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 from Harnois in Quebec, which will be repurposed for the company's flagship Sorel-Tracy facility.
• The acquisition accelerates the timeline for Phase 1 commissioning, targeting first industrial Ultra High Purity (UHP) hydrogen sales in Q4 2025, leveraging completed grid and water connections.
• Concurrently, the company announced the initial closing of a $1 million non-brokered private placement, issuing units at $0.06 per unit to fund the equipment purchase, re-installation, and working capital.

Key Details

• Asset Acquisition Terms:
  • Target: Operational hydrogen production and refuelling equipment currently in use by Harnois.
  • Consideration: $1,000,000 total value, structured as stock and cash.
  • Equity Component: $1,000,000 paid in CHARBONE stock at the market price on the effective date.
  • Cash Component: Cash balance payable in three tranches; one-third on the effective date, with the remainder paid over two years.
  • Strategic Benefit: Repurposing proven equipment reduces installation costs and accelerates production timeline to early Q4 2025.
• Private Placement Details:
  • Total Raise: $1,000,000 (non-brokered).
  • Initial Closing: $500,000 secured.
  • Second Tranche: Remaining $500,000 expected to close by October 15, 2025.
  • 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 share at an exercise price of $0.08 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 equipment from Harnois, re-installation at Sorel-Tracy, infrastructure development, and general working capital.
• Operational Updates (Sorel-Tracy Facility):
  • Grid Connection: Completed; Hydro-Québec installed the energy meter on July 22 and completed interconnection on August 13.
  • Water Connection: Completed by the Town of Sorel-Tracy, providing the necessary water supply for hydrogen production.
  • Timeline: Equipment to be dismantled, repurposed, and relocated to Sorel-Tracy to fast-track Phase 1 commissioning.
• Capital Context:
  • Transaction follows the signing of a non-dilutive USD 50 million construction capital facility announced in May and June 2025, demonstrating strengthened capital position for broader project financing.

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.”