Base Carbon : Management’s Discussion & Analysis for the Years Ended December 31, 2023

BASE CARBON INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

FOR THE YEARS ENDED

DECEMBER 31, 2023 AND 2022 (EXPRESSED IN UNITED STATES DOLLARS)

Base Carbon Inc.

Management's Discussion and Analysis For the year ended December 31, 2023

Introduction

The Management's Discussion and Analysis ("MD&A") of the financial condition and results of the operations of Base Carbon Inc. (the "Company" or "Base Carbon") constitutes management's review of the factors that affected the Company's consolidated financial and operating performance for the year ended December 31, 2023. This discussion should be read in conjunction with the Company's audited annual consolidated financial statements for the year ended December 31, 2023 (the "consolidated financial statements"), and together with the notes thereto. This MD&A is dated as of April 2, 2024, unless otherwise indicated.

Unless otherwise indicated and as hereinafter provided, all financial information contained in this MD&A, and the Company's consolidated financial statements have been prepared in accordance with IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). Unless otherwise noted in this MD&A, all monetary amounts are expressed in United States dollars, and "we", "us" and "our" refer to the "Company" or "Base Carbon" including each of its subsidiaries.

The Company exists under the Business Corporations Act (Ontario). Its registered and mailing office is located at 50 Carroll Street, Toronto, Ontario, M4M 3G3.

Caution Regarding Forward-Looking Statements

This MD&A contains forward-looking statements about the Company's objectives, plans, goals, aspirations, strategies, financial condition, results of operations, cash flows, performance, prospects, opportunities, and legal and regulatory matters. Specific forward-looking statements in this MD&A include, but are not limited to, statements with respect to the Company's anticipated future results, events, plans, strategic initiatives, future liquidity, planned capital investments, such as statements as to expectations for the Company's current carbon credit projects in development and future pipeline opportunities, including the steps involved to realize on such opportunities and the timeline in which such opportunities may be realized, as to the timing and number of carbon credits expected to be generated by such carbon credit projects and the resulting financial performance, and under the headings "Key Events and Project Updates" and "Outlook".

Forward-looking statements are typically identified by words such as "expect", "anticipate", "believe", "foresee", "could", "estimate", "goal", "intend", "plan", "seek", "strive", "will", "may", "maintain", "achieve", "grow", "should" and similar expressions, as they relate to the Company and its management. Forward-looking statements reflect the Company's current estimates, beliefs and assumptions, which are based on management's perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. The Company's expectation of operating and financial performance in 2024 is based on certain assumptions including assumptions about operational growth, anticipated cost savings, operating efficiencies, anticipated benefits from strategic initiatives, future liquidity, and planned capital investments. The Company's estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive, and other uncertainties and contingencies regarding future events and as such, are subject to change. There is no assurance that such estimates, beliefs and assumptions will prove to be correct.

In particular, and without limiting the generality of the foregoing, this MD&A contains forward-looking statements concerning:

• • the Company's business plans and strategies;

• • expectations regarding carbon market trends, overall carbon market growth rates and prices for carbon credits;

• • expectations regarding the operation and/or development of the Company's carbon removal or carbon reduction project, including as to the timing of carbon credit issuances for such projects and the number of carbon credits expected to be generated by such projects;

• • expectations with respect to future pipeline opportunities, including the steps involved to realize on such opportunities and the timeline in which such opportunities may be realized; and

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Base Carbon Inc.

Management's Discussion and Analysis For the year ended December 31, 2023

• • future development activities, including acquiring interests in carbon removal or carbon reduction projects and carbon credits and the development of software and technological applications to carbon removal or carbon reduction projects and carbon credits.

Although management believes that the anticipated future results, performance or achievements expressed or implied by the forward-looking information are based upon reasonable assumptions and expectations, readers should not place undue reliance on forward-looking information because it involves assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking information.

The forward-looking statements made herein are subject to a variety of risks and uncertainties, many of which are beyond the Company's control, which could cause actual events or results to differ materially and adversely from those reflected in the forward-looking statements. These risks and other factors are described or referred to herein are described in the Company's Annual Information Form for the year ended December 31, 2023 (the "AIF") under the heading "Risk Factors", copies of which are available under the Company's profile on SEDAR onwww.sedarplus.ca.

Investors and all readers also cautioned that the factors and assumptions described above, in the AIF and this MD&A are not exhaustive. Readers are also cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Should one or more of the risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially and adversely from those described in the forward-looking statements. The Company's actual results, programs and financial position could differ materially from those expressed in or implied by these forward-looking statements, and accordingly, no assurance can be given that the events anticipated by the forward-looking statements will transpire or occur, or that, if any of them do so, what benefits the Company will derive therefrom. The forward-looking statements contained in this MD&A are made as of the date of this MD&A unless otherwise stated and are expressly qualified by this cautionary statement. The Company does not undertake any obligation to publicly update or revise any forward-looking statements except as expressly required by applicable securities laws.

General Business Description

Base Carbon is a publicly traded entity which is listed on the Cboe Canada under the trading symbol "BCBN" and trading on the OTCQX Best Market under the symbol "BCBNF". Base Carbon runs administrative operations through its wholly owned subsidiaries, Base Carbon Corp. and Base Carbon (US) Corp., and general operations, including ownership of carbon removal and carbon reduction and removal projects through its wholly owned subsidiary Base Carbon Capital Partners Corp. ("BCCPC").

Base Carbon, through BCCPC, provides capital, development expertise and management operating resources to projects involved in the voluntary carbon markets. The Company seeks to be the preferred carbon project partner in providing capital and developmental resources to carbon projects globally and, where appropriate, will endeavour to utilize technologies within the evolving carbon industry to enhance efficiencies, commercial credibility, and trading transparency.

As part of the Company's strategy, the Company focuses most of its business activities across three fundamental carbon project stages:

• • Identification Stage: sourcing of high-quality carbon development projects based on a combination of internal and external factors. Internally, potential projects must comply with the Company's environmental, social and governance policy, project structure for risk mitigation and due diligence, economic return objectives, project development timelines and carbon production profiles. Projects that are expected to produce initial credits within three years are considered near-term, between three and seven years are considered medium-term and over seven years are

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Base Carbon Inc.

Management's Discussion and Analysis For the year ended December 31, 2023

considered long-term. External factors include benchmarking against the United Nations' Sustainable Development Goals. The Company will then seek to enter contractual arrangements setting out the project.

• • Development Stage: the Company utilizes internal expertise to fulfill its commitment to help facilitate the successful development of each selected high-quality carbon project. Depending upon the project, Base Carbon may introduce select additional project partners and co-investors such as large multinational corporations seeking offtake arrangements to 'decarbonize' their business activities.

• • Operational Stage: implementing technology and software tools to enhance efficiency and transparency of carbon development projects which will support and develop the broader carbon economy. This can include project management or oversight standards relating to measurement, reporting, verification, and auditing to enhance the efficiencies and credibility of carbon credits.

At this time, the Company is focused on developing projects suited to the growing voluntary carbon markets. The Company intends to monitor the continued evolution of the compliance carbon markets and may consider developing compliance related projects in the future.

Key Events and Project Updates

STX Group Partnership

In December 2023, the Company signed a Letter of Intent (LOI) with STX Group, a prominent player in environmental markets and climate solutions, to jointly create an investment vehicle focused on innovative carbon removal projects. This venture aims to meet the rising demand for high-quality carbon removals, aligning with global net-zero commitments. The investment focus will prioritize greenfield carbon solutions with robust quantification, scientific integrity, community engagement, and adherence to industry standards and the Paris Agreement.

STX Group is a global environmental commodity trader and climate solutions provider, with a history of over 25 years in the transition to a low-carbon economy. With trading and Corporate Climate Solutions offerings, STX Group directs funds towards green projects, providing certified proof-points for corporate environmental contributions.

STX Group will provide project origination, development, marketing, and distribution services leveraging its global market expertise, while Base Carbon will manage the fund, utilizing its investment platform and team. This collaboration represents a significant step in both companies' efforts to reduce global greenhouse gas emissions. Investor marketing and project discussions began in early 2024.

Consolidation of BCCPC and HCBL Restructuring

As further described in the Company's existing AIF, consolidated financial statements, and management's discussion and analysis for the year ended December 31, 2022, on November 4, 2021, Base Carbon entered into an investment agreement (the "Investment Agreement") between, among others, Philip Hardwick and Hardwick Climate Business Limited, that set out a series of transactions (collectively, the "HCBL Transaction") providing for investments in HCBL by Base Carbon, the establishment and funding of a joint venture entity (being BCCPC) between Base Carbon and HCBL to invest in carbon reduction projects, various consulting arrangements and the purchase of all issued and outstanding shares of HCBL over three phases, each conditional upon parties satisfying certain conditions including business deliverables.

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Base Carbon Inc.

Management's Discussion and Analysis For the year ended December 31, 2023

On May 10, 2023, the Company completed a restructuring transaction which included the purchase of the remaining 22% of outstanding shares of BCCPC from HCBL, in exchange for $2,996,000 in total consideration. The consideration was comprised of (i) $1,600,000 in cash, and (ii) a promissory note payable to HCBL for $1,396,000, which was cancelled upon the Company reducing its equity ownership in HCBL from 49.9% to 15%.

As part of the restructuring transaction, the Company entered into a consulting and origination agreement with HCBL, whereby HCBL will continue to originate and present carbon reduction and removal project opportunities to the Company for investment, partnership, or development until June 30, 2024. The Company has agreed to pay HCBL milestone-driven project origination fees of up to 3.5% in aggregate of the Company's required capital investment for qualified carbon reduction or removal projects which are sourced by HCBL and executed by Base Carbon. HCBL will also provide certain consulting services to the Company with respect to the Company's carbon project portfolio for a fixed fee of approximately $908,788 during the term. This fee was paid in full during the year ended December 31, 2023.

In connection with the HCBL restructuring transaction, pursuant to a new escrow agreement, Philip Hardwick resigned as Chief Operating Officer of Base Carbon and reverted to his role as CEO of HCBL. 2,324,376 common shares of the Company previously issued to Philip Hardwick under the terms of the original investment agreement were placed into escrow until June 30, 2024. Philip Hardwick also entered into an individual consulting agreement with the Company and was issued 500,000 Base Carbon common share purchase options with an exercise price of C$1.00 per common share (the "Options"). 1/3 of the Options vested immediately and the remaining amount will vest in equal tranches on the first and second anniversaries of closing, which was May 10, 2023.

As a result of the restructuring transaction, a net amount of $316,834 was reported through the retained earnings in the statement of changes in equity. The $316,834 figure represents the difference between the fair value of the outstanding shares of BCCPC, the total consideration of (i) and (ii) for the outstanding BCCPC shares, and the historic losses of BCCPC attributable to non-controlling interest.

The Company has 100% equity ownership in BCCPC as a result of the transactions, and the Company retained a 15% equity ownership in HCBL.

Vietnam Household Devices Project

On May 27, 2022, the Company, through BCCPC, entered into a project agreement with SIPCO as in-country project developer, to facilitate the Vietnam Household Devices Project. Pursuant to the terms of the agreement, Base Carbon would invest US$20,828,600 to fund the manufacturing, distribution and monitoring of approximately 850,000 cookstoves and 364,000 water purifiers across several provinces of Vietnam. Citigroup is the carbon credit off-taker for the Vietnam Household Devices Project.

The project was registered with Verra under project IDs #2923 (cookstoves) and #2557 (water purifiers) with PDDs available on Verra's website. The cookstoves component of the project is currently registered with Verra using methodology 'VMR0006 Energy Efficiency and Fuel Switch Measures in Thermal Applications' and based upon such project methodology and a pro rata calculation of the number of carbon credit identified in the initial verification reports, the projects could generate up to an aggregate of approximately 45 million carbon credits over the project's lifespan. However, the number of carbon credits issued will depend upon the project methodologies and the actual amount of carbon reduced by a project as monitored and then verified by the validation and verification body ("VVB"). Subsequently, Verra reviews the submitted verification report and, if accepted, issues the corresponding carbon credits. A significant deviation of the operations and/or performance of a project for a particular time period (or verification period) from the estimates set out in the PDD or project methodology may negatively impact the number of carbon credits issued with respect to such verification period. Downward revisions to methodologies or the adoption of new methodologies, including the recent revisions to methodology VMR0006 adopted by Verra in July 2023, may also negatively impact the number of carbon credits issued.

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Base Carbon Inc.

Management's Discussion and Analysis For the year ended December 31, 2023

Readers are cautioned that forward-looking statements are not guarantees of future performance. Specific reference is made to the most recent AIF on file with the Canadian provincial securities regulatory authorities (and available on SEDAR) for a more detailed discussion of some of the factors underlying forward-looking statements and the risks that may affect the Company's ability to achieve the expectations set forth in the forward-looking statements contained in this MD&A and in the AIF.

The first carbon credits were generated and issued by the project during Q2 2023 and the Company expects issuance of carbon credits expected approximately every six months over the estimated 10-year life of the project.

Based on the agreement terms, SIPCO will sell and transfer to BCCPC, and SIPCO will buy back from BCCPC the first 7.4 million carbon credits for subsequent offtake by Citigroup ("Phase 1"). BCCPC has the right but not the obligation to purchase the additional carbon credits generated by the project at a prescribed price from SIPCO ("Phase 2"). If BCCPC exercises this option to buy all the additional carbon credits, BCCPC may then sell such carbon credits to either SIPCO, pursuant to a buyback option (two thirds of which may be for offtake to Citigroup) or into the open Voluntary Carbon Credit Market (or a combination thereof).

Device Purchases and Distribution

All 1,214,000 Vietnam Household Devices Project cookstove and water purifying devices are purchased and distributed to participating households, approximately four months earlier than the initial plan of May 2023 and on budget.

Vietnam Capital Deployment

As at December 31, 2023, the Company made payments totalling $19,177,018. These payments were made in accordance with specific project milestones and subject to certain conditions continually being met by SIPCO.

Capital deployed in Q1 2023 Capital deployed in Q2 2023 Capital deployed in Q3 2023 Capital deployed in Q4 2023

(2,666,105) (245,683) (244,000) -

Vietnam Capital Deployment	Amount
Committed capital deployment at project execution	20,828,600
Capital deployed as at December 31, 2022	(16,021,230)
Total capital deployed as at December 31, 2023
Remaining capital deployment as at December 31, 2023

$

$ (19,177,018)

$

1,651,582

As at December 31, 2023, Base Carbon has spent 92% of the aggregate capital deployment for the Vietnam Household Devices Project. During the year ended December 31, 2023, the Company deployed $3,155,788 in payments towards the Vietnam Household Devices Project. Remaining capital expenditures in support of ongoing project monitoring and verification expenses are anticipated to be fully deployed in regular intervals by year end 2024.

Carbon Credit Issuances

In June 2023, Base Carbon completed cash settlement of its first tranche of carbon credits relating to Phase 1 of the Vietnam Household Devices Project. Pursuant to its agreement with the project developer, SIPCO, and offtake arrangement with Citigroup, these carbon credits were delivered to Citigroup who paid Base Carbon in full for the carbon credits.

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Base Carbon Inc.

Management's Discussion and Analysis For the year ended December 31, 2023

Issuance	Carbon Credit	# of Carbon Credits	Cash Payment Received
Type	Issued and Delivered
Issuance #1	Cookstoves	1,020,903
Issuance #2	Water Purifiers	95,318	548,079
Total	1,116,221	$ 6,418,271

$ 5,870,192

In May 2023, the first issuance totaling 1,020,903 carbon credits associated with the cookstove component

of the Vietnam Household Devices Project were sold and transferred to the project off-taker. In June 2023,

the Company received the full payment of $5,870,192.

In June 2023, the first issuance totaling 95,318 carbon credits associated with the water purifier component

of the Vietnam Household Devices Project were sold and transferred to the project off-taker. In June 2023,

the Company received the full payment of $548,079.

The table below summarizes the changes in the Vietnam Household Devices Project during the year ended

December 31, 2023:

Vietnam Household Devices Project Balance, beginning of the period

December 31, 2023

December 31, 2022

Capital deployed in the project during the period Unrealized gain on investment in carbon credit projects (i) Realized gain on investment in carbon credit projects (ii) Settlements of investment in carbon credit projects (ii)

• $ 16,021,230 3,155,788

  $

• $ 104,684,223 6,418,271 (6,418,271)

  - 16,021,230 - -

  Balance, end of the period

• $ 123,861,241

$ 16,021,230

(i) Unrealized gain on investment in carbon credit projects

During the year ended December 31, 2023, the Company evaluated the investment's performance of the Vietnam Household Devices Project after the successful verification, delivery and cash settlement of the first tranche of carbon credits which resulted in a change of the valuation technique and the significant increase of unrealized gains for the Vietnam Household Devices Project.

.

The Company considers the contractual settlement of $6,418,271 for the carbon credits issued and transferred to Citigroup as significant cashflow from the project. This significant cashflow demonstrates that there is a greater probability of future cashflows being generated from the project, in accordance with contractual terms and the Company's forecast for the project.

This significant cashflow demonstrates that:

• • The project is operating in line with approved Verra methodologies, leading to the generation of carbon credits;

  • o Verra is an organization that develops and manages standards for various sustainability initiatives. Verra manages a global carbon markets program, the Verified Carbon Standard ("VCS") Program. Subject to their VCS program requirements, Verra certifies, verifies and monitors carbon reduction projects, and approves carbon credit issuance from the projects.

• • The project is on schedule to generate verified carbon credits;

  • o The project can achieve timely milestones, including verification of carbon credits by Verra, delivery of the credits to SIPCO, transfer of the credits to Citigroup and receipt of contractual cashflows.

Prior to this assessment, the Company was strictly at the capital deployment stage without earnings from the project.

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Base Carbon Inc.

Management's Discussion and Analysis For the year ended December 31, 2023

Based on these assessments, and in accordance with IFRS 13, the Company determined that the valuation technique for the project should be changed from the cost approach to the income approach. The income approach uses a discounted cash flow ("DCF") model, totalling the future discounted after-tax cashflows from the lifetime of the project. The Company considers the income valuation technique to be the most relevant and reliable in representing the fair value of the Vietnam Household Devices Project now that the project has issued carbon credits.

The carbon credit price, carbon credit volume and discount rate inputs have the most significant impact on the valuation of the investment.

i)Carbon Credit Price:

Excluding the fixed off-take volumes of 7,400,000 carbon credits for Phase 1 of the project, a price curve ranging from $9.27 to $9.75 was used as pricing inputs for the 38,385,981 carbon credits which may be issued during Phase 2 of the project. The price curve used was from an independent carbon reduction credit pricing source.

ii) Carbon Credit Volumes:

During Phase 1 of the project the project is expected to generate an estimate 7,400,000 carbon credits.

During Phase 2 of the project, from 2025 to 2032, based on the latest project monitoring reports, the project design document ("PDD"), current methodology VMR0006, and other factors, including expected use of cookstoves and water purifiers by participating households and the performance of such devices, the project is projected to generate up to an estimated 38,385,981 carbon credits. As discussed above, the number of carbon credits issued will depend upon the project methodologies applied and the actual amount of carbon reduced by a project as monitored and then verified by the VVB which may change over time.

Failing to meet these projected carbon credits volumes in the future will result in significant impairment to the investment value, resulting in losses of unrealized gains.

iii)Discount Rates:

During Phase 1 of the project, the discount rate used is 8%.

During Phase 2 of the project, the discount rate used is 15%.

The discount rates account for conditions and risk factors of the project, including:

• • Methodology risk relating to carbon reduction projects

• • Uncertainty of carbon credit volume

• • Uncertainty of carbon credit price and market conditions

• • Foreign operations and political risk

Refer to the "DCF model sensitivity analysis" for details on the inputs' impact on the consolidated financial statements.

After revaluation under the income approach, the Vietnam Household Devices Project was valued at $130,035,512. The initial unrealized gain arising from the revaluation was $111,102,494, which was the difference between the new income basis value of $130,035,512, and the previous cost basis value of $18,933,018.

After the sale of 1,116,221 carbon credits for $6,418,271 during the year ended December 31, 2023, $6,418,271 was recognized as a realized gain from settlement of the carbon credits, and the unrealized gain in the period decreased from $111,102,494 to $104,684,223 as a result.

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Base Carbon Inc.

Management's Discussion and Analysis For the year ended December 31, 2023

During the year ended December 31, 2023, the company made a total of $3.2 million in payments towards the SIPCO project, which were added to the SIPCO current investment balance. The fair value of the Vietnam Household Devices Project's as at December 31, 2023 was $123,861,241.

The Rwanda Cookstove Project remains in the development stage and is pre-issuance of carbon credits and the valuation technique remains at the cost basis of $8,825,000 as at December 31, 2023, in measurement of fair value.

The India ARR Project remains in the development stage and is pre-issuance of carbon credits and the valuation technique remains at the cost basis of $4,400,000 as at December 31, 2023, in measurement of fair value.

The Company will continue to update its evaluation of each project on a quarterly basis, based on the project performance, market conditions, and various risk factors.

There is no active market or observable market data for the investments in carbon credit projects, and it is classified as Level 3 in the fair value hierarchy.

During the year ended December 31, 2023, there were no transfers of assets between Level 1, Level 2 and Level 3 for investments in carbon credit projects.

(ii) Realized gain on investments in carbon credit projects

In 2023 the Vietnam Household Devices Project generated carbon credits. Through agreements with SIPCO and Citigroup, these were delivered directly to Citigroup. This resulted in the contractual settlement of $6,418,271 and represents the amount derecognized from the financial asset balance of the investment in the Vietnam Household Devices Project and therefore the realized gain on investments in carbon credit projects during the year ended December 31, 2023.

For the initial volumes delivered in Phase 1 of the Vietnam Household Devices Project, management contractually agreed a prepayment price of $4 per carbon credit generated, and as a result assessed the prepayment cost of $4,466,884 relating to the total carbon credits delivered in the period. This resulted in a net contractual gain for this portion of phase 1 of the arrangement of $1,951,387 ($6,418,271 proceeds from disposition of carbon credits, less $4,466,884 cost of investment).

DCF model sensitivity analysis

The Company considers carbon credit prices, carbon credit volumes, and the discount rates used in the DCF model as the main inputs impacting the valuation of the investment in the Vietnam Household Devices Project. Based on a 1% increase or decrease in each of the inputs when compared to the base case inputs used in the DCF model, the Company's valuation would have the following estimate impacts on net income for the year ended December 31, 2023:

Key Input and Change in Assumption	Impact on Net Income for the Six Months Ended December 31, 2023
Carbon credit price input increased by 1%	$2,033,932 increase in net income and total assets
Carbon credit price input decreased by 1%	$2,033,932 decrease in net income and total assets
Carbon credit volume input increased by 1%	$1,202,519 increase in net income and total assets
Carbon credit volume input decreased by 1%	$1,202,519 decrease in net income and total assets
Discount rates input increased by 1%	$512,767 decrease in net income and total assets
Discount rates input decreased by 1%	$512,767 increase in net income and total assets

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Base Carbon Inc.

Management's Discussion and Analysis For the year ended December 31, 2023

Rwanda Cookstoves Project

On January 25, 2022, the Company, through BCCPC, entered into a carbon reduction project agreement with a subsidiary of the DelAgua Group to supply cookstoves in the country of Rwanda as part of an expansion of its existing carbon reduction project previously registered as a clean development mechanism (or CDM) project governed by the United Nations pursuant to the Kyoto Protocol. Pursuant to the terms of the agreement, BCCPC invested US$8,825,000 to fund the manufacturing, distribution and monitoring of approximately 250,000 cookstoves across rural Rwanda in exchange for a revenue sharing agreement with respect to the first 7.5 million carbon credits which are expected to be generated by such fleet of the project.

As announced during December 2023, the Government of Rwanda issued a letter of authorization (the "LOA") with respect to the Rwanda Cookstoves Project which resulted in Verra issuing its first ever correspondingly adjusted or "Article 6 Authorized Label" for a carbon removal or reduction project. A corresponding adjustment is a concept included in Article 6 of the 'Paris Agreement' relating to climate change and is intended to address the potential issue of double counting emission reductions. By applying a corresponding adjustment, the project host country agrees to not count the emission reductions from the project as part of their national commitment to lower carbon emissions.

The DelAgua Group was recently issued approximately 815,000 carbon credits with respect to Base Carbon's 250,000 cookstoves each tagged by Verra with the "Article 6 Authorized Label" or as correspondingly adjusted carbon credits. BCCPC and the DelAgua Group are currently in discussions with respect to the implementation of the LOA. It is currently anticipated each carbon credit tagged with the "Article 6 Authorized Label" will be equal to approximately 1.14 carbon credits for the purposes of the 7.5 million carbon credits subject to the revenue sharing arrangement between the BCCPC and the DelAgua Group. The Company believes that the correspondingly adjusted carbon credits designation will expand the pool of buyers with potential pricing upside for such carbon credits.

In aggregate, the Company expects to receive approximately 2.1 million carbon credits, or 1.85 million correspondingly adjusted carbon credits, from the Rwanda Cookstoves Project during 2024 for sale into the market according to the project agreement and revenue sharing arrangement, pursuant to which BCCPC maintains a contractual preferential share of proceeds from the sale of such credits.

Device Purchases and Distribution

Distribution of all 250,000 cookstoves associated with the initial project in Rwanda has been completed.

Rwanda Capital Deployment

As at December 31, 2023, the Company had completed all project payments totalling $8,825,000 relating to the Rwanda Cookstoves Project. These payments were made in accordance with specific project milestones and subject to certain conditions being met by DelAgua.

Rwanda Capital Deployment	Amount
Committed capital deployment	$ 8,825,000
Capital deployed as at December 31, 2022	(8,450,000)

Capital deployed in Q2 2023

(375,000)

Remaining capital deployment

$

-

Investment in India Afforestation, Reforestation, and Revegetation (ARR) Project

As announced on August 8, 2023, the Company, through BCCPC, entered into an agreement to facilitate the development of a nature-based carbon removal project, focused on the reforestation of degraded rural farmlands in the northern Indian state of Uttar Pradesh. Value Network Ventures Advisory Services Pte Ltd. ("VNV") is Base Carbon's project development partner.

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