With revenue approximately half of that the prior year ESG Inc. (ESGH), a maker of plant based ingredients and food, revealed in its latest annual report that it booked no revenue in September 2025 due to operational disruptions related to its ongoing environmental compliance and capacity expansion initiatives.

Substantially all of ESG’s business is conducted in China and says it was recently required to upgrade its primary production facility— constructing and installing a new Environmental Protection Agency (EPA) compliance facility and related integration equipment.

Clearly, the upgrade did not go as planned. ESG acknowledged that batches of compost it made were unusable, leaving insufficient usable compost to sustain the cultivation of mushrooms in the latter part of the third quarter:

“Notably, the Company did not record any fresh mushroom sales in September 2025, as the harvest that would normally have occurred in that month was lost due to the compromised compost. This absence of September sales, combined with lower production volumes in August, significantly reduced the Company’s quarterly revenue relative to prior periods.”

By late October 2025, matters appear to have worsened.

ESG says it temporarily suspended production at its primary facility to facilitate the swift completion of the EPA compliance facility installation and prevent further losses.

The revelation comes as ESG inserted new language in its latest annual report suggesting it has been accused of not paying its suppliers:

“The Company’s PRC operating subsidiaries and affiliates have been involved in several disputes with suppliers arising from unpaid amounts owed to raw material vendors following the suspension of production and related liquidity constraints. These matters primarily involve claims by suppliers of chicken manure, straw, and other production inputs, and several have been resolved through court-mediated settlements or judgments requiring staged payments or confirming liability.”

The company hired a new auditor, Tang Qian & Associates, PLLC, two weeks prior to filing its latest annual report.

Tang Quian & Associates PLLC appears to have launched a year ago with clients that include:

—Top KingWin Ltd (WAI) down 99.9% since going public
—Cheetah Net Supply Chain Service (CTNT) down 99.9% since going public
—Chaince Digital Holdings Inc. (CD) up 512% since going public

With an Enterprise Value (EV) of approximately $111 million, ESG is priced as if it will grow annual sales to more than $250.6 million, up from $6.1 million in 2025. To justify its current share price of $4.00 our Reverse DCF— which quantifies investor expectations embedded in the current share price— indicates ESG must:

—Grow sales 45% annually for the next decade, versus 2025 sales growth of (51.6%) and three-year average of 7.2%
—Increase NOPAT margin to 8.5%, versus our 2025 estimate of (39.7$) and three-year average estimate of (9.8%)
—Increase Invested Capital (IC) Turns to 1.1, up from our three-year estimates of 0.4

Notably, the current share price also implies ESG increases Return on Invested Capital (ROIC) to 9.3% from our 2025 estimate of (11.5%):