CHARBONE Hydrogen: Fueling Growth with US$6 Million Convertible Notes

CHARBONE Hydrogen Corporation, North America's only publicly traded pure-play green hydrogen company, has secured an initial tranche of US$6 million in convertible notes. This strategic funding will accelerate the construction of two green hydrogen production facilities in Sorel-Tracy, Quebec, and Detroit, Michigan, including the procurement of two 2.5 MW electrolyzers. With operations at Sorel-Tracy imminent, CHARBONE is poised to generate near-term revenue and solidify its position as a leader in the North American green hydrogen market.

The initial tranche of US$1.5 million (CA$2.1M) in unsecured convertible notes, led by the company's US banker, matures in December 2027 or can be converted earlier. The 36-month term comes with an annual interest rate of 12%, offering investors a steady return while providing the potential for significant upside through early conversion. If converted, the principal amount can be exchanged for common shares at a price per share representing a discount of up to 20%, or at a minimum of US$0.10 per share.

CHARBONE's aggressive growth strategy is evident in its plans to build and deliver a network of sixteen green hydrogen production facilities across North America by 2030. By securing this funding, the company demonstrates its ability to attract investors and solidify its position in the growing green hydrogen market. As CHARBONE executes its plans and meets stakeholder expectations, it is well-positioned to attract more investors and partners seeking to capitalize on the increasing demand for green hydrogen.



The 12% annual interest rate provides investors with a stable return, while the potential conversion of notes into common shares at a discount offers additional upside. Assuming a conservative stock price increase of 10% within three years, investors could realize a return of approximately 28% from interest and conversion. This potential, combined with the company's robust management and enduring business model, suggests that CHARBONE could offer attractive returns on investment.

However, the risk-return profile of investing in CHARBONE is influenced by the company's growth prospects and the broader hydrogen market trends. As a first-mover in the North American green hydrogen market, CHARBONE faces potential technological, regulatory, and market adoption hurdles. To mitigate these risks, investors should consider the company's management team, strategic partnerships, and its ability to execute on its growth plans. Furthermore, the global shift towards clean energy and the increasing demand for hydrogen as a low-carbon fuel source could enhance CHARBONE's long-term prospects. Therefore, while there are risks associated with investing in CHARBONE, the potential returns could be substantial given the company's unique position in the rapidly growing hydrogen market.