CHARBONE HYDROGEN CORPORATION has announced the successful closing of a $2.1 million CAD ($1.5M USD) unsecured convertible debt tranche. The funding will accelerate the development of CHARBONE’s first two green hydrogen production facilities in Sorel-Tracy, Quebec, and Detroit, Michigan, marking significant progress toward the company’s goal of establishing a 16-facility green hydrogen network across North America by 2030.
Strategic Projects Underway
The Sorel-Tracy facility, CHARBONE’s flagship project, is set to commence operations in the coming weeks, with the first electrolyzer delivery scheduled for Q1 2025. Meanwhile, plans for a second project near Detroit are advancing and will soon be confirmed. These projects represent CHARBONE’s commitment to modular green hydrogen production and decarbonization solutions for North America’s growing hydrogen market.
Details of the Convertible Note Offering
The initial tranche of financing includes US$1.5 million in gross proceeds through unsecured convertible notes. Key terms include:
- 36-month term maturing in December 2027.
- 12% annual interest rate, with interest accrued until maturity or conversion.
- Conversion options at a price of the greater of CA$0.10 per share or a 20% discount to market prices under specific conditions.
CHARBONE has allocated the funds for engineering, equipment, infrastructure, and project management for both facilities, placing US$1 million in deposits for two 2.5 MW electrolyzers. The electrolyzers are sourced from a globally recognized manufacturer with over 17 years of experience, 60+ patents, and a proven track record of delivering over 300 units worldwide.
CEO Remarks on Strategic Milestone
Dave Gagnon, CEO and Chairman of CHARBONE, highlighted the significance of this funding:
“This investment underscores CHARBONE’s position as a first mover in North America’s green hydrogen market. With operations at Sorel-Tracy imminent, we are focused on generating near-term revenue and advancing our vision of a modular hydrogen network. This funding ensures we can execute our aggressive growth strategy while meeting industry standards and stakeholder expectations.”
Investor Incentives
As part of the financing:
- A 10% placement fee was paid in cash (US$150,000).
- 1.5 million equity warrants were issued, exercisable at CA$0.10 per share for five years.
- Securities are subject to a restrictive legend for four months and one day per applicable regulations.
Future Plans and Outlook
CHARBONE intends to close a second tranche by January 3, 2025, as part of a larger private placement totaling up to US$6 million in unsecured convertible notes. The funds will further accelerate CHARBONE’s expansion, ensuring timely delivery of its innovative hydrogen production network to meet the rising demand for clean energy solutions in North America.
Pioneering the Green Hydrogen Revolution
With its modular approach to green hydrogen production and strategic investments in cutting-edge electrolyzer technology, CHARBONE is positioned to lead North America’s transition to sustainable energy while delivering substantial value to its shareholders.
