| Restatement of Previously Issued Financial Statements |
Note 21 – Restatement of Previously Issued Financial Statements
The Company identified material misstatements
in its previously issued unaudited condensed financial statements as of June 30, 2024 and for the three and nine months ended June 30,
2024 as below, and as a result the Company has restated the previously issued unaudited condensed consolidated financial statements as
of June 30, 2024 and for the three and nine months ended June 30, 2024 in accordance with ASC 250 Accounting Changes and Error Corrections,
to reflect the effects of the restatement adjustments and to make certain corresponding disclosures. The categories of adjustments and their impacts
on previously issued financial statements are described below and identified in the Restatement Reconciliation Tables in the column entitled
“Reference”:
| a. | The Company failed to record the correct cost of the intellectual
property purchased from a related party, incorrectly recorded the amortization expense,
and incorrectly recorded the liability without considering imputed interest related to the intellectual property purchased. Such failure
has resulted in the misstatements of “Intangible assets, net”, “Accumulated deficit” and “Accumulated other
comprehensive (loss) profit” as of June 30, 2024, and misstatements of “General and administrative expenses” and “Net
loss” for the three and nine months ended June 30, 2024. |
| b. | The Company incorrectly recorded the merger transaction costs
as general and administrative expenses. Such failure has resulted in the misstatements of “Deferred merger costs”, “Additional
paid-in capital”, “Accumulated deficit” and “Accumulated other comprehensive (loss) profit” as of June
30, 2024, and misstatements of “General and administrative expenses” and “Net loss” for the nine months ended
June 30, 2024. |
| c. | The Company incorrectly classified other expenses as general
and administrative expenses, and under accrued the bonus of the senior management team of Graphjet for the successful business combination
and corporate listing, and classified changes in payable to director as operating activities. Such failure has resulted in the misstatements
of “Provision for bonus”, “Accumulated deficit” and “Accumulated other comprehensive (loss) profit”
as of June 30, 2024, and misstatements of “General and administrative expenses”, “Other expenses, net” and “Net
loss” for the three and nine months ended June 30, 2024, and misstatements of “Statements of cash flows” for the nine
months ended June 30, 2024. |
| d. | The Company incorrectly recorded the accounts related to
reverse recapitalization. Such failure has resulted in the misstatements of “Balance sheet” as of June 30, 2024, misstatements
of “Weighted average number of ordinary shares outstanding - basic and diluted” for the three and nine months ended June
30, 2024, and misstatements of “Statements of cash flows” for the nine months ended June 30, 2024. |
| e. | The Company incorrectly used historical exchange rate to
translated certain accounts from Malaysian Ringgit (“RM”) into US$. Such failure has resulted in the misstatements of “Balance
sheet” as of June 30, 2024, and misstatements of “Statements of operations and comprehensive loss” for the three and
nine months ended June 30, 2024, and misstatements of “Statements of cash flows” for the nine months ended June 30, 2024. |
In the following tables, the Company presented
a reconciliation of consolidated balance sheets, statements of operations and comprehensive loss, and cash flows as previously issued
for these prior periods to the restated and revised amounts. Summary of Restatements – Unaudited Condensed Consolidated
Statements of Operations and Comprehensive loss:
| | |
For the Three Months Ended June 30, 2024 | |
| | |
As
previously
reported | | |
Adjustments | | |
Reference | |
As restated | |
| | |
| | |
| | |
| |
| |
| Operating expenses: | |
| | |
| | |
| |
| |
| General and administrative expenses | |
$ | 2,132,149 | | |
$ | (119,211 | ) | |
a, c, e | |
$ | 2,012,938 | |
| Total operating expenses | |
| 2,132,149 | | |
| (119,211 | ) | |
a, c, e | |
| 2,012,938 | |
| | |
| | | |
| | | |
| |
| | |
| Loss from operations | |
| (2,132,149 | ) | |
| 119,211 | | |
a, c, e | |
| (2,012,938 | ) |
| | |
| | | |
| | | |
| |
| | |
| Other income (expenses) | |
| | | |
| | | |
| |
| | |
| Interest expense, net | |
| (5,796 | ) | |
| 514 | | |
e | |
| (5,282 | ) |
| Other expenses, net | |
| — | | |
| (311 | ) | |
c | |
| (311 | ) |
| Total other expense, net | |
| (5,796 | ) | |
| 203 | | |
c, e | |
| (5,593 | ) |
| | |
| | | |
| | | |
| |
| | |
| Loss before income taxes | |
| (2,137,945 | ) | |
| 119,414 | | |
a, c, e | |
| (2,018,531 | ) |
| | |
| | | |
| | | |
| |
| | |
| Income tax expense | |
| — | | |
| — | | |
| |
| — | |
| | |
| | | |
| | | |
| |
| | |
| Net loss | |
$ | (2,137,945 | ) | |
$ | 119,414 | | |
a, c, e | |
$ | (2,018,531 | ) |
| | |
| | | |
| | | |
| |
| | |
| Foreign currency translation adjustment | |
| (18,415 | ) | |
| (1,937 | ) | |
a, c, e | |
| (20,352 | ) |
| | |
| | | |
| | | |
| |
| | |
| Total comprehensive loss attributable to ordinary shareholders | |
$ | (2,156,360 | ) | |
$ | 117,477 | | |
a, c, e | |
$ | (2,038,883 | ) |
| | |
| | | |
| | | |
| |
| | |
| Weighted average number of ordinary shares outstanding - basic and diluted* | |
| 2,445,688 | | |
| (41 | ) | |
d | |
| 2,445,647 | |
| | |
| | | |
| | | |
| |
| | |
| Loss per ordinary share - basic and diluted* | |
$ | (0.87 | ) | |
$ | 0.04 | | |
a, b, c, d e | |
$ | (0.83 | ) |
| * | Giving retroactive effect to reverse recapitalization effected on March 14, 2024 to reflect exchange ratio of approximately 55.1 as described in Note 4 and share combination at a ratio of one-for-sixty effected on August 25, 2025 as described in Note 1. | Summary of Restatements - Unaudited Condensed Consolidated Statements
of Operations and Comprehensive loss:
| | |
For the Nine Months Ended June 30, 2024 | |
| | |
As
previously
reported | | |
Adjustments | | |
Reference | |
As restated | |
| | |
| | |
| | |
| |
| |
| Operating expenses: | |
| | | |
| | | |
| |
| | |
| General and administrative expenses | |
$ | 14,139,078 | | |
$ | 2,189,882 | | |
a, b, c, e | |
$ | 16,328,960 | |
| Total operating expenses | |
| 14,139,078 | | |
| 2,189,882 | | |
a, b, c, e | |
| 16,328,960 | |
| | |
| | | |
| | | |
| |
| | |
| Loss from operations | |
| (14,139,078 | ) | |
| (2,189,882 | ) | |
a, b, c, e | |
| (16,328,960 | ) |
| | |
| | | |
| | | |
| |
| | |
| Other income (expenses) | |
| | | |
| | | |
| |
| | |
| Interest expense, net | |
| (17,440 | ) | |
| (345,044 | ) | |
a, c | |
| (362,484 | ) |
| Other expenses, net | |
| — | | |
| (1,363 | ) | |
c | |
| (1,363 | ) |
| Total other expense, net | |
| (17,440 | ) | |
| (346,407 | ) | |
a, c | |
| (363,847 | ) |
| | |
| | | |
| | | |
| |
| | |
| Loss before income taxes | |
| (14,156,518 | ) | |
| (2,536,289 | ) | |
a, b, c, e | |
| (16,692,807 | ) |
| | |
| | | |
| | | |
| |
| | |
| Income tax expense | |
| — | | |
| — | | |
| |
| — | |
| | |
| | | |
| | | |
| |
| | |
| Net loss | |
$ | (14,156,518 | ) | |
$ | (2,536,289 | ) | |
a, b, c, e | |
$ | (16,692,807 | ) |
| | |
| | | |
| | | |
| |
| | |
| Foreign currency translation adjustment | |
| (29,994 | ) | |
| (164,327 | ) | |
a, b, c, e | |
| (194,321 | ) |
| | |
| | | |
| | | |
| |
| | |
| Total comprehensive loss attributable to ordinary shareholders | |
$ | (14,186,512 | ) | |
$ | (2,700,616 | ) | |
a, b, c, e | |
$ | (16,887,128 | ) |
| | |
| | | |
| | | |
| |
| | |
| Weighted average number of ordinary shares outstanding - basic and diluted* | |
| 972,814 | | |
| 1,382,286 | | |
d | |
| 2,355,100 | |
| | |
| | | |
| | | |
| |
| | |
| Loss per ordinary share - basic and diluted* | |
$ | (14.55 | ) | |
$ | 7.46 | | |
a, b, c, d, e | |
$ | (7.09 | ) |
| * | Giving retroactive effect to reverse recapitalization effected on March 14, 2024 to reflect exchange ratio of approximately 55.1 as described in Note 4 and share combination at a ratio of one-for-sixty effected on August 25, 2025 as described in Note 1. | Summary of Restatements - Unaudited Condensed Consolidated Statements
of Cash Flows:
| | |
For the Nine Months Ended June 30, 2024 | |
| | |
As
previously
reported | | |
Adjustments | | |
Reference | |
As restated | |
| | |
| | |
| | |
| |
| |
| Cash flows from operating activities: | |
| | |
| | |
| |
| |
| Net loss | |
$ | (14,156,518 | ) | |
$ | (2,536,289 | ) | |
a, b, e | |
$ | (16,692,807 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities. | |
| | | |
| | | |
| |
| | |
| Amortization expense | |
| 323,772 | | |
| (323,696 | ) | |
a, e | |
| 76 | |
| Depreciation expense | |
| 3,870 | | |
| (12 | ) | |
e | |
| 3,858 | |
| Foreign currency translation | |
| (29,994 | ) | |
| 29,994 | | |
e | |
| — | |
| Changes in operating assets and liabilities | |
| | | |
| | | |
| |
| | |
| Prepaid expenses | |
| 125,596 | | |
| (32,110 | ) | |
d, e | |
| 93,486 | |
| Advance to a related company | |
| 97,882 | | |
| (529 | ) | |
e | |
| 97,353 | |
| Deposits | |
| (43,114 | ) | |
| (763 | ) | |
e | |
| (43,877 | ) |
| Other receivables | |
| (47,018 | ) | |
| (337 | ) | |
e | |
| (47,355 | ) |
| Interests payable | |
| 17,433 | | |
| (9 | ) | |
e | |
| 17,424 | |
| Other payables | |
| (289,900 | ) | |
| 290,000 | | |
d | |
| 100 | |
| Accrued expenses | |
| (878,520 | ) | |
| 1,071,791 | | |
d, e | |
| 193,271 | |
| Related party payable | |
| (88,542 | ) | |
| 88,542 | | |
d | |
| — | |
| Deferred underwriting fee | |
| (2,000,000 | ) | |
| 2,000,000 | | |
d | |
| — | |
| Payable to directors | |
| 2,463,297 | | |
| (2,463,297 | ) | |
a, c, d, e | |
| — | |
| Provision for bonus | |
| 10,154,677 | | |
| 3,645,323 | | |
c | |
| 13,800,000 | |
| Net cash used in operating activities | |
| (4,347,079 | ) | |
| 1,768,608 | | |
a, b, c, d, e | |
| (2,578,471 | ) |
| | |
| | | |
| | | |
| |
| | |
| Cash flows from investing activities: | |
| | | |
| | | |
| |
| | |
| Purchases of property and equipment | |
| (1,271,043 | ) | |
| (691 | ) | |
e | |
| (1,271,734 | ) |
| Net cash used in investing activities | |
| (1,271,043 | ) | |
| (691 | ) | |
e | |
| (1,271,734 | ) |
| | |
| | | |
| | | |
| |
| | |
| Cash flows from financing activities: | |
| | | |
| | | |
| |
| | |
| Proceeds from issuance of shares | |
| 6,260,259 | | |
| (6,260,259 | ) | |
d | |
| — | |
| Repayment of working capital loan | |
| (555,358 | ) | |
| 555,358 | | |
d | |
| — | |
| Proceeds from long-term debt - related party | |
| — | | |
| 2,583,996 | | |
c | |
| 2,583,996 | |
| Repayments to long-term debt - related party | |
| — | | |
| (105,988 | ) | |
c | |
| (105,988 | ) |
| Payments of deferred merger costs | |
| — | | |
| (919,446 | ) | |
b, e | |
| (919,446 | ) |
| Proceeds from the completion of reverse recapitalization | |
| — | | |
| 1,231 | | |
d | |
| 1,231 | |
| Proceeds from PIPE investment | |
| — | | |
| 2,500,000 | | |
b, c, d, e | |
| 2,500,000 | |
| Net cash provided by financing activities | |
| 5,704,901 | | |
| (1,645,108 | ) | |
b, c, d, e | |
| 4,059,793 | |
| | |
| | | |
| | | |
| |
| | |
| Effect of exchange rate changes | |
| — | | |
| (122,809 | ) | |
e | |
| (122,809 | ) |
| | |
| | | |
| | | |
| |
| | |
| Net change in cash | |
| 86,779 | | |
| — | | |
| |
| 86,779 | |
| | |
| | | |
| | | |
| |
| | |
| Cash - beginning of the period | |
| 1,430 | | |
| — | | |
| |
| 1,430 | |
| | |
| | | |
| | | |
| |
| | |
| Cash - end of the period | |
$ | 88,209 | | |
$ | — | | |
| |
$ | 88,209 | |
|