CORRECTED: CHARBONE Hydrogen is Acquiring Hydrogen Production Assets and Closing a First Tranche of $1M Private Placement Financing

Executive Summary

• CHARBONE Hydrogen Corporation signed an Asset Purchase Agreement to acquire operational hydrogen production and refuelling equipment in Quebec, which will be repurposed for its flagship Sorel-Tracy facility.
• The transaction includes a $1 million consideration paid partly in stock and partly in cash tranches, aiming to accelerate production to early Q4 2025 while preserving cash.
• Concurrently, the company announced the initial closing of a $1 million non-brokered private placement, with proceeds allocated to the equipment acquisition, re-installation, and working capital.

Key Details

• Asset Acquisition: Signed Asset Purchase Agreement on September 4, 2025, for operational hydrogen production and refuelling equipment currently in use in Quebec.
• Strategic Impact: Equipment will be dismantled, repurposed, and relocated to the Sorel-Tracy facility to fast-track Phase 1 commissioning and enable first industrial Ultra High Purity (UHP) hydrogen sales in Q4 2025.
• Transaction Consideration: Total purchase price of $1 million.
  • Payment structure: $1 million in CHARBONE stock (issued at market price on effective date plus cash balance) payable in 3 tranches (one-third on effective date, remaining over two years).
  • Goal: Preserve cash for growth.
• Private Placement (Equity Offering):
  • Total size: $1 million non-brokered private placement.
  • Initial Tranche: $0.5 million secured; closing already occurred.
  • Second Tranche: $0.5 million expected to close by October 15, 2025.
  • Unit Price: $0.06 per Unit.
  • Units Issued (Initial): 7,699,666 Units.
  • Warrant Terms: Each Unit includes one common share and one warrant. Warrants allow purchase of one additional common share at $0.08 exercise price for 24 months post-closing.
  • Finder’s Fees: $17,222 cash fee and 287,040 finder’s warrants issued to registered dealers.
  • Use of Proceeds: Purchase of operating hydrogen equipment, re-installation at Sorel-Tracy, infrastructure development, and general working capital.
• Operational Status:
  • Grid connection completed; Hydro-Québec installed energy meter on July 22 and completed interconnection on August 13.
  • Town of Sorel-Tracy completed water connection to main system.
  • Site now has power and water required for hydrogen production.
• Regulatory/Exchange Conditions: Closing subject to TSX Venture Exchange approval and customary conditions. Securities subject to 4-month and 1-day statutory hold period.

Notable Quotes

• “Investors have waited for Sorel-Tracy to move from development to revenue,” said Dave Gagnon, President and CEO of CHARBONE. “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. This acquisition positions us to deliver green and high purity hydrogen (UHP) to our industrial customers quicker, and with best-in-class operating equipment.”