement or thereafter, Mr. Lim will be subject to restrictions on the disclosure of confidential information relating to the Combined Entity. The Employment Agreement is governed by Malaysian law.

 

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3. Executive Employment Agreement with Aw Jeen Rong as Executive Director. Simultaneously with the Closing, the Combined Entity intends to enter into an executive employment agreement with Aw Jeen Rong as Executive Director. Pursuant to the Employment Agreement, the Combined Entity shall employ Mr. Aw as its Executive Director responsible for (i) assisting the Board of Directors to develop a vision and strategic plan to guide the Combined Entity; (ii) developing and directing organizational strategy; (iii) engaging with external finance organizations for financing activities; (iv) drafting organizational policies and philosophies; (v) engaging with community groups; (vi) creating sound business plans; (vii) coaching department heads; (viii) overseeing financial accounts; (ix) reporting on revenue and expenditure; and (x) conducting performance reviews. Mr. Aw agreed to devote all of his professional time and attention to the business and affairs of the Combined Entity.

 

In exchange for these services, the Combined Entity shall pay Mr. Aw an annual salary of US$125,000, which may be increased or decreased by the Compensation Committee of the Board. An annual cash bonus and a transaction incentive bonus may also be granted as determined by the Compensation Committee. Further, the Combined Entity will make necessary statutory contributions to the Employees Provident Fund (EPF), the Social Security Organisation (SOCSO) and the Employee’s Insurance Scheme (EIS) in accordance with the prevailing statutory requirements, and Mr. Aw shall be eligible to participate in the Combined Entity’s long-term incentive plan, on terms and conditions as determined by the Compensation Committee. Mr. Aw will also be entitled to participate in such health, group insurance, welfare, pension, and other employee benefit plans, programs, and arrangements as are made generally available to other employees and shall be eligible for up to 14 days of Annual Leave per calendar year.

 

The Employment Agreement may be terminated by the Combined Entity and by Mr. Aw subject to at least 60 days’ written notice of intent to terminate employment. For a period of five years following the date of termination of the Employment Agreement, Mr. Aw will be subject to non-solicitation provisions, and for an indefinite period during the term of the Employment Agreement or thereafter, Mr. Aw agrees to restrictions on the disclosure of confidential information relating to the Combined Entity. The Employment Agreement is governed by Malaysian law.

 

4. Executive Employment Agreement with Tham Choi Kuen as Chief Financial Officer. Simultaneously with the Closing, the Combined Entity intends to enter into an executive employment agreement with Tham Choi Kuen as Chief Financial Officer. Pursuant to the Employment Agreement, the Combined Entity shall employ Ms. Tham as its Chief Financial Officer responsible for (i) reporting to the CEO; (ii) leading the finance team and developing annual organization objectives and individual development plans for team; (iii) strengthening the provision of resource allocation to business priorities, including long and medium-term financial forecasting and scenario planning; (iv) leading finance functions such as accounting, financial management and analysis; (v) preparing timely financial reports, forecast, annual budget variance analysis and performance indicators; (vi) ensuring company accounting and financial reporting standards are complaint as required by regulators such as US GAAP; (vii) implementing policies, guidelines and standard operating procedures to support the processes of financial planning, budgeting, forecasting and projections; (viii) liaising with auditors, tax consultants, solicitors, bankers, company secretary and other professionals to ensure compliance with all matters relating to audit, tax and statutory requirements; (ix) leading and accounting for preparation and finalization of annual reports; (x) managing cash flow effectively ensuring company cash flow positions are always positive and close monitoring to prevent serious business disruption; (xi) ensuring the integrity of the accounting system, improvement of the accounting system and that the accounting system is running effectively; and (xii) sourcing and securing external funding to increase the financial capacity of the Combined Entity, both public and private funding. Ms. Tham agreed to devote all of her professional time and attention to the business and affairs of the Combined Entity.

 

In exchange for these services, the Combined Entity shall pay Ms. Tham an annual salary of US$31,250, which may be increased or decreased by the Compensation Committee of the Board. An annual cash bonus and a transaction incentive bonus may also be granted as determined by the Compensation Committee. Further, the Combined Entity will make necessary statutory contributions to the Employees Provident Fund (EPF), the Social Security Organisation (SOCSO) and the Employee’s Insurance Scheme (EIS) in accordance with the prevailing statutory requirements, and Ms. Tham shall be eligible to participate in the Combined Entity’s long-term incentive plan, on terms and conditions as determined by the Compensation Committee. Ms. Tham will also be entitled to participate in such health, group insurance, welfare, pension, and other employee benefit plans, programs, and arrangements as are made generally available to other employees and shall be eligible for up to 14 days of Annual Leave per calendar year.

 

The Employment Agreement may be terminated by the Combined Entity and by Ms. Tham subject to at least 60 days’ written notice of intent to terminate employment. For a period of five years following the date of termination of the Employment Agreement, Ms. Tham will be subject to non-solicitation provisions, and for an indefinite period during the term of the Employment Agreement or thereafter, Ms. Tham will be subject to restrictions on the disclosure of confidential information relating to the Combined Entity. The Employment Agreement is governed by Malaysian law.

 

5. Executive Employment Agreement with Boh Woan Yun as Senior Finance Manager. Simultaneously with the Closing, the Combined Entity intends to enter into an executive employment agreement with Boh Woan Yun as Senior Finance Manager. Pursuant to the Employment Agreement, the Combined Entity shall employ Ms. Boh as its Senior Finance Manager responsible for (i) monitoring the day-to-day financial operations within the Combined Entity (payroll, invoicing, and other transactions); (ii) preparing monthly and quarterly management reporting; (iii) participating in strategic data analysis, research, and modeling for senior company leadership; (iv) supporting project analysis, validation of plans, and ad-hoc requests; (v) managing the Combined Entity’s financial accounting, monitoring, and reporting systems; and (vi) ensuring compliance with accounting policies and regulatory requirements. Ms. Boh agreed to devote all of her professional time and attention to the business and affairs of the Combined Entity.

 

In exchange for these services, the Combined Entity shall pay Ms. Boh an annual salary of US$12,500, which may be increased or decreased by the Compensation Committee of the Board. An annual cash bonus and a transaction incentive bonus may also be granted as determined by the Compensation Committee. Further, the Combined Entity will make necessary statutory contributions to the Employees Provident Fund (EPF), the Social Security Organisation (SOCSO) and the Employee’s Insurance Scheme (EIS) in accordance with the prevailing statutory requirements, and Ms. Boh shall be eligible to participate in the Combined Entity’s long-term incentive plan, on terms and conditions as determined by the Compensation Committee. Ms. Boh will also be entitled to participate in such health, group insurance, welfare, pension, and other employee benefit plans, programs, and arrangements as are made generally available to other employees and shall be eligible for up to 14 days of Annual Leave per calendar year.

 

The Employment Agreement may be terminated by the Combined Entity and by Ms. Boh subject to at least 60 days’ written notice of intent to terminate employment. For a period of five years following the date of termination of the Employment Agreement, Ms. Boh will be subject to non-solicitation provisions, and for an indefinite period during the term of the Employment Agreement or thereafter, Ms. Boh will be subject to restrictions on the disclosure of confidential information relating to the Combined Entity. The Employment Agreement is governed by Malaysian law.

 

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6. Executive Employment Agreement with Lim Seh Jiang as General Manager. Simultaneously with the Closing, the Combined Entity intends to enter into an executive employment agreement with Lim Seh Jiang in the role of General Manager. Pursuant to the Employment Agreement, the Combined Entity shall employ Mr. Lim as its General Manager responsible for (i) leading and working with different teams to ensure all the business/marketing plans of the Combined Entity run smoothly; (ii) working hand-in-hand with top management in order to develop and implement new plans/ideas that will enhance the operations of the Combined Entity; (iii) improving processes, policies, and practices so as to achieve the Combined Entity’s financial goals and operational disciplines; (iv) managing growth and achieving business targets; (v) executing different business strategies to support the Combined Entity’s growth and business expansion; (vi) overseeing training and employee performance; (vii) evaluating performance, productivity and competitiveness; (viii) spearheading policies, strategies and directional growth; (ix) hiring and training new staff to continuously grow the team size and ensure employee retention; and (x) managing budgets and sales revenue efficiently. Mr. Lim agreed to devote all of his professional time and attention to the business and affairs of the Combined Entity.

 

In exchange for these services, the Combined Entity shall pay Mr. Lim an annual salary of US$31,250, which may be increased or decreased by the Compensation Committee of the Board. An annual cash bonus and a transaction incentive bonus may also be granted as determined by the Compensation Committee. Further, the Combined Entity will make necessary statutory contributions to the Employees Provident Fund (EPF), the Social Security Organisation (SOCSO) and the Employee’s Insurance Scheme (EIS) in accordance with the prevailing statutory requirements, and Mr. Lim shall be eligible to participate in the Combined Entity’s long-term incentive plan, on terms and conditions as determined by the Compensation Committee. Mr. Lim will also be entitled to participate in such health, group insurance, welfare, pension, and other employee benefit plans, programs, and arrangements as are made generally available to other employees and shall be eligible for up to 14 days of Annual Leave per calendar year.

 

The Employment Agreement may be terminated by the Combined Entity and by Mr. Lim subject to at least 60 days’ written notice of intent to terminate employment. For a period of five years following the date of termination of the Employment Agreement, Mr. Lim will be subject to non-solicitation provisions, and for an indefinite period during the term of the Employment Agreement or thereafter, Mr. Lim will be subject to restrictions on the disclosure of confidential information relating to the Combined Entity. The Employment Agreement is governed by Malaysian law.

 

7. Executive Employment Agreement with Liu Yu as Head of Research and Chief Scientific Officer. Simultaneously with the Closing, the Combined Entity intends to enter into an executive employment agreement with Liu Yu as Head of Research and Chief Scientific Officer. Pursuant to the Employment Agreement, the Combined Entity shall employ Mr. Liu as its Head of Research and Chief Scientific Officer responsible for (i) creating technology strategies and proposing implementation methods; (ii) communicating with company executives and the Board; (iii) setting a vision for how technology will be used in the Combined Entity; (iv) ensuring that technological resources meet the Combined Entity’s short and long-term needs; (v) outlining the goals for research and development; (vi) creating timelines for the development and deployment of all technological services; (vii) making executive decisions on behalf of the Combined Entity’s technological requirements; (viii) managing technology budgets and timeframes; (ix) staying on top of technology trends and developments; and (x) ensuring all technology practices adhere to regulatory standards. Mr. Liu agreed to devote all of his professional time and attention to the business and affairs of the Combined Entity.

 

In exchange for these services, the Combined Entity shall pay Mr. Liu an annual salary of US$93,750, which may be increased or decreased by the Compensation Committee of the Board. An annual cash bonus and a transaction incentive bonus may also be granted as determined by the Compensation Committee. Further, the Combined Entity will make necessary statutory contributions to the Employees Provident Fund (EPF), the Social Security Organisation (SOCSO) and the Employee’s Insurance Scheme (EIS) in accordance with the prevailing statutory requirements, and Mr. Liu shall be eligible to participate in the Combined Entity’s long-term incentive plan, on terms and conditions as determined by the Compensation Committee. Mr. Liu will also be entitled to participate in such health, group insurance, welfare, pension, and other employee benefit plans, programs, and arrangements as are made generally available to other employees and shall be eligible for up to 14 days of Annual Leave per calendar year.

 

The Employment Agreement may be terminated by the Combined Entity and by Mr. Liu subject to at least 60 days’ written notice of intent to terminate employment. For a period of five years following the date of termination of the Employment Agreement, Mr. Liu will be subject to non-solicitation provisions, and for an indefinite period during the term of the Employment Agreement or thereafter, Mr. Liu will be subject to restrictions on the disclosure of confidential information relating to the Combined Entity. The Employment Agreement is governed by Malaysian law.

 

8. Executive Employment Agreement with Hoo Swee Guan as Executive Director. Simultaneously with the Closing, the Combined Entity intends to enter into an executive employment agreement with Hoo Swee Guan in the role of Executive Director. Pursuant to the Employment Agreement, the Combined Entity shall employ Mr. Hoo as its Executive Director responsible for (i) reporting to and assisting the CEO; (ii) assisting the Board of Directors to develop a vision and strategic plan to guide the Combined Entity; (iii) acting as a professional advisor to the Board on all aspects of the Combined Entity’s activities; (iv) reviewing and revising existing policies and procedures and providing consultation to the Board if new policies are required; (v) monitoring policies and procedures for effectiveness and compliance; (vi) ensuring that the operation of the Combined Entity meets the expectations of its clients and the Board; (vii) overseeing the planning, implementation and evaluation of the Combined Entity’s operation; and (viii) identifying and evaluating the risks to the Combined Entity’s clients, staff, management, volunteers, property, finances, goodwill and image and implement measures to control risks. Mr. Hoo agreed to devote all of his professional time and attention to the business and affairs of the Combined Entity.

 

In exchange for these services, the Combined Entity shall pay Mr. Hoo an annual salary of US$62,500, which may be increased or decreased by the Compensation Committee of the Board. An annual cash bonus and a transaction incentive bonus may also be granted as determined by the Compensation Committee. Further, the Combined Entity will make necessary statutory contributions to the Employees Provident Fund (EPF), the Social Security Organisation (SOCSO) and the Employee’s Insurance Scheme (EIS) in accordance with the prevailing statutory requirements, and Mr. Hoo shall be eligible to participate in the Combined Entity’s long-term incentive plan, on terms and conditions as determined by the Compensation Committee. Mr. Hoo will also be entitled to participate in such health, group insurance, welfare, pension, and other employee benefit plans, programs, and arrangements as are made generally available to other employees and shall be eligible for up to 14 days of Annual Leave per calendar year.

 

The Employment Agreement may be terminated by the Combined Entity and by Mr. Hoo subject to at least 60 days’ written notice of intent to terminate employment. For a period of five years following the date of termination of the Employment Agreement, Mr. Hoo will be subject to non-solicitation provisions, and for an indefinite period during the term of the Employment Agreement or thereafter, Mr. Hoo will be subject to restrictions on the disclosure of confidential information relating to the Combined Entity. The Employment Agreement is governed by Malaysian law.

 

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PIPE Investment

 

Energem and Graphjet entered into a term sheet (the “Walleye Term Sheet”) with Walleye Opportunities Master Fund Ltd. (the “Potential PIPE Investor”) on September 16, 2023, pursuant to which the Potential PIPE Investor agreed to purchase, and Graphjet agreed to sell to the Potential PIPE Investor, Graphjet Pre-Transaction Shares before the Closing of the Business Combination. The Term Sheet was terminated on November 1, 2023 by mutual agreement of the parties when they could not agree on mutually acceptable final terms.

 

Thereafter, Energem and Graphjet entered into definitive purchase agreement for a PIPE investment (the “PIPE Investment Purchase Agreement”) with Dato’ Sri Pang Chow Huat and/or investment vehicles directly managed by such investor (the “PIPE Investor”) on December 20, 2023, as amended and restated on January 10, 2024, pursuant to which the PIPE Investor has agreed to purchase, and Graphjet has agreed to sell to the PIPE Investor, 4,530 Graphjet Pre-Transaction Shares before the Closing of the Business Combination, which Graphjet Pre-Transaction Shares will be exchanged for 250,000 Combined Entity Ordinary Shares at the Closing of the Business Combination, for an aggregate purchase price of $2,500,000 (the “Purchase Price”) . The number of Combined Entity Ordinary Shares is fixed, the number of Graphjet Pre-Transaction Shares to be purchased is subject to adjustment depending on the final consideration paid to the Graphjet shareholders. The PIPE Investment Purchase Agreement is attached to this proxy statement/prospectus as Exhibit 10.25, as amended by the amended and restated PIPE Investment Purchase Agreement of January 24, 2024 (the “Revised PIPE Agreement”), which is attached at Exhibit 10.32, pursuant to which Graphjet has agreed to file, within 60 calendar days after the Closing, a registration statement with the SEC registering the resale or transfer of the Combined Entity Ordinary Shares.

 

The Revised PIPE Agreement eliminated the termination provision that previously provided for the termination of the PIPE Investment if the Closing of the Business Combination does not occur on or prior to March 31, 2024. The PIPE Investment Purchase Agreement provides further that the issuance of the Combined Entity Ordinary Shares to the PIPE Investor in exchange for the Graphjet Pre-Transaction Shares shall take the form of a registered issuance of securities under the Securities Act of 1933, as amended, pursuant to Energem’s effective registration on Form S-4 (No. 333-268716).

 

The PIPE Investment Purchase Agreement provides for the termination of the PIPE Investment upon the earlier to occur of the date that (a) the Share Purchase Agreement is terminated, or (b) upon the mutual written agreement of each of the parties; provided that nothing herein will relieve any party from liability for any willful breach hereof prior to the time of termination, and each party will be entitled to any remedies at law or in equity to recover reasonable and documented out-of-pocket losses, liabilities or damages arising from such breach, however the there is no break-up fee to be paid according to the PIPE Investment Purchase Agreement. The PIPE Investment Purchase Agreement is attached to this proxy statement/prospectus as Exhibit 10.25.

 

Standby Equity Purchase Agreement

 

On January 12, 2023, Energem and Graphjet entered into a Standby Equity Purchase Agreement (“SEPA”) with YA II PN, Ltd., a Cayman Islands exempt limited partnership managed by Yorkville Advisors Global, LP (“Yorkville”) pursuant to which, subject to the consummation of the Business Combination, the Combined Entity had the option, but not the obligation, to issue, and Yorkville had to subscribe for, an aggregate amount of up to $200 million of Combined Entity Ordinary Shares. Effective as of September 25, 2023, Energem and Graphjet terminated the SEPA with Yorkville, which termination was a condition to entering into the potential PIPE on September 16, 2023.

 

Material U.S. Federal Income Tax Considerations

 

For a description of U.S. federal income tax consequences of the Business Combination, the ownership and disposition of Energem Class A Ordinary Shares and/or Energem Warrants, please see the information set forth in “Material U.S. Federal Income Tax Considerations” in this proxy statement/prospectus. The consequences of a redemption to any particular public shareholder will depend on that shareholder’s particular facts and circumstances. Accordingly, you are urged to consult your tax advisor to determine your tax consequences from the exercise of your redemption rights, including the applicability and effect of U.S. federal, state, local and non-U.S. income and other tax laws in light of your particular circumstances.

 

Material Cayman Islands Tax Considerations

 

For a description of material Cayman Islands tax considerations including in connection with the ownership and disposition of Combined Entity Ordinary Shares, please see the information set forth in “Material Cayman Tax Considerations”.

 

Redemption Rights

 

Pursuant to the Energem M&A, a holder of Energem Public Shares may demand that Energem redeem such shares for cash if the business combination is consummated; provided that Energem may not consummate the business combination if it has less than $5,000,001 of net tangible assets either immediately prior to or upon consummation of the business combination unless the NTA Proposal is approved. Holders of Energem Public Shares will be entitled to receive cash for these shares only if they deliver their shares to Energem’s transfer agent no later than two (2) business days prior to the Extraordinary General Meeting.

 

Holders of Energem Public Shares do not need to vote on the Business Combination Proposal or be a holder of such Energem Public Shares as of the Record Date to exercise redemption rights. If the Business Combination is not consummated, these shares will not be redeemed for cash. If a holder of Energem Public Shares properly demands such redemption, delivers his, her or its shares to Energem’s transfer agent as described above, and the Business Combination is consummated, Energem will redeem each Energem Public Share into a full pro rata portion of the Trust Account, calculated as of two (2) business days prior to the date of the Extraordinary General Meeting. It is anticipated that this would amount to approximately [$11.23] per share based on the remaining cash in the Trust Account of [$13,667,908] as of the record date. Holders of Energem Warrants do not have redemption rights with respect to such securities.

 

Appraisal Rights

 

Energem Shareholders and holders of Energem Warrants do not have appraisal rights in connection with the Business Combination under Cayman Islands law. See the section of this proxy statement/prospectus titled “Extraordinary General Meeting of Energem Shareholders—Appraisal Rights.”

 

Voting Power; Record Date

 

Energem Shareholders will be entitled to vote or direct votes to be cast at the Extraordinary General Meeting if they owned Energem Class A Ordinary Shares at the close of business on [_______], 2024, which is the Record Date for the Extraordinary General Meeting. Energem Shareholders will have one vote for each Energem Ordinary Share owned at the close of business on the Record Date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. Energem Warrants do not have voting rights. On the Record Date, there were 4,620,007 Energem Ordinary Shares outstanding, of which 1,216,932 were Energem Public Shares with the rest being held by the Energem Board, Energem’s officers and other initial shareholders and their respective affiliates (including the Sponsor).

 

Following the Business Combination, the voting power for every shareholder is one vote for each Ordinary Share. Further, following the Business Combination, the Combined Entity will not be a “controlled company” under the Nasdaq listing rules because not more than 50% of the Combined Entity’s voting power held by a single person, entity or group.

 

The NTA Proposal

Assuming the Business Combination Proposal is approved, Energem’s shareholders will be asked to consider and vote upon a proposal to approve by special resolution, the NTA Proposal, which shall be effective, if adopted and implemented by Energem, prior to the consummation of the proposed Business Combination, to remove the requirements contained in the Energem M&A limiting Energem’s ability to consummate an initial business combination if Energem would have less than $5,000,001 in net tangible assets prior to or upon consummation of such initial business combination. The NTA Proposal is conditioned upon the approval of the Business Combination Proposal. Therefore, if the Business Combination Proposal is not approved, then the NTA Proposal will not be presented to Energem’s shareholders at the Extraordinary General Meeting. Please see the section of this proxy statement/prospectus entitled “Proposal 1—The NTA Proposal.”

 

The Business Combination Proposal

 

Energem Shareholders will be asked to approve and adopt a proposal to approve, as an Ordinary Resolution, the Business Combination, including the Share Purchase Agreement. As consideration for the Business Combination, the Graphjet Shareholders shall be entitled to receive from Energem, that number of Class A Ordinary Shares equal to the Transaction Consideration, after the Closing of the Business Combination, and upon the Business Combination, all of the issued and outstanding share capital of Graphjet immediately prior to the Effective Time will be acquired by Energem and the aggregate Transaction Consideration will be paid to Graphjet Shareholders, as of immediately prior to the Effective Time, as provided in the Share Purchase Agreement and elsewhere in this proxy statement/prospectus. See the section of this proxy statement/prospectus titled “Proposal No. 2Business Combination Approval.

 

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The Energem M&A Proposals

 

Energem will ask its shareholders to approve and adopt, assuming the NTA Proposal, the Business Combination Proposal, the Share Issuance Proposal and the Equity Incentive Plan Proposal are each approved and adopted, a proposal to approve, as Special Resolutions, the Energem M&A Proposals comprising the change of name and amendments to the Energem M&A. The Energem M&A Proposals will not be presented if the NTA Proposal, the Business Combination Proposal, the Share Issuance Proposal and the Equity Incentive Proposal are not all approved. If approved, the Energem M&A Proposals would take effect on and from the Closing Date. See the section of this proxy statement/prospectus titled “Proposal No. 3The Energem M&A Proposals.”

 

The Share Issuance Proposal

 

Energem will ask its shareholders to approve and adopt, assuming the Business Combination Proposal is approved and adopted, in order to comply with applicable listing rules of Nasdaq, a proposal for the issuance of more than 20% of Energem’s Ordinary Shares in connection with the Business Combination, which is conditioned on the approval of the Business Combination Proposal. Therefore, if the Business Combination Proposal is not approved, the Share Issuance Proposal will have no effect, even if approved by holders of the Energem’s Ordinary Shares. See the section of this proxy statement/prospectus titled “Proposal No. 4— Share Issuance Proposal.”

 

The Equity Incentive Plan Proposal

 

Energem will ask its shareholders to approve and adopt, assuming the Business Combination Proposal and the Share Issuance Proposal are each approved and adopted, the Equity Incentive Plan Proposal through an Ordinary Resolution for the approval of the Equity Incentive Plan, which, if approved, would take effect on and from the Closing Date. The Equity Incentive Plan Proposal will not be presented if the Business Combination Proposal is not approved. This summary is qualified in its entirety by reference to the complete text of the Equity Incentive Plan Proposal. See the section of this proxy statement/prospectus titled “Proposal No. 5—The Equity Incentive Plan Proposal.”

 

The Director Appointment Proposal

 

Energem will ask its holders of Energem Class B Ordinary Shares to approve and adopt, assuming the NTA Proposal, the Business Combination Proposal, the Share Issuance Proposal and the Equity Incentive Plan Proposal are each approved and adopted, the Director Appointment Proposal through an Ordinary Resolution for the appointment of new directors, which, if approved, would take effect upon Closing. The Director Appointment Proposal will not be presented if the NTA Proposal, the Business Combination Proposal, the Share Issuance Proposal and the Equity Incentive Proposal are not all approved. This summary is qualified in its entirety by reference to the complete text of the Director Appointment Proposal. See the section of this proxy statement/prospectus titled “Proposal No. 6—The Director Appointment Proposal.”

 

The Adjournment Proposal

 

If Energem is unable to consummate the Business Combination at the time of the Extraordinary General Meeting for any reason, the chairman presiding over the Extraordinary General Meeting may submit a proposal to adjourn the Extraordinary General Meeting to a later date or dates, if necessary. See the section of this proxy statement/prospectus titled “Proposal No. 7—The Adjournment Proposal.”

 

Recommendation to Energem Shareholders

 

The Energem Board has determined that each of the proposals outlined above is fair to and in the best interests of Energem and its shareholders and recommended that Energem Shareholders vote “FOR” the NTA Proposal, vote “FOR” the Business Combination Proposal, “FOR” the Energem M&A Proposals, “FOR” the Share Issuance Proposal, “FOR” the Equity Incentive Plan Proposal, “FOR” the Director Appointment Proposal, and “FOR” the Adjournment Proposal, if presented.

 

Implications of being an “Emerging Growth Company” and a “Smaller Reporting Company”

 

Following the Business Combination, the Combined Entity will be, 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”). As such, the Combined Entity will be eligible to 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 of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in their periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find the Combined Entity’s securities less attractive as a result, there may be a less active trading market for the Combined Entity’s securities and the prices of the Combined Entity’s securities may be more volatile.

 

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The Combined Entity will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year (a) following the fifth anniversary of the closing of the Energem IPO, (b) in which the Combined Entity has total annual gross revenue of at least $1.235 billion, or (c) in which the Combined Entity is deemed to be a large accelerated filer, which means the market value of the Combined Entity’s common equity that is held by non-affiliates exceeds $700 million as of the last business day of its most recently completed second fiscal quarter; and (ii) the date on which the Combined Entity has issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.

 

The Combined Entity will also be considered a smaller reporting company, and we will remain a smaller reporting company until the fiscal year following the determination that our voting and non-voting ordinary shares held by non-affiliates is more than $250 million measured on the last business day of our second fiscal quarter, or our annual revenues are more than $100 million during the most recently completed fiscal year and our voting and non-voting ordinary shares held by non-affiliates is more than $700 million measured on the last business day of our second fiscal quarter. Similar to emerging growth companies, smaller reporting companies are able to provide simplified executive compensation disclosure, are exempt from the auditor attestation requirements of Section 404, and have certain other reduced disclosure obligations, including, among other things, not being required to provide selected financial data, supplemental financial information or risk factors.

 

We may choose to take advantage of some, but not all, of the available exemptions for emerging growth companies and smaller reporting companies. We cannot predict whether investors will find our ordinary shares less attractive if we rely on these exemptions. If some investors find our ordinary shares less attractive as a result, there may be a less active trading market for our ordinary shares and our share price may be more volatile.

 

The Combined Entity may choose to take advantage of some but not all of these reduced burdens. Energem has taken advantage of reduced reporting requirements in this proxy statement/prospectus. Accordingly, the information contained in this prospectus may be different from the information you receive from Energem’s competitors that are public companies, or other public companies in which you have made an investment.

 

The Combined Entity will continue to file reports as a domestic issuer at least until the last business day of its second fiscal quarter, at which time it would be able to assess its status as a foreign private issuer pursuant to Rule 405 of the Securities Act. The Combined Entity’s first opportunity to make a determination whether it qualifies as a “foreign private issuer” is estimated to be June 30, 2024.

 

Regulatory Matters

 

The Business Combination is not subject to any foreign, federal or state regulatory requirement or approval.

 

Summary Risk Factors

 

You should consider all the information contained in this proxy statement/prospectus in deciding how to vote for the proposals presented in this proxy statement/prospectus. In particular, you should consider the risk factors described under “Risk Factors” in this proxy statement/prospectus. Such risks include, but are not limited to, the following:

 

Graphjet has a history of net losses, anticipates increasing expenses in the future, and may not be able to achieve or maintain profitability;
   
Graphjet’s relatively limited operating history makes it difficult to evaluate our current business and future prospects and increases the risk of your investment;
   
If Graphjet fails to effectively manage its growth, Graphjet may be unable to execute its business plan, adequately address competitive challenges or maintain its corporate culture, and Graphjet’s business, financial condition and results of operations would be harmed;
   
Graphjet’s business and growth strategy depend on Graphjet’s ability to maintain and expand a network of qualified providers. If Graphjet is unable to do so, Graphjet’s future growth would be limited and Graphjet’s business, financial condition and results of operations would be harmed;
   
Graphjet is dependent on its relationships with third-party manufacturers to assist in the production of its products. Graphjet does not own such manufacturing capabilities however, at closing, Graphjet expects to construct the first carbonization plant which is to open in the Kuantan district of Malaysia to produce 10,000 tons of graphite and 60 tons of graphene using its processing technology from 30,000 tons of dried palm kernel waste annually;
   
 

If Graphjet is unable to attract customers, Graphjet’s revenue projections would not materialize and Graphjet’s business would be materially adversely affected;

 

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  Graphjet may face intense competition, which could limit Graphjet’s ability to maintain or expand market share within Graphjet’s industry, and if Graphjet does not maintain or expand Graphjet’s market share, Graphjet’s business and operating results will be harmed;
     
  If Graphjet is not able to develop and release new products and meet demands for its products, Graphjet’s business could be adversely affected;
     
  There are significant risks associated with estimating the amount of revenue that Graphjet will recognize under Graphjet’s sale agreements, and if Graphjet’s estimates of revenue are materially inaccurate, it could impact the timing and the amount of Graphjet’s revenue recognition or have a material adverse effect on Graphjet’s business, financial condition, results of operations and cash flows;
     
  Security breaches, loss of data and other disruptions could compromise sensitive information related to Graphjet’s business or members, or prevent Graphjet from accessing critical information and expose Graphjet to liability, which could adversely affect Graphjet’s business and reputation;
     
  If Graphjet is unable to obtain, maintain and enforce intellectual property protection for Graphjet’s technology and methods, or if the scope of our intellectual property protection is not sufficiently broad, others may be able to develop and commercialize technology substantially similar to that of Graphjet, and Graphjet’s ability to successfully commercialize our technology may be adversely affected;
     
  Graphjet may in the future become subject to litigation or regulatory investigation, which could harm Graphjet’s business;
     
  Graphjet may acquire other businesses, form joint ventures or make other investments that could negatively affect its operating results, dilute shareholders’ ownership, increase its debt or cause it to incur significant expenses;
     
  Graphjet is vulnerable to severe weather conditions and natural disasters, including earthquakes, fires, floods, hurricanes, as well as power outages and other industrial incidents, which could severely disrupt the normal operation of its business and adversely affect its results of operations;
     
  Graphjet conducts business in a heavily regulated industry and if Graphjet fails to comply with these laws and government regulations, or if the rules and regulations change or the approach that regulators take in classifying Graphjet’s products and services under such regulations change, Graphjet could incur penalties or be required to make significant changes to Graphjet’s operations, products, or services or experience adverse publicity, which could have a material adverse effect on Graphjet’s business, financial condition, and results of operations;
     
  Graphjet faces uncertainty as to whether it will achieve its strategic initiatives including construction of its manufacturing plan and whether it will yield the expected benefits, and uncertainty as to the availability of financing or financing on favorable terms and will operate with a dependence on commodity prices, the impact of inflation on costs, the risks of obtaining the necessary permits, the operating performance of Graphjet’s assets and businesses, competitive factors in the graphite mining and production industry generally;
     
  Many countries have difficult and unpredictable legal systems and underdeveloped laws and regulations that are unclear and subject to corruption and inexperience, which may adversely impact our results of operations and financial condition;
     
  Many of the economies in Asia are experiencing substantial inflationary pressures which may prompt the governments to take action to control the growth of the economy and inflation that could lead to a significant decrease in Graphjet’s profitability;
     
  If any dividend is declared in the future and paid in a foreign currency, you may be taxed on a larger amount in U.S.;
     
  There is no guarantee that a Public Shareholder’s decision whether to redeem their shares for a pro rata portion of the Trust Account will put such shareholder in a better future economic position;
     
  Energem does not have a specified maximum redemption threshold, except that unless the NTA Proposal is approved, the Energem M&A limit Energem’s ability to redeem ordinary shares and consummate the Business Combination if Energem would have less than $5,000,001 in net tangible assets prior to or upon consummation of the Business Combination. As a result, the absence of such a redemption threshold may make it possible for Energem to consummate the Business Combination with which a substantial majority of Energem’s shareholders do not agree;
     
  Graphjet depends on its talent to grow and operate its business, and if Graphjet is unable to hire, integrate, develop, motivate and retain personnel, Graphjet may not be able to grow effectively; and
     
  The other matters described in the section titled “Risk Factors” in this proxy statement/prospectus.

 

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SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

Defined terms included below shall have the same meaning as terms defined and included elsewhere in this proxy statement/prospectus.

 

Introduction

 

Energem is providing the following unaudited pro forma condensed combined financial information to aid in the analysis of the financial aspects of the Business Combination.

 

The unaudited pro forma condensed combined statement of financial position as of September 30, 2023 combines the historical balance sheet of Energem with the historical consolidated statement of financial position of Graphjet on a pro forma basis as if the Business Combination, summarized below, had been consummated as of that date. The unaudited pro forma condensed combined statement of profit or loss for the twelve months ended September 30, 2023 combines the historical statement of operations of Energem with the historical consolidated statement of profit or loss and other comprehensive income of Graphjet for such period on a pro forma basis as if the Business Combination had occurred as of January 1, 2022. This information should be read together with the historical financial statements of Graphjet and related notes, Energem’s historical financial statements and related notes, “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Graphjet,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Energem” and other financial information included elsewhere in this proxy statement/prospectus.

 

Because Graphjet’s fiscal year end is September 30 and, Energem’s fiscal year end is December 31, in order for the comparative information as of and for the year ended September 30, 2023 to be comparable, Energem’s information was adjusted and determined based on information as of and for the year ended September 30, 2023.

 

Energem financial information for the year ended September 30, 2023 was determined by taking the three months ended December 31, 2022 and adding the nine months ended September 30, 2023.

 

The unaudited pro forma condensed combined financial information is prepared in accordance with Article 11 of Regulation S-X. The unaudited pro forma condensed combined financial information presents the pro forma effects of the Business Combination.

 

The unaudited pro forma condensed combined statement of profit or loss for the year ended September 30, 2023 has been prepared using the following:

 

  Graphjet’s historical consolidated statement of profit or loss and other comprehensive income for the year ended September 30, 2023, as included elsewhere in this proxy statement/prospectus.
     
  Energem’s statement of operations for the three months ended December 31, 2022 and adding nine months ended September 30, 2023, as included elsewhere in this proxy statement/prospectus.

 

(in thousands, except shares and per share amounts)  Proforma Combined 
Summary Unaudited Pro Forma Condensed Combined Statement of Operations Data For the year ended September 30, 2023 

Assuming No

Redemption

     Assuming 50% Redemption    

Assuming
Maximum

Redemption

 
Net Loss  $(3,897)  $ (3,897 )   $(3,897)
Net Loss per share-basic and diluted  $(0.03)  $ (0.03 )   $(0.03)
Weighted average shares outstanding of ordinary shares-basic and diluted   

145,380,007

    

144,771,541

     

144,163,075

 

 

(in thousands, except shares and per share amounts)                
Summary Unaudited Pro Forma Condensed Combined Balance Sheet Data as of September 30, 2023                
Total Assets   20,131      13,325     6,518 
Total Liabilities   11,009      11,009     11,009 
Total shareholders’ equity (Deficit)   9,122      2,316     (4,491)

 

Summary of the Business Combination

 

On August 1, 2022, Energem, Graphjet and the Parties entered into the Share Purchase Agreement, which contains customary representations and warranties, covenants, closing conditions, termination provisions and other terms relating to the acquisition of all of the issued and outstanding Graphjet Pre-Transaction Shares and the other Transactions contemplated thereby. The key steps, in sequential order, are (1) Energem will acquire all of the issued and outstanding Graphjet Pre-Transaction Shares owned by the Selling Shareholders pursuant to the Share Purchase Agreement; (2) the Selling Shareholders will receive the Consideration Shares in accordance with the formula set forth in the Share Purchase Agreement; (3) Graphjet will become a wholly-owned subsidiary of Energem Corp.; and (4) Energem will be renamed Graphjet Technology and trade on the Nasdaq Capital Market under the tickers “GTI” and “GTIW.” Upon consummation of the Business Combination, Energem Shareholders and Graphjet will become Graphjet Shareholders.

 

For more information about the Business Combination, please see the section entitled “The Share Purchase Agreement.

 

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Accounting for the Business Combination

 

Notwithstanding the legal form of the Business Combination pursuant to the Share Purchase Agreement, the Business Combination is expected to be accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, Energem Corp. will be treated as the acquired company and Graphjet will be treated as the survivor for financial statement reporting purposes. Graphjet has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

 

Graphjet existing securityholders will have the greatest voting interest in the Combined Entity under the no redemptions and maximum redemptions scenarios with more than 94.23% and 95.04% voting interest, respectively (excluding any outstanding Warrants) and assuming that (i) there are no redemptions of any shares by Energem Public Shareholders in connection with the Business Combination, and (ii) no awards are issued under the Equity Incentive Plan;

 

the largest individual minority stockholder of the Combined Entity is an existing stockholder of Graphjet;
   
Graphjet’s directors will represent five out of seven board seats for the Combined Entity’s board of directors;
   
Graphjet’s existing shareholders will have the ability to control decisions regarding election and removal of directors and officers of the Combined Entity’s executive board of directors;
   
Graphjet’s senior management will be the senior management of the Combined Entity; and
   
Graphjet operations will be the only continuing operations of the Combined Entity.

 

No Appraisal Rights

 

Holders of Energem Ordinary Shares will not be entitled to any dissenters’ rights or appraisal rights with respect to the Business Combination under Cayman Islands law.

 

Basis of Pro Forma Presentation

 

The historical financial statements of Graphjet have been prepared in accordance with U.S. GAAP in its presentation currency of United States Dollars. The historical financial statements of Energem have been prepared in accordance with U.S. GAAP in its presentation currency of United States Dollars.

 

The adjustments presented on the unaudited pro forma condensed combined financial statements have been identified and presented to provide an understanding of the Combined Entity upon consummation of the Business Combination for illustrative purposes.

 

The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” Release No. 33-10786 replaces the existing pro forma adjustment criteria with simplified requirements to depict the accounting for the transaction (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). No Management’s Adjustments have been identified and therefore only Transaction Accounting Adjustments are included in the following unaudited pro forma condensed combined financial information.

 

The unaudited pro forma condensed combined financial information is for illustrative purposes only. The financial results may have been different had the companies been combined for the referenced period. The unaudited pro forma condensed combined financial information should not be relied on as being indicative of the historical results that would have been achieved had the companies been combined for the referenced period or the future results that the Combined Entity will experience. Graphjet and Energem have not had any historical relationship prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

 

The pro forma condensed combined provision for income taxes of nil does not necessarily reflect the amounts that would have resulted had the Combined Entity filed consolidated income tax returns during the periods presented.

 

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The unaudited pro forma condensed combined financial information has been prepared assuming three alternative levels of redemption into cash of Energem Class A Ordinary Shares:

 

  Assuming No Redemptions: This presentation assumes that no Energem Shareholders exercise redemption rights with respect to their Energem Class A Ordinary Shares upon consummation of the Business Combination;
     
  Assuming 50% Redemption: This presentation assumes that Energem Shareholders exercise their rights with respect to 608,466 Energem Class A Ordinary Shares (approximately 50.0% of the issued and outstanding Energem Class A Ordinary Shares) and such shares are redeemed for their pro rara share of approximately $11.23 per share (RM52.25 per share) of the funds in the Trust Account for aggregate redemption proceeds of $6,833,954 (RM31,798,387.96) including a pro rata portion of interest accrued on the Trust Account, and
     
  Assuming Maximum Redemptions: This presentation assumes that Energem Shareholders exercise their redemption rights with respect to 1,216,932 Energem Class A Ordinary Shares (approximately 100.0% of the issued and outstanding Energem Class A Ordinary Shares) and such shares are redeemed for their pro rata share of approximately $11.23 per share (RM52.34 per share) of the funds in the Trust Account for aggregate redemption proceeds of the remaining cash in the Trust Account of $13,667,908 as of the date hereof (RM63,706,119.19), including a pro rata portion of interest accrued on the Trust Account.

 

The Assuming Maximum Redemptions and Assuming 50% Redemptions scenario include all adjustments contained in the Assuming No Redemptions scenario and presents additional adjustments to reflect the effect of the maximum and 50% redemptions. The maximum redemption amount reflects the maximum number of the Energem’s Public Shares that can be redeemed with the assumption that Energem’s M&A is amended such that Energem will not be required to maintain a minimum net tangible asset value of at least $5,000,001 prior to or upon consummation of the Business Combination after giving effect to the payments to redeeming shareholders. Should the NTA Proposal not be approved, Energem would not be permitted to proceed with the Business Combination in the event of a maximum redemption.

 

The following table summarizes the pro forma number of Energem Ordinary Shares outstanding, by source, under the three alternative scenarios presented above (in each case, giving effect to the Energem Warrants that will remain outstanding immediately following the Business Combination and may be exercised 30 days after completion of the Business Combination):

 

   Share Ownership in Graphjet Technology 
   Assuming No   Assuming 50%   Assuming Maximum 
   Redemption   Redemption(1)   Redemption(2) 
   Number of   Percentage of   Number of   Percentage of   Number of   Percentage of 
   Shares   Outstanding   Shares   Outstanding   Shares   Outstanding 
Graphjet Shareholders   137,750,000    79.27%   137,750,000    79.58%   137,750,000    79.90%
Energem Public Shareholders   1,216,932    0.70%   608,466    0.35%   -    -%
Public Warrants   11,500,000    6.62%   11,500,000    6.64%   11,500,000    6.67%
Initial Shareholders   3,403,075    1.96%   3,403,075    1.97%   3,403,075    1.97%
Placement Warrants(4)   528,075    0.30%   528,075    0.31%   528,075    0.31%
FA Shares(3)   2,760,000    1.59%   2,760,000    1.59%   2,760,000    1.60%
Equity incentive plan(5)   16,153,334    9.30%   16,085,727    9.29%   16,018,119    9.29%
Underwriter Shares(6)   202,500    0.12%   202,500    0.12%   202,500    0.12%
PIPE Investor Shares   250,000    0.14%   250,000    0.14%   250,000    0.15%
Total   173,763,916    100%   173,087,843    100%   172,411,769    100%
Total Pro Forma Book Value                              
Post-Redemptions ($’000)  $9,122        $2,316        $(4,491)     
Pro Forma Book Value Per Share**  $0.05        $0.01        $(0.03)     

 

 

(1) Assumes Illustrative 50% Redemptions of 608,466 Energem Class A Ordinary Shares in connection with the Business Combination. For a description of the Maximum Redemption Scenario, see “Unaudited Pro Forma Condensed Combined Financial Information.”
   
(2) Assumes Illustrative Maximum Redemptions of 1,216,932 Energem Class A Ordinary Shares in connection with the Business Combination. For a description of the Maximum Redemption Scenario, see “Unaudited Pro Forma Condensed Combined Financial Information.”
   
(3) Assumes transaction equity fees of approximately 2% paid in Energem Class A Ordinary Shares, which are referred to as the “FA Shares”.
   
(4) Does not reflect the potential cashless exercise of the Placement Warrants.
   
(5) Includes the maximum number of shares issuable upon exercise of options that may be granted under the equity incentive plan. As of the date of this proxy statement/prospectus, there have been no options granted.
   
(6) Represents the 202,500 Combined Entity Ordinary Shares issued to the underwriters to satisfy $2,025,000 of the deferred underwriting fee. This does not include potential additional Combined Entity Ordinary Shares to be issued to the underwriters if the aggregate VWAP value of the 202,500 Ordinary Shares, as of the effectiveness date of the registration statement required to be filed by the Combined Entity within 30 days of the Closing, as discussed elsewhere in this proxy statement/prospectus, is lower than $10.00 per share (the “Difference in Amount”). If so, then the Combined Entity shall at the election of the Company compensate the underwriters in cash or by issuing additional Ordinary Shares in an amount equal to the Difference in Amount on the effectiveness date of the registration statement. If the Combined Entity decides to compensate the underwriters for the Difference in Amount in issuing additional Ordinary Shares, then the new share price shall equal an amount that is the lowest of the VWAP for a period of five (5) trading days immediately prior to the effective date of the registration statement.

 

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RISK FACTORS

 

If the Business Combination is completed, the Combined Entity will operate in a market environment that is difficult to predict and that involves significant risks, many of which will be beyond its control. You should carefully consider the risks described below before voting your shares. Additional risks and uncertainties not presently known to Graphjet or Energem or that they do not currently believe are important to an investor, if they materialize, also may adversely affect the Business Combination. If any of the events, contingencies, circumstances or conditions described in the following risks actually occur, the Combined Entity’s business, financial condition or results of operations could be seriously harmed. If that happens, the trading price of the Combined Entity’s Ordinary Shares could decline, and you may lose part or all of the value of any Combined Entity Ordinary Shares or, if the Business Combination is not consummated, Energem Ordinary Shares that you hold.

 

In considering the Business Combination, you should carefully consider the following information about these risks, as well as the other information included in or incorporated by reference into this proxy statement/prospectus, including Graphjet’s consolidated financial statements and the related notes and “Graphjet’s Management’s Discussion and Analysis of Results of Operations and Financial Condition.” The risks and uncertainties described below are those significant risk factors, currently known and specific to us, that we believe are relevant when considering the Business Combination. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also harm us and adversely affect the Combined Entity’s post-Business Combination business and financial results in material respects. You should also consider the other information in this proxy statement/prospectus and the documents incorporated by reference into this proxy statement/prospectus, including the Share Purchase Agreement, which is attached at Annex A hereto and to the registration statement of which this proxy statement/prospectus is a part.

 

You are also encouraged to read and consider the risk factors specific to Energem’s businesses (that may also affect the Combined Entity) described in Energem’s annual report on Form 10-K for the year ended December 31, 2022 because, as a result of the Business Combination, they will become the Combined Entity’s risks. Please also see “Where You Can Find More Information,” for information on where you can find the periodic reports and other documents we and Energem have filed with or furnished to the SEC. In this section “we,” “us” and “our” refer to Graphjet prior to the Closing and the Combined Entity following the Closing.

 

Risks Related to the Business Combination

 

The completion of the Business Combination is subject to a number of important conditions, and the Share Purchase Agreement may be terminated before the completion of the Business Combination in accordance with its terms. As a result, there is no assurance that the Business Combination will be completed.

 

The completion of the Business Combination is subject to the satisfaction or waiver, as applicable, of a number of important conditions set forth in the Share Purchase Agreement, including the approval of the Business Combination by the Energem Shareholders, the approval of the listing of the Combined Entity Ordinary Shares on Nasdaq, and several other customary closing conditions. If these conditions are not satisfied or, if the Share Purchase Agreement is otherwise terminated by either party, you will not receive the Transaction Consideration. For more information, see “The Share Purchase Agreement.”

 

The unaudited pro forma financial information included in this proxy statement/prospectus may not be representative of Graphjet’s results after the Business Combination.

 

Energem and Graphjet currently operate as separate companies. Energem and Graphjet have had no prior history as a combined entity and their respective operations have not previously been managed on a combined basis. The unaudited pro forma financial information of Graphjet included elsewhere in this proxy statement/prospectus has been presented for informational purposes only and is not necessarily indicative of the financial position or results of operations that actually would have occurred had the transactions been consummated as of the dates indicated, nor is it indicative of the Combined Entity’s future operating results or financial position after the assumed consummation of the Transactions or other individually insignificant acquisitions. The unaudited pro forma financial information does not reflect future events that may occur after the Business Combination and does not consider potential impacts of current market conditions on revenues or expense. The unaudited prospective financial information of Graphjet is based in part on certain assumptions that we believe are reasonable under the circumstances. Our assumptions may not prove to be accurate over time. The pro forma financial information included in the section entitled “Unaudited Pro Forma Condensed Combined Financial Statements” has been derived from Energem’s and Graphjet’s historical financial statements and certain adjustments and assumptions including revenue projections have been made regarding the Combined Entity after giving effect to the Business Combination. Differences between preliminary estimates in the pro forma financial information and the final acquisition accounting will occur and could have an adverse effect on the pro forma financial information and the Combined Entity’s financial position and future results of operations.

 

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In addition, the assumptions used in preparing the pro forma financial information may not prove to be accurate and other factors may affect the Combined Entity’s financial condition or results of operations following the Closing. Any potential decline in the Combined Entity’s financial condition or results of operations may cause significant variations in the Combined Entity Ordinary Share price.

 

Graphjet’s revenue projections are subject to significant risks, assumptions, estimates and uncertainties. As a result, Graphjet’s projected revenue, gross profit, EBITDA and net profit may differ materially from expectations.

 

Graphjet’s operates in a competitive industry and its revenue projections will be subject to the risks and assumptions made by management, set forth in this proxy statement/prospectus, in the fairness opinion with respect to its industry and its ability to produce sufficient product to meet customer demands, if any, and other unforeseen risks. Operating results are difficult to forecast because they generally depend on a number of factors, including the competition the Combined Entity would face, and its ability to enter into contracts with existing potential customers and to attract and retain new customers while generating sustained revenues. This may result in less revenue than projected and the Combined Entity may be unable to adopt measures in a timely manner to compensate for any unexpected shortfall in income. This inability could cause the Combined Entity’s operating results in a given quarter to be higher or lower than expected. These factors make creating accurate forecasts and budgets challenging and, as a result, the Combined Entity may fall materially short of its forecasts and expectations, which could cause its share price to decline and investors to lose confidence in it.

 

The Business Combination may not result in increased share liquidity for Energem Shareholders following the Business Combination.

 

We are undertaking the Business Combination because we believe that the Transactions will provide Energem Shareholders with a number of advantages, including providing our shareholders with securities that we expect will enjoy greater market liquidity than the securities these shareholders currently hold. However, the Business Combination may not accomplish these objectives particularly given the number of shares to be held by Energem Shareholders coupled with your right to redeem your Energem Ordinary Shares in connection with the consummation of the Business Combination. Accordingly, we cannot predict whether a liquid market for the newly issued the Combined Entity Ordinary Shares will be maintained.

 

Your ownership percentage in the Combined Entity at Closing will be less than the ownership percentage you currently hold in Energem.

 

Your ownership percentage in the Combined Entity Ordinary Shares following the Business Combination will be less than your existing ownership percentage in Energem as a result of dilution attributable to the relative equity values of the companies involved in the Business Combination. Immediately after the Business Combination, assuming no redemptions by Energem Shareholders, and after taking into account the potential issuance of Combined Entity Ordinary Shares under the Public Warrants, the Equity Incentive Plan, and the Placement Warrants and the issuance of the FA Shares at Closing, it is anticipated that (i) the existing shareholders of Graphjet will hold as a group approximately 79.27% of the issued and outstanding Combined Entity Ordinary Shares, and (ii) the current Energem Shareholders including the Sponsor will hold as a group approximately 2.95% of the issued and outstanding Combined Entity Ordinary Shares, which includes the shares underlying Placement Units and Placement Warrants, but no exercise of the Public Warrants, or 9.57% inclusive of the exercise of 100% of the Public Warrants, all as shown in the following table (there is no anti-dilution adjustment).

 

Remaining Class A ordinary shares:  no redemption       33.3% redemption       50% redemption       66.7% redemption       maximum redemption     
Energem public stockholders   1,216,932    0.70%   811,288    0.47%   608,466    0.35%   405,644    0.23%   -    0.00%
Public Warrants   11,500,000    6.62%   11,500,000    6.64%   11,500,000    6.64%   11,500,000    6.65%   11,500,000    6.67%
Sponsor and related party   3,403,075    1.95%   3,403,075    1.96%   3,403,075    1.97%   3,403,075    1.97%   3,403,075    1.98%
Placement Warrants   528,075    0.30%   528,075    0.30%   528,075    0.31%   528,075    0.31%   528,075    0.31%
Graphjet stockholders   137,750,000    79.27%   137,750,000    79.48%   137,750,000    79.58%   137,750,000    79.69%   137,750,000    79.90%
FA Shares(1)   2,760,000    1.59%   2,760,000    1.59%   2,760,000    1.59%   2,760,000    1.60%   2,760,000    1.60%
Underwriters Shares   202,500    0.12%   202,500    0.12%   202,500    0.12%   202,500    0.12%   202,500    0.12%
PIPE Investor Shares   250,000    0.14%   250,000    0.14%   250,000    0.14%   250,000    0.14%   250,000    0.15%
Equity incentive plan   16,153,334    9.30%   16,108,263    9.29%   16,085,727    9.29%   16,063,919    9.29%   16,018,119    9.29%
Total   173,763,916    100%   173,313,201    100%   173,087,843    100%   173,862,485    100%   172,4111,769     100%

 

 (1)

FA Shares represent compensation to Energem’s financial advisor, Arc Group Limited.

 (2)Represents the 202,500 Combined Entity Ordinary Shares issued to the underwriters to satisfy $2,025,000 of the deferred underwriting fee. This does not include potential additional Combined Entity Ordinary Shares to be issued to the underwriters if the aggregate VWAP value of the 202,500 Ordinary Shares, as of the effectiveness date of the registration statement required to be filed by the Combined Entity within 30 days of the Closing, as discussed elsewhere in this proxy statement prospectus, is lower than $10.00 per share (the “Difference in Amount”). If so, then the Combined Entity shall at the election of the Company compensate the underwriters in cash or by issuing additional Ordinary Shares in an amount equal to the Difference in Amount on the effectiveness date of the registration statement. If the Combined Entity decides to compensate the underwriters for the Difference in Amount in issuing additional Ordinary Shares, then the new share price shall equal an amount that is the lowest of the VWAP for a period of five (5) trading days immediately prior to the effectiveness date of the registration statement.

 

As a result, Energem Shareholders will have less influence over matters submitted to a vote of the Combined Entity shareholders than they currently hold in Energem. Nevertheless, the Sponsor, directors and officers of Energem Corp will benefit from the completion of the Business Combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to public stockholders rather than liquidate.

 

Directors of Energem have potential conflicts of interest in recommending that shareholders vote in favor of approval of the Business Combination and approval of the other proposals described in this proxy statement/prospectus.

 

When considering the Energem Board’s recommendation that Energem Shareholders vote in favor of the approval of the Business Combination, Energem Shareholders should be aware that Energem’s directors and executive officers, advisors and entities affiliated with them, have interests in the Business Combination that may be different from, or in addition to, the interests of Energem Shareholders. These interests include:

 

  If the Business Combination with Graphjet or another business combination is not consummated by August 18, 2023 (or pursuant to up to six (6) one-month extensions to February 18, 2024 by depositing additional funds into the Company’s Trust Account, as described in more detail in this proxy statement/prospectus), Energem will cease all operations except for the purpose of winding up, redeeming 100% of the issued and outstanding Energem public shares for cash and, subject to the approval of its remaining shareholders and its board of directors, dissolving and liquidating. In such event, the Founder Shares held by the Sponsor and Energem’s directors and officers, which were acquired for an aggregate purchase price of $25,000 prior to the Energem IPO, would be worthless because the holders are not entitled to participate in any redemption or distribution with respect to such shares. Such shares had an aggregate market value of $[32,918,750] based upon the closing price of $[11.45] per share on Nasdaq on the record date. On the other hand, if the Business Combination is consummated, each outstanding Energem Ordinary Share will remain a Combined Entity Ordinary Share pursuant to the Share Purchase Agreement.

 

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The Sponsor purchased 528,075 placement units from Energem for $10.00 per unit raising $5,280,750. Each placement unit consists of one Class A Ordinary Share and one warrant. Each Energem Warrant is exercisable to purchase one Class A Ordinary Share at $11.50 per share. This purchase took place on a private placement basis simultaneously with the consummation of the Energem IPO. All of the proceeds Energem received from the Energem IPO and substantially all of the proceeds from the sale of the placement units were placed in the Trust Account. The private placement units and the Energem Class A Ordinary Shares underlying the private placement units and warrants will become worthless if Energem does not consummate a business combination by August 18, 2023 (or pursuant to up to six (6) one-month extensions to February 18, 2024 by depositing additional funds into the Company’s Trust Account, as described in more detail in this proxy statement/prospectus). On the other hand, if the Business Combination is consummated, each outstanding Energem Warrant will become a Combined Entity warrant exercisable to purchase one Combined Entity Ordinary Share following consummation of the Business Combination and each outstanding Energem Ordinary Shares will become a Combined Entity Ordinary Shares pursuant to the Share Purchase Agreement.

   
If Energem is unable to complete a business combination within the required time period, the Sponsor will be personally liable under certain circumstances described herein to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Energem for services rendered or contracted for or products sold to Energem. If Energem consummates a business combination, on the other hand, Energem will be liable for all such Claims.
   
The Sponsor and Energem’s officers and directors and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on Energem’s behalf, such as identifying and investigating possible business targets and business combinations. However, if Energem fails to consummate a business combination within the required period, they will not have any claim against the Trust Account for reimbursement. Accordingly, Energem may not be able to reimburse these expenses if the Business Combination or another business combination is not completed by August 18, 2023 (or pursuant to up to six (6) one-month extensions to February 18, 2024 by depositing additional funds into the Company’s Trust Account, as described in more detail in this proxy statement/prospectus). As of the record date, the Sponsor and Energem’s officers and directors and their affiliates had incurred approximately $950,000 of unpaid reimbursable expenses.
   
The Share Purchase Agreement provides for the continued indemnification of Energem’s current directors and officers and the continuation of directors and officers liability insurance covering Energem’s current directors and officers.
   
Energem’s officers and directors (or their affiliates) may make loans from time to time to Energem to fund certain capital requirements. As of the date of this proxy statement/prospectus, no such loans have been made, but loans may be made after the date of this proxy statement/prospectus. However, under the promissory note entered into between Energem and the Sponsor before the Energem IPO, $88,542 is due to the Sponsor and payable at Closing of the Business Combination and $209,682 is due under the working capital loans for a total of $298,224 due as of December 15, 2023. If the Business Combination is not consummated, the loans will not be repaid and will be forgiven except to the extent there are funds available to Energem outside of the Trust Account.
   
 Pursuant to the Administrative Support Agreement entered into between Energem and the Sponsor contemporaneous to the Energem IPO, Energem agreed to reimburse the Sponsor $10,000 per month commencing after the IPO through the Business Combination. These amounts are accruing and remain unpaid and payable at the time of the Closing of the Business Combination. Presently, approximately $120,000 is due under the Administrative Support Agreement. If the Business Combination is not consummated, these outstanding payments owed and loans will not be repaid and will be forgiven except to the extent there are funds available to Energem outside of the Trust Account.

 

These financial interests of the officers and directors, and entities affiliated with them, may have influenced their decision to approve the Business Combination and may incentivize these individuals and entities, including our Sponsor, to complete an acquisition of a less favorable target company or on terms less favorable to shareholders in order to avoid liquidation. You should consider these interests when evaluating the Business Combination and the recommendation to vote in favor of the Business Combination Proposal and other proposals to be presented to Energem Shareholders.

 

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Following the completion of the Business Combination, the Sponsor will have the ability to influence the Combined Entity’s business and management.

 

It is anticipated that, upon completion of the Business Combination, assuming no redemptions by Energem Shareholders, and after taking into account the potential issuance of Combined Entity Ordinary Shares under the Public Warrants, the Equity Incentive Plan, and the Placement Warrants and the issuance of the FA Shares at Closing, it is anticipated that (i) the existing shareholders of Graphjet will hold as a group approximately 79.27% of the issued and outstanding Combined Entity Ordinary Shares, and (ii) the current Energem Shareholders including the Sponsor will hold as a group approximately 2.95% of the issued and outstanding Combined Entity Ordinary Shares, which includes the shares underlying Placement Units and Placement Warrants but no exercise of the Public Warrants, or 9.57% inclusive of the exercise of 100% of the Public Warrants. As a result, Energem Shareholders will have less influence over matters submitted to a vote of the Combined Entity shareholders than they currently hold in Energem. Accordingly, the Sponsor will be able to influence the approval of actions requiring approval of the board of directors of the Combined Entity through their voting power and will retain influence with respect to the Combined Entity’s management, business plans and policies, including the appointment and removal of its officers. In addition, the Sponsor, directors and officers of Energem Corp will benefit from the completion of the Business Combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to public stockholders rather than liquidate.

 

Subsequent to the consummation of the Business Combination, the Combined Entity may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition, results of operations and share price, which could cause you to lose some or all of your investment.

 

Although Energem has conducted due diligence on Graphjet, Energem cannot assure you that this diligence revealed all material issues that may be present in its businesses, that it would be possible to uncover all material issues through a customary amount of due diligence or that factors outside of Energem’s or Graphjet’s control will not later arise. Graphjet is aware that Energem must complete an initial business combination by August 18, 2023 (or pursuant to up to six (6) one-month extensions to February 18, 2024 by depositing additional funds into the Company’s Trust Account, as described in more detail in this proxy statement/prospectus). Consequently, Graphjet may have obtained leverage over Energem in negotiating the Share Purchase Agreement, knowing that if Energem does not complete the Business Combination, Energem may be unlikely to be able to complete an initial business combination with any other target business prior to such deadline. In addition, Energem has had limited time to conduct due diligence. Graphjet is a privately held company and Energem therefore has made its decision to pursue a business combination with Graphjet on the basis of limited information, which may result in a business combination that is not as profitable as expected, if at all.

 

As a result of these factors, the Combined Entity may be forced to later write-down or write-off assets, restructure operations, or incur impairment or other charges that could result in reporting losses. Even if Energem’s due diligence successfully identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with Energem’s preliminary risk analysis. Even though these charges may be non-cash items and would not have an immediate impact on the Combined Entity’s liquidity, the fact that the Combined Entity is required to report charges of this nature could contribute to negative market perceptions about the Combined Entity or the Combined Entity Ordinary Shares. Accordingly, any Energem Shareholders who choose to remain shareholders of the Combined Entity following the Business Combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by Energem’s officers or directors of a duty of care or other fiduciary duty owed by them to Energem, or if they are able to successfully bring a private claim under securities laws that the proxy statement/prospectus relating to the Business Combination contained an actionable material misstatement or material omission.

 

Energem cannot assure you that the due diligence Energem has conducted on Graphjet will reveal all material issues that may be present with regard to Graphjet, or that it would be possible to uncover all material issues through a customary amount of due diligence or that risks outside of Energem’s control will not later arise.

 

Evaluation of the Graphjet Transactions and alternative business opportunities may not have revealed the best target for a business combination or all material risks that may be present with regard to the Business Combination.

 

The Energem Board, consisting of four independent directors and two interested directors, evaluated the Graphjet Transactions and considered alternative business opportunities. Over the course of its evaluation, the Energem Board offered letters of intent to two other distinct Potential Targets in order to maximize Energem Shareholder value, which it did not pursue. As part of the Energem Board’s independent evaluation, which was conducted over a five-month period, and retained independent financial and legal advisors. The Energem Board also undertook its own analysis of key aspects of the financial model underlying Graphjet’s financial projections.

 

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In analyzing the Business Combination, the Energem Board conducted due diligence on Graphjet and engaged in comprehensive discussions regarding the terms of the transaction, including the relative ownership of Graphjet following the Business Combination. Following the entering of an LOI with Graphjet, the Energem Board commenced a comprehensive evaluation of, and due diligence effort and undertook extensive negotiations with, Graphjet. The Energem Board hired and convened with financial advisors and legal team, relied on their own financial and capital markets background, as well as obtained a fairness opinion from Baker Tilly (Malaysia), its independent financial advisor, to opine on the fairness of the proposed acquisition of 100% of the equity interests in Graphjet for the Transaction Consideration of US$1.38 billion. The fairness opinion ascertained that the Transaction Consideration is fair based on Baker Tilly’s application of the Relative Valuation Approach method, even after applying a fifty percent (50%) Start-Up Discount to Graphjet’s valuation.

 

A relative valuation model is a business valuation method that compares a company’s value to that of its competitors or industry peers to assess the company’s financial worth. In the present case, once that worth was determined using the Relative Valuation Approach, Baker Tilly applied the Start-Up Discount of 50% to the fair market value it determined for Graphjet, to account for uncertainties related to Graphjet’s pre-revenue start-up status. Baker Tilly concluded that the fair market value of the entire equity interest in Graphjet ranges from USD $2.20 billion to $2.65 billion while the Transaction Consideration falls below Graphjet’s fair market value. Due to the fair market value in excess of the Transaction Consideration of $1.38 billion, Baker Tilley deemed the transaction “fair” to Energem shareholders.

 

The Energem Board determined that this proposed Business Combination, which would be a negotiated exchange of Graphjet Pre-Transaction Shares in exchange for the Energem Ordinary Shares represents a significant and immediate 37.2% premium on the purchase price, assuming a USD $2.20 billion fair market value of Graphjet or an immediate 48.0% premium on the purchase price, assuming a USD $2.65 billion fair market value of Graphjet from Baker Tilley’s fairness opinion – was in the best interests of the Energem Shareholders and recommended that Energem Shareholders approve the Business Combination and adopt the Share Purchase Agreement and related Transactions and proposals. The Energem Board unanimously recommend that all Energem Shareholders entitled to vote thereon vote in favor of the adoption of the Share Purchase Agreement pursuant to which the Graphjet transaction will be effected.

 

Despite the foregoing, there is no assurance that Energem’s and its advisors’ due diligence and analysis revealed all material risks that may be present with regard to Graphjet, which has a short operating history. Moreover, Baker Tilly’s valuation in itself is highly dependent on, amongst others, the risk factors set forth in this proxy statement/prospectus and set forth in Section 7 of the fairness opinion, as well as the achievability of the projected revenue and financials, the materialization of the assumptions used by Baker Tilly among other factors. Accordingly, the Combined Entity’s performance and profitability may be materially adversely affected should its actual results differ in substantial part from revenue projections relied upon in the Energem Board’s due diligence as well as upon which the fairness opinion’s valuation was based in part.

 

Subsequent to the consummation of the Business Combination, Energem will become a holding company of Graphjet and will be dependent on distributions from Graphjet to fund operating costs.

 

Upon consummation of the Business Combination, the only principal asset of the Combined Entity following the Business Combination will be its interest in Graphjet, and accordingly, the Combined Entity will be a holding company and it will depend on distributions from Graphjet to pay taxes and operating expenses, as well as to pay dividends in the future, which will be dependent upon the financial results and cash flows of Graphjet. There can be no assurance that Graphjet will generate sufficient cash flow to distribute funds to the Combined Entity, or that applicable law and contractual restrictions, including negative covenants under any debt instruments, if applicable, will permit such distributions. If Graphjet does not distribute sufficient funds to the Combined Entity to pay its taxes or other liabilities, the Combined Entity may default on contractual obligations or have to borrow additional funds. In the event that the Combined Entity is required to borrow additional funds, it could adversely affect the Combined Entity’s liquidity and subject it to additional restrictions imposed by lenders.

 

The Sponsor and certain insiders of Energem has agreed to vote in favor of the Business Combination, regardless of how Energem Shareholders vote.

 

The Sponsor and certain insiders of Energem have agreed to vote their shares in favor of the Business Combination. The Sponsor and Energem officers and directors beneficially own approximately 73.7% of Energem Ordinary Shares prior to the Business Combination. Accordingly, it is more likely that the necessary shareholder approval for the Business Combination will be received than would be the case if the Sponsor and certain insiders of Energem agreed to vote their shares in accordance with the majority of the votes cast by Energem Shareholders.

 

Even if Energem consummates the Business Combination, there can be no assurance that the Energem Warrants will be in the money at the time they become exercisable, and they may expire worthless.

 

The exercise price for the Energem Warrants is $11.50 per Energem Class A Ordinary Share. Even if Energem consummates the Business Combination, there can be no assurance that the Energem Warrants will be in the money following the time they become exercisable and prior to their expiration, and as such, the Energem Warrants may expire worthless.

 

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If Energem is unable to complete the Business Combination with Graphjet or another business combination by August 18, 2023 (or pursuant to up to six (6) one-month extensions to February 18, 2024 by depositing additional funds into the Company’s Trust Account, as described in more detail in this proxy statement/prospectus), Energem will cease all operations except for the purpose of winding up, dissolving and liquidating. In such event, third-parties may bring claims against Energem and, as a result, the IPO proceeds in the Trust Account could be reduced and the per share liquidation price received by Energem Shareholders could be less than $10.15 per share.

 

Under the terms of the Energem M&A, Energem must complete the Business Combination or another business combination by August 18, 2023 (or pursuant to up to six (6) one-month extensions to February 18, 2024 by depositing additional funds into the Company’s Trust Account, as described in more detail in this proxy statement/prospectus), or Energem must: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem 100% of the issued and outstanding public shares, at a share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the Trust Account deposits (which interest will be net of taxes payable and less up to $100,000 to pay dissolution expenses), divided by the number of then-outstanding public shares, which redemption will completely extinguish its Public Shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of its remaining shareholders and the Energem Board of directors, dissolve and liquidate, subject, in the case of clauses (i) and (ii), to its obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. In connection with Energem’s Extraordinary General Meeting of Shareholders held on August 10, 2023, the Preliminary Proxy on Schedule 14A and the Definitive Proxy on Schedule 14A filed with the SEC, each wrote that Energem sought approval to allow Energem to extend the period to complete the business combination by up to six (6) one-month extensions of time. Due to a typographical error not addressed prior to filing, the date referenced in connection with up to six (6) one-month extensions of time wrote November 18, 2023 instead of February 18, 2024. This error was caught before the mailing to the Shareholders of Energem and in the mailing and the proxy card to Shareholders and was corrected to write February 18, 2024. Because of the typographical error, there is uncertainty with respect to whether the requirements of Exchange Act Rule 14a-6(b) and Rule 14a-9 were satisfied. Energem faces potential liabilities resulting from the use of November 18, 2023 instead of February 18, 2024 because it could be deemed misleading and thus it acted in contravention of such requirements contained in Exchange Act Rule 14a-6(b) and Rule 14a-9.

 

Energem Warrants

 

Only after the expiration of this full time period will public security holders, including holders of the Energem Warrants, be entitled to distributions from the Trust Account if Energem Corp. is unable to complete a business combination. Accordingly, investors’ funds may be unavailable to them until after such date and to liquidate their investment, public security holders may be forced to sell their public units or Public Warrants, potentially at a loss. In addition, if Energem fails to complete an initial business combination by the prescribed time frame, there will be no redemption rights or liquidating distributions with respect to the Public Warrants, which will expire worthless.

 

The exercise price of the Energem Warrants is $11.50 per share, which is above the recent trading price for the underlying Energem Class A Ordinary Shares and may reduce their near-term value. To the extent such warrants are exercised, additional Energem Class A Ordinary Shares will be issued, which will result in dilution to the then existing holders of Energem Class A Ordinary Shares and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of Energem Class A Ordinary Shares.