CHARBONE Corporation (TSXV: CH; OTCQB: CHHYF; FSE: K47), a vertically integrated industrial gases company, has closed a $1.5 million drawdown under its secured convertible loan facility with RiverFort Global Opportunities PCC Ltd. The drawdown is the second under the facility and forms part of a larger $3 million tranche, bringing the total principal amount owed to RiverFort to $4.5 million.

The company intends to allocate the proceeds to accelerating the development timelines of its clean ultra-high purity (UHP) hydrogen production plants, supporting capital expenditures and equipment deployment, and providing general working capital. Benoit Veilleux, CFO and Corporate Secretary, said the funds are being deployed directly toward priorities at Sorel-Tracy and across the industrial gas platform.

The convertible loan, first announced on April 29, 2026, provides up to $10 million in secured funding structured across multiple drawdowns. The initial $3 million drawdown closed on the announcement date. The second drawdown, of up to $3 million, is now partially drawn, with the remaining $1.5 million available under certain conditions. A further $4 million is accessible over the loan term, subject to mutual agreement. For a company of CHARBONE's size, staged drawdowns of this kind allow capital to be raised in step with project milestones rather than through a single large financing, though convertible structures can also result in share dilution if lenders elect to convert.

The loan carries a 12% annual interest rate, payable in cash every four months, with a default interest cap of 24%. The $1.5 million drawn is convertible into units consisting of one common share and 0.3 of a warrant, at a conversion price of $0.196875 per unit. If the amount is not converted, repayment is scheduled at 10% after six months, 20% after twelve months, and the remaining 70% at maturity, which is set for March 4, 2028. The terms reflect the financing environment facing early-stage hydrogen developers, where capital is generally costlier than for conventional energy projects and lenders frequently secure repayment against specific corporate assets.

Each whole warrant issued in connection with the drawdown entitles the holder to purchase one additional common share at $0.236250 per share for 48 months, subject to a maximum of five years from the original closing date. The loan is secured by a first-ranking hypothec over the movable property of Charbone Hydrogène Québec Inc. and Charbone Hydrogen Corporation. An implementation fee of 5% of drawdowns has been paid in cash.

The financing forms a key component of CHARBONE's strategy to scale hydrogen production and expand its industrial gas platform across North America. The company focuses on UHP hydrogen and other strategic gases for sectors including semiconductors, data centers, pharmaceuticals, and aerospace, and its modular, decentralized approach is designed to serve mid-tier customers reliably. UHP hydrogen is a specified feedstock grade in industries where impurity tolerances are extremely tight, and demand from semiconductor fabrication and data center cooling has made localized supply a growing consideration for industrial gas buyers. CHARBONE's decentralized model positions it as a smaller regional alternative to the large industrial gas majors that dominate the sector.

RiverFort provides debt and equity capital to high-growth companies, operating globally with offices in London, Australia, and Gibraltar, and has executed over US$15 billion in growth financing transactions.

CHARBONE is listed on the TSX Venture Exchange, OTC Markets, and the Frankfurt Stock Exchange. The company continues to evaluate subsequent drawdowns under the loan facility in line with its capital requirements.

Source: Citybuzz