Charbone Hydrogen Corporation (TSX-V:CH, OTCQB:CHHYF) announced it has signed an Asset Purchase Agreement to acquire operational hydrogen production and refueling equipment in Québec.
The strategic acquisition will allow the company to fast-track the commissioning of phase one of its flagship Sorel-Tracy facility and begin producing and delivering its first ultra-high purity (UHP) hydrogen sales in the upcoming quarter, Charbone said on Thursday.
The equipment, currently in use, will be dismantled, repurposed, and relocated to the Sorel-Tracy site.
Charbone said the move reduces installation costs compared to purchasing new equipment and supports production by early fourth quarter 2025.
The company also highlighted recent operational progress at Sorel-Tracy, including completion of the grid connection.
Hydro-Québec installed the energy meter on July 22 and finalized the interconnection on August 13, while the Town of Sorel-Tracy connected the site to its main water system, providing the two elements needed for hydrogen production.
Dave Gagnon, Charbone CEO, said that investors have been waiting for Sorel-Tracy to move from development to revenue.
“By repurposing proven equipment — at a lower cost of a new build — and structuring the deal to preserve cash, we’re entering execution mode with strong capital backing and minimal dilution,” Gagnon said.
“This acquisition positions us to deliver green and high-purity hydrogen to our industrial customers quicker, and with best-in-class operating equipment.”
The transaction involves a mix of equity and cash: $1 million in Charbone stock at market price on the TSX Venture Exchange, plus a cash balance payable in three installments over two years.
Charbone noted that the transaction follows its signing of a non-dilutive US$50 million construction capital facility announced on May 1 and June 4, 2025.
While the facility is earmarked for broader project financing rather than this equipment purchase, the company said it demonstrates strengthened capital position and capacity to scale its development plan.
Additionally, Charbone announced sequential closings of a $1 million non-brokered private placement.
The first tranche, totaling $0.5 million, has closed, with a second tranche expected by October 15, 2025. The proceeds will go toward the equipment purchase, reinstallation at Sorel-Tracy, infrastructure development, and working capital.
The first tranche involved the issuance of 7,699,666 units priced at $0.06 each, consisting of one common share and one warrant. Each warrant allows the holder to purchase one additional share at $0.08 within 24 months.
Shares of Charbone gained 18% on Thursday afternoon following the update.