CHARBONE Corporation, a vertically integrated industrial gases company, announced the closing of a $1.5 million drawdown under its secured convertible loan facility with RiverFort Global Opportunities PCC Ltd. This drawdown represents half of the second tranche of up to $3 million available to the company, with the remaining $1.5 million potentially advanced within six months of the initial drawdown closing. The total facility is structured for up to $10 million in multiple drawdowns.
The company intends to use the proceeds to accelerate development timelines of its clean ultra-high purity (UHP) hydrogen production plants, support capital expenditures and equipment deployment, and provide general working capital for near-term growth initiatives. Benoit Veilleux, CFO and Corporate Secretary, emphasized that the funds will be deployed directly toward priorities at the Sorel-Tracy project and across their industrial gas platform.
The drawdown carries a 12% annual interest rate, payable in cash every four months, with default interest capped at 24%. The loan is convertible into units comprising one common share and 0.3 of a warrant at a conversion price of $0.196875 per unit. If not converted earlier, repayment is scheduled: 10% at six months, 20% at twelve months, and 70% at maturity in 18 months. Warrants issued are exercisable at $0.236250 per share for 48 months. The securities are subject to a statutory four-month hold period in Canada.
As security, the loan holds a first-ranking hypothec over the universality of present and future movable property of Charbone Hydrogène Québec Inc. and Charbone Hydrogen Corporation. An implementation fee of 5% of drawdowns has been paid in cash. With this closing, RiverFort holds an aggregate of $4.5 million in principal under the convertible loan.
This financing is crucial for CHARBONE's strategy to scale hydrogen production and expand its industrial gas platform across North America. The company serves sectors including semiconductors, artificial intelligence and data centers, advanced pharmaceuticals, and aerospace and defense, where UHP gases are essential. Its modular, decentralized approach aims to provide reliable supply of UHP gases to mid-tier customers.
The company has been advancing a network of clean UHP hydrogen production plants and is committed to supporting the global transition to a lower-carbon economy. The additional capital will help maintain its rapid growth pace and meet communicated milestones.
For more information about CHARBONE and its operations, visit www.charbone.com.
