ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. - Capital/Financing Update 2011

ABN
28
009
120
405

==> picture [554 x 196] intentionally omitted <==

Prospectus

Non-‐Renounceable
Rights
Issue

26
August
2011

Prospectus
for
non-‐renounceable
rights
issue
of
2
New
Shares
for
every
3
fully
paid
ordinary
shares
held
at
0.6
cents per
New
Share
to
raise
approximately
$3.8
million
before
expenses.

Subscribers
for
New
Shares
will
receive,
at
no
cost,
1
New
Option
for
every
2
New
Shares
issued
to
them
at
an
exercise price
of
approximately
2
cents.

This
Offer
is
partially
underwritten.

There
is
no
minimum
subscription
and
Eligible
Shareholders
may
apply
for
Additional
New
Shares
in
excess
of
their Entitlement.

The last date for applications and payment to be received is 5:00pm on 27 September 2011 (unless extended).

IMPORTANT NOTICE

This
is
an
important
document
and
requires
your
immediate
attention.
It
should
be
read
in
its
entirety.
If
you
are
in doubt
about
what
to
do,
you
should
consult
your
professional
adviser
without
delay.
The
New
Shares
and
New Options
offered
under
this
Prospectus
should
be
considered
as
speculative.

Level
8,
530
Little
Collins
Street,
Melbourne
Vic,
3000
Australia
|
Phone
+613
9684
0888
|
www.ectltd.com.au
|
ABN
28
009
120
405 Listed
on
the
Australian
Securities
Exchange
(ASX:ESI)

Contents IMPORTANT
NOTICE
................................................
3 SUMMARY
OF
THE
OFFER
........................................
6 KEY
OFFER
DETAILS
..................................................
7 LETTER
FROM
THE
CHAIRMAN
.................................
9 INVESTMENT
DETAILS
............................................
11 1 Details
of
the
Issue
and
Terms
of
the
Offer
....
11 2 Answers
to
Key
Questions
................................
16 3 Your
options
under
the
Offer
...........................
19 4 Overview
of
ECT
...............................................
22 5 Effect
of
the
Issue
on
the
Company
.................
26 6 Risk
Factors
......................................................
29 7 Additional
information
.....................................
35 8 Definitions
........................................................
48 9 Corporate
Directory
.........................................
51 Entitlement
and
Acceptance
Form

Page 2 of 51

www.ectltd.com.au

IMPORTANT NOTICE

This
Prospectus
is
dated
26
August
2011
and
was
lodged
with
ASIC
on
that
date.
Neither
ASIC
nor
ASX takes
any
responsibility
for
the
contents
of
this
Prospectus
or
the
merits
of
the
investment
to
which
this Prospectus
relates.

No
New
Shares
or
New
Options
will
be
issued
on
the
basis
of
this
Prospectus
more
than
13
months
after the
date
of
this
Prospectus.

The
Prospectus
sets
out
information
in
relation
to
the
non-‐renounceable
offer
by
ECT
of
New
Shares
and New
Options
in
the
share
capital
of
Environmental
Clean
Technologies
Limited
ACN
109
120
405
( ECT ) (Offer).

ECT
will
apply
for
admission
of
the
New
Shares
and
New
Options
to
quotation
on
ASX
within
7
days
after the
date
of
this
Prospectus.
The
fact
that
ASX
may
grant
Official
Quotation
of
the
New
Shares
and
New Options
is
not
to
be
taken
in
any
way
as
an
indication
of
the
merits
of
ECT,
the
New
Shares
or
the
New Options.

This is an important document

It
is
important
that
you
carefully
read
this
Prospectus
in
its
entirety
before
deciding
to
invest
in
ECT
and,
in particular,
that
you
consider
the
risk
factors
that
could
affect
the
financial
performance
of
ECT.
In
addition to
the
general
risks
applicable
to
all
investments
in
listed
companies
(which
are
further
described
in
section 6.3),
there
are
specific
risks
associated
with
an
investment
in
ECT.
These
risks
are
discussed
in
section
6.2. You
should
carefully
consider
these
risks
in
light
of
your
personal
circumstances
(including
financial
and taxation
issues)
and
seek
professional
advice
from
your
accountant,
stockbroker,
lawyer
or
other professional
adviser
before
deciding
whether
to
invest.

Disclaimer

No
person
is
authorised
to
give
any
information
or
to
make
any
representation
in
connection
with
the
Offer that
is
not
contained
in
this
Prospectus.
Any
information
or
representation
not
contained
in
this Prospectus
may
not
be
relied
on
as
having
been
authorised
by
ECT
in
connection
with
the
Offer.
Neither ECT
nor
any
other
person
warrants
the
future
performance
of
ECT
or
any
return
on
any
investment
made under
this
Prospectus,
except
as
required
by
law
and
then
only
to
the
extent
so
required.

Some
of
the
information
contained
in
this
Prospectus
constitutes
forward-‐looking
statements
that
are subject
to
various
risks
and
uncertainties.
Forward-‐looking
statements
include
those
containing
such
words as
‘anticipate’,
‘estimate’,
‘should’,
‘will’,
‘expects’,
‘plans’
or
similar
expressions.
These
statements
discuss future
objectives
or
expectations
concerning
results
of
operations
or
financial
conditions
or
provide
other forward-‐looking
information.
ECT’s
actual
results,
performance
or
achievements
could
be
significantly different
from
the
results
or
objectives
expressed
in,
or
implied
by,
those
forward-‐looking
statements.
This Prospectus
details
some
important
factors
that
could
cause
ECT’s
actual
results
to
differ
from
the
forward-‐ looking
statements
made
in
this
Prospectus.

Ineligible shareholders

This
Prospectus
contains
an
Offer
only
to
persons
(including
individuals
and
corporate
entities)
with registered
addresses
in
Australia
or
New
Zealand.

This
Offer
is
not
extended
to,
and
no
New
Shares
or
New
Options
are
offered
or
will
be
issued
to,
persons with
registered
addresses
outside
of
Australia
and
New
Zealand.
ECT
considers
it
unreasonable
to
extend the
Offer
to
those
Shareholders
with
registered
addresses
in
jurisdictions
outside
Australia
and
New Zealand
having
regard
to
the
small
number
and
value
of
the
New
Shares
and
New
Options
that
would
be

Page 3 of 51

www.ectltd.com.au

offered
in
such
jurisdictions
and
the
cost
of
complying
with
the
legal
and
regulatory
requirements
in
those jurisdictions.

However,
non-‐Australian
and
non-‐New
Zealand
resident
shareholders
can
apply
for
an
allocation
of
Shares on
the
same
terms
as
this
Offer.
Subject
to
relevant
legislation
and
regulations
in
the
country
of
domicile
of the
Shareholder,
the
Board
may
allocate
a
portion
of
any
Shortfall
to
non-‐Australian
and
non-‐New
Zealand resident
shareholders
who
have
applied
for
an
allocation
of
Shares.

Foreign jurisdictions and restrictions on the distribution of this Prospectus

This
Prospectus
has
been
prepared
to
comply
with
the
requirements
of
the
securities
laws
of
Australia.

This
Prospectus
and
accompanying
Entitlement
and
Acceptance
Form
do
not,
and
are
not
intended
to, constitute
an
offer
of
New
Shares
or
New
Options
in
any
place
outside
Australia
and
New
Zealand
unless the
person
to
whom
the
Prospectus
and
the
accompanying
Entitlement
and
Acceptance
Form
has
been sent
has
been
expressly
and
personally
invited
in
writing
by
ECT
to
participate
in
the
Offer.
The
distribution of
this
Prospectus
and
the
accompanying
Entitlement
and
Acceptance
Form
outside
of
Australia
and
New Zealand
may
be
restricted
by
law
and
persons
who
come
into
possession
of
this
Prospectus
and
the accompanying
Entitlement
and
Acceptance
Form
should
seek
advice
on
and
observe
those
restrictions. Any
failure
to
comply
with
those
restrictions
may
constitute
a
violation
of
applicable
securities
laws. Without
limitation,
neither
this
Prospectus
nor
the
accompanying
Entitlement
and
Acceptance
Form
may be
sent
or
passed
to
persons
outside
Australia
and
New
Zealand
or
otherwise
distributed
outside
Australia and
New
Zealand.

In
particular,
the
Offer
has
not
been,
and
will
not
be,
registered
under
the
US Securities Act or
the
securities laws
of
any
state
of
the
United
States
and
is
not
being
made
in
the
United
States
or
to
persons
resident
in the
United
States.
Without
limitation,
neither
this
Prospectus
nor
the
accompanying
Entitlement
and Acceptance
Form
may
be
sent
to
investors
in
the
United
States
or
otherwise
distributed
in
the
United States.

The
New
Shares
and
New
Options
are
not
being
offered
or
sold
to
the
public
within
New
Zealand,
other than
to
existing
Shareholders
of
ECT
with
registered
addresses
in
New
Zealand
to
whom
the
Offer
is
being made
in
reliance
on
the Securities Act (Overseas Companies) Exemption Notice 2002
(New
Zealand).
This Prospectus
and
Entitlement
and
Acceptance
Form
have
not
been
registered,
filed
or
approved
by
a
New Zealand
regulatory
authority
under
the Securities Act 1978
(New
Zealand).
This
Prospectus
is
not
an investment
statement
or
prospectus
under
New
Zealand
law
and
is
not
required
to,
and
may
not,
contain all
the
information
that
an
investment
statement
or
prospectus
under
New
Zealand
law
is
required
to contain.

This
Prospectus
complies
with
Australian
disclosure
requirements.
These
disclosure
requirements
may
be different
from
those
applicable
in
other
jurisdictions.
The
financial
information
included
in
this
Prospectus was
prepared
with
a
view
towards
compliance
with
Australian
practice
and
not
that
of
any
other jurisdiction.

Electronic Prospectus

This
Prospectus
may
be
viewed
online
at
www.asx.com.au
and
www.ectltd.com.au.
If
you
are
an
Eligible Shareholder
and
have
access
to
an
electronic
version
of
this
Prospectus,
you
should
ensure
that
you download
and
read
the
entire
document.
The
electronic
version
of
this
Prospectus
will
not
include
an Entitlement
and
Acceptance
Form.
The
Entitlement
and
Acceptance
Form
will
be
mailed
to
Eligible Shareholders
together
with
a
hard
copy
of
this
Prospectus.

Defined terms and abbreviations

Terms
and
abbreviations
used
in
this
Prospectus
are
defined
in
section
8.

Page 4 of 51

www.ectltd.com.au

Application for New Shares and New Options

If
you
wish
to
apply
for
New
Shares
and
New
Options,
you
must
complete
and
return
the
personalised Entitlement
and
Acceptance
Form
which
accompanies
this
Prospectus,
with
payment,
by
the
Closing
Date. Eligible
Shareholders
who
wish
to
make
payment
via
BPAY
are
not
required
to
return
the
Entitlement
and Acceptance
Form.
Details
of
how
to
make
a
payment
via
BPAY
are
set
out
in
section
3.5.
If
you
have
not received
a
personalised
Entitlement
and
Acceptance
Form,
please
contact
Security
Transfer
Registrars
Pty Limited
on
+61
8
9315
2333
or
via
email
at
[email protected].

Page 5 of 51

www.ectltd.com.au

SUMMARY OF THE OFFER

The Offer

ECT
is
offering
approximately
634
million
New
Shares
at
$0.006
per
New
Share
to
raise
approximately
$3.8 million
before
costs
and
expenses
under
this
Prospectus,
on
the
basis
of
2
New
Shares
for
every
3
fully
paid ordinary
shares
in
ECT
( Shares ) held
on
the
Record
Date
(5.00pm
on
7
September
2011)
( Offer ).

The
number
of
New
Shares
to
which
you
are
entitled
is
shown
on
the
Entitlement
and
Acceptance
Form accompanying
this
Prospectus.

In
addition,
subscribers
for
New
Shares
will
receive
1
New
Option,
at
no
cost,
for
every
2
New
Shares
issued to
them.

This
Offer
is
partially
underwritten
by
Iain
McEwin,
non-‐executive
director
and
key
Shareholder
of
the Company.
Details
of
the
Underwriting
Agreement
are
set
out
in
section
7.7.

Persons
with
registered
addresses
in
Australia
or
New
Zealand
who
are
registered
holders
of
Shares
on
the Record
Date
( Eligible Shareholders )
will
be
entitled
to
participate
in
the
Offer.

Reasons for the Offer

The
purpose
of
the
Offer,
and
the
intended
use
of
the
funds
raised
by
the
Offer,
is
to:

complete
Phase
1
of
the
Design
for
Tender
in
respect
of
the
Proposed
Coldry
Production
Plant as
described
in
section
4.2;
fund
the
net
cash
loss
between
the
cost
of
producing,
and
the
revenue
derived
from,
the 2,000
tonnes
of
Coldry
BCE
to
be
used
by
Datang
in
the
Test
Burn;
meet
short-‐term,
working
capital
requirements
in
respect
of
the
Test
Burn;
and
meet
operational
expenditure
in
respect
of
the
on-‐going
development
of
the
Coldry Technology
and
the
MATMOR
Technology.

Page 6 of 51

www.ectltd.com.au

KEY OFFER DETAILS

Key financial data relating to the Offer
New Share issue Price	$0.006
New Option exercise price	Approximately $0.02
	The actual exercise price will be announced on or
	before 2 September 2011. Refer section 1.14.
Offer ratio	2 New Shares for every 3 Shares held by Eligible
	Shareholders on the Record Date. Additionally,
	subscribers will be issued 1 New Option, at no cost,
	for every 2 New Shares issued.
Number of New Shares to be issued	Approximately 634 million
Number of New Options to be issued	Approximately 317 million
Amount to be raised under the Offer	Approximately $3.8 million (before expenses)
Underwriting	Partially underwritten by Iain McEwin (details of the Underwriting Agreement are set out in section 7.7)
Number of Shares on issue following	Approximately 1,586 million fully paid Shares
completion of the Offer
Number of Options on issue following	Approximately 836 million Options
completion of the Offer

Key
Dates*

Announcement Date: Announcement
of
the
Offer
and Friday
26
August
2011 lodgement
of
Prospectus
with
ASIC

Ex Date: The
date
on
which
ECT
Shares
commence
trading Tuesday
30
August
2011 without
the
entitlement
to
participate
in
the
Offer

Record Date: The
date
for
determining
entitlements
of Monday
5
September
2011 Shareholders
to
participate
in
the
Offer
(at
5:00pm)

Prospectus sent to Shareholders: Anticipated
despatch
of Tuesday
6
to
Friday
9
September Prospectus
and
Entitlement
and
Acceptance
Forms 2011

Closing Date: The
last
day
for
receipt
of
Entitlement
and Tuesday
27
September
2011 Acceptance
Forms
and
payment
(at
5:00pm)

Trading of New Shares and New Options :

Date
on
which Wednesday
28
September
2011 New
Shares
and
New
Options
will
begin
trading
on
ASX
on
a deferred
settlement
basis

Despatch Date: Anticipated
entry
of
New
Shares
and
New Wednesday
5
October
2011 Options
into
uncertified
accounts

Normal Trading: Date
on
which
normal
trading
of
New Thursday
6
October
2011 Shares
and
New
Options
commences

Page 7 of 51

www.ectltd.com.au

These
dates
are
subject
to
change
and
are
indicative
only.
ECT
reserves
the
right
to
amend
this
indicative
timetable without
notice.
In
particular,
ECT
reserves
the
right,
subject
to
the
Corporations
Act
and
the
ASX
Listing
Rules
to
close the
Offer
early,
to
extend
the
Closing
Date
or
to
withdraw
the
Offer
without
prior
notice.
Any
extension
of
the
Closing Date
will
have
a
consequential
effect
on
the
date
for
the
issue
of
New
Shares
and
New
Options.

Page 8 of 51

www.ectltd.com.au

LETTER FROM THE CHAIRMAN

Dear
Shareholder

The
Directors
of
ECT
are
pleased
to
offer
you
the
opportunity
to
increase
your
investment
in
the
Company through
this
pro
rata
offer
of
New
Shares
and
attaching
New
Options.

This
non-‐renounceable
Offer
provides Shareholders
the
right
to
subscribe
for
2
New
Shares
for
every
3 Shares
held
at
an
issue
price
of
0.6
cents
per
New
Share.
Subscribers
for
New
Shares
will
also
receive,
at
no cost,
1
New
Option
for
every
2
New
Shares
issued
to
them.
Each
New
Option
will
be
an
ESIO
exercisable
on or
before
16
January
2014.
The
New
Options
will
rank
equally
with
existing
ESIOs.

The
Offer
will
raise
approximately
$3.8
million
before
expenses,
which
are
expected
to
be
approximately $200,000
(not
including
Brokerage
or
Shortfall
Fees).
If
the
Offer
is
fully
subscribed,
the
Company
will
issue approximately
634
million
New
Shares
and
317
million
New
Options.
The
Company
will
apply
for
ASX
listing of
the
New
Shares
and
New
Options
as
ESI
and
ESIO
respectively.

The
Company
will
consider
applications
for
Additional
New
Shares
from
Eligible
Shareholders
under
the Offer
and
also
reserves
its
right
to
invite
third
parties
to
participate
in
any
Shortfall.

Existing
holders
of
ESIOs
and
Unlisted
Options
who
do
not
exercise
these
Options
by
the
Record
Date
are not
entitled
to
participate
in
the
Offer
in
respect
of
those
Options.

The
Company
is
a
sales
and
marketing
led,
technology
commercialisation
vehicle.
Our
business
model
is based
on
licensing
technology,
essentially
creating
annuity
based
revenue
streams
without
the
need
to raise
equity
or
carry
debt
to
finance
construction.
The
Company’s
focus
has
been
on
commercialising
the Coldry
and
MATMOR
Technologies.
The
Company plans
to
licence
the
construction
and
operation
of
a
large scale
Coldry
production
plant
at
the
Loy
Yang
Power
Station
in
Victoria’s
Latrobe
Valley.

Following
termination
of
the
joint
venture
agreement
between
ECT
and
Tincom
Australia
Pty
Ltd
on
31
May 2011,
the
Directors
have
been
reviewing
the
Company’s
options
to
progress the
commercial
deployment
of the
Coldry
Technology.
Future
directions
for
the
Company
which
are
currently
being
considered
include:

negotiating
with
coal
producers,
coal
trading
companies
and
coal
consumers
in
several countries
to
secure
Coldry
Technology
licensing
arrangements;
engaging
a
new
partner
to
participate
in
the
Victorian
Coldry
Project;
and
entering
into
large
scale
coal
off-‐take
agreements
with
overseas
black
coal
consumers, primarily
power
station
operators,
to
support
the
ongoing
commercial
operations
of
the Proposed
Coldry
Production
Plant.

Important
steps
in
realising
the
future
direction
of
the
Company
are:

successful
completion
of
the
Test
Burn
to
be
conducted
by
Datang;
completion
of
Phase
1
of
Arup’s
Design
for
Tender;
and
continuing
to
pursue
opportunities
to
secure
off-‐take
agreements
and
other
contractual commitments
in
respect
of
the
sale
and
supply
of
Coldry
BCE.

The
Design
for
Tender
will
cost
approximately
$3.6
million
and
will
be
delivered
in
three
phases.
Phase
1,
to be
concluded
at
the
end
of
2011
or
early
2012,
will
cost
approximately
$1
million
and
will
allow
for
the results
from
the
Test
Burn
to
be
incorporated
into
the
remaining
DFT
program.
The
net
cost
of
funding

Page 9 of 51

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production
of
the
Test
Burn
tonnage
and
its
delivery
to
China
will
be
approximately
$0.5
million.
The Company
also
requires
additional
funding
to
satisfy
its
working
capital
requirements
through
to
the
first half
of
2012.

The
Directors
are
seeking
to
minimise
Shareholder
dilution
by
phasing
its
capital
raising
to
align
with
the results
of
the
Test
Burn
and
on-‐going
funding
requirements
for
the
continuing
development
of
the
Coldry and
MATMOR
Technologies
into
2012.

The
Company
is
in
the
early
stages
of
the
commercial
scale
up
of
its
Coldry
Plants.
Like
other
companies
at a
similar
stage
of
commercialisation
of
its
products,
the
Company
faces
a
number
of
risks
which
could adversely
impact
on
its
performance
and
the
value
of
its
Shares.
While
details
of
the
risk
are
provided
in section
6,
the
Directors
consider
the
key
risks
for
the
Company
to
be:

the
failure
of
the
Datang
Test
Burn;
inability
to
secure
a
long-‐term,
off-‐take
agreement
with
Datang;
and
inability
to
enter
into
a
binding
contract
with
GEAC
for
coal
supply
and
siting
of
the
Proposed Coldry
Production
Plant.

To
apply
for
New
Shares
and
New
Options
under
the
Offer,
you
must
complete
and
return
the
Entitlement and
Acceptance
Form
accompanying
this
Prospectus,
with
payment,
no
later
than
5.00
pm
on
Tuesday
27 September
2011.

Iain
McEwin
is
non-‐executive
Director
and
a
key
Shareholder
of
the
Company.
He
has
agreed
to
take
up
his full
Entitlement
to
New
Shares
under
the
Offer
and
partially
underwrite
the
Offer
by
subscribing
for
New Shares
to
the
value
of
$100,000
to
be
issued
under
any
Shortfall.
Ashley
Moore,
Chief
Operating
Officer and
executive
Director
intends
to
take
up
his
full
Entitlement
under
the
Offer.

I
invite
you
to
read
the
Prospectus
in
its
entirety.
On
behalf
of
ECT,
we
recommend
this
Offer
to
you
and encourage
your
participation.

Mike Davies Managing Director and Executive Chairman

26
August
2011

Page 10 of 51

www.ectltd.com.au

INVESTMENT DETAILS

1 Details

of
the
Issue
and
Terms
of
the
Offer

This
section
is
intended
to
provide
information
on
the
Offer
under
this
Prospectus.

1.1 This Offer

ECT
is
making
a
non-‐renounceable
offer
to
Eligible
Shareholders
to
subscribe
for
New
Shares
on
the
basis
of 2
New
Shares
for
every
3
Shares
held
as
at
5:00
pm
on
the
Record
Date
at
an
issue
price
of
0.6
cents
per New
Share.

The
price
payable
for
each
New
Share
under
the
Offer
is
the
same
as
the
placement
announced
on
18 August
2011,
which
represents
a
14%
discount
on
the
closing
market
price
of
Shares
on
ASX
on
17
August 2011.

Subscribers
for
New
Shares
will
also
receive,
at
no
cost,
1
New
Option
for
every
2
New
Shares
issued
to them.

The
number
of
New
Shares
and
New
Options
that
you
are
entitled
to
(that
is,
your
Entitlement
and
the number
of
Rights
you
have)
is
shown
on
the
personalised
Entitlement
and
Acceptance
Form
accompanying this
Prospectus.

Rights
are
non-‐renounceable
which
means
that
Eligible
Shareholders
may
not
transfer,
dispose
of
or otherwise
deal
with
any
part
of
their
Entitlement.
There
will
be
no
trading
of
Rights
on
ASX

Eligible
Shareholders
will
not
be
obliged
to
pay
brokerage
or
other
fees
in
respect
of
the
New
Shares
and New
Options
acquired
under
the
Offer.

1.2 Underwriting

This
Offer
is
partially
underwritten
by
Iain
McEwin,
non-‐executive
director
and
key
Shareholder
of
the Company.
Pursuant
to
the
Underwriting
Agreement,
Mr
McEwin
(or
entities
controlled
by
him)
must subscribe
for
New
Shares,
up
to
the
value
of
$100,000,
to
be
issued
under
any
Shortfall.
The
agreement
to partially
underwrite
the
Offer
is
in
addition
to
Mr
McEwin
agreeing
to
subscribe
for
his
full
Entitlement
to New
Shares
under
the
Offer.

1.3 Use of the proceeds of Offer

The
Offer
will
raise
approximately
$3.8
million
(before
costs
and
expenses),
if
fully
subscribed.

The
funds
raised
under
the
Offer
will
be
used
to:

complete
Phase
1
of
the
Design
for
Tender
in
respect
of
the
Proposed
Coldry
Production
Plant and,
if
the
Offer
is
fully
subscribed,
initiate
Phase
2
of
the
Design
for
Tender
as
described
in section
4.2;
fund
the
net
cash
loss
between
the
cost
of
producing,
and
the
revenue
derived
from,
the 2,000
tonnes
of
Coldry
BCE
to
be
used
by
Datang
in
the
Test
Burn;
meet
short-‐term,
working
capital
requirements
in
respect
of
the
Test
Burn;
and

Page 11 of 51

www.ectltd.com.au

meet
operational
expenditure
in
respect
of
the
on-‐going
development
of
the
Coldry
and MATMOR
Technologies.

Further
details
on
the
intended
use
of
the
proceeds
of
the
Offer
are
set
out
in
section
4.3.

It
is
important
to
note
that
there
is
no
minimum
subscription
for
the
Offer
and
the
Offer
is
only
partially underwritten.
Accordingly,
the
Company
may
not
raise
the
full
amount
under
the
Offer
or
by
the
placement of
any
Shortfall.

If
the
Offer
is
not
fully
subscribed,
ECT
will
be
constrained
in
its
ability
to
further
develop
the
Coldry Technology
and
advance
its
plans
for
the
Proposed
Coldry
Production
Plant.

Note:

The
Company
will
pay
holders
of
an
AFSL
(as
determined
by
the
Board)
a
Brokerage
Fee
of
5%
of
the
gross proceeds
of
any
New
Shares
(including
any
Additional
New
Shares)
issued
to
Eligible
Shareholders
under
the Offer.
The
Board
also
reserves
the
right
to
pay
an
additional
5%
fee
to
the
holder
of
an
AFSL
for
the placement
of
a
substantial
portion
of
any
Shortfall
(Shortfall
Fee).
The
estimated
expenses
of
the
Offer
set out
in
section
7.17
do
not
include
any
Brokerage
or
Shortfall
Fees
that
may
be
paid
to
holders
of
an
AFSL
and accordingly,
the
estimated
expenses
may
increase
to
the
extent
of
any
such
payment.
The
total
Brokerage Fees
and
any
Shortfall
Fees
cannot
be
calculated
as
at
the
date
of
this
Prospectus
as
it
is
dependent
on
the number
of
New
Shares
issued
in
connection
with
the
holders
of
an
AFSL.

1.4 Your Entitlement

Your
Entitlement,
that
is,
the
number
of
Rights
you
have
(or,
the
number
of
New
Shares
and
New
Options to
which
you
are
entitled)
under
the
Offer
is
shown
on
your
personalised
Entitlement
and
Acceptance
Form accompanying
this
Prospectus.
Fractional
entitlements
to
New
Shares
and
New
Options
will
be
rounded
up to
the
nearest
whole
number.
Please
note
that
if
you
have
more
than
one
holding
of
Shares,
you
will
be sent
more
than
one
personalised
Entitlement
and
Acceptance
Form.
A
separate
Entitlement
and Acceptance
Form
and
payment
of
Application
Monies
must
be
completed
for
each
separate
Entitlement you
hold.

Your
Rights
are
non-‐renounceable,
which
means
that
Eligible
Shareholders
may
not
transfer,
dispose
of
or otherwise
deal
with
any
part
of
their
Entitlement.
There
will
be
no
trading
of
Rights
on
ASX.

The
Record
Date
for
the
purpose
of
the
Offer
is
5.00
pm
on
5
September
2011.
Persons
with
registered addresses
in
Australia
or
New
Zealand
who
are
registered
as
the
holders
of
Shares
on
the
Record
Date (Eligible
Shareholders),
will
be
entitled
to
participate
in
the
Offer.

1.5 Closing date

The
Company
will
accept
applications
from
the
date
of
this
Prospectus
until
5.00
pm
on
27
September
2011 or
such
other
date
as
the
Directors
in
their
absolute
discretion
may
determine
subject
to
the
requirements of
the
ASX
Listing
Rules.
Applications
for
any
Shortfall
will
be
accepted
after
the
Closing
Date.

For
the
convenience
of
Eligible
Shareholders,
an
Australian
reply
paid
envelope
has
been
enclosed
with
this Prospectus.

1.6 Total number of New Shares and New Options to be issued

The
total
number
of
New
Shares
to
be
issued
pursuant
to
this
Offer
will
be
approximately
634
million
and 317
million
respectively
(the
exact
numbers
will
depend
on
rounding-‐up
of
individual
holdings
and
the
level of
acceptances
of
the
Offer).

Page 12 of 51

www.ectltd.com.au

The
gross
proceeds
(before
costs
and
expenses)
of
this
Offer
will
be
approximately
$3.8
million.
The expenses
of
the
Offer
are
expected
to
be
approximately
$200,000
exclusive
of
GST
and
disbursements.
The estimated
costs
of
the
Offer
do
not
include
any
Brokerage
Fees
or
Shortfall
Fees
payable
to
holders
of
an AFSL
in
respect
of
the
issue
of
New
Shares.

1.7 Application for Additional New Shares

Eligible
Shareholders,
excluding
related
parties
of
the
Company,
unless
approved
by
Shareholders,
may apply
to
take
up
Additional
New
Shares
in
addition
to
their
Entitlements.
Eligible
Shareholders
may
apply for
Additional
New
Shares
by
indicating
on
the
Entitlement
and
Acceptance
Form
the
number
of
Additional New
Shares
for
which
they
wish
to
apply.
Additional
New
Shares
will
form
part
of
the
Shortfall
(if
any).

1.8 Entitlements not taken up

The
Offer
under
the
terms
of
the
Issue
may
be
accepted
in
whole
or
in
part.
If
Eligible
Shareholders
decide not
to
accept
all
or
any
part
of
their
Entitlement
under
the
Offer,
their
Entitlement
will
lapse
and
those New
Shares
will
become
part
of
any
Shortfall
to
which
sections
1.7
and
1.9
will
apply.

1.9 Placement of any Shortfall

This
Offer
is
partially
underwritten.
The
Directors
reserve
the
right,
at
their
discretion,
to
place
any Shortfall
to
Eligible
Shareholders,
the
Underwriter
and
any
other
persons
who
wish
to
to
participate
in
any Shortfall.
The
issue
of
Additional
New
Shares
and
the
placement
of
any
Shortfall
will
occur
within
3
months of
the
Closing
Date
of
the
Offer.

The
issue
price
of
New
Shares
under
the
Shortfall
will
not
be
less
than
the price
of
New
Shares.
If
applications
for
any
Shortfall
(including
Additional
New
Shares)
cannot
be
filled
in full
or
in
part,
surplus
Application
Monies
will
be
returned
to
applicants
without
any
adjustment
for interest.
The
Company
does
not
guarantee
that
an
application
for
any
Shortfall
(including
Additional
New Shares)
will
be
filled,
in
full
or
in
part.

If
any
New
Shares
under
the
Shortfall
are
offered
to
any
person,
that
offer
will
be
made
on
the
basis
of
this Prospectus.

1.10 Issue of New Shares and New Options

ECT
expects
to
issue
the
New
Shares
and
New
Options
on
or
before
5
October
2011.
No
issue
of
New Shares
and
New
Options
will
be
made
unless
permission
is
granted
for
quotation
of
the
New
Shares
and New
Options
on
ASX.

Application
Monies
will
be
held
in
trust
for
applicants
in
a
subscription
account
until
New
Shares
and
New Options
are
allotted
to
such
applicants.
Interest
earned
on
Application
Monies
will
be
for
the
benefit
of ECT
and
will
be
retained
by
ECT
irrespective
of
whether
New
Shares
and
New
Options
are
issued.

1.11 Withdrawal of Offer

The
Company
reserves
the
rights
not
to
proceed
with
the
Offer
at
any
time
before
the
issue
of
the
New Shares
and
attaching
New
Options.
If
the
Offer
does
not
proceed,
the
Company
will
return
all
Application Monies
as
soon
as
practicable
after
giving
notice
of
its
withdrawal,
without
any
adjustment
for
interest.

1.12 ASX quotation

ECT
will
apply
for
admission
of
the
New
Shares
and
New
Options
to
quotation
on
ASX
within
7
days
after the
date
of
this
Prospectus.
If
ASX
does
not
grant
Official
Quotation
of
the
New
Shares
and
New
Options within
3
months
after
the
date
of
this
Prospectus,
ECT
will
not
issue
any
New
Shares
and
New
Options
and will
repay
all
Application
Monies
within
the
time
prescribed
under
the
Corporations
Act,
without
interest.

Page 13 of 51

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1.13 Ranking of New Shares

The
New
Shares
will
be
in
the
same
class
and
will
rank
equally
with
existing
Shares
on
issue
in
the Company.
A
summary
of
the
rights
attaching
to
the
New
Shares
(and
existing
Shares)
is
set
out
in
section 7.4.

1.14 Ranking and exercise price of New Options

The
New
Options
will
be
in
the
same
class
and
will
rank
equally
with
the
existing
ESIOs
on
issue
in
the Company.
A
summary
of
the
rights
attaching
to
the
New
Options
(and
ESIOs)
is
set
out
in
section
7.5.
In accordance
with
the
terms
of
issue
of
the
ESIOs,
as
a
consequence
of
this
Offer,
the
exercise
price
of
the ESIOs
will
be
reduced
in
accordance
with
the
formula
set
out
in
ASX
Listing
Rule
6.22.2.
As
at
the
date
of this
Prospectus,
the
exercise
price
for
the
New
Options
and
ESIOs
is
$0.02.
The
actual
exercise
price
for
the New
Options
and
ESIOs
will
be
announced
on
or
before
2
September
2011.

1.15 Market prices of Shares and ESIOs

The
lowest
and
highest
market
sale
price
of
Shares
on
ASX
during
the
3
months
immediately
preceding
the lodgement
date
of
this
Prospectus,
and
the
respective
dates
of
those
sales,
were:

highest
price
was
2.4
cents
on
26
May
2011;
and
lowest
price
was
0.6
cents
on
25
August

The
closing
price
for
Shares
on
ASX
on
25
August
2011,
being
the
last
day
of
trading
of
Shares
prior
to
the date
of
this
Prospectus,
was
0.6 cents.

The
lowest
and
highest
market
sale
price
of
ESIOs
on
ASX
during
the
3
months
immediately
preceding
the lodgement
date
of
this
Prospectus,
and
the
respective
dates
of
those
sales,
were:

highest
price
was
1.3
cents
on
27
May
2011;
and
lowest
price
was
0.2
cents
on
19
August

The
closing
price
for
ESIOs
on
ASX
on
25
August
2011,
being
the
last
day
of
trading
of
ESIOs
prior
to
the date
of
this
Prospectus,
was
0.3 cents.

1.16 Ineligible Shareholders

This
Prospectus
contains
an
Offer
to
Eligible
Shareholders
with
a
registered
address
in
Australia
or
New Zealand.

Eligible
Shareholders
with
a
registered
address
in
Australia
or
New
Zealand
who
hold
Shares
on
the
Record Date
on
behalf
of
persons
who
are
not
resident
in
Australia
or
New
Zealand
are
responsible
for
ensuring that
taking
up
the
New
Shares
and
New
Options
under
the
Offer
does
not
breach
securities
law
in
the relevant
overseas
jurisdictions.
Return
of
a
duly
completed
Entitlement
and
Acceptance
Form
will
be
taken by
ECT
to
constitute
a
representation
that
there
has
been
no
breach
of
such
laws.

Subject
to
compliance
with
relevant
legislation
in
their
country
of
domicile
non-‐Australian
or
New
Zealand resident
shareholders
can
apply
for
an
allocation
of
any
Shortfall.
Refer
to
sections
1.7
and
1.9.

1.17 Taxation implications

The
Board
considers
that
it
is
not
appropriate
to
provide
advice
regarding
the
taxation
consequences
of subscribing
for
New
Shares
and
New
Options
under
this
Prospectus
in
any
tax
jurisdiction.

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ECT
recommends
that
Eligible
Shareholders
consult
their
own
independent
accountant,
legal
adviser
or other
professional
adviser
regarding
the
taxation
treatment
of
subscribing
for
and
disposing
of
New
Shares and
New
Options
under
this
Offer.
ECT
and
its
officers
and
advisers
do
not
accept
any
responsibility
or liability
for
any
taxation
consequences
of
Eligible
Shareholders
subscribing
for
and
disposing
of
New
Shares and
New
Options.

1.18 Entitlement and Acceptance Form is binding

A
completed
and
lodged
Entitlement
and
Acceptance
Form,
together
with
the
Application
Monies
for
the number
of
New
Shares
and
Additional
New
Shares
(if
any)
applied
for,
or
the
payment
for
New
Shares
and Additional
New
Shares
(if
any)
via
BPAY,
cannot
be
withdrawn
and
constitutes
a
binding
application
for
the number
of
New
Shares
and
Additional
New
Shares
(if
any)
specified
by
the
Eligible
Shareholder
in
the Entitlement
and
Acceptance
Form,
or
for
which
payment
is
made
via
BPAY,
on
the
terms
set
out
in
this Prospectus.
The
Entitlement
and
Acceptance
Form
does
not
need
to
be
signed
to
be
binding.

In
relation
to
the
Offer
to
Eligible
Shareholders,
ECT
will
not
process
applications
until
the
expiry
of
the Offer
Period.
No
preference
will
be
conferred
on
applications
on
the
basis
of
when
those
applications
were received
in
the
Offer
Period.

If
the
Entitlement
and
Acceptance
Form
is
not
completed
correctly,
ECT
in
its
absolute
discretion
can
reject it
or
treat
it
as
valid.
ECT’s
decision
as
to
whether
to
accept
or
reject
an
Entitlement
and
Acceptance
Form or
how
to
construe,
amend
or
complete
it
is
final.

1.19 Enquiries

Enquiries
concerning
the
Entitlement
and
Acceptance
Form
should
be
directed
to
Security
Transfer Registrars
Pty
Limited
on
+61
8
9315
2333
or
at
[email protected].

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2 Answers

to
Key
Questions

Question	Answer
What is the Offer?	2 New Shares for every 3 Shares held at Record Date at an Issue Price of 0.6 cents per New Share. Subscribers of New Shares will also receive, at no cost, 1 New Option for every 2 New Shares issued to them under the Offer. The Offer is expected to raise approximately $3.8 million before expenses.
Who can participate in the Offer?	Only Eligible Shareholders can participate in the Offer. Eligible Shareholders are persons who are registered holders of Shares on the Record Date with registered addresses in Australia or New Zealand. Non-Australian or non-New Zealand resident Shareholders can apply for an allocation of any Shortfall under the same terms as the Offer. Subject to the warning set out in this Prospectus, the Board, subject to availability and relevant regulations in the country of domicile of the Shareholder, may allocate a portion of the Shortfall to non-Australian or non-New Zealand resident Shareholders.
How much do I have to pay to participate in the Offer?	The Issue Price for a New Share is 0.6 cents. No additional amount is payable for a New Option. The exercise price for a New Option is estimated to be 0.195 cents. The actual exercise price will be announced on or before 2 September 2011. You may subscribe for all, or part of, your Entitlement, or more than your Entitlement by applying for Additional New Shares(however, as set out in section 1.9, any Shortfall will be placed at the discretion of the Directors).
What are the terms of the New Shares?	The New Shares issued under the Offer will rank equally with existing Shares on issue in the Company. The rights and liabilities attaching to Shares (and New Shares) are detailed in section 7.4. The New Options issued under the Offer will rank equally with existing ESIOs on issue in the Company. The rights and liabilities attaching to ESIOs (and New Options) are detailed in section 7.5.
Is the Offer underwritten?	The Offer is partially underwritten by the Underwriter. The Underwriter has agreed to subscribe for New Shares up to the value of $100,000 to be issued under any Shortfall. The Directors reserve the right, in their discretion, to place any further Shortfall with Eligible Shareholders, who have applied for Additional New Shares, or with persons other than Eligible Shareholders. See sections 1.9 and 7.7 for further details.
Can the Offer be withdrawn?	Yes. The Directors reserve the right to withdraw the Offer

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Question	Answer
	and this Prospectus any time, subject to the Corporations Act, ASX Listing Rules and other applicable laws. No agreement to issue the New Shares and New Options under this Offer arises until expiry of the Offer Period. If the Offer is withdrawn, ECT will refund Application Monies in accordance with the Corporations Act, without any adjustment for interest.
What is the purpose of the Offer?	Refer to section 1.2 for details.
What is my entitlement?	Your entitlement as an Eligible Shareholder is set out in your personalised Entitlement and Acceptance Form accompanying this Prospectus. If you did not receive your personalised Entitlement and Acceptance Form please contact Security Transfer Registrars Pty Limited on +61 8 9315 2333 or via email at [email protected].
What are my options?	You may either: take up all or part of your Entitlement; take up all of your Entitlement and apply for Additional New Shares(as set out in section 1.9, any Shortfall will be placed at the discretion of the Directors); or do nothing and allow your Entitlement to New Shares and New Options to lapse with any Shortfall to be placed at the Directors’ discretion. Please read the Prospectus carefully before selecting an option.
How do I exercise my Rights?	If you are an Eligible Shareholder, and you wish to subscribe for all or some of the New Shares and New Options making up your Entitlement (and Additional New Shares in excess of your Entitlement) you must complete the Entitlement and Acceptance Form accompanying this Prospectus, and forward it, with your Application Monies, to: Rights Issue Environmental Clean Technologies Limited c/- Security Transfer Registrars Pty Limited PO Box 535 Applecross, Western Australia AUSTRALIA 6153 ECT must receive your Entitlement and Acceptance Form by the Closing Date. Alternatively, you may accept this Offer by making payment of the Application Monies by BPAY. Payment by BPAY does not require you to complete the Entitlement and Acceptance Form. Please see section 3.5 regarding acceptance of Offer and payment of Application Monies via BPAY.

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Question	Answer
Can I sell or transfer my Rights?	No, as the Offer is non-renounceable, you cannot sell or transfer any of your Rights. There will be no trading of Entitlements on ASX.
Is there a cooling off period?	No, there is no cooling off period. As such, in most circumstances, you cannot withdraw an application for New Shares, New Options or Additional New Shares once the Entitlement and Acceptance Form and/or Application Monies have been received by ECT.
How can I obtain further information?	ECT encourages you to seek advice from your financial or other professional adviser. Enquiries concerning this Prospectus should be directed to ECT. Enquiries concerning the Entitlement and Acceptance Form should be directed to Security Transfer Registrars Pty Limited on +61 8 9315 2333 or at [email protected].

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3 Your
options
under
the
Offer

3.1 Entitlement

Your
Entitlement
is
shown
on
the
accompanying
personalised
Entitlement
and
Acceptance
Form.
Before taking
any
action
in
relation
to
the
Offer,
you
should
read
this
Prospectus
in
its
entirety,
and
seek professional
advice
from
your
accountant,
stockbroker,
lawyer
or
other
professional
adviser.

You

may:

take
up
all
or
part
of
your
Entitlement;
take
up
all
of
your
Entitlement
and
apply
for
Additional
New
Shares
(as
set
out
in
section
1.9, any
Shortfall
will
be
placed
at
the
discretion
of
the
Directors);
or
do
nothing
and
allow
your
Entitlement
to
New
Shares
and
attaching
New
Options
to
lapse with
any
Shortfall
to
be
placed
at
the
Directors’
discretion.

3.2 Take up all or part of your Entitlement

If
you
wish
to
take
up
all
or
part
of
your
Entitlement:

complete
the
accompanying
Entitlement
and
Acceptance
Form
in
accordance
with
the instructions
set
out
on
the
form,
specifying
the
amount
of
your
Entitlement
you
wish
to
take up;
and
ensure
your
application
and
Application
Monies
are
received
by
the
Company
at:

Rights
Issue Environmental
Clean
Technologies
Limited c/-‐
Security
Transfer
Registrars
Pty
Limited PO
Box
535 Applecross,
Western
Australia AUSTRALIA
6153

Facsimile:
+61
(0)
8
9315
2233

by 5.00 pm on the Closing Date (the
Closing
Date
is
currently
Tuesday
27
September
2011, but
ECT
reserves
the
right
to
extend
the
Offer).
For
acceptance
of
Offer
and
payment
of Application
Monies
via
BPAY
please
refer
to
section
3.5.

3.3 Take up all of your Entitlement and apply for Additional New Shares

If
you
wish
to
take
up
all
of
your
Entitlement
and
apply
for
Additional
New
Shares:

complete
the
accompanying
Entitlement
and
Acceptance
Form
in
accordance
with
the instructions
set
out
on
the
form,
specifying
that
you
wish
to
take
up
the
total
amount
of
your Entitlement
and
the
amount
of
Additional
New
Shares
you
wish
to
take
up
(as
set
out
in section
1.9,
any
Shortfall
will
be
placed
at
the
discretion
of
the
Directors);
and

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ensure
your
application
and
Application
Monies
are
received
by
the
Company
at:

Rights
Issue Environmental
Clean
Technologies
Limited c/-‐
Security
Transfer
Registrars
Pty
Limited PO
Box
535 Applecross,
Western
Australia AUSTRALIA
6153

Facsimile:
+61
(0)
8
9315
2233

by 5.00 pm on the Closing Date (the
Closing
Date
is
currently
Tuesday
27
September
2011, but
ECT
reserves
the
right
to
extend
the
Offer).

3.4 Do nothing

If
you
do
nothing,
your
Entitlement
will
lapse
and
the
New
Shares
and
New
Options
which
represent
your Entitlement
will
form
part
of
any
Shortfall
which
will
be
issued
to
the
Underwriter
and,
in
the
event
of
any Shortfall
of
New
Shares
exceeding
a
value
of
$100,000,
to
any
other
such
persons
as
the
Directors,
in
their absolute
discretion,
determine
.
Any
Shortfall
will
be
issued
within
3
months
of
this
Prospectus.
The
issue of
any
Shortfall
will
be
at
a
price
that
is
not
less
than
the
Issue
Price
under
this
Prospectus.
Although
you will
continue
to
own
the
same
number
of
Shares
in
ECT,
your
percentage
shareholding
in
ECT
will
be diluted.

Please
carefully
read
this
Prospectus
in
its
entirety
before
making
your
decision.

3.5 Form of payment

Payments
of
Application
Monies
will
only
be
accepted
in
Australian
currency
and
may
only
be
made
by
one of
the
following
methods:

Bank
cheque
drawn
on
and
redeemable
at
any
Australian
bank;
Personal
cheque
drawn
on
and
redeemable
at
any
Australian
bank.
Eligible
Shareholders
must ensure
there
are
sufficient
funds
in
the
account
on
which
the
personal
cheque
is
drawn
so that
the
cheque
clears
in
favour
of
ECT
when
it
is
first
presented
for
payment;
Money
order;
or
®[[1]]
� BPAY .

If paying by cheque

Cheques
or
bank
cheques
should
be
made
payable
to
“ Environmental Clean Technologies Limited -‐ Rights Issue ”
and
crossed
“ Not Negotiable ”.
Eligible
Shareholders
are
asked
not
to
forward
cash.
Receipts
for payment
will
not
be
provided.

[1] ® Registered to Bpay Pty Ltd ABN 69 079 137 518

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If paying via BPAY

To
apply
and
pay
via
BPAY,
you
should:

Read
this
Prospectus
and
the
Entitlement
and
Acceptance
Form
in
their
entirety
and
seek appropriate
professional
advice
if
necessary;
and
Make
your
payment
via
BPAY
for
the
number
of
New
Shares
and
Additional
New
Shares
you
wish to
subscribe
for
(being
the
Issue
Price
of
0.6
cents
($0.006)
per
New
Share
multiplied
by
the number
of
New
Shares
and
Additional
New
Shares
you
are
applying
for)
so
that
it
is
received
no later
than
5:00pm
on
27
September
2011,
or
such
later
date
as
the
Company
may
specify.
You
can only
make
a
payment
via
BPAY
if
you
are
the
holder
of
an
account
with
an
Australian
financial institution.
Your
unique
BPAY
reference
number
is
shown
on
your
personalised
Entitlement
and Acceptance
Form.

If you choose to pay via BPAY you are not required to submit the Entitlement and Acceptance Form.

If
your
BPAY
payment
is
received
by
5:00pm
on
27
September
2011,
or
such
later
date
as
the
Company
may
specify, the
New
Shares
and
attaching
New
Options
are
anticipated
to
be
allotted
to
you
on
or
before
5
October
2011
(which date
may
change
without
notice).

Applicants should be aware that their own financial institution may implement earlier cut off times with regards to electronic payment, and should therefore take this into consideration when making payment. You may also have your own limit on the amount that can be paid via BPAY. It is your responsibility to check that the amount you wish to pay via BPAY does not exceed your limit .

If
you
have
multiple
holdings
you
will
be
issued
multiple
BPAY
reference
numbers.
To
ensure
that
you receive
your
entitlement
in
respect
of
each
holding,
you
must
use
the
customer
reference
number
shown on
each
personalised
Entitlement
and
Acceptance
Form
when
paying
for
any
New
Shares
and
Additional New
Shares
that
you
wish
to
apply
for
in
respect
of
that
holding.

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4 Overview

of
ECT

4.1 Background

ECT
is
a
public
company
established
in
1985
and
based
in
Melbourne,
Australia.
In
February
1986
the Company
became
listed
on
ASX.

ECT
is
in
the
business
of
commercialising
and
selling
disruptive,
leading-‐edge
technologies
that
have
game-‐ changing
potential
within
the
energy
and
resources
sector
due
to
their
capability
to
deliver
environmental and
commercial
benefits.

We
are
focused
on
advancing
a
portfolio
of
such
technologies
that
have attractive
market
potential.
This
potential
is
largely
informed
by
global
markets
that
exhibit
significant potential
for
growth
and
enable
us
to
secure
sustainable
profits
through
licensing
royalties
or
other commercial
mechanisms.

Our
business
model
is
based
on
partnering
with,
or
engaging
the
services
of,
experts
in
those
fields essential
to
the
technical
and
commercial
development
of
our
technologies.

Disruptive
technologies
naturally
sit
outside
of
an
existing
paradigm,
and
as
such,
presents
unique marketing
challenges.
Our
approach
to
market
analysis
allows
us
to
dovetail
technology
and
product development
with
sales
and
marketing
strategies
designed
to
engage
end
users
and
drive
adoption
of
the end
product.

4.2 ECT’s strategy

ECT
is
a
sales
and
marketing
led,
technology
commercialisation
vehicle.
Our
business
model
is
based
on licensing
technology,
essentially
creating
annuity
based
revenue
streams
without
needing
to
raise
equity
or carry
debt
to
finance
construction.
The
Company’s
objective
has
been
the
commercialisation
of
its
Coldry and
MATMOR
Technologies.
The
Company
plans
to
licence
the
construction
and
operation
of
the
large scale
Proposed
Coldry
Production
Plant,
located
at
the
Loy
Yang
Power
Station
in
Victoria’s
Latrobe
Valley.

Following
termination
of
the
joint
venture
agreement
between
ECT
and
Tincom
Australia
Pty
Ltd
on
31
May 2011,
your
Directors
have
been
reviewing
the
Company’s
options
to
progress
the
commercial
deployment of
the
Coldry
Technology.
Future
directions
for
the
Company
which
are
currently
being
considered
include:

negotiating
with
coal
producers,
coal
trading
companies
and
coal
consumers
in
several countries
to
secure
Coldry
technology
licensing
arrangements;
engaging
a
new
partner
to
participate
in
the
Victorian
Coldry
Project;
and
entering
into
large
scale
coal
off-‐take
agreements
with
overseas
black
coal
consumers, primarily
power
station
operators,
to
support
the
ongoing
commercial
operations
of
the Proposed
Coldry
Production
Plant.

Important
steps
in
realising
the
future
direction
of
the
Company
are:

successful
completion
of
the
Test
Burn
to
be
conducted
by
Datang;
completion
of
Phase
1
of
the
Arup
Design
for
Tender;
and
continuing
to
pursue
opportunities
to
secure
off-‐take
agreements
and
other
contractual commitments
in
respect
of
the
sale
and
supply
of
Coldry
BCE.

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Datang

Datang
is
a
subsidiary
of
China
Datang
Corporation,
a
leading
Chinese,
state-‐owned
power
generation enterprise.
It
specialises
in
power
generation
and
supply,
and
related
coal
mine
development
and production.

On
25
May
2011,
ECT
announced
that
it
had
signed
the
Coal
Supply
Agreement
with
Datang
to
undertake the
Test
Burn
of
2,000
metric
tonnes
of
Coldry
BCE
in
one
of
Datang’s
black
coal-‐fired
power
stations. Pursuant
to
a
Memorandum
of
Understanding
between
ECT
and
Datang
signed
on
19
January
2011,
the parties
agreed
that
if
the
Test
Burn
is
successful,
the
Company
and
Datang
will
target
a
commercial
scale coal
supply
agreement.

On
25
August
2011
Datang
agreed
to
revise
the
date
on
which
the
Test
Burn
sample
lot
is
to
be
delivered
to the
Australian
port
for
shipping
to
China,
and
the
subsequent
Test
Burn.
The
original
date
for
shipping
was by
the
end
of
August
2011.

Arup

Arup
is
a
global
engineering
firm
providing
design,
planning
and
project
management
services.
Over
the past
3
years,
Arup
has
worked
closely
with
ECT
on
the
development
of
the
Demonstration
Plant.
During the
time
it
has
worked
with
ECT,
Arup
has
accumulated
considerable
knowledge
of
the
Coldry
process
and understands
the
opportunities
for
minimising
capital
and
operating
costs.
ECT
intends
for
Arup
to undertake
the
Design
for
Tender
for
the
Plant
to
be
located
at
the
Loy
Yang
Power
Station
with
sufficient documentation
and
engineering
plans
to
enable
a
reputable
Australian
construction
contractor
(for example
McConnell
Dowell)
to
prepare
a
capital
cost
estimate
of
a
suitable
accuracy
to
support
the
further development
of
the
Project.
The
level
of
accuracy
should
provide
a
prospective
contractor
with
the confidence
to
prepare
a
“Lump
Sum
Price”,
with
a
minimum
design
contingency
amount
or
“Guaranteed Maximum
Price”.
Arup’s
fee
for
delivering
the
DFT
is
estimated
to
be
$3.6
million.
To
support
ECT’s planned
phased
capital
raising
program,
Arup
has
divided
the
DFT
into
the
following
three
phases:

Phase
1
will
entail
the
commencement
of
the
DFT
project,
preliminary
investigation
and assessment
of
the
Loy
Yang
Power
Station
site
including
the
availability
of
resources,
and
early stage
design
works.
The
cost
of
Phase
1
is
estimated
at
$1
million.
Phase
2
will
entail
the
preliminary
design
of
the
plant
hopper
civils
(foundation,
piling
and
other civil
engineering
aspects),
mechanical
plant
and
equipment,
and
the
conveyor
and
transfer systems.
The
cost
of
Phase
2
is
estimated
at
$1
million.
Phase
3
will
entail
refinements
of
the
design
for
the
Plant
and
civil
works,
the
preparation
of tender
documentation
and
review
of
tender
responses.
This
phase
will
also
include
a
capital expenditure
and
operating
cost
review
of
the
Plant
and
its
operation.
The
cost
of
Phase
3
is estimated
at
$1.6
million.

4.3 Use of funds

The
Offer
seeks
to
raise
approximately
$3.8
million
before
expenses.
These
funds
will
be
used
to:

complete
Phase
1
of
the
Design
for
Tender
in
respect
of
the
Proposed
Coldry
Production
Plant;
fund
the
net
cash
loss
between
the
cost
of
producing,
and
the
revenue
derived
from,
the 2,000
tonnes
of
Coldry
BCE
to
be
used
by
Datang
in
the
Test
Burn;
meet
short-‐term,
working
capital
requirements
in
respect
of
the
Test
Burn;
and
meet
operational
expenditure
in
respect
of
the
on-‐going
development
of
the
Coldry
and MATMOR
Technologies.

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The
intended
use
of
the
funds
raised
by
the
Offer
(including
any
funds
raised
by
the
placement
of
any Shortfall
within
3
months
of
the
Closing
Date)
is
summarised,
based
on
a
subscription
of
50%
and
100%,
in the
table
below.

Application of Funds	50% Subscribed	100% Subscribed
Test Burn (net cost)	$0.5 million	$0.5 million
Design for Tender – Phase 1	Phase 1 will not proceed	$1.0 million
Short term working capital requirements (including costs of the Offer)	$1.2 million	$2.1 million
Estimated expenses of the Issue*	$0.2 million	$0.2 million
Total	$1.9 million†	$3.8 million†

†The
total
amount
raised
from
the
Offer
does
not
include
any
amounts
raised
on
the
exercise
of
the New
Options.

*This
amount
does
not
include
any
Brokerage
Fees
or
Shortfall
Fees
payable
by
ECT
in
respect
of New
Shares
issued
to
Eligible
Shareholders
whose
Entitlement
and
Acceptance
Forms
bear
the stamp
of
the
holder
of
an
AFSL.

ECT
is
unable
to
estimate
the
total
Brokerage
Fees
and
any Shortfall
Fees
that
may
be
payable
to
the
holders
of
AFSLs.

The
actual
amount
of
expenditure
may
vary
from
the
table
above.

4.4 Consequences if the Offer is not fully subscribed or any Shortfall cannot be placed

The
use
of
the
proceeds
of
the
Offer
and
activities
of
the
Company
will
be
directly
affected
by
the:

amount
of
funds
available
from
acceptance
of
Entitlements
under
the
Offer;
ability
of
the
Company
to
place
all
of
or
a
proportion
of
any
Shortfall
within
3
months
of
the Closing
Date;
and
total
amount
of
capital
available
to
the
Company
following
the
placement of any Shortfall.

If
there
is
insufficient
capital
to
effectively
deliver
the
stated
Company
objectives,
the
Directors:

reserve
the
right
to
consider
alternative
capital
sources
in
order
to
fully
commercialise
the Coldry
Technology;
give
no
undertakings
as
to
the
nature,
cost
and
impact
of
alternate
funding
on
Shareholders; and
will
take
appropriate
measures
to
limit
Company
activity
to
the
available
funds.

If
the
Company
is
unable
to
pay
all
its
debts
as
and
when
they
fall
due,
the
Directors
will
be
obliged
to consider
the
appointment
of
external
administrators
to
manage
the
affairs
of
the
Company.

Page 24 of 51

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4.5 The Directors

Mr Stephen Carter MBA,
Dip.
Applied
Science,
Advanced
Dip.
Company
Directors,
Diploma
Stockbroking. FAICD,
MSAA

Non
Executive
Director

Stephen
has
extensive
experience
in
delivering
strategic
projects
including
the
commissioning
of
Crown Casino,
the
commercial
preparation
for
the
integration
of
Ansett/Air
New
Zealand,
delivery
of
a
multi-‐ million
dollar
funding
package
for
the
redevelopment
of
the
Melbourne
Showgrounds,
the
review
and transformation
of
Air
New
Zealand’s
engineering
division
and
the
commercial
repositioning
of
Spotlight
Pty Ltd.

Mr Mike Davies Diploma
Civil
Engineering,
Graduate
of
Macquarie
University
Advanced
Management Program.

Managing
Director
and
Executive
Chairman

Mike
is
an
experienced
senior
manager
having
spent
fourteen
years
in
General
Manager
and CEO/Managing
Director
roles.
The
largest
part
of
Mike’s
career
was
spent
in
the
employment
of
Caterpillar Inc.,
the
global
leader
in
the
mining
and
construction
equipment
industries,
and
of
Caterpillar
dealers including
Hastings
Deering
Limited
and
Gough
Group
(New
Zealand)
Limited.
He
was
CEO/Managing Director
of
Gough
Group
Limited
between
1992
and
1997.
Mike
was
also
CEO/Managing
Director
of
Joy Mining
Machinery
Australia
Limited,
the
Australian
subsidiary
of
Joy
Global
Inc.,
the
global
leader
in underground
coal
mining
equipment,
between
1997
and
1999,
before
commencing
his
consulting
business. Mike
has
had
extensive
exposure
to
the
mining
industry
in
Australasia,
USA,
Europe,
Asia
and
Africa.

Mr Iain McEwin

Non
Executive
Director

Iain
has
considerable
business
experience
in
the
ownership
and
operation
of
his
own
business
as
a
supplier to
the
building
and
construction
industry.
Iain
is
a
key
Shareholder
in
ECT.

Ashley Moore Bachelor
of
Engineering
(Chemical),
MIEAust,
CPEng Chief
Operating
Officer
and
Executive
Director

Ashley
was
appointed
to
the
positions
of
Chief
Operating
Officer
and
Executive
Director
of
the
Company
on 17
August
2011.
Ashley
is
a
graduate
of
Melbourne
University
in
chemical
engineering
and
is
a
Chartered Professional
Engineer.
He
has
extensive
industry
experience
in
all
facets
of
supply
chain
management, sales
and
marketing
and
major
project
delivery
from
more
than
25
years
in
the
industry.
Ashley
joined
ECT in
October
2009
as
Business
Manager,
Coldry,
during
which
time
he
displayed
exemplary
leadership
and team
building
skills.

Page 25 of 51

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5 Effect

of
the
Issue
on
the
Company

5.1 Structure of Capital Raising

The
capital
raising
will
consist
of
the
Offer
of
approximately
634
million
New
Shares
at
$0.006
per
New Share
for
a
total
cash
consideration
of
approximately
$3.8
million
before
expenses.
Subscribers
for
New Shares
will
also
receive,
at
no
cost,
1
New
Option
for
every
2
New
Shares
issued
to
them.

As
at
the
date
of
this
Prospectus,
ECT
has
951,908,845
Shares,
and
519,139,537
Options
on
issue.
All
Shares in
the
Company
are
fully
paid.

After
the
successful
conclusion
of
the
Offer,
ECT
will
have
approximately
1,586,514,742
Shares
and approximately
836,442,485
Options
on
issue.

The
following
table
shows
the
current
capital
structure
position
and
post-‐Offer
capital
structure
position
of ECT:

	Current	Capital	Issued	to	Capital	Structure
	Structure		Offer		post Offer
Fully paid ordinary shares (ESI)	951,908,845		634,605,897		1,586,514,742
Listed Options - expiring 16 January	519,139,537		317,302,948		836,442,485
2014 (ESIO)
Unlisted Options – Exercisable at		708,306		Nil		708,306
5.59 cents expiring 25 September
2011
Unlisted Options – Exercisable at		794,806		Nil		794,806
4.04 cents expiring on 8 October
2011
Unlisted Options – Exercisable at		962,106		Nil		962,106
3.795 cents expiring on 17
November 2011
Unlisted Options – Exercisable at		360,999		Nil		360,999
3.12 cents expiring 23 December
2011
Convertible Notes†	US$646,055			Nil	US$646,055

†
The
convertible
notes
have
a
total
face
value
of
US$646,055
(AUD624,932
at
an
exchange
rate of
US$1.03
:
AUD1.00
as
at
19
August
2011.
The
book
value
is
AUD596,112,
being
the converted
amount
at
the
prevailing
USD:AUD
rate
when
the
US
dollars
were
received
by
the Company)
convertible
into
ordinary
shares
based
on
the
average
of
the
three
lowest
volume weighted
average
price
during
the
15
trading
days
prior
to
the
date
of
conversion
of
part
or
all of
the
convertible
note
in
accordance
with
the
terms
and
conditions
set
out
in
the
Funding Agreement
between
the
Company
and
La
Jolla
Cove
Investors,
Inc.
dated
28
October
2010.
All of
the
convertible
notes
mature
and
are
repayable
on
2
November
2013
if
not
converted beforehand.

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5.2 Pro-‐forma Unaudited Consolidated Balance Sheet

The
pro-‐forma
unaudited
consolidated
balance
sheet
of
ECT
set
out
below
has
been
prepared
to
illustrate the
financial
position
of
ECT
following
completion
of
the
Offer.
This
pro-‐forma
unaudited
consolidated balance
sheet
is
intended
to
be
illustrative
only
and
will
not
necessarily
reflect
the
actual
position
and balances
as
at
the
date
of
this
Prospectus
or
at
the
conclusion
of
the
Offer.

Pro-‐forma
post-‐capital
raising
balance
sheet
assuming
a
50%
and
100%
subscription
based
on
the unaudited
preliminary
results
for
the
full
financial
year
to
June
30
June
2011
are
as
follows:

Current Assets Cash and Cash Equivalents Trade and Other Receivables Other Total Current Assets Non Current Assets Investments Property Plant & Equipment Intangible Assets Total Non Current Assets TOTAL ASSETS Current Liabilities Trade and Other Payables Interest Bearing Liabilities Provisions Total Current Liabilities Non Current Liabilities Other Total Non Current Liabilities TOTAL LIABILITIES NET ASSETS Equity Contributed Equity Other reserves	CONSOLIDATED 50% UNAUDITED 100% UNAUDITED As at 30 June 2011 Subscribed PRO FORMA Subscribed PRO FORMA $ $ $ $ $ 670,653 1,700,000 2,370,653 3,600,000 4,270,653 63,557 63,557 63,557 90,457 90,457 90,457
	824,667 1,700,000 2,524,667 3,600,000 4,424,667
	2 2 2 270,001 270,001 270,001 8,640,000 8,640,000 8,640,000
	8,910,003 0 8,910,003 0 8,910,003
	9,734,670 1,700,000 11,434,670 3,600,000 13,334,670
	453,840 453,840 453,840 293,489 293,489 293,489 80,088 80,088 80,088
	827,417 0 827,417 0 827,417
	654,620 654,620 654,620
	654,620 0 654,620 0 654,620
	1,482,037 0 1,482,037 0 1,482,037

	8,252,633 1,700,000 9,952,633 3,600,000 11,852,633
	44,989,191 1,900,000 46,889,191 3,800,000 48,789,191 221,033 221,033 221,033

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Accumulated Losses TOTAL EQUITY	(36,957,591) (200,000) (37,157,591) (200,000) (37,157,591)
	8,252,633 1,700,000 9,952,633 3,600,000 11,852,633

Pro
forma
adjustments
underlying
the
pro
forma
balance
sheet
are:

Gross
proceeds
of
$3.8
million
from
the
Offer
with
expenses
of
the
Issue
being
$200,000.
The
Application
Monies
received
have
been
recorded
as
cash
and
cash
equivalents.
The
cost
of
the
Issue
will
be
treated
as
an
increase
in
accumulated
losses.

Page 28 of 51

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6 Risk

Factors

6.1 Introduction

Like
other
companies
at
a
similar
stage
of
development,
the
Company
faces
a
number
of
specific
and general
risk
which
could
adversely
impact
the
Company’s
performance
and
the
value
of
its
Shares.
Eligible Shareholders
should
be
aware
of
and
consider
these
risks
and
should
consult
their
stockbroker,
accountant, lawyer
or
other
professional
adviser
before
deciding
whether
to
subscribe
for
New
Shares
and
New
Options under
the
Offer.

6.2 Specific risk factors

The
following
is
not
an
exhaustive
summary,
but
points
to
some
of
the
specific
risks
that
are
peculiar
to
a company
involved
in
the
production
of
Coldry
BCE
product.
Any
one
or
a
combination
of
such
risks
could affect
the
Company
adversely
and
thus
the
value
of
any
investment
in
the
Company.
The
Board
is
unable
to speculate
as
to
the
extent
of
such
adversity,
and
thus
an
investment
in
the
Company
should
be
regarded
as speculative.

Test Burn

There
are
a
number
of
risks
in
respect
of
the
impending
Test
Burn;
namely:

Production
or
delivery
of
the
BCE
pellets
required
for
the
Test
Burn
( Sample Lot )
could
be impeded
by
delays
in
sourcing
the
raw
coal
required
for
production
of
the
Sample
Lot,
or transporting
the
finished
Sample
Lot
to
China.
The
raw
coal
is
being
sourced
from
Loy
Yang mine
on
a
small
scale,
and
is
therefore
a
low
priority
for
the
mine.
Production
is
required
to operate
on
a
24
hour
basis,
and
though
the
factory
has
previously
run
continuously,
the production
rates
today
are
higher
than
previously.
Bulk
transport
of
Coldry
BCE
by
sea
has not
been
previously
attempted.

The
quality
of
the
Sample
Lot
may
deviate
from
that
agreed
to
with
Datang.
The
major parameters
of
quality
are
moisture
content
and
heating
value.
The
quality
of
BCE
can
be impacted
by
the
ash
composition
of
the
raw
coal.
ECT
does
not
currently
manage
the
mining plan
in
respect
of
raw
coal
to
satisfy
ash
composition
requirements.
Application
testing
in
Datang’s
boiler
and
systems
may
not
produce
a
satisfactory
result. Contamination
of
the
Sample
Lot
in
transit
could
decrease
the
performance
of
the
Sample
Lot. Excessive
handling
may
result
in
levels
of
dust
higher
than
acceptable
to
Datang.

To
mitigate
the
risks
associated
with
the
Test
Burn,
ECT
is
closely
coordinating
the
raw
lignite
offtake
plans with
the
Loy
Yang
mine
and
the
transit
requirements
with
the
selected
transportation
companies.
Support from
key
equipment
and
service
providers
is
being
used
to
strive
for
the
best
possible
operating performance
of
the
Demonstration
Plant.
Production
quality
is
monitored
on
a
continuous
basis,
and process
corrections
applied
when
deviations
are
noted.
Sea
freight
broking
and
support
companies
have been
engaged
to
support
the
required
approvals
and
freight
availability
for
the
final
shipments
of
the Sample
Lot.

Specifications
from
Datang
are
clearly
understood
and
reflected
in
the
supply
contract.
Appropriate production
and
shipment
measurements
will
be
taken
to
ensure
compliance
with
the
agreed
Coldry
BCE product
specifications.

Page 29 of 51

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Sales and Purchase Contract with Datang

Following
the
Test
Burn,
Datang
is
not
contractually
obliged
to
purchase
commercial
quantities
of
Coldry BCE
from
ECT.
However,
the
parties
signed
a
non-‐binding
MoU
on
19
January
2011,
which
contains, amongst
other
things,
the
product
specifications,
annual
quantities
and
pricing
structure
acceptable
to
the parties.

Design for Tender engineering works

The
cost,
deliverables
or
design
schedule
of
Phase
1
of
the
Design
for
Tender
may
not
be
achieved,
delaying or
compromising
subsequent
phases
of
the
DFT.

ECT
believes
that
its
engineering
partner,
Arup,
is
the
most
experienced
provider
to
deal
with
Coldry Technology
and
develop
the
Design
for
Tender.
Using
other
service
providers
could
increase
the
risks associated
with
delivering
the
Design
for
Tender
as
other
providers
do
not
have
Arup’s
level
of
knowledge of
ECT
and
our
Coldry
Technology.

Financial Risks

As
a
small
technology
company
without
an
established
revenue
stream,
ECT
is
reliant
on
the
funds
raised from
this
Offer
to
satisfy
its
working
capital
and
technology
development
requirements.
If
this
Offer
is
not sufficiently
subscribed
for
and
ECT
is
unable
to
secure
funding
from
an
alternate
source,
for
example through
a
placement
or
the
issue
of
some
form
of
convertible
funding,
ECT
will
not
have
sufficient
working capital
to
continue
its
operations
beyond
the
end
of
2011.
Without
the
necessary
working
capital
the Company
is
likely
to
become
insolvent
and
external
administrators
would
need
to
be
appointed
to
manage the
affairs
of
the
Company.
Such
an
appointment
could
materially
reduce
or
eliminate
the
amount
that Shareholders
can
realise
from
their
investment
in
ECT.

Market conditions

The
demand
for
black
coal
from
has
been
growing
in
recent
years
and
consequentyl,
international
coal prices
have
trended
upwards.
If
the
growth
in
demand
for
coal
reduces
significantly
or
substantial
new black
coal
resources
become
available
to
meet
international
demand,
the
price
of
coal
may
be
reduced
to the
point
where
Coldry
production
from
any
of
ECT’s
projects
are
not
commercially
viable.

Although
ECT
is
not
able
to
directly
take
action
to
mitigate
the
risks
in
respect
of
market
conditions,
coal fired
power
stations
continue
to
be
constructed
in
China,
India
and
other
developing
countries.
Coal demand
from
these
stations
is
expected
to
remain
in
place
for
the
life
of
the
stations.
Further,
the availability
and
expense
associated
with
newly
discovered
and
developed
black
coal
reserves
is
expected
to continue
to
rise
in
line
with
the
difficulty
of
exploitation
of
these
newly
discovered
reserves.

Trends
in
coal
pricing
tend
to
track
those
of
replacement
energy
sources.
Known
reserves
of
lignite
and higher-‐moisture
brown
coals
exceed
those
of
known
black
coal
reserves
(today
~51%:~49%)
and significantly
longer
lifespans
are
expected
for
lignite
and
high
moisture
sub-‐bituminous
coals
based
on current
consumption
ratios
of
these
resources.
Accordingly,
power
generators
will
need
to
consider
the
use of
non-‐black
coal
resources
to
fire
their
power
stations
in
the
coming
decades.

Changes to Australian and foreign legislation and policy

There
may
be
changes
to
the Income Tax Assessment Act (Cth),
the
Corporations
Act or
other
legislation
or government
policy,
which
may
be
detrimental
to
participants
or
investors
in
the
resources
industry.

ECT
may
be
affected
by
changes
to
foreign
government
policies
and
legislation
including
those
relating
to property,
the
environment,
superannuation,
taxation,
the
regulation
of
trade
practices
and
competition, government
grants
and
incentive
schemes.

Page 30 of 51

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The
Australian
Parliament
is
currently
considering
legislation
to
introduce
a
tax
on
the
production
of
carbon dioxide
emissions
( Carbon Tax ).
The
Carbon
Tax
may
increase
ECT’s
production
costs
in
respect
of
Coldry BCE
due
to
increases
in
the
price
of
electricity
and
raw
coal.
At
this
stage,
the
Company
is
unable
to quantify
the
increase
in
production
costs.
ECT
does
not
expect
to
be
one
of
Australia’s
500
largest
polluting companies
( Top 500 Polluters )
and
therefore
will
not
be
required
to
pay
the
Carbon
Tax
directly.
Like
most Australian
businesses
and
consumers,
ECT’s
financial
exposure
to
the
Carbon
Tax
is
an
indirect
one, resulting
from
being
a
consumer
of
products
or
services
produced
or
supplied
by
the
Top
500
Polluters.

The
proposed
Minerals
Resource
Rent
Tax,
as
announced,
will
be
applied
to
mine
gate
products,
and
not further
down
the
supply
chain
or
value
chain.
As
such,
its
implementation
will
impact
Coldry
Technology’s costs
in
respect
of
raw
materials
rather
than
the
cost
of
the
finished
BCE
product.
ECT
considers
that
the implementation
of
the
Minerals
Resource
Rent
Tax
would
increase
ECT’s
costs,
but
to
a
lesser
degree
than competitive
materials
sourced
from
within
Australia.
The
Company
believes
the
introduction
of
the proposed
Minerals
Resource
Rent
Tax
will
increase
the
profit
margin
on
Coldry
BCE.

Protection of intellectual property rights

A
key
component
of
the
Coldry
process
is
covered
by
an
invention
that
is
the
subject
of
the
International Patent
Application
number
PCT/AU
2004/001319.

A
key
component
of
the
MATMOR
Technology
is
covered
by
an
invention
that
is
the
subject
of
International and/or
Australian
Patent
numbers
767268
and
703821.

ECT’s
success
depends
in
part
on
its
ability
to:

obtain
and
maintain
commercially
valuable
patents;
protect
know-‐how,
technical
information
and
trade
secrets;
operate
without
infringing
upon
the
intellectual
property
rights
of
others;
and
prevent
others
from
infringing
ECT’s
intellectual
property
rights
and
intellectual
property rights
licensed
to
ECT.

ECT
will
only
be
able
to
protect
its
intellectual
property
from
unauthorised
use
to
the
extent
that
these rights
are
covered
by
valid
and
enforceable
patents
or
are
effectively
maintained
as
trade
secrets.

Maintaining
the
Company’s
patent
position
involves
complex
legal
and
factual
questions.
Legal
standards relating
to
the
validity
and
scope
of
claims
in
respect
of
patents
in
the
coal
industry
and
are
still
evolving.

Commercialisation of products and market acceptance

The
Company
is
still
at
a
relatively
early
stage
of
commercialising
the
products
generated
by
its
Coldry
and MATMOR
Technologies.
Whilst
there
have
been
some
commercial
sales
of
Coldry
BCE,
the
Directors anticipate
that
full
commercialisation
of
ECT’s
products
and
a
resultant
revenue
stream
will
take
four
to
six years
to
achieve.

The
acceptance
of
the
Company’s
Coldry
BCE
in
the
global
market
and
full
commercialisation
of
this product
is
dependent,
in
part,
on
the
successful
completion
of
the
Test
Burn.
If
the
Test
Burn
is
not successful,
the
Company
may
be
unable
to
secure
an
off-‐take
agreement
with
Datang
in
respect
of
further sales
of
its
product
and
may
have
difficulty
in
marketing
its
Coldry
BCE
to
other
Chinese
consumers.

Page 31 of 51

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Design and construction of the Proposed Coldry Production Plant

The
design
and
construction
of
the
Proposed
Coldry
Production
Plant
is
subject
to
multiple
risks
including:

ability
of
the
Company
to
engage
McConnell
Dowell
or
other
suitable
partner
for
the construction
of
the
Proposed
Coldry
Production
Plant;
issues
with
the
integration
of
the
Plant
with
the
Loy
Yang
Power
Station;
ability
of
the
Company
to
engage
Transfield
Services
or
other
suitable
operator
for
the
Plant;
ability
to
secure
contracts
in
respect
of
transporting
the
Coldry
BCE
pellets
from
the
Plant
to shipping
ports;
and
ability
to
secure
a
contract
with
a
shipping
provider
in
respect
of
the
BCE
to
be
exported globally

Key employee risks

ECT
has
built
a
small
team
with
sales,
marketing,
engineering
and
technical
expertise
in
the
Coldry
and MATMOR
Technologies.
A
loss
any
of
our
key
personnel
may
delay
the
commercial
exploitation
of
these technologies
whilst
replacement
expertise
is
secured
and
trained.

The
Board
has
a
range
of
remuneration,
retention
and
incentive
programs
aimed
at
retaining
key personnel.

Climatic risks

The
Coldry
Technology
uses
an
evaporative,
rather
than
drying,
approach
to
achieving
the
dewatering
of raw
lignite.
Accordingly,
the
process
draws
upon
atmospheric
air,
which
is
warmed
using
available
energy from
the
host
power
station.
The
elevated
temperature
causes
moisture
from
the
surface
of
the
coal
to
be absorbed
as
it
passes
through
the
packed
bed
dryer.
If
the
ambient
humidity
or
the
waste
energy
available from
the
power
station
does
not
meet
expectations
based
on
historical
operations,
then
the
anticipated production
capacity
of
the
Proposed
Coldry
Production
Plant
may
be
less
than
planned.

To
mitigate
the
risks
associated
with
changes
in
climatic
conditions,
ECT
will
review
all
historical
and projected
operational
conditions
using
detailed
engineering
calculations
to
ensure
robust
projections
are made
with
respect
to
operating
conditions.

Environmental risks

The
Proposed
Coldry
Production
Plant
will
require
the
approval
of
the
Environmental
Protection
Authority ( EPA ).
This
process
may
be
drawn
out,
introducing
delays
into
the
execution
of
the
Project.

The
approvals
granted
by
the
EPA
may
impose
stringent
conditions
in
respect
of
nuisance
or
fugitive
dust emissions.
Accordingly,
ECT’s
capital
expenditure
requirements
may
need
to
be
increased
beyond
our original
projections
in
order
to
comply
with
any
conditions
imposed
by
the
EPA.

The
environmental
emissions
resulting
from
the
Coldry
Technology
are
water
vapour
emitted
from
the processed
raw
coal,
water
as
recovered
in
the
chiller
sub-‐systems,
and
air
from
the
packed
bed
dryer.
The Coldry
production
process
operates
at
low
temperatures,
which
does
not
liberate
any
volatile
coal components
into
the
atmosphere.
The
water
vapour
and
air
streams
from
the
Proposed
Coldry
Production Plant
will
require
monitoring
to
provide
proof
of
emissions
to
the
EPA.
However,
ECT
does
not
anticipate that
the
emissions
will
require
any
form
of
remediation
prior
to
discharge
into
the
atmosphere.
This
is based
on
long-‐term
experience
at
our
Bacchus
Marsh
demonstration
plant.

Page 32 of 51

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Recovered
water
will
be
unlikely
to
be
discharged,
but
rather
provided
as
a
valuable
by-‐product
for
sale
or transfer
to
the
Loy
Yang
Power
Station,
reducing
its
need
to
draw
upon
alternate
sources
such
as
river water.
Should
discharge
of
recovered
water
be
required
due
to
operational
modes
of
the
Plant
or
the
Loy Yang
Power
Station,
capacity
to
monitor
quality,
rather
than
remedial
correction
of
quality
is
the
likely conditions
that
would
be
imposed
upon
the
Plant
by
the
EPA.

Air
discharged
from
the
packed
bed
dryer
will
be
moist,
and
residual
dust
will
be
collected
and
trapped
in
a number
of
designed
features
within
the
Plant
prior
to
the
air
being
discharged.
Any
monitoring
conditions imposed
will
be
incorporated
within
the
design
of
the
Plant.
It
should
be
noted,
however,
that
the
Plant
will be
installed
adjacent
to
the
largest
open
pit
mine
in
Australia,
which
places
in
context
the
likely
conditions required
to
be
met.

Production risks

There
can
be
no
assurance
given
that
the
Company
will
achieve
commercially
viable
levels,
or
commercial grade
quality,
of
Coldry
production
from
any
of
its
projects.
Additionally,
there
is
no
assurance
that
even
if the
Company
produces
commercially
viable
quantities
of
Coldry
BCE
that
there
will
be
a
market
for
the
sale and
supply
of
the
BCE.
Accordingly,
the
Company
may
not
be
able
to
recoup
the
costs
of
production
or generate
sufficient
revenue
from
its
product
to
continue
as
a
going
concern.

Risk as to profitability

Anticipated
or
estimated
possible
Coldry
production
levels
may
not
be
achieved,
and
even
if
achieved,
may not
result
in
the
Company
being
profitable.
The
ability
of
the
Company
to
pay
dividends
will
depend
on
it generating
revenue
and
then
deriving
sufficient
after-‐tax
profits
to
be
able
to
do
so.
As
stated
above, market
acceptance
of
the
Company’s
Coldry
BCE
is
dependent
in
part
on
the
successful
completion
of
the Test
Burn.
If
the
Test
Burn
is
not
successful,
the
Company
may
be
unable
to
generate
the
necessary revenue
for
the
Company
to
continue
as
a
growing
concern
in
the
future.

Dependency on others

The
future
success
of
the
Company
will
be
in
part
dependent
on
the
competency
of
organisations
chosen from
time
to
time
to
be
operators
of
the
Company’s
Coldry
projects
and
on
each
operator’s
capacity
to manage
day
to
day
operations.
The
Company’s
future
growth
will
also
be
dependent
in
part
upon engagement
of
management
capable
of
managing
and
expanding
its
operations
beyond
the
present
Coldry projects.
The
Company
is
yet
to
formally
engage
a
number
of
key
providers
in
respect
of
the
Proposed Coldry
Production
Plant.

Contract Risks

The
Company
intends
to
enter
into
licence
agreements
with
operators
and
sub-‐contractors
for
the construction
and
operation
its
Proposed
Coldry
Production
Plant.
Sale
of
Coldry
BCE
will
be
effected through
various
marketing
and
off-‐take
agreements.
A
number
of
the
necessary
contractual
relationships are
yet
to
be
formalised.
Once
entered
into,
these
contracts
will
carry
risks
associated
with
the performance
by
the
parties
thereto
of
their
obligations
as
to
time
and
quality
of
work
performed.

Currency exchange risks

Revenue
and
expenditure
in
overseas
jurisdictions
are
subject
to
the
risk
of
fluctuations
of
international currency
exchange
markets.
Foreign
taxes,
limitations
on
repatriation
of
earnings,
compliance
with
foreign accounting
and
business
laws
and
cultural
differences
carry
a
certain
amount
of
risk.

Page 33 of 51

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6.3 General risk factors

Economic conditions

The
performance
of
ECT
may
be
significantly
affected
by
changes
in
economic
conditions,
and
particularly conditions
that
affect
the
coal
mining
and
power
generation
sector.
Profitability
of
the
business
may
be affected
by
factors
such
as
market
conditions,
interest
rates,
inflation
and
global
coal
prices.

Geo-‐political factors

ECT
may
be
affected
by
the
impact
that
geo-‐political
factors
have
on
the
various
world
economies
or
the Australian
economy
or
on
financial
markets
and
investments
generally
or
specifically.

Share market conditions

ECT,
being
a
company
listed
on
ASX,
is
subject
to
the
market
forces
that
influence
the
broad
share
market trends
and
the
price
of
securities
of
individual
companies.
Recent
global
political
and
economic
events, including
the
continuing
terrorist
threats
and
global
financial
crisis,
may
cause
share
price
fluctuations
in the
Australian
share
market
and
globally.
Accordingly,
assuming
that
the
New
Shares
are
granted
Official Quotation
on
ASX,
they
may
trade
on
ASX
at
higher
or
lower
prices
than
the
Issue
Price.

Competition Risk

The
structure
of
the
markets
in
which
the
Company
operates
may
alter
or
new
competitors
may
enter some
or
all
of
those
markets,
resulting
in
increased
competition.
Increased
competition
may
result
in
lower prices,
operating
margins
and
profit
for
the
Company.

Operational Risks

Other
risk
factors
include
those
normally
found
in
conducting
business,
including
litigation
resulting
from the
breach
of
agreements
or
in
relation
to
employees
or
contractors
(through
personal
injuries,
industrial matters
or
otherwise)
or
any
other
cause,
including
strikes,
loss
of
service
of
key
management
or operational
personnel,
non-‐insurable
risks,
delay
in
resumption
of
activities
after
reinstatement
following the
occurrence
of
an
insurable
risk
and
other
matters
that
may
interfere
with
the
business
or
trade
of
ECT.

Page 34 of 51

www.ectltd.com.au

7 Additional

information

7.1 Disclosure

ECT
is
a
disclosing
entity
for
the
purposes
of
the
Corporations
Act
and,
as
such,
is
subject
to
regular reporting
and
disclosure
obligations.
These
obligations
include
compliance
with
the
requirements
of
the ASX
Listing
Rules
and
the
Corporations
Act
concerning
notification
of
information
to
ASX.
Copies
of documents
lodged
at
ASIC
in
relation
to
ECT
may
be
obtained
from,
or
inspected
at,
an
office
of
ASIC. Copies
of
announcements
made
to
ASX
by
ECT
may
be
viewed
at
ASX’s
website
at
www.asx.com.au
or
ECT’s website
at
www.ectltd.com.au.

In
addition,
a
copy
of
the
following
documents
will
be
provided
by
the
Company
free
of
charge,
upon request,
during
the
application
period
for
this
Prospectus:

the
most
recent
annual
financial
report
lodged
with
ASIC;
any
half-‐year
financial
report
lodged
with
ASIC
after
the
lodgement
of
that
annual
financial report
and
before
lodgement
of
this
Prospectus
with
ASIC;
and
any
continuous
disclosure
notice
given
by
the
Company
after
the
lodgement
of
that
annual financial
report
and
before
lodgement
of
this
Prospectus
with
ASIC.

7.2 Documents

The
following
table
provides
a
list
of
all
of
ECT’s
announcements
lodged
with
ASX
prior
to
the
date
of
this Prospectus
since
the
annual
financial
report
was
lodged
with
ASX
on
27
October
2010
(copies
of
documents lodged
with
ASIC
in
relation
to
the
Company
may
be
obtained
from,
or
inspected
at,
an
office
of
ASIC):

List of ASX Announcements – 27 October 2010 – 25 August 2011

28
October
2010 Funding
Agreement
Signed
with
La
Jolla
Cove
Investors 28
October
2010 Proxy
Form
amendment 4
November
2010 Appendix
3B 4
November
2010 Section
708A
Cleansing
Statement 15
November
2010 Victoria
Coldry
Project
Update 26
November
2010 AGM
Chairman’s
Address 26
November
2010 Results
of
Meeting 6
December
2010 Top
40
securityholders 6
December
2010 Appendix
3B 6
December
2010 Section
708A
Cleansing
Statement 6
December
2010 Top
40
Amended
date 7
December
2010 Appendix
3B 24
December
2010 Securities
Trading
Policy 30
December
2010 Appendix
3B 10
January
2011 Appendix
3B 21
January
2011 Appendix
3B 4
February
2011 Coldry
pilot
plant
upgrade
adds
commercial
capability 8
February
2011 Appendix
3B 9
February
2011 ECT
Achieves
First
Local
Coldry
Sale 11
February
2011 Appendix
3B 21
February
2011 Open
Briefing
Interview

Page 35 of 51

www.ectltd.com.au

24
February
2011 Half
Yearly
Reports
and
Accounts 25
February
2011 Appendix
3B 4
March
2011 Small
Shareholding
Facility 1
April
2011 Appendix
3B 4
April
2011 Victoria
Coldry
Project
Signed 5
April
2011 Appendix
3B 13
April
2011 Appendix
3B 18
April
2011 Appendix
3B 2
May
2011 TinCom
deposits
initial
funds
to
joint
venture 11
May
2011 Small
Shareholding
Sale
Facility
Completed 17
May
2011 Appendix
3B 20
May
2011 Appendix
3B 25
May
2011 ECT
signs
coal
supply
agreement
with
China
Datang
Corp. 31
May
2011 Termination
of
Tincom
Joint
Venture 2
June
2011 Top
40
Shareholders 6
June
2011 Appendix
3B 16
June
2011 ECT
Enhances
Management
Team 16
June
2011 Appendix
3B 29
June
2011 Advances
to
Final
Stage
in
USA 1
July
2011 Chairman
to
retire 4
July
2011 Director
resigns 5
July
2011 Shareholder
Update
–
Coldry
Technology 5
July
2011 Director
resignation
and
new
director
appointment 7
July
2011 Board
Renewal 8
July
2011 Final
Director’s
Interest
Notice 8
July
2011 Initial
Director’s
Interest
Notice 8
July
2011 Suspension
from
Official
Quotation 11
July
2011 Reinstatement
to
Official
Quotation 11
July
2011 New
Director
Appointment 12
July
2011 Initial
Director’s
Interest
Notice 18
July
2011 Appendix
3B 20
July
2011 Update
–
Victorian
Coldry
Project
and
Capital
Raising 28
July
2011 Update
Coldry
Patent
–
Australia 15
August
2011 Resignation
of
Chief
Executive 16
August
2011 Appendix
3B 16
August
2011 Trading
Halt 18
August
2011 Shareholder
Update
–
Executive
Team
/
Capital
Raising 18
August
2011 Appendix
3B 19
August
2011 Appendix
3B 22
August
2011 Initial
Director’s
Interest
Notice 22
August
2011 Cleansing
Statement

7.3 Continuous disclosure prospectus

This
Prospectus
contains
information
required
under
the
special
prospectus
content
rules
for
continuously quoted
securities
pursuant
to
section
713
of
the
Corporations
Act.
That
section
enables
disclosing
entities

Page 36 of 51

www.ectltd.com.au

to
issue
a
special
prospectus
in
relation
to
continuously
quoted
securities
of
a
body
or
options
to
acquire continuously
quoted
securities
of
a
body.

Apart
from
formal
matters,
a
continuous
disclosure
prospectus
need
only
contain
information
relating
to the
terms
and
conditions
of
the
Offer,
the
effect
of
the
Offer
on
ECT
and
the
rights
and
liabilities
attaching to
the
New
Shares
and
New
Options.
Other
general
information
is
not
required
to
be
included
by
a disclosing
entity
as
the
periodic
reporting
and
continuous
disclosure
requirements
applicable
to
disclosing entities
mean
that
all
this
information
should
have
previously
been
released
to
the
market
via
ASX.

7.4 Rights and liabilities attaching to Shares

The
New
Shares
will
rank
equally
with,
and
have
the
same
rights
and
liabilities,
as
the
existing
Shares
on issue
in
the
Company.

The
rights
attaching
to
Shares
are
set
out
in
the
Constitution,
a
copy
of
which
is
available
for
inspection
at the
Company’s
registered
office
during
normal
business
hours.
Rights
are
affected
by
the
Corporations
Act, the
ASX
Listing
Rules
and
statute
and
general
law.
The
following
is
a
summary
of
the
rights
attaching
to Shares
as
set
out
in
the
Constitution.

Voting

Subject
to
any
rights
and
restrictions
for
the
time
being
attached
to
any
class
or
classes
of
Shares,
at general
meetings
of
Shareholders
or,
classes
of
Shareholders:

each
Shareholder
entitled
to
vote
may
vote
in
person
or
by
proxy,
attorney
or
representative; and
on
a
show
of
hands,
every
person
present
who
is
a
Shareholder
or
a
proxy,
attorney
or representative
of
a
Shareholder
has
one
vote;
and
on
a
poll,
every
person
present
who
is
a
Shareholder
or
a
proxy,
attorney
or
representative
of a
Shareholder
shall,
in
respect
of
each
fully
paid
Share
held
by
him,
or
in
respect
of
which
he
is appointed
a
proxy,
attorney
or
representative,
have
one
vote
for
the
Share
but
in
respect
of partly
paid
Shares,
shall
have
such
number
of
votes
as
bears
the
same
proportion
which
the amount
paid
(not
credited)
is
of
the
total
of
such
Shares
registered
in
the
Shareholder’s
name as
the
amount
paid
(not
credited
bears
to
the
total
amounts
paid
and
payable
(excluding amounts
credited).

General meetings

Each
Shareholder
is
entitled
to
receive
notice
of
and
to
be
present
in
person,
or
by
proxy,
attorney
or representative
to
attend
and
vote
at
general
meetings
of
ECT
and
to
receive
all
notices,
accounts
and
other documents
required
to
be
sent
to
ECT
Shareholders
under
the
Constitution,
the
Corporations
Act
or
the
ASX Listing
Rules.

A
Shareholder
may
requisition
meetings
in
accordance
with
the
Corporations
Act
and
the
Constitution. Dividends

The
Directors
may
from
time
to
time
declare
a
dividend
to
be
paid
to
the
Shareholders
entitled
to
the dividend.

Subject
to
the
rights
of
any
preference
Shareholders
and
to
the
rights
of
the
holders
of
any
Shares
created or
raised
under
any
special
arrangement
as
to
dividends,
the
dividend
as
declared
shall
be
payable
on
all Shares
according
to
the
proportion
that
the
amount
paid
(not
credited)
is
of
the
total
amounts
paid
and payable
(excluding
amounts
credited)
in
respect
of
such
Shares
in
accordance
with
Part
2.5
of
Chapter
2H

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of
the
Corporations
Act.
The
Directors
may
from
time
to
time
pay
to
the
Shareholders
any
interim dividends
that
they
may
determine.

No
dividend
shall
be
payable
except
out
of
profits.
A
determination
by
the
Directors
as
to
the
profits
of
the Company
shall
be
conclusive.

No
dividend
shall
carry
interest
as
against
the
Company.

In
addition,
the
Company
must
comply
with
section
254T
of
the
Corporations
Act
when
declaring
a dividend.

Transfer of Shares

Subject
to
the
Constitution,
Shareholders
may
transfer
any
Share
held
by
them
by:

an
ASTC
(now
ASX
Settlement)
Transfer
or
any
other
method
of
transferring
or
dealing
in Shares
introduced
by
ASX
or
operated
in
accordance
with
the
ASTC
Settlement
Rules
(now
the ASX
Settlement
Operating
Rules)
or
Listing
Rules
and
in
any
such
case
recognised
under
the Corporations
Act;
or
an
instrument
in
writing
in
any
usual
or
common
form
or
in
any
other
form
that
the
Directors approve.

Issue of Shares

Without
prejudice
to
any
special
rights
previously
conferred
on
the
holders
of
any
existing
Shares
or
class
of Shares,
unissued
Shares
shall
be
under
the
control
of
the
Directors
and,
subject
to
the
Corporations
Act,
the Listing
Rules
and
the
Constitution,
the
Directors
may
at
any
time
issue
such
number
of
Shares
either
as ordinary
Shares
or
Shares
of
a
named
class
or
classes
(being
either
an
existing
class
or
a
new
class)
at
the issued
price
that
the
Directors
determine
and
with
such
preferred,
deferred,
or
other
special
rights
or
such restrictions,
whether
with
regard
to
dividend,
voting,
return
of
capital
or
otherwise,
as
the
Directors
shall, in
their
absolute
discretion,
determine.

Issue of Options

Subject
to
the
Listing
Rules,
the
Directors
may
at
any
time
and
from
time
to
time
issue
Share
Options
on such
terms
and
conditions
as
the
Directors
shall,
in
their
absolute
discretion
determine. Issue
of
Preference
Shares

Subject
to
the
Listing
Rules
and
the
Corporations
Act,
the
Company
may
issue
preference
Shares:

that
are
liable
to
be
redeemed
whether
at
the
option
of
the
Company
or
otherwise;
and
including,
without
limitation
preference
Shares
of
the
kind
described
above
in
accordance with
Schedule
1
of
the
Constitution.

Entitlement to Share certificate and Option certificate

A
person
whose
name
is
entered
as
a
Shareholder
in
the
Register
of
Shareholders
is
entitled
without payment
to
receive
a
Share
certificate
or
notice
(as
the
case
may
be)
in
respect
of
the
Share
under
seal
in accordance
with
the
Corporations
Act.

If
the
securities
of
the
Company
are
CHESS
Approved
Securities
and
held
in
uncertificated
mode,
then
the Company
shall
allot
such
CHESS
Approved
Securities
and
enter
them
into
the
Shareholder’s
uncertificated

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holding
in
accordance
with
the
Listing
Rules
and
ASTC
Settlement
Rules(now
the
ASX
Settlement
Operating Rules).
In
these
circumstances
the
Shareholder
will
not
receive
a
Share
certificate.

Where
the
Directors
have
determined
not
to
issue
share
certificates
or
to
cancel
existing
Share
certificates, a
Shareholder
shall
have
the
right
to
receive
such
statements
of
holdings
of
the
Shareholder
as
are
required to
be
distributed
to
a
Shareholder
under
the
Corporations
Act
or
the
Listing
Rules.

Where
a
Share
certificate
is
lost,
worn
out
or
destroyed,
the
Company
shall
issue
a
duplicate
certificate
in accordance
with
the
requirements
of
section
1070D
of
the
Corporations
Act
and
the
Listing
Rules.

Variation of rights

If
at
any
time
the
share
capital
of
the
Company
is
divided
into
different
classes
of
Shares,
the
rights attached
to
any
class
(unless
otherwise
provided
by
the
terms
of
issue
of
the
Shares
of
that
class)
may
be varied,
whether
or
not
the
Company
is
being
wound
up,
with
the
consent
in
writing
of
the
holders
of
three quarters
of
the
issued
Shares
of
that
class,
or
if
authorised
by
a
special
resolution
passed
at
a
separate meeting
of
the
holders
of
the
Shares
of
the
class.
Any
variation
of
rights
shall
be
subject
to
Part
2F.2
of Chapter
2F
of
the
Corporations
Act.
The
provisions
of
the
Constitution
relating
to
general
meetings
shall apply
to
so
far
as
they
are
capable
of
application
and
with
necessary
alterations
to
every
such
separate meeting
except
that
a
quorum
is
constituted
by
two
persons
who
together
hold
or
represent
by
proxy
not less
than
one-‐third
of
the
issues
Shares
of
the
class.

Winding up

If
the
Company
is
wound
up,
the
liquidator
may,
with
the
authority
of
a
special
resolution,
divide
among the
Shareholders
in
kind
the
whole
or
any
part
of
the
property
of
the
Company,
and
may
for
that
purpose set
such
value
as
he
or
she
considers
fair
upon
any
property
to
be
so
divided,
and
may
determine
who
the division
is
to
be
carried
out
as
between
the
Shareholders
or
different
class
of
Shareholders.

The
liquidator
may,
with
the
authority
of
a
special
resolution,
vest
the
whole
or
any
part
of
any
such property
in
trustees
upon
such
trusts
for
the
benefit
of
the
contributories
as
the
liquidator
thinks
fit,
but
so that
no
Shareholder
is
compelled
to
accept
any
Shares
or
other
securities
in
respect
of
which
there
is
any liability.

ASX Listing Rules

Because
ECT
is
listed
on
the
official
list
of
ASX,
notwithstanding
anything
in
the
Constitution,
if
the
ASX Listing
Rules
prohibit
an
act
being
done,
the
act
must
not
be
done.
If
the
ASX
Listing
Rules
require
an
act
to be
done
or
not
to
be
done,
authority
is
given
for
that
act
to
be
done
or
not
to
be
done,
and
if
a
provision
is required
in
the
Constitution
by
the
ASX
Listing
Rules,
the
Constitution
will
be
treated
as
containing
that provision.
If
any
provision
of
the
Constitution
becomes
inconsistent
with
the
ASX
Listing
Rules,
the Constitution
will
be
treated
as
not
containing
that
provision
to
the
extent
of
the
inconsistency.

7.5 Rights and liabilities attaching to New Options

The
New
Options
will
rank
equally
with,
and
have
the
same
rights
and
liabilities,
as
existing
ESIOs.

The
rights
and
liabilities
attaching
to
New
Options
offered
under
this
Prospectus
arise
from
the
terms
of issue
of
the
existing
ESIOs
which
are
set
out
in
the
“Notice
of
Exercise
of
Options”
provided
to
holders
of ESIOs
at
the
time
of
issue
of
those
ESIOs.
The
New
Options
can
be
traded
on
ASX.

Page 39 of 51

www.ectltd.com.au

The
following
is
a
summary
of
the
rights
and
obligations
attaching
to
the
New
Options:

each
New
Option
entitles
the
New
Option
holder
( Holder )
to
subscribe
for
and
be
allotted
1 Share
upon
the
exercise
of
the
New
Option
and
payment
to
the
Company
of
the
exercise price.
For
information
on
the
exercise
price,
refer
to
section
1.14;
the
New
Options
are
exercisable
by
the
Holder
at
any
time
prior
to
5.00pm
on
16
January 2014
( Expiry Date ).
New
Options
not
exercised
on
or
before
the
Expiry
Date
will
automatically lapse;
Holders
may
exercise
all
their
New
Options
at
once,
or
may
exercise
parcels
of
their
New Options
which
are
multiples
of
25,000
(or
such
lower
multiple
as
the
Company
permits
in
its absolute
discretion);
to
exercise
the
New
Options
the
Holder
must
complete
a
“Notice
of
Exercise”
and
deliver
it
to the
registered
office
of
the
Company
(or
such
other
place
as
the
Company
may
notify
Holders in
writing)
together
with
payment
of
the
exercise
price
any
time
prior
to
the
Expiry
Date;
a
Notice
of
Exercise
is
not
effective
if
it
is
received
by
the
Company
after
the
Expiry
Date;
the
Company
must
send
a
Holder
before
the
Expiry
Date
of
the
New
Options
any
notice required
by
the
ASX
Listing
Rules
to
be
sent
to
Holders;
upon
the
exercise
of
a
New
Option
and
receipt
of
all
relevant
documents
and
payment
of
the exercise
price,
the
Holder
will
be
allotted
and
issued
1
Share
for
every
New
Option
exercised ranking
pari
passu
with
all
other
issued
Shares.
Shares
issued
pursuant
to
the
exercise
of
a
New
Option
will
be
issued
not
more
than
10 Business
Days
of
receipt
of
the
Notice
of
Exercise;
the
Company
will
apply
to
ASX
to
have
the
issued
Shares
granted
Official
Quotation
within
10 Business
Days
of
allotment
of
those
Shares;
the
Company
will
keep
and
maintain
a
register
of
Option
holders
( Register )
and
must
ensure the
Register
is
maintained
in
compliance
with
the
Corporations
Act
and
all
other
applicable rules
and
requirements;
the
Company
must
send
to
the
Holder
a
holding
statement
or
other
statement
in
respect
of the
New
Options
so
held
and
any
Shares
issued
on
exercise
of
those
New
Options
within
the time
and
in
accordance
with
the
applicable
provisions
of
the
ASX
Listing
Rules,
ASX
Settlement Operating
Rules
and
the
Constitution;
if
required
bv
the
ASX
Listing
Rules,
the
Company
must
tell
the
Holder
in
writing
of
the exercise
price
and
Expiry
Date
of
the
Options
within
the
time
prescribed
by
the
ASX
Listing Rules
after
the
first
holding
statement
or
other
statement
is
sent;
there
will
be
no
entitlement
inherent
in
the
New
Options
for
Holders
to
participate
in
new issues
of
securities
which
may
be
offered
to
Shareholders
during
the
currency
of
the
New Options.
However,
prior
to
any
new
pro
rata
issue
of
securities
to
Shareholders,
Holders
will be
notified
by
the
Company
before
the
record
date
to
provide
them
with
an
opportunity
to exercise
their
New
Options
prior
to
the
date
for
determination
of
entitlements
to
participate in
that
new
issue
of
securities;
in
the
event
the
Company
proceeds
with
a
pro
rata
issue
(except
a
bonus
issue)
of
securities
to Shareholders
(whether
renounceable
or
non-‐renounceable)
after
the
date
of
issue
of
the
New

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Options,
the
exercise
price
of
the
New
Options
will
be
adjusted
in
accordance
with
the formula
set
out
in
ASX
Listing
Rule
6.22.2;

if
there
is
an
issue
of
bonus
shares
to
Shareholders
( Bonus Issue )
then
the
number
of
Shares over
which
each
New
Option
is
exercisable
will
be
increased
by
the
number
of
Shares
which the
Holder
would
have
received
under
the
Bonus
Issue
if
the
New
Option
had
been
exercised before
the
record
date
for
the
Bonus
Issue
in
the
event
of
any
reorganisation
(including
consolidation,
sub-‐division,
reduction, cancellation
or
return)
of
the
issued
capital
of
the
Company
on
or
prior
to
the
expiry
date,
all rights
of
a
Holder
will
be
changed
to
the
extent
necessary
to
comply
with
the
applicable
ASX Listing
Rules
governing
reorganisations
in
force
at
the
time
of
the
reorganisation;
and
Holders
are
bound
by
the
terms
of
issue
of
the
New
Options
and
the
Constitution;
subject
to
the
Constitution,
ASX
Listing
Rules
and
ASTC
(now
ASX
Settlement)
all
New
Options are
transferrable.

7.6 Effect on exercise price of Options

As
consequence
of
the
Offer,
the
exercise
price
of
all
Options
may
be
altered
in
accordance
with
their terms
of
issue
and
consistent
with
ASX
Listing
Rule
6.22.2.
For
more
information
on
the
exercise
price
of the
New
Options
and
ESIOs
refer
to
section
1.14.

7.7 Underwriting Agreement

The
Company
has
entered
into
an
underwriting
agreement
with
Iain
McEwin
(Underwriter)
dated
25 August
2011
pursuant
to
which
the
Underwriter
has
agreed
to
partially
underwrite
the
Offer.

Under
the
terms
of
the
Underwriting
Agreement:

the
Underwriter
must
subscribe
for
14,576,766
New
Shares,
being
his
full
Entitlement
under the
Offer,
by
the
Closing
Date;
if
at
the
Closing
Date,
the
Offer
is
not
fully
subscribed,
ECT
may
give
notice
in
writing
to
the Underwriter
of
the
number
of
New
Shares
under
the
Shortfall
for
which
the
Underwriter
must subscribe,
being
up
to
16,666,667
New
Shares
( Notice ).
upon
receipt
of
the
Notice,
the
Underwriter
(or
an
entity
controlled
by
the
Underwriter)
must, on
the
next
business
day
following
receipt
of
the
Notice,
subscribe
for
the
number
of
New Shares
set
out
in
the
Notice;
the
Underwriter
has
no
right
to
terminate
the
Underwriting
Agreement;
and
the
Underwriter
is
not
entitled
to
an
underwriting
fee.

7.8 Privacy

ECT
collects
information
about
each
Eligible
Shareholder
provided
on
the
Entitlement
and
Acceptance
Form for
the
purpose
of
processing
applications
for
New
Shares
and
to
administer
the
Eligible
Shareholder’s security
holding
in
ECT.

By
submitting
an
Entitlement
and
Acceptance
Form,
each
Eligible
Shareholder
agrees
that
ECT
may
use
the information
provided
on
those
forms
for
the
purposes
set
out
in
this
privacy
disclosure
statement
and
may disclose
it
for
those
purposes
to
ECT’s
share
registry,
related
bodies
corporate,
agents,
contractors
and

Page 41 of 51

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third
party
service
providers,
including
mailing
houses
and
professional
advisers,
and
to
ASX
and
other regulatory
authorities.

The
Corporations
Act
requires
ECT
to
include
information
about
the
security
holder
(including
name, address
and
details
of
the
securities
held)
in
its
public
register.
The
information
contained
in
ECT’s
public registers
must
remain
there
even
if
that
person
ceases
to
be
a
security
holder
of
ECT.
Information contained
in
ECT’s
register
is
also
used
to
facilitate
distribution
payments
and
corporate
communications (including
ECT’s
financial
results,
annual
reports
and
other
information
that
ECT
may
wish
to
communicate to
its
security
holders)
and
compliance
by
ECT
with
legal
and
regulatory
requirements.

If
the
information
required
on
an
Entitlement
and
Acceptance
Form
is
not
provided,
ECT
may
not
be
able
to accept
or
process
the
application.

A
Shareholder
has
a
right
to
gain
access
to
the
information
that
ECT
holds
about
that
person
subject
to certain
exemptions
under
law.
A
fee
may
be
charged
for
access.
Access
requests
must
be
made
in
writing to
ECT’s
Company
Secretary
at
ECT’s
registered
office.

7.9 Disclaimer

The
information
contained
in
section
4
does
not
represent
any
forecast
or
projection
as
to
the
future revenue
or
profitability
of
ECT.
See
section
6
regarding
risk
factors
generally
in
respect
of
your
decision
on whether
to
take
part
in
the
Offer.

7.10 CHESS and issuer sponsorship

ECT
participates
in
CHESS.
All
trading
on
ASX
in
Shares
and
Options
is,
and
in
New
Shares
and
New
Options will
be,
settled
through
CHESS.
ASX
Settlement,
a
wholly-‐owned
subsidiary
of
ASX,
operates
CHESS
in accordance
with
the
ASX
Listing
Rules
and
the
ASX
Settlement
Operating
Rules.
The
registry
operates
an electronic
issuer-‐sponsored
sub-‐register
and
an
electronic
CHESS
sub-‐register.
Both
these
sub-‐registers constitute
ECT’s
principal
register
of
Shareholders.

Holders
of
New
Shares
and
New
Options
will
not
receive
a
share
certificate
but
will
receive
a
statement
of their
holding.
If
an
Eligible
Shareholder
is
sponsored
by
a
broker
or
other
participant
in
CHESS,
that
person will
receive
a
CHESS
statement
which
will
set
out
the
number
of
New
Shares
and
New
Options
issued
to them
under
this
Prospectus,
provide
details
of
their
HIN
(Holder
Identification
Number),
and
provide
the participant
identification
number
of
the
sponsor.

If
applicants
are
registered
on
the
issuer-‐sponsored
sub-‐register,
their
holding
statement
will
contain
the number
of
New
Shares
and
New
Options
issued
to
them
under
this
Prospectus
and
their
SRN
(Security-‐ holder
Reference
Number).

A
CHESS
statement
or
issuer-‐sponsored
statement
will
be
sent
to
Shareholders
at
the
end
of
any
calendar month
during
which
the
balance
of
their
shareholding
changes.
Shareholders
may
request
a
statement
at any
other
time
however,
a
charge
may
be
made
for
additional
statements.

7.11 Allotment of New Shares and New Options

New
Shares
and
New
Options
will
be
allotted
and
holdings
statements
shall
be
despatched
no
later
than
4 October
2011
to
allottees
at
the
address
appearing
in
the
register
of
members
or
such
other
address
as may
be
advised
by
the
allottee.

7.12 Interests of Directors

Other
than
as
set
out
below
or
elsewhere
in
this
Prospectus,
no
Director,
and
no
firm
in
which
a
Director
is a
partner,
holds,
or
held
at
any
time
during
the
last
two
years
before
the
date
of
this
Prospectus,
any

Page 42 of 51

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interest
in
the
formation
or
promotion
of
ECT,
any
property
acquired
or
proposed
to
be
acquired
by
ECT
in connection
with
its
formation
or
promotion
or
in
connection
with
the
Offer.

Other
than
as
set
out
below
or
elsewhere
in
this
Prospectus,
no
amounts
have
been
paid
or
agreed
to
be paid
and
no
benefits
have
been
given
or
agreed
to
be
given
to
any
Director
in
the
last
two
years:

to
induce
them
to
become,
or
to
qualify
them
as,
a
Director;
or
for
services
rendered
by
them
in
connection
with
the
formation
or
promotion
of
ECT
or
in connection
with
the
Offer.

The
Directors
disclose
their
relevant
interests
(whether
the
shareholding
is
held
in
their
personal
name
or otherwise)
in
Shares
and
in
Options,
as
at
the
date
of
this
Prospectus
as
follows:


				Entitlement
				under Offer

	Position	Existing Shares	Existing Options	New Shares	New Options
S Carter	Non-executive Director	0	0	N/A	N/A
M Davies	Managing Director and Executive Chairman	0	0	N/A	N/A
I McEwin*	Non-executive Director	21,865,148	22,790,920	14,576,766	7,288,383
A. Moore†	Chief Operating Officer and Executive Director	1,750,000	0	1,166,667	538,334

McEwin
is
a
key
Shareholder
of
ECT.
He
has
agreed
to
take
up
his
full
Entitlement
under
the
Offer
and
to
partially
underwrite
the Offer
by
subscribing
for
New
Shares,
up
to
the
value
of
$100,000,
to
be
issued
under
any
Shortfall.

†
Ashley
Moore
intends
to
take
up
his
full
Entitlement
under
the
Offer.

7.13 Directors’ Remuneration

The
Constitution
contains
provisions
as
to
the
remuneration
of
Directors.
The
Directors
are
to
be remunerated
for
their
services
such
sum
as
the
Company
in
general
meeting
determines,
to
be
divided among
them
in
such
proportion
and
manner
as
they
agree,
or
in
default
of
agreement,
equally.

The
annual
remuneration
payable
to
a
non-‐executive
Director
is
currently
$36,000.

The
remuneration
paid
to
Directors
for
the
financial
year
ended
30
June
2011
is
detailed
below.

Director	Directors’ Remuneration	Directors’ Remuneration
	Salary	Directors’ Fees	Super	Options	Total
S Carter	$0	$36,000	$0	Nil	36,000
M Davies†	$0	$0	$0	Nil	Nil
I McEwin*	$0	$0	$0	Nil	Nil
A. Moore^	$0	$0	$0	Nil	Nil

†
Mr
Davies
was
appointed
to
the
Board
on
5
July
2011

Mr
McEwin
was
appointed
to
the
Board
on
11
July
2011

^
Mr
Moore
was
appointed
to
the
Board
on
17
August
2011

Page 43 of 51

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7.14 Litigation

The
Company
is
not
currently
involved
in
any
litigation
or
arbitration
considered
to
be
material
in
the context
of
this
Prospectus,
and
is
not
aware
of
any
threatened
litigation
or
pending
arbitration
against
it considered
to
be
material
in
the
context
of
this
Prospectus.

7.15 Material contracts

Below
is
a
summary
of
the
contracts
and
MoUs
which
are
material
to
ECT’s
ongoing
development
and deployment
of
the
Coldry
Technology.
This
summary
reflects
the
information
previously
disclosed
to
the market
through
ASX
announcements.

Arup Collaboration Agreement

In
March
2008,
ECT
entered
into
an
agreement
with
Arup
pursuant
to
which
Arup
became
the
Company’s world-‐wide
design
and
engineering
partner
for
its
Coldry
Technology.
Pursuant
to
the
agreement,
Arup
will design
the
Proposed
Coldry
Production
Plant.

JC Steele & Sons Collaboration Agreement

ECT
entered
into
a
“Collaboration
Agreement”
with
JC
Steele
&
Sons
in
October
2010
pursuant
to
which
JC Steele
&
Sons
supplied
a
pug
mill
and
extruder
to
the
Demonstration
Plant
and
became
ECT’s
preferred supplier
of
extruders
for
the
Proposed
Coldry
Production
Plant
and
other
plants
to
be
established
world-‐ wide.

Datang Coal Supply Agreement

On
25
May
2011,
ECT
announced
that
it
had
signed
the
Coal
Supply
Agreement
with
Datang
pursuant
to which
ECT
will
supply
2,000
metric
tonnes
of
Coldry
BCE
for
testing
in
one
of
Datang’s
black
coal-‐fired power
stations
in
China.
Delivery
of
the
Test
Burn
Coldry
BCE
pellets
was
originally
scheduled
for
the
third quarter
of
2011.
On
25
August
2011,
Datang
and
ECT
agreed
to
revise
the
delivery
time
for
the
Sample
Lot and
the
subsequent
Test
Burn.
ECT
and
Datang
have
re-‐enforced
their
mutual
commitment
to
the
delivery of
the
Sample
Lot.
Pursuant
to
a
Memorandum
of
Understanding
between
ECT
and
Datang
signed
on
19 January
2011,
the
parties
agreed
that
if
the
Test
Burn
is
successful,
the
Company
and
Datang
will
target
a commercial
scale
coal
supply
agreement.

Great Energy Alliance Corporation (GEAC) Memorandum of Understanding

GEAC
is
an
Australian
proprietary
company
that
owns
and
operates
Loy
Yang
Power
Station,
the
largest electricity
generator
in
Victoria
and
the
Loy
Yang
mine,
the
largest
open
cut
lignite
mine
in
Australia
with
an annual
output
of
approximately
30
million
tonnes.
ECT
and
GEAC
have
entered
into
a
Memorandum
of Understanding
in
which
both
parties
have
agreed
to
cooperate
in
the
establishment
and
operation
of
the Proposed
Coldry
Production
Plant
at
the
Loy
Yang
site.

The
terms
of
the
MOU
between
GEAC
and
ECT
include:

The
purchase
by
ECT
from
GEAC
of
up
to
5,000,000
tpa
of
lignite
over
a
50
year
period,
to produce
2,000,000
tpa
of
Coldry
Black
Coal
Equivalent
(BCE)
pellets;
A
site
in
the
vicinity
of
the
Loy
Yang
Power
Station,
as
well
as
the
services
of
electricity,
heated water
and
others
to
be
provided
by
GEAC,
and
The
collaboration
between
ECT
and
GEAC
with
technical
issues
concerning
the
mine
(via
GHD) and
power
station
(via
Worley
Parsons).

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Coldry IP Purchase Agreement.

In
June
2009,
following
Shareholder
approval,
ECT
acquired
the
intellectual
property
rights
to
the
Coldry Technology.
In
consideration
for
the
acquisition
of
these
rights,
the
vendors
of
the
Coldry
Technology received
$1.0
million
in
cash
and
55
million
Shares
and
110
million
ESIO.
The
acquisition
of
the
Coldry
IP rights
was
publicly
announced
on
29
June
2009.

McConnell Dowell Memorandum of Agreement.

In
April
2008,
ECT
and
McConnell
Dowell
signed
a
“Memorandum
of
Agreement”
for
the
procurement
and construction
of
the
Demonstration
Plant
and
any
subsequent
Coldry
plants
in
Australia.
The
Roles
and responsibilities
of
the
parties
are
set
out
in
the
Memorandum
of
Agreement
including
agreed
outcomes
to be
achieved
by
McConnell
Dowell
in
the
project
development
phase
at
no
cost,
provided
the
Constructor role
is
held
by
McConnell
Dowell
and
the
framework
in
respect
of
a
construction
contract.
The Memorandum
of
Agreement
is
binding
until
terminated
or
superseded
by
a
construction
contract.

7.16 Interest of other persons

ECT
has
paid
or
agreed
to
pay
the
following
amounts
to
the
following
persons
in
connection
with
the
Offer:

Norton Rose Australia

Fees
for
professional
services
undertaken
as
legal
advisers
to
ECT
in
connection
with
the
Offer
of approximately
$60,000
(plus
GST
and
disbursements)
as
at
the
date
of
this
Prospectus.
The
fees
charged
by Norton
Rose
Australia
are
in
accordance
with
the
Firm’s
standard
hourly
rates.

Various suppliers

Fees
for
other
services
provided
in
connection
with
the
Offer
including
marketing,
share
registry
fees, printing,
postage
and
handling,
ASIC
lodgement
fees,
ASX
quotation
fees
and
company
secretarial
and consulting
fees
of
approximately
$140,000
plus
GST.
Members
and
staff
of
the
above
companies,
firms
or their
associates
may
be
Eligible
Shareholders.

Other
than
as
set
out
above
or
elsewhere
in
this
Prospectus,
no
person
named
in
this
Prospectus
is performing
a
function
in
a
professional,
advisory
or
other
capacity
in
connection
with
the
preparation
or distribution
of
this
Prospectus,
and
no
promoter
of
ECT
involved
in
the
Offer
holds,
or
held
at
any
time during
the
last
2
years
before
the
date
of
this
Prospectus,
any
interest
in
the
formation
or
promotion
of ECT,
any
property
acquired
or
proposed
to
be
acquired
by
ECT
in
connection
with
its
formation
or promotion
or
in
connection
with
the
Offer,
and
no
amounts
have
been
paid
or
agreed
to
be
paid
and
no benefit
has
been
given
or
agreed
to
be
given
to
any
of
these
persons
for
services
rendered
by
them
in connection
with
the
formation
or
promotion
of
ECT
or
in
connection
with
the
Offer.

7.17 Expenses of the Offer

The
total
expenses
of
the
Offer
exclusive
of
GST,
disbursements,
Brokerage
Fees
and
any
Shortfall
Fees payable
by
the
Company
are
estimated
as
follows:

Expense	Total
Legal fees and expenses (excluding GST and	$60,000
disbursements)
Other expenses including marketing, share registry	$140,000
fees, printing, postage and handlingcosts,ASIC

Page 45 of 51

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lodgement
fees,
ASX
quotation
fees,
company secretarial
fees
and
consulting
fees. Total $200,000

7.18 Brokerage Fees

The
Company
will
pay
holders
of
an
AFSL
(as
determined
by
the
Board)
the
Brokerage
Fee
in
respect
of
any New
Shares
(including
any
Additional
New
Shares)
issued
to
Eligible
Shareholders
whose
Entitlement
and Acceptance
Form
bears
the
stamp
of
the
holder
of
an
AFSL.
The
estimated
expenses
of
the
Offer
set
out
in section
7.17
do
not
include
any
Brokerage
Fees
that
may
be
paid
to
holders
of
an
AFSL
and
accordingly,
the estimated
expenses
may
increase
to
the
extent
of
any
such
payment.
The
total
Brokerage
Fees
cannot
be calculated
as
at
the
date
of
this
Prospectus
as
it
is
dependent
on
the
number
of
New
Shares
and
Additional New
Shares
issued
in
connection
with
the
holders
of
AFSLs.

7.19 Shortfall Fee

The
Board
reserves
the
right
to
pay
a
Shortfall
Fee
to
the
holder
of
an
AFSL
for
the
placement
of
a substantial
portion,
as
determined
by
the
Board,
of
any
Shortfall
(excluding
Additional
New
Shares).
The estimated
expenses
of
the
Offer
set
out
in
section
7.17
do
not
include
any
Shortfall
Fee
that
may
be
paid
to the
holder
of
an
AFSL
and
accordingly,
the
estimated
expenses
may
increase
to
the
extent
of
any
such payment.
The
total
Shortfall
Fee
cannot
be
calculated
as
at
the
date
of
this
Prospectus
as
it
is
dependent
on the
existence
of
any
Shortfall
and
the
placement
of
a
substantial
portion
of
the
Shortfall
by
the
holder
of
an AFSL.

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7.20 Governing Law

This
Prospectus
and
the
contracts
which
arise
on
acceptance
of
Entitlement
and
Acceptance
Forms
are governed
by
the
law
applicable
in
Victoria,
Australia
and
each
applicant
submits
to
the
non-‐exclusive jurisdiction
of
the
courts
of
Victoria,
Australia.

7.21 Consents and disclaimers

The
following
consents
have
been
given
in
accordance
with
the
Corporations
Act:

Security Transfer Registrars

Security
Transfer
Registrars
Pty
Limited
( Security Transfer Registrars )
has
given
and
has
not
withdrawn
its written
consent
to
being
named
as
share
registrar
in
the
form
and
context
in
which
it
is
named.

Security
Transfer
Registrars
has
had
no
involvement
in
the
preparation
of
any
part
of
the
Prospectus
other than
being
named
as
share
registrar
to
the
Company.
Security
Transfer
Registrars
has
not
authorised
or caused
the
issue
of,
and
expressly
disclaims
and
takes
no
responsibility
for,
any
part
of
the
Prospectus.

Norton Rose Australia

Norton
Rose
Australia
(legal
advisers
to
ECT
in
relation
to
the
Offer)
has
given
and
not
withdrawn
its written
consent
to
being
named
in
the
Prospectus
in
the
form
and
context
in
which
it
is
named.

Norton
Rose
Australia
has
not
caused
or
authorised
the
issue
of
this
Prospectus,
does
not
make
or
purport to
make
any
statement
in
this
Prospectus
or
on
which
a
statement
in
this
Prospectus
is
said
to
be
based, except
to
the
extent
set
out
in
Norton
Rose
Australia’s
consent
above,
and
to
the
maximum
extent permitted
by
law,
expressly
disclaims
and
takes
no
responsibility
for
any
part
of
this
Prospectus
except
to the
extent
set
out
in
Norton
Rose
Australia’s
consent
above.

PKF

PKF
Australia
Ltd
( PKF )
has
given
and
not
withdrawn
its
written
consent
to
being
named
as
auditors
of
the Company
in
the
form
and
context
in
which
it
is
named.
With
the
exception
of
the
consent
as
stated
above, PKF
has
not
authorised
the
issue
of
this
Prospectus.
Accordingly
it
makes
no
representations
regarding
and takes
no
responsibility
for
any
other
statement
or
material
in
or
omissions
from
this
Prospectus.

7.22 Directors’ Consent to Lodgement

Each
Director
has
consented
in
writing
to
the
lodgement
of
this
Prospectus
with
ASIC
and
has
not withdrawn
that
consent.

Dated
26
August
2011

Mike Davies Managing Director

Page 47 of 51

www.ectltd.com.au

8 Definitions

In
this
Prospectus,
the
following
terms
and
abbreviations
have
the
following
meanings,
unless
the
context otherwise
requires:

$ means
Australian
dollars
(and
references
to
cents
are
to
Australian
cents)
unless
otherwise
indicated;

Additional New Shares means
any
New
Shares
applied
for
by
Eligible
Shareholders
in
excess
of
their Entitlement.
The
Additional
New
Shares
form
part
of
any
New
Shares
issued
under
the
Shortfall;

AFSL means
an
Australian
financial
services
licence,
as
that
term
is
defined
in
the
Corporations
Act;

Application Monies means
monies
payable
by
Eligible
Shareholders
in
respect
of
applications
for
New Shares;

Arup means
Arup
Pty
Limited
ACN
000
966
165;

ASIC means
Australian
Securities
and
Investments
Commission;

ASX means
ASX
Limited
ABN
98
008
624
691,
or
the
securities
exchange
operated
by
it,
as
the
case requires;

ASX Listing Rules means
the
official
listing
rules
of
ASX
as
waived
or
modified
from
time
to
time;

ASX Settlement means
ASX
Settlement
Pty
Limited
ACN
008
504
532
(formerly
ASX
Settlement
and Transfer
Corporation
Pty
Ltd);

ASX Settlement Operating Rules means
the
settlement
rules
of
ASX
Settlement
(formerly
the
ASX Settlement
Operating
Rules);

Black Coal Equivalent or BCE means
the
black
coal
equivalent
pellets
produced
by
the
Coldry
Technology from
lignite
or
sub-‐bituminous
coals;

Board means
the
board
of
directors
of
ECT;

Brokerage Fee means
5%
of
the
gross
proceeds
(plus
GST)
of
any
New
Shares
(including
Additional
New Shares)
issued
to
Eligible
Shareholders
under
the
Offer
whose
Entitlement
and
Acceptance
Form
bears
the stamp
of
a
holder
of
an
AFSL.

Business Day means
a
day
on
which
ASX
is
open
for
the
transaction
of
business;

CHESS means
the
Clearing
House
Electronic
Subregister
System;

Closing Date means,
subject
to
section
1.5,
27
September
2011;

Coal Supply Agreement means
the
agreement
between
ECT
and
Datang
in
respect
of
the
Test
Burn announced
to
ASX
on
25
May
2011;

Coldry Technology means
ECT’s
patented
technology
for
the
de-‐watering
and
upgrading
of
brown
coal
to produce
a
Brown
Coal
Equivalent
product;

Constitution means
the
constitution
of
ECT
as
amended
from
time
to
time;

Corporations Act means
the Corporations Act 2001 (Cth);

Page 48 of 51

www.ectltd.com.au

Datang means
China
Datang
(Beijing)
International
Trade
Co.,
Ltd,
a
subsidiary
of
China
Datang Corporation;

Demonstration Plant means
ECT’s
Coldry
BCE
demonstration
plant
in
Bacchus
Marsh,
Victoria;

Design for Tender or DFT means
the
full
engineering
specifications
for
the
Proposed
Coldry
Production Plant
drafted
by
Arup;

Directors means
the
directors
of
the
Company
at
the
date
of
this
Prospectus;

ECT or Company means
Environmental
Clean
Technologies
Limited
ABN
28
009
120
405;

Eligible Shareholder means
those
shareholders
who
have
a
registered
address
in
Australia
or
New
Zealand and
who
are
registered
as
holders
of
Shares
as
at
the
Record
Date;

Entitlement or Rights means
the
entitlement
or
right
to
apply
for
2
New
Shares
for
every
3
Shares
held
by an
Eligible
Shareholder
as
at
Record
Date.
Additionally,
subscribers
for
New
Shares
will
receive,
at
no
cost, 1
New
Option
for
every
2
New
Shares
issued;

Entitlement and Acceptance Form means
the
entitlement
and
acceptance
form
accompanying
this Prospectus
and,
unless
the
context
requires
otherwise,
includes
any
application
or
similar
form accompanying
this
Prospectus
in
relation
to
the
placement
of
any
Shortfall;

ESI means
the
ASX
code
for
a
Share
which
is
quoted
on
ASX;

ESIO means
the
ASX
code
for
an
Option
which
is
quoted
on
ASX
and
which
is
exercisable
on
or
before
16 January
2014;

GST means
goods
and
services
or
similar
tax;

Issue means
the
issue
of
New
Shares
and
New
Options
pursuant
to
this
Prospectus;

Issue Price means
0.6
cents
per
New
Share;

JC Steele & Sons means
JC
Steele
&
Sons
Australia
LLC
ARBN
073
084
876;

MATMOR Technology means
the
patented
retort
and
process
for
the
production
of
high-‐quality
iron
from brown
coal
and
iron
oxide
bearing
materials
such
as
mill
scale,
nickel
tailings
and,
high
or
low
grade
iron ore;

McConnell Dowell means
McConnell
Dowell
Constructors
(Aust)
Pty
Ltd
ACN
002
929
017;

MoU means
memorandum
of
understanding;

New Option means
an
ESIO
granted
pursuant
to
this
Prospectus
to
acquire
1
fully
paid
Share
in
the Company,
exercisable
no
later
than
5.00pm
on
16
January
2014;

New Share means
a
Share
issued
at
0.6
cents
each
pursuant
to
this
Prospectus;

Offer means
the
non-‐renounceable
offer
of
New
Shares
and
New
Options
to
Eligible
Shareholders
pursuant to
this
Prospectus
and
includes
any
Offer
in
relation
to
the
placement
of
any
Shortfall;

Offer Period means
the
period
between
the
Opening
Date
and
the
Closing
Date;

Official Quotation means
official
quotation
of
the
New
Shares
and
New
Options
(as
the
case
requires)
by ASX
in
accordance
with
the
ASX
Listing
Rules;

Page 49 of 51

www.ectltd.com.au

Opening Date means
the
date
of
this
Prospectus,
26
August
2011;

Option means
an
option
to
acquire
one
Share
in
the
Company;

Proposed Coldry Production Plant or Plant means
the
Coldry
production
plant
to
be
constructed
at
the
Loy Yang
Power
Station
in
Loy
Yang,
Victoria.
The
plant
will
have
a
production
capacity
of
2
million
tonnes
of Coldry
BCE
pellets.

Prospectus means
this
transaction
specific
prospectus
dated
26
August
2011;

Record Date means
5.00pm
on
5
September
2011;

Sample Lot has
the
meaning
given
in
section
6.2;

Shares means
fully
paid
ordinary
shares
(ESI)
in
the
capital
of
the
Company;

Shareholder means
a
person
who
holds
Shares;

Shortfall means
the
number
of
New
Shares
(if
any)
to
which
Eligible
Shareholders
have
an
Entitlement
but which
are
not
subscribed
for
pursuant
to
this
Prospectus
by
5.00
pm
on
the
Closing
Date.
Any
Additional New
Shares
applied
for
will
be
satisfied
out
of
the
Shortfall;

Shortfall Fee means
5%
of
the
gross
proceeds
(plus
GST)
of
New
Shares
(excluding
Additional
New
Shares) issued
pursuant
to
placement
of
a
substantial
portion,
as
determined
by
the
Board,
of
the
Shortfall
by
the holder
of
an
AFSL.
The
Shortfall
Fee
is
payable
in
addition
to
any
Brokerage
Fee
that
is
due
and
payable
to the
holder
of
the
AFSL
in
respect
of
New
Shares
and
Additional
New
Shares
issued
in
connection
with
that AFSL;

Test Burn means
the
testing
of
2,000
tonnes
of
Coldry
BCE
pellets
in
one
of
Datang’s
black
coal-‐fired
power stations
in
China.
The
pellets
for
the
test
burn
are
being
produced
at
ECT’s
Demonstration
Plant;

Underwriter means
Iain
McEwin;

Underwriting Agreement means
the
underwriting
agreement
between
ECT
and
Iain
McEwin
dated
25 August
2011,
the
key
terms
of
which
are
set
out
in
section
7.7;

Unlisted Option means
an
Option
which
is
not
listed
on
ASX;
and

Victorian Coldry Project or Project means
the
design
and
construction
of
the
Proposed
Coldry
Production Plant.

References
in
this
Prospectus
to:

currency
are,
unless
stated
otherwise,
to
the
currency
of
Australia;
and
time,
means
time
in
Melbourne,
Victoria,
Australia
unless
otherwise
stated.

Page 50 of 51

www.ectltd.com.au

9 Corporate

Directors

Stephen
Carter Mike
Davies Iain
McEwin Ashley
Moore

Company Secretary

John
Osborne

Solicitors to the Offer

Norton
Rose
Australia RACV
Tower 485
Bourke
Street Melbourne
VIC
3000

Registered Office and Principal Place of Business

Level
8 530
Little
Collins
Street Melbourne
VIC
3000

Share Registry*

Security
Transfer
Registrars 770
Canning
Highway Applecross
WA
6153

Auditor*

PKF Level
14 140
William
Street Melbourne
VIC
3000 *
The
names
of
these
parties
are
included
for
information
purposes
only.

ASX CODE

ESI ESIO

Page 51 of 51

AI assistant

ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. — Capital/Financing Update 2011

64819_rns_2011-08-25_4894df43-262b-4229-a77e-6ec400e9b003.pdf

IMPORTANT NOTICE

IMPORTANT NOTICE

This is an important document

Disclaimer

Ineligible shareholders

Foreign jurisdictions and restrictions on the distribution of this Prospectus

Electronic Prospectus

Defined terms and abbreviations

Application for New Shares and New Options

SUMMARY OF THE OFFER

The Offer

Reasons for the Offer

KEY OFFER DETAILS

LETTER FROM THE CHAIRMAN

INVESTMENT DETAILS

1 Details

1.1 This Offer

1.2 Underwriting

1.3 Use of the proceeds of Offer

Note:

1.4 Your Entitlement

1.5 Closing date

1.6 Total number of New Shares and New Options to be issued

1.7 Application for Additional New Shares

1.8 Entitlements not taken up

1.9 Placement of any Shortfall

1.10 Issue of New Shares and New Options

1.11 Withdrawal of Offer

1.12 ASX quotation

1.13 Ranking of New Shares

1.14 Ranking and exercise price of New Options

1.15 Market prices of Shares and ESIOs

1.16 Ineligible Shareholders

1.17 Taxation implications

1.18 Entitlement and Acceptance Form is binding

1.19 Enquiries

2 Answers

3.1 Entitlement

You

3.2 Take up all or part of your Entitlement

3.3 Take up all of your Entitlement and apply for Additional New Shares

3.4 Do nothing

3.5 Form of payment

If paying by cheque

If paying via BPAY

If you choose to pay via BPAY you are not required to submit the Entitlement and Acceptance Form.

4 Overview

4.1 Background

4.2 ECT’s strategy

Datang

Arup

4.3 Use of funds

4.4 Consequences if the Offer is not fully subscribed or any Shortfall cannot be placed

4.5 The Directors

Mr Iain McEwin

5 Effect

5.1 Structure of Capital Raising

5.2 Pro-­‐forma Unaudited Consolidated Balance Sheet

6 Risk

6.1 Introduction

6.2 Specific risk factors

Test Burn

Sales and Purchase Contract with Datang

Design for Tender engineering works

Financial Risks

Market conditions

Changes to Australian and foreign legislation and policy

Protection of intellectual property rights

Commercialisation of products and market acceptance

Design and construction of the Proposed Coldry Production Plant

Key employee risks

Climatic risks

Environmental risks

Production risks

Risk as to profitability

Dependency on others

Contract Risks

ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. Capital/Financing Update 2011

5.2 Pro-‐forma Unaudited Consolidated Balance Sheet

Geo-‐political factors