Core Viewpoint - ESGL Holdings Limited has received shareholder approval for its business combination with De Tomaso Automobili, aiming to enhance growth opportunities and shareholder value [1][2][3]. Group 1: Shareholder Approval - All proposals related to the business combination were approved by ESGL shareholders during the Extraordinary General Meeting held on June 10, 2025 [2]. - The proposals included the expansion of authorized share capital, potential share consolidation, a proposed name change, adoption of a revised charter, and authority to adjourn the meeting for maximum shareholder support [8]. Group 2: Strategic Implications - The Chairman and CEO of ESGL expressed confidence that the transaction will unlock new growth opportunities and expand the company's presence across various industries and markets [3]. - The company is actively working with Nasdaq to complete the listing review process and fulfill remaining closing conditions [3]. Group 3: Next Steps - The completion of the business combination is still subject to Nasdaq's approval and other customary closing conditions [2][3]. - Further updates will be provided as material developments occur [4].

Group 1 - The Chairman and CEO of ESGL Holdings Limited, Mr. Quek Leng Chuang, acquired 336,134 ordinary shares at an average price of $2.25 per share, increasing his ownership to approximately 8.2% [1][2] - This acquisition reflects Mr. Quek's confidence in the company's long-term strategy and performance, aligning leadership interests with shareholder value creation [2] - Other officers and directors may consider acquiring additional shares through private transactions or open market purchases [2] Group 2 - ESGL is advancing its proposed business combination with De Tomaso Automobili, which is progressing through regulatory and shareholder approval processes [3] - The completion of this transaction is expected to enhance ESGL's portfolio and long-term growth strategy [3] Group 3 - ESGL Holdings Limited is a leader in sustainable circular solutions for the chemicals, electronics, and manufacturing sectors, focusing on transforming waste into high-value circular products [4]

Core Viewpoint - ESGL Holdings Limited is pursuing a business combination with De Tomaso Automobili to enhance long-term shareholder value through the acquisition of a prestigious luxury performance brand [1]. Group 1: Business Combination Details - The Extraordinary General Meeting (EGM) for voting on the proposals related to the business combination is scheduled for June 10, 2025 [2]. - Upon completion, ESGL will be renamed OIO Holdings Limited and will trade on Nasdaq under the new tickers "OIO" for ordinary shares and "OIOWW" for warrants [2]. Group 2: Strategic Importance - De Tomaso's P72 and P900 hypercars are in high demand among top-tier collectors, indicating strong financial performance potential due to limited production and high pricing power [3]. - The acquisition represents a strategic expansion for ESGL from industrial sustainability into the ultra-luxury consumer sector [3]. - The structure of the combined company is designed for growth, featuring long-term shareholder alignment and performance-based earnouts [3]. Group 3: Company Backgrounds - ESGL Holdings Limited specializes in sustainable circular solutions across chemicals, electronics, and manufacturing sectors, focusing on transforming waste into high-value products [5]. - De Tomaso Automobili, founded in 1959, is known for its blend of Italian design and motorsport heritage, aiming to create emotionally resonant vehicles for a new generation [6].

Core Insights - The unveiling of the production specification De Tomaso P72 highlights the brand's strength and readiness for commercial operations as the merger with ESGL Holdings approaches completion [1][4] - The P72, featuring a carbon fibre chassis and a 5.0L supercharged V8 engine, emphasizes a return to mechanical design and driver-focused engineering [2] - The launch of the P72 is seen as a significant commercial catalyst, indicating De Tomaso's readiness to scale operations [4] Company Overview - ESGL Holdings Limited is a leader in sustainable circular solutions, focusing on transforming waste into high-value products for various sectors [6] - De Tomaso Automobili, founded in 1959, combines Italian design with motorsport heritage and aims to create emotionally resonant vehicles for enthusiasts [7] Product Details - The P72 was initially revealed as a concept in 2019 and is now ready for customer deliveries expected in late 2025 [3] - The production vehicle showcases the final engineering, design, and build quality that De Tomaso aims to deliver at scale [3] Market Engagement - The P72 is currently available for exclusive viewings at Miller Motorcars in Connecticut, with limited public displays planned [5] - The launch has garnered significant media attention, with features in prominent automotive publications highlighting its design and engineering [6]

Core Viewpoint - ESGL Holdings Limited has demonstrated a significant turnaround in FY2024, showcasing the potential for sustainability and profitability to coexist, supported by disciplined cost management and the introduction of new circular products [2][7]. Financial Performance - The company reported a near 100% reduction in net loss year-on-year, decreasing from US$95.0 million in FY2023 to US$0.6 million in FY2024 [7]. - Adjusted EBITDA improved by over 200%, rising from US$965,000 to US$2.3 million [7]. - Loss per share narrowed significantly from US$14.70 to US$0.02 [7]. Business Operations - ESGL has commenced commercial sales of several new circular products, including NEWSPAR, NEWEARTH, and NEWCHEM, developed through proprietary waste-to-resource processes [2]. - The company continues to scale its capabilities in sustainable waste treatment and circular product manufacturing, particularly in Southeast Asia [3]. Company Overview - ESGL Holdings Limited is focused on sustainable waste management solutions and operates through its subsidiary, Environmental Solutions (Asia) Pte. Ltd., based in Singapore [5].

PART I [Item 3. Key Information](index=7&type=section&id=Item%203.%20Key%20Information) This section details the primary risks facing the company, categorized into business/industry, securities, and public company operations * Net Loss and Accumulated Deficit | Metric | FY 2024 | FY 2023 | | :--- | :--- | :--- | | **Net Loss** | US$633,257 | US$94,979,338 | | **Accumulated Deficit** | US$100,619,185 | US$99,985,928 | * The significant net loss in 2023 was primarily driven by non-recurring listing expenses of approximately **US$93.1 million** related to the Business Combination[30](index=30&type=chunk) * The company's revenue for fiscal year 2024 was approximately **US$6.1 million**, failing to meet the projected range of **US$7.6 million to US$9.5 million** due to lower hazardous chemical waste revenue, funding challenges, and unexpected regulatory changes[36](index=36&type=chunk)[37](index=37&type=chunk) * The business is exposed to various risks, including competition from larger players, fluctuations in recyclable material prices, dependency on key personnel, and potential impacts from economic conditions, climate change, and cybersecurity threats[34](index=34&type=chunk)[38](index=38&type=chunk)[46](index=46&type=chunk)[52](index=52&type=chunk)[60](index=60&type=chunk) [Item 4. Information on the Company](index=21&type=section&id=Item%204.%20Information%20on%20the%20Company) ESGL operates as a holding company, with its primary business conducted through its Singapore-based subsidiary, ESA, a waste management and recycling firm [A. History and Development of the Company](index=21&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) ESGL Holdings Limited was formed on November 18, 2022, and became a publicly traded entity on Nasdaq on August 4, 2023, following a business combination with Genesis Unicorn Capital Corp * The company was formed on November 18, 2022, and completed its business combination with GUCC on August 2, 2023, becoming a publicly traded entity on Nasdaq[99](index=99&type=chunk)[20](index=20&type=chunk) [B. Business Overview](index=22&type=section&id=B.%20Business%20Overview) ESGL, through its subsidiary ESA, is a Singapore-based waste management company that recycles industrial waste into circular products, pursuing growth through technology enhancement, overseas expansion, licensing, and strategic acquisitions * On February 26, 2025, ESGL agreed to acquire De Tomaso Automobili Holdings Limited for an aggregate consideration of **US$1.03 billion**, to be paid in **1 billion** newly issued ESGL ordinary shares, with potential earnout shares based on vehicle delivery targets[105](index=105&type=chunk)[106](index=106&type=chunk) * The company's four-pillar growth strategy focuses on making its Singapore operations a center of excellence, expanding overseas, forming partnerships via technology licensing, and diversifying its portfolio through acquisitions[113](index=113&type=chunk)[119](index=119&type=chunk) * Customer and Supplier Concentration (FY2024) | Concentration Type | Details | | :--- | :--- | | **Customer Concentration** | Four customers accounted for **22.3%**, **15.4%**, **14.7%**, and **13.4%** of total revenue | | **Supplier Concentration** | One supplier accounted for **36.9%** of total inventory and logistic costs | | **Logistics Provider Concentration** | Two logistics providers accounted for **52.2%** of total inventory and logistics costs | * Capitalized R&D Expenses | Year | Amount (US$) | | :--- | :--- | | **2024** | **6,100,000** | | **2023** | **4,300,000** | [D. Property, Plant and Equipment](index=30&type=section&id=D.%20Property%2C%20Plant%20and%20Equipment) The company operates from several leased facilities in Singapore and recently moved storage operations to a new, larger leased facility in Johor, Malaysia, to reduce rental expenses and support expansion * The company's headquarters are located at 101 Tuas South Avenue 2, Singapore, under a 17-year state lease ending in 2030[150](index=150&type=chunk) * In October 2024, the company terminated a lease at 110 Tuas, Singapore, and moved storage operations to a new 52,270 sq. ft. facility in Johor, Malaysia, to reduce costs and support expansion, estimated to save **S$17,000** in monthly rent[152](index=152&type=chunk)[153](index=153&type=chunk) [Item 5. Operating and Financial Review and Prospects](index=32&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) In FY2024, ESGL's revenue remained stable at US$6.1 million, while its net loss significantly reduced to US$0.63 million due to the absence of one-off listing expenses from the prior year [Results of Operations](index=33&type=section&id=Results%20of%20Operations) For FY2024, revenue slightly decreased to US$6.1 million, while net loss dramatically improved to US$0.63 million due to the absence of US$93.1 million in non-recurring listing expenses from 2023 * Comparison of Operations (FY2024 vs FY2023) | Metric | 2024 (US$) | 2023 (US$) | Change (%) | | :--- | :--- | :--- | :--- | | **Revenue** | 6,099,777 | 6,164,173 | **-1.0%** | | **Cost of inventory** | 215,059 | (977,619) | **122.0%** | | **Logistics costs** | (642,423) | (925,225) | **-30.6%** | | **Operating expenses** | (3,789,227) | (3,466,606) | **9.3%** | | **Listing expenses** | - | (93,067,324) | **-100.0%** | | **Net loss** | (633,257) | (94,979,338) | **99.3%** | * The slight revenue decrease was due to lower collection of chemical waste (down **US$0.09 million**) and reduced sales of circular products (down **US$0.26 million**), particularly base metals which fell **51.3%**, partially offset by a **US$0.35 million** increase in revenue from solid hazardous waste treatment[161](index=161&type=chunk)[162](index=162&type=chunk) [Non-GAAP Measures](index=36&type=section&id=Non-GAAP%20Measures) The company uses EBITDA as a non-GAAP measure, reporting **US$2.31 million** for FY2024, a significant improvement from the negative **US$92.1 million** in FY2023, which was heavily impacted by non-recurring listing expenses * EBITDA Reconciliation (Non-GAAP) | | For the Year Ended December 31, | | :--- | :--- | :--- | | | **2024 (US$)** | **2023 (US$)** | | **Loss before income tax** | (760,586) | (94,846,338) | | Finance expense | 350,145 | 388,717 | | Depreciation and amortization | 2,720,774 | 2,354,839 | | **EBITDA** | **2,310,333** | **(92,102,782)** | | Add: non-recurring listing expenses | - | 93,067,324 | | **Adjusted EBITDA** | **2,310,333** | **964,542** | [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2024, the Group had negative working capital of approximately US$7.0 million, an improvement from 2023, with cash from financing activities providing a net inflow of US$5.4 million * Cash Flow Summary (FY2024 vs FY2023) | Cash Flow Activity | 2024 (US$) | 2023 (US$) | | :--- | :--- | :--- | | **Net cash (used in)/from operating activities** | (3,111,587) | 5,282,766 | | **Net cash used in investing activities** | (2,019,272) | (2,019,189) | | **Net cash from/(used in) financing activities** | 5,398,980 | (3,149,215) | | **Net increase in cash** | 268,121 | 114,362 | * The Group had negative working capital of **US$7.0 million** at year-end 2024, primarily because bank loans of **US$4.3 million** were classified as current liabilities due to demand clauses in the agreements[177](index=177&type=chunk)[414](index=414&type=chunk) * Average trade receivables turnover days increased from **25 days** in 2023 to **34 days** in 2024, mainly due to increased sales to multinational companies with longer credit terms (average **60 days**)[188](index=188&type=chunk) [Critical Accounting Estimates](index=41&type=section&id=Critical%20Accounting%20Estimates) The company's financial statements, prepared under IFRS, require management to make critical estimates and judgments in areas such as revenue recognition, asset useful lives, inventory valuation, and impairment of non-financial assets * Management's critical accounting estimates include useful lives of property and equipment, inventory valuation, expected credit losses for receivables, impairment of non-financial assets, and capitalization of intangible assets[201](index=201&type=chunk)[523](index=523&type=chunk) * The carrying amount of capitalized internally generated intangible assets, which include systems for inventory management, thermal treatment, and converting waste to oil, was **US$2.98 million** as of December 31, 2024[219](index=219&type=chunk)[220](index=220&type=chunk) [Item 6. Directors, Senior Management and Employees](index=46&type=section&id=Item%206.%20Directors%2C%20Senior%20Management%20and%20Employees) This section outlines the company's leadership, compensation, board structure, and employee base, noting that total compensation for named executive officers was US$0.60 million in 2024 and the company had 79 full-time employees * Executive and Director Compensation (US$) | Compensation Type | 2024 | 2023 | | :--- | :--- | :--- | | **Named Executive Officers (4 individuals)** | | | | Base Salary | 563,596 | 445,111 | | Annual Bonuses | 37,840 | 0 | | Defined Contribution Plan | 44,884 | 35,745 | | **Non-Employee Directors** | | | | Total Remuneration | 128,000 | 55,252 | * On December 16, 2024, the Board adopted an Equity Incentive Plan, under which approximately **865,000** ordinary shares were issued to named executive officers in February 2025[250](index=250&type=chunk) * As of December 31, 2024, the company had **79** full-time employees, with **47** classified as operations workers[264](index=264&type=chunk)[266](index=266&type=chunk) * As of April 16, 2025, significant beneficial ownership includes Samuel Wu (**16.78%**), Chin Sor Fong (**11.96%**), Ftag Investment Bank (**9.57%**), and Chau Loi Yau (**8.25%**)[270](index=270&type=chunk) [Item 7. Major Shareholders and Related Party Transactions](index=55&type=section&id=Item%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) This section details transactions with related parties, including a director's personal guarantee for bank loans and an unsecured promissory note from the SPAC's Sponsor prior to the business combination * A director, Mr. Quek Leng Chuang, provided a personal guarantee to secure a term loan (Term Loan VII) and a revolving credit loan (Revolving Credit Loan II) from a bank, obtained in March 2023[277](index=277&type=chunk) * Prior to the merger, the Sponsor provided GUCC with an unsecured promissory note, which had an outstanding balance of **US$0.35 million** as of the report date[275](index=275&type=chunk) [Item 10. Additional Information](index=56&type=section&id=Item%2010.%20Additional%20Information) This section covers the company's share capital, governance documents, material contracts, and tax considerations, including the potential classification as a Passive Foreign Investment Company (PFIC) * As of April 16, 2025, the company had **41.8 million** ordinary shares and **9.3 million** warrants outstanding[288](index=288&type=chunk) * The company conducted several private placements to raise funds, including raising **US$2.5 million** in March/April 2024, **US$5.0 million** in August/September 2024, and securing an agreement for up to **US$30.0 million** in January 2025[306](index=306&type=chunk)[307](index=307&type=chunk)[308](index=308&type=chunk) * The Forward Purchase Agreement with Vellar and ARRT, established during the 2023 business combination, was fully terminated by March 2024, with the company receiving net proceeds of **US$1.0 million** from Vellar before its termination[313](index=313&type=chunk)[315](index=315&type=chunk)[317](index=317&type=chunk) * The company notes that it may be classified as a Passive Foreign Investment Company (PFIC), which could result in adverse U.S. federal income tax consequences for U.S. holders of its securities, with the determination being factual and made annually[98](index=98&type=chunk)[324](index=324&type=chunk) [Item 11. Quantitative and Qualitative Disclosures About Market Risks](index=65&type=section&id=Item%2011.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) The company is exposed to market risks including currency risk, where a 10% SGD/USD exchange rate change would impact pre-tax profit by US$0.89 million, and interest rate risk, where a 0.5% change would affect after-tax loss by US$0.02 million * The Group is exposed to currency risk as most sales and purchases are in Singapore Dollars (SGD) while reporting is in U.S. Dollars (USD), where a **10%** strengthening of the SGD against the USD would decrease profit before tax by approximately **US$0.89 million**[347](index=347&type=chunk)[585](index=585&type=chunk) * The Group is exposed to interest rate risk on its variable-rate borrowings, where a **0.5%** increase/decrease in SGD interest rates would lower/higher the loss after tax by **US$0.02 million** for FY2024[349](index=349&type=chunk)[587](index=587&type=chunk) * The company faces commodity price risk as a portion of its revenue is derived from the sale of circular products like zinc and other metals, whose prices are subject to market volatility[234](index=234&type=chunk)[355](index=355&type=chunk) PART II [Item 15. Controls and Procedures](index=67&type=section&id=Item%2015.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures, and internal control over financial reporting, were effective as of December 31, 2024 * Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[361](index=361&type=chunk) * Based on the COSO 2013 framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2024[365](index=365&type=chunk) [Item 16. Corporate Governance and Other Matters](index=67&type=section&id=Item%2016.%20Corporate%20Governance%20and%20Other%20Matters) The company has adopted a Code of Business Conduct and Ethics and an Insider Trading Policy, with **US$0.14 million** paid to the principal auditor for audit services in FY2024, and a cybersecurity risk management program in place * Principal Accountant Fees (Assentsure PAC) | Service | 2024 (US$) | 2023 (US$) | | :--- | :--- | :--- | | Audit Fees | 140,000 | 140,000 | * The company has adopted a Code of Business Conduct and Ethics, which is publicly available on its website[368](index=368&type=chunk) * A cybersecurity risk management program is in place, with oversight from the Board's Audit Committee, and the company has not experienced any material cybersecurity incidents in the last three fiscal years[379](index=379&type=chunk)[380](index=380&type=chunk)[381](index=381&type=chunk) PART III [Item 18. Financial Statements](index=70&type=section&id=Item%2018.%20Financial%20Statements) This section contains the company's audited consolidated financial statements for FY2024 and FY2023, highlighting a going concern uncertainty despite a significant reduction in net loss in 2024 [Report of Independent Registered Public Accounting Firm](index=74&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The auditor's report provides a fair opinion on the financial statements but includes a 'Going Concern' paragraph due to net losses and net current liabilities, raising substantial doubt about the company's ability to continue * The auditor's report includes a 'Going Concern' paragraph, citing the company's net losses and net current liabilities as conditions that raise doubt about its ability to continue as a going concern[393](index=393&type=chunk) [Consolidated Financial Statements](index=75&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show total assets of US$25.9 million and total liabilities of US$11.1 million as of December 31, 2024, with a net loss of US$0.63 million for FY2024, a significant improvement from the US$95.0 million net loss in FY2023 * Consolidated Statement of Financial Position (Abridged) | Metric (US$) | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | 25,855,412 | 25,632,266 | | **Total Liabilities** | 11,142,299 | 17,611,509 | | **Total Equity** | 14,713,113 | 8,020,757 | * Consolidated Statement of Profit or Loss (Abridged) | Metric (US$) | 2024 | 2023 | | :--- | :--- | :--- | | **Revenue** | 6,099,777 | 6,164,173 | | **Net Loss** | (633,257) | (94,979,338) | | **Basic and Diluted Loss Per Share** | (0.02) | (14.69) | [Notes to the Consolidated Financial Statements](index=80&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes provide detailed explanations, reiterating the going concern uncertainty, breaking down revenue by type, detailing borrowings secured by a director's guarantee, and outlining significant subsequent events including a private placement and the De Tomaso acquisition * The financial statements were prepared on a going concern basis, despite net current liabilities of **US$7.0 million**, with management's plans relying on cost reduction, revenue growth, and capital raising, noting that **US$7.5 million** was successfully raised via share issuance in FY2024[414](index=414&type=chunk)[415](index=415&type=chunk) * Revenue by Type (US$) | Revenue Source | 2024 | 2023 | | :--- | :--- | :--- | | Sales of circular products | 1,198,610 | 2,305,646 | | Waste disposal services | 4,901,167 | 3,858,527 | | **Total** | **6,099,777** | **6,164,173** | * Subsequent to year-end, the company entered into an agreement to acquire De Tomaso Automobili for **US$1.03 billion** in stock and entered a share purchase agreement for a private placement of up to **37.5 million** shares at **US$0.80** per share[619](index=619&type=chunk)[620](index=620&type=chunk)[621](index=621&type=chunk) [Item 19. Exhibits](index=70&type=section&id=Item%2019.%20Exhibits) This section lists all exhibits filed as part of the annual report, including key legal documents such as the Merger Agreement, the De Tomaso Share Purchase Agreement, the company's charter, and various financing and governance documents * The exhibits include key legal documents such as the Merger Agreement (2.1), the De Tomaso Share Purchase Agreement (2.2), the company's charter (3.1), and various financing and governance documents[385](index=385&type=chunk)

Core Viewpoint - ESGL Holdings Limited has agreed to acquire De Tomaso Automobili, aiming to enhance shareholder value and create a strategic partnership for future growth [2][4]. Group 1: Transaction Details - The acquisition involves ESGL acquiring the entire issued share capital of De Tomaso Automobili in exchange for newly issued ordinary shares of ESGL, subject to certain closing conditions [1][4]. - The transaction has been unanimously approved by the directors of both companies and is expected to close in the second quarter of 2025, pending necessary approvals [4]. Group 2: Strategic Highlights - The partnership is expected to leverage ESGL's expertise in low-impact manufacturing to enhance De Tomaso Automobili's vehicle production and expand its global market presence [5]. - Both companies believe the transaction will strengthen their financial positioning, unlock long-term value for investors, and accelerate growth opportunities [8]. Group 3: Company Backgrounds - De Tomaso Automobili is a renowned Italian high-performance automotive brand with a legacy of over 65 years, known for luxury and exceptional performance [6]. - ESGL Holdings Limited is a Singapore-based carbon-neutral enviro-tech company focused on transforming spent industrial chemicals into sustainable circular products [7].

Core Insights - ESGL Holdings Limited achieved its first-ever profitable half-year for its operating subsidiary, marking a significant improvement from the loss in the first half of 2023 [2][5] - The company's revenue for the first half of 2024 reached US$3.49 million, reflecting a 2.8% increase year-on-year despite facing regulatory challenges [2] - Loss before taxation improved by 45.3%, decreasing from US$590,000 in the first half of 2023 to US$322,000, attributed to effective cost management [2][11] Financial Performance - Revenue Growth: The first half of 2024 saw revenue increase to US$3.49 million, a 2.8% improvement from US$3.39 million in the same period of 2023 [2][11] - Significant Reduction in Losses: Loss before taxation improved by 45.3%, from US$590,000 in H1 2023 to US$322,000 in H1 2024 [2][11] - Logistics Cost Savings: Logistics costs were reduced by US$527,000, representing a 66.6% decrease year-on-year [2] Operational and Segment Performance - Solid Waste Thermal Processing Solutions: Revenue grew by 8.15%, supported by the collection of new waste types and an expanded customer base [3] - Liquid Waste Synthesis Solutions: Revenue declined by 45.8% due to regulatory impacts on a key customer, with expectations for recovery in the second half of 2024 [3] - Circular Products Sales: Sales decreased by 39.1% due to lower demand for base metals, though the company remains optimistic about market recovery [3] Outlook - The company is optimistic about the second half of 2024, focusing on expanding its solid hazardous waste customer base and regaining liquid hazardous waste volume while maintaining operational efficiency [4] - ESGL is actively working to renew long-term contracts with key clients to sustain and enhance profitability [4] CEO Statement - The CEO highlighted the achievement of the first profitable half-year as a reflection of the company's strategic focus on cost efficiency and operational optimization, expressing confidence in sustained growth across core segments [5]

Core Insights - ESGL Holdings Limited and STMicroelectronics have achieved a significant milestone by creating the world's first sustainable brick made from NEWSPAR, a material regenerated from hazardous semiconductor waste [1][2][3] Group 1: Revolutionary Technology and Circular Innovation - ESGL has developed NEWSPAR, a proprietary material that transforms hazardous semiconductor waste into a sustainable resource, resulting in durable bricks suitable for construction [2][3] - The innovative process involves advanced research and development, showcasing the potential of waste reutilization in creating environmentally friendly products [2][3] Group 2: Driving Decarbonization and Advancing the Circular Economy - The creation of NEWSPAR is expected to drive substantial decarbonization across supply chains, reinforcing the shift towards a circular economy [3] - This achievement sets a new benchmark for sustainable practices in critical industries, highlighting ESGL's commitment to minimizing environmental impact [3] Group 3: Leadership Endorsement - Leadership from both ESGL and STMicroelectronics expressed enthusiasm for the partnership, emphasizing the importance of collective action in achieving sustainability goals [4] - The collaboration is seen as a significant win for the semiconductor industry, with plans to expand the application of circular synthetic products in various manufacturing processes [4] Group 4: About ESGL Holdings Limited - ESGL Holdings Limited is a Singapore-based carbon-neutral enviro-tech company focused on transforming industrial waste into circular products, positioning itself as a leader in the environmental solutions industry [5] Group 5: About NEWSPAR - NEWSPAR is derived from recycled Hydrofluoric wastewater sludge and Hydrofluoric Acid, providing an alternative to natural fluorspar and reducing reliance on mining [6] - The production of synthetic fluorspar through ESGL's proprietary technology aims to integrate this material into other industries, further lowering environmental impact [6]

Financial Performance - The Group incurred net losses of US$94,979,338 and US$2,391,812 for the years ended December 31, 2023 and 2022, respectively, with an accumulated deficit of US$99,985,928 as of December 31, 2023[28]. - The Group's actual revenue for the fiscal year 2023 was approximately US$6.2 million, significantly below the projected US$11.0 million, impacted by high redemptions from the merger and operational challenges[36]. - Revenue increased by approximately US$1.2 million or 23.5% from US$4.99 million in FY2022 to US$6.16 million in FY2023, primarily driven by a 71.8% increase in waste disposal services[159]. - The Group recorded a net loss of approximately US$95.0 million for the year ended December 31, 2023, an increase of approximately US$92.6 million or >100% compared to a net loss of approximately US$2.4 million for 2022[173]. - EBITDA for the year ended December 31, 2023 was approximately (US$92.1 million), a decrease of >100% compared to EBITDA of US$162,799 for 2022, primarily due to non-recurring listing expenses of US$93.1 million[175][176]. Operational Challenges - The Group's revenue generation was further affected by geopolitical tensions, market volatility, and unexpected regulatory changes in Singapore, which hindered operational efficiency[36]. - The Group's ability to achieve profitability is contingent on increasing operating capacity and successfully commercializing circular products, which have begun sales of Fluorspar and Kao Lin[31]. - The Group faces significant capital requirements for operations and growth, with historical funding primarily through ordinary shares, operational cash, and bank borrowings[35]. - The Group's operations are subject to risks from extreme weather events and climate change, which could limit waste collection and increase operational costs[45]. - The Group's insurance coverage may be inadequate to cover all significant risk exposures, potentially impacting financial condition and results of operations[48]. Market and Economic Factors - The Group's business is directly affected by changes in national economic factors, including consumer confidence and interest rates, which can impact revenues and operating margins[54]. - The Company is currently facing economic uncertainty due to inflationary pressures and potential government actions that may restrict credit availability, adversely impacting demand for its products and services[73]. - Inflationary pressures and rising interest rates may adversely affect the selling prices of the Group's circular products, impacting revenue and operating profit margins[38]. - The Group's revenues and cash flows are susceptible to fluctuations in commodity prices, particularly for recyclable materials and circular products, which can be volatile due to market conditions[42]. Workforce and Labor Costs - Approximately 64.7% of the Group's total workforce comprises foreign workers, which may lead to increased labor costs due to foreign worker levies[65]. - The monthly baseline wage for an entry-level waste collection crew worker is expected to increase from S$2,210 in 2023 to S$3,260 in 2028 under the new progressive wage model[66]. - The Group paid foreign worker levies of US$168,137 and US$97,703 for the fiscal years ended December 31, 2023 and 2022, respectively[64]. - Employee benefits expense rose by approximately US$431,000 or 46.2% from US$933,000 in FY2022 to US$1.36 million in FY2023, driven by increased salaries and headcount[168]. Compliance and Regulatory Risks - The Group's licenses and permits are subject to periodic renewal, and failure to comply with regulations could result in revocation or penalties[68]. - The Company is subject to the Sarbanes-Oxley Act, requiring effective internal controls over financial reporting, which may strain its resources[89]. - Failure to maintain effective internal controls could result in material misstatements in financial statements and potential delisting[90]. - As a foreign private issuer, the Company is exempt from certain Nasdaq corporate governance standards, which may provide less protection to shareholders[95]. Strategic Initiatives and Future Plans - ESA plans to enhance its sludge thermal processing capacity and increase its spent acid processing capacity to improve waste processing capabilities[116]. - The company has entered into a joint development agreement with Nanomatics Pte Ltd to develop carbon nanotubes and hydrogen from waste plastic[119]. - ESA's commitment to corporate social responsibility includes a partnership with the Alliance to End Plastic Waste to recycle at least 350 metric tons of plastics through educational programs in Singapore[135]. - The Company intends to retain earnings for business operations and expansion, which may limit the ability of shareholders to receive returns on their investments[76]. Financial Position and Cash Flow - As of December 31, 2023, the Group has outstanding borrowings classified as current liabilities totaling approximately US$5.7 million[56]. - The Group generated net cash from operating activities of approximately US$5.3 million for the year ended December 31, 2023, despite a significant loss before income tax of approximately US$94.8 million[184]. - Net cash used in investing activities was approximately US$2.0 million for the year ended December 31, 2023, primarily due to the purchase of property, plant, and equipment and intangible assets[186]. - Net cash used in financing activities was approximately US$3.1 million for the year ended December 31, 2023, mainly for the repayment of bank borrowings and lease liabilities[188]. Competition and Market Position - The Group faces significant competition from larger waste management companies, which may impact its market share and pricing strategies[148]. - ESA's waste management operations sent only 5 to 8% of the waste collected to landfills in 2023, significantly lower than competitors[114]. - ESA's primary business focus includes converting industrial waste into circular products such as pyrolysis oil, metals, and chemicals[108]. - The Group's future working capital requirements will depend on revenue growth, new product introductions, and expansion of sales and marketing activities[182].