CHARBONE Corporation (TSXV: CH; OTCQB: CHHYF; FSE: K47), a North American producer and distributor of clean Ultra High Purity (UHP) hydrogen and industrial gases, announced today that it has modified the terms of its secured convertible loan agreement with Riverfort Global Opportunities PCC Ltd (RiverFort). The first drawdown amount has been increased from $2.15 million to $3 million, as the closing process progresses on the facility that provides for up to $10 million in financing.
The company, which is developing a network of clean hydrogen production facilities starting with its flagship Sorel-Tracy project in Quebec, stated that subsequent drawdowns will be convertible into common shares at a conversion price representing a 25% premium to a reference price. The reference price is defined as the greater of the average of the five daily volume-weighted average prices (VWAPs) immediately preceding the drawdown date, or a 5% premium to the market price at the time of the press release announcing the drawdown. Default interest, if applicable, will be capped at 24% per annum.
The first drawdown, which will become available upon signing definitive agreements and satisfying closing conditions including TSX Venture Exchange approval, retains previously announced terms. It is convertible into units comprising one common share and 0.3 of a warrant at a conversion price of $0.15 per unit. Each whole warrant will be exercisable for one additional common share at $0.195 for 48 months, subject to a maximum of five years from closing. The loan carries 12% annual interest payable in cash every four months. Repayment terms specify that 10% of the first drawdown is due at six months, 20% at 12 months, and 70% at maturity in 18 months, unless converted earlier. An implementation fee of 5% of the first drawdown will be paid in cash on closing, and a non-refundable $20,000 due diligence fee has already been paid. The loan is secured by a first-ranking hypothec over the universality of present and future movable property of Charbone Hydrogène Quebec Inc. and Charbone Hydrogen Corporation.
In a separate development, CHARBONE announced the completion of the full conversion of the September 2025 Convertible Replacement Debentures, issued on October 1, 2025, for $2.05 million.
This financing is crucial for CHARBONE as it advances its modular clean hydrogen production facilities. The company's integrated model aims to reduce risk, enhance scalability, and enable diversified revenue streams through partnerships in helium and other specialty gases. By securing this funding, CHARBONE is positioned to support the global transition to a lower-carbon economy by providing accessible, decentralized clean hydrogen solutions to underserved industrial gas customers.
