Environmental Clean Technologies Limited (ASX: ECT) (“ECT” or “Company”) is pleased to provide the following update on the status of its FY21 R&D Tax incentive refund and the establishment of a new R&D Loan facility provided by InvestVictoria, a business of the Victorian State Government.
- Establishment of new $1.968M R&D loan facility with InvestVictoria
- FY21 R&D Tax Incentive refund received from the ATO ($1.988M)
- Current loan with RnD Lending satisfied in full
- Surplus of ~$670,000 from R&D refund providing free cashflow available to Company
- R&D refund and new loan combined deliver ~$2.6m of cashflow for the current financial year
FY21 R&D Tax Incentive Refund
The FY21 tax incentive refund of $1.988M delivers a net cashflow of ~$670k to the Company following the repayment of the R&D loan balance (plus accrued interest, as disclosed in the 2021 Annual Financial Report). These funds will contribute to financing the Company’s strategic initiatives, including the commercial demonstration of its Coldry technology and the preparation of a full feasibility study for the proposed Net Zero Emission Hydrogen Refinery Hub Project in Victoria’s Latrobe Valley, announced recently.
New R&D Loan Facility
The Company is pleased to announce it has established a new $1.968M R&D loan facility with InvestVictoria, for FY22.
ECT has previously utilised finance facilities that have allowed the forward factoring of accrued R&D Tax Incentive refunds, providing flexibility to the capital management plan by delivering cashflow when required, rather than waiting until after the tax return is lodged each year.
About the InvestVictoria R&D Cash Flow Loan
The R&D Cash Flow Loans program provides low-interest loans of up to $4 million, for a period of between 12-28 months, to innovative Victorian SMEs that meet certain eligibility criteria including:
- The company must qualify for the Commonwealth Government’s R&D tax incentive plan
- The company must demonstrate compelling potential for R&D in Victoria, meeting at least two of the following scenarios:
- expected to lead to meaningful growth in R&D in Victoria
- expected to lead to meaningful job creation in Victoria
- expected to fund meaningful expansion of R&D operations into Victoria
- headquartered in Victoria.
This new low interest loan program offered by InvestVictoria has now closed for further applications.
The key terms of the facility are provided in the following table.
|Offer date||19 November 2021|
|Maximum Loan Amount||$1,968,000|
|Maturity Date||31 October 2023|
|Maximum first draw||$1,180,000|
|First draw date||10 business days from date of signing|
|Maximum second draw||$788,000|
|Second Draw date||Between 1 January and 28 February 2022|
|Forecast FY22 R&D Refund||$2,460,560|
|Loan to Value Ratio (LVR)||80%|
|Interest Rate||Treasury Corporation of Victoria – [TCV] 11AM AEST Rate, currently 0.265% p.a.|
Managing Director Glenn Fozard noted:
“This new loan provided by the Victorian State Government evidences our increasing involvement in Victoria’s economic growth via technology expansion, with the savings of over $100,000 in interest expense being able to be directed into further R&D.
“The combined value of R&D rebate surplus and new R&D loan facility delivers approximately $2.6m of cashflow for the current financial year and gives the Company greater depth in financial resources ahead of completion of our Bacchus Marsh project and the continued progress on the Latrobe Valley Hydrogen program.”
This announcement is authorised for release to the ASX by the Board.
For further information, please contact: