Carbonxt Raises $1.3M, Increases Kentucky Facility Stake to 45.9%, Revenue Up 50%

Kentucky Facility Nears Operational Milestone

Carbonxt Group Limited (ASX, CG1) has taken a significant step forward in its North American growth strategy by increasing its ownership stake in the Kentucky activated carbon facility to 45.9%, edging closer to its 50% target. The company has completed the construction of the kiln, including refractory lining and heat treatment, with commissioning activities now underway. This facility is expected to triple group sales and open access to the much larger liquid-phase activated carbon market, which is critical for applications such as PFAS filtration and wastewater treatment.

The Kentucky plant’s design aligns closely with tightening US Environmental Protection Agency (EPA) regulations on PFAS contaminants, positioning Carbonxt to meet growing demand for high-performance, domestically produced activated carbon products. The commissioning phase includes finalising bagging systems, silos, and power infrastructure, with initial commercial production anticipated in early 2026.

Financial Strength and Capital Raising

Supporting this expansion, Carbonxt successfully raised approximately $1.3 million through a combination of a non-renounceable entitlement offer, convertible notes, and a share placement to its major shareholder, Phelbe Pty Ltd. The entitlement offer issued nearly 70 million Loyalty Options, raising about $698,000 before costs, while the placement and convertible notes contributed an additional $1.0 million. These funds are earmarked for working capital and further investment in the Kentucky facility.

Operationally, the company reported a 50% increase in quarterly revenue to $5.45 million, driven by higher sales volumes and improved cost control measures. Activated Carbon Pellet sales rose 11%, reflecting steady demand from key customers, while Powdered Activated Carbon sales remained robust under long-term contracts. Positive EBITDA was recorded in every month of the second half of FY25 and continued into the first quarter of FY26, underscoring the company’s improving profitability.

Regulatory and Market Tailwinds

Carbonxt’s growth trajectory is buoyed by regulatory momentum from the US EPA’s stringent PFAS standards, which mandate compliance by 2031 and affect millions of Americans. The EPA’s reaffirmation of maximum contaminant levels for hazardous PFAS chemicals has accelerated demand for effective filtration solutions. Additionally, potential trade policy shifts favoring domestic producers, such as expanded tariffs on imported activated carbon, could further enhance Carbonxt’s competitive position.

With three US production facilities either operational or nearing commissioning, Carbonxt is well-positioned to capitalize on a liquid-phase activated carbon market estimated to grow at 5–9% annually through 2030. The Kentucky facility’s commissioning will significantly expand production capacity and market reach, enabling the company to address industrial and water treatment sectors more effectively.

Looking Ahead

As Carbonxt approaches commercial production at the Kentucky plant, the company’s focus will be on scaling operations, securing customer qualifications, and leveraging regulatory drivers to expand market share. The successful capital raises provide a solid financial foundation to support these objectives. Investors will be watching closely for updates on commissioning progress, shareholder approval of convertible note options, and evolving EPA regulations that could shape demand dynamics.