Base Carbon Annual Letter to Shareholders

Executive Summary

• Base Carbon reports a cash‑rich balance sheet (≈ US$5.7 M) with no debt and has repurchased >20% of its shares, indicating strong free‑cash‑flow generation.
• All three flagship projects are delivering or poised to deliver significant carbon credit inventories: Rwanda Cookstoves (CORSIA‑eligible, ~1.8 M credits on hand), Vietnam Household Devices (Phase 2 option at US$5/credit, projected 7.6 M credits), and India Afforestation (6.5 M trees planted, ~1.2 M credits expected).
• The company values its assets at roughly US$109 M versus a market cap of ≈ US$57 M, suggesting a ~50% discount and substantial upside potential for shareholders.

Key Details

• Financial Position – Cash balance of US$5.7 M (≈10% of market cap) and zero debt; share repurchase of >25.6 M shares (≈20% of outstanding).
• Asset Valuation – Booked assets ≈ US$109 M vs. current market valuation ≈ US$57 M (≈0.5×).
• Rwanda Cookstoves Project – Achieved CORSIA‑eligible tagging in Feb 2026; first compliance sales completed. Inventory: ~1.1 M credits held by Base Carbon + ~680k credits held by partner DelAgua Group. Anticipated future issuance ≈ 2.6 M credits (bi‑annual cadence).
• Vietnam Household Devices Project – Phase 1 returned invested capital and generated >US$15 M of returns. Phase 2 option to purchase all future credits at US$5/credit; projected 7.6 M credits, with an expansion option adding ~4.7 M credits (total potential ≈ 19.7 M).
• India Afforestation/RE/REV Project – 6.5 M trees planted; transitioning to Verra VM0047 methodology and seeking ABACUS label. Expected issuance ≈ 1.2 M credits over crediting period, with two optional expansions of 10 M trees each (20 M additional trees). First credits expected early 2027.
• Market Outlook – Company expects continued price upside for high‑integrity carbon credits; believes downside risk to current pricing is limited and cash flow generation will remain positive even if prices fall.
• Share Repurchase Program – Ongoing, with no new equity issuances since becoming public.

Notable Quotes

“The impediment to action advances action. What stands in the way becomes the way.” — Marcus Aurelius, Meditations

All forward‑looking statements are subject to risks and uncertainties detailed in the release.