false
0001883835
0001883835
2025-10-21
2025-10-21
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities
Exchange Act of 1934
Date of Report (Date of earliest event
reported): October 21, 2025
| ESG Inc. |
| (Exact name of registrant as specified in its charter) |
| Nevada |
333-259772 |
87-1918342 |
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
|
433 East Hillendale Rd.
Chadds Ford, PA |
19317 |
| (Address of principal executive offices) |
(Zip Code) |
| Registrant’s telephone number, including area code |
267-467-5871 |
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Securities registered pursuant to Section
12(b) of the Act:
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
| N/A |
N/A |
N/A |
Item 1.01 Entry into a Material Definitive Agreement.
ESG Inc. is reporting two material definitive agreements entered into
on October 21, 2025: (i) a non-binding Letter of Intent for a proposed acquisition of Panco Foods Inc., and (ii) an Advisor Agreement
with Craft Capital Management LLC in connection with the proposed acquisition and related financing.
Letter of Intent with Panco Foods Inc.
On October
21, 2025, ESG Inc. (“ESG” or the “Company”)
entered into a Letter of Intent (the “LOI”) with Panco Foods
Inc. (“Panco”), a privately held Oregon corporation headquartered
in Portland, Oregon.
Under the
terms of the LOI, ESG and Panco have agreed to negotiate exclusively toward the execution of a definitive acquisition agreement pursuant
to which ESG would acquire 100% of the outstanding equity interests of Panco (the “Transaction”).
The proposed purchase price is approximately $10 million, payable in shares of ESG’s
common stock subject to compliance with applicable securities laws and the execution of a definitive purchase agreement and customary
adjustments for working capital, indebtedness, and transaction expenses.
The LOI provides
that the final structure and terms of the Transaction will be determined following completion of due diligence, tax analysis, and legal
review, and reflected in a definitive purchase agreement. Closing of the Transaction is subject to various customary conditions, including
completion of ESG’s due diligence to its satisfaction, negotiation
and execution of the definitive agreement, receipt of all required corporate and regulatory approvals, and the absence of any material
adverse change in Panco’s business prior to closing.
The LOI contains certain binding provisions, including an exclusivity
period, confidentiality obligations, ESG’s right to make public disclosures and file SEC reports relating to the LOI, mutual good
faith negotiation obligations, and allocation of expenses.
The LOI does not constitute a binding commitment by either party to
consummate the proposed Transaction, and there can be no assurance that the Transaction will be completed on the terms set forth in the
LOI or at all. The parties anticipate negotiating and executing a definitive purchase agreement within approximately forty-five (45) days
from the date of the LOI.
A copy of the LOI is filed as Exhibit 10.1 to this Current Report on
Form 8-K and is incorporated herein by reference. Certain portions of the LOI may be redacted pursuant to Item 601(b)(10)(iv) of Regulation
S-K.
Advisor Agreement with Craft Capital Management LLC
Also on October
21, 2025, ESG entered into an Advisor Agreement with Craft Capital Management LLC (“Craft”),
a FINRA and SEC-registered broker-dealer and investment banking firm, pursuant to which Craft will serve as the Company’s
exclusive financial advisor in connection with the proposed acquisition of Panco and related financing activities.
Under the terms of the agreement, Craft will provide strategic and
financial advisory services, including merger and acquisition support, capital structure review, and assistance in sourcing and arranging
financing. Craft has agreed to devote reasonable time and best efforts to the engagement, which includes advising on transaction structure,
assisting with due diligence and documentation, supporting negotiations, and introducing potential investors or funding sources.
The engagement is for a term of six (6) months and includes compensation
consisting of a non-refundable retainer fee and success fees tied to the completion of financing transactions introduced by Craft. The
success fees are calculated as a percentage of gross proceeds received by the Company from such transactions, with varying rates depending
on the financing type (e.g., equity placement, PIPE, or debt facility). Craft is not entitled to success fees on financings sourced independently
by ESG.
Item 8.01 Other Events.
On October 17, 2025, ESG Inc. (the “Company”) temporarily
suspended production operations at its primary facility to complete the construction and installation of equipment associated with its
Environmental Protection Agency (“EPA”) compliance project. The suspension is part of an EPA-approved integration and compliance
initiative intended to align the Company’s expanded production capacity with environmental and operational standards.
During this process, construction activities affected composting conditions,
which resulted in the disposal of certain production batches and a temporary shortage of compost for internal cultivation and external
sales. As a result, no fresh mushroom sales were recorded in September 2025.
Following consultation with internal management and external experts,
the Company determined that temporarily suspending production was the most prudent approach to expedite completion of the compliance installation,
minimize losses, and ensure full environmental alignment.
Production operations are expected to remain suspended for approximately
three months, after which the Company anticipates resuming normal operations with enhanced capacity and improved regulatory compliance.
The Company does not currently expect the temporary suspension to result in a material impairment of assets under ASC 360 and will continue
to evaluate its financial impact in connection with its next periodic filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. |
|
Description |
| 10.1 |
|
Letter of Intent dated October 21, 2025, by and between ESG Inc. and Panco Foods Inc. |
Forward-Looking Statements
This Current Report on Form 8-K contains statements that constitute
“forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities
Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations,
estimates, and projections about future events and are not guarantees of future performance. Words such as “anticipates,”
“expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,”
and similar expressions are intended to identify such forward-looking statements.
These forward-looking statements include, among others, statements
regarding: (i) the anticipated structure, timing, and potential completion of the proposed acquisition of Panco Foods Inc.; (ii) the Company’s
future operating results, business strategy, and growth plans; (iii) the timing and expected duration of the temporary production suspension;
(iv) the completion of the Company’s EPA-compliance facility and related equipment installation; and (v) the Company’s expectations
for future operations, production capacity, and revenue recovery.
Forward-looking statements are subject to risks, uncertainties, and
assumptions that are difficult to predict, many of which are beyond the Company’s control. Actual results may differ materially
from those expressed or implied by such statements. Factors that could cause actual results to differ include, among others: the Company’s
ability to complete due diligence and negotiate definitive terms, obtain necessary regulatory or corporate approvals, satisfy closing
conditions, and successfully integrate the target business; construction delays or cost overruns; equipment installation or operational
issues; environmental or regulatory compliance risks; and other factors described in the Company’s filings with the Securities and
Exchange Commission.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this report. The Company undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events, or otherwise, except as required by law.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| By: /s/ Zhi (Thomas) Yang |
|
| Name: Zhi (Thomas) Yang |
|
| Title: Chief Executive Officer |
|
| Date: October 21, 2025 |
|
