Charbone Hydrogen Corporation (TSX-V:CH, OTCQB:CHHYF) has closed a C$2.1 million (US$1.5 million) unsecured convertible debt tranche to support the construction of its first two green hydrogen production facilities in Sorel-Tracy, Quebec, and Detroit, Michigan.
The financing is part of a larger private placement of up to US$6 million in unsecured convertible notes. Charbone paid a 10% placement fee and issued five-year warrants equal to 10% of the offering at an exercise price of C$0.10 per share.
Charbone's Sorel-Tracy facility, set to begin operations in the coming weeks, will serve as the company's flagship site. The facility's pre-ordered electrolyzer is scheduled for delivery in the first quarter of 2025.
In Detroit, the company plans to finalize the development of a second green hydrogen project soon.
By 2030, Charbone aims to establish a network of 16 green hydrogen production facilities across North America.
“Our ability to attract this significant investment solidifies Charbone’s position as a first mover and leader in the North American green hydrogen market,” said CEO Dave Gagnon. “With production at Sorel-Tracy imminent, we are focused on generating near-term revenue, delivering value to shareholders, and advancing our vision of a modular green hydrogen network.”
The debt tranche comprises a 36-month term unsecured convertible note offering at a 12% annual interest rate. The note matures in December 2027 and is convertible into common shares under specific terms.
Charbone has already placed a US$1 million deposit for two 2.5 MW electrolyzers from a global manufacturer with over 17 years of experience, more than 300 units delivered, and an annual production capacity exceeding 5 GW.
Charbone’s growth strategy aligns with increasing demand for green hydrogen across North America. The company’s modular production model aims to support the transition to renewable energy while meeting industrial and stakeholder expectations.
Charbone is also advancing amendments to a prior C$1.2 million secured convertible debenture issuance, with final approval from the TSX Venture Exchange expected soon.
Charbone expects to close a second tranche of its private placement by early January 2025.