CHARBONE CORPORATION (TSXV: CH; OTCQB: CHHYF; FSE: K47), a North American producer and distributor of clean Ultra High Purity hydrogen and industrial gases, has announced an increase in the first drawdown of its secured convertible loan from Riverfort Global Opportunities PCC Ltd from $2.15 million to $3 million. The loan, which provides up to $10 million in financing, is designed to support the company's flagship Sorel-Tracy project in Quebec and its growing industrial gas distribution platform.
The modified terms include a higher initial drawdown and changes to the conversion structure for subsequent drawdowns. Under the new terms, any subsequent drawdowns will be convertible into common shares at a conversion price set at a 25% premium to the reference price. The reference price is defined as the greater of: the average of the five daily VWAPs of the shares 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, is capped at 24% per annum on the outstanding principal balance.
The first drawdown, now set at $3 million, remains convertible into units consisting of one common share and 0.3 of a warrant, at a conversion price of $0.15 per unit. Each whole warrant will be exercisable to acquire one additional common share at $0.195 per share for 48 months, subject to a maximum of five years from the closing date. The loan carries 12% annual interest payable in cash every four months. If not converted earlier, repayment terms require 10% of the first drawdown at six months, 20% at 12 months, and 70% at maturity in 18 months. An implementation fee of 5% of the first drawdown will be paid in cash at 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 all present and future movable property of Charbone Hydrogène Quebec Inc. (Sorel-Tracy project) and Charbone Hydrogen Corporation. The closing process is progressing, subject to definitive agreements and TSX Venture Exchange approval. Securities issued upon conversion will be subject to a four-month hold period in Canada.
Additionally, CHARBONE announced the full conversion of the September 2025 Convertible Replacement Debentures, issued for $2.05 million. This development strengthens the company's financial position as it advances its network of clean hydrogen production facilities. CHARBONE's integrated model focuses on reducing risk, enhancing scalability, and enabling diversified revenue streams through partnerships in helium and other specialty gases, supporting underserved industrial gas customers and the transition to a localized clean energy economy.
For more information, visit charbone.com.
