Investor Note — Reliability, Uptime and Insurability

Why Carbotura Is Not
a Project-Risk Investment

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

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

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

The risk you already know

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

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

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

02

A plant that is manufactured

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

Before any module reaches a site, it is assembled, integration-tested and certified by our Authorized Systems Integrator (ASI), with an independent validation partner present at factory and site acceptance. Every module must perform within a 2.5% manufacturing tolerance of its specification.

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

The core distinction

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

Other industries already build this way

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

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

Reliability, uptime, insurability

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

The biggest shift is timing. A project’s performance is known at commercial operation. Ours is known at the factory, before your capital meets the site.

04

Side by side

Dimension Typical EPC project Carbotura DFM
Performance known At commercial operation At the factory, within 2.5% tolerance
Adding capacity Design and build a bigger plant Add identical, validated modules
Accountability Contractor, subs and vendors One ASI with a single warranty
Redundancy Optional, at owner’s cost N+1 line capacity installed
Major repair Field diagnosis, custom parts Swap a standard module from spares
Insurance Full wrap on an unproven plant Serialized asset cover, moving to guarantee and warranty
Timeline Typically 42–78 months to commercial operation 12–24 months from permit issuance, always as a range
05

What this means for you

You are underwriting a manufactured asset with validated performance. Site integration still has to be done, and site integration testing exists to close it out. The process risk that defines a project is retired at the factory.

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

Questions worth asking us in diligence

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

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

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

What does the ASI guarantee and warranty cover?

The ASI is the single party that holds the performance guarantee, and the module comes with one warranty. If a module doesn’t perform, you go to one party. We go through the specific guarantee and warranty terms under NDA in diligence.

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

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

How is frame and module insurance structured?

Frames and modules are insured as serialized manufactured assets under property and equipment-breakdown cover. Each one comes with its production record and acceptance-test data. Performance risk sits with the ASI guarantee and warranty instead of a construction-style performance wrap. We walk through current carrier terms and coverage limits one-on-one.

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