ESG Core Investments B : Annual report 2022

Annual report 2022

Contents

Report of the Management Board

Report of the Supervisory Board

Consolidated Financial Statements

Company Financial Statements

Other Information

Independent auditor's report

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Report of the Management Board

This annual report of ESG Core Investments B.V. (ESG Core Investments or the Company) for the financial year ended 31 December 2022 consists of the report of the management board of the Company (the Management Board), including the responsibility statement and other mandatory statements by the Management Board, the report of the supervisory board (the Supervisory Board), and the Consolidated Financial Statements, the company accounts, and the accompanying notes.

General

ESG Core Investments B.V. is a private limited liability company incorporated under Dutch law (besloten vennootschap met beperkte aansprakelijkheid), with its statutory seat in Amsterdam, the Netherlands. ESG Core Investments was admitted to listing and trading on Euronext Amsterdam on 12 February 2021 pursuant to an initial public offering (IPO) in which it raised €250 million in gross proceeds (the Proceeds).

ESG Core Investments is a Special Purpose Acquisition Company (SPAC) and was founded with the aim to unlock a unique investment opportunity in Europe within industries that benefit from strong Environmental, Social and Governance (ESG) profiles. Since the IPO, ESG has sought to identify and acquire a stake in a company with a clear ESG focus in the core of its business, preferably headquartered in North-Western Europe and enjoying a strong competitive position within its industry, ideally based on unique technology.

Since the IPO, we have been focusing on finding the right target company for our SPAC. Whilst we have reviewed, and are currently still reviewing, potential target companies, at the date of this annual report, we have not yet selected a target company that could be proposed to the BC-EGM (as defined below). The Company currently believes that the consummation of a suitable Business Combination is highly improbable. Since its IPO, the Company has reviewed more than hundred of potential targets, and had advanced discussions with multiple of them. Despite extensive efforts to date, none of these discussions has resulted in the consummation of a Business Combination. Certain prospective targets were, through investigation, found not to meet the Company's target business criteria, or otherwise would not result in a Business Combination at an acceptable valuation, while others elected to pursue other strategic avenues like a stand-alone IPO or full or partial private sale. Some targets seemed hesitant to pursue a Business Combination due to macro-economic events impacting valuations and dissapointing stock price performance in capital markets generally.

Although it is highly probable that the Company will not be able to complete a suitable Business Combination before the Business Combination Deadline, being 16 February 2023, the Company is continuing its search process in earnest, in a disciplined manner, and will continue to do so up until the Business Combination Deadline. This in parallel with preparations for its dissolution and liquidation, such that the amount held in the Escrow Account can be returned to shareholders as soon as possible after the Business Combination Deadline, taking into account a statutory creditor opposition period of two months after the liquidation process commences.

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Should the search process result in a suitable Business Combination target being identified, an extension of the Business Combination Deadline would be required, and as such a general meeting would be convened and the corresponding Business Combination put to shareholder vote. More information can be found in the Company's press release dated 4 January 2022.

ESG Core Investments has not recorded any operational revenues. The result is attributable to the net interest rate expense on the Escrow Account (see below) plus a change in the market value of the warrants and office expenses. Due to the fact that the negative interest was partly off-set by a positive interest, as announced on 20 September 2022, the Proceeds held in escrow have marginally decreased to €248.9 at 31 December 2022. ESG Core Investments suffered an after-tax loss of €2.8 million over the financial year ending 31 December 2022.

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About ESG Core Investments B.V.

Capital structure

At incorporation, the Company issued 5,000,000 ordinary shares, each with a nominal value of €0.01, to Infestos Sustainability B.V. (the Sponsor). Prior to settlement of the IPO these ordinary shares became founder shares and the number of founder shares has been increased to 6,250,000, each with a nominal value of €0.01. The Sponsor holds all of the founder shares. In case of a successful Business Combination only, each founder share will convert into one ordinary share.

Upon completion of the IPO, the Company issued 25,000,000 units for a price of €10 per unit. Each unit consists of (i) one ordinary share with a nominal value of €0.01 per share (the Ordinary Shares); and (ii) one-eighth (0.125) market warrant that has been allotted concurrently with, and for, each corresponding Ordinary Share (such market warrants, the IPO-Market Warrants) and, following completion of the Business Combination, one-eighth (0.125) market warrant shall be allotted for each Ordinary Share that is held by a holder of Ordinary Shares on the day that is two trading days after the date of completion of a Business Combination (such market warrants, the BC-Market Warrants, and together with the IPO-Market Warrants, the Market Warrants). Consequently, the Company issued 25,000,000 Ordinary Shares and 6,250,000 Market Warrants in aggregate. Each of the Market Warrants will be exercisable after completion of a Business Combination. Furthermore, the Company issued 4,166,666 founder warrants at a price of €1.50 per founder warrant (the Founder Warrants) to the Sponsor, exercisable after completion of a Business Combination. Each whole Market Warrant or Founder Warrant entitles the holder thereof to exercise such warrant into an ordinary share at an exercise price of €11.50. The Sponsor has the option to exercise the Founder Warrants on a cashless basis in which case it would receive a certain amount of Ordinary Shares based on the fair market value of the Ordinary Shares without being obliged to pay cash, as further set out in the Prospectus.

Furthermore, the Sponsor purchased 1,500,000 units (consisting of 1,500,000 Ordinary Shares, 187,500 IPO-Market Warrants and 187,500 BC-Market Warrants) at the settlement date of the IPO as a cornerstone investment for a total consideration of €15 million on the terms and conditions as set out in the Prospectus.

If the Company does not complete a business combination within 24 months from the settlement date of the IPO (the Business Combination Deadline), the Company shall, within no more than three months after such 24-month period, convene a general meeting for the purpose of adopting a resolution to dissolve and liquidate the Company and to delist the Ordinary Shares and Market Warrants. To this end, the Company today convenes the Annual General Meeting (AGM) such that it will take place on 16 February 2023, to also facilitate voting on the dissolution and liquidation of the Company in accordance with its articles of association and article 2:19 of the Dutch Civil Code as further set out in in the agenda, explanatory notes and convocation for the AGM, which are published today as well. In the event of a liquidation, the distribution of the Company's assets and the allocation of the liquidation surplus shall be completed, after payment of the Company's creditors and settlement of its liabilities, in accordance with the rights of the Founder Shares and the Ordinary Shares and in accordance with a pre-determined order of priority.

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