Technology — The Regenesis™ Protocol, OmniCrude™ & Total Material Conversion

Total Material Conversion is the collective outcome of the Circular Advantage program and the four Carbotura Protocols operating in sequence. TMC is designed to convert virtually all incoming manufacturing feedstock into saleable manufactured materials, recovered energy, and ultrapure water — with near-zero residual, near-zero emissions, and near-zero discharge.

The Four Carbotura Protocols

OmniCrude™ — The Intermediate State

OmniCrude™ is Carbotura's branded designation for the molecularly disintegrated intermediate state produced by the Regenesis™ Protocol. OmniCrude™ is not the feedstock — it is what feedstock becomes after the Regenesis™ process breaks it to its molecular level, liberating the carbon, hydrogen, metals, rare earth elements, and other elemental constituents locked within the original material.

OmniCrude™ is the Carbotura equivalent of crude oil leaving the wellhead: an elementally rich intermediate state ready for selective refining into finished manufactured products. Regenesis MAX™ then refines OmniCrude™ into the full portfolio of manufactured materials. In distributed deployment architectures, OmniCrude™ becomes a transportable intermediate commodity — OmniCrude™ Haulers transport it from Regenesis™ Nodes to central Regenesis MAX™ refining facilities, completing the refinery analogy architecturally.

The No-Combustion Distinction

The Recyclotron™ uses Microwave Catalytic Reforming in an anoxic environment — no oxygen, no flame, no oxidation reaction, no combustion air supply, no stack, no ash, and no combustion byproducts. This is a fundamental process distinction from all combustion-based thermal processing, including waste-to-energy and pyrolysis. The regulatory frameworks governing combustion-based facilities were written to manage the environmental consequences of combustion. Those consequences do not exist in Carbotura's operations, and those regulatory frameworks do not apply.

The Modular Integration Architecture

The Regenesis™ Protocol integrates modular technologies — each validated through technology work, testing, and compliance completed with the representative vendors producing that equipment — into a single unified Total Material Conversion system. The Company's proprietary contribution is the interface architecture, sequencing logic, and AI-optimized control system that makes these technologies operate in concert to achieve TMC. Each component has been validated at the vendor level. The innovation is making them work together at system scale.

Manufactured Materials Families — 400 TPD Baseline

Material recovery rate: 42–45% of feedstock mass into saleable manufactured materials; balance as recovered energy and ultrapure water. All projections at RevCon 3 baseline. Hydrogen consumed internally for Island Mode facility self-powering — zero external hydrogen offtake or revenue.

RevCon™ Valorization Ladder

The Revenue Confidence Level (RevCon) Valorization Ladder is the Company's proprietary classification system for manufactured outputs, representing increasing purity, performance, and market value. RevCon 3 — Optimized Circular Material — is the conservative baseline for all financial projections in this Memorandum. RevCon 4 and RevCon 5 are upside only.

Engineering Doctrine — Advanced Circular Manufacturing Doctrine v2.0

The ACM Doctrine is Carbotura's first-principles engineering and operational framework governing how every ACM Manufacturing Center is designed, validated, assembled, operated, and continuously improved. It is not a quality management overlay — it is the foundational discipline that makes Deterministic Manufacturing possible. The Doctrine was developed beginning in 2019 and represents one of the core intellectual property assets contributed to Carbotura Inc. at formation.

The Mathematical Constraint — A System That Closes

The defining characteristic of an ACM facility is mathematical closure. A circular engineered system is not an aspiration — it is a mathematical constraint. Every input must transform into a product, a recycled feedstock, or a quantified residual. There are no miscellaneous losses, no permitted discharge sinks, and no open-ended emission streams. This closure property produces three verifiable characteristics that distinguish an ACM facility from all prior industrial processing paradigms:

The Six-Stage Design-to-FMEA Arc

The ACM Doctrine structures the engineering design and risk validation process as a six-stage arc — not a sequential checklist but a single unified doctrine. The design creates the specification against which failure is defined. The FMEA returns refinements that sharpen the design. The loop never closes permanently; operational events continuously feed the model through CAFI.

The Digital Triplet — Operational Architecture

The Digital Triplet is Carbotura's proprietary operational architecture connecting three nodes through a shared CAFI data lake — a single source of operational truth continuously closed and refined by the CAFI engine.

CAFI — Continuous Adaptive Feedback Integration

CAFI is the intelligence engine that closes the Digital Triplet — transforming raw telemetry into structured intelligence and distributing actionable artifacts back to all nodes. The loop closes upon action, not upon receipt.

The Five-Tier Authorized Vendor & Partner Structure

Authorization in the ACM ecosystem is a doctrine compliance commitment, not a commercial designation. Every tier carries defined accountability for CAFI data lake access and data contribution obligations.

The full Doctrine Accountability Matrix (RACI) mapping all tiers across all six doctrine stages, assembly, FAT/SAT, deployment, performance guarantee, spares management, and all three CAFI steps is maintained in the Company’s engineering governance documentation and available through the investor portal at www.carbotura.com.

Intellectual Property — Multilayered Portfolio & Protection Strategy

Carbotura's intellectual property portfolio is structured as a deliberate multilayered system designed to protect the Company's category-defining position in Advanced Circular Manufacturing (ACM) across the technology stack, the integration architecture, the software and process logic, and the brand. The portfolio combines third-party vendor IP and patents (built into the modular processing skids the Company sources), Carbotura's own trade secrets covering the integration, software, and process logic that turns those skids into a complete ACM system, in-licensed third-party patents where appropriate, blanket defensive and blocking patent filings authored by the Company, and a complete copyright and trademark estate covering the Company's branded products, processes, and communications.

The Six Layers of the Carbotura IP Portfolio

The Company's IP architecture consists of six discrete protection layers, each addressing a distinct category of intellectual property and each contributing to the overall defensibility of the platform. Specific filings, registration numbers, jurisdictions, and license counterparties are maintained on the Company's IP register and will be disclosed to prospective investors in the data room prior to first sale of securities in this offering.

IP Assignment at Formation — IRS Section 351 Contribution

At the formation of Carbotura Inc. in June 2025 (see Part III Company History), the founders executed a full assignment of all known and future intellectual property rights developed during the preceding Gravitas Infinitum, LLC development period into Carbotura Inc. as part of the Section 351 contribution. The assignment covered all then-existing trade secrets, copyrights, trademark applications and registrations, patent filings, vendor-license rights, and the full body of operational, regulatory, and financial frameworks contributed at formation. The Company maintains an ongoing IP assignment programme requiring all employees, contractors, and engaged advisors to assign work-product IP to the Company through standard invention-assignment agreements. The combination of the founding §351 assignment and the ongoing assignment programme is designed to ensure that the Company holds clear, unencumbered title to its intellectual property base at all times.

IP Held at Parent; Royalty-Free Licensed to Project Entities

All Company IP is owned by the parent (Carbotura Inc.) and licensed to project-level entities — including Carbotura York, LLC for the first commercial deployment — on a royalty-free, perpetual basis for the term of each project's Circular Supply Agreement (CSA). This structure (i) benefits project-level entities by giving them unrestricted access to the full Carbotura platform without intercompany royalty drag; (ii) concentrates IP value at the parent company level, where it is the principal asset of Carbotura Inc. and accordingly underpins the equity value held by Series A-1 investors; and (iii) is consistent with industry-standard project-finance structures in modular industrial manufacturing. License terms are disclosed in CSA Schedule 18 (see also Part V PPM-20 — Related Party Transactions).

Trade-Secret Protection Discipline

Trade secrets are protected through a layered discipline that includes: (i) contractual confidentiality applicable to all employees, contractors, vendors, ASI counterparties, and CSA counterparties via NDA and confidentiality covenants in operative agreements; (ii) technical access controls on all software, documentation, and engineering source materials, including role-based access, audit logging, and the multi-tier governance described in the Company's site-wide user-management system; (iii) need-to-know discipline applicable to all sensitive information, including the trade-secret estate, vendor identities, ASI selection, and pre-petition regulatory work; and (iv) physical access controls applicable to OEM-certified modules during commissioning, all factory acceptance testing, and all on-site site-integration testing. The Company's trade-secret discipline is integrated with its broader information-governance posture (see Part V PPM-20A — Insurance & Indemnification, and Part VIII PPM-30 — AML / KYC and data-handling).

Limitations

The Company's intellectual property portfolio is not a guarantee of competitive position. Patents — including the Company's own filings and the third-party patents on which the platform relies — may be invalidated, narrowed, designed around, or unenforced; licenses may be terminated under their terms; trade secrets may be misappropriated, independently invented, or reverse-engineered; trademarks may be challenged on prior-use or descriptiveness grounds; and copyrights are subject to fair-use and other statutory carve-outs. The Company maintains the IP portfolio described above on a best-practices basis but cannot ensure that all elements of the portfolio will remain enforceable or that competitors will not develop equivalent or superior capabilities. See Part II PPM-10 — Intellectual Property & Competition Risk.

Specific IP register entries — including patent application and registration numbers, filing dates, claim coverage, prosecution status, in-license counterparty identities, trademark registration numbers and classes, copyright registrations, and the full Material Contracts schedule for IP-related instruments — will be made available to verified accredited investors in the data room prior to first sale of securities in this offering. Investors are encouraged to confirm the IP portfolio status in their pre-investment legal and technical diligence.

Operating Model — BOO Structure, Circular Advantage Program & Circular Supply Agreement

Carbotura finances, assembles, deploys, owns, and operates every ACM Manufacturing Center under 30-year Circular Supply Agreements (CSAs) through a Build, Own, Operate (BOO) model. The feedstock supplier assumes zero capital risk. Carbotura maintains full operational responsibility for the life of the agreement.

The Economic Inversion

Legacy waste management systems charge communities fees to destroy valuable materials and return nothing. Carbotura inverts this model entirely. The community pays a Beneficiation Fee (TMC Fee) for manufacturing conversion services — competitive with or below current waste disposal costs — and then receives a Circular Royalty™ back from Carbotura beginning 13 months after the corresponding feedstock delivery, as a recurring share of the value of manufactured materials produced from that community's feedstock. The community pays less than it costs today to dispose. It receives royalties that have never existed before. The economic logic is not charity — it is a fundamental realignment of value flows once the manufacturing lens is applied.

The Circular Advantage Program — Three-Agreement Architecture

The Circular Advantage Program is Carbotura's integrated commercial platform. It is structured as three distinct binding agreements, governed by a common Annex SD-1 that defines shared terms and the Single Mass-Basis Rule:

Beyond the three agreements, the Circular Advantage Program also includes:

• Feedstock Hauler integration — legacy waste hauling companies transition into Feedstock Hauler roles within the ACM supply chain, delivering manufacturing feedstock rather than transporting material to disposal sites
• Optional passive equity participation — up to 20% community equity participation available under certain CSA structures
• Community partnership team engagement as the entry pathway — direct working sessions with prospective feedstock suppliers confirming feedstock characterization, volume, and site parameters before LOI/MOU execution

Single Mass-Basis Rule (Annex SD-1)

Annex SD-1 — Shared Definitions & Mass-Basis Annex is incorporated by reference into each of the three agreements (CSA, CMOA, CEAA). It performs the function a single master agreement would otherwise perform, without forcing the three agreements — which have different counterparties, signing events, and cardinality — into one instrument. Annex SD-1 establishes the common defined terms used identically across the three agreements and, most importantly, sets the Single Mass-Basis Rule.

The Single Mass-Basis Rule provides that the same physical mass is counted once in each of three value dimensions — once as an asset under the CSA (URV-S Proven Contractual Reserve), once as revenue under the CMOA (RevCon™ Materials sales), and once as attributes under the CEAA (environmental and tax credits). The three dimensions are additive in value character — they recognize distinct economic events at distinct stages — but they are not additive in mass. The Rule is the structural safeguard that permits the platform to be presented to auditors and capital-markets counterparties as three distinct value streams without overstatement. It explicitly prohibits summing the three streams as independent masses.

The Mass-Basis Rule reinforces and is consistent with the Separate Transaction Principle (above): all three of the asset, revenue, and attribute streams are independent transactions on independent bases and timing, and are never netted or summed across dimensions.

The Circular Supply Agreement — Structure

The CSA is the 30-year contractual instrument at the center of the Circular Advantage program. It contains two core financial components:

Additional standard CSA terms include take-or-pay structures, optional 20% community equity participation, government backing provisions for public sector agreements, and renewal options. The canonical engagement progression is: LOI/MOU → Term Sheet → CSA execution (Time-Zero, T0). T0 is when deployment commences. Phase Initial Commercial Operation Date (COD) = T0 + 24 months.

The BOO Model — Capital & Operational Structure

Under the BOO model, Carbotura bears 100% of the capital cost of the ACM Manufacturing Center. The feedstock supplier contributes manufacturing feedstock and, in some structures, deeded land and tax abatement (the Three-Component Asset Swap under Option B; under Option B the Beneficiation Fee (TMC Fee) is waived and the Asset Swap substitutes for it per Canon §2.3). The feedstock supplier has no construction risk, no technology risk, no operating risk, and no capital obligation. Carbotura's obligations run for 30 years under the Parent Performance Guarantee (PPG), an 18-month parent guarantee backing Carbotura's performance obligations.

The GC constructs the facility shell. The ASI deploys the Serialized Assets. The Joint Working Group (JWG) — a bi-party governance structure pre-COD — coordinates site preparation, permitting, and commissioning activities. Carbotura operates the facility from COD forward, with full operational responsibility for staffing, maintenance, compliance, insurance, and product quality.

Revenue Stack — Seven-Stream Architecture & Beneficiation Fee / Circular Royalty™ Structure

Each Carbotura ACM Manufacturing Center is designed to generate up to seven independent revenue streams — the Revenue Stack. This multi-stream architecture decouples financial performance from any single commodity market, providing infrastructure-grade revenue resilience anchored by the contractually fixed Beneficiation Fee.

All revenue projections use the RevCon 3 conservative baseline. Streams 4–7 are supplementary — not primary revenue drivers at RevCon 3. Hydrogen is consumed internally as facility power; zero external hydrogen offtake or revenue in any scenario. Revenue streams are independent — each is assessed on its own commercial merits without netting against any other stream or against the Circular Royalty™ outflow.

Revenue Stack vs. Legacy Systems

Pipeline & Growth Strategy — 50-Facility Programme

The York County ACM Manufacturing Center is the first facility in Carbotura's 50-facility development programme. Beginning in 2019, the Company developed a global government client pipeline through direct engagement with over 140 government clients across domestic and international markets. The 50-facility programme represents the current deployment programme target drawn from that broader pipeline. The Company has identified 49 additional project opportunities beyond York County across 10 countries and 6 U.S. states, representing an estimated aggregate capital expenditure of approximately $41.2 billion and an estimated gross reserve value of approximately $180 billion under the Company's Urban Reserve Valuation Standard (URV-S) across the 50-facility programme.

Pipeline figures are management estimates. Reserve figures calculated under the Company's proprietary Urban Reserve Valuation Standard (URV-S). Hydrogen excluded from all reserve calculations (captive use only). Per-site reserve figure (~$3.6B) is gross, hydrogen-excluded, at RevCon 3 specifications. The $4.93B 30-year figure referenced elsewhere in Company materials includes 2.5% CPI escalation and phased ramp and is the cumulative 30-year revenue per the RC3 baseline P&L model — distinct from the per-site gross reserve figure. All figures are forward-looking estimates subject to material revision.

York County — First Commercial Deployment

The York County, Pennsylvania facility is the Company's first commercial ACM Manufacturing Center. Carbotura York, LLC holds the executed Circular Supply Agreement with York County — the foundational contract that establishes the Beneficiation Fee structure, the Circular Royalty™ obligation schedule, and the 30-year CSA framework. York County is the Proven Reserve in the Company's URV-S reserve classification: an active CSA with a commissioned facility at COD. See Part IV of this Memorandum for the York County facility overview and URV-S reserve statement.

Pipeline Composition — Geographic Diversification

The Company's global government client engagement began in 2019 and has grown to over 140 government clients across domestic and international markets. The 50-facility programme represents the current structured deployment target drawn from that broader client base. The 49-opportunity pipeline spans domestic U.S. markets (including Broward County FL, Clark County NV, Collier County FL, Hillsborough County FL, Montgomery County MD, Miami-Dade County FL, St. Lucie County FL, Salt Lake City UT, Phoenix AZ, Rhode Island, Puerto Rico, Oahu HI, and Salinas CA) and international markets (including Abu Dhabi UAE, Dubai UAE, Cayman Islands, Lekki Nigeria, Nagpur India, Seville Spain, Tuscany Italy, Moose Jaw Canada, and Newport UK, among others). Pipeline opportunities are in various stages of engagement from initial contact through Term Sheet negotiation. No pipeline opportunity beyond York County has an executed CSA as of the date of this Memorandum.

Capital Deployment Strategy — Series A-1 and Growth Financing

The proceeds of the Series A-1 offering are dedicated to the York County facility — the Company's first commercial deployment. See the Use of Proceeds section (PPM-21) for the itemized deployment of offering proceeds. Growth financing for pipeline facility development beyond York County is expected to be sourced through a combination of future equity rounds, project-level debt financing, government grant programs, and the Circular Bond instrument the Company is developing. The Series A-1 offering is not the financing instrument for pipeline facilities beyond York County, and prospective investors should not evaluate this offering on the basis of pipeline opportunity figures alone.

Build · Bond · Recycle — The Equity Return Architecture

The Company's capital model for the Series A-1 round follows a defined Build · Bond · Recycle cycle. Series A-1 equity builds the York County facility; the URV-S methodology validates the economic value of the contracted manufacturing-feedstock reserve secured under the executed CSA; a Circular Bond is then closed against the contracted Beneficiation Fee revenue stream; the bond proceeds are intended to recycle capital back to Series A-1 investors; and the capital remaining after that return is redeployed into the next facility (Site 2), where the cycle repeats. Consistent with the Separate Transaction Principle, the Beneficiation Fee revenue and the Circular Royalty™ obligation are independent transactions and are never netted — the Circular Bond is closed against the contracted Beneficiation Fee revenue only.

The Circular Bond refinancing is the Company's intended liquidity mechanism for Series A-1 investors. It is not predicated on an initial public offering and not predicated on a sale of the Company. The Company's modelled returns for the Series A-1 round — approximately a 46% internal rate of return (IRR) and approximately a 5.0× multiple on invested capital (MOIC) — are modelled to the Circular Bond refinancing event at the RevCon 3 conservative baseline. These are modelled projections, not guarantees, and are subject to the assumptions, risks, and uncertainties described throughout this Memorandum, including the Risk Factors in Part II and the Forward-Looking Statement Disclaimer in PPM-02. Actual results may differ materially, and investors may lose their entire investment.

Strategic Materials — National Security Positioning

Carbotura's manufactured materials portfolio addresses critical domestic supply chain vulnerabilities. Synthetic graphite — essential for electric vehicle battery anodes — is a $20B+ global market with over 70% of current supply from China. Rare earth elements critical to defense, clean energy, and advanced manufacturing represent a $7B+ annual market with over 80% sourced from China. Carbotura's ACM Manufacturing Centers produce these strategic materials from abundant domestic Municipal Solid Waste feedstock, converting a community liability into sovereign manufacturing capacity and reducing dependence on foreign supply chains. This positioning supports federal funding applications, defense industry partnerships, and national infrastructure alignment.

50-Facility Programme — Long-Term Value Architecture

The 50-facility programme is Carbotura's long-term development target. Each facility is structured as a standalone BOO deployment with its own CSA, its own capital structure, and its own Revenue Stack. The programme is designed to be modular and repeatable: each deployment replicates the York County architecture, refined by operational learning. The 50-facility programme does not depend on any single technology breakthrough or market condition — it depends on the Company's ability to replicate a proven commercial model at successive sites. York County is the proof of concept. The 49-opportunity pipeline is the market validation that the model is broadly applicable across geographies, regulatory environments, and feedstock profiles.

Urban Reserve Valuation Standard (URV-S) — Reserve Classification & Methodology

The Urban Reserve Valuation Standard (URV-S) is Carbotura's proprietary framework for classifying and quantifying the economic value of manufacturing feedstock reserves associated with ACM Manufacturing Centers. URV-S produces reserve values through a five-step certified data pipeline, with independent methodology verification as a required step before market pricing and RevCon yield application. URV-S was developed by Carbotura to address the absence of any established industry standard for classifying the economic value of perpetually replenishing urban feedstock streams under long-term contractual arrangements.

The URV-S Rationale — Why a New Standard

Established reserve certification standards — NI 43-101, JORC, SEC S-K 1300 — were designed for finite mineral deposits: ore bodies with a defined mass, grade, and depletion profile. Urban feedstock reserves are fundamentally different in character: they are perpetually replenishing (a community generates MSW continuously for the life of the CSA and beyond), contractually defined (the CSA establishes the volume, quality, and duration of feedstock delivery), and economically valued through a revenue stack rather than a single commodity price. URV-S was developed to capture these structural differences and to provide a rigorous, consistent classification framework appropriate to ACM reserve economics.

URV-S — Four-Category Reserve Classification

URV-S Certification Framework — Five-Step Certified Data Pipeline

URV-S reserve values are produced through a rigorous five-step certified data pipeline. The process operates at the atomic level — it is a materials science and elemental accounting exercise, not an engineering estimate or a geological survey. Independent methodology verification (Step 3) is a required gate before market pricing (Step 4) and RevCon yield application (Step 5) are applied.

Step 1 — Engineering-Certified Feedstock Materials Analysis

The first step is a detailed materials analysis of the contracted manufacturing feedstock stream. The analysis characterizes the feedstock by material type and composition — establishing the identity and proportional makeup of the input stream at the material level (plastics, organics, ferrous metals, non-ferrous metals, glass, textiles, and other constituent categories as applicable to the specific feedstock profile). This analysis is engineering-certified: it is conducted to an engineering standard and the outputs carry engineering certification before they are used as inputs to Step 2. The certified feedstock materials analysis is specific to the contracted feedstock under the executed CSA and is the factual foundation of the URV-S reserve calculation.

Step 2 — URV-S Elemental Calculation Against Government-Certified Datasets

The Step 1 certified feedstock materials analysis is processed by the URV-S standard against three leading government-certified material-to-elemental-makeup datasets. These datasets establish the known elemental composition of each material category — mapping each material type to its constituent elements at the atomic level. The URV-S calculation produces two outputs: (1) a per-feedstock-material line-item elemental count, identifying the quantity of each recoverable element attributable to each material category in the feedstock stream; and (2) a total elemental count across the entire feedstock, representing the aggregate elemental inventory available for conversion through the Regenesis™ Protocol. This is atom-level precision work grounded in government-certified scientific data. The accuracy and rigor of the elemental count is a direct function of the quality of the Step 1 feedstock analysis and the authority of the government-certified datasets applied.

Step 3 — Methodology Verification

Before market pricing is applied, independent methodology verification is performed by a recognized internationally accredited inspection and certification firm, confirming that Steps 1 and 2 have been conducted in accordance with the URV-S standard. Methodology verification is a process audit of the certified data pipeline: it confirms that the feedstock materials analysis was engineering-certified and that the URV-S elemental calculation was applied correctly against the appropriate government-certified datasets. Methodology verification is not a mineral reserve QP review. This verification is completed prior to distribution of this Memorandum.

Step 4 — Certified Market Pricing and Reserve Value Calculation

With the verified elemental inventory established from Steps 1 and 2, the URV-S standard applies third-party certified market pricing data to each of the 100+ material products producible through the Regenesis™ Protocol and its RevCon Valorization Ladder. Market pricing is sourced from recognized commodity intelligence authorities and carries third-party certification. The certified pricing data is calculated against the tonnage and yield data for each RevCon-graded product to establish the current-period value of each recoverable material, metal, and mineral in the contracted feedstock stream.

Step 5 — RevCon Yield and Revenue Ranges

The final step applies the RevCon Valorization Ladder yield data to the Step 4 pricing to produce the URV-S reserve value. RevCon yield data quantifies the expected recovery rate and product specification for each material product at each RevCon level — from RevCon 1 (base reusable materials) through RevCon 5 (premium nanomaterials). At RevCon 3 — the conservative baseline for all financial projections in this Memorandum — the yield and revenue range data is applied across the full manufactured materials portfolio, against the CSA tonnage and the Step 4 certified pricing, to produce the URV-S gross reserve value for the site. This step transforms the elemental inventory and current market pricing into a site-specific, RevCon-graded reserve value figure denominated in dollars per contracted feedstock ton over the CSA term.

URV-S vs. Established Standards — Comparator Reference Only

The classification terms Proven Reserve, Probable Reserve, Indicated Resource, and Inferred Resource are used by Carbotura under URV-S with meanings specific to the ACM context as defined above. These terms do not carry the same meanings as the identically named categories under NI 43-101, JORC, or SEC S-K 1300 when applied to mineral deposits.

York County Reserve Statement — URV-S Proven & Probable Reserves

York County — Proven Reserve (Category 1 · CSA Executed · Facility Under Construction)

York County attains URV-S Category 1 (Proven Reserve) classification upon achieving COD. As of the date of this Memorandum, the CSA is executed and the facility is in construction. The Proven Reserve designation reflects the executed contractual right to the feedstock volume and the advanced state of facility deployment. The reserve value below will be confirmed upon COD.

York County — Probable Reserve (Category 2 · CSA Expansion Capacity)

The York County CSA's expansion capacity — representing the additional feedstock volume available upon facility expansion beyond the 400 TPD baseline under the Master Site Plan — is classified as a URV-S Category 2 (Probable Reserve). The contractual right to this feedstock volume is established under the CSA's expansion provisions; the physical deployment path (incremental 100 TPD modular installations to 800 TPD) has been architecturally planned. The Probable Reserve will be reclassified to Proven Reserve as each increment achieves COD.

50-Facility Programme — Aggregate URV-S Reserve Estimate

Across the Company's 50-facility programme, the estimated aggregate gross reserve value under URV-S is approximately $180 billion, calculated as the sum of per-site gross reserve estimates (~$3.6B per site × 50 facilities) at the 400 TPD baseline, RevCon 3 specifications, and current commodity price assumptions. This figure is a management estimate based on the pipeline as currently known and is subject to material revision as pipeline opportunities progress through the engagement stages, as feedstock characterization data is obtained, and as independent QP review is completed. The ~$180B figure excludes hydrogen from all calculations and is presented on a gross basis before any deduction for operating costs, capital costs, debt service, or royalty obligations.

URV-S Methodology Verification

The URV-S reserve calculation for the York County facility is subject to independent methodology verification (Step 3) by an internationally accredited inspection and certification firm, confirming that Step 1 (engineering-certified feedstock materials analysis) and Step 2 (URV-S elemental calculation against government-certified datasets) have been conducted in accordance with the URV-S standard. Step 4 market pricing is sourced from recognized commodity intelligence authorities. Step 5 applies RevCon yield and revenue ranges to produce the final URV-S reserve value. All five steps are completed prior to distribution of this Memorandum.

URV-S methodology verification confirms the integrity of the certified data pipeline — it is not a mineral reserve QP review and does not involve the application of NI 43-101, JORC, or SEC S-K 1300 frameworks, which are designed for finite geologically-defined mineral deposits and are structurally inapplicable to perpetually replenishing urban feedstock reserves valued through a multi-product elemental accounting model.

Permits, Environmental & Regulatory Status — York County

The York County Advanced Circular Manufacturing (ACM) facility is being permitted and constructed as a manufacturing facility under NAICS Sector 31–33 codes (325180, 325998, 327992, 331110, 331314, 331492), expressly excluding waste-management codes (562212, 562213, 562219, 562920). The Company's regulatory posture is cooperative, evidence-based, and built around a structured engagement with the relevant federal, Pennsylvania state, and York County local agencies. The following summarizes the permits, environmental assessments, and regulatory engagements applicable to the York County facility and their respective status as of the date of this Memorandum. Specific permit numbers, filing dates, agency correspondence, and supporting technical documentation are maintained in the project regulatory file and disclosed to verified accredited investors in the data room prior to first sale of securities in this offering.

Manufacturing Classification — Regulatory Predicate

The foundational regulatory position for the York County facility is the manufacturing predicate: the position that the facility's operations constitute Advanced Circular Manufacturing under the applicable NAICS Sector 31–33 codes, and accordingly are governed by the manufacturing regulatory framework rather than the waste-management framework. This position is supported by (i) the Company's process architecture (the four Carbotura Protocols, the Recyclotron™ Microwave Catalytic Reforming reactor operating under an inert oxygen-free envelope — see PPM-13); (ii) title-transfer-at-collection and dwell-time discipline under the CSA; and (iii) the Company's URV-S elemental analysis methodology evidencing the materials-conversion nature of facility operations. The Company expects to engage with the Pennsylvania Department of Environmental Protection through standard pre-application processes to confirm the manufacturing classification on the record prior to construction commencement. Specific PA statutory engagement is pre-petition / pre-application as of the date of this Memorandum.

Permit Inventory — York County Facility

The following permits and authorizations are required, or are expected to be required, in connection with the construction and operation of the York County facility. Status, agency, and filing references are placeholder pending confirmation by the project regulatory team and counsel; all specific permit references will be disclosed in the data room prior to first sale of securities in this offering.

Environmental Site Assessments

The Company has conducted, or is in the process of conducting, the following environmental assessments of the York County project site, as appropriate to the site's history and intended use:

• Phase I Environmental Site Assessment (ASTM E1527-21) — review of historical and current site conditions, identification of any recognized environmental conditions (RECs), and confirmation of site suitability for the planned manufacturing use. [Phase I status — to be confirmed by project team.]
• Phase II Environmental Site Assessment (where indicated by Phase I findings) — targeted sampling and analysis to characterize any identified or potential subsurface conditions. [Conditional on Phase I findings.]
• Wetlands / Threatened & Endangered Species review — coordination with U.S. Army Corps of Engineers and U.S. Fish & Wildlife Service (and PA Game Commission as applicable) to confirm absence of jurisdictional wetlands and protected species concerns. [Status — to be confirmed.]
• Cultural Resources / Section 106 review — coordination with the Pennsylvania State Historic Preservation Office to confirm no impact to historic or archeological resources. [Status — to be confirmed if federal nexus.]

Regulatory Engagement Posture

The Company's posture in all regulatory engagements is cooperative authority engagement: complete evidentiary filings, voluntary monitoring commitments independent of permit outcomes (mass-balance reports, third-party audits, continuous performance logging, first-article Circular Supply Agreements, and open agency access), respect for agency determinations, and the willingness to adapt approach where any agency determination materially deviates from the Company's stated position. The Company does not self-declare permit exemption in any external document and submits its PTE Memorandum and non-waste-determination evidence as inputs to the regulatory authority for the authority's determination, not as substitutes for that determination.

Public Notice & Community Engagement

Public-notice obligations applicable to the York County facility — including any required public comment periods, public hearings, and host-community notifications — will be conducted in accordance with the timing and substantive requirements of each applicable permit programme. The Company's Circular Supply Agreement with York County contemplates ongoing transparency reporting via the project Transparency Portal (see CSA §16.2), which will publish quarterly operational KPIs following Commercial Operation Date — feedstock throughput, manufactured-materials output, environmental-performance metrics, safety performance, and compliance status. The Transparency Portal is a public-facing commitment and operates independent of the confidentiality obligations governing this Memorandum.

Status Summary — As of Date of This Memorandum

All status entries are management characterizations as of the date of this Memorandum. Specific permit application numbers, filing dates, agency correspondence, supporting technical reports, and the full project regulatory file are maintained in the project regulatory documentation and disclosed to verified accredited investors in the data room. See Part II PPM-06 — Regulatory, Permitting & Environmental Risk for the corresponding risk-factor disclosure.

Compensation & Equity

As an early-stage company that has not yet commenced commercial operations, Carbotura Inc. currently maintains a compensation structure appropriate to its development stage. The following disclosures reflect the Company's compensation framework as of the date of this Memorandum.

Executive Compensation — Summary

Executive officer compensation at Carbotura Inc. is currently structured to conserve capital during the pre-revenue construction and commissioning period. The Company's founders and senior executives may be compensated through a combination of base salary, deferred compensation, and equity incentives as determined by the Board of Directors. The Company does not currently have a compensation committee; compensation decisions are made by the full Board.

[Complete executive compensation table — including base salary, bonus, deferred compensation, and equity awards for the prior two fiscal years — to be prepared and inserted by management prior to distribution of this Memorandum. The Company's securities laws obligations regarding compensation disclosure will be confirmed with its legal advisors.]

Equity Structure — Pre-Offering Capitalization Summary

The Company's equity capitalization as of the date of this Memorandum is summarized below. The full pre-offering and post-offering capitalization table is presented in the Capitalization Table section (PPM-22).

Closely Held Equity Structure — Founding Stockholder Entities

Carbotura Inc. is a closely held company. Prior to this offering, the Company's issued common stock is held by the following entities and individuals:

The specific share counts, ownership percentages, and any vesting or transfer restriction provisions applicable to each stockholder's holdings are set forth in the Company's corporate records and will be reflected in the Capitalization Table (PPM-22) prior to distribution of this Memorandum. Because the Company is closely held among its founding team, common stockholders as a group have the ability to control the outcome of all matters submitted to stockholders for approval, including director elections, charter amendments, and approval of major corporate transactions. Series A-1 investors will have limited ability to influence corporate governance through their equity position absent specific contractual rights negotiated in the Series A-1 Term Sheet.

Series A-1 Preferred Stock — Economic Terms Summary

The Series A-1 Non-Participating Preferred Stock offered in this offering carries the following economic terms. Full legal terms are set forth in the Description of Securities (PPM-24) and the Series A-1 Term Sheet (Exhibit G).

All Series A-1 terms are subject to finalization in the Series A-1 Term Sheet and the Subscription Agreement. The summary above reflects the Company's current intentions and is subject to change prior to closing. The full legal terms of the Series A-1 Preferred Stock will be set forth in the Company's amended Certificate of Incorporation and the Subscription Agreement (Exhibit B).

Related Party Transactions & Conflicts of Interest

The Company is required to disclose all material transactions between Carbotura Inc. and any officer, director, or 5%-or-greater stockholder occurring within the prior two fiscal years or currently proposed. The following disclosures reflect currently known related party arrangements. This section must be reviewed and confirmed complete by the Company's management and legal advisors prior to distribution.

Founding Stockholder Entities

Carbotura Inc. is a closely held company. Its common stock is held by four founding stockholder entities or individuals: Magna Recurrit, LLC (beneficially owned by Allen Witters), Arciero Associates (beneficially owned by John Arciero), Tyler Wood (direct stockholder), and Gravitas Infinitum, LLC (beneficially owned by Allen Witters, John Arciero, Tyler Wood, and Pelle Malmhagen). None of these entities or individuals are parties to any operational agreement with Carbotura Inc. beyond their capacity as common stockholders. The specific terms of the equity held through each entity or individual — including share counts, ownership percentages, vesting schedules, and transfer restrictions — are set forth in the Company's stockholder agreements and corporate records.

Because multiple founding stockholders hold equity through Gravitas Infinitum, LLC, the beneficial ownership interests within that entity and their relationship to each individual beneficial owner's aggregate position in Carbotura Inc. will be disclosed in the Capitalization Table (PPM-22) and in the Subscription Agreement prior to distribution of this Memorandum.

Saudi Arabia Subsidiary — Stasis Status

Carbotura Inc. maintains a wholly owned Saudi Arabia subsidiary that is currently held in operational stasis. The subsidiary was formed in connection with the Company's international development activities and currently holds no active CSA or operating assets. No material intercompany transactions between the Company and the Saudi Arabia subsidiary are currently anticipated during the period covered by the Series A-1 offering.

Intercompany Arrangements — Carbotura York, LLC

Carbotura Inc. and Carbotura York, LLC are parties to intercompany arrangements governing the management, operation, and financing of the York County facility, including management services agreements, IP license agreements (pursuant to CSA Schedule 18), and intercompany loan arrangements as applicable. The terms of these intercompany arrangements are designed to be on arms-length or comparable-to-arms-length terms, with the objective of ensuring that the economics of the York County project are appropriately reflected in both the parent company and the SPV financial statements. These arrangements will be described in detail in the Company's audited financial statements.

Conflicts of Interest Policy

As an early-stage company, Carbotura Inc. does not currently have a fully documented formal conflict-of-interest policy of the type typically found in mature public companies. The Board of Directors is expected to adopt a formal conflicts policy in connection with the appointment of investor-designated directors following the Series A-1 closing. In the interim, all potential conflicts of interest are disclosed to and approved by the full Board.

Prospective investors should be aware of the following potential or existing conflicts:

Rule 506(d) — Bad Actor Representations

Rule 506(d) under Regulation D disqualifies an issuer from relying on the Rule 506(c) exemption if any "covered person" — including all officers, directors, and 20%-or-greater beneficial owners, as well as any placement agents or promoters — has been subject to a "disqualifying event" as specified in Rule 506(d)(1). Prior to the first sale of securities in this offering, all covered persons are required to execute written representations confirming the absence of any disqualifying event.

Covered persons for purposes of this offering include, at minimum: Allen Witters (officer, director, and beneficial owner through Magna Recurrit, LLC and Gravitas Infinitum, LLC); John Arciero (officer, director, and beneficial owner through Arciero Associates and Gravitas Infinitum, LLC); Tyler Wood (officer and beneficial owner — direct stockholder and beneficial owner through Gravitas Infinitum, LLC); Pelle Malmhagen (beneficial owner through Gravitas Infinitum, LLC, to the extent his interest constitutes 20% or more of the Company's outstanding voting securities — to be confirmed against corporate records); Tom Pitlanish (officer); Shannon Law (officer); Paul Camp (officer); and any placement agents or finders who receive compensation in connection with this offering.

[Rule 506(d) representations to be executed and confirmed complete by all covered persons prior to commencement of the offering. Any covered person who has been subject to a disqualifying event must disclose it and the Company must determine whether a waiver application to the SEC is required and feasible.]

Insurance & Indemnification

The Company maintains, and intends to maintain, an insurance and indemnification programme appropriate to a Delaware C-Corporation in the development stage with an executed Circular Supply Agreement (CSA) and a first commercial facility under construction. Aon plc serves as the Company's Insurance Broker of Record.

Insurance Broker of Record

Aon plc (the "Insurance Broker of Record" or "BOR") is engaged to advise on, place, and administer the Company's insurance programme across all current and anticipated coverage lines. Aon is one of the world's leading professional services firms providing risk, retirement, and health solutions, and was selected for its global capacity, manufacturing-sector underwriting depth, and ability to coordinate placement across the construction, environmental, and operational phases of the York County facility lifecycle.

Coverage Lines — Current and Anticipated

The Company's insurance programme is structured around the coverage lines summarized below. Specific carriers, policy limits, retentions, deductibles, named insureds, additional insureds, and exclusions are subject to ongoing market placement through Aon and will be reflected in the Company's binder portfolio prior to first sale of securities in this offering. Coverage applicable to the York County facility construction is being placed as the facility approaches Module Delivery Authorization (MDA) and General Contractor mobilization.

All policy limits, retentions, deductibles, named insureds, additional insureds, and exclusions are subject to underwriting and market conditions and will be set forth in the Company's binder portfolio prior to first sale of securities in this offering. Coverage may be modified or supplemented from time to time on the advice of the Insurance Broker of Record.

Indemnification of Directors and Officers

The Company's Amended and Restated Certificate of Incorporation and Bylaws provide for the indemnification of directors and officers to the fullest extent permitted by the Delaware General Corporation Law (the "DGCL"), including under Section 145 of the DGCL. Indemnification covers expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by an indemnified person in connection with any threatened, pending, or completed action, suit, or proceeding by reason of the indemnified person's service to the Company. The Company is also authorized to advance expenses to indemnified persons in advance of final disposition of any proceeding, subject to customary undertaking requirements.

The Company maintains, or intends to maintain through Aon, Directors & Officers liability insurance to backstop its indemnification obligations. The combination of charter and bylaw indemnification, expense advancement, and D&O insurance is intended to provide directors and officers with a structurally sound indemnification programme appropriate to a Delaware C-Corporation conducting a Rule 506(c) offering. Investor-designated directors elected following the Series A-1 closing will be entitled to the same indemnification rights and D&O coverage as all other directors.

Programme Limitations

The Company's insurance and indemnification programme is not a guarantee that the Company will be fully protected against all losses, claims, or proceedings. Coverage gaps, exclusions, sub-limits, and retentions exist in any insurance programme, and indemnification under Delaware law has statutory limits — including the prohibition on indemnification against breaches of the duty of loyalty, acts or omissions not in good faith, intentional misconduct, knowing violations of law, transactions from which the indemnified person derived an improper personal benefit, and certain other matters described in DGCL §§102(b)(7) and 145. Prospective investors should consult their own legal advisers regarding the structural limitations of the Company's insurance and indemnification programme and the implications for investor recourse in the event of director or officer wrongdoing.

Material Contracts

This section enumerates the material contracts, agreements, and binding instruments of Carbotura Inc. and its operating subsidiaries, as of the date of this Memorandum. Specific counterparty identities, executed copies, schedules, and exhibits are made available to verified accredited investors in the data room under the confidentiality restrictions described in this Memorandum. Forms of the principal investor-facing instruments — Subscription Agreement, Investors Rights Agreement, Voting Agreement, ROFR / Co-Sale Agreement, and the Series A-1 Certificate of Designation — are attached as exhibits to this Memorandum or made available to verified accredited investors prior to subscription.

Circular Advantage Program Agreements

The three binding agreements of the Circular Advantage Program (see PPM-14) are the principal commercial instruments of the Company's platform. Each is incorporated by reference to the Annex SD-1 — Shared Definitions & Mass-Basis Annex.

Corporate & Governance Instruments

Operational, Vendor & Site Instruments

All material contracts described above are summarized at the level appropriate for investor disclosure. Specific terms, executed copies, schedules, exhibits, and counterparty identities (other than Aon plc, the named Insurance Broker of Record) are made available to verified accredited investors in the data room subject to the confidentiality restrictions described in this Memorandum. Investors are encouraged to review the operative documents in their pre-investment legal diligence. See PPM-20 (Related Party Transactions & Conflicts of Interest) for related-party-specific disclosures and PPM-13B (Intellectual Property) for IP-instrument disclosures.

Capitalization Table

The following table sets forth the Company's capitalization on a pre-offering and post-offering (assuming full $100M close) basis. Specific share counts, ownership percentages, option pool size, and prior financing details are to be confirmed from corporate records and inserted prior to distribution of this Memorandum.

All share counts and ownership percentages to be confirmed from corporate records. Post-offering percentage assumes full $100M close at a per-share price to be determined by the Board of Directors in consultation with Series A-1 investors. The fully diluted share count includes all issued and outstanding shares plus all shares reserved under the equity incentive pool, assuming full option exercise and conversion of all convertible securities.

Historical Financial Information & Development-Stage Disclosure

Carbotura Inc. was formed in June 2025 through an IRS Section 351 tax-free reorganization. The Series A-1 offering described in this Memorandum is the first institutional capital raise in the Company's history. The following describes the Company's basis of formation, the limited operating activity that has occurred since formation, and the Company's posture as a development-stage enterprise. Historical financial statements covering the periods described below — and any required audited or interim unaudited financial statements — will be made available to prospective investors in the data room prior to first sale of securities in this offering.

Formation and IRS Section 351 Contribution — June 2025

In June 2025, the founders of the Company executed an IRS Section 351 tax-free reorganization, contributing all assets, contracts, brand, and intellectual property developed during the preceding Gravitas Infinitum, LLC development period (2019–2025) into Carbotura Inc. in exchange for the Company's common stock. The estimated cost-basis value of contributed assets at formation was approximately $24 million (see Part III Business Description — Company History & Development). This contribution constitutes the Company's opening balance sheet position. The transaction was effected as a tax-free reorganization within the meaning of Section 351 of the Internal Revenue Code; no cash consideration was paid in connection with the contribution.

Limited Operating Activity Since Formation

Since formation in June 2025, the Company has conducted limited operating activity appropriate to a development-stage enterprise prior to its first Commercial Operation Date (COD). Activity during this period has consisted principally of: (i) continued development of the Carbotura platform, Authorized Systems Integrator (ASI) selection and engagement, vendor qualification, and engineering work in connection with the York County facility; (ii) execution and ongoing administration of the York County Circular Supply Agreement through the Company's wholly owned subsidiary Carbotura York, LLC; (iii) pipeline development activities and global agent network engagement; (iv) corporate, legal, accounting, and pre-offering activities in preparation for the Series A-1 offering; and (v) maintenance of the brand, intellectual property, and operational frameworks contributed at formation.

The Company has not generated material operating revenue since formation. The Company's first material Beneficiation Fee (TMC Fee) and Circular Royalty™ revenues are expected to commence at and following the York County COD (target: 2027) and the corresponding feedstock-delivery royalty trigger (13 months after corresponding feedstock delivery). All revenue projections set forth in PPM-23 are forward-looking estimates and have no historical basis at the Company. The Beneficiation Fee and the Circular Royalty™ are independent transactions under the Separate Transaction Principle and are never netted.

Basis of Accounting & Audit Status

The Company prepares its financial information in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"), applied on a consistent basis. As of the date of this Memorandum, the Company's financial statements covering the period from formation (June 2025) through the most recent quarter-end have been prepared on an unaudited basis. The Company intends to engage an independent registered public accounting firm to audit the Company's financial statements for the period from formation through the close of the fiscal year in which the Series A-1 offering occurs. Audited financial statements, when available, will be provided to investors in accordance with the Company's investor reporting commitments (see Part IX, PPM-31 — Available Information & Investor Reporting).

Selected Unaudited Financial Information — Pre-Audit

All dollar figures other than the opening cost-basis value at §351 contribution are placeholders pending the Company's pre-offering financial review and audit. Final figures will be confirmed by the Company's Chief Financial Officer and reviewed by the Company's independent registered public accounting firm prior to first sale of securities in this offering. The opening cost-basis value is a management estimate based on the carryover cost basis of contributed assets at formation; it is not a fair-value or market-value measurement, and is not the Company's enterprise value or a valuation used in the Series A-1 offering.

Going Concern & Capital Requirements

The Company is a development-stage enterprise. As of the date of this Memorandum, the Company has not yet commenced material commercial operations. The Company's continuing operations through the York County COD (target: 2027) and the corresponding revenue ramp depend on (i) the successful completion of the Series A-1 offering at or near the maximum offering amount of $100,000,000, (ii) the successful construction and commissioning of the York County facility on or near schedule and budget, and (iii) the absence of any material adverse development in the regulatory, permitting, financial, or operating environment of the York County project. Failure of any of these conditions to be satisfied could materially impair the Company's ability to continue as a going concern. See Part II Risk Factors — Financial & Liquidity Risk for additional disclosure regarding the Company's capital requirements and going-concern posture, and see Part VI, PPM-21 — Use of Proceeds and the discussion of additional capital required beyond this offering.

Significant Accounting Policies

The Company's significant accounting policies — including its accounting for the §351 contribution at formation (carryover cost basis; no step-up to fair value at formation), capitalization of pre-COD project development costs, recognition of Beneficiation Fee and Circular Royalty™ obligations under the CSA upon facility commissioning, and accounting for intellectual property, brand, and intercompany arrangements — will be described in detail in the Company's audited financial statements when issued. Prospective investors are encouraged to review the Company's accounting policies and significant judgments and estimates in connection with their pre-investment financial diligence and to consult their own financial and tax advisers.

No Comparative Historical Statements Available

Because Carbotura Inc. was formed in June 2025 and the Series A-1 offering occurs within twelve to fifteen months of formation, the Company does not have comparative-period historical financial statements covering prior fiscal years in the form typically presented by mature operating companies. The Company's development-period operating history (2019–June 2025) was conducted at Gravitas Infinitum, LLC, which was an entirely separate legal entity; Gravitas Infinitum's financial statements are not the Company's financial statements. Prospective investors should evaluate this offering on the basis of the Company's RevCon 3 baseline projections (PPM-23), the executed York County CSA and associated URV-S reserve disclosures (Part IV), and the Risk Factors (Part II) — not on the basis of historical operating-company financial performance, which is not available.

URV-S Accounting Treatment — Standards-by-Analogy Framework

This section describes the accounting policy framework the Company has adopted for the recognition, measurement, depletion, and disclosure of the assets and liabilities arising from each executed Circular Supply Agreement (CSA), with particular focus on the contractually-secured manufacturing-feedstock reserve quantified under the Urban Reserve Valuation Standard (URV-S). The policy is set forth in the Company's internal Accounting Policy Memorandum APM-URVS-001 (v2026.7.2 DRAFT — CSA Cascade Applied, "the APM"), issued by the Office of the Chairman — Legal, Finance & Capital Markets and currently pending Big 4 auditor pre-clearance. The APM is available to verified accredited investors in the data room subject to the confidentiality restrictions described in this Memorandum. Until the APM is countersigned by the Company's independent registered public accounting firm, the policy described below is the Company's intended treatment and is subject to revision based on auditor and SEC staff input.

Legal Predicate — Title-Transfer Supply Contract, Not a Lease

Under the CSA, legal title to the manufacturing feedstock transfers to the Company at the point of delivery, and (in Option B structures) fee-simple title to the project site and supporting infrastructure also passes to the Company at CSA signing. The feedstock provider retains no identified asset over which the Company has a "right of use" within the meaning of ASC 842 (Leases) or IFRS 16 (Leases). Accordingly, the CSA is classified as a title-transfer supply contract, not a lease, and neither ASC 842 nor IFRS 16 applies. This determination drives the entire downstream balance-sheet treatment and is the foundational policy decision in the APM.

Standards-by-Analogy Framework

Because there is no specific U.S. GAAP subtopic or IFRS standard governing contractually-secured manufacturing-feedstock reserves, the Company establishes its policy by analogy under ASC 250-10-05-6 (U.S. GAAP) and IAS 8.10–12 (IFRS). The analogy framework is:

Recognition — Intangible Asset at CSA Signing

The Company recognizes the contractually-secured manufacturing-feedstock reserve as an identifiable intangible asset on its balance sheet at the date of CSA signing (the "Recognition Date"), under ASC 350-30 (U.S. GAAP) and IAS 38 (IFRS). The Recognition Date is the CSA signing date — not the Commercial Operation Date (COD). COD is the date extraction (revenue) begins; it is not the date the contractual reserve right is acquired. Deferring recognition to COD would be inconsistent with the asset-acquisition framework and would understate the Company's balance sheet from signing through Financial Close.

The intangible asset is recognized independently of, and does not overlap with, the property, plant, and equipment (PP&E) recognized for the modular manufacturing facility. PP&E is recognized progressively during construction from Financial Close through COD as capital expenditures are incurred, consistent with ASC 360 and IAS 16. Neither asset captures any portion of the other's measurement.

Initial Measurement

The initial-measurement basis differs by accounting framework:

• U.S. GAAP: Fair value at the Recognition Date, measured under ASC 820. The Company's URV-S valuation is classified as a Level 3 measurement (unobservable inputs based on the Company's proprietary methodology). To support audit clearance and rating-agency acceptance, the Company will engage a qualified independent appraiser to co-sign each facility's URV-S valuation, validating the per-ton economic value, the Minimum Annual Feedstock Volume (MAFV), and the discount rate selection. As the Company's CSA portfolio grows and comparable-transaction evidence develops, the measurement may migrate toward Level 2.
• IFRS: Cost under IAS 38.24 — the fair value of the consideration given up to acquire the contractual right, or the fair value of the assets received, whichever is more reliably measurable. Under Option A, cost is the present value of the committed Beneficiation Fee (TMC Fee) stream over the CSA term, discounted at the Company's incremental borrowing rate at signing. Under Option B, cost is the fair value of the deeded assets received (independently appraised) plus the present value of the royalty obligation assumed. The Company has elected the IAS 38.75 revaluation model as its long-term subsequent-measurement basis, to be activated upon satisfaction of the IAS 38.78 "active market" qualification (currently not satisfied; reassessed annually as the CSA portfolio grows).

Subsequent Measurement & Depletion — Units-of-Production

The intangible asset has a finite useful life — the CSA Term (30-year minimum from COD plus the contractual royalty tail). The asset is depleted using the units-of-production (UOP) method, consistent with extractive-industries practice for mineral reserves under both ASC 930 and the IFRS 6 analogy. The annual depletion charge is:

Annual Depletion = (Tons processed in period ÷ Total contracted tonnage over Term) × Carrying value

If actual deliveries fall below MAFV in any period, the CSA's Take-or-Pay obligation generates a cash receipt equal to the shortfall × the contractual floor rate. The depletion charge in a shortfall year is computed on the MAFV (not actual tons), reflecting the economic consumption of the reserve entitlement. Each subsequent 100 TPD expansion increment (per the CSA's Expansion Notice mechanism) recognizes a new intangible asset tranche at its own signing-date fair value and is added to the depletion denominator. Receipt of a Non-Renewal Notice (where applicable under the CSA) triggers accelerated depletion over the remaining contracted Term.

Impairment

The intangible asset is tested for impairment annually and at any indicator of impairment, under ASC 350-30 (U.S. GAAP) and IAS 36 (IFRS). The CSA's Take-or-Pay structure provides a structural impairment floor: in any scenario where physical delivery approaches zero, the Take-or-Pay generates cash receipts at the contractual floor rate that represent the minimum recoverable amount of the reserve. A decline in commodity prices for the Company's manufactured-materials portfolio does not independently constitute an impairment indicator for the contractual reserve, because the Take-or-Pay floor is not indexed to output prices. Impairment is assessed against the recoverable amount computed from the contractual cash floor, not against upside commodity-market value.

Revenue Recognition — ASC 606 / IFRS 15

The CSA is the "contract with a customer" for purposes of ASC 606 and IFRS 15. The Company's performance obligations under the CSA are: (i) Beneficiation services — processing manufacturing feedstock through the four-Protocol sequence and producing certified RevCon™ Materials, recognized over time using an output method (revenue as each ton is processed), satisfying ASC 606-10-25-27(b); and (ii) RevCon™ Materials sales — recognized at point in time when control of the materials transfers to the purchaser at the facility gate upon certified product release. Variable consideration arising from Take-or-Pay shortfall payments is included in the transaction price to the extent it is highly probable that no significant revenue reversal will occur; the contractual Take-or-Pay floor is the constraint anchor.

Royalty Treatment — Cost of Goods Sold

The Circular Royalty™ (Option A) and the Public Authority Resource Royalty (PARR) (Option B) are classified as Cost of Goods Sold (COGS) on the project-level income statement. They are never netted against revenue, never presented as a revenue reduction, and never presented as a contra-revenue item. This classification is consistent with the CSA's express characterization of the royalty as an operating obligation paid from materials sales proceeds and is required by the Company's Separate Transaction Principle, which governs that the Beneficiation Fee and the Circular Royalty™ (or PARR) are independent contractual transactions that are never netted (see PPM-15). The royalty is accrued as a COGS line item on a 13-month rolling basis following the corresponding feedstock delivery, consistent with the CSA's payment mechanics, irrespective of the actual cash payment date. The royalty obligation is also recognized as a contract liability at CSA signing at the present value of the total royalty stream over the Term plus the contractual royalty tail.

Option B Asset Swap — Dual Asset Recognition

Where the Feedstock Provider elects the Option B Asset Swap, deed transfer of the project site and supporting infrastructure to the Company at CSA signing triggers dual asset recognition on the same Recognition Date:

• Land and Site Improvements — recognized as PP&E under ASC 360 / IAS 16 at the fair value of the deeded estate at the recording date, supported by an independent third-party real-property appraisal. Land is not depreciated; site improvements are depreciated over their estimated useful lives (typically 15–20 years for civil infrastructure).
• Contractually-Secured Reserve — recognized as an intangible asset on the basis described above and depleted on the same UOP basis.

The two assets are recognized and measured independently. Their combined initial carrying values represent the functional equivalent, in a manufacturing-feedstock context, of a mineral interest in extractive industries — the surface estate plus the contractually secured material stream. The key distinction from a geologic mineral interest is that the Company's reserve is contractually guaranteed under an executed CSA rather than geologically risked, which strengthens the impairment floor without changing the asset classification.

Parent Performance Guarantee

The 18-month Parent Performance Guarantee issued by Carbotura Inc. to the Feedstock Provider under CSA Article 18 is a financial guarantee within the meaning of ASC 460 (U.S. GAAP) and IFRS 9 / IAS 37 (IFRS). The guarantee liability is recognized at inception at fair value (expected to be minimal given the 18-month cap and senior-to-equity recourse structure) and is disclosed in the Company's financial statement notes as a contingent liability with the maximum exposure quantified.

Take-or-Pay — Derivative Assessment

The CSA's Take-or-Pay mechanism — asymmetric under Option A and symmetric under Option B — is assessed under ASC 815 (Derivatives and Hedging) and IFRS 9 (Financial Instruments) at each CSA signing. The Company expects the own-use exception (ASC 815-10-15-22 / IFRS 9.2.4) to apply, because the CSA's primary purpose is the physical processing of manufacturing feedstock and the Company does not have a practice of net settlement. In that case, Take-or-Pay shortfall amounts are recognized as variable consideration under ASC 606 / IFRS 15 when probable and estimable. If the derivative definition is met and no scope exception applies for a specific CSA, the Take-or-Pay obligation will be carried at fair value through earnings. A standalone derivative-assessment memorandum is prepared for each new CSA.

Status — DRAFT Policy Pending Auditor Pre-Clearance

The APM is in DRAFT status and is not effective until countersigned by the Company's independent registered public accounting firm. Prior to the first sale of securities in this offering, the Company intends to: (i) retain a qualified independent appraiser under ASC 820 / IFRS 13 to co-sign the URV-S valuation report for the York County facility; (ii) obtain a Big 4 audit firm pre-clearance letter on the policy framework described above; and (iii) prepare the standalone Take-or-Pay derivative assessment memorandum. The Company will also seek SEC Staff Accounting Bulletin pre-clearance on the intangible-asset recognition policy if and when it undertakes any registered securities offering. The policy described in this PPM-22B section is the Company's intended treatment and is subject to revision based on auditor, appraiser, and (if applicable) SEC staff input.

Disclosure Anchor

Once effective, the Company's financial-statement note disclosures regarding the URV-S intangible asset will include: description of the asset and methodology; gross carrying amount and accumulated depletion at each period end; UOP depletion method and total contracted tonnage denominator; period depletion charge; reconciliation of opening to closing gross carrying amount; ASC 820 / IFRS 13 fair-value measurement disclosures (Level classification, valuation technique, significant unobservable inputs at the appropriate level of generality); and, when the IAS 38 revaluation model is active under IFRS, revaluation date, method, and surplus recognition. Public disclosures will describe the contractually-secured reserve and the URV-S methodology at the level required for investor and regulator understanding, without disclosing the specific URV-S model inputs and parameters that constitute Company trade secret.

This PPM-22B section is a high-level summary of the Company's intended accounting policy. The complete policy is set forth in Accounting Policy Memorandum APM-URVS-001 v2026.7.2 DRAFT (CSA Cascade Applied), which is the controlling document for all accounting determinations described above. Prospective investors should review the full APM in the data room and should consult their own accounting advisers regarding the implications of the policy for their pre-investment financial diligence.

Management's Discussion & Analysis

This Management's Discussion & Analysis (the "MD&A") supplements the historical and projected financial information set forth in PPM-22A (Historical Financial Information & Development-Stage Disclosure), PPM-22B (URV-S Accounting Treatment), and PPM-23 (Financial Statements & RevCon 3 Financial Projections). It provides the Company's narrative discussion of recent developments, results of operations, liquidity and capital resources, material commitments, critical accounting estimates, and operational outlook. This MD&A is forward-looking in substantial part and is subject to the Forward-Looking Statement Disclaimer set forth in PPM-02 and the Risk Factors in Part II.

Overview & Recent Developments

Carbotura Inc. (the "Company") is a Delaware C-Corporation formed in June 2025 through an IRS Section 351 tax-free reorganization. The Company is the originator of the Advanced Circular Manufacturing (ACM) industrial category. Since formation, the Company has executed its first commercial Circular Supply Agreement (CSA) with York County, Pennsylvania, advanced facility design and procurement for the York County ACM Manufacturing Center, qualified its Authorized Systems Integrator (ASI) and vendor programme, formalized its three-agreement Circular Advantage Program architecture (CSA / CMOA / CEAA + Annex SD-1), and prepared for the Series A-1 offering — the first institutional capital raise in the Company's history. The Company has not yet achieved Commercial Operations Date (COD) at any facility; the York County COD target is 2027.

Results of Operations

The Company is a development-stage enterprise. During the period from formation (June 2025) through the most recent quarter-end, the Company generated no material operating revenue. Activity during this period has consisted of: continued platform development and engineering work in connection with the York County facility; execution and administration of the York County CSA through the Company's wholly owned subsidiary Carbotura York, LLC; pipeline development and global agent network engagement; corporate, legal, accounting, and pre-offering activities in preparation for the Series A-1 offering; and maintenance of the brand, intellectual property, and operational frameworks contributed at formation. Operating expenses during this period have consisted principally of general and administrative costs, engineering and project development costs (a portion of which has been capitalized pre-COD consistent with the Company's accounting policies — see PPM-22B), legal and professional fees, and pre-offering expenses. Specific period figures are set forth in PPM-22A.

The Company expects its first material operating revenue to commence at and following the York County COD (target 2027) and the corresponding feedstock-delivery royalty trigger. Beneficiation Fee (TMC Fee) revenue is expected to be recognized over time using an output method under ASC 606 / IFRS 15; RevCon™ Materials sales revenue (governed by the CMOA) is expected to be recognized at point in time on delivered output. The Circular Royalty™ is an operating obligation recognized as COGS and is never netted against revenue under the Separate Transaction Principle (see PPM-22B).

Liquidity & Capital Resources

The Company's liquidity to date has consisted of contributed assets at formation and modest founder-funded working capital. The Company has no operating revenue, has not yet issued any institutional equity prior to this offering, and has not yet incurred senior project debt. The Company has no committed bank credit facility at the parent level as of the date of this Memorandum. Continuing operations through the York County COD (target 2027) depend upon (i) the successful completion of the Series A-1 offering at or near the maximum offering amount of $100,000,000, (ii) the successful sequencing of subsequent project-level senior debt financing and the Circular Bond instrument under the Build · Bond · Recycle architecture described in the Executive Summary, and (iii) the absence of any material adverse development in the regulatory, permitting, financial, or operating environment of the York County project.

The Company believes that the Series A-1 proceeds, deployed in accordance with PPM-21 (Use of Proceeds), are sufficient to advance the York County facility through the construction, commissioning, and COD milestones at the RevCon 3 baseline assumptions. There can be no assurance that those assumptions will be realized or that the Series A-1 offering will be fully subscribed. Failure of any of the foregoing conditions to be satisfied could materially impair the Company's ability to continue as a going concern. See Part II PPM-08 (Financial & Liquidity Risk).

Material Commitments & Off-Balance-Sheet Arrangements

The Company's principal material commitments as of the date of this Memorandum consist of: (i) the executed York County CSA (30-year minimum term, perpetual continuation; Beneficiation Fee and Circular Royalty™ payment streams; Parent Performance Guarantee capped at 18 months); (ii) ASI and vendor engagement commitments under the Authorized Systems Integrator framework; (iii) employment and advisor agreements with officers and key personnel; (iv) intercompany arrangements between the Company and Carbotura York, LLC (see PPM-20 — Related Party Transactions); and (v) the Insurance Broker of Record engagement with Aon plc (see PPM-20A — Insurance & Indemnification).

The Company has no material off-balance-sheet arrangements as of the date of this Memorandum, other than the Parent Performance Guarantee under CSA Article 18 (recognized as a financial guarantee under ASC 460 / IFRS 9; expected to be minimal in fair-value terms given the 18-month cap and senior-to-equity recourse structure — see PPM-22B). The Take-or-Pay obligations under the CSA are expected to qualify for the own-use exception under ASC 815 / IFRS 9 and are accounted for as variable consideration under ASC 606 / IFRS 15 (see PPM-22B).

Critical Accounting Estimates & Judgments

The Company's most significant accounting estimates and judgments — set forth in the Accounting Policy Memorandum APM-URVS-001 (v2026.7.2 DRAFT, CSA Cascade Applied) and summarized in PPM-22B — are: (i) the recognition and measurement of the URV-S Proven Contractual Reserve as an identifiable intangible asset at CSA signing under ASC 350-30 / IAS 38, including the Level 3 fair-value determination requiring qualified independent appraiser co-signature; (ii) the units-of-production depletion applied across the CSA Term, including treatment of MAFV-based depletion in Take-or-Pay shortfall years; (iii) the Single Mass-Basis Rule (Annex SD-1) requiring that the same physical mass be counted once each in the asset (CSA), revenue (CMOA), and attributes (CEAA) dimensions and never summed across dimensions; (iv) the Take-or-Pay derivative assessment under ASC 815 / IFRS 9 (own-use exception expected); and (v) the going-concern assessment dependent on Series A-1 completion. These estimates and judgments are inherently subject to uncertainty and may be revised as auditor pre-clearance, independent appraiser review, and operational experience accumulate.

Forward-Looking Operational Outlook

The Company's principal near-term operational milestones are: (i) completion of the Series A-1 offering; (ii) completion of pre-construction engineering and Module Delivery Authorization for the York County facility; (iii) commencement of construction with the General Contractor; (iv) achievement of the York County Commercial Operation Date (target 2027); (v) commencement of feedstock delivery and Beneficiation Fee (TMC Fee) revenue recognition under the CSA; and (vi) the commencement of RevCon™ Materials sales under the CMOA, with the Circular Royalty™ obligation commencing 13 months after corresponding feedstock delivery. Beyond York County, the Company's medium-term outlook is the systematic conversion of pipeline opportunities (~49 identified projects, ~$41.2 billion aggregate CAPEX) into executed CSAs and, ultimately, into the 50-facility programme target. The Series A-1 offering funds York County only; pipeline financing is expected to be sourced through future equity rounds, project-level senior debt, government grant programs, and the Circular Bond instrument under the Build · Bond · Recycle architecture (see Executive Summary; PPM-16; PPM-23).

This MD&A is forward-looking in substantial part. Actual results may differ materially from the outlook described above. Prospective investors should not place undue reliance on this MD&A and should read it together with PPM-22A, PPM-22B, PPM-23, the Risk Factors in Part II, and the Forward-Looking Statement Disclaimer in PPM-02.

Financial Statements & RevCon 3 Financial Projections

The following projections present the Company's Revenue Confidence Level 3 (RevCon 3) financial model for the York County ACM Manufacturing Center over a ten-year operating horizon beginning at the target Commercial Operation Date (COD) of 2027. RevCon 3 is the Company's conservative commercial and operational baseline. All projections are forward-looking estimates and subject to the qualifications set forth below and in the Forward-Looking Statement Disclaimer in Part I of this Memorandum.

Key Model Assumptions — RevCon 3 Baseline

10-Year Revenue Projection — RevCon 3 Baseline · York County · 400 TPD

The following table presents the projected Revenue Stack for the York County facility over the first ten operating years under the RevCon 3 baseline. Year 1 represents the first full year of commercial operation following COD (target: 2027). Ramp-up is reflected in throughput assumptions for Years 1–3. All figures are management estimates from the Authorized Model.

All projections are forward-looking estimates under the RevCon 3 baseline. Revenues shown are gross before debt service. Circular Royalty™ outflow is presented as a COGS line item in Year 2 onward, reflecting the 13-month operational lag from corresponding feedstock delivery (Year 1) to first royalty payment to York County. The $185–$300M steady-state revenue range represents the full RC3 revenue stack at design throughput; Year 10 ($222M) reflects the lower end of that range, consistent with conservative RC3 assumptions. The $4.93B cumulative 30-year revenue figure includes 2.5% CPI escalation and the full phased ramp per the Authorized Model. RevCon 4 and RevCon 5 projections are upside scenarios only and are not presented here. Carbon credit, 45Q, and 45V revenues are excluded from the RC3 baseline. Hydrogen is excluded from all revenue projections — captive use only.

Historical Financial Statements

Carbotura Inc. has not yet completed an audit of its historical financial statements. Historical audited financial statements (or reviewed financial statements) for the Company's prior fiscal years will be prepared and included as Exhibit E to this Memorandum prior to distribution to prospective investors. Prospective investors should be aware that the Company's historical financial statements will reflect a development-stage enterprise with no revenue from ACM manufacturing operations, development-stage costs, and capital formation activities.

30-Year Cumulative Revenue Summary

Subscription Procedures & Accredited Investor Verification

This offering is conducted pursuant to Rule 506(c), which permits general solicitation but requires the Company to take reasonable steps to verify that each purchaser is an accredited investor. The following procedures govern the subscription process and accredited investor verification for this offering.

Step-by-Step Subscription Process

Accredited Investor Verification — Accepted Methods

The following verification methods are accepted by the Company under Rule 506(c)'s safe harbor provisions. Investors may use any method appropriate to their circumstances.

Subscription Funds — Escrow and Closing Mechanics

Subscription funds will be held in a designated account or escrow arrangement pending the applicable closing. The Company does not have a minimum offering amount — the offering does not require a minimum aggregate subscription to hold a closing. The Company may, in its sole discretion, hold closings at any time upon acceptance of subscriptions it deems appropriate. Subscription funds are not held in a formal escrow account unless specifically required by applicable law or as described in the applicable Subscription Agreement. Investors should review the specific escrow or funding mechanics set forth in the Subscription Agreement (Exhibit B) before submitting a subscription.

The Company reserves the right to accept or reject any subscription, in whole or in part, for any reason or no reason, at any time prior to the applicable closing. The Company is not obligated to accept subscriptions in the order in which they are received. Return of rejected subscription funds will occur promptly after rejection, without interest.

Investor Contact

All investor inquiries, subscription requests, and accredited investor verification submissions should be directed to:

Plan of Distribution

The following describes the manner in which the Series A-1 Preferred Stock will be offered and sold. This offering is being conducted pursuant to Rule 506(c), which permits general solicitation and advertising of the offering to the general public, provided that all sales are made exclusively to verified accredited investors.

Manner of Offering — Self-Directed by Company Officers

The Company intends to offer the Series A-1 Preferred Stock directly through its officers and employees, including Allen Witters (Chairman and CEO), Shannon Law (EVP Investor Relations), and Paul Camp (EVP Capital Markets & Structuring). No placement agent has been engaged as of the date of this Memorandum; however, the Company reserves the right to engage one or more FINRA-registered broker-dealers as placement agents for this offering. If a placement agent is engaged, the placement agent's identity, the terms of the engagement, and the compensation to be paid will be disclosed in a supplement to this Memorandum prior to any sales through such placement agent.

Officers of the Company who participate in the offer and sale of securities in this offering are relying on the safe harbor provided by Rule 3a4-1 under the Securities Exchange Act of 1934, which exempts certain officers and employees from broker-dealer registration requirements in connection with participation in exempt offerings. Each such officer must meet the requirements of that safe harbor, including that they are not subject to a statutory disqualification and do not receive transaction-based compensation for their participation.

General Solicitation — Permitted Activities Under Rule 506(c)

Rule 506(c) permits the use of general solicitation and advertising in connection with this offering. The Company may conduct the following solicitation activities:

• Publication of offering materials and investor information on the Company's investor portal at finance.carbotura.com and the Intelligence Hub at ih.carbotura.com
• Distribution of this Memorandum and accompanying materials to prospective investors who have accessed the investor portal and confirmed preliminary accreditation status
• Investor presentations, roadshows, and meetings conducted by Company officers
• Outreach to institutional investors, family offices, and high-net-worth individuals through direct contact by Company officers
• References to the offering in press releases, media interviews, and conference presentations
• Online marketing and digital advertising, subject to applicable securities law requirements

All general solicitation materials used in connection with this offering must comply with the anti-fraud provisions of the federal securities laws, including Rule 10b-5 under the Securities Exchange Act of 1934. The Company maintains a log of all investor contacts, presentations, and solicitation materials commencing from the date this offering is first publicly communicated.

Placement Agent — Status and Compensation

As of the date of this Memorandum, no placement agent has been formally engaged for this offering. The Company is evaluating whether to engage a FINRA-registered broker-dealer to assist with investor introductions and subscription processing. Any person who receives compensation — whether in cash, securities, or any other form — in connection with the offer or sale of securities in this offering must be a registered broker-dealer or an associated person of a registered broker-dealer, or must qualify for an applicable exemption from broker-dealer registration. The Company will not pay any unregistered finder's fees in connection with this offering.

If a placement agent is engaged, the terms of the engagement — including any cash commission, placement fee, or warrants to be issued to the placement agent — will be disclosed in a supplement to this Memorandum. Any compensation paid to a placement agent will be deducted from the gross proceeds of the offering and will reduce the net proceeds available for use by the Company as described in the Use of Proceeds section.

Restrictions on Transfer

The Series A-1 Preferred Stock sold in this offering has not been registered under the Securities Act and is being offered and sold pursuant to an exemption from registration. The securities may not be resold or transferred unless they are subsequently registered under the Securities Act or an exemption from registration is available. Each share certificate (or book-entry notation) will bear a legend to the following effect:

Rule 144 Availability

Rule 144 under the Securities Act provides a safe harbor for the resale of restricted securities in public markets, subject to conditions including a holding period, information requirements, volume limitations, and manner of sale conditions. As a non-reporting company, Carbotura Inc. is not currently subject to the SEC's reporting requirements under the Exchange Act. Investors should be aware that Rule 144 is generally not available for resale of securities of a non-reporting company until the Company becomes a reporting company and satisfies all applicable Rule 144 conditions. There is no assurance that the Company will ever become a reporting company or that Rule 144 will become available as a resale mechanism for the Series A-1 Preferred Stock.

State Securities Law — Blue Sky Notice Filings

The Series A-1 Preferred Stock constitutes "covered securities" under Section 18(b)(4)(D) of the Securities Act, by virtue of the Rule 506(c) exemption, and is therefore exempt from state registration requirements under the National Securities Markets Improvement Act of 1996 (NSMIA). However, many states require the filing of a Form D notice and payment of a filing fee in connection with Rule 506(c) offerings made to investors residing in that state. The Company will make all required Form D state notice filings on a timely basis. Investors should consult their own legal counsel regarding any state-specific requirements applicable to their investment.

Form D Filing

The Company will file a Form D with the SEC electronically through the SEC's EDGAR system within 15 calendar days after the first sale of securities in this offering, pursuant to Rule 503 of Regulation D. The Form D will identify the offering as a Rule 506(c) offering, confirm the offering's general solicitation status, and provide the required information about the Company, its officers, and the offering terms. The Company will also file any required amendments to the Form D and any required state notice filings on a timely basis. The Form D is a notice filing only and does not constitute SEC approval or review of the offering.

Regulation S — International Investors

To the extent securities are offered and sold to Non-U.S. Persons (as defined in Rule 902(k) under Regulation S) in offshore transactions, such offers and sales will be conducted in compliance with Regulation S under the Securities Act. The terms and conditions governing offshore offers and sales are set forth in Part X of this Memorandum (Regulation S Addendum) and in Exhibit REG-S. Non-U.S. Person investors must read the Regulation S Addendum in its entirety before participating in this offering. Securities sold to Non-U.S. Persons pursuant to Regulation S are subject to applicable flowback restrictions and offshore transaction conditions as described in Part X.

Material U.S. Federal Tax Considerations

The following is a summary of material U.S. federal income tax considerations relevant to the acquisition, ownership, and disposition of the Series A-1 Preferred Stock by investors who are U.S. persons. This summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations thereunder, and administrative and judicial interpretations in effect as of the date of this Memorandum, all of which are subject to change — possibly retroactively — in a manner that could adversely affect the tax consequences described below.

Dividends

Distributions paid on the Series A-1 Preferred Stock will generally be treated as ordinary dividend income to the extent paid from the Company's current or accumulated earnings and profits, as determined under U.S. federal income tax principles. To the extent any distribution exceeds the Company's current and accumulated earnings and profits, such excess will be treated first as a tax-free return of the investor's adjusted tax basis in the shares, and thereafter as capital gain. At the current stage of the Company's development, the Company does not anticipate paying dividends on the Series A-1 Preferred Stock in the near term and does not have accumulated earnings and profits from prior operations. Investors should consult their own tax advisors regarding the tax treatment of any distributions they receive.

Qualified Dividend Income

Dividends paid by a domestic corporation that constitute "qualified dividend income" are generally taxable to individual U.S. taxpayers at the preferential long-term capital gains rates (currently 0%, 15%, or 20%, depending on the investor's taxable income), subject to a minimum holding period requirement. Investors should consult their own tax advisors regarding the applicability of the qualified dividend income rules to any distributions received on the Series A-1 Preferred Stock, as qualification depends on factors specific to each investor and each distribution.

Sale, Exchange, or Conversion of Series A-1 Preferred Stock

A sale, exchange, or other taxable disposition of the Series A-1 Preferred Stock will generally result in capital gain or loss equal to the difference between the amount realized and the investor's adjusted tax basis in the shares. Capital gain or loss will generally be long-term if the shares have been held for more than one year at the time of disposition, and short-term otherwise. Long-term capital gains of individual taxpayers are generally taxable at preferential rates (0%, 15%, or 20%) subject to applicable income thresholds. Capital losses may be subject to limitations on deductibility.

The conversion of Series A-1 Preferred Stock into common stock of the Company will generally not be a taxable event, except to the extent cash is received in lieu of fractional shares. Investors should consult their own tax advisors regarding the tax consequences of any conversion.

Net Investment Income Tax

Individual U.S. investors whose modified adjusted gross income exceeds applicable thresholds ($200,000 for single filers; $250,000 for joint filers) are subject to a 3.8% net investment income tax (NIIT) on certain investment income, including dividends and capital gains from the sale or exchange of the Series A-1 Preferred Stock. Investors should consult their own tax advisors regarding the applicability of the NIIT to their investment in the Series A-1 Preferred Stock.

Information Reporting and Backup Withholding

Payments of dividends and proceeds from the sale or exchange of the Series A-1 Preferred Stock may be subject to information reporting to the IRS and possible backup withholding at the applicable rate (currently 24%) if the investor fails to provide a valid taxpayer identification number and certify that the investor is not subject to backup withholding. Backup withholding is not an additional tax; amounts withheld may be credited against the investor's U.S. federal income tax liability. Investors that are exempt from backup withholding (including most corporations) should provide documentation confirming their exempt status.

Foreign Account Tax Compliance Act (FATCA)

Under FATCA (Sections 1471 through 1474 of the Code), a withholding tax of 30% may be imposed on dividends paid on the Series A-1 Preferred Stock and on gross proceeds from the sale or exchange of the Series A-1 Preferred Stock, to certain non-U.S. financial institutions and other non-U.S. entities that fail to comply with FATCA information-reporting and withholding requirements. Prospective non-U.S. investors should consult their own tax advisors regarding the applicability of FATCA to their investment.

State and Local Tax Considerations

The Company is incorporated in Delaware and will operate its primary facility in Pennsylvania. Investors may be subject to state and local income taxes on income from the Series A-1 Preferred Stock (including dividends and capital gains from disposition) depending on their state and local tax jurisdiction. Pennsylvania and Delaware impose income taxes on various categories of investment income. Investors should consult their own tax advisors regarding the state and local tax consequences of an investment in the Series A-1 Preferred Stock.

Tax Considerations for the Company — Relevant Items

The following tax matters are relevant to the Company's projected financial performance and should be considered by prospective investors in evaluating the Company's financial projections:

ERISA and Plan Investment Considerations

The following is a summary of certain considerations relevant to the investment in the Series A-1 Preferred Stock by employee benefit plans subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), plans described in Section 4975(e)(1) of the Code (including individual retirement accounts and Keogh plans), and entities whose underlying assets include "plan assets" within the meaning of ERISA (collectively, "Benefit Plan Investors").

Fiduciary Responsibility

ERISA imposes duties of prudence and loyalty on fiduciaries of ERISA-covered employee benefit plans. Before investing in the Series A-1 Preferred Stock, a fiduciary of an ERISA plan should determine whether the investment is consistent with the plan's investment policy, satisfies the prudent expert standard of care, is prudently diversified, and is appropriate in light of the plan's specific circumstances — including the plan's funding status, liquidity needs, risk tolerance, and investment time horizon. Given the speculative and illiquid nature of an investment in early-stage private equity, fiduciaries should carefully evaluate whether such an investment is consistent with their fiduciary obligations.

Prohibited Transaction Rules

ERISA and Section 4975 of the Code prohibit certain transactions between an ERISA plan or an IRA and "parties in interest" or "disqualified persons" with respect to the plan. These prohibited transactions include, among others, the sale or transfer of property, the lending of money, the extension of credit, and the furnishing of goods, services, or facilities between the plan and a party in interest. If the Company or any of its affiliates, officers, directors, or stockholders is or becomes a "party in interest" or "disqualified person" with respect to an investing plan, an investment by that plan in the Series A-1 Preferred Stock could constitute a prohibited transaction unless a statutory or administrative exemption applies. Each Benefit Plan Investor should consult with its own ERISA counsel prior to investing to confirm that no prohibited transaction will result from the investment.

Plan Asset Regulations

Under ERISA, the assets of a Benefit Plan Investor that invests in an entity may be treated as "plan assets" of the investing plan, in which case ERISA's fiduciary responsibility and prohibited transaction provisions would apply to the Company's assets and operations. However, if the equity interest offered in an entity does not constitute a "significant participation" in the entity by Benefit Plan Investors (generally, if less than 25% of the value of each class of equity interest in the entity is held by Benefit Plan Investors), the entity's assets are generally not treated as plan assets. The Company intends to monitor the aggregate holdings of Benefit Plan Investors in the Series A-1 Preferred Stock. However, no assurance can be given that Benefit Plan Investor holdings will remain below the 25% threshold at all times. Each Benefit Plan Investor should consult with its own ERISA counsel regarding the applicability of the plan asset regulations to its investment in the Series A-1 Preferred Stock.

Unrelated Business Taxable Income (UBTI)

Tax-exempt investors, including ERISA plans and IRAs, may be subject to federal income tax on unrelated business taxable income (UBTI) if the Company generates income that constitutes UBTI for such investors. UBTI can arise, among other circumstances, when a tax-exempt investor holds an interest in an entity that incurs "acquisition indebtedness" or engages in activities unrelated to the investor's exempt purpose. The Company does not currently anticipate that the Series A-1 Preferred Stock will generate significant UBTI for tax-exempt investors; however, no assurance can be given in this regard. Tax-exempt investors should consult with their own tax advisors regarding the potential for UBTI in connection with their investment.

Representations by Benefit Plan Investors

Each investor that is a Benefit Plan Investor will be deemed, by subscribing for the Series A-1 Preferred Stock, to have represented that: (i) the fiduciary making the investment decision on behalf of the plan is independent of the Company and is qualified to make such investment decision; (ii) the fiduciary has determined that the investment is appropriate for the plan in light of the plan's investment policy and the plan's financial circumstances; and (iii) the fiduciary has determined that no prohibited transaction will result from the investment. Each Benefit Plan Investor must also separately confirm these representations in the Subscription Agreement (Exhibit B).

Anti-Money Laundering & Know-Your-Customer Compliance

The Company is committed to full compliance with applicable anti-money laundering (AML), counter-terrorist financing (CTF), and know-your-customer (KYC) laws and regulations. The following disclosures describe the Company's AML/KYC compliance obligations in connection with the Series A-1 offering and the representations and information that will be required from each investor.

Applicable Legal Framework

The Company is subject to applicable U.S. anti-money laundering laws and regulations, including the Bank Secrecy Act (BSA), the USA PATRIOT Act of 2001, and regulations promulgated thereunder by the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury. In connection with the offer and sale of the Series A-1 Preferred Stock, the Company (and any placement agent engaged for the offering) is required to implement reasonable AML/KYC procedures to verify the identity of each investor and to detect and prevent money laundering, terrorist financing, and other financial crimes.

Investor Identity Verification

Each prospective investor will be required to provide information and documentation sufficient to verify their identity and the source of funds to be invested. Required information and documentation typically includes:

• Individual investors: Government-issued photo identification (passport, driver's license, or equivalent); current address; taxpayer identification number; information regarding the source of funds to be invested in this offering.
• Entity investors: Organizational documents (certificate of incorporation, articles of organization, partnership agreement, or equivalent); evidence of formation and good standing; information regarding beneficial owners of the entity owning 25% or more; identification of authorized signatories; information regarding the source of funds.
• Trust investors: Trust agreement; identification of trustees and beneficial owners; evidence of authorization to invest.
• Foreign investors: Enhanced due diligence documentation as required by applicable law, including documentation establishing the investor's home-country AML compliance framework, source of wealth, and beneficial ownership chain.

OFAC Compliance and Prohibited Investors

The Company is required to comply with the economic sanctions programs administered by the U.S. Office of Foreign Assets Control (OFAC). The Company will screen each prospective investor against OFAC's Specially Designated Nationals and Blocked Persons (SDN) list, the Consolidated Sanctions List, and other applicable restricted party lists before accepting any subscription. The Company will decline to accept any subscription from any person or entity that is:

• Included on any OFAC SDN or restricted party list
• Located in a jurisdiction subject to comprehensive U.S. economic sanctions (currently including Cuba, Iran, North Korea, Russia, Syria, and the Crimea, Donetsk, and Luhansk regions of Ukraine)
• Owned or controlled by, or acting on behalf of, any person or entity included on any OFAC restricted party list
• Otherwise prohibited from receiving or holding U.S. securities under applicable sanctions law

By submitting a subscription, each investor represents and warrants that the investor is not a Specially Designated National or a person otherwise subject to applicable OFAC sanctions, that the investor is not acting for or on behalf of any such person, and that the investment funds do not originate from any jurisdiction or entity subject to applicable U.S. economic sanctions.

Politically Exposed Persons (PEPs)

Prospective investors who are, or who are closely associated with, a politically exposed person (PEP) — defined generally as a current or former senior government official, political party official, military officer, state-owned enterprise executive, or judicial official, and their immediate family members and close associates — are subject to enhanced due diligence requirements. PEP investors must provide additional information regarding the source of their wealth and investment funds. The Company reserves the right to decline subscriptions from PEP investors at its sole discretion.

Beneficial Ownership for Legal Entity Customers

Consistent with FinCEN's beneficial ownership rule (31 C.F.R. § 1010.230), each entity investor must identify and provide verification documentation for all natural persons who directly or indirectly own or control 25% or more of the equity interests of the entity (the "Beneficial Owners") and for the single individual with significant responsibility to control, manage, or direct the entity (the "Control Person"). This information is required regardless of whether the entity is a domestic or foreign legal entity. Entity investors must complete the Beneficial Ownership Certification Form included in the Subscription Agreement (Exhibit B).

Right to Request Additional Information

The Company reserves the right, at any time before or after acceptance of a subscription, to request additional information from any investor for purposes of completing AML/KYC verification. Failure to provide requested information within a reasonable time period may result in rejection of the subscription or, if securities have already been issued, the Company may be required by applicable law to take remedial action including suspension of the investor's account rights or mandatory redemption of the investor's securities.

Investor Representations

By subscribing for Series A-1 Preferred Stock, each investor represents and warrants to the Company that:

• The investor is not a Specially Designated National or otherwise subject to OFAC sanctions;
• The investor's subscription funds are not derived from, and will not be commingled with, any proceeds of unlawful activity;
• The investor is not acting as an agent, nominee, or trustee on behalf of any undisclosed principal who would not be eligible to invest directly;
• The investor will promptly notify the Company if any of the foregoing representations become inaccurate;
• The investor consents to the Company sharing AML/KYC information with any placement agent, administrator, or regulatory authority as required by applicable law.

These AML/KYC compliance procedures apply in addition to, and are not a substitute for, the accredited investor verification requirements of Rule 506(c). Each investor must satisfy both the AML/KYC requirements described in this section and the accredited investor verification requirements described in the Subscription Procedures section (PPM-25) before a subscription will be accepted.

Defined Terms & Glossary

The following glossary defines terms used throughout this Memorandum. Terms are arranged alphabetically. Capitalized terms not defined here have the meanings ascribed to them in the applicable operative documents — the Series A-1 Term Sheet, the Subscription Agreement, and the Circular Supply Agreement.

Flowback Restrictions & Transfer Restrictions for Offshore Securities

Distribution Compliance Period — One Year

For securities sold under Regulation S to Non-U.S. Person investors, the Distribution Compliance Period is one year from the date of the applicable closing. During the Distribution Compliance Period, each Non-U.S. Person investor who acquires Series A-1 Preferred Stock under Regulation S must comply with the following restrictions:

Legend on Securities

Each share of Series A-1 Preferred Stock sold to a Non-U.S. Person under Regulation S will bear the following legend (in addition to the standard Securities Act transfer restriction legend described in PPM-26):

Permitted Transfers During and After the Distribution Compliance Period

During the Distribution Compliance Period, transfers of Regulation S securities may be made to other Non-U.S. Persons in offshore transactions, provided that the transferee makes all applicable Regulation S representations and agrees to be bound by the restrictions described in this Part X and Exhibit REG-S. After the Distribution Compliance Period, transfers of Regulation S securities to U.S. Persons may be made pursuant to Rule 144 (if available, subject to the conditions described in PPM-26) or another applicable exemption from the registration requirements of the Securities Act. All transfers remain subject to the Company's ROFR, co-sale, and transfer approval requirements.