Carbonxt Group Ltd (ASX: CG1) (“Carbonxt” or “the Company”) has secured A$500,000 in additional funding through the issue of Convertible Notes to major shareholder Phelbe Pty Ltd, with proceeds directed toward working capital and a further stake increase in its Kentucky-based activated carbon facility.
The funding marks another deliberate step in the Company’s plan to grow its ownership in New Carbon Processing, LLC, the joint venture behind Carbonxt’s flagship Inez Power Activated Carbon Plant in Inez, Kentucky.
Convertible Note Structure
The Convertible Notes carry the following terms:
- Up to 500,000 Convertible Notes issued at a face value of A$1.00 each
- Convertible into 5,000,000 fully paid ordinary shares at an exercise price of A$0.10
- One free-attaching option for every three Convertible Notes held (1:3 ratio), exercisable at A$0.10 with a three-year term
- Securities to be issued under the Company’s ASX Listing Rule 7.1 placement capacity
Phelbe Pty Ltd is not considered a related party under Chapter 10 of the ASX Listing Rules.
How the Funds Are Being Used
The A$500,000 raised through this issue will be applied to two purposes. First, to support general working capital requirements. Second, and more strategically, to fund a further investment of USD 250,000 into New Carbon Processing, LLC, the operating entity behind the Kentucky facility.
This additional investment will lift Carbonxt’s ownership interest in the joint venture from its prior level to 47.4%, putting the Company within reach of its stated 50% ownership target.
Figure 1: Carbonxt’s incremental stake increases in New Carbon Processing, LLC across 2025-2026.
The path to 50% has been deliberate and consistent. Since early 2025, the Company has made a series of investments into the joint venture, each time deploying capital from equity raisings and convertible note facilities to grow its share of what it views as a defining strategic asset.
The Kentucky Facility: Why It Matters
The Inez Power Activated Carbon Plant is no ordinary production site. Built through the NewCarbon joint venture with Kentucky Carbon Processing, the facility focuses on manufacturing Granular Activated Carbon (GAC), a product segment specifically suited to liquid-phase water treatment, including the removal of PFAS contaminants from drinking water.
Figure 2: Carbonxt’s Kentucky activated carbon facility. [Carbonxt Group]
This is a market with serious regulatory momentum behind it. In 2024, the U.S. Environmental Protection Agency finalised its National Primary Drinking Water Regulations for PFAS, the first time the EPA has set legally enforceable limits on so-called “forever chemicals” in public water supplies. The rule covers six PFAS compounds and is expected to require thousands of water utilities across the United States to install treatment infrastructure.
For activated carbon producers, the timing couldn’t be better.
According to industry forecasts, the global activated carbon market was valued at over USD 4,068.8 million in 2025 and is projected to grow at a compound annual growth rate of around 4% through to 2033, driven substantially by PFAS remediation and tightening water quality standards.
Figure 3: Global Activated Carbon Market Size and Growth Forecast [Grand View Research]
Early product samples from the Kentucky plant have demonstrated 99% PFOA removal efficiency and 92% geosmin removal, results that position Carbonxt competitively against established GAC suppliers in the North American water treatment market.
Once fully operational, the Kentucky facility is expected to increase the Company’s total group sales capacity by approximately 200%, opening the door to a materially larger revenue base than what its existing Georgia and Minnesota facilities currently generate.
A Steady Track Record of Shareholder Support
What stands out here is the consistency of Phelbe Pty Ltd’s support. This latest convertible note follows a pattern the major shareholder established in early 2025, when the original convertible note facility was first put in place on 27th February 2025, almost exactly a year before this latest announcement.
Since then, Phelbe has participated in multiple rounds of funding, including an expanded facility in April 2025 and a direct share placement in October 2025. The fact that the Company’s major shareholder keeps returning with capital is a signal worth noting.
Over the same period, Carbonxt has also demonstrated operational progress. For the full year ended 30th June 2025, the Company reported group revenue of AUD 16.2 million, up 7.1% on the prior year (FY24: AUD 15.1 million). Gross margins improved sharply to 52%, up from 38% the year prior, driven by pricing adjustments, a better product mix, and lease restructuring at the Black Birch facility in Georgia.
The underlying EBITDA loss narrowed to AUD 0.46 million (FY24: AUD 3.13 million loss), with the second half turning EBITDA-positive at AUD 0.23 million, a meaningful inflection point for a Company that has been building toward commercial-scale production.
Three Facilities, One Direction
Carbonxt operates three U.S.-based production facilities:
- Black Birch, Georgia – Powdered Activated Carbon (PAC) production, serving air-phase industrial applications and the long-term ReWorld Waste supply agreement
- Arden Hills, Minnesota – Activated Carbon Pellet (ACP) manufacturing, serving the Wisconsin Public Service contract and other industrial clients
- Inez, Kentucky – Granular Activated Carbon (GAC), targeting liquid-phase water treatment and PFAS removal
The Kentucky plant is the growth engine. The other two facilities provide a stable, contracted revenue base. Carbonxt holds a four-year, AUD 24 million contract with Reworld Waste, LLC for PAC and completed a AUD 4.3 million forward sale of Activated Carbon Pellets to Wisconsin Public Service, deals that underpin cash flow as the Kentucky facility progresses to full commercial output.
About the Company’s Strategy
Warren Murphy, Managing Director of Carbonxt Group Limited, has previously noted that the Kentucky facility is central to the Company’s next phase. Speaking in the context of earlier capital raises, Murphy described the progression as part of a clear strategic roadmap, with each investment designed to bring the Company closer to full ownership and full production at the flagship facility.
Investors can expect further commentary on the Kentucky facility’s commissioning progress and FY26 revenue outlook when the Company next reports to the market.
Investor’s Outlook
As of 25 February 2026, Carbonxt Group Limited (ASX: CG1) was trading at AUD 0.089 per share, within a 52-week range of AUD 0.043 to AUD 0.115. The Company’s current market capitalisation stands at approximately AUD 38.56 million. 
Figure 4: CG1 Price Chart. [ASX]
Carbonxt is building toward a clear operational milestone. The Kentucky facility gives the Company access to the faster-growing liquid-phase activated carbon segment, a market twice the size of the air-phase segment it currently serves, at a time when U.S. water utilities face firm regulatory deadlines to address PFAS contamination.
The incremental ownership strategy, now at 47.4%, means Carbonxt is closing in on a controlling position that would give it greater revenue recognition and strategic flexibility in the joint venture.
