CHARBONE Corporation (TSXV: CH; OTCQB: CHHYF; FSE: K47), 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, which was initially announced on September 2, 2026. With this closing, RiverFort now holds an aggregate of $4.5 million in principal amount under the facility.
The convertible loan facility, first announced on April 29, 2026, provides up to $10 million in multiple drawdowns. The initial $3 million drawdown closed on April 29, 2026. The remaining $1.5 million from the second tranche may be advanced before the date falling six months from the first drawdown closing, subject to mutual agreement and customary conditions. An additional $4 million is available during the loan term under similar conditions. Each drawdown carries a three-year term, repayable over 18 months, with the second drawdown maturing on March 4, 2028. The loan bears interest at 12% per annum, payable in cash every four months, with default interest capped at 24%.
The $1.5 million drawdown is convertible, at RiverFort's option, 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, the principal is repayable in installments: 10% at the end of six months, 20% at the end of twelve months, and 70% at maturity. Any securities issued upon conversion will be subject to a four-month statutory hold period in Canada. Each whole warrant will be exercisable to acquire one additional common share at $0.236250 per share for 48 months, subject to a maximum of five years from the closing date. 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, with a 5% implementation fee paid in cash on each drawdown.
The proceeds from this drawdown are earmarked to accelerate development timelines of CHARBONE's 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, stated, "With this capital now closed, we are focused on execution to maintain our rapid pace of growth. The proceeds are being deployed directly toward our priorities at Sorel-Tracy and across our industrial gas platform, and we remain committed to delivering on the milestones we have communicated to our shareholders."
This financing is a key component of CHARBONE's broader strategy to scale its hydrogen production capacity 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 critical for high-precision manufacturing. By securing additional capital, CHARBONE aims to advance its modular, decentralized hydrogen production plants and integrated storage/distribution network, potentially addressing supply gaps for mid-tier industrial customers and supporting the transition to a lower-carbon economy.
The transaction underscores growing investor confidence in clean hydrogen infrastructure, as companies like CHARBONE position themselves to meet increasing demand for UHP gases. RiverFort, which has executed over US$15 billion in growth financing transactions, continues to support CHARBONE's expansion, reflecting a broader trend of private capital flowing into sustainable industrial gas projects.
CHARBONE is listed on the TSX Venture Exchange, OTC Markets, and Frankfurt Stock Exchange. For more information, visit www.charbone.com.
