Funding Secured but Cash Tight as ECT Pushes COLDry Fertiliser Trials Forward
Environmental Clean Technologies Limited has commissioned batch-scale granulation equipment and produced its first 12 tonnes of COLDry Fertiliser, while securing $1.75 million in capital through placements and convertible notes to support ongoing project financing.
- Installation and commissioning of batch-scale granulation equipment at Bacchus Marsh
- Production of first 12 tonnes of COLDry Fertiliser for lab and field trials
- Completion of $475,000 Tranche 1 placement and approval of $275,000 Tranche 2
- Approval and execution of $1.13 million convertible note facility
- Ongoing project financing discussions targeting financial close in H2 2025
Project Progress and Production Milestones
Environmental Clean Technologies Limited (ASX: ECT) has reported significant progress in its COLDry Fertiliser Project during the quarter ending 31 March 2025. The company successfully installed and commissioned batch-scale granulation equipment at its Bacchus Marsh facility, marking a key step in scaling production capabilities. This milestone enabled the production of the first 12 tonnes of COLDry Fertiliser, which have been dispatched for laboratory and field trials.
The trials aim to benchmark product performance, validate the fertiliser formulation, and pave the way for securing offtake agreements with agricultural stakeholders. The initial shipment to South Australia targets cotton and wheat producers, indicating a strategic focus on high-value crop markets.
Capital Management and Funding Initiatives
On the financial front, ECT completed Tranche 1 of a share placement raising $475,000 in February 2025, with Tranche 2 of $275,000 approved at the Extraordinary General Meeting (EGM) held on 23 April. Additionally, the company secured shareholder approval for a $1.13 million convertible note facility, reinforcing its capital structure to support ongoing development and operational needs.
The convertible note terms were clarified to exclude R&D tax rebates and intellectual property from the security deed, while maintaining a conversion price of $0.00425 per share. These capital management measures are designed to underpin the company’s financing strategy as it advances towards commercialisation.
Financial Performance and Cash Flow
ECT recorded net cash outflows of $635,560 for the quarter, consistent with prior periods. Research and development expenditure declined to $72,331, reflecting the completion of key design and development phases in late 2024. Conversely, administration and corporate costs rose by $152,284 due to the settlement of accrued expenses.
The company’s cash position at quarter-end stood at $93,000, supplemented by $50,000 in unused financing facilities. Despite a tight cash runway estimated at just over one-fifth of a quarter, management expressed confidence in continuing operations supported by the recent capital raises and convertible note facility.
Outlook and Next Steps
Looking ahead, ECT plans to distribute COLDry Fertiliser to trial participants ahead of the upcoming planting season, with the objective of securing binding offtake agreements following successful trial outcomes. Concurrently, the company is actively engaging with financiers, having released an updated project presentation in April to support due diligence and financing discussions.
Financial close for project financing is targeted for the second half of calendar year 2025, a critical milestone that will determine the pace of commercial rollout. The company’s strategic partnership with Zero Quest Pty Ltd and ESG Agriculture remains central to advancing the project’s commercialisation pathway.
Bottom Line?
With trial production underway and capital secured, ECT’s next challenge lies in converting field trial success into binding offtake agreements and finalising project financing.
Questions in the middle?
- Will the field trials validate COLDry Fertiliser’s performance sufficiently to secure commercial offtake agreements?
- Can ECT successfully close project financing in the second half of 2025 to sustain and scale operations?
- How will the company manage its limited cash runway amid ongoing development and corporate expenses?
