ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. — Interim / Quarterly Report 2021

Jan 12, 2021

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Quarterly Activity Report and Appendix 4C

13 January 2021: Environmental Clean Technologies Limited (ASX: ECT) (ECT or Company) provides the following quarterly activity report and Appendix 4C.

Quarterly Activity Report – 1 October to 31 December 2020

During the quarter, the Company continued activities to rebuild its Bacchus Marsh facility (the “Project”) following the fire in October 2019.

Approximately $601K in cash was spent on the Project during the quarter on eligible research and development (R&D) expenditure that would qualify for the ATO’s R&D tax incentive.

Of this amount, $402K was attributable to property, plant and equipment purchases (previous quarter $313K) with the remaining $199K on other R&D project expenses (previous quarter $220K). An estimated $350K in accrued research and development tax incentive credit is yet to be drawn via the proposed loan referred to in the Appendix 4C below.

In the previous quarter the Company received its research and development tax incentive of ~$899K which was disclosed as a government grant. In the quarter ended 31 December 2020 government grants amounted to $20K which consisted of JobKeeper payments.

Other cash inflow and outflow categories were comparable to the previous quarter. As such, and notwithstanding the items mentioned above, the Appendix 4C is not materially different to the prior quarter.

Cash on hand at the end of the quarter was $324K compared to $1.220M at the end of September 2020.

Following the reporting period, on 7 January 2021, the Company received the $593K balance of the insurance proceeds payable following the fire at its Bacchus Marsh facility in October 2019.

For further information, contact:

Glenn Fozard – Chairman info@ectltd.com.au

About ECT

ECT is in the business of commercialising leading-edge energy and resource 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 licensing and other commercial mechanisms.

About Coldry

Coldry is the gateway enabler of higher-value applications for low rank coals.

388 Punt Road, South Yarra, VIC 3141 Australia | Phone +613 9849 6203| www.ectltd.com.au | ABN 28 009 120 405 Listed on the Australian Stock Exchange (ASX:ECT)

Low rank coals are a rich source of valuable hydrocarbons but suffer from high moisture content that must be reduced to enable higher-value upgrading and conversion to solid fuels, liquid or gaseous hydrocarbons.

Drying is easy. However, drying efficiently and cost effectively has been the challenge. Coldry meets this challenge through a combination of ‘brown coal densification’ and waste heat utilisation, delivering the world’s first low temperature, low pressure, low cost, zero CO2 emissions drying process.

About HydroMOR

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

HydroMOR is a simple, low cost, low emission, hydrogen-driven technology which enables the use of ‘low value’ feedstocks to produce primary iron.

About COHgen

The COHgen process has the potential to deliver a lower cost, lower emission method for hydrogen production from brown coal.

COHgen is currently advancing through fundamental laboratory development intended to form the basis for a patent application ahead of scale up and commercialisation.

About CDP-WTE

The catalytic depolymerisation-based waste-to-energy process converts ‘low-value’ resources into higher-value diesel and other valuable by-products.

CDP-WTE can be deployed as a standalone solution or integrated with the Coldry process to deliver higher-value, lower-emission energy solutions to lignite resource owners.

Areas covered in this announcement:

ECT (ASX:ECT)	ECT Finance	ECT India	Aust. Projects	R&D	HVTF	Business Develop.	Sales

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Appendix 4C

Quarterly report for entities subject to Listing Rule 4.7B

Name of entity: Environmental Clean Technologies Limited ABN: 28 009 120 405

Quarter ended: 31 December 2020

Consolidated statement of cash flows	Consolidated statement of cash flows	Consolidated statement of cash flows	Current quarter $A’000	Year to date (6 months) $A’000
1		Cash flows from operating activities
1.1		Receipts from customers	8	11
1.2		Payments for
		(a) research and development	(199)	(419)
		(b) product manufacturing and operating costs	-	-
		(c) advertising and marketing	-	-
		(d) leased assets	-	-
		(e) staff costs	(53)	(133)
		(f) administration and corporate costs	(249)	(449)
1.3		Dividends received (see note 3)	-	-
1.4		Interest received	1	3
1.5		Interest and other costs of finance paid	(2)	(4)
1.6		Income taxes paid	-	-
1.7		Government grants and tax incentives	20	965
1.8		Other (provide details if material)	-	-
1.9		Net cash from / (used in) operating activities	(474)	(26)
2		Cash flows from investing activities
2.1		Payments to acquire:
		(a) property, plant and equipment	(403)	(715)
		(b) businesses (see item 10)	-	-
		(c) investments	-	-
		(d) intellectual property	-	-

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	(e) other non-current assets	-	-
2.2	Proceeds from disposal of:
	(a) property, plant and equipment	-	-
	(b) businesses (see item 10)	-	-
	(c) investments	-	-
	(d) intellectual property	-	-
	(e) other non-current assets	-	-
2.3	Cash flows from loans to other entities	-	-
2.4	Dividends received (see note 3)	-	-
2.5	Other (provide details if material)	-	-
2.6	Net cash from / (used in) investing activities	(403)	(715)
3	Cash flows from financing activities
3.1	Proceeds from issues of shares	-	-
3.2	Proceeds from issue of convertible notes	-	-
3.3	Proceeds from exercise of share options	-	-
3.4	Transaction costs related to issues of shares, convertible notes or options	-	-
3.5	Proceeds from borrowings	-	-
3.6	Repayment of borrowings	(19)	(39)
3.7	Transaction costs related to loans and borrowings	-	-
3.8	Dividends paid	-	-
3.9	Other (provide details if material)	-	-
3.1	Net cash from / (used in) financing activities	(19)	(39)
4	Net increase / (decrease) in cash and cash equivalents for the period
4.1	Cash and cash equivalents at beginning of quarter/year to date	1,220	1,105
4.2	Net cash from / (used in) operating activities (item 1.9 above)	(474)	(26)
4.3	Net cash from / (used in) investing activities (item 2.6 above)	(403)	(715)
4.4	Net cash from / (used in) financing activities (item 3.10 above)	(19)	(39)
4.5	Effect of movement in exchange rates on cash held	-	-
4.6	Cash and cash equivalents at end of quarter	324	324

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5	Reconciliation of cash and cash equivalents At the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1	Bank balances	324	324
5.2	Call deposits	-	-
5.3	Bank overdrafts	-	-
5.4	Other (provide details)	-	-
5.5	Cash and cash equivalents at end of quarter (should equal item 4.6 above)	324	324
6	Payments to related parties of the entity and their associates	Current quarter $A'000	Previous quarter $A’000
6.1	Aggregate amount of payments to related parties and their associates included in item 1	140	296
6.2	Aggregate amount of payments to related parties and their associates included in item 2	-	-
	Amounts in item 6.1 are payments of directors' fees for all directors and payments for consulting fees to executive directors
7	Financing facilities	Total facility amount at quarter end	Amount drawn at quarter end
	Note: the term “facility’ includes all forms of financing arrangements available to the entity.	$A’000	$A’000
	Add notes as necessary for an understanding of the sources of finance available to the entity.
7.1	Loan facilities	-	-
7.2	Credit standby arrangements	-	-
7.3	Other (R & D lending facility- see below)	-	-
7.4	Total financing facilities	-	-
7.5	Unused financing facilities available at quarter end	-	-

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7.6	Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well.
	There are no unused lending facilities.

8	Estimated cash available for future operating activities	$A’000
8.1	Net cash from / (used in) operating activities (Item 1.9)	(474)
8.2	Cash and cash equivalents at quarter end (Item 4.6)	324
8.3	Unused finance facilities available at quarter end (Item 7.5)	-
8.4	Total available funding (Item 8.2 + Item 8.3)	324
8.5	Estimated quarters of funding available (Item 8.4 divided by Item 8.1)	(0.68)
8.6	If Item 8.5 is less than 2 quarters, please provide answers to the following questions:
	1. Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not?
	Yes. $593K was received from insurance proceeds on 7 January 2021 and the Company is currently finalising arrangements with a lender who lends against research and development tax incentives receivable from the Australian Taxation Office.
	2. Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?
	The Company believes that it is very likely that the lending facility referred to in answer 8.6 (1) above will be approved.
	3. Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?
	Yes. Cash on hand currently together with funds to be borrowed are expected to provide enough cash for the business to continue operations.

Compliance statement	Compliance statement
1	This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.
2	This statement gives a true and fair view of the matters disclosed.

Date : 11 January 2021 Authorised by : The board

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Notes
1	This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.
2	If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of,_AASB 107: Statement of Cash Flows_apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standard applies to this report.
3	Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.
4	If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”. If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [name of board committee–eg Audit and Risk Committee]”. If it has been authorised for release to the market by a disclosure committee, you can insert here: “By the Disclosure Committee”.
5	If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s_Corporate Governance Principles and Recommendations_, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

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