Carbonxt Group Limited (ASX: CG1) has released its quarterly activities report for the three months to 30 June 2026.
The report sets out a plan to reshape the Company’s balance sheet, an update on its Kentucky plant, and the quarter’s financial results.
The Company also confirmed positive operating cash flow and steady sales across its two main product lines.
Inside Carbonxt’s June 2026 Quarter
The quarter brought progress on funding, the Kentucky build, sales and cash flow. The key points were:
- A two-stage balance sheet restructuring agreed with Phelbe Pty Ltd and Pure Asset Management
- A cash injection of up to $11 million and a net debt cut of $5 million on completion
- Customer receipts of $4.1 million for the quarter, up from $3.3 million in the March quarter
- Positive operating cash flow of $271,000, against an outflow of $368,000 in the March quarter
- A quarterly gross margin of 52.4%, with year-to-date margins above 45%
- Kentucky kiln parts arriving, with commissioning expected to restart this quarter
Figure 1: Snapshot of the June 2026 quarter highlights [Source: Carbonxt Group Limited]
A Two-Stage Restructuring Cuts Debt and Adds Cash
The Company agreed a plan with its two largest financial backers. Phelbe Pty Ltd is a major shareholder and noteholder. Pure Asset Management is the senior lender.
Neither party is treated as a related party under Chapter 10 of the ASX Listing Rules.
The plan runs in two stages. Stage 1 provides immediate funding. Stage 2 reduces debt once the Kentucky plant starts up.
The share price was $0.068 when the agreement was struck on 6 July 2026. All conversion and exercise prices sit above that level.
Stage 1: Immediate Funding
A convertible note is a loan that can later turn into shares. Stage 1 brings in $3.5 million of new convertible notes.
- Phelbe subscribes for $2.0 million of new notes in fresh cash
- Pure subscribes for $1.5 million of notes, set off against existing debt and accrued interest
- $3.0 million of the new notes falls under existing placement capacity
- The remaining $0.5 million, plus the options for Pure, needs shareholder approval
- Pure has agreed to waive any required covenants until 31 December 2026
Table 1: First stage convertible note terms
| Term | Detail |
|---|---|
| Issue Size | $2.0 million (Phelbe, new cash); $1.5 million (Pure, set off against debt and accrued interest) |
| Conversion Price | $0.10 per share |
| Interest Rate | 9.5% per annum |
| Term | 3 years |
| Maturity | If a note is not converted and is repaid, the holder receives a further set of 3-year options on the same terms (exercisable at $0.10). |
| Security | Ranks equally with existing senior debt (Pure Asset Management). |
| Attaching Options | One unlisted option for every 2 shares issued on conversion, exercisable at $0.10 (10 million options to Phelbe and 7.5 million options to Pure). |
Stage 2: Debt Reduction
Stage 2 depends on two conditions. Shareholders must approve it at a meeting, and the Kentucky plant must start operating.
Start-up means an independent engineer certifies the plant is running, and it reaches a first revenue milestone of US$1 million.
Once both conditions are met, the following steps take place:
- Phelbe converts $2.0 million of existing notes into equity at about $0.075 per share
- Phelbe exercises 37.9 million options at about $0.09 per share
- Pure exercises 64 million warrants at about $0.07 per share, and 5.03 million options at about $0.097 per share
- Pure’s proceeds of about $4.97 million reduce the senior debt facility from $15.0 million to about $10.0 million
- All financial covenants are removed for the remaining life of the loan, which matures on 31 May 2027
Table 2: Indicative Stage 2 outcomes
| Stakeholder | Instrument | Volume | Indicative Price | Cash to Company |
|---|---|---|---|---|
| Phelbe | Convertible Notes Converted to Equity | $2.0m of Notes | ~$0.075/share | Nil (Debt to Equity) |
| Phelbe | Options Exercised | 37.9 million | ~$0.09/share | ~$3.4m (combined) |
| Pure | Warrants Exercised | 64 million | ~$0.07/share | ~$4.97m (combined) |
| Pure | Options Exercised | 5.03 million | ~$0.097/share | Included Above |
Shareholder Approvals and Early-Conversion Incentive
Some parts of the plan need shareholder approval. The Company expects to hold an Extraordinary General Meeting in September 2026.
Approvals include a 10% per annum early-exercise discount on options, and a resolution to let Phelbe move above 20% of the Company, to about 23%, without a takeover bid.
- The early-conversion incentive offers a 10% per annum discount to bring forward conversions
- It applies to Phelbe and other note holders, but not to Pure’s warrants
- The offer lapses on 31 December 2026
- Indicative post-completion holdings: Phelbe about 19.6% (about 23% if the separate resolution passes), and Pure about 15.7%
Carbonxt Managing Director Warren Murphy said the plan matches the business the Company is building:
“The restructuring agreed with Phelbe and Pure is the most significant step we have taken toward a balance sheet that matches the business we are building. It provides immediate funding, a clear pathway to materially reduce senior debt as Kentucky comes online, and it does so at prices above the levels at which our shares have been trading. The kiln construction is now being finalised, and we expect commissioning to begin this quarter. The finalisation of one of our core offtake contracts on improved terms and with expected annual revenue from that contract to increase by over 30% is a great way to finish FY26.”
Figure 2: Before-and-after graphic of the balance sheet [Source: Carbonxt Group Limited]
Kentucky Plant Moves Closer to Commissioning
The Kentucky activated carbon plant is the Company’s main near-term project. Once fully running, it is forecast to lift group sales by about 200%.
The plant opens the liquid-phase market, which is several times larger than the air-phase segment the Company serves today.
It is built to make premium-grade activated carbon for PFAS filtration, wastewater treatment and industrial emission control.
Progress during and after the quarter included:
- Replacement kiln parts have begun to arrive, with all parts expected within a week
- Kiln construction is due to be finalised this quarter
- All outside works are complete, including the storage silos and bagging station
Kentucky start-up is also the condition that unlocks Stage 2 of the restructuring.
Revenue Rises and Cash Flow Turns Positive
The Company reported higher revenue and improved margins for the quarter, compared with the March 2026 quarter.
- Total revenue for the quarter: $4.1 million (March quarter: $3.3 million)
- Activated carbon pellet sales made up 53.3% of total revenue (March quarter: 47.6%)
- Gross margin of 52.4% for the quarter (March quarter: 46.7%; first half: 51.6%)
- Positive EBITDA and operating cash flow year to date, with gross margins about 50%
The Company’s cash position moved as follows:
- Cash of $0.6 million at 30 June 2026 (31 March 2026: $0.3 million), before the $2.0 million received under Stage 1
- A further $250,000 invested in NewCarbon Processing, LLC after quarter end, lifting Carbonxt’s stake to 48.7%
Steady Sales Across Both Product Lines
Carbonxt makes two main products. Powdered activated carbon (PAC) is used mainly in water treatment. Activated carbon pellets (ACP) are used in air and gas cleaning.
The Company’s growth strategy showed through in sales during the quarter:
- ACP sales were 37% higher as Black Birch feedstock recovered from an earlier outage
- PAC sales rose 10% on the prior quarter as the largest PAC customer’s volumes recovered
- A 3-year contract extension was signed with a main ACP customer on higher pricing and better payment terms
- That customer plans to lift volumes in FY2027, which could add about $2.0 million in FY27 revenue
- Pellet production will move from Arden Hills to a new Minnesota site, cutting monthly costs by about US$10,000; the move completes in the September quarter
- A first-month order was delivered for a new customer, with talks underway on a long-term deal
US Rules Keep Driving Demand for Activated Carbon
PFAS are long-lasting chemicals, often called forever chemicals, found in drinking water. Activated carbon is one of the most common ways to remove them.
US regulation moved forward during and after the quarter, which supports demand for the Company’s products:
- On 18 May 2026, the US EPA reaffirmed limits for PFOA and PFOS at 4 parts per trillion through formal rulemaking
- Water systems may apply for two extra years, to April 2031, to meet the limits
- The EPA released nearly US$1 billion in new grant funding to states to address PFAS in drinking water
- On 24 June 2026, US authorities announced a US$450 million settlement with The Chemours Company, the first comprehensive federal settlement with a PFAS manufacturer
- The EPA proposed a Sixth Unregulated Contaminant Monitoring Rule to track 30 more contaminants between 2028 and 2030
Table 3: Federal PFAS developments during and after the June 2026 quarter
| Date | Development | Why It Matters for Carbonxt |
|---|---|---|
| 18 May 2026 | EPA reaffirms PFOA and PFOS limits at 4 parts per trillion; proposes a two-year extension to April 2031; announces nearly US$1 billion in grant funding. | Core standards that drive demand are confirmed and funded. |
| 24 June 2026 | US$450 million settlement with The Chemours Company, including a US$22.5 million penalty and a US$90 million mitigation program. | First federal settlement with a PFAS maker; reinforces long-term policy. |
| 26 June / 1 July 2026 | EPA proposes monitoring of 30 unregulated contaminants, including ultrashort-chain PFAS, from 2028 to 2030. | Wider monitoring supports future demand for treatment. |
Activated Carbon Market Backdrop Supports the Strategy
The wider market helps explain the interest in Carbonxt’s build-out:
- The global activated carbon market was valued at US$4.1 billion in 2025 and is forecast to reach US$5.5 billion by 2033
- North America held about 38.4% of that market in 2025, and water treatment was the largest use
- The global PFAS treatment market was valued at US$2.8 billion in 2025 and is forecast to reach US$4.8 billion by 2033
- Granular activated carbon remains one of the most widely used PFAS removal methods
Sources: Grand View Research activated carbon market and Grand View Research PFAS treatment market.
For more Information: https://colitco.com/
Investors’ Outlook
| Metric | Value |
|---|---|
| Last Price | $0.083 |
| 1 Week | +3.75% |
| 1 Month | +48.21% |
| 1 Year | +20.29% |
| vs ASX 200 (1yr) | +17.61% |
| Market Capitalisation | $35,966,421 |
| Reference Price (6 July 2026, per ASX announcement) | $0.068 per share |
| Cash (30 June 2026) | $0.6 million |
Near-term catalysts for Carbonxt include:
- Kentucky commissioning and independent engineer certification
- The US$1 million initial revenue milestone at Kentucky
- The Extraordinary General Meeting, expected in September 2026, and Stage 2 of the restructuring
- Conversion of the new ACP purchase order into a long-term supply deal
- Final US EPA drinking water rules
Disclaimer
This article has been prepared by Colitco in collaboration with Carbonxt Group Limited as part of a commercial content and investor communications arrangement. Colitco may receive compensation for the production and distribution of this content. This article is intended for informational purposes only and does not constitute financial product advice, investment advice, or a recommendation to buy or sell any securities. The content reflects information available at the time of publication and may not be updated. All figures, data and statements have been sourced from Carbonxt Group Limited’s official ASX announcements and publicly available sources. Readers should conduct their own independent research and seek professional financial advice before making any investment decisions. Past performance is not a reliable indicator of future results. Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from expectations.
Luke Carlino is a seasoned Copywriter, Content Strategist, and Social Media Manager specialising in Mining, Finance, and Business journalism. With more than a decade of industry experience, he brings rigorous editorial standards and commercial acuity to every project.
