CLOSE THE LOOP LTD. — Investor Presentation 2024

Jul 8, 2024

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collecting today. creating tomorrow. IT Refurbishment Investor Presentation | 9 July 2024

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Disclaimer

The following disclaimer applies to this presentation. You should read this disclaimer carefully before reading or making any other use of this presentation or any information contained in this presentation. By accepting this presentation, you represent and warrant that you are entitled to receive this presentation in accordance with the restrictions, and agree to be bound by the limitations, contained within it. This presentation has been prepared by Close the Loop Limited ACN 095 718 317 (“Close the Loop Group”, “Close the Loop” or the “Company”) and does not constitute or form part of, and should not be construed as, an offer, solicitation or invitation to subscribe for, underwrite or otherwise acquire, any securities of Close the Loop or any member of its group nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities of Close the Loop or any member of its group, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever.

This presentation is not a prospectus, product disclosure statement or other disclosure document under Australian law (or any other law) and has not been lodged with the Australian Securities and Investments Commission (or any other regulatory body in Australia or abroad). This presentation contains summary information about Close the Loop and its related bodies corporate and their activities, which is current as at the date of this presentation. The information included in this presentation is of a general nature and does not purport to be complete nor does it contain all the information which a prospective investor should consider when making an investment decision.

Each recipient of this presentation should make its own enquiries and investigations regarding all information in this presentation including but not limited to the assumptions, uncertainties and contingencies which may affect the future operations of Close the Loop and the impact that different future outcomes may have on Close the Loop. This presentation has been prepared without taking account of any person’s investment objectives, financial situation or particular needs. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs, make their own assessment of the information and seek legal, financial, accounting and taxation advice appropriate to their jurisdiction in relation to the information and any action taken on the basis of the information.

The information included in this presentation has been provided to you solely for your information and background and is subject to updating, completion, revision and amendment and such information may change materially. Unless required by applicable law or regulation, no person (including Close the Loop) is under any obligation to update or keep current the

information contained in this presentation and any opinions expressed in relation thereto are subject to change without notice. No representation or warranty, express or implied, is made as to the fairness, currency, accuracy, reasonableness or completeness of the information contained herein.

None of Close the Loop’s advisers, directors, officers, employees or agents have authorised, permitted or caused the issue, despatch or provision of this presentation nor, except to the extent referred to in this presentation, made or purported to make any statement in this presentation. Neither Close the Loop nor any other person accepts any liability and Close the Loop, its related bodies corporate and advisers their respective directors, officers and employees, to the maximum extent permitted by law, expressly disclaim all liabilities and responsibility for any loss howsoever arising, directly or indirectly, from this presentation or its contents.

References:

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https://www.statista.com/statistics/273495/global-shipments-of-personal-computers-since-
2006/
https://www.stellarmr.com/report/Laptop-Market/2107
https://www.statista.com/statistics/267018/global-market-share-held-by-pc-vendors/
https://www.statista.com/outlook/cmo/consumer-electronics/computing/printers-
copiers/worldwide
https://www.papercut.com/blog/insights/why-eco-friendly-ink-matters-when-it-comes-to-print-
sustainability/#:~:text=It%20can%20also%20be%20difficult,of%20that%20number%20being%20r
ecycled
https://www.mordorintelligence.com/industry-reports/printer-market/market-size
https://www.statista.com/statistics/272595/global-shipments-forecast-for-tablets-laptops-and-
-
desktop pcs/
https://www.statista.com/topics/1070/pcs/
https://greencentralbanking.com/2022/02/28/what-is-double-materiality-central-banks/
https://www.who.int/news-room/fact-sheets/detail/electronic-waste-(e-
waste)#:~:text=In%202019%2C%20an%20estimated%2053.6,as%20open%20burning%20(3).
https://ventureoutsource.com/contract-manufacturing/what-difference-between-oem-cm-
cem-ecm-ems-odm-jdm-design-house-contract-electronic-terms/#:~:text=OEM%20–
%20original%20equipment%20manufacturer&text=Apple's%20iPhone%20has%20the%20Apple,
Both%20EMS%20and
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IT Refurbishment Investor Presentation 9 July 2024

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01

Total Addressable Market

ODM and OEM 02 Dynamics

Evolving Business 03 Models HP Renew Solutions 04 and Circularity Close the Loop Capabilities and 05 Expansion Plans

Presenters:

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Joe Foster Group CEO Michael Welton North America CEO

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OEMs are rapidly evolving their business models towards a circular economy to accommodate global drivers of change:

1.

New environmental, social and governance regulations (ESG), and

2. Changing business and consumer demands.

Which is leading to the…

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Laptop Market

240m laptops sold in 2023 ~US$164bn market

Lenovo, Dell and HP collectively account for ~60% of global laptop sales

Key metrics:

• On average OEMs release three new models per year that are designed to last 5-6 years

• Useful life is determined by grading, wear and tear warranties, component degradation and market developments in software and hardware

Less than 10% of laptops sold are refurbished

• Significant advancements have been made with cameras, memory and processing capabilities, but many core laptop components remain unchanged over the past decade

• New AI chips are expected to trigger a replacement cycle in laptops

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~100m printers sold each year ~US$52bn

~1.3bn print consumables are sold each year ~$25bn

HP is globally dominant in the print/copy world with ~30% of the market followed by Xerox (20%), Canon (17%) and Brother (10%)

Printer Market

On average every person in the EU consumes one print consumable per year

Key metrics:

• Approximately 1.3 billion print consumables sold globally with under 30% being recycled

• In the US alone, over 300 million inkjet and 70 million laser cartridges are sold yearly

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Other Markets

Computing accessories

As the world becomes more connected and electronic devices proliferate our daily lives, there is a growing opportunity and demand for computing equipment to become more circular

Key metrics:

• Servers – ~$126bn

• • Gaming – ~$34bn

• • POS – ~$29bn

• Accessories – ~$15bn

• Teleconferencing – ~$10bn

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New product manufacturing Deep symbiotic relationships delivering global efficiencies of scale in highly specialised manufacturing and fabrication processes

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Original Design manufacturers (ODMs)

• ODMs, mostly based in Taiwan and China, are responsible for the fabrication of most new laptops and accessible to any company that can afford their minimum order quantity

• ODMs function as contract manufacturers to the largest OEMs, providing manufacturing expertise, reliability, outsourced research and development, speed to market, and significant economics of scale resulting in very low unit costs

• The five largest ODMs account for ~80% of the total production and supply of laptops globally

Original Equipment Manufacturers (OEMs)

• OEMs rely heavily on multiple ODMs, but retain in-house research, design and fabrication expertise – typically, IP heavy components

• OEMs are now increasingly brand solution providers that invest resources in design, marketing, sales and distribution channels to win and supply consumers

ODMs

• Foxconn,

• Pegatron,

• Wistron,

• Compal,

• Quanta,

• Inventec,

• Gigabyte Technology,

• Advancetech,

• Supermicro,

• Wiwynn,

• MiTAC,

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Business

• Many businesses purchase PCs through value adding resellers, such as system integrators and managed a service providers who provide a holistic suite of services relating to their procurement, installation, configuration, maintenance and replacement.

Business and consumer channels

• Businesses tend to favour consistent high performance, software compatibility, durability and security over any other features, and enterprise grade laptops are specifically designed to service these needs

• Business consumers tend to use laptops for 2 - 3 years, coinciding with leasing norms and warranties offered by financing companies and OEMs before renewing and upgrading to the latest models

• IT departments typically begin planning refreshment one year in advance

• Businesses look for repairability and upgradeability

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Consumer

• Typically, bought with a one-year warranty

• Sold thought mainstream or online retail networks

• Aesthetics and design as important as performance

• Range of price choice to cater for budget options

• Frequently used by one owner until end of design life (5-6 years)

• Until recently repairability and upgradeability has not been an important feature

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The problem with a linear model

The take, make and dispose business model presents several problems for OEMs:

Ownership

OEMs lose control of their product and brand

Having put the product into the market, OEMs lose control of their brand and the customer experience with little to no participation in the secondary marketing and sale of their product, missing out on servicing and/or refurbishment. This dilutes the brand experience and limits the participation through the entire product lifecycle

Environment

Poor environmental outcomes

The manufacture of the OEM equipment creates 80% of the product’s carbon footprint, requires energy intensive processes and the supply of critical rare earth and other materials. Limited reuse and recycling of these products is contributing to climate change and unsustainable e-waste volumes being sent to landfill

Inefficient

Matching products with market segments

With limited OEM participation in the secondary market businesses and consumers have not benefitted from the opportunity to regularly upgrade or refurbish products to their changing requirements and needs

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Environmental impact

• The manufacture of a single laptop produces on average 331kg of carbon dioxide (CO2) • Lorem Ipsum The overall ICT industry is responsible for as much greenhouse gas pollution as the dolar sit airline industry – or ~2% of global Lorem ipsum dolor sit amet, CO2 and is forecast to account for as much as 14% by 2040 consectetur adipiscing elit, • sed do eiusmod tempor ~80% of the environmental impact can be traced to incididunt ut labore et manufacturing dolore magna aliqua. Dolor • sit amet consectetur Copper, nickel, lithium and tin are used in the production of laptops adipiscing elit ut. Tellus and pose a supply risk due to 80% molestie nunc non blandit of global production coming from massa enim.China

Three new laptops generate one metric ton of carbon dioxide

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E-waste

• According to the UN’s global e-waste monitor report, e-waste increased from 41.8 mt in 2014 to 53.6 mt in 2022 and is predicted to reach 74.7 mt by 2030

• Electronic waste (e-waste) is one of the world’s fastest growing waste streams, fuelled mainly by higher consumption rates of electric and electronic equipment, short life cycles and few options to repair

• E-waste is a health and environmental hazard, containing toxic additives or hazardous substances such as mercury, which can damage the human brain and coordination system

• In recent years, many countries have implemented EPR (Extended Producer Responsibility) schemes on electrical and electronic equipment including all EU members states, USA, Canada, Japan, South Korea, Chile, Brazil, Argentina, Colombia.

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Only 17.4% of e-waste is collected and recycled

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Regulation

• UK – FCA’s TCFD – SDR EU – WEEE, NFRD, CSRD, SFDR, CSDDD USA – SEC, FIO, NYSDoL – CCAA, FSSAA China – CSRC, CERDS – DRaLC, ESGD

A new wave of ESG and financial reporting regulation is driving change in industry behaviour

• The Taskforce on Climate-related Financial Disclosures (TCFD) is now the common thread across international legislation on climate disclosure, including the US, EU, UK, Switzerland, Singapore, Hong Kong, New Zealand, and Japan.

• The European Union has introduced several regulations to ensure that companies provide accurate and comparable ESG information.

• In the US, the Securities and Exchange Commission (SEC) finalised disclosures rule for Investors that requires public companies to disclose certain climate-related information in their annual reports.

• The first set of ESG disclosure guidelines issued by China will raise the standard of reporting by local companies and promote sustainable investments in the country.

• The Shanghai, Shenzhen and Beijing exchanges are taking a double materiality approach”, requiring companies to report on the impact their activities have on the environment as well as the risks and impact of environmental factors on their business.

• Around half of China’s listed companies will be obliged to carry out the reporting

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The solution

Circularity

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Collect Create

Resell

Working with OEMs to establish device trade-in services and reverse logistic systems that empower businesses and consumers from all over the world to recover value for their used technology

Provide an Supply highecosystem of quality certified tools and refurbished processes that, in technology to conjunction with consumers and OEMs, businesses economically globally through refurbish and a network of repair technology trustworthy sales with trusted channels warranties and customer support

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HP Renew Solutions – circularity in action

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Benefits of HP Certified Refurbished for businesses

Leverage flexibility within the workplace

Combining new hardware with refurbished devices without compromising on quality or performance

Support a circular economy Stretch IT budgets further by extending the life of existing devices

Maximise return on investment

Get value back through responsible services and programs when kickstarting IT refresh

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HP Renew Solutions

By 2026, circularity will become a key component of product lifecycle management

HP Certified Partners

HP business customers can purchase HP Certified Refurbished products from HP Certified Refurbished Partners. This select group of partners restore hardware that adheres to HP’s strict standards, including environmental compliance, quality testing, and the use of approved HP parts. These devices come with 1- year limited warranty serviced by HP.

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Close the Loop is an HP Certified Refurbished Partner

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Global refurbishment capabilities

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Leading refurbisher and distributor of consumer electronics within a blue-chip customer base

Third party refurbishment partner for Microsoft, HP, Samsung, LG, and other industry–leading manufacturers

Refurbishment and reseller for high volumes of new, off-lease, or previouslyowned computers, inkjet, LaserJet, and commercial printers

Innovative approach following the best and highest use hierarchy

Extensive experience in designing and implementing go-to-market strategies for programs, products, and services

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Equipment recovery pathways

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Retail Returns

Off-Lease Equipment (b2b)

Close the Loop manages collection, product triage & testing, refurbishment, remarketing

Close the Loop offers “white glove” service including collection, aggregation and transport of off-lease equipment on behalf of OEM’s. Product triage & testing, repair, and return to OEM, trade-in program, or remarketing

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End of Life or Retired Electronics (b2c)

Close the Loop manages collection, product triage & testing, repair, or parts harvesting on behalf of OEM’s

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Damaged or Rejected Products Close the Loop manages collection, product triage & testing, repair, or parts harvesting on behalf of OEM’s

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Close the Loop – Sales Channels

Wholesale

• 30,000+ monthly units

• Over 200 wholesale distribution clients

• Education, government, B2B, and B2C

• Global reach

Marketplace

• 20,000+ monthly units

• Operating on Amazon, eBay, Walmart, Newegg, Mercado Libre, Reebelo, and Target.

• Onboarding new brands (e.g. Staples)

Direct to Consumer

• Online storefront

• Targeted social media advertising campaigns

• In-house website for all product lines.

Close the Loop is committed to delivering an outstanding omnichannel experience by focusing on exceptional quality and customer service

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Ecosystem of clients, partners and providers

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Strategic growth and expansion

Location	America’s	America’s	America’s	America’s	EMEA	EMEA	EMEA	APJ	APJ	APJ	APJ
	KY	TX	CA	MX	BE	DU	ZA	AU	VN	SG/ MY	NZ
PC Refurbishing
Print Refurbishing
Monitor Refurbishing
ITAD
Cartridge Recycle
Electronic Recycling
Reuse Packaging
e-Waste
Packaging& QC
Collection/Distribution
Fulfilment Services
Sales

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Mexicali facility

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Cost Factor	Southlake, TX	Mexicali, MX
Direct Labor Costs	$18 / hr	$7.5 / hr
Rent	$12 per sqft.	$8.50 per sqft.
Utility Expenses	18 cents per kWh	11 cents per kWh

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Investor enquiries: Warrick Lace 0488 335 815 investors@closetheloop.com.au

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