Graphex Group Limited (NYSE American: GRFX | HKSE: 6128) and its
wholly owned U.S. subsidiary, Graphex Technologies LLC
(collectively “Graphex” or “Company”), a global leader in
mid-stream processing of specialized natural graphite used for
electric vehicle (EV) lithium-ion (Li-ion) batteries, today
provided its announcement of the preliminary interim financial
results for the six month period ending June 30,2022, as well as an
update that reflects on milestones achieved in 2022 and its
objectives for the remainder of the year. The announcement was
made in Hong Kong in accordance with the applicable rules of The
Stock Exchange of Hong Kong Limited (“HKSE”). Financial results for
the six month period ending June 30, 2022 that are prepared in
accordance with U.S. Generally Accepted Accounting Principles will
be provided on or prior to September 30, 2022. Highlights of the
interim financial results.
Despite residual effects of COVID and supply chain issues,
particularly in the Asian region, the Company revenues were
relatively steady year over year, particularly for the graphene
products segment. Graphex Group believes that such steady revenues
for the graphene segment indicate continued strong demand for the
entire output of refined graphene products and an opportunity for
the Company to expand its graphene products business in Asia, as
well as in the U.S. and globally. Combined revenues decreased
slightly, driven primarily by lingering pandemic effects affecting
the eco design landscape architecture and design business. The
Company was able to reduce its cost of sales, selling and marketing
expenses, and administrative costs. In addition, the Company was
also able to decrease its debt by 33% and losses for the six month
period decreased. After adjustment for non-cash depreciation and
the costs of the recent uplisting to the NYSE American market, the
Company’s cash flow was positive.
“We expect continued stability in the second
half of 2022 and look forward to moving ahead with our expansion
plans for the graphene business in Asia and the U.S.,” said Andross
Chan, CEO of Graphex Group. “Growth in the EV market in Asia
continues to accelerate and we believe we have positioned our
graphene products very well to participate in that growth.”
The formation of Graphex Michigan I LLC, the U.S. joint venture
between Emerald Energy Solutions (“EES”) and the U.S. subsidiary
Graphex Technologies LLC, has marked the beginning of the
participation in the global electric vehicle (“EV”) supply chain.
The expansion of Graphex’s presence in the U.S. - and more
specifically in Warren, (Detroit area) Michigan, the heart of the
automotive sector - comes at a critical moment in global
transportation history as evidenced by the recent enactment of the
Inflation Reduction Act of 2022, which is expected to provide the
largest investment to combat climate change in U.S. history. As the
demand projections for electric vehicles and other sustainable
energy solutions are expected to grow, there will be a parallel
increase in demand for the critical minerals necessary to
manufacture the Li-ion batteries that power them. Equally as
important, the tremendous impetus for the industry to move supply
chains away from geopolitically sensitive or logistically
challenging regions and to localize end-to-end processing and
production capabilities in the U.S. is at the highest intensity in
decades.
“As we continue to pursue supply agreements and continue
progress at our new processing plant in Michigan, we believe that
the growth trajectory for Graphex’s graphene business is completely
aligned with and supported by recent policy advances and funding
opportunities for domestication of critical mineral processing,”
said John DeMaio, CEO of Graphex Technologies and President of the
Graphene Division of Graphex. As we recently shared with the
New York Times, we believe that the invocation of the Defense
Production Act, the Bipartisan Infrastructure Law, and the newly
enacted Inflation Reduction Act of 2022 will greatly assist
companies like Graphex to accelerate the scale of domestic
production to meet demand and in turn accelerate the transition to
EVs and other sustainable energy solutions that utilize lithium-ion
(Li-ion) batteries.”
Graphex is currently among the top suppliers of specialized
spherical graphite to the EV and renewable energy industries with a
global expansion strategy that completely supports energy
transition and electrification efforts worldwide.
Recent milestones and actions to achieve its business objectives
include:
- Graphex is one of the largest
specialized graphite processors in the world:
- Increasing production from 10,000 to 40,000 tonnes per annum to
meet growing EV demand
- Diversifying upstream sourcing of
raw materials to stabilize supply chains:
- Actively negotiating offtake agreements with sources of natural
graphite away from politically sensitive and/or logistically
volatile regions
- Pursuing new raw material sources around the world including
the US, Brazil, Canada, Africa, Australia, Europe, and other
locations through a combination of straight offtake agreements for
raw materials and also through collaborative partnerships with the
mining operations to construct mid-stream processing facilities
near the raw material sources.
- Building mid-stream processing
plants in North America:
- The previously announced joint venture with Emerald Energy
Solutions LLC to construct a new 15,000 metric ton per year
graphite processing facility in Warren, Michigan is progressing as
planned. The first such plant to be built by an experienced
commercial- scale mid-stream graphite processor in the US and the
first of multiple facilities anticipated by Graphex, the Warren
facility is expected to be operational in Q2/Q3 of 2023.
- Actively negotiating supply
agreements to sell product to the battery manufacturers in the
West:
- Graphex has entered into at least one confidential non-binding
MOU with OEM EV battery manufacturers to supply anode material to
their future gigafactories, including one in the US, and to
evaluate the construction of co-located processing facilities near
the OEM’s gigafactories. Graphex is engaged in similar
ongoing discussions with other OEMs and battery manufacturers.
- Continuing our research of advanced battery chemistry and
material science innovations:
- Collaboration with the Technology
Institute to conduct an in-depth Study on Electrode Materials
for Graphene-based Sodium Ion Batteries
With over 10 years of commercial experience
producing 10,000 metric tons per annum (tpa), the Company believes
that they are well positioned to bring experienced mid-stream
capabilities online quickly in the U.S. Graphex Group also intends
to continue its efforts to diversify the upstream sourcing of raw
materials and further streamline, localize, and stabilize supply
chains. This combination of technical capability coupled with the
operational agility to form progressive downstream supply
arrangements with OEMs and battery manufacturers uniquely positions
Graphex to deliver needed critical graphene materials now and well
into the future as the EV market expands globally.
To learn more about Graphex, please visit
www.graphexgroup.com
About Graphex
Graphex Group Limited is a Cayman Island company
with principal and administrative offices in Hong Kong and
subsidiary office in Royal Oak, MI. Graphex is a global leader in
the industry focused on the development of technologies and
products for the enhancement of renewable energy, particularly the
enrichment of spherical graphite and graphene, key components for
Electric Vehicle (EV) batteries, lithium-ion batteries, and other
use cases. Proficient in commercial deep processing of graphite,
Graphex has been consistently producing over 10,000 metric tons of
spherical graphite annually for over 9 years. With a strategy to
expand its global operations to support energy transition and
electrification efforts worldwide, Graphex Group is currently among
the top suppliers of specialized spherical graphite to the EV and
renewable energy industries and holds patents in areas including
products, production methods, machinery design, and environmental
protection.
Forward Looking Statements
This release contains statements that constitute
“forward-looking statements,” for purposes of the safe harbor
provisions under the Private Securities Litigation Reform Act of
1995 and the safe harbor in Section 21E of and the Securities
Exchange Act of 1934, including statements regarding the Company’s
future plans and prospects. Forward-looking statements may be
identified by words or phrases such as “may”, “will”, “expect”,
“anticipate”, “aim”, “estimate”, “intend”, “plan”, “believe”,
“likely”, “potential”, “continue” or other similar expressions. The
Company has based these forward-looking statements largely on the
Company’s current expectations and projections about future events
that it believes may affect its financial condition, results of
operations, business strategy and financial needs. These
forward-looking statements include statements relating to:
- The Company’s goals and
strategies;
- The Company’s future business
development, financial conditions and results of operations;
- Fluctuations in prices, interest
rates and other factors that may increase the Company’s costs
significantly;
- The Company’s expectations
regarding demand for and market acceptance of its products and
services;
- Competition in the Company’s
industry;
- Relevant government policies and
regulations relating to the Company’s industry, including
governmental policies in the Peoples Republic of China as well as
other governmental or sovereign risk factors related to the Peoples
Republic of China and its relationship with the United States;
- The Company’s ability to continue
to diversify its manufacturing and operations in the U.S. and
globally;
- The growth of the renewable energy
sector; and
- The U.S. and global economy
including any recession or other adverse economic factors that
limit the ability of the Company’s customers to purchase its
products, including such customer’s ability to continue investment
in the renewable energy sector.
These forward-looking statements involve various
risks and uncertainties. Although the Company believes that its
expectations expressed in these forward-looking statements are
reasonable, the Company’s expectations may later be found to be
incorrect. The Company’s actual results could be materially
different from the Company’s expectations. Important risks and
factors that could cause the Company’s actual results to be
materially different from the Company’s expectations.
The Company’s forward-looking statements are
based, in part, on certain data and information that it obtained
from various government and private sources. Statistical data
obtained from these sources may include projections based on a
number of assumptions. The Company’s industry may not grow at the
rate projected by these sources, or at all. Failure of the
Company’s markets to grow at the projected rate may have a material
and adverse effect on the Company’s businesses and the market price
of the Company’s ordinary shares and the ADSs. In addition, the
rapidly changing nature of the Company’s markets may result in
significant uncertainties for any projections or estimates relating
to the Company’s growth prospects or future condition. Furthermore,
if any one or more of the assumptions underlying the market data
are later found to be incorrect, actual results may differ from the
projections based on these assumptions. You should not place undue
reliance on these forward-looking statements.
The forward-looking statements made in this
release relate only to events or information as of the date on
which the statements are made in this release. Except as required
by law, the Company does not undertake an obligation to update or
revise publicly any forward-looking statements, whether as a result
of new information, future events or otherwise, after the date on
which the statements are made or to reflect the occurrence of
unanticipated events. You should read this release and the other
information about the Company that is available publicly,
completely and with the understanding that the Company’s actual
future results may be materially different from what the Company
expects.
This communication is for informational purposes
only and is neither an offer to sell nor a solicitation of an offer
to purchase any securities of Graphex Group Limited, including but
not limited to its American Depositary Shares.
Media Contact:
graphex@fischtankpr.com
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