CLOSE THE LOOP LTD. - Interim / Quarterly Report 2024

==> picture [216 x 234] intentionally omitted <==

Close the Loop Ltd ABN: 91 095 718 317

Report for the half year ended 31 December 2023

==> picture [301 x 136] intentionally omitted <==

==> picture [301 x 137] intentionally omitted <==

==> picture [151 x 44] intentionally omitted <==

APPENDIX 4D

1.1 Company details

Name of entity: Close the Loop Limited ABN: 91 095 718 317 Reporting period: For the half-year ended 31 December 2023 Previous period: For the half-year ended 31 December 2022

1.2 Results for announcement to the market

					$’000
Revenues from ordinary activities	Up	/~~Down~~	76%	to	103,125
Profit/(Loss) from ordinary activities after tax attributable to the owners of Close the Loop Limited	Up	/~~Down~~	21.8%	to	4,927
Profit/(Loss) for the half year attributable to the owners ofClose theLoopLimited	Up	/~~Down~~	21.8%	to	4,927

Dividends

Close the Loop Limited has not paid any dividends in the half year ending 31 December 2023 nor does it propose to pay any dividends.

Close the Loop Limited does not have a dividend reinvestment plan in place.

Comments

Please refer to the Review of Operations in the Directors’ Report for an explanation of the results.

This Appendix 4D should be read in conjunction with the Consolidated Interim Financial Report of Close the Loop Limited for the half year ended 31 December 2023 that has been reviewed by Nexia Melbourne Audit Pty Ltd. This report should be read in conjunction with the ASX announcement on 26 February 2023. This report should also be read in conjunction with any public announcements made by Close the Loop Limited in accordance with the continuous disclosure requirements arising under the Corporations Act 2001 and ASX listing rules.

The profit for the half year ended 31 December 2023 has been impacted by the amortisation of intangible assets of $8,245,000 that occurs as a result of the consolidated group recognising customer relationships, brand names and internal generated software upon the business combinations accounting standard and that is required to be amortised over their useful lives.

The information provided in this report contains all the information required by ASX Listing Rule 4.2A.

1.3 Net tangible assets

	31 December 2023	31 December 2022
Net tangible assets per ordinary security	(2.55 cents)	7.5 cents

1.4 Control gained over entities

There was no control gained over any entities during the reporting period.

1.5 Loss of Control over entities

There was no loss of control over any entities during the reporting period.

1.6 Details of associated and joint venture entities

Close the Loop Limited does not have any interest in joint venture or associated entities.

1.7 Audit review

The financial statements were subject to a review by the auditors and the unmodified review report is attached as part of the Interim Report.

CtL Ltd Group Half Year Report to 31 December 2023

Page 2 of 31

==> picture [151 x 44] intentionally omitted <==

All foreign entities in the Close the Loop Limited group have used International Financial Reporting Standards as the accounting standards by which they have reported and been included in the Interim Report for the period ending 31 December 2023.

1.8 Attachments

The Interim Report of Close the Loop Limited for the half-year ended 31 December 2023 is attached.

1.9 Signed

==> picture [75 x 33] intentionally omitted <==

Signed: ____ Date: 26 February 2024 Gregory Toll Director

==> picture [301 x 136] intentionally omitted <==

CtL Ltd Group Half Year Report to 31 December 2023

Page 3 of 31

==> picture [216 x 234] intentionally omitted <==

Report for the half year ended 31 December 2023

Close the Loop Ltd ABN: 91 095 718 317

==> picture [301 x 136] intentionally omitted <==

==> picture [301 x 137] intentionally omitted <==

==> picture [151 x 44] intentionally omitted <==

DIRECTORS’ REPORT

The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity') consisting of Close the Loop Limited (referred to hereafter as the 'company' or 'parent entity') and the entities it controlled at the end of, or during, the half-year ended 31 December 2023.

Directors

The following persons were directors of Close the Loop Limited during the whole of the financial half-year and up to the date of this report, unless otherwise stated:

Gregory Toll
Marc Lichtenstein
Joseph Foster
Grant Carman
Sammy Saloum (appointed 23 November 2023)
Lawrence Jaffe

Principle Activities

The principal activity of the consolidated group during the financial half year was the creation of innovative products and packaging solutions as well as recovering a wide range of electronic products, print consumables, cosmetics, plastics, paper and cartons and any other activity incidental thereto, through to the reusing of toner and post-consumer soft plastics for an asphalt additive, TonerPlas. The consolidated entity is also a leading supplier of thermal paper and associated paper products and services in Australia. The Company is focused on the future, sustainability and the circular economy.

There were no significant changes in the nature of the activities of the Group during the half year.

Review of Operations

With locations across Australia, United States, Europe and South Africa, Close the Loop collects waste products through takeback programs across its resource recovery businesses for recovery and reuse; and provides packaging products through its packaging businesses which allow for recovery and recyclability. The Company’s overall premise is zero waste to landfill. From recovering a wide range of electronic products, print consumables, eyewear, cosmetics, plastics, paper and cartons and any other activity incidental thereto, through to the reusing of toner and post-consumer soft plastics for an asphalt additive, the Group is a global circular economy leader with a focus on the future, sustainability and the circular economy.

	31 December 2023	31 December 2022
	$’000	$’000
Revenue	103,125	58,587
Gross Margin %	36.2%	32.8%
EBITDA	22,689	9,491
Net Profit before tax	6,988	5,598
Net Profit after tax	5,009	4,004
Amortisation of intangible assets	8,245	1,006
Underlying Net Profit after tax	13,254	5,010

CtL Ltd Group Half Year Report to 31 December 2023

Page 5 of 31

==> picture [151 x 44] intentionally omitted <==

	31 December 2023	31 December 2022
	$’000	$’000
Current Assets	108,966	51,552
Current Liabilities	61,452	27,766
Current Ratio	1.77	1.86
Total Assets	303,197	103,561
Equity	132,899	54,598

The profit before interest, tax, depreciation, and amortisation charges (“EBITDA”) attributable to the members of the parent entity for the half year ended 31 December 2023 is $22,689,000 (31 December 2022: $9,491,000) which is a 139% increase compared to the previous corresponding reporting period. The growth in the financial results for the period ending 31 December 2023 are a result of this being the first reporting period that includes the full impact of the ISP Tek Services, Alliance Paper and Close the Loop Plastic Recycling acquisitions.

The profit for the consolidated group after providing for income tax and non-controlling interest amounted to $4,927,000 (2022: $4,044,000). The profit for the half year ended 31 December 2023 has been impacted by the amortisation of intangible assets of $8,245,000 that occurs as a result of the consolidated group recognising customer relationships, brand names and internally generated software upon the business combinations accounting standard and that is required to be amortised over their useful lives.

The Group has generated $12,324,000 cash from operations for the half year that has been invested into the upgraded TonerPlas manufacturing line in Melbourne; and working capital to fund the growth of the overall business. The cash flows from operations have been used to reduce the overall debt position of the Group. Net debt which is calculated as total borrowings less cash on hand at 31 December 2023 has reduced by $11,810,000 to $26,246,000 since the last reporting date, 30 June 2023. The Close the Loop recycling division increased its processing volumes during the period, introducing several new collection programs, complementing its traditional imaging consumables business, and the half year inclusion of ISP Tek Services’ performance.

ISP Tek Services have made a strong contribution to the overall performance of the Group since the acquisition of this business. The financial performance is ahead of the expectations at the time of the completion of the acquisition due diligence investigation. The company is continuing to work towards delivering on new sales opportunities with existing customers and with a view to expanding its service offering to a wider market base. During the reporting period, Close the Loop Operations in Australia has commenced and successfully completed a number of new Information Technology Asset Disposition (“ITAD”) projects. The ITAD projects could become a significant revenue stream for this business unit in the future. The Australian ITAD engagement is a direct result of the ISP Tek Services acquisition. ISP Tek Services' industry knowledge and the group utilising cross selling opportunities has led to new ITAD opportunities in Australia and Europe, utilising the ClozDloop infrastructure.

ISP Tek Services entered into an exclusive North American Alternative Recovery Program agreement with HP Inc. during the period. The agreement is effective for 3 years from 1 November 2023 with the following products being exclusive to ISP Tek Services; Consumer Notebooks, Consumer Chrome OS, Consumer Monitors, Consumer Accessories and Hyper X products including headsets, microphones, keyboards and mice. ISP Tek Services has entered into a revenue share model with HP Inc. for the products listed above. The revenue share model is expected to improve the profitability, recovery value and cash generated from this agreement for all parties. All other product lines continue to be processed with no change to existing “as-is” arrangements.

The core recycling operations in Australia, United States and Europe have continued to grow and provide services across the respective geographies. New activity has been progressed with the installation of a new TonerPlas line in Melbourne, which will produce revenue in the second half. O F Resource Recovery, which provides recycling, reuse, and waste services, for the paper, board and magazine industries in Australia has been impacted by its exposure to reducing commodity prices during the period. Commodity prices have started to improve towards the end of the reporting period and the business has generated profits in December 2023 and January 2024.

CtL Ltd Group Half Year Report to 31 December 2023

Page 6 of 31

==> picture [151 x 44] intentionally omitted <==

The European business launched a pan-European multi-vendor collection program, which resulted in significant interest from all the major print original equipment manufacturers (“OEMs”) with the majority of the OEMs joining the program. The program was launched on 1 November 2023 in Benelux, Germany and the United Kingdom. The multi-vendor collection program is being expanded across Europe, with more OEMs joining the program. The full financial impact of this collection program will begin to be reflected in the 2025 financial year.

The Close the Loop packaging businesses have not achieved the sales growth expected due to some challenging economic conditions, namely inflation, shipping issues, industry demand and pricing impacts. However, these obstacles are diminishing as we enter the second half. Despite these challenges, the packaging segment has delivered similar EBITDA to previous period after adjusting costs to meet the market. Management have ensured that margins are upheld whilst taking steps to ensure the cost base of the business unit is commensurate with revenue. The Packaging business continues to have strong demand for its specialised range of sustainable packaging. The future forecasts see a return to planned growth. The South African operations have performed exceptionally well during the period.

Significant Changes in the State of Affairs

There were no significant changes in the state of affairs of the consolidated group during the reporting period.

Events Subsequent to Reporting Date

On 31 January 2024 Close the Loop Plastic Recycling Inc. (“Plastic Recycling”) acquired plant and equipment together with some inventory from Material Processing and Handling Company (“MPH”). MPH was paid US$1,140,000 in cash and US$400,000 worth of shares in Close the Loop Limited have been issued. The plant and equipment together with the inventory have been acquired to increase the footprint of the Plastic Recycling business in the USA, as well as to facilitate growth and expansion of this business unit.

Since 31 December 2023, the company has commenced or continued discussions with a number of potential acquisition targets for share and or asset purchases for businesses that are complementary to the current service offerings of the Group. At the time of this report no binding agreements have been entered into with any of these potential acquisition targets.

Other than the matters discussed above, there has not arisen in the interval between the end of the reporting period and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group.

Rounding of Amounts

The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report.

This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001.

On behalf of the directors

==> picture [75 x 34] intentionally omitted <==

Signed: ____ Gregory Toll Director

Date: 26 February 2024

CtL Ltd Group Half Year Report to 31 December 2023

Page 7 of 31

Nexia Melbourne Audit Pty Ltd Level 35, 600 Bourke St Melbourne VIC 3000

Australia

E: [email protected]

P: +61 3 8613 8888

F: +61 3 8613 8800

nexia.com.au

��

��
��

==> picture [83 x 46] intentionally omitted <==

��

==> picture [65 x 41] intentionally omitted <==

�� 

��

==> picture [151 x 44] intentionally omitted <==

Statement of profit or loss and other comprehensive income .................................................................. 10 Statement of financial position ..................................................................................................................... 12 Statement of changes in equity .................................................................................................................... 13 Statement of cash flows ................................................................................................................................ 14 Notes to the financial statements ................................................................................................................. 15 Directors' declaration .................................................................................................................................... 30

Independent auditor's review report to the members of Close the Loop Limited ................................... 31

General Information

The financial statements cover Close the Loop Limited as a consolidated entity consisting of Close the Loop Limited and the entities it controlled at the end of, or during, the half-year. The financial statements are presented in Australian dollars, which is Close the Loop Limited’s functional and presentation currency.

Close the Loop Limited is a listed public company limited by shares, incorporated, and domiciled in Australia. Its registered office and principal place of business are:

Registered office Principal place of business 43 – 47 Cleeland Road 43 – 47 Cleeland Road Oakleigh South VIC 3167 Oakleigh South VIC 3167 Australia Australia

A description of the nature of the consolidated entity's operations and its principal activities are included in the directors' report, which is not part of the financial statements.

All amounts in the Consolidated Interim Financial Report have been rounded off in accordance with ASIC Corporations (Rounding in Financial/Directors’ Report) Instrument 2016/191 to the nearest one thousand dollars unless otherwise stated.

The financial statements were authorised for issue, in accordance with a resolution of directors, on 22 February 2024.

==> picture [301 x 136] intentionally omitted <==

CtL Ltd Group Half Year Report to 31 December 2023

Page 9 of 31

==> picture [151 x 44] intentionally omitted <==

Statement of profit or loss and other comprehensive
income
For the half-year ended 31 December 2023
Note
Revenue from continuing operations
Revenue
3
Cost of Sales
Gross Profit
Expenses
Other Income
4
Selling and distribution expenses
Administration expenses
Occupancy costs
Employee benefits
Depreciation and amortisation
5
Other expenses
Operating Profit
Finance costs
5
Profit before income tax expense from continuing
operations
Income tax expense
Profit after income tax expense from continuing
operations
Profit after income tax expense for the half year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the half-year, net of tax
Total comprehensive income for the half year
Profit for the half-year is attributable to:
Non-controlling interest
Owners of Close the Loop Limited
Total comprehensive income for the half-year is attributable
to:
Continuing operations
Non-controlling interest
Continuing operations

Consolidated
31 Dec 2023
$’000
31 Dec 2022
$’000
103,125
58,587
(65,834)
(39,373)
37,291
19,214
3,030
478
(121)
(110)
(5,718)
(2,460)
(2,484)
(200)
(8,659)
(7,357)
(10,988)
(3,188)
-
(74)
12,351
6,303
(5,363)
(705)
6,988
5,598
(1,979)
(1,594)
5,009
4,004
5,009
4,004
(1,069)
3
(1,069)
3
3,940
4,007
82
(40)
4,927
4,044
5,009
4,004
3,858
4,047
82
(40)
3,940
4,007

CtL Ltd Group Half Year Report to 31 December 2023

Page 10 of 31

==> picture [151 x 44] intentionally omitted <==

Statement of profit or loss and other comprehensive		Consolidated	Consolidated
income For the half-year ended 31 December 2023	Note	31 Dec 2023	31 Dec	2022
		Cents	Cents
Earnings per share for profit attributable to the owners
of Close the Loop Limited
Basic earnings per share	15	0.95		1.21
Diluted earnings per share	15	0.92		1.17

The above Statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.

==> picture [301 x 136] intentionally omitted <==

CtL Ltd Group Half Year Report to 31 December 2023

Page 11 of 31

==> picture [151 x 44] intentionally omitted <==

Statement of financial position
As at 31 December 2023
Note
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other
Total current assets
Non-current assets
Investments
Property, plant, and equipment
Right-of-use assets
Intangibles
13
Deferred tax
Other
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
14
Lease liabilities
Income tax
Provisions
Deferred revenue
Other
Total current liabilities
Non-current liabilities
Borrowings
14
Lease liabilities
Provisions
Deferred tax liability
Deferred revenue
Other
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
6
Reserves
Retained profits
Non-controlling interest
Total equity

Consolidated
31 Dec 2023
$’000
30 Jun 2023
$’000
55,675
49,458
29,921
26,148
19,716
15,875
3,653
5,156
108,965
96,637
198
155
20,727
20,168
22,782
20,838
146,405
131,269
1,974
1,674
2,146
638
194,232
174,742
303,197
271,379
26,501
29,180
14,772
16,094
3,360
3,766
4,144
1,642
2,085
2,695
861
-
9,729
439
61,452
53,816
67,149
71,420
20,963
19,577
95
265
19,692
1,372
152
152
795
717
108,846
93,503
170,298
147,319
132,899
124,060
105,247
100,588
(2,217)
(1,260)
29,270
24,215
599
517
132,899
124,060

The above Statement of Financial Position is to be read in conjunction with the accompanying notes.

CtL Ltd Group Half Year Report to 31 December 2023

Page 12 of 31

==> picture [151 x 44] intentionally omitted <==

Statement of changes in equity For the half-year ended 31 December 2023

Consolidated Balance at 1 July 2022 Profit after income tax expense for the half year, net of tax Foreign exchange movement Total comprehensive income for the half-year Transactions with owners in their capacity as owners: Business combination on completion of transactions Balance at 31 December 2022 Consolidated Balance at 1 July 2023 Profit after income tax expense for the half year, net of tax Foreign exchange movement Total comprehensive income for the half-year Transactions with owners in their capacity as owners: Movement in issued shares (Note 6) Transfer of Share Based Payments to Retained Profits Share based payments Balance at 31 December 2023	Issued capital $’000 41,695 - - - - 41,695 Issued capital $’000 100,588 - - - 4,659 - - 105,247	Reserves $’000 (899) - 3 3 (709) (1,605) Reserves $’000 (1,260) - (1,069) (1,069) - (128) 240 (2,217)	Retained profits $’000 12,105 4,044 - 4,044 (1,970) 14,179 Retained profits $’000 24,215 4,927 - 4,927 - 128 - 29,270	Non- controlling interest $’000 327 (40) - (40) 42 329 Non- controlling interest $’000 517 82 - 82 - - - 599	Total equity $’000 53,228 4,004 3
					4,007 (2,637)
					54,598
					Total equity $’000 124,060 5,009 (1,069)
					3,940 4,659 - 240
					132,899

The above Statement of Changes in Equity is to be read in conjunction with the accompanying notes.

CtL Ltd Group Half Year Report to 31 December 2023

Page 13 of 31

==> picture [151 x 44] intentionally omitted <==

Statement of cash flows For the half-year ended 31 December 2023 Cash flows from operating activities Receipts from customers (inclusive of GST) Payments to suppliers and employees (inclusive of GST) Government grants Other revenue Interest and other finance costs paid Business combination costs Income taxes paid Net cash (used in)/from operating activities Cash flows from investing activities Payment for purchase of business, net of cash acquired Acquisition of subsidiary Payments for property, plant, and equipment Net cash used in investing activities Cash flows from/(used in) financing activities Proceeds from share issue net of issue costs Net Proceeds from borrowings Repayment of borrowings Repayment of lease liabilities Net cash from/(used in) financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial half-year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the financial half-year Cash and cash equivalents in the statement of financial position Bank balances Bank overdrafts repayable on demand and used for cash management purposes Cash and cash equivalents in the statement of cashflows	Consolidated 31 Dec 2023 $’000 31 Dec 2022 $’000 98,338 64,675 (81,176) (58,054) 17,162 6,621 - 411 1,509 40 (4,111) (705) - (315) (2,236) (78) 12,324 5,974 - (47) - (2,624) (3,195) (2,218) (3,195) (4,889) 4,680 - - 6,022 (4,216) (2,061) (2,578) (1,699) (2,114) 2,262 7,015 3,347 49,458 9,660 (798) - 55,675 13,007 55,675 13,151 - (144) 55,675 13,007	Consolidated 31 Dec 2023 $’000 31 Dec 2022 $’000 98,338 64,675 (81,176) (58,054) 17,162 6,621 - 411 1,509 40 (4,111) (705) - (315) (2,236) (78) 12,324 5,974 - (47) - (2,624) (3,195) (2,218) (3,195) (4,889) 4,680 - - 6,022 (4,216) (2,061) (2,578) (1,699) (2,114) 2,262 7,015 3,347 49,458 9,660 (798) - 55,675 13,007 55,675 13,151 - (144) 55,675 13,007
		6,621 411 40 (705) (315) (78)
		5,974
		(47) (2,624) (2,218)
		(4,889)
		- 6,022 (2,061) (1,699)
		2,262
		3,347 9,660 -
		13,007
		13,151 (144)
		13,007

The above Statement of Cash Flows is to be read in conjunction with the accompanying notes.

CtL Ltd Group Half Year Report to 31 December 2023

Page 14 of 31

Notes to the Financial Statements 31 December 2023

==> picture [151 x 44] intentionally omitted <==

Note 1. Significant accounting policies

These general-purpose financial statements for the interim half-year reporting period ended 31 December 2023 have been prepared in accordance with Australian Accounting Standard AASB134 ‘Interim Financial Reporting’ and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 ‘Interim Financial Reporting’.

These general-purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2023 and any public announcements made by the Company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The principal accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, unless otherwise stated.

New or amended Accounting Standards and Interpretations adopted

The consolidated entity has adopted all the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period.

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

Basis of preparation

The condensed consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.

The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the company’s 2023 annual financial report for the financial year ended 30 June 2023 except as discussed in the adoption of new and revised Australian Accounting Standards. The accounting policies are consistent with Australian Accounting Standards and with IFRS Accounting Standards.

Statements of financial position

The Statement of Financial Position as at 30 June 2023 represents Close the Loop Group. The Statement of Financial Position for 31 December 2023 reflects the consolidated position of Close the Loop Group.

Statement of profit and loss and other comprehensive income

The Consolidated Statement of Profit or Loss and Other Comprehensive Income for the period 1 July 2023 to 31 December 2023 represent the results of Close the Loop.

Statement of changes in equity

The Consolidated Statement of Changes in Equity for the period 1 July 2023 to 31 December 2023 comprises Close the Loop Group.

Statement of cash flows

The Statement of Cash Flows represents cash flows of Close the Loop Group for the period 1 July 2023 to 31 December 2023.

Critical accounting estimates and assumptions

Business combinations are initially accounted for on a provisional basis. The fair value of assets acquired, liabilities and contingent liabilities assumed are initially estimated by the consolidated entity taking into consideration all available information at the reporting date. Fair value adjustments on the finalisation of the business combination accounting are retrospective, where applicable, to the period the combination appeared and may have an impact on the assets and liabilities, depreciation and amortisation reported.

CtL Ltd Group Half Year Report to 31 December 2023

Page 15 of 31

Notes to the Financial Statements 31 December 2023

==> picture [151 x 44] intentionally omitted <==

Note 2. Operating segments

Identification of reportable operating segments

The consolidated entity is organised into two operating segments based on differences in products and services provided: resource recovery and packaging. These operating segments are based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources. There is aggregation of operating segments.

The CODM reviews EBITDA (earnings before interest, tax, depreciation, and amortisation). The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.

The information reported to the CODM is on a monthly basis.

Types of products and services

The principal products and services of each of these operating segments are as follows:

Packaging	Provides premium and innovative flexible and carton packaging as well as bulk storage and sustainable packaging solutions and thermal paper and associated paper products.
Resource recovery	The takeback, recovery and reuse of complex waste streams including electronic equipment, imaging consumables, cosmetics, paper, cardboard and magazines and products associated there with.

Intersegment transactions

An internally determined transfer price is set for all intersegment sales. This price is reset and is based on what would be realised in the event the sale was made to an external party at arm’s length. Intersegment transactions are eliminated on consolidation.

Intersegment receivables, payables, and loans

Intersegment loans are initially recognised at the consideration received, net of transaction costs. Intersegment loans receivable and loans payable that earn or incur non-market interest are not adjusted to fair value based on market interest rates. Intersegment loans are eliminated on consolidation.

Operating segment information

Consolidated 31 December 2023 Revenue Sales to external customers Intersegment sales Total sales revenue Other revenue Total segment revenue Intersegment eliminations Unallocated revenue Total revenue EBITDA Depreciation and amortisation Net finance costs Profit before income tax expense Income tax expenses Profit after income tax expense	Resource Recovery $’000 71,154 - 71,154 1,763 72,917 16,941 (10,364) (4,626) 1,951 (402) 1,549	Packaging $’000 31,971 - 31,971 1,267 33,238 5,748 (624) (87) 5,037 (1,577) 3,460	Total $’000 103,125 - 103,125 3,030 106,155 - - 106,155 22,689 (10,988) (4,713) 6,988 (1,979) 5,009

CtL Ltd Group Half Year Report to 31 December 2023

Page 16 of 31

Notes to the Financial Statements 31 December 2023

==> picture [151 x 44] intentionally omitted <==

Consolidated 31 December 2023 Assets Segment assets Intersegment eliminations Unallocated assets Total assets Liabilities Segment liabilities Intersegment eliminations Unallocated liabilities: Total liabilities Consolidated 31 December 2022 Revenue Sales to external customers Intersegment sales Total sales revenue Other revenue Total segment revenue Intersegment eliminations Unallocated revenue Total revenue EBITDA Depreciation and amortisation Finance costs Profit before income tax expense Income tax expenses Profit after income tax expense Assets Segment assets Intersegment eliminations Unallocated assets Total assets Liabilities Segment liabilities Intersegment eliminations Unallocated liabilities: Total liabilities	Resource Recovery $’000 260,864 154,683 Resource Recovery $’000 21,504 - 21,504 29 21,533 3,708 (1,782) (425) 1,501 (637) 864 47,313 - 30,266	Packaging $’000 50,623 - 23,905 Packaging $’000 37,083 - 37,083 449 37,531 5,783 (1,406) (280) 4,097 (957) 3,140 56,248 - 18,697	Total $’000 311,487 (8,290) - 303,197 178,588 (8,290) - 170,298 Total $’000 58,587 - 58,587 478 59,065 - - 59,065 9,491 (3,188) (705) 5,598 (1,594) 4,004 103,561 - - 103,561 48,963 - - 48,963

CtL Ltd Group Half Year Report to 31 December 2023

Page 17 of 31

Notes to the Financial Statements 31 December 2023

==> picture [151 x 44] intentionally omitted <==

Geographical segment information

Consolidated 31 December 2023 Revenue Sales to external customers Intersegment sales Total sales revenue Other revenue Total segment revenue Intersegment eliminations Unallocated revenue Total revenue EBITDA Depreciation and amortisation Net finance costs Profit before income tax expense Income tax expenses Profit after income tax expense Assets Segment assets Intersegment eliminations Unallocated assets Total assets Liabilities Segment liabilities Intersegment eliminations Unallocated liabilities Total liabilities Consolidated 31 December 2022 Revenue Sales to external customers Intersegment sales Total sales revenue Other revenue Total segment revenue Intersegment eliminations Unallocated revenue Total revenue	Australia $’000 31,017 - 31,017 1,987 33,004 4,880 (1,638) (695) 2,547 (928) 1,619 164,119 - 45,054 - Australia $’000 37,564 - 37,564 415 37,979	USA $’000 62,199 - 62,199 435 62,634 16,664 (9,201) (4,100) 3,363 (800) 2,563 176,971 - 157,799 - USA $’000 11,791 - 11,791 - 11,791	Europe $’000 3,384 - 3,384 506 3,890 313 (128) (6) 179 - 179 3,635 - 13,693 - Europe $’000 2,405 - 2,405 11 2,416	South Africa $’000 6,525 - 6,525 102 6,627 832 (21) 88 899 (251) 648 7,632 - 2,912 - South Africa $’000 6,827 - 6,827 52 6,879	Total $’000 103,125 - 103,125 3,030 106,155 - - 106,155 22,689 (10,988) (4,713) 6,988 (1,979) 5,009 352,357 - (49,160) 303,197 219,458 - (49,160) 170,298 Total $’000 58,587 - 58,587 478 59,065 - - 59,065

CtL Ltd Group Half Year Report to 31 December 2023

Page 18 of 31

Notes to the Financial Statements 31 December 2023 Consolidated 31 December 2022 Australia $’000 EBITDA 6,055 Depreciation and amortisation (1,723) Finance costs (425) Profit before income tax expense 3,907 Income tax expenses (1,070) Profit after income tax expense 2,837 Assets Segment assets 74,536 Intersegment eliminations - Unallocated assets Total assets Liabilities Segment liabilities 25,398 Intersegment eliminations - Unallocated liabilities Total liabilities	USA $’000 2,603 (1,000) (277) 1,326 (391) 935 21,207 - 9,330 -	Europe $’000 254 (459) (25) (230) - (230) 3,221 - 13,347 -	South Africa $’000 579 (6) 22 595 (133) 462 4,597 - 888 -	Total $’000 9,491 (3,188) (705) 5,598 (1,594) 4,004 103,561 - - 103,561 48,963 - - 48,963

Note 3. Revenue

From continuing operating activities Revenue from contracts with customers Sale of goods Collection revenue ote 4.Other income Interest Income Government grants Foreign Exchange Gains Other Income Other income	Consolidated 31 Dec 2023 $’000 31 Dec 2022 $’000 80,751 43,470 22,374 15,117 103,125 58,587 Consolidated 31 Dec 2023 $’000 31 Dec 2022 $’000 652 27 310 411 858 30 1,210 10 3,030 478

Note 4. Other income

CtL Ltd Group Half Year Report to 31 December 2023

Page 19 of 31

Notes to the Financial Statements 31 December 2023

==> picture [151 x 44] intentionally omitted <==

Note 5. Expenses

Profit before income tax from continuing operations includes expenses: Depreciation and Amortisation Depreciation of property, plant and equipment Amortisation of right-of-use assets Total depreciation Amortisation of non-current assets Total depreciation and amortisation Finance costs Interest and finance charges paid/payable on borrowings Interest and finance charges paid/payable on lease liabilities Finance costs expensed Note 6. Equity - issued capital 31 Dec 2023 Shares Ordinary shares – fully paid 530,297,981 Movements in ordinary share capital Date Balance at the beginning of the year 1 Jul 2022 Shares issued to acquire ClozDloop BV minority interest 20 Mar 2023 Issue of shares pursuant to capital raise (Tranche 1) 23 Mar 2023 Shares issued upon conversion of Close the Loop options 29 Mar 2023 Issue of shares pursuant to capital raise (Tranche 2) 27 Apr 2023 Shares issued to ISP Tek Services and Captive Trade Corp vendors 1 May 2023 Issue of shares for management services 3 May 2023 Shares issued upon conversion of Close the Loop options 9 Jun 2023 Issue of shares to employees 23 Jun 2023 Transaction costs relating to share issues Balance 30 Jun 2023	the following 30 Jun 2023 Shares 515,656,791		Consolidated 31 Dec 2023 $’000 31 Dec 2022 $’000 1,096 906 1,621 1,276 2,717 2,182 8,271 1,006 10,988 3,188 4,501 304 862 401 5,363 705 31 Dec 2023 $’000 30 Jun 2023 $’000 105,247 100,588 Issue price $’000 41,695 $0.33 660 $0.33 26,400 $0.30 50 $0.33 18,600 $0.3708 15,040 $0.33 248 $0.30 74 $0.43 50 (2,229) 100,588






	Shares 335,451,478 2,000,000 80,000,000 168,189 56,363,637 40,560,560 750,000 246,677 116,250
	515,656,791

CtL Ltd Group Half Year Report to 31 December 2023

Page 20 of 31

Notes to the Financial Statements 31 December 2023

==> picture [151 x 44] intentionally omitted <==

otes to the Financial Statements 1 December 2023
Date Balance at the beginning of the half year 1 Jul 2023 Shares issued to ISP Tek Services and Captive Trade Corp vendors 19 Jul 2023 Shares issued upon conversion of Close the Loop options 1 Dec 2023 Transaction costs relating to share issues Balance	Shares Issue price 515,656,791 4,056,056 $0.3708 10,585,134 $0.30 530,297,981	$’000 100,588 1,504 3,176 (21)
		105,247

Note 7. Share Based Payments

Close the Loop’s approach to remuneration is to ensure that employee remuneration is closely linked to the Consolidated Entity’s performance and the returns generated for shareholders. Performance ‑ linked compensation, as outlined in the Consolidated Entity’s Employee Incentive Plan (‘EIP’), includes both short ‑ term ‑ and long term incentives, and is designed to incentivise and reward employees for meeting or exceeding ‑ ‑ Company wide and individual objectives. The short term incentive (‘STI’) is an “at risk” bonus provided in the ‑ form of cash and/or shares, while the long term incentive (’LTI’) is provided as options and performance rights over ordinary shares of the Company. Performance rights are granted pursuant to the Company’s Performance Rights Plan Rules which were approved by shareholders on 16 November 2022.

Performance rights are granted at the discretion of the Board to key executives by way of issue at nil cost both at the time of grant and vesting. Vesting is contingent on the Company meeting or exceeding performance hurdles over the performance period and upon each key executive’s ongoing employment by the Company. The performance hurdles involve an assessment of the Company’s total shareholder returns in absolute terms.

As part to of the Australian Stock Exchange listing process certain key executives and advisors received, for no consideration, options over ordinary shares of the Company at specified exercise prices as determined by the Board. The grant of options is intended to align the interests of senior executives with other owners of the Company over the medium to longer term and to increase those senior executives’ proportion of ‘at risk’ remuneration.

Set out below are summaries of options granted as at 31 December 2023:

							Balance at the
							end of the
			Balance at the			Expired/	financial half
Grant	Expiry	Exercise	start of the			Forfeited/	year
Date	Date	Price	financial half year	Granted	Exercised	other
2 Dec 2021	1 Dec 2023	$0.30	10,585,134	-	10,585,134	-	-

There were no movements in the options in the half year ended 31 December 2022.

Set out below are summaries of performance rights granted as at 31 December 2023. The valuation of the performance rights has been split into 4 Tranches.

For the performance rights granted during the current financial period, a Binomial Option Valuation model was used to value the performance rights for Tranche 1. A probability adjustment for market vesting conditions is then attached to the value of the performance rights. Each performance right, once vested, entitles the performance right holder to receive one fully paid ordinary share in the Company for zero consideration.

The Tranche 2, Tranche 3 and Tranche 4 Performance Rights are effectively plain vanilla options with nil exercise price and vesting conditions that include a price target. The values of Tranche 2, Tranche 3 and Tranche 4 are assessed using a binomial option pricing model, adjusted to take account of the price target. This model allows for the potential exercise of the Performance Rights between vesting and expiry.

CtL Ltd Group Half Year Report to 31 December 2023

Page 21 of 31

Notes to the Financial Statements 31 December 2023

==> picture [151 x 44] intentionally omitted <==

A risk-free rate of 3% was used in the valuation model as this yield on Commonwealth bonds is assumed to match the life of the Performance Rights. The valuation model inputs used to determine the fair value at the grant date are as follows:

						Balance at the
			Balance at the			end of the
			start of the		Expired/	financial half
Grant	Expiry	Exercise	financial half		Forfeited/	year
Date	Date	Price	year	Granted	Exercised other
20 Dec 2022	19 Dec 2027	$0.00	7,250,000	-	- 1,500,000	5,750,000
15 Dec 2023	14 Dec 2028	$0.00	-	8,400,000	- -	8,400,00
	Share price at			Dividend	Number of	Fair value at
Tranche		grant date	Volatility	Yield	Performance Rights	grant date
Tranche 1		$0.38	60%	$nil	2,900,000	$0.38
Tranche 2		$0.38	60%	$nil	1,450,000	$0.29
Tranche 3		$0.38	60%	$nil	1,450,000	$0.262
Tranche 4		$0.38	60%	$nil	1,450,000	$0.248
Tranche 5		$0.335	60%	$nil	3,360,000	$0.335
Tranche 6		$0.335	60%	$nil	1,680,000	$0.256
Tranche 7		$0.335	60%	$nil	1,680,000	$0.231
Tranche 8		$0.335	60%	$nil	1,680,000	$0.219

Note 8. Equity - dividends

Dividends paid during the financial half-year were as follows:

No dividend paid for the half year ended 31 December 2023

	Consolidated	Consolidated
31	Dec 2023	30 Jun 2023
	$’000	$’000
	-	-

There have been no dividends declared or paid from 30 November 2021 onwards.

Note 9. Contingent liabilities

As part of the acquisition of ISP Tek Services there is potential contingent consideration payable in the form of a 12 month earn out capped at US$5,000,000 (A$7,279,000) based on the entity achieving EBITDA performance hurdles in the 12 months period post settlement. This has been taken up as a liability at 30 June 2023.

The Directors are not aware of any other material contingent liabilities as at 31 December 2023.

Note 10. Related party transactions

The group's only material related party transaction during the period is the receipt of a licence fee from Foster International Packaging Pty Ltd of 7% of revenue per annum which generated intercompany licence fees of $384,000 (2022: $290,000).

With effect from 1 October 2022 Close the Loop Limited acquired all of the shares in The Pouch Shop Proprietary Limited, a director related company domiciled in South Africa. Joseph Foster was a 70% shareholder of this company.

On 1 December 2023, the Australian based directors entered into loan agreements with the company to exercise the 30 cent options that expired on that date as disclosed in Note 7. The key terms of the loans are that 80% of

CtL Ltd Group Half Year Report to 31 December 2023

Page 22 of 31

Notes to the Financial Statements 31 December 2023

==> picture [151 x 44] intentionally omitted <==

the value of the aggregate issue price of the shares are provided as the loan amount in the form of an interestbearing loan. The loan is for 3 years, which can be extended for a further term of 3 years and interest is charged at 4% per annum. On 1 December each year, 10% of the loan amount and interest accrued for the year to 1 December are required to be paid to the company.

Note 11. Business combinations

No new business combinations took place during the half year ended 31 December 2023.

On 30 August 2022, Close the Loop Limited acquired 100% of the ordinary shares of Alliance Paper Pty Ltd and its wholly owned subsidiary Sustain Paper Pty Ltd for total consideration of $1. At settlement Close the Loop became responsible for all debts of the acquired companies and was required to make an investment in the working capital of Alliance and Sustain Paper.

Alliance Paper is an Australian supplier of thermal paper and associated paper products and services. It is the largest and longest-serving supplier and converter of paper roll products in the Australian market. Alliance offers a range of BPA and phenol-free thermal receipt rolls and other paper products which are recyclable. The acquisition allows the Close the Loop’s to develop new sustainable paper products that can replace some traditional plastic packaging, based on technologies that Alliance has developed and has been trialled successfully by Close the Loop subsidiaries.

The goodwill of $20,000 represents the expected synergies from merging this business with the packaging division and expanding the service offering of the Group. The acquired business contributed revenues of $5,017,000 and profit after tax of $233,000 to the consolidated entity for the period from 31 August to 31 December 2022. If the acquisition occurred on 1 July 2022, the full half-year contributions would have been revenues of $7,516,000 and loss after tax of $57,000. The values identified in relation to the acquisition of Alliance Paper Pty Ltd were accounted for on a provisional basis as at 31 December 2022 and finalised during the current reporting period with no changes being made to the provisional accounting from the prior period.

Details of the acquisition are as follows:

Cash and cash equivalents
Trade receivables
Inventory
Other receivables
Plant and equipment
Trade payables
Deferred tax liability
Other payables
Net assets acquired
Goodwill
Acquisition-date fair value of the total consideration transferred
Representing:
Cash paid or payable to vendor
Acquisition costs expensed to profit or loss
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Less: cash and cash equivalents
Less: payments to be made in future periods
Net cash used

Fair value
$’000
91
3,749
1,097
414
2,140
(1,299)
-
(6,212)
(20)
20
-
-
44
-
91
-
91

CtL Ltd Group Half Year Report to 31 December 2023

Page 23 of 31

Notes to the Financial Statements 31 December 2023

==> picture [151 x 44] intentionally omitted <==

On 1 October 2022, Close the Loop Limited acquired 100% of the ordinary shares of The Pouch Shop Proprietary Limited for total consideration of ZAR8,000,000 plus the value of inventory less trade and statutory liabilities. At settlement date on 1 October 2022 ZAR4,000,000 plus 50% of the inventory on hand less 50% trade liabilities was paid with the balance of the consideration paid on the second anniversary of the settlement date. The balance of the purchase amount accrues interest at 5% per annum calculated in arrears on a monthly basis.

The Pouch Shop, a niche provider of ready-to-label packaging and pouches for food products in South Africa. The Pouch Shop is the largest stockist of off the shelf readymade pouches in Southern Africa. The Pouch Shop product range of recyclable flat bottom and stand-up pouches caters to small-volume fast-to-market customer needs. Its range and customer base complements the South Africa-based Foster International Packaging offer. The two South African businesses currently share warehouse and manufacturing facilities as well as back-end office and logistics processes. The goodwill of $645,000 represents the expected synergies from merging this business with the packaging division in South Africa and leveraging the current knowledge and know how of Foster International Packaging’s packaging business.

The acquired business contributed revenues of $483,000 and profit after tax of $46,000 to the consolidated entity for the period from 1 October to 31 December 2022. If the acquisition occurred on 1 July 2022, the full half-year contributions would have been revenues of $960,000 and profit after tax of $111,000. The values identified in relation to the acquisition of The Pouch Shop Proprietary Limited were accounted for on a provisional basis as at 31 December 2022 and finalised during the current reporting period with no changes being made to the provisional accounting from the prior period.

Details of the acquisition are as follows:

Cash and cash equivalents Trade receivables Inventory Other receivables Plant and equipment Trade payables Income tax payable Other payables Net assets acquired Goodwill Acquisition-date fair value of the total consideration transferred Representing: Cash paid or payable to vendor Acquisition costs expensed to profit or loss Cash used to acquire business, net of cash acquired: Acquisition-date fair value of the total consideration transferred Less: cash and cash equivalents Less: payments to be made in future periods Net cash used	Fair value $’000 114 25 518 5 1 (130) (12) (132)
	389 645
	1,034
	1,034
	8
	1,034 (114) (873)
	47

Net cash used

On 28 February 2023, Close the Loop Plastic Recycling Inc. acquired the assets and liabilities of In-Plas Recycling Inc. for total consideration of US$4,000,000 plus inventory of US$300,000 with a value of up to $US$500,000 at settlement. US$3,300,000 was paid at settlement which includes the payment of up to US$500,000 for inventory and deferred cash payments totalling US$1 million. Close the Loop will pay in the form of four equal annual deferred cash payments of US$250,000 each, paid on the anniversary date of the settlement. There is no interest payable on the deferred cash settlement amount, which has been guaranteed by close the Loop Inc.

CtL Ltd Group Half Year Report to 31 December 2023

Page 24 of 31

Notes to the Financial Statements 31 December 2023

==> picture [151 x 44] intentionally omitted <==

In-Plas Recycling is a recycler and processor of post-industrial scrap, pellets, regrind and by-products, and also sells a broad range of recovered plastic products on the market. It operates at three sites in Ohio and Indiana. The acquisition expands Close the Loop’s recycling scope and capabilities in North America. It strengthens the service offering in the plastic recycling market in the region and complements the existing business service offering.

The goodwill of $254,000 represents the expected synergies from merging this business with the USA resource recovery division and leveraging the current knowledge and know-how of Close the Loop Inc’s management and business. The acquired business contributed revenues of $2,285,000 and loss after tax of $232,000 to the consolidated entity for the period from 1 March to 30 June 2023. If the acquisition occurred on 1 July 2022, the full year contributions would have been revenues of $8,062,000 and loss after tax of $427,000. The values identified in relation to the acquisition of In-Plas Recycling were accounted for on a provisional basis as at 30 June 2023 and have now been finalised during this reporting period.

Details of the acquisition are as follows:

Plant and equipment / Right of use assets Inventory Deferred consideration Deferred tax liability Lease liabilities Employee benefits Net assets acquired Goodwill Brand name Customer Relationships Acquisition-date fair value of the total consideration transferred Representing: Cash paid or payable to vendors Acquisition costs expensed to profit or loss Cash used to acquire business, net of cash acquired: Acquisition-date fair value of the total consideration transferred Less: inventory on consignment Less: payments to be made in future periods Net cash used	Fair value $’000 4,096 933 (870) (1,456) (1,232) (45)
	1,426 254 372 3,770
	5,822
	5,822
	- 5,822 (435) (1,456)
	3,931

Net cash used

On 30 April 2023, Close the Loop Limited acquired 100% of the ordinary shares of ISP Tek Services LLC and Captive Trade Corporation for total consideration of up to US$66 million. At settlement US$35 million was paid in cash, 40,560,560 shares with a value of US$10 million (A$15,039,856) were issued to the vendors and two convertible notes worth US$7.5 million each were issued. On 18 July 2023 4,056,056 shares were issued with a value of US$1 million (A$1,503,985) to the vendors. The balance of the consideration is to be paid in the form of an earn out of up to US$5,000,000 based on the financial performance of the business in the 12 months to 30 March 2024.

ISP Tek Services LLC and Captive Trade Corp. is a US-based electronics refurbisher and trading platform businesses based in Southlake, Texas, USA. The acquisition provides the Group with significant consumer and commercial electronics remanufacturing and technological capabilities, a considerable US market sales and trading presence, and extensive distribution networks. It also adds reuse capabilities to the Company’s portfolio and further strengthen its service offering to original equipment manufacturers (OEMs), supporting sustainability and circular economy initiatives.

CtL Ltd Group Half Year Report to 31 December 2023

Page 25 of 31

Notes to the Financial Statements 31 December 2023

==> picture [151 x 44] intentionally omitted <==

The acquired business contributed revenues of $16,382,000 and profit before tax of $5,407,000 to the consolidated entity for the period from 1 May to 30 June 2023. If the acquisition occurred on 1 July 2022, the full year contributions would have been revenues of $81,699,000 and profit before tax of $22,175,000. The values identified in relation to the acquisition of ISP Tek Services and Captive Trade Corporation are accounted for on a provisional basis as at 30 June 2023 and have now been finalised during this reporting period.

Details of the acquisition are as follows:

Cash and cash equivalents Trade receivables Prepayments Plant and equipment / Right of use assets Inventory Deferred tax asset Trade payables Financial liabilities Lease liabilities Employee benefits Net assets acquired Goodwill Software Customer relationships Deferred tax liability Acquisition-date fair value of the total consideration transferred Representing: Cash paid or payable to vendors Convertible notes payable Deferred consideration Close the Loop shares issued to vendors Total Acquisition costs expensed to profit or loss Cash used to acquire business, net of cash acquired: Acquisition-date fair value of the total consideration transferred Less: share issued upon settlement Less: cash and cash equivalents Less: payments to be made in future periods Net cash used	Fair value $’000 - - - 8,028 - - - - (3,153) -
	4,875 16,217 8,114 86,803 (19,933)
	96,076
	51,178 22,490 7,279 15,129
	96,076
	-
	96,076 (15,129) - (29,769)
	51,178

Note 12. Events after the reporting period

CtL Ltd Group Half Year Report to 31 December 2023

Page 26 of 31

Notes to the Financial Statements 31 December 2023

==> picture [151 x 44] intentionally omitted <==

No other matter or circumstance has arisen since 31 December 2023 that has significantly affected, or may significantly affect the consolidated entity’s operations, the results of those operations, or the consolidated entity’s state of affairs in future financial years.

Note 13. Intangibles

Goodwill Less: Impairment Customer Relationships Less: Accumulated amortisation Patents and trademarks - at cost Less: Accumulated amortisation Brand Names - at cost Less: Accumulated amortisation Software created - at cost Less: Accumulated amortisation	Consolidated 31 Dec 2023 $’000 31 Dec 2022 $’000 41,512 15,249 - - 41,512 15,249 99,571 9,175 (7,832) (1,280) 91,739 7,895 1,331 1,281 (835) (760) 496 521 5,342 5,005 (435) (108) 4,907 4,897 9,960 1,500 (2,209) (493) 7,751 1,007 146,405 29,569	Consolidated 31 Dec 2023 $’000 31 Dec 2022 $’000 41,512 15,249 - - 41,512 15,249 99,571 9,175 (7,832) (1,280) 91,739 7,895 1,331 1,281 (835) (760) 496 521 5,342 5,005 (435) (108) 4,907 4,897 9,960 1,500 (2,209) (493) 7,751 1,007 146,405 29,569
		15,249
		9,175 (1,280)
		7,895
		1,281 (760)
		521
		5,005 (108)
		4,897
		1,500 (493)
		1,007
		29,569

Reconciliations

Reconciliations of the written down values at the beginning and end of the current financial half-year are set out below:

Consolidated Balance at 1 July 2022 Purchase price adjustment Additions through business combinations (Note 11) Amortisation expense Balance at 31 December 2022	Goodwill $’000 20,265 (5,681) 665 - 15,249	Customer Relationships $’000 7,878 676 - (659) 7,895	Patents and Trademarks $’000 572 - - (51) 521	Brand Names $’000 - 5,005 - (108) 4,897	Software Created $’000 1,195 - - (188) 1,007	Total $’000 29,910 - 665 (1,006) 29,569

CtL Ltd Group Half Year Report to 31 December 2023

Page 27 of 31

Notes to the Financial Statements 31 December 2023

==> picture [151 x 44] intentionally omitted <==

1 December 2023
Consolidated Balance at 1 July 2023 Additions Purchase price adjustment Movement in foreign exchange rate Amortisation expense Balance at 31 December 2023	Goodwill $’000 117,525 - (75,983) (30) - 41,512	Customer Relationships $’000 7,566 - 90,649 317 (6,793) 91,739	Patents and Trademarks $’000 556 22 (62) - (20) 496	Brand Names $’000 4,802 - 229 1 (125) 4,907	Software Created $’000 820 - 8,202 57 (1,328) 7,751	Total $’000 131,269 22 23,035 345 (8,266)
						146,405

Note 14. Borrowings

During the previous corresponding period and with effect from 30 August 2022, the Group entered into two new finance facilities with Octet to fund the working capital requirements of Alliance Paper Pty Ltd. A debtor funding facility with a funding limit of $3,000,000 and a trade finance facility of $2,500,000. On 23 December 2022 the trade finance facility was increased to $4,500,000. As a result of the Group entering into the new syndicated loan facility, the Octet trade finance facility was repaid in full and a new trade finance facility of $1,000,000 was put in place with effect from 4 May 2023. At 31 December 2023 $255,000 (31 December 2022: $1,386,046) of the trade finance facility and $1,466,000 (31 December 2022: $1,183,302) of the debtor funding facility had been utilised. The loan is secured over Alliance Paper’s trade receivables and inventory.

During the half-year ended 31 December 2022, the Group obtained new business bank loans to the amount of $5,200,000. The proceeds from the loans were used to repay Commonwealth Bank of Australia loans and fund the Crasti and Co. acquisition. Repayments of other bank loans amounting to $2,061,000 were made in line with previously disclosed repayment terms during the half year ended 31 December 2022. As a result of entering into the PGIM Inc. facilities all National Australia Bank bank loans were repaid in full during the year ended 30 June 2023.

On 26 April 2023 the Group entered into a Multi-Currency Revolving Credit Facility (“Revolver”) of US$7,500,000 with PGIM Inc., the global investment management business of Prudential Financial Inc. This facility is part of the Senior Secured Term Loan facility taken out on the same date. The facility was not used at 30 June 2023 or at any time during the half year ended 31 December 2023 and has a maturity date of 26 December 2029. The facility incurs interest at a rate of 2.36250% if it is undrawn with interest required to be paid quarterly at the end of March, June, September and December. Security over the Revolver is provided by way of a first lien over all assets of the business via a floating charge.

On 26 April 2023 the Group entered into a Senior Secured Term Loan of US$40,000,000 with PGIM Inc., the global investment management business of Prudential Financial Inc. The facility was fully drawn on 26 April 2023 and unpaid principal balance as of 31 December 2023 was US$39,250,000 (30 June 2023: $39,750,000). The facility matures on 26 October 2029 and incurs interest at a variable rate of 12.14187% paid quarterly at the end of March, June, September and December. Security over the Senior Secured Term Loan is provided by way of a first lien over all assets of the businesses via a floating charge. At the end of each quarter 0.625% of the principal is required to be repaid in years 1 and 2. Thereafter 1.25% of the principal is required to be repaid each quarter. The initial drawdown was used to finance the ISP Tek Services acquisition and provide working capital for this business post-acquisition.

As part of the Senior Secured Term Loan, US$5,000,000 has been committed as a Delayed Draw Term Loan Facility. The facility was not used at 30 June 2023 or 31 December 2023 and has a maturity date of 26 October 2029. The facility incurs interest at a rate of 2.36250% if it is undrawn with interest required to be paid quarterly at the end of March, June, September and December. Security over the Revolver is provided by way of a first lien over all assets of the business via a floating charge.

CtL Ltd Group Half Year Report to 31 December 2023

Page 28 of 31

Notes to the Financial Statements 31 December 2023

==> picture [151 x 44] intentionally omitted <==

The Group has complied with all banking covenants throughout the period and as at 31 December 2023.

On 28 April 2023 Close the Loop Limited promised to issue to the order of the vendors of ISP Tek Services, 7,500,000 convertible notes (“Notes”), each having a face value of US$1.00 and the principal sum of US$7,500,000 in the aggregate, together with interest thereon from the date of issuance of the convertible at maturity notes. Interest will accrue at a simple rate of 4% per annum on these notes. The principal and accrued interest of the Notes issued will be due and payable by Close the Loop on 28 April 2026. The Notes will be convertible into Close the Loop’s ordinary shares at the discretion of the company at a set price of A$0.74 cents per share converted at the rate published by the Reserve Bank of Australia as at the trading day immediately preceding the date of conversion.

A second note was issued on 28 April 2023 by Close the Loop Limited which promised to issue to the order of the vendors of ISP Tek Services, 7,500,000 convertible notes (“Notes”), each having a face value of US$1.00 and the principal sum of US$7,500,000 in the aggregate, together with interest thereon from the date of issuance of the convertible on demand notes. Interest will accrue at a simple rate of 4% per annum on these notes. Unless earlier repaid in cash or converted into shares at Close the Loop’s election, the principal and accrued interest of the Notes issued will be due and payable by Close the Loop on 28 April 2026. The Notes will be convertible into Close the Loop’s ordinary shares at the discretion of the company at a set price of A$0.74 cents per share converted at the rate published by the Reserve Bank of Australia as at the trading day immediately preceding the date of conversion. This note is classified as a current liability as it can be converted any time at the Company’s discretion prior to the maturity date.

There were no other changes to the Group’s borrowings as reported in the 30 June 2023 financial report.

Note 15. Earnings per share

Earnings per share for profit from continuing operations
Profit after income tax
Non-controlling interest
Profit after income tax attributable to the owners of Close the Loop Limited
Basic earnings per share
Diluted earnings per share
Weighted average number of ordinary shares
Weighted average number of ordinary shares used in calculating basic
earnings per share
Adjustments for calculation of diluted earnings per share:
Options over ordinary shares
Performance Rights
Weighted average number of ordinary shares used in calculating diluted
earnings per share

Consolidated
31 Dec 2023
$’000
31 Dec 2022
$’000
5,009
4,004
(82)
40
4,927
4,044
Cents
Cents
0.95
1.21
0.92
1.17
Number
Number
521,121,468
335,451,478
9,216,635
11,000,000
6,526,087
435,792
536,864,190
346,887,270

CtL Ltd Group Half Year Report to 31 December 2023

Page 29 of 31

==> picture [151 x 44] intentionally omitted <==

2 DIRECTORS DECLARATION

In the directors' opinion:

The attached financial statements and notes comply with the Corporations Act 2001, Australian Accounting Standard AASB 134 ‘Interim Financial Reporting’, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
The attached financial statements and notes give a true and fair value of the consolidated entity’s financial position as at 31 December 2023 and of its performance for the financial half-year ended on that date; and
• There are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of directors made pursuant to section 303(5)(a) of the Corporations Act 2001.

On behalf of the directors

==> picture [75 x 33] intentionally omitted <==

Signed: ____ Date: 26 February 2024 Gregory Toll Director

==> picture [301 x 136] intentionally omitted <==

CtL Ltd Group Half Year Report to 31 December 2023

Page 30 of 31

Nexia Melbourne Audit Pty Ltd Level 35, 600 Bourke St Melbourne VIC 3000

Australia

E: [email protected]

P: +61 3 8613 8888 F: +61 3 8613 8800

nexia.com.au

��

��
��

��

Australia

��

==> picture [75 x 43] intentionally omitted <==

��

==> picture [81 x 41] intentionally omitted <==

�� 

��

AI assistant

CLOSE THE LOOP LTD. — Interim / Quarterly Report 2024

64659_rns_2024-02-25_0f3ecd0a-6c6f-44c7-a15c-b9b903d251c3.pdf

APPENDIX 4D

1.1 Company details

1.2 Results for announcement to the market

Dividends

Comments

1.3 Net tangible assets

1.4 Control gained over entities

1.5 Loss of Control over entities

1.6 Details of associated and joint venture entities

1.7 Audit review

1.8 Attachments

1.9 Signed

DIRECTORS’ REPORT

Directors

Principle Activities

Review of Operations

Significant Changes in the State of Affairs

Events Subsequent to Reporting Date

Rounding of Amounts

Auditor's independence declaration

Australia

nexia.com.au

������������������������������ ����������

General Information

Statement of changes in equity For the half-year ended 31 December 2023

Notes to the Financial Statements 31 December 2023

Note 1. Significant accounting policies

New or amended Accounting Standards and Interpretations adopted

Basis of preparation

Statements of financial position

Statement of profit and loss and other comprehensive income

Statement of changes in equity

Statement of cash flows

Critical accounting estimates and assumptions

Notes to the Financial Statements 31 December 2023

Note 2. Operating segments

Identification of reportable operating segments

Types of products and services

Intersegment transactions

Intersegment receivables, payables, and loans

Operating segment information

Notes to the Financial Statements 31 December 2023

Notes to the Financial Statements 31 December 2023

Note 3. Revenue

Note 4. Other income

Note 5. Expenses

Notes to the Financial Statements 31 December 2023

Note 7. Share Based Payments

Notes to the Financial Statements 31 December 2023

Note 8. Equity - dividends

Note 9. Contingent liabilities

Note 10. Related party transactions

Notes to the Financial Statements 31 December 2023

Note 11. Business combinations

Notes to the Financial Statements 31 December 2023

Notes to the Financial Statements 31 December 2023

Notes to the Financial Statements 31 December 2023

Note 12. Events after the reporting period

Notes to the Financial Statements 31 December 2023

Note 13. Intangibles

Reconciliations

Notes to the Financial Statements 31 December 2023

Note 14. Borrowings

Notes to the Financial Statements 31 December 2023

Note 15. Earnings per share

2 DIRECTORS DECLARATION

Australia

������������������������������������ �������������������������������������

�����������������������������������������

�����������

���������������������

���������������������������������������������������������

Australia

����������������������������������������������������������������

������������������������������ ����������

More from CLOSE THE LOOP LTD.

CLOSE THE LOOP LTD. Interim / Quarterly Report 2024

��

��

��

��

��

��

��

��