CHARBONE Closes $10M Convertible Loan, Secures $3M Initial Tranche for Hydrogen Expansion

CHARBONE Corporation, a North American producer of clean ultra-high purity (UHP) hydrogen and industrial gases, announced the closing of a secured convertible loan facility with RiverFort Global Opportunities PCC Ltd. for up to $10 million. The initial drawdown of $3 million has been completed, marking the first tranche of the committed financing, as detailed in the company’s press release.

The loan is structured as a multi-drawdown secured facility, with additional tranches available over a three-year term. The second drawdown of up to $3 million may be advanced within six months, subject to mutual agreement, and the remaining $4 million is available under customary conditions. Each drawdown is repayable over 18 months, with the initial maturity date set for October 29, 2027.

Key terms include an interest rate of 12% per annum, payable in cash every four months, with default interest capped at 24%. The first drawdown is convertible at the lender’s option into units comprising one common share and 0.3 of a warrant at a conversion price of $0.15 per unit. If not converted, repayment is structured: 10% at six months, 20% at 12 months, and 70% at maturity. Warrants issued on conversion are exercisable at $0.195 per share for 48 months, subject to a four-month hold period in Canada. The loan is secured by a first-ranking hypothec over the movable property of Charbone Hydrogène Québec Inc. and Charbone Hydrogen Corporation. An implementation fee of 5% of the first drawdown was paid in cash, along with a non-refundable due diligence fee.

Proceeds from the initial drawdown are expected to accelerate development timelines of CHARBONE’s clean UHP hydrogen production facilities, support capital expenditures and equipment deployment, and provide general working capital for near-term growth initiatives. This financing is a key component of the company’s broader strategy to scale hydrogen production capacity and expand its industrial gas platform across North America.

Benoit Veilleux, CHARBONE’s Chief Financial Officer and Corporate Secretary, stated, ‘This closing represents an important milestone for CHARBONE as we continue to execute on our growth strategy. The partnership with RiverFort provides flexible, staged capital that aligns with our development timeline and supports the acceleration of our hydrogen infrastructure buildout.’

CHARBONE is focused on serving customers in semiconductors, artificial intelligence and data centers, advanced pharmaceuticals, and aerospace and defense technologies, where UHP gases are critical for high-precision manufacturing. The company’s modular, decentralized approach aims to address supply gaps for mid-tier industrial customers. For more information, visit www.charbone.com.

The company is listed on the TSX Venture Exchange under the symbol CH, on the OTC Markets under CHHYF, and on the Frankfurt Stock Exchange under K47. Forward-looking statements in the release are subject to risks and uncertainties detailed in the company’s management discussion and analysis available on SEDAR+.

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