CHARBONE Corporation, a North American producer and distributor of clean ultra high purity hydrogen and industrial gases, announced modifications to its secured convertible loan agreement with Riverfort Global Opportunities PCC Ltd. The loan, which provides up to $10 million in financing, now features an increased first drawdown amount of $3 million, up from the previously announced $2.15 million. The company also confirmed it has completed the full conversion of the September 2025 Convertible Replacement Debentures, totaling $2.05 million.
Under the revised terms, subsequent drawdowns after the first will be convertible at the lender's option 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 volume-weighted average prices (VWAPs) immediately 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 provisions have been capped at 24% per annum on any overdue amounts, ensuring the total return under each drawdown does not exceed that rate.
The first drawdown, once definitive agreements are signed and TSX Venture Exchange approval is obtained, will be 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 for one additional common share at $0.195 for 48 months, subject to a maximum of five years from the closing date. The loan carries a 12% annual interest rate payable in cash every four months. Repayment terms for the first drawdown include 10% at six months, 20% at 12 months, and 70% at the 18-month maturity date. An implementation fee of 5% of the first drawdown will be paid in cash upon closing, and a non-refundable $20,000 due diligence fee has already been disbursed.
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. Securities issued upon conversion will be subject to a statutory four-month hold period in Canada.
This financing is critical for CHARBONE as it advances its flagship Sorel-Tracy clean hydrogen production project in Quebec and expands its industrial gas distribution platform. The increased first drawdown provides additional upfront capital to support development activities. The company's modular approach to hydrogen production aims to reduce risk and enhance scalability, while partnerships in helium and other specialty gases diversify revenue streams. By providing accessible, decentralized clean hydrogen and specialty gas solutions, CHARBONE supports the global transition to a lower-carbon economy and serves underserved industrial gas customers.
For more information, visit www.charbone.com. The company's filings are available on SEDAR+ at www.sedarplus.ca.
