Investor Note — Reliability, Uptime and Insurability

Why Carbotura Is Not
a Project-Risk Investment

A facility that is manufactured, designed to be validated at the factory and planned to be insured as a known asset carries a different risk profile from one built in the field.

This is the two-minute version. The full argument, with the engineering behind it, is the EPC Primer.

FAT Performance known at the factory vs. at commercial operation
2.5% Manufacturing tolerance to pass independent validation partner signs off
N+1 Line capacity installed from day one vs. redundancy at owner's cost, if at all
12–24 mo Permit issuance to commercial operation vs. 42–78 months EPC
01

The risk you already know

If you have invested in infrastructure, you know the pattern. A plant is engineered for its site, built in the field by an EPC contractor, and nobody knows how it really performs until commercial operation. Cost overruns, startup delays and performance shortfalls all land in that window.

Lenders and insurers price that uncertainty in, and equity absorbs whatever they don’t cover. That is project risk.

Carbotura’s facilities carry a different risk profile, because of how they are made. This note explains why, in terms of the three things that matter most to an asset owner: reliability, uptime and insurability.

02

A plant that is manufactured

Carbotura uses Design for Manufacturability (DFM). Our process modules are manufactured products, built in a factory to one production specification, the same way every time.

Before any module reaches a site, it is designed to be assembled, integration-tested and certified by our Authorized Systems Integrator (ASI), with an independent validation partner present at factory and site acceptance. Manufacturing of the first module begins when the Cornerstone round closes. Every module must perform within a 2.5% manufacturing tolerance of its specification. No module has been manufactured, tested or operated yet.

To add capacity, we add identical modules. A standard 400 tons-per-day deployment is four 100 tons-per-day modules. Nothing gets redesigned or scaled up.

The core distinction

Every component in the module is established, commercial-grade equipment. What is new is how it is integrated, and that is designed to be proven at the factory.

Other industries already build this way

Manufacturing a capital asset instead of constructing it is not a new idea. It is how several mature industries already deliver plant, and how their lenders and insurers already underwrite it.

Grid-scale battery storage A storage site is a row of identical, factory-assembled and factory-tested units set on pads. Capacity is a count of units, not a bigger design. Investors already finance these sites as a fleet of products, which is exactly how a 400 tons-per-day deployment of four identical modules should be read.
Industrial gas plants Air separation and hydrogen plants moved from bespoke, site-designed builds to a catalog of standardized, skid-built sizes. The industry made that move because bespoke plants were slower to deliver, costlier to build and harder to guarantee. The same logic applies to every process module we ship.
Wind turbines A turbine is a serialized product with a type certificate and a production record. Lenders underwrite a wind fleet on the type’s performance history, not on each site’s construction, and insurers write cover on the asset class. That is the model for how our frames and modules are planned to be insured as known, repeated assets.
03

Reliability, uptime, insurability

Reliability In a project, you learn how the plant fails by watching it run. With our modules, failure modes are analyzed once at the specification level, and every module built after that inherits the work. Operating data from every deployed module flows back into the specification; a fix found at one site improves every module in the fleet. One party is accountable: the Master Authorized Systems Integrator (MASI) owns acceptance testing and spares and gives the full-line warranty, so you do not sort out blame among a contractor, its subcontractors and a dozen equipment vendors.
Uptime Every building is designed with N+1 line capacity installed from day one. If a line or frame goes down, the remaining lines carry the building’s named throughput. When something breaks in a project plant, crews diagnose a custom system on site and often wait on custom parts. When something breaks in ours, the design calls for the ASI to swap a standardized module from fleet spares — a replacement cycle, measured against a rebuild cycle. Maintenance is the same at every site, and each module runs against its known specification, so drift shows up early and maintenance gets scheduled before it becomes an outage.
Insurability A project needs a full insurance wrap — builder’s risk, delay-in-startup, performance bonds and liquidated damages — priced on a plant with no operating history. We plan to insure frames and modules as serialized manufactured assets. No policy is bound today. Each one is designed to have a production record and acceptance-test data behind it, so property and equipment-breakdown cover can be written on a known, repeated asset class; underwriting is planned once for the class and applied to every unit. Performance risk is designed to sit with the MASI’s full-line guarantee and warranty, because each module is designed to ship already validated. No ASI agreement is executed today. Losses are smaller and shorter, too: with redundant lines and swappable modules, a claim means replacing one module while the rest keep running.

The biggest shift is timing. A project’s performance is known at commercial operation. Ours is designed to be known at the factory, before the module ships to the site.

04

Side by side

Dimension Typical EPC project Carbotura DFM
Performance known At commercial operation Designed to be known at the factory, within 2.5% tolerance
Adding capacity Design and build a bigger plant Add identical modules built to the same specification
Accountability Contractor, subs and vendors One MASI with a single managed warranty package
Redundancy Optional, at owner’s cost N+1 line capacity by design
Major repair Field diagnosis, custom parts Designed for a standard-module swap from spares
Insurance Full wrap on an unproven plant Planned: serialized asset cover, moving to guarantee and warranty
Timeline Typically 42–78 months to commercial operation 12–24 months from permit issuance, always as a range
05

What this means for you

You are underwriting a manufactured asset whose performance is designed to be validated at the factory before it ships. The first module is manufactured after this round closes. Site integration still has to be done, and site integration testing exists to close it out. The process risk that defines a project is designed to be retired at the factory.

Deployments run 12 to 24 months from permit issuance to commercial operation.

Questions worth asking us in diligence

What does factory and site acceptance testing cover, and who signs off? What do the guarantee and warranty cover? How are spares held, and how fast is a module swap? How is frame and module insurance structured? The short answers are below; we will walk through any of them one-on-one.

What does factory and site acceptance testing cover, and who signs off?

Testing runs in three stages. Factory Acceptance Testing (FAT) checks the assembled, integrated module against its production specification before it ships. Site Acceptance Testing (SAT) confirms it arrived and installed to that same specification. Site Integration Testing (SIT) proves it works with the site’s own systems. The ASI runs all three and certifies the module. An independent Authorized Validation Partner must be present at FAT and SAT and signs off separately. A module has to perform within 2.5% of its specification to pass.

What do the guarantee and warranty cover?

The Master Authorized Systems Integrator (MASI) is the single party that gives the full-line warranty and performance guarantees, built from the ASI module warranties and the component warranties beneath them, as one managed package. If a module doesn’t perform, you go to one party. This is the planned structure; no MASI or ASI agreement is executed today. We go through the specific guarantee and warranty terms under NDA in diligence.

How are spares held, and how fast is a module swap?

Spares are part of the ASI’s scope. Every module is built to the same specification, so the whole fleet uses one set of spares. That makes a repair a swap, with no custom parts to source. While a module is out, the building’s N+1 line capacity carries its named throughput. We share the spares plan and target swap times in diligence.

How is frame and module insurance structured?

Frames and modules are planned to be insured as serialized manufactured assets under property and equipment-breakdown cover; no policy is bound today. Each one is designed to come with its production record and acceptance-test data. Performance risk is designed to sit with the full-line guarantee and warranty of the Master Authorized Systems Integrator (MASI) instead of a construction-style performance wrap; no ASI agreement is executed today. We walk through current carrier terms and coverage limits one-on-one.

Disclaimer: This note describes Carbotura’s deployment model and is provided for information. It is not an offer to sell or a solicitation of an offer to buy any security. Guarantee, warranty, spares and insurance terms are shared in diligence and are subject to agreements not yet executed.