CARBONXT (CG1.ASX) is at a pivotal stage, expected to generate initial Kentucky revenues in H1 2025
CARBONXT GROUP LIMITED is at a pivotal stage, with its Kentucky activated carbon plant reaching mechanical completion. The facility is expected to generate initial revenues in H1 2025, positioning the company to benefit from increased demand driven by PFAS regulations and industrial air and water treatment needs. The funds raised will support:
·The ramp-up of the Kentucky facility
·Increasing Carbonxt’s ownership stake from 40% to 50% in the facility through a structured three-tranche investment (first instalment: A$1.6 million)
·Strengthening working capital to support growth and contract execution
The company has secured new contracts and achieved significant cost reductions of A$1.5 million annually, which enhances its financial position.
Given the expected interest shown in this SPP Offer, the company reserves the right to scale back applications under the SPP if applications exceed A$2m. We’re contacting you today to make sure you’re aware of your ability to participate as an eligible shareholder in the business.
Proceeds from the recent Placement and SPP and Debt Facility are intended to primarily be used to provide the company with funds to support its growth and operational capacity, this includes:
· The ramping-up of Carbonxt’s state-of-the-art activated carbon plant located in eastern Kentucky, USA, following the formal completion of all on-site mechanical works.
· To increase the company’s current 40% ownership in a new state-of-the-art activated carbon plant located in eastern Kentucky, USA. The Group has the right to acquire a further 10%
stake in three increments totalling USD 3.25m ($5.3m). The first instalment is for USD 1 million ($1.6m). If more monies are raised than this instalment then those funds will be utilised for the next instalment.
The proceeds will place CARBONXT in a good position to capitalise on strengthening the Company’s financial position as it progresses its strategic initiatives. Carbonxt Managing Director Warren Murphy commented: “With our Kentucky facility advancing towards commercial output and growing demand for activated carbon, we are well-positioned to deliver long-term value. Entering the US water treatment market, supported by regulatory changes, presents a major growth opportunity. Additionally, our joint venture with Kentucky Carbon Processing enhances supply chain security and strengthens our ability to meet rising industrial demand. We appreciate your continued support and look forward to an exciting period ahead.”
Other factual information provided by the company has been summarised below:
- Carbonxt is economically positioned as summarised by their recent SPP, to take advantage of the activated carbon market, scale growth and reduce expenses which includes:
·Kentucky facility expected to generate initial revenues in H1 2025, with capacity expansion potential
·New contracts and market expansion positioning Carbonxt for accelerated revenue growth
·Significant cost reductions of $1.5 million annually, improving financial stability
·Strong demand for activated carbon driven by PFAS regulations and industrial needs
·EPA regulations driving heightened demand for activated carbon filtration solutions
- The company’s strategic outlook is focused on bringing the Kentucky activated carbon plant online for full-scale operations. With WPAC demand increasing and key cost reductions in place, Carbonxt is positioned for stronger financial performance in the coming quarters.
- The company’s recent December quarterly noted PAC (Pellet Activate Carbon) sales contributed 68% of total revenue, providing a $3.1m for the quarter. Cost reductions of $1.5 million per annum was achieved in the December quarter, with lease restructuring expected to bring additional cost efficiencies in the March 2025 quarter. Carbonxt increased FY25 revenue guidance by 40% for H2FY25
- Managing Director – Warren Murphy, has an established track record leading a large number of acquisitions and financings across the energy, resources and infrastructure sectors. Warren was the Co-Head of the Australian Infrastructure and Head of Energy at Babcock and Brown in Sydney, along with founding Infigen Energy (recently acquired by Iberdrola for close to $1billion).
- Carbonxt’s Board and Management Team, have extensive hands-on operational experience in minerals, cleantech development and strategic commercialisation in Australia and around the world.
- Directors have skin in the game – they have invested considerable amounts of their own money in via direct share purchases/placements and are fully committed to the business and motivated towards its success.
About the company
CARBONXT GROUP LIMITED (CG1) is an ASX-listed, cleantech company that develops, and markets specialised Activated Carbon products, focused on the capture of contaminants in industrial processes that emit substantial amounts of harmful pollutants. The Company produces and manufactures Powdered Activated Carbon and Activated Carbon pellets for use in industrial air purification, wastewater treatment and other liquid and gas phase markets.
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