ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. — Capital/Financing Update 2014

Aug 13, 2014

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Strategic Deliverable Bond reaches conclusion

Thursday 14 August 2014: Environmental Clean Technologies Limited (ECT or Company) (ASX:ESI) advises that the Strategic Deliverable Bond (SDB), established to fund the delivery of Coldry engineering outcomes, has today been extinguished through the receipt of a final conversion notice for the balance of the Bond.

The attached Appendix 3B represents the conclusion of a funding program which has enabled the highest value outcomes delivered by the Company since its inception; detailed engineering and design for the Coldry commercial-scale demonstration plant.

The Bond in total provided $3.9 million in funding, at an average conversion price of 0.54 cents per share.

Background

The detailed engineering program began in late 2011, initially funded by shareholders through a Rights Issue. The Arup Strategic Deliverable Bond was set in place in November 2012 to support the delivery of the 'Design for Tender' (DFT) program, necessary to scale up the Coldry process from pilot-scale to a commercial-scale demonstration plant.

The early stage works included process data mapping of the Pilot Plant and validation activities enabling the scale up design works to begin.

The second phase included equipment performance specification development, options analysis for equipment configurations, and a range of cost saving and performance improvement engineering works.

The DFT works were then focussed to provide for a specific outcome of a Commercial-scale Demonstration Plant (CDP) project, and expanded to include various pre-construction and construction planning activities, as well as construct-ability analyses.

The 'Construction Ready' design package was presented to shareholders in August 2013.

This level of preparedness enabled the Company to pursue its India strategy, initially entailing the engagement of Greenard Willing India and YES Bank to support delivery against the Manufacturing Strategy elements. This included the detailed review of capable Indian EPC companies, and culminated in the appointment of Thermax as ECT's Indian EPC partner.

Next Steps

The progressive delivery against this strategy, enabled by the work funded by the SDB, sees the Company now positioned to significantly advance in India and globally.

Managing Director Ashley Moore stated, “The works embodied by the DFT and construction ready engineering packages were vitally important in engaging with Thermax. Through that, we have now reduced the projected cost of demonstrating Coldry at commercial scale by more than $30 million”.

While this is the last conversion associated with the Bond the future value potential enabled through the delivery of engineering outcomes produced by it is yet to be fully realised.

For further information contact: Ashley Moore – Managing Director - info@ectltd.com.au

Level 7, 530 Little Collins Street, Melbourne Vic, 3000 Australia | Phone +613 9909 7684 | www.ectltd.com.au | ABN 28 009 120 405 Listed on the Australian Stock Exchange (ASX:ESI)

About ECT

ECT is in the business of commercialising leading-edge coal and iron making technologies, which are capable of delivering financial and environmental benefits.

We are focused on advancing a portfolio of technologies, which have significant market potential globally.

ECT’s business plan is to pragmatically commercialise these technologies and secure sustainable, profitable income streams through licencing and other commercial mechanisms.

About Coldry

When applied to lignite and some sub-bituminous coals, the relatively simple Coldry beneficiation process produces a black coal equivalent (BCE) in the form of pellets. Coldry pellets have equal or superior energy value to many black coals and produce lower CO2 emissions than raw lignite.

About MATMOR

The MATMOR process has the potential to revolutionise primary iron making.

MATMOR is a simple, low cost, low emission, production technology, utilising the patented MATMOR retort, which enables the use of cheaper feedstocks to produce primary iron.

Appendix(3B( New(issue(announcement(

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

Environmental Clean Technologies Limited

ABN

28 009 120 405

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (e.g. if options, exercise price and expiry date; if partly paid+securities, the amount outstanding and due dates for payment; if+convertible securities, the conversion price and dates for conversion)	Ordinary Shares (ASX code: ESI)
	222,826,088
	Fully Paid Ordinary Shares ranking equally with existing Ordinary Shares

+!See!chapter!19!for!defined!terms.!

04/03/2013!

Appendix!3B!!Page!1!

Appendix(3B( New(issue(announcement(

4 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted +securities? If the additional+securities do not rank equally, please state: ! the date from which they do ! the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment ! the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)	Yes, the new shares will rank equally with existing ESI securities
	$525,000 - Conversion Notice received in relation to the Strategic Deliverable Bond as outlined in item 6. $49,000 – Remaining fees (3.5% of the extension amount) under the terms of the Strategic Deliverable Bond per the ASX announcement on 5 July 2013.
	! On 21 November 2012 the Company advised it would be issuing Strategic Deliverable Bonds with a face value of up to $2,500,000. ! On 5 July 2013 the Company advised it would extend the SDB by up to $1,400,000. ! On 19 February 2013 the Company received a conversion notice for part of the Bond, being $750,000. ! On 21 May 2013 the Company received a 2ndconversion notice for part of the Bond, being $150,000. ! On 7 June 2013 the Company has received a 3rd Conversion Notice for part of the Bond, being $200,000. ! On 26 June 2013 the Company has received a 4rd Conversion Notice for part of the Bond, being $150,000. ! As at 11 July 2013 the Company has received a 5th Conversion Notice for part of the Bond, being $100,000. ! As at 17thJuly 2013 the Company has received a 6th Conversion Notice for part of the Bond, being $150,000 ! As at 19thJuly 2013 the Company has received a 7th Conversion Notice for part of the Bond, being $150,000. ! As at 15thAugust 2013 the Company has received an 8th Conversion Notice for part of the Bond, being $150,000. ! As at 20thAugust 2013 the Company has received a 9th Conversion Notice for part of the Bond, being $300,000. ! As at 21stAugust 2013 the Company has received a 10th Conversion Notice for part of the Bond, being $254,000. ! As at 21stAugust 2013 the Company has received an 11thConversion Notice for part of the Bond being $71,000. ! As at 12thSeptember 2013 the Companyhas received a

+!See!chapter!19!for!defined!terms.!

Appendix!3B!Page!2!

04/03/2013!

Appendix(3B( New(issue(announcement(

6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the+securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of +securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A	12~~th~~Conversion Notice for part of the Bond being $450,000. ! As at 25thOctober 2013 the Company has received a 13th Conversion Notice for part of the Bond being $300,000. ! As at 25thMarch 2014 the Company has received a 14th Conversion Notice for part of the Bond being $50,000. Note:This conversion notice relates to a Convertible Note issued under the Bond for cash payments made to Arup for the DFT during 2013. ! As at 8thApril 2014 the Company has received a 15th Conversion Notice for part of the Bond being $100,000. Note:This conversion notice relates to a Convertible Note issued under the Bond for cash payments made to Arup for the DFT during 2013. ! As at 2ndJune 2014 the Company has received a 16th Conversion Notice for part of the Bond being $50,000. Note:This conversion notice relates to a Convertible Note issued under the Bond for cash payments made to Arup for the DFT during 2013. ! As at 14 August 2014 the Company has received a 17th and FINAL Conversion Notice for part of the Bond being $525,000. ! The conversion is upon the terms of the Bonds as shown in the announcement of 21 November 2012. The Bond issued to date has been in consideration for the work being undertaken by Arup to deliver design and engineering works associated with the development and delivery of the Coldry technology in addition to operating capital.
	Yes.
	29 November 2013
	24,526,432
	Nil

+!See!chapter!19!for!defined!terms.!

04/03/2013!

Appendix!3B!Page!3!

Appendix(3B( New(issue(announcement(

Appendix3B Newissueannouncement
6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of +securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. 8 Number and+class of all+securities quoted on ASX (_including_the +securities in section 2 if applicable	Nil Nil
	Yes, the issue price is greater than 75% of the 15 day VWAP. ! Issue price: 0.2576¢ ! Issue date: 14 August 2014 ! 15 day VWAP: 0.3429¢. ! 75% of 15 day VWAP: 0.2572¢
	N/A
	7.1 remaining capacity is 300,700,831 and 7.1A capacity is 0.
	14 August 2014
		~~+~~Class Ordinary Shares (ESI) Options (ESIOA) Options (ESIOB)
	Number	~~+~~Class
	2,409,526,361 1,396,172,364 724,768,416	Ordinary Shares (ESI) Options (ESIOA) Options (ESIOB)

+!See!chapter!19!for!defined!terms.!

Appendix!3B!Page!4!

04/03/2013!

Appendix(3B( New(issue(announcement(

		Appendix3B Newissueannouncement
9 Number and+class of all+securities not quoted on ASX (_including_the +securities in section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number	~~+~~Class
	20,000,000	Unlisted options exercisable at 5.0 cents each and expiring on 14 December 2014
	None

+!See!chapter!19!for!defined!terms.!

04/03/2013!

Appendix!3B!Page!5!

Appendix(3B( New(issue(announcement(

Part 2 - Pro rata issue

Not applicable

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of[+] securities ( tick one )

• (a) +Securities described in Part 1

• (b) All other[+] securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Not applicable

Entities that have ticked box 34(b)

Not applicable

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the +securities on any conditions it decides.

• 2 We warrant the following to ASX.

• ! The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• ! There is no reason why those[+] securities should not be granted[+] quotation.

• ! An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

• ! Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• ! Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• ! If we are a trust, we warrant that no person has the right to return the[+] securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

+!See!chapter!19!for!defined!terms.!

Appendix!3B!Page!6!

04/03/2013!

Appendix(3B( New(issue(announcement(

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before[+] quotation of the[+] securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here:

............................................................ Company secretary

Date: 14 August 2014

Print name: Adam Giles

== == == == ==

+!See!chapter!19!for!defined!terms.!

04/03/2013!

Appendix!3B!Page!7!

Appendix(3B( New(issue(announcement(

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

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----- Start of picture text -----

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
Insert number of fully paid [+] ordinary securities on 1,884,569,392
issue 12 months before the [+] issue date or date of
agreement to issue
Add the following:
• Number of fully paid [+] ordinary securities issued Nil
in that 12 month period under an exception in
rule 7.2
• Number of fully paid [+] ordinary securities issued 283,612,362
in that 12 month period with shareholder
approval
• Number of partly paid [+] ordinary securities that Nil
became fully paid in that 12 month period
Note:
• Include only ordinary securities here – other
classes of equity securities cannot be added
• Include here (if applicable) the securities the
subject of the Appendix 3B to which this form is
annexed
• It may be useful to set out issues of securities
on different dates as separate line items
Subtract the number of fully paid [+] ordinary Nil
securities cancelled during that 12 month period
“A” 2,168,181,754
----- End of picture text -----

+!See!chapter!19!for!defined!terms.!

Appendix!3B!Page!8!

04/03/2013!

Appendix(3B( New(issue(announcement(

Step 2: Calculate 15% of “A”

Step 2: Calculate 15% of “A”	Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	325,227,263
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
Insertnumber of+equity securities issued or agreed to be issued in that 12 month period_not_ counting_those issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 _Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	14/8/14 – 24,526,432
“C”	24,526,432
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
“A” x 0.15 Note: number must be same as shown in Step 2	2,168,181,754 x 0.15 = 325,227,263
Subtract“C” Note: number must be same as shown in Step 3	24,526,432
Total[“A” x 0.15] – “C”	300,700,831 [Note: this is the remaining placement capacity under rule 7.1]

+!See!chapter!19!for!defined!terms.!

04/03/2013!

Appendix!3B!Page!9!

Appendix(3B( New(issue(announcement(

Part 2

Rule 7.1A – Additional placement capacity for eligible entities

Appendix3B Newissueannouncement Part 2	Appendix3B Newissueannouncement Part 2
Rule 7.1A – Additional placement capacity for eligible entities
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
“A” Note: number must be same as shown in Step 1 of Part 1	2,168,181,754
Step 2: Calculate 10% of “A”
“D”	0.10 Note: this value cannot be changed
Multiply“A” by 0.10	216,818,175
Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used
Insertnumber of+equity securities issued or agreed to be issued in that 12 month period under rule 7.1A Notes: • This applies to equity securities – not just ordinary securities • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained • It may be useful to set out issues of securities on different dates as separate line items	2/6/14 - 18,518,519 14/8/14 – 198,299,656
“E”	216,818,175

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	216,818,175
Subtract“E” Note: number must be same as shown in Step 3	216,818,175
Total[“A” x 0.10] – “E”	NIL Note: this is the remaining placement capacity under rule 7.1A

+!See!chapter!19!for!defined!terms.!

Appendix!3B!Page!10!

04/03/2013!

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Via ASX online

ASX Market Announcements Office

14 August 2014

Information disclosed under ASX Listing Rules 3.10.5A and 7.1A.4(b)

Environmental Clean Technologies Limited (ASX:ESI) (Company or ECT) provides the following additional information under ASX Listing Rule 3.10.5A. in relation to the share issue under listing rule 7.1A on 14 August 2014 per the below details.

The following information is provided as a matter of record only.

Share Issue on the 14 August 2014

• a) A total of 222,826,088 shares were issued at a price of 0.2576¢ per share pursuant to Listing Rule 7.1A (representing 9.25% of the then post placement capital).

• a. pre-placement security holders who did not participate in the Bond conversion held an aggregate 90.75% of the then post-placement capital

• b. pre-placement security holders who did participate in the Bond conversion held an aggregate 9.25% of the then post-placement capital

• c. there were no participants in the Bond conversion who were not previously security holders

• b) The issue of fully paid shares through this capital raising related to the presentation of a conversion notice under the Strategic Deliverable Bond issued 21 November 2012, for work performed on the Coldry ‘design for tender’ during 2013. The Company considered the Bond to be the most efficient and reliable method available for raising the funds required to advance the stated objectives given the funding certainty.

• c) No underwriting arrangements were entered into.

• d) The capital raising fee in relation to the Strategic Deliverable Bond extension was 5%.

For further information, please contact:

Adam Giles - Company Secretary Office Phone: 03 9909 7684 Email: info@ectltd.com.au

Level 7, 530 Little Collins Street, Melbourne Vic, 3000 Australia | Phone +613 9909 7684 | www.ectltd.com.au | ABN 28 009 120 405 Listed on the Australian Stock Exchange (ASX:ESI)