Charbone Hydrogen Corporation (TSX-V:CH, OTCQB:CHHYF) said Wednesday it has completed the issue of $2.05 million in convertible replacement debentures, giving the Quebec-based company more breathing room to fund new equipment purchases.
The financing, approved by the TSX Venture Exchange, replaces earlier secured convertible debentures due in late September and October of this year.
The new instruments will mature on September 30 next year, carry a 12% annual interest rate and allow conversion into shares at $0.07 each. That compares with the previous conversion price of $0.10.
Convertible debentures are a form of debt that pays interest but can also be turned into equity at a set price. They are often used by smaller companies that need access to capital but want to keep flexibility for investors to take shares if the business grows.
The latest agreement rolls together $1.75 million in existing debentures with a further $303,634 of fresh cash. Charbone said the additional funds will help cover the acquisition of hydrogen production equipment, a purchase first outlined in early September.
The company expects to close the equipment deal in the coming days, which will mark the start of dismantling and installation.
Charbone, listed in Toronto, Frankfurt and on the U.S. over-the-counter market, is focused on building a modular network of facilities to produce “green” hydrogen, a clean-burning fuel made using renewable energy.
The group also distributes industrial gases such as helium, which it says allows it to generate revenue without building costly new plants.