CHARBONE Corporation (TSXV: CH; OTCQB: CHHYF; FSE: K47), a vertically integrated industrial gases company specializing in clean ultra-high purity (UHP) hydrogen and other strategic gases, 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 before the six-month anniversary of the initial drawdown. The initial $3 million drawdown closed on April 29, 2026, and with this latest advance, RiverFort holds an aggregate principal amount of $4.5 million under the facility.
The proceeds from this drawdown are earmarked to accelerate development timelines of CHARBONE's clean UHP hydrogen production plants, support capital expenditures and equipment deployment, and provide general working capital to boost near-term growth initiatives. According to Benoit Veilleux, CFO and Corporate Secretary, the capital will be deployed directly toward priorities at the Sorel-Tracy project and across the industrial gas platform, reflecting the company's commitment to delivering on communicated milestones.
The convertible loan, structured as a multi-drawdown facility with a total capacity of up to $10 million, is a key component of CHARBONE's strategy to scale hydrogen production capacity and expand its industrial gas platform across North America. The loan carries a 12% annual interest rate, payable in cash every four months, with a default interest rate capped at 24%. Each drawdown is repayable over 18 months, with maturity dates of October 29, 2027, for the initial drawdown and March 4, 2028, for this second tranche.
Conversion terms allow the lender to convert the principal into units consisting of 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 as 10% at six months, 20% at twelve months, and the remaining 70% at maturity. Each whole warrant issued in connection with this drawdown is exercisable to acquire one additional common share at $0.236250 per share for 48 months, subject to a maximum of five years from the original closing date. All securities issued upon conversion are subject to a statutory four-month hold period in Canada.
The loan is secured by a first-ranking hypothec over the universality of present and future movable property of Charbone Hydrogène Québec Inc. (Sorel-Tracy project) and Charbone Hydrogen Corporation. An implementation fee of 5% of the drawdown has been paid in cash at closing.
The company and RiverFort will continue to evaluate subsequent drawdowns under the facility, which may be advanced over time based on the company's capital requirements and mutual agreement. The remaining $1.5 million of the second tranche may be drawn before the six-month anniversary, and the additional $4 million under the total facility is available during the loan term, subject to customary conditions.
CHARBONE is advancing a network of modular, decentralized clean UHP hydrogen production plants across North America and selected international markets, serving sectors such as semiconductors, artificial intelligence, advanced pharmaceuticals, and aerospace. This financing is expected to play a pivotal role in maintaining the company's growth momentum and fulfilling its strategic objectives.
