CHARBONE CORPORATION (TSXV: CH; OTCQB: CHHYF; FSE: K47), a North American producer and distributor of clean Ultra High Purity (UHP) hydrogen and strategic industrial gases, announced modifications to its secured convertible loan agreement with Riverfort Global Opportunities PCC Ltd. The loan, initially announced on March 31, 2026, provides up to $10 million in financing. The first drawdown amount has been increased from $2.15 million to $3 million, signaling enhanced immediate capital access for the company.
The modified terms include changes to subsequent drawdowns, which will be convertible at the lender's option into common shares at a conversion price that is a 25% premium to a reference price. The reference price is defined as the greater of the average of the five daily VWAPs preceding the drawdown date or a 5% premium to the market price at the time of the press release announcing the drawdown. Additionally, default interest, if applicable, is capped at 24% per annum on the outstanding principal balance for any amount not paid when due.
The first drawdown retains its original conversion terms: convertible into units comprising one common share and 0.3 of a warrant at a conversion price of $0.15 per unit. Whole warrants are exercisable at $0.195 per share 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 require 10% of the first drawdown at six months, 20% at 12 months, and the remaining 70% at maturity in 18 months. A 5% implementation fee on the first drawdown is payable 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. (for the Sorel-Tracy project) and Charbone Hydrogen Corporation. The securities issued upon conversion are subject to a statutory four-month hold period in Canada.
CHARBONE also announced the completion of the full conversion of the September 2025 Convertible Replacement Debentures, originally issued on October 1, 2025, for $2.05 million. This development underscores the company's ongoing efforts to strengthen its financial position as it advances its clean hydrogen production projects.
The importance of this financing lies in its potential to accelerate CHARBONE's development of a network of clean hydrogen production facilities across North America, starting with its flagship Sorel-Tracy project in Quebec. By securing up to $10 million, the company can scale its modular approach to hydrogen production, reduce risk, and enhance scalability. The increased first drawdown provides immediate liquidity, which is critical for capital-intensive clean energy projects. For the industry, this signals continued investor interest in green hydrogen, a key component of the global transition to a lower-carbon economy. The modified terms, including a conversion premium, reflect investor confidence in CHARBONE's growth prospects while protecting their downside.
For readers, this news matters because it highlights the financial mechanisms driving the clean energy transition. CHARBONE's integrated model, which includes partnerships in helium and other specialty gases, aims to support underserved industrial gas customers and accelerate localized clean energy adoption. The successful conversion of previous debentures further demonstrates the company's ability to manage its capital structure effectively.
Forward-looking statements in the release reflect management's expectations but are subject to risks and uncertainties, including those outlined in the company's Management's Discussion & Analysis available on SEDAR+. CHARBONE undertakes no obligation to update forward-looking information except as required by securities legislation.
