CHARBONE Corporation, a vertically integrated industrial gases company focused on ultra-high purity (UHP) hydrogen, has announced the closing of a $1.5 million drawdown from RiverFort Global Opportunities PCC Ltd. This marks half of the second drawdown tranche under a secured convertible loan facility of up to $10 million, originally announced in April. The funds are earmarked to accelerate the company's growth, particularly in developing its network of clean hydrogen production plants and expanding its industrial gas platform across North America.
The transaction is part of a structured facility that CHARBONE can access over a three-year term, with each drawdown repayable over 18 months. The latest drawdown carries a 12% annual interest rate, payable quarterly, and is convertible into units comprising one common share and 0.3 of a warrant at a price of $0.196875 per unit. If not converted earlier, the principal is scheduled for repayment in installments: 10% at six months, 20% at twelve months, and the remaining 70% at maturity. Additionally, each whole warrant issued allows the holder to purchase one common share at $0.236250 for up to 48 months.
The proceeds from this drawdown are expected to be used to accelerate development timelines of CHARBONE's clean UHP hydrogen production plants, support capital expenditures and equipment deployment, and provide general working capital to fund near-term growth initiatives. Benoit Veilleux, CFO and Corporate Secretary of CHARBONE, emphasized that the capital will be deployed directly toward priorities at the Sorel-Tracy project and across their industrial gas platform, ensuring the company meets its communicated milestones.
This funding is crucial for CHARBONE as it positions itself to serve high-demand sectors such as semiconductors, artificial intelligence, data centers, advanced pharmaceuticals, and aerospace. The company's modular and decentralized approach to hydrogen production, combined with integrated storage and distribution for all UHP gases, aims to address supply gaps for mid-tier customers who often struggle to source reliable regional supplies. By localizing clean energy production, CHARBONE also contributes to the global transition to a lower-carbon economy.
RiverFort, the lender, provides debt and equity capital to high-growth companies and has executed over US$15 billion in growth financing transactions. The partnership with CHARBONE reflects confidence in the company's strategic direction and the growing demand for clean hydrogen. With an aggregate of $4.5 million now drawn under the facility, CHARBONE and RiverFort will continue to evaluate further drawdowns, aligning with CHARBONE's capital requirements as it scales operations.
As CHARBONE accelerates its growth, the successful closing of this drawdown not only provides immediate capital but also underscores the company's ability to secure financing in a competitive market. The funds will be instrumental in advancing its production capabilities and maintaining its rapid pace of development, ultimately strengthening its position in the emerging clean hydrogen economy.
