basecarbon

BASE CARBON INC.

UNAUDITED CONDENSED INTERIM
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2025 AND 2024
(EXPRESSED IN UNITED STATES DOLLARS)

Base Carbon Inc.
Condensed Interim Consolidated Statements of Financial Position
(Expressed in United States Dollars)
Unaudited

	Note	September 30, 2025	December 31, 2024
ASSETS
Current assets
Cash and cash equivalents		$ 7,987,145	$ 14,798,726
Short term investments		39,282	41,687
Other receivables		8,056	18,997
Short term loan receivable	4	1,005,787	-
Related party loan receivable	5	931,014	1,464,274
Prepaid and other assets		116,525	48,872
Carbon credit inventory	6	23,085,177	25,632,656
Current investments in carbon credit projects	7	11,385,144	8,816,450
Rwanda Revenue Share Asset	8	1,841,174	-
		46,399,304	50,821,662
Non-current assets
Property and equipment		61,488	93,480
Non-current investments in carbon credit projects	7	65,205,295	61,067,618
Investments at fair value		85,000	85,000
Total Assets		$ 111,751,087	$ 112,067,760
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities		$ 184,274	$ 806,044
Income tax liability	9	901,137	936,825
		1,085,411	1,742,869
Non-current liabilities
Deferred tax liabilities	9	7,746,657	7,253,245
Lease liability		30,566	63,216
Total liabilities		$ 8,862,634	$ 9,059,330
Shareholders' Equity
Share capital	10	$ 46,125,055	$ 48,513,906
Contributed surplus	11	1,713,560	1,813,148
Retained earnings		55,049,838	52,681,376
Total shareholders' equity		102,888,453	103,008,430
Total Liabilities and Shareholders' Equity		$ 111,751,087	$ 112,067,760

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

Approved and authorized on behalf of the Board of Directors:

Director /s/ "Michael Costa"
Director /s/ "Margot Naudie"

Base Carbon Inc.
Condensed Interim Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
(Expressed in United States Dollars)

Unaudited

	Note	For the three months ended September 30,		For the nine months ended September 30,
		2025	2024	2025	2024
Gains on investments in carbon credit projects
Realized cash settled gains on investments in carbon credit projects	7	$ -	$ 11,037,196	$ 1,811,143	$ 23,545,648
Total gains on investments in carbon credit projects		-	11,037,196	1,811,143	23,545,648
Carbon credit sales
Carbon credit sales		-	190,000	-	190,000
Carbon credit cost of sales		-	(268,800)	-	(268,800)
Gross profit (loss) on carbon credit sales		$ -	$ (78,800)	$ -	$ (78,800)
Operating expenses
Consulting		195,191	149,809	581,890	791,273
Professional fees		171,872	155,424	543,414	665,570
Salaries and wages		526,110	528,580	2,527,960	2,367,138
General and administrative		77,398	78,182	351,998	449,449
Travel, marketing and promotion		114,253	233,203	387,380	368,484
Depreciation		13,457	12,884	39,586	37,861
Filing fee		17,395	7,368	70,849	54,971
Insurance		21,193	105,280	84,013	300,415
Share-based compensation	11	22,222	70,754	92,284	293,116
Write-down of inventory	6	2,063,868	-	2,063,868	-
Royalty license fee	5	-	281,248	45,279	593,959
Sales tax expense		-	160,507	-	160,507
Total operating expenses		3,222,959	1,783,239	6,788,521	6,082,743
Operating income (loss) for the period		$ (3,222,959)	$ 9,175,157	$ (4,977,378)	$ 17,384,105
Unrealized gains (losses) on investments in carbon credit projects	7	7,398,777	(8,875,730)	10,160,938	(29,594,671)
Foreign exchange gain (loss)		(3,137)	16,720	19,376	23,433
(Loss) on re-quantification of inventory	6	(2,932,298)	-	(2,932,298)	-
Unrealized gain on Rwanda RSA	8	235,294	-	235,294	-
Interest income		77,865	64,882	226,913	96,620
Interest expense		(3,767)	(20,917)	(8,784)	(23,171)
Loss on investments at fair value		-	-	-	(600,000)
Other income	4 & 15	75,000	-	149,980	-
Net income (loss) before income tax		$ 1,624,775	$ 360,112	$ 2,874,041	$(12,713,684)
Income tax recovery (expense)	9	(12,818)	(298,679)	(505,579)	407,416
Net income (loss)		$ 1,611,957	$ 61,433	$ 2,368,462	$(12,306,268)
Comprehensive income (loss) for the period		$ 1,611,957	$ 61,433	$ 2,368,462	$(12,306,268)
Basic income (loss) per share		$ 0.02	$ 0.00	$ 0.02	$ (0.11)
Basic weighted average number of common shares		103,625,709	114,331,339	106,187,341	116,318,404
Diluted income (loss) per share		$ 0.02	$ 0.00	$ 0.02	$ (0.11)
Diluted weighted average number of common shares		105,171,334	114,704,401	106,880,815	116,318,404

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

Base Carbon Inc.
Condensed Interim Consolidated Statements of Cash Flow
(Expressed in United States Dollars)
Unaudited

	Note	For the three months ended September 30,		For the nine months ended September 30,
		2025	2024	2025	2024
Cash provided by (used in):
Operating Activities
Net income (loss) for the period		$ 1,611,957	$ 61,433	$ 2,368,462	$(12,306,268)
Adjustment for:
Depreciation		13,457	12,884	39,586	37,861
Share-based compensation	11	22,222	70,754	92,284	293,116
Unrealized loss (gain) on investment in carbon credit projects	7	(7,398,777)	8,875,730	(10,160,938)	29,594,671
Write-down of inventory		2,063,868	-	2,063,868	-
Loss on re-quantification of inventory		2,932,298	-	2,932,298	-
Unrealized (gain)/loss on Rwanda RSA		(235,294)	-	(235,294)	-
Foreign exchange (gain) loss		3,137	(16,720)	(19,376)	(23,433)
Loss on investments at fair value		-	-	-	600,000
Changes in operating assets and liabilities:
Other receivables		13,668	(40,253)	10,941	(55,618)
Related party receivable	5	(20,871)	(1,003,699)	533,260	(577,745)
Prepaid and other assets		100,079	14,702	(67,654)	66,287
Accounts payable and accrued liabilities		58,403	178,785	(621,770)	34,096
Income tax liability	9	(148,239)	145,153	(35,688)	318,557
Deferred income tax liability	9	161,056	156,313	493,412	(731,380)
Lease liability		(10,786)	(11,741)	(32,650)	(35,543)
Investments in carbon credit projects		(600,000)	(1,338,318)	(600,000)	(3,041,395)
Net cash from (used in) operating activities		$ (1,433,822)	$ 7,105,023	$ (3,239,259)	$ 14,173,206
Investing Activities
Short term investment		920	-	2,405	-
Purchase of property and equipment		-	(1,580)	(7,594)	(5,029)
Issuance of short-term loan receivable	4	(89,637)	-	(1,005,787)	-
Net cash used in investing activities		$ (88,717)	$ (1,580)	$ (1,010,976)	$ (5,029)
Financing Activities
Proceeds from exercise of options		85,096	-	88,977	-
Repurchase of shares	10	(1,019,432)	(966,896)	(2,669,700)	(1,957,762)
Net cash used in financing activities		$ (934,336)	$ (966,896)	$ (2,580,723)	$ (1,957,762)
Increase (decrease) in cash and cash equivalents		(2,456,875)	6,136,547	(6,830,958)	12,210,415
Change in cash related to foreign exchange		18,862	(65,790)	19,377	(60,735)
Cash and cash equivalents, beginning of period		10,425,158	7,479,605	14,798,726	1,400,682
Cash and cash equivalents, end of period		$ 7,987,145	$ 13,550,362	$ 7,987,145	$ 13,550,362

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

Base Carbon Inc.
Condensed Interim Consolidated Statements of Changes in Equity
(Expressed in United States Dollars)
Unaudited

	Number of Common Shares	Share Capital	Contributed surplus	Retained earnings	Shareholders’ Equity
Balance, December 31, 2023	117,918,182	$ 51,448,159	$ 1,654,038	$ 81,586,662	$ 134,688,859
Net loss for the period	-	-	-	(12,306,268)	(12,306,268)
Stock based compensation	-	-	293,116	-	293,116
Shares purchased and cancelled under NCIB	(5,654,396)	(1,957,762)	-	-	(1,957,762)
Balance, September 30, 2024	112,263,786	$ 49,490,397	$ 1,947,154	$ 69,280,394	$ 120,717,945
Balance, December 31, 2024	109,235,486	$ 48,513,906	$ 1,813,148	$ 52,681,376	$ 103,008,430
Net income for the period	-	-	-	2,368,462	2,368,462
Stock based compensation	-	-	92,284	-	92,284
Exercise of options	643,297	280,849	(191,872)	-	88,977
Shares purchased and cancelled under NCIB	(3,145,392)	(1,532,326)	-	-	(1,532,326)
Shares purchased and cancelled under share purchase agreements	(3,724,565)	(1,137,374)	-	-	(1,137,374)
Balance, September 30, 2025	103,008,826	$ 46,125,055	$ 1,713,560	$ 55,049,838	$ 102,888,453

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

Base Carbon Inc.

Notes to Unaudited Condensed Interim Consolidated Financial Statements

For the three and nine months ended September 30, 2025, and 2024

(Expressed in United States Dollars)

1. Nature of operations

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

Base Carbon, through BCCPC, is in the business of providing capital, development expertise and management of operating resources to projects involved primarily in the voluntary carbon markets and the broader environmental 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.

The Company exists under the Business Corporations Act (Ontario). The Company's registered and mailing address is 50 Carroll Street, Toronto, Ontario, M4M 3G3.

2. Basis of preparation

(a) Statement of compliance

These unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2025, were prepared in accordance with International Accounting Standard 34, and do not include all the information required for full annual financial statements. These unaudited condensed interim consolidated financial statements should be read in conjunction with the Company's audited annual consolidated financial statements for the year ended December 31, 2024.

Effective January 1, 2025, amendments to IAS 21 Lack of Exchangeability, provide guidance to specify when a currency is exchangeable and how to determine the exchange rate when it is not. It requires an entity to apply a consistent approach to assessing whether a currency is exchangeable into another currency and, when it is not, to determining the exchange rate to use and the disclosures to provide. These adopted amendments had no impact on the Company's unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2025.

The accounting policies as disclosed in the annual financial statements for the year ended December 31, 2024 have been applied consistently to the periods presented in these unaudited condensed interim consolidated financial statements unless otherwise noted under Note 3 Material Accounting Policies.

These unaudited condensed interim consolidated financial statements were approved and authorized for issuance by the Board of Directors on November 3, 2025.

(b) Going concern

These unaudited condensed interim consolidated financial statements have been prepared on a going concern basis which presumes that the Company will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the normal course of its operations. Refer to Note 14 Risk Management – Liquidity Risk for details.

(c) Basis of measurement

These financial statements have been prepared on a historical cost basis except for the Company's financial instruments, stock options, investments in carbon credit projects, and investments at fair value, which are measured at fair value.

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

(d) Basis of consolidation

These financial statements include the accounts of the Company and its subsidiary companies after eliminating intercompany balances and transactions. Subsidiaries are entities over which the Company has the power to govern financial and operating policies, generally accompanying a shareholding of greater than 50% of the voting rights.

At September 30, 2025, the Company's subsidiaries and consolidation basis are as follows:

Entity name	Functional currency	Place of incorporation	Ownership as at
			September 30, 2025	December 31, 2024
Base Carbon Capital Partners Corp. (BCCPC)	USD	Barbados	100%	100%
Base Carbon Corp.	USD	Canada	100%	100%
Base Carbon (US) Corp.	USD	United States	100%	100%

For historic details of the Company's investments in subsidiaries, refer to the Company's annual consolidated financial statements for the year ended December 31, 2024.

Material accounting policies

(a) Use of judgements and estimates

The preparation of these financial statements require management to make certain judgments, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual outcomes could differ from these estimates.

These financial statements include estimates that, by their nature, are uncertain. The impact of these estimates is pervasive throughout the financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Judgements made in applying accounting policies that have the most significant effects on the amounts recognized in these financial statements are included in the following notes:

Accounting for investments in carbon credit projects – management assessed the contractual agreements to determine whether the investments in carbon credit projects are financial instruments and their classification and measurement (Note 3(e)).
Accounting for carbon credit inventory – management assessed that the carbon credits from the Rwanda Cookstoves project are to be valued at the lower of cost or net realizable value (NRV), as the Company is not a commodity broker trader.

Information about assumptions and estimate uncertainties that have a significant risk of resulting in a material adjustment in these financial statements is included in the following notes:

Fair values of investments in carbon credit projects – management estimates the fair value using the cost approach or income approach depending on the stage of the investment in a carbon credit project, with such carbon credit investment classified as a financial instrument, the fair value determined by either the cost or income approach is presented through profit or loss (FVTPL) (Note 3(e)).

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

The cost approach is a valuation technique where fair value approximates the cumulative cash spend at the period end and assessing that the cost per carbon credit has not fallen below the carbon credit price. Projects valued using the cost approach involve significant subjectivity and estimation uncertainty, including the carbon credit price assumption (Note 7).

The income approach uses a discounted cash flow model, summing the future discounted after-tax cashflows generated over the life of the project to a current net present value. The model reflects market expectations based on key inputs and assumptions, namely the carbon credit price, carbon credit volume, and discount rates. Projects valued using the income approach involve significant subjectivity and estimation uncertainty, including assumptions related to the carbon credit price, carbon credit volume, and discount rates (Note 7).

As part of the operational stage of a carbon reduction project, the Company emphasizes the implementation of project management or oversight standards relating to measurement, reporting, verification and auditing to enhance the efficiencies and credibility of carbon credits.

With the exception of carbon credit market pricing inputs attained from a third-party pricing source, the valuation of the Company's projects is performed internally, with the India Afforestation, Reforestation and Revegetation Project ("India ARR project") using the cost approach, and the Vietnam Household Devices and Rwanda Cookstove projects valued by the income approach utilizing a "discounted cash flow" analysis.

Initial valuation is performed by the Company's Corporate Development Department, with subsequent assessment and review by the Company's Finance Department. Further review is performed by the Company executives, namely: The Company CEO, President and CFO. Personnel at each stage all possess the requisite qualifications and expertise. The Company believes it has all the necessary internal expertise to coordinate and perform the valuation.

Further oversight is provided by both the Audit Committee and Board of Directors, to whom details of projects are presented for review, and in the case of the Board of Directors, approval.

The Company uses a third party to provide data to determine the carbon credit price assumption. The Finance Department reviews documentation provided by that third party to confirm that the pricing source is appropriate for use in the valuation of investments in carbon credit projects.

Carbon credit inventory – management determines the lower of cost or NRV of carbon credit inventory by estimating the fair value of the carbon credits using the spot price on the date of receipt (i.e. cost) versus the fair value of the carbon credits using the spot price on the reporting date (i.e. NRV). Where it is determined that the spot price at the reporting date is lower than on the date of receipt, an appropriate write-down is made. If there is a subsequent increase in the value of inventory on hand, reversals of previous write-downs to net realizable value are made. The spot price is determined based on pricing inputs provided by a third-party pricing source.

(b) Carbon credit inventory

Carbon credit inventory is initially and subsequently measured at the lower of cost or NRV. In subsequent measurements, any write-down to NRV is recognized as an expense in the period in which the write-down occurs. Any reversal should be recognized in the income statement in the period in which the reversal occurs. Cost of carbon credit inventory received from investments in carbon credit projects is equal to management's estimate of the fair value of the carbon credits at the prevailing spot price of carbon credits prior to deducting any revenue-sharing obligations under the project agreement or financial costs related to the LOA (as defined below) issued by the Government of Rwanda (see Note 7) on the date of receipt.

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

IFRS 15 Revenue from Contracts with Customers establishes a comprehensive framework for recognizing revenue from contracts with customers. Under IFRS 15, revenue is recognized based on the transfer of control of goods or services to the customer at an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.

The Company recognizes revenue from the sale of carbon credits that are received and are initially recognized as inventory. Revenue is recognized upon transfer of control of the carbon credits to customers in an amount that reflects the consideration the Company receives. Revenue from the sale of carbon credits is recorded when the carbon credits have been transferred, and the Company's performance obligation has been satisfied.

(d) Functional and foreign currency translation

The presentation currency of these financial statements is United States dollars. The functional currency of the Company is also the United States dollar. The functional currency for the Company is determined by the currency of the primary economic environment in which it operates. The Company believes that the United States dollar as functional and presentation currency best reflects the current and future operating activities for the Company and will provide shareholders with an accurate reflection of the Company's various business activities. It will also enhance the future comparability of the Company's financial information to its industry peers listed on various global exchanges.

Currency exchange gains or losses on translation are included on the unaudited condensed interim consolidated statement of income and comprehensive income. Transactions denominated in foreign currencies are translated into the entity's functional currency as follows:

Monetary assets and liabilities are translated at the exchange rate in effect at the reporting date.
Non-monetary assets and liabilities are translated at historical exchange rates prevailing at each transaction date.
Deferred tax assets and liabilities are translated at the exchange rate in effect at the reporting date with translation gains and losses recorded in income tax expense; and
Revenues and expenses are translated at the average exchange rates throughout the reporting period, except depreciation, which is translated at the rates of exchange applicable to the related assets, and share-based compensation expense, which is translated at the rates of exchange applicable at the date of grant of the share-based compensation.

(e) Financial instruments

Classification

Financial assets are measured at fair value at initial recognition. Financial assets are subsequently measured at fair value through profit or loss (FVTPL), fair value through other comprehensive income (FVOCI) or amortized cost based on the business model for managing those financial instruments and the contractual cash flow characteristics of those instruments.

The Company's investment in the Vietnam Household Devices Project is a financial asset measured at FVTPL using the income approach to determine the fair value of the investment. The contracts are in the scope of IFRS 9 – Financial Instruments, because they are not entered into for the purpose of the receipt or delivery of carbon credits in accordance with the Company's expected purchase, sale or usage requirements and can be settled net in cash by either:

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

contractually, as the seller has a right or is obligated to pay a pre-agreed price to buy back the carbon credits instead of physical delivery,
entering into offsetting forward sales contract with another party, or
receiving a share of proceeds from sales to a third party instead of physical delivery.

The Company's investment in the Rwanda Cookstoves Project is a financial asset measured at FVTPL using the income approach to determine the fair value of the investment. The contracts are in the scope of IFRS 9, because the Company will take delivery of the contracted carbon credits once issued, and will enter into forward sales contracts with counterparties, or sell to counterparties at prevailing prices for cash settlement.

The Company's investment in the India ARR project is a financial asset measured at FVTPL using the cost approach to determine the fair value of the investment. The contracts are in the scope of IFRS 9, because the Company will take delivery of the contracted carbon credits once issued, and will enter into forward sales contracts with counterparties, or sell to counterparties at prevailing prices for cash settlement.

Equity instruments are measured at FVTPL, unless the asset is not held for trading purposes, and we make an irrevocable election to designate the asset as FVOCI. This election is made on an instrument-by-instrument basis.

Debt investments are classified based on the Company's business model for managing the assets and the contractual cash flow characteristics. Debt instruments are measured at:

Amortized cost if held to collect contractual cash flows that are solely payments of principal and interest (SPPI),
FVOCI if held to collect contractual cash flows and for sale, where the cash flows are SPPI, or
FVTPL for all other debt investments.

Currently, the Company's debt investment is measured at amortized cost.

The Company applies the expected credit loss (ECL) model to debt investments measured at amortized cost or FVOCI, recognizing a loss allowance at each reporting date. For debt investments at FVTPL, changes in fair value (including credit risk) are recognized in profit or loss.

Debt investments are derecognized when the contractual rights to cash flows expire or are transferred, and the Company has transferred substantially all the risks and rewards of ownership.

Financial liabilities are initially measured at fair value and are derecognized when the obligations are discharged, cancelled, or expire.

IFRS 9 includes an expected credit loss model for all financial assets measured at amortized cost and debt instruments measured at FVOCI. Expected credit losses are the present value of cash shortfalls over the remaining expected life of the financial asset using either a 12-month expected credit losses or lifetime expected credit losses.

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

(f) Share based payments

Share based payment are securities instruments that call for settlement by issuing equity instruments, typically common shares, which are granted as an award to employees, contractors or directors. The awards are valued using the Black Scholes option valuation model. The cost is recognized on a graded vesting method basis, adjusted for expected forfeitures as an employee, contractor or director expense with a corresponding increase to equity in contributed surplus. Consideration paid by employees, contractors or directors on the exercise of stock options is recorded as share capital.

(g) Earnings per share

The Company presents basic and diluted earnings per common shares, calculated by dividing the earnings attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. The weighted average number of common shares outstanding are adjusted for the effects of all potential dilutive common shares.

(h) Investments in carbon credit projects

Investments in carbon credit projects are classified and measured as financial instruments measured at FVTPL (refer to Note 3(e)). During the years ended December 31, 2023 and 2022 the Company initially entered into investments in carbon credit projects that will be primarily net settled in cash as described in Note 7 – Investment in carbon credit projects. Refer to Note 3(e) for details of delivery and settlement.

The Company uses valuation techniques appropriate in the circumstances and for which sufficient data are available to measure fair value, while maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

The objective of using a valuation technique is to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants and the measurement date under current market conditions.

The three widely used valuation techniques are:

i) market approach – uses prices and other relevant information generated by market transactions involving identical or comparable assets, liabilities, or a group of assets and liabilities
ii) cost approach – reflects the amount that would be required currently to replace the service capacity of an asset (current replacement cost)
iii) income approach – converts future amounts (cash flows or income and expenses) to a single current (discounted) amount, reflecting current market expectations about those future amounts.

In some cases, a single valuation technique will be appropriate, whereas in others, multiple valuation techniques will be appropriate.

During the three and nine months ended September 30, 2025, in accordance with IFRS 13 Fair Value Measurement, the Company continued to use the income approach as the valuation technique for the Vietnam Household Devices project and the Rwanda Cookstoves project. The income approach uses a discounted cash flow model, summing the future discounted after-tax cashflows from the lifetime of the project to a current net present value. The model reflects market expectations based on key inputs and assumptions, namely the carbon credit price, carbon credit volume, and discount rates. The gains from the remeasurement of investments in carbon credit projects were recorded in the "Unrealized gains (losses) on investments in carbon credit projects" line in the unaudited condensed interim consolidated statement of income (loss) and comprehensive income (loss).

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

As at September 30, 2025, the fair value of investment in the India ARR project was determined using the cost approach, as the project has not yet generated carbon credits.

Investments in carbon credit projects are disclosed as current assets if the project has generated carbon credits as at the reporting date and management expects carbon credits from such projects to be realized within 12 months of the reporting date.

4. Short term loan receivable

In February 2025, BCCPC invested $500,000 towards a secured debenture in a Canadian company (the "Secured Debenture"). The Secured Debenture is classified as a financial asset. It will subsequently be measured at amortized cost. In May 2025, BCCPC invested a further $250,000 and in July 2025, the Secured Debenture was amended and restated and an extension fee of $75,000 was added to the principal amount for an aggregate amount, prior to including accrued interest, of $825,000.

The Secured Debenture bears interest at a rate of 7% per annum, calculated and payable monthly in cash, is secured against the assets of the investee, with an initial scheduled maturity of July 15, 2025, subsequently extended to October 15, 2025 with a further extension to November 15, 2025 pursuant to an amendment and restatement of the Secured Debenture subsequent to the end of the quarter. See further details and discussion under the heading "Subsequent Events" below. The interest earned and accrued as at September 30, 2025 is $30,787 (2024 - $nil).

In June 2025, BCCPC entered into an operational support loan agreement with SIPCO in the amount of $200,000 in relation to costs associated with the transition from Verra's VMR0006 methodology to the VM0050 methodology for the Vietnam Household Devices project, specifically the cookstoves project (Project ID 2923).

The facility is unsecured and interest-free, and may be drawn in one or more tranches before November 30, 2026, with $150,000 to SIPCO for the internal costs related to that transition and $50,000 payable to the Verification and Validation Body (VVB) to be engaged in the transition. As at quarter-end, $150,000 had been drawn by SIPCO. The operation support agreement matures on January 1, 2027 and BCCPC may off-set monies owed by SIPCO under the operation support loan against amounts payable to SIPCO for the purchase of future carbon credits generated from the Vietnam Household Devices project on or before the maturity date.

5. Related party receivable

Abaxx Technologies Inc. ("Abaxx"), a related party to the Company, owned approximately 18.8% of the Company's outstanding shares as at September 30, 2025. Abaxx and the Company also have two common board of director members. In September 2021, a technology, IP and royalty agreement was executed between Abaxx and the Company, whereby the Company would owe a 2.5% royalty fee payment to Abaxx on Company revenue, including realized cash settled gains on investments in carbon credit projects.

Base Carbon Inc.

Notes to Unaudited Condensed Interim Consolidated Financial Statements

For the three and nine months ended September 30, 2025, and 2024

(Expressed in United States Dollars)

The table below summarizes movements in the related party receivable balance between September 30, 2025 and December 31, 2024:

As at	September 30, 2025	December 31, 2024
Balance, beginning of the period	$ 1,464,274	$ 425,954
Loan issued	-	1,000,000
Repayments	(45,279)	(542,068)
Interest income	62,019	30,388
Payment for share purchase agreement	1,000,000	550,000
Repayment for share purchase agreement	(1,550,000)	-
Balance, end of the period	$ 931,014	$ 1,464,274

Refer to the Company's 2024 Annual Financial Statements for historical details on the $1,464,274 outstanding loan balance as at December 31, 2024.

In September 2024, the Company issued an additional $1,000,000 unsecured loan to Abaxx. The loan originally matured on September 16, 2025, bearing an annualized interest rate of 9%, compounded monthly. Subsequent to maturity on September 16, 2025, the annualized interest rate increased to 15% on the amount of principal and interest outstanding.

As at September 30, 2025, $931,014 (2024 - $1,003,699) was the outstanding loan balance receivable from Abaxx. Loan interest income of $62,019 and $20,871 was recognized during the three and nine months ended September 30, 2025 (2024 - $3,699 and $3,699) respectively.

In December 2024, the Company and Abaxx entered into a share purchase and sale agreement whereby the Company agreed to purchase such number of common shares of the Company owned by Abaxx equal to the aggregate purchase price of $550,000 divided by the per share market value on closing, which was expected to occur in January 2025. The purchase price was paid to Abaxx in advance of closing during December 2024.

In January 2025, the Company and Abaxx amended the share purchase and sale agreement, whereby the Company agreed to purchase such number of common shares of the Company owned by Abaxx equal to the aggregate purchase price of $1,550,000 (inclusive of $550,000 from the December 2024 original agreement) divided by the per share market value on closing which was expected to occur in March 2025. The additional $1,000,000 purchase price was paid to Abaxx in advance of closing and the aggregate purchase price of $1,550,000 was subsequently returned to the Company in connection with the termination of the transaction by Abaxx in January 2025.

In connection with an extension of the termination provisions of the amended share purchase agreement, an extension fee of $75,000 was charged to Abaxx, which Abaxx paid upon termination of the agreement and the return of the $1,550,000 purchase price. Also see discussion under the heading "Related Party Transactions" below.

6. Carbon credit inventory

In April 2024, BCCPC received 717,558 carbon credits from the Rwanda Cookstoves project. The Company considers these carbon credits as inventory held for sale. Based upon the fair market value on the date the carbon credits were received by BCCPC, the 717,558 carbon credits received had a total value of $9,271,207. There was a corresponding transfer from the carrying amount of current investments in carbon credit projects arising from the receipt of the carbon credits valued at $9,271,207.

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

In July 2024, the Company realized a cash settlement of $190,000 from the sale of carbon credits to a third party. Based upon the fair market value of such carbon credits on the date received by the Company from the Rwanda Cookstoves Project, the carbon credits sold had a total cost of sale of $268,800, inclusive of $15,000 due to DelAgua through the revenue sharing agreement, resulting in a gross accounting loss of $78,800.

In October 2024, the Company received an additional 1,014,635 carbon credits from the Rwanda Cookstoves project with a total value of $16,268,810 based upon the fair market value on the date received. There was a corresponding transfer in the carrying amount of current investments in carbon credit projects arising from the receipt of the carbon credits valued at $16,268,810.

During the third quarter on July 7, 2025, the Company received into inventory 192,810 carbon credits from the Rwanda Cookstoves project with a total value of $2,448,687 based on the fair market value on the date received. There was a corresponding transfer in the carrying amount of current investments in carbon credit projects arising from the receipt of the carbon credits valued at $2,448,687. On the same day, DelAgua received 371,275 carbon credits, which will be subject to the revenue sharing arrangement. Refer to Note 8 – Rwanda Revenue Share Asset (“Rwanda RSA”) for additional information.

During the third quarter on September 22, 2025, carbon credit registry Verra approved and publicly filed the application of methodology VM0050 to the Company's Rwanda Cookstoves project. Although the approval is now visible on Verra's public Project Summary page, the corresponding update to the Company's project account is expected to be reflected in early Q4 2025.

As at September 30, 2025, the Company performed a detailed review of its inventory balances at period-end and identified two distinct and material write-downs: (i) write-down of inventory, and (ii) loss on re-quantification of inventory to VM0050.

(i) Based on the prevailing decline in VMR0006 credit pricing during 2025, the Company determined a write-down of certain vintages was required. The write-down of inventory was in the amount of $2,063,868 at September 30, 2025.

(ii) Under the new methodology, Verra's VM0050 standard will be applied to re-quantify previously issued carbon credits held in inventory by the Company, as well as future credits anticipated to be issued from the Rwanda Cookstoves project. Credits issued under VM0050 currently meet the standards for use under the Carbon Offsetting and Reduction Scheme for International Aviation ("CORSIA"). Based on the approval of the new VM0050 methodology, the Company updated its inventory quantity and prices to reflect eligibility under the CORSIA scheme. This resulted in a carbon credit price of $21.45 at September 30, 2025. Additionally, based on the Company's re-quantification of the carbon credits, the inventory quantity declined from 1,905,003 VMR0006 to 1,076,232 VM0050 carbon credits. The total loss on re-quantification of inventory to VM0050 was $2,932,298 at September 30, 2025.

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

The table below summarizes the changes in the carbon credit inventory held as at September 30, 2025, and as at year ended December 31, 2024:

Carbon credit inventory quantity	September 30, 2025	December 31, 2024
Balance, beginning of the period	1,712,193	-
Receipt of carbon credit inventory during the period	192,810	1,732,193
Subtotal VMR0006 Balance	1,905,003	1,732,193
Re-quantification of inventory to VM0050	(828,771)	-
Sale of carbon credit inventory	-	(20,000)
Balance, end of the period	1,076,232	1,712,193
Carbon credit inventory value	September 30, 2025	December 31, 2024
---	---	---
Balance, beginning of the period	$ 25,632,656	$ -
Receipt of carbon credit inventory	2,448,687	25,901,456
Write-down of inventory	(2,063,868)	-
Loss on re-quantification of inventory to VM0050	(2,932,298)	-
Sale of carbon credit inventory	-	(268,800)
Balance, end of the period	$ 23,085,177	$ 25,632,656

As at September 30, 2025, the total inventory of 1,076,232 carbon credits was valued at $23,085,177, a decrease of $2,547,479 when compared to December 31, 2024.

7. Investments in carbon credit projects

Categorization of current and non-current investment balances in carbon credit projects

The following table summarizes the current and non-current balances of investments in carbon credit projects as at September 30, 2025 and December 31, 2024:

Current Investments in Carbon Credit Projects	September 30, 2025	December 31, 2024
Rwanda Cookstoves Project	$ 5,434,604	$ 2,723,478
Vietnam Household Devices Project	5,950,540	6,092,972
Total Current Investments in Carbon Credit Projects	$ 11,385,144	$ 8,816,450
Non-Current Investments in Carbon Credit Projects	September 30, 2025	December 31, 2024
---	---	---
Rwanda Cookstoves Project	$ 10,630,834	$ 5,088,247
Vietnam Household Devices Project	47,874,461	49,879,371
India ARR Project	6,700,000	6,100,000
Total Non-current Investments in Carbon Credit Projects	$ 65,205,295	$ 61,067,618

For the Rwanda Cookstoves project, the current investments balance represents the discounted after-tax cashflows from the sale of carbon credits at fair value expected to be received from the project within the next twelve months of the balance sheet date. The non-current investments balance represents the discounted after-tax cashflows from the sale of the carbon credits expected to be received from the project beyond the next twelve months of the balance sheet date. Also see discussion under the headings "Current

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

and Non-current investment balance for the Rwanda Cookstove Project" and "Unrealized gains on investment in Rwanda Cookstoves Project" below.

For the Vietnam Household Devices project, the current investments balance represents the discounted after-tax cashflows of the projects expected to be received within the next twelve months of the balance sheet date. The non-current balance represents the discounted after-tax cashflows of the projects expected to be received beyond the next twelve months of the balance sheet date. Also see discussion under the headings "Current and Non-current investment balance for the Vietnam Household Devices Project", "Realized cash settled gains on investment in Vietnam Household Devices Project" below and "Unrealized (losses)/gains on investment in Vietnam Household Devices Project" below.

The India ARR project is not yet in the carbon credit generation stage and is valued at fair value, approximated by cost, and categorized as a non-current investment.

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 ("DelAgua"), as in-country project developer, to supply cookstoves in Rwanda. According to the terms of the agreement, BCCPC invested $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 the project.

In February 2023, DelAgua completed distribution of all 250,000 cookstoves to participating households. During the year ended December 31, 2023, the Company made its final investment of $375,000 into the project. As at December 31, 2023, the project had not yet generated carbon credits and the cost approach was used to determine the fair value of the investment in the project being equal to the total disbursed investment payments of $8,825,000.

In December 2023, the Government of Rwanda issued a letter of authorization ("LOA") to allow for the application of the concept of a corresponding adjustment pursuant to Article 6 of the Paris Agreement with respect to the Rwanda Cookstoves project. This resulted in Verra, the carbon registry for the project, announcing it had applied its article 6 authorized ("Article 6 Authorized") label to the project, being the first time Verra had applied such designation to a carbon project. According to the LOA, a copy of which may be found on Verra's website under project ID 4150, 2% of any issued Article 6 Authorized labeled carbon credits are to be immediately retired to help offset global emissions, 10% of such carbon credits are to be transferred to the Government of Rwanda to help achieve its nationally determined emission reduction targets, and 5% of revenues generated from the initial sale of the remaining Article 6 Authorized labeled issued carbon credits will be remitted to the Rwanda Green Fund ("RGF").

In April 2024, BCCPC and DelAgua executed an amended and restated project agreement to facilitate the implementation of the LOA. Following execution of this agreement, in April 2024, the Company received its first carbon credits generated from the project when DelAgua transferred 717,558 carbon credits which have been tagged by Verra with an Article 6 Authorized label. There was a corresponding increase in carbon credit inventory arising from the receipt of the carbon credits.

Under the terms of the revised project agreement, BCCPC will contribute $0.20 per carbon credit to RGF for the first 1,925,000 carbon credits and the parties will split the 5% RGF remittance attributable to sales revenue from remaining Article 6 Authorized labeled carbon credits, based upon each party's pro rata share of cashflows from each carbon credit sale. Article 6 Authorized labeled carbon credits received by the parties pursuant to the Rwanda cookstoves project agreement will be net of the 12% volume reduction outlined in the LOA. Therefore, assuming all carbon credits from the Rwanda cookstoves project are issued with an Article 6 Authorized label, a revised aggregate minimum of approximately 6.6 million carbon credits would be subject to a revenue sharing arrangement between BCCPC and DelAgua.

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

In December of 2024, the Company and DelAgua made the decision that the new cookstove project methodology VM0050, recently published by Verra, the project registry, should be evaluated for the project in order to be eligible for carbon credit sales into compliance programs like CORSIA as well as to expand other sales channels. The transition to the VM0050 methodology will require a re-quantification of the credits expected to be generated from the project.

On July 7, 2025, $2,448,687 was transferred from the current investment balance and recognized as the value of the VMR0006 carbon credit inventory, an amount equal to the fair market value of the 192,810 issued VMR0006 carbon credits on the date received by BCCPC.

On the same day, DelAgua received 371,275 VMR0006 carbon credits, which will be subject to the revenue sharing arrangement. As a result, the portion of the Rwanda Cookstove project investment related to the issued credits was derecognized, and a Rwanda Revenue Share Asset ("Rwanda RSA") at the same fair value of $1,605,880, representing the Company's share of the future sales, was recognized. Following the approval of the application of methodology VM0050 to the Company's Rwanda Cookstoves project, the carbon credits relating to the Rwanda RSA were then re-quantified and an unrealized gain of $235,294 was recognized. This resulted in a Rwanda RSA of $1,841,174 as at September 30, 2025 (2024 – $nil). Refer to Note 8 – Rwanda Revenue Share Asset ("Rwanda RSA") for additional information.

On September 22, 2025, the Company was notified that carbon credit registry Verra had approved the application of methodology VM0050 to the Company's Rwanda Cookstoves project. The Company employed a change in the methodology, moving from VMR0006 to VM0050 for all credits in the Rwanda Cookstove project. Those credits previously received into inventory and subject to the revenue share arrangement have been re-quantified under VM0050. The estimate of the number of credits expected to be issued over the life of the project is now 4.4 million VM0050 credits. This is comprised of 1.1 million prepayment VM0050 credits, 0.2 million Rwanda RSA credits, and anticipated future VM0050 credit issuances in the amount of 3.1 million credits.

The table below summarizes the changes in the Rwanda Cookstoves project during the nine months ended September 30, 2025, and the year ended December 31, 2024:

Rwanda Cookstoves Project	September 30, 2025	December 31, 2024
Balance, beginning of the period	$ 7,811,725	$ 8,825,000
Unrealized gains on investment in carbon credit projects	12,308,280	24,619,381
Transfer to Rwanda RSA	(1,605,880)
Receipt of carbon credit inventory	(2,448,687)	(25,632,656)
Balance, end of the period	$ 16,065,438	$ 7,811,725

Unrealized gain on investment in Rwanda Cookstoves Project

During the year ended December 31, 2024, the Company determined that once the project began issuing credits, the valuation technique for the Rwanda Cookstoves 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 Rwanda Cookstoves project now that the project has issued carbon credits. The carbon credit price, carbon credit volumes and discount rates are considered to be unobservable inputs which the Company has determined to have the most significant impact on the valuation of the investment.

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

i) Carbon Credit Price

As at September 30, 2025, a price of $21.45 (December 2024 - $18.60) per carbon credit was used for the duration of the DCF forecast period, which was determined with reference to recent market sale transactions of carbon credits, and a published futures option quote for carbon credits, with similar characteristics, including Article 6 Authorized and CORSIA eligible VM0050 carbon credits.

ii) Carbon Credit Volumes:

With the implementation of the new VM0050 methodology and factoring in the impact of the LOA with the Government of Rwanda, it is currently estimated that the project would generate approximately an aggregate of 4.4 million (December 2024 – 3.4 million) Article 6 Authorized and CORSIA eligible VM0050 carbon credits.

Failing to meet these projected carbon credit volumes, including further changes to the project methodology resulting in lower crediting volumes or future pricing will result in significant impairment to the investment value, resulting in reversal of unrealized gains.

iii) Discount Rate:

A discount rate of 15% (December 2024 – 15%) is used for the project.

The discount rate accounts for conditions and risk factors of the project, including:

Methodology risk relating to carbon reduction and removal projects
Uncertainty of carbon credit volumes
Uncertainty of carbon credit price and market conditions
Foreign operations and political risk

Refer to the DCF Model Sensitivity Analysis below for details on each inputs' impact on these financial statements.

During the nine months ended September 30, 2025, an unrealized gain of $12,308,280 (2024 - $28,700,222) was recognized on the project and this was primarily a result of higher crediting profile and carbon credit prices, as well as the unwinding of the discount rate.

During the three months ended September 30, 2025, an unrealized gain of $11,831,994 (2024 - $2,270,257), was recognized on the project.

Current and non-current investment balance for the Rwanda Cookstoves Project

As at September 30, 2025, the current balance of the investment in the Rwanda Cookstoves project was $5,434,604 (2024 - $2,723,478). This investment balance represents the discounted after-tax cashflows expected to be received within the next twelve months of the balance sheet date.

As at September 30, 2025, the non-current balance of the investment in the Rwanda Cookstoves project was $10,630,834 (2024 - $5,088,247). This investment balance represents the discounted after-tax cashflows of the project expected to be received beyond the next twelve months of the balance sheet date.

There is limited 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 three and nine months ended September 30, 2025, and the year ended December 31, 2024, there were no transfers of assets between Level 1, Level 2 and Level 3 for the Rwanda Cookstove project.

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

Vietnam Household Devices Project

On May 27, 2022, the Company, through BCCPC, entered into transaction documents to facilitate the development of a cookstove and water purifier carbon reduction project in the country of Vietnam with Sustainability Investment Promotion and Development Joint Stock Company ("SIPCO"), as in-country project developer. Citigroup Global Markets Limited ("Citigroup") is the carbon credit off-taker to SIPCO for the Vietnam Household Devices project. BCCPC has fully funded its capital commitment of $20,828,600 used to fund the manufacturing, distribution and monitoring of approximately 850,000 cookstoves and 364,000 water purifiers across several provinces of Vietnam. The distribution of the household devices was completed in February 2023. BCCPC has the option to expand the project to an aggregate total of 1,200,000 cookstoves and 600,000 water purifiers for an additional prepayment.

Project documentation provides that during the initial project carbon credit generation phase ("Phase 1") SIPCO will sell and transfer to BCCPC, and SIPCO will then buy back from BCCPC the first 7.4 million carbon credits for subsequent offtake by Citigroup pursuant to a fixed price off-take arrangement ("Citigroup"). BCCPC has the option to purchase all additional carbon credits generated by the project on a yearly basis for $5 per carbon credit ("Phase 2").

During the three and nine months ended September 30, 2025, there was no further capital contributed, as it was fully deployed as at December 31, 2024 after relevant project milestones were fulfilled by SIPCO.

During the three and nine months ended September 30, 2025, carbon credits were issued and settled for cash, as detailed under the heading "Realized cash settled gains on investment in the Vietnam Household Devices Project".

Verra, the project registry, has published an updated methodology for cookstove projects, VM0050. Transition to this methodology will require a re-quantification of the credits to be generated from this project for 2025 carbon credit vintages onward. During the second quarter, 2025, BCCPC and SIPCO elected to begin work to apply Verra's new methodology to the Vietnam Household Devices project.

Based on the implementation of this updated methodology, the estimate of the credits expected to be issued over the life of the project is now 15.0 million credits (7.4 million VMR0006 cookstove and AMS-III.AV water purifier credits previously issued under Phase 1, and 7.6 million VM0050 cookstove and AMS-III.AV water purifier credits in Phase 2). Under the expansion option, the Company anticipates an additional 4.7 million VM0050 and AMS-III.AV credits.

The table below summarizes the changes in the Vietnam Household Devices project during the nine months ended September 30, 2025 and year ended December 31, 2024:

Vietnam Household Devices Project	September 30, 2025	December 31, 2024
Balance, beginning of the period	$ 55,972,343	$ 123,861,241
Capital deployed in the project during the period	-	1,651,693
Unrealized gain (loss) on investment in carbon credit projects	(2,147,342)	(69,540,591)
Realized cash settled gains on investment in carbon credit projects	1,811,143	28,027,107
Settlements of investment in carbon credit projects	(1,811,143)	(28,027,107)
Balance, end of the period	$ 53,825,001	$ 55,972,343

Realized cash settled gains on investment in the Vietnam Household Devices Project

During the three and nine months ended September 30, 2025, BCCPC received $nil and $1,811,143 respectively in cash payments from the delivery and monetization of carbon credits from the Vietnam

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

project, representing both a realized gain, as well as an amount derecognized from the financial asset balance of the investment during the three and nine months ended September 30, 2025.

Since the establishment of the project and as of September 30, 2025, the Company has received aggregate cash payments of approximately $36.3 million from the sale of carbon credits generated by the project at a total cost of $20.8 million, resulting in a full repayment of capital and a cash gain of approximately $15.5 million.

Unrealized loss on investment in Vietnam Household Devices Project

The Company reviewed and revalued the investment in the Vietnam Household Devices project as of September 30, 2025, taking into account inputs such as expected carbon credit volumes generated based upon the implementation of Verra's updated methodology in 2025, carbon credit prices, discount rates, and discounted cashflow valuation of the project expansion option. These inputs are considered to be unobservable inputs which the Company has determined to have the most significant impact on the valuation of the investment.

i) Carbon Credit Price:

ii) Carbon Credit Volumes:

During Phase 1 of the project, from 2023 to June 30, 2025, the project generated the expected 7.4 million (December 2024 – 7.4 million) carbon credits.

During Phase 2 of the project, from 2025 to 2032, and based on the latest project monitoring reports, the project design document, the implementation of Verra's updated project methodology in 2025 among 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 an estimated 7.6 million (December 2024 – 10.1 million) carbon credits.

During the expansion option of the project, from 2025 to 2036, and based on SIPCO's preliminary assumptions as well as the implementation of Verra's updated project methodology in 2025, among 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 an estimated 4.7 million (December 2024 – 6.1 million) carbon credits.

Failing to meet these projected carbon credit volumes, including due to further changes to the project methodology resulting in a reduction of forecasted carbon credit volumes, and a reduction in prices in the future will result in significant impairment to the investment value, resulting in losses of unrealized gains.

iii) Discount Rates:

In Phase 1 of the project, from 2023 to 2025, the discount rate used was 8% (December 2024 – 8%). This Phase of the project ended during Q2 2025.

During Phase 2 of the project, from 2025 to 2032, the discount rate used is 15% (December 2024 – 15%).

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

During the expansion option of the project, from 2025 to 2036, the discount rate used is 20% (December 2024 – 20%).

The discount rates account for conditions and risk factors of the project, including:
- Methodology risk relating to carbon reduction projects
- Uncertainty of carbon credit volumes
- Uncertainty of carbon credit price and market conditions
- Foreign operations and political risk

Refer to the DCF Model Sensitivity Analysis for details on each inputs’ impact on these financial statements.

During the nine months ended September 30, 2025, an unrealized loss of $2,147,342 was recognized on the project due to lower crediting profile and the addition of insurance costs. This is partially offset by higher credit prices for VM0050, CORSIA eligible credits and the unwinding of the discount rate.

During the three months ended September 30, 2025, an unrealized loss of $4,433,217 was recognized on the project.

Current and non-current investment balance for the Vietnam Household Devices Project

As at September 30, 2025, the current balance of the investment in the Vietnam Household Devices project was $5,950,540 (2024- $9,955,921). This investment balance represents the discounted after-tax cashflows expected to be received within the next twelve months of the balance sheet date.

As at September 30, 2025, the non-current balance of the investment in the Vietnam Household Devices project was $47,874,461 (2024 - $57,262,110). This investment balance represents the discounted after-tax cashflows of the project expected to be received beyond the next twelve months of the balance sheet date.

There is limited 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 nine months ended September 30, 2025, and year ended December 31, 2024 there were no transfers of assets between Level 1, Level 2 and Level 3 for the Vietnam Household Devices project.

DCF Model Sensitivity Analysis

The Company considers carbon credit price, carbon credit volumes, and the discount rates used in the DCF model as the main inputs impacting the valuation of the investments in the Rwanda and Vietnam projects. 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 as at September 30, 2025:

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

Key Input and Change in Assumptions	Impact on Net Income as at September 30, 2025
	Rwanda Cookstoves Project	Vietnam Household Devices Project
Carbon credit price input increased by 1%	$201,938 increase in net income and total assets	$523,416 increase in net income and total assets
Carbon credit price input decreased by 1%	$201,938 decrease in net income and total assets	$523,416 decrease in net income and total assets
Carbon credit volume input increased by 1%	$164,360 increase in net income and total assets	$543,040 increase in net income and total assets
Carbon credit volume input decreased by 1%	$164,360 decrease in net income and total assets	$549,250 decrease in net income and total assets
Discount rates input increased by 1%	$48,020 decrease in net income and total assets	$314,538 decrease in net income and total assets
Discount rates input decreased by 1%	$48,324 increase in net income and total assets	$317,545 increase in net income and total assets

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 Pte Ltd. ("VNV") is the Company's project development partner.

The project's aim is to facilitate the planting of approximately 6,500,000 trees on rural farmlands and deserted lands in northern India, and the planting of all project trees was completed during the year ended December 31, 2024, additionally the India ARR project was submitted for validation during the second quarter of 2025. The project is expected to generate an estimated 1,659,180 nature-based removal carbon credits issued over an expected 20-year project life.

Per the terms of the agreement and assuming all condition precedents are met, BCCPC will invest an aggregate of roughly $13.6 million into the project, of which BCCPC has invested $6.7 million as of September 30, 2025. Approximately $6 million of the total capital commitment is considered maintenance capital of which approximately $4 million is expected to be funded through the sale of carbon credits generated by the project.

The table below summarizes the changes in the India ARR project during the nine months ended September 30, 2025, and the year ended December 31, 2024:

India ARR Project	September 30, 2025	December 31, 2024
Balance, beginning of the period	$ 6,100,000	$ 4,400,000
Capital deployed in the project during the period	600,000	1,700,000
Balance, end of the period	$ 6,700,000	$ 6,100,000

During the three and nine months ended September 30, 2025, there was $600,000 in capital deployed towards the project. As the India ARR project remains in the developmental stage and is pre-issuance of carbon credits, the project's fair value continued to be approximated by its cost basis as at September 30, 2025, remaining unchanged from December 31, 2024.

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

8. Rwanda Revenue Share Asset (“RSA”)

On July 7, 2025, 371,275 VMR0006 carbon credits previously included in the investment in the Rwanda Cookstove project at a fair value of $1,605,880 were formally issued to DelAgua. Under the revenue share agreement, the Company is entitled to receive a share of the proceeds when DelAgua sells these credits, which represents a contractual and enforceable right to future cash flows.

As a result, the portion of the Rwanda Cookstove project investment related to these issued credits was derecognized, and a Rwanda RSA at the same fair value of $1,605,880, representing the Company's share of the future sales, was recognized. The Rwanda RSA reflects the Company's ongoing financial interest in the issued credits and will be measured at fair value going forward, with changes recognized through profit or loss. The reclassification ensures the carrying value aligns with the underlying rights and obligations following credit issuance.

As previously described, the Company received notification that carbon credit registry Verra had approved the application of CORSIA-compliant methodology VM0050 to the Company's Rwanda Cookstoves project. Therefore, on September 30, 2025, there was a change in fair value due to re-quantification, and the Company recognized an additional $235,294 unrealized gain on the Rwanda RSA for a total value of $1,841,174 (2024 - $nil).

9. Income tax expense, income tax liability, and deferred income tax liability

During the nine months ended September 30, 2025, the income tax expense and liability are driven by the realized gain of $1,811,143 (2024 - $23,545,648) from the Vietnam project, and $10,160,938 (2024 - $29,594,671) in total unrealized gains from investments in carbon credit projects. Accounting income is adjusted to net taxable income to estimate current and deferred income tax.

During the three months ended September 30, 2025, the income tax expense and liability are driven by the realized gain of $nil (2024 - $11,037,196) from the Vietnam project, and $7,398,777 (2024 - ($8,875,730)) in total unrealized gains from investments in carbon credit projects. Accounting income is adjusted to net taxable income to estimate current and deferred income tax.

Income tax expense of $505,579 (2024 - $407,416 (recovery)) was recognized during the nine months ended September 30, 2025. Income tax liability decreased by $35,688 during the period, while deferred tax liability increased by $493,412.

Income tax expense of $12,818 (2024 - $298,679) was recognized during the three months ended September 30, 2025. Income tax liability decreased by $148,239 during the period, while deferred tax liability decreased by $10,786.

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

10. Share capital

Common shares issued are as follows:

	Number of Common Shares	Share Capital
Balance, December 31, 2023	117,918,182	$ 51,448,159
Shares repurchased and cancelled under NCIB (d)	(5,654,396)	(1,957,762)
Balance, September 30, 2024	112,263,786	$ 49,490,397
	Number of Common Shares	Share Capital
Balance, December 31, 2024	109,235,486	$ 48,513,906
Common shares issued with respect to exercise of options (b and c)	643,297	280,849
Shares repurchased and cancelled under NCIB (d)	(3,145,392)	(1,532,326)
Shares purchased and cancelled under share purchase agreements (e)	(3,724,565)	(1,137,374)
Balance, September 30, 2025	103,008,826	$ 46,125,055

Common Shares

(a) Authorized

Unlimited number of common shares without par value.

(b) Issued

643,297 common shares were issued upon the exercise of stock options during the nine months ended September 30, 2025. No shares were issued during the nine months ended September 30, 2024.

(c) Exercised

During the nine months ended September 30, 2025, a total of 885,333 stock options were exercised, of which 643,297 common shares were issued. 286,297 stock options were exercised using a cashless option, with the remaining 357,000 being exercised for a total consideration of $88,977. No options were exercised for shares during the nine months ended September 30, 2024.

(d) Repurchased and cancelled under NCIB

Pursuant to a normal course issuer bid ("NCIB"), Base Carbon was authorized to purchase, from time to time, over a period of 12 months beginning June 17, 2022, and ending June 16, 2023, up to 8,716,601 common shares representing approximately 7% of the total 127,663,680 issued and outstanding common shares and 10% of the Company's public float as of June 16, 2022. For this first NCIB period, Base Carbon purchased a cumulative 7,370,778 common shares for cancellation.

On June 21, 2023, the Company renewed its NCIB and was authorized to purchase over a period of 12 months beginning June 21, 2023, and ending June 20, 2024, up to 7,974,471 common shares. For this second NCIB period, Base Carbon purchased a cumulative 1,937,220 common shares for cancellation under the NCIB, all of which were purchased and cancelled during the year ended December 31, 2023.

On June 21, 2024, the Company renewed its NCIB, pursuant to which was authorized by Cboe Canada to purchase, from time to time, over a period of 12 months starting June 21, 2024, and ended June 20, 2025,

Base Carbon Inc.

Notes to Unaudited Condensed Interim Consolidated Financial Statements

For the three and nine months ended September 30, 2025, and 2024

(Expressed in United States Dollars)

up to 7,571,314 common shares. For this third NCIB period, Base Carbon purchased a cumulative 7,217,736 common shares for cancellation.

On June 23, 2025, the Company renewed its NCIB, pursuant to which it is authorized by Cboe Canada to purchase, from time to time, beginning on June 23, 2025, and ending June 22, 2026, up to 6,659,310 common shares representing approximately 6.4% of the 104,324,986 issued and outstanding common shares and 10% of the Company's public float as of June 17, 2025. On any given day during the new NCIB program, Base Carbon may purchase up to 69,082 common shares. Block trades for a greater number of common shares may be made once per calendar week. During this fourth NCIB period and as at September 30, 2025, Base Carbon purchased a cumulative 1,857,492 common shares for cancellation.

During the nine months ended September 30, 2025, the Company purchased and cancelled 3,145,392 of its common shares, pursuant to its NCIB. During the nine months ended September 30, 2024, the Company purchased and cancelled 5,654,396 of its common shares pursuant to its NCIB.

(e) Repurchased and Cancelled Under Share Purchase Agreements

During the nine months ended September 30, 2025, a total of 3,724,565 shares were repurchased and cancelled. 3,700,000 shares were purchased from Abaxx while the remaining 24,565 shares were purchased from a past employee.

11. Contributed surplus stock options

Contributed surplus consists of stock option expense. As at September 30, 2025 and 2024, the Company had the following outstanding stock options:

	Number of stock options	Weighted average exercise price
Balance, December 31, 2023	7,171,666	$ 0.60
Granted during the period	4,295,000	$ 0.53
Cancelled during the period	(150,000)	$(0.46)
Balance, September 30, 2024	11,316,666	$ 0.58
Balance, December 31, 2024	10,308,666	$ 0.56
Options exercised	(885,333)	$ 0.28
Granted during the period	700,000	$ 0.57
Forfeited during the period	(683,333)	$ 0.69
Cancelled during the period	(150,000)	$ 0.38
Balance, September 30, 2025	9,290,000	$ 0.59

During the nine months ended September 30, 2025, 700,000 (2024 - 4,295,000) options were granted with a weighted average exercise price of $0.57 (2024 - $0.53). During the same period, 683,333 options were forfeited with a weighted average exercise price of $0.69, while 150,000 options were cancelled with a weighted average exercise price of $0.38. 885,333 stock options were exercised of which 286,297 were exercised using a cashless option, with the remaining 357,000 being exercised for a total consideration of $88,977.

The weighted average exercise price per option outstanding as at September 30, 2025 was $0.59 (2024 - $0.58).

The fair value of share-based awards is determined using the Black-Scholes Option Pricing Model. The model utilizes certain subjective assumptions including the expected life of the option and expected future stock price volatility. Changes in these assumptions can materially affect the estimated fair value of the

Base Carbon Inc.

Notes to Unaudited Condensed Interim Consolidated Financial Statements

For the three and nine months ended September 30, 2025, and 2024

(Expressed in United States Dollars)

Company's stock options. The Company used the Black-Scholes Option Pricing Model for its stock options granted.

Goods or services received or to be received by the entity need to be provided by the stock option grantees in its capacity as a supplier of goods or services. If the goods or services are provided by a counterparty in its capacity as a shareholder, then the transaction is not a share-based payment transaction. The options have vesting periods based on conditions of goods or services provided being met over time. The granted and vested options expire at the earlier of one year from the date of the termination of goods or services provided to the Company, and four years from the grant date.

During the nine months ended September 30, 2025, share-based compensation expense was $92,284 (2024 - $293,116).

During the three months ended September 30, 2025, share-based compensation expense was $22,222 (2024 - $70,754).

12. Earnings (loss) per share

For the three and nine months ended September 30, 2025 and 2024, basic and diluted income (loss) per share has been calculated based on the net income (loss) attributable to common shareholders and the weighted average number of common shares outstanding. Diluted earnings per share includes the effect of stock options that are in-the-money, as shown below.

	For the three months ended		For the nine months ended
	September 30, 2025	September 30, 2024	September 30, 2025	September 30, 2024
Net income (loss) attributable to common shareholders	$ 1,611,957	$ 61,433	$ 2,368,462	$ (12,306,268)
Weighted average number of common shares outstanding	103,625,709	114,331,339	106,187,341	116,318,404
Basic earnings (loss) per common share	$ 0.02	$ 0.00	$ 0.02	$ (0.11)
Net income (loss) attributable to common shareholders	$ 1,611,957	$ 61,433	$ 2,368,462	$ (12,306,268)
Weighted average number of common shares outstanding	103,625,709	114,331,339	106,187,341	116,318,404
Adjustments to average shares due to stock options and others	1,545,625	373,062	693,474	-
Weighted average number of diluted common shares outstanding	105,171,334	114,704,401	106,880,815	116,318,404
Diluted earnings (loss) per common share	$ 0.02	$ 0.00	$ 0.02	$ (0.11)

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

13. Capital management

The Company manages its capital with the following objectives:

to ensure sufficient financial flexibility to achieve the ongoing business objectives including funding of future growth opportunities, and pursuit of accretive acquisitions; and
to maximize shareholder return through enhancing the share value.

The Company monitors its capital structure and adjusts according to market conditions in an effort to meet its objectives given the current outlook of the business and industry in general. The Company may manage its capital structure by issuing new shares, repurchasing outstanding shares, adjusting capital spending, or disposing of assets. The capital structure is reviewed by the Company's management and the Board of Directors on an ongoing basis.

The Company considers its capital to be shareholders' equity, being comprised of share capital, contributed surplus, and retained earnings, which as at September 30, 2025 totaled $102,888,453 (2024 - $120,717,945).

The Company manages capital through its financial and operational forecasting processes. The Company reviews its working capital and forecasts its future cash flows based on operating expenditures, and other investing and financing activities. There were no changes in the Company's approach to capital risk management during the nine months ended September 30, 2025, and the Company is not subject to any externally imposed capital requirements.

14. Fair Value and Risk Management

Fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are categorized into levels within a fair value hierarchy based on the nature of valuation inputs (Level 1, 2 or 3).

The fair value hierarchy has the following levels:

Level 1 – quoted prices represent unadjusted quoted prices for identical instruments exchanged in active markets.
Level 2 – significant other observable inputs includes directly or indirectly observable inputs, other than quoted prices for identical instruments exchanged in active markets.
Level 3 – significant unobservable inputs include inputs that are not based on observable market data.

The fair value of financial assets and financial liabilities are considered to be their carrying value when they are of short duration or when the instrument's interest rate approximates current observable market rates. The fair value of cash and cash equivalents, short term investment, related party receivable and other receivables approximates their carrying amounts due to the relatively short period to maturity.

The fair value of the Company's investment in carbon credit projects is calculated based on a discounted cash flow method for both the Vietnam Household Devices Project and the Rwanda Cookstoves Project and approximated by its cost for the India ARR Project (refer to Note 7 – Investments in Carbon Credit Projects).

Where other financial assets and financial liabilities are of longer duration, then fair value is determined using the discounted cash flow method using discount rates based on adjusted observable market rates.

Base Carbon Inc.

Notes to Unaudited Condensed Interim Consolidated Financial Statements

For the three and nine months ended September 30, 2025, and 2024

(Expressed in United States Dollars)

The following table illustrates the classification of the Company's consolidated financial instruments within the fair value hierarchy as at September 30, 2025, according to the significance and reliability of the inputs used in determining fair value measurements. There were no transfers of assets between Level 1, Level 2 and Level 3.

	Level 1	Level 2	Level 3	Total
Cash and cash equivalents	$ 7,987,145	$ -	$ -	$ 7,987,145
Short term investments	39,282	-	-	39,282
Related party receivable	-	931,014	-	931,014
Other receivables	8,056	-	-	8,056
Short term loan receivable	-	1,005,787	-	1,005,787
Investments at fair value	-	-	85,000	85,000
Current investments in carbon credit projects	-	-	11,385,144	11,385,144
Rwanda Revenue Share Asset	-	-	1,841,174	1,841,174
Non-current investments in carbon credit projects	-	-	65,205,295	65,205,295
Accounts payable and accrued liabilities	(184,274)	-	-	(184,274)
	$ 7,850,209	$ 1,936,801	$78,516,613	$88,303,623

The following table illustrates the classification of the Company's consolidated financial instruments within the fair value hierarchy as at December 31, 2024, according to the significance and reliability of the inputs used in determining fair value measurements. There were no transfers of assets between Level 1, Level 2 and Level 3.

	Level 1	Level 2	Level 3	Total
Cash and cash equivalents	$14,798,726	$ -	$ -	$14,798,726
Short term investments	41,687	-	-	41,687
Related party receivable	-	1,464,274	-	1,464,274
Other receivables	18,997	-	-	18,997
Investments at fair value	-	-	85,000	85,000
Current investments in carbon credit projects	-	-	8,816,450	8,816,450
Non-current investments in carbon credit projects	-	-	61,067,618	61,067,618
Accounts payable and accrued liabilities	(806,044)	-	-	(806,044)
	$14,053,366	$ 1,464,274	$69,969,068	$85,486,708

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations.

The Company's credit risk is attributable to cash and cash equivalents, short term investments, other receivables, prepaid and other assets, related party receivable, and investments in carbon credit projects. Cash and cash equivalents and short-term investment are on deposit with a Barbadian, Canadian and United States chartered banks, from which management believes the risk of loss is remote. Other receivables are due from revenue authorities, from which management believes the risk of loss to be remote. The Company's maximum exposure to credit risk as at September 30, 2025 is the sum of the carrying value of the aforementioned asset accounts.

The Company manages credit risk of the aforementioned asset accounts by:

assessing credit profile and worthiness of and completing due diligence on counterparties prior to agreements.
structuring agreements with defined services or benefits, terms, and remuneration, enforcing the Company's rights from such agreements, and
conducting post disbursement monitoring and executing dispute resolution processes.

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

Liquidity risk

The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due, including commitments arising from investments in carbon credit projects. As at September 30, 2025, the Company had current assets of $46,399,304 to settle current liabilities of $1,085,411. $11,385,144 in current investments in carbon credit projects, $23,085,177 in carbon credit inventory, $1,841,174 in Rwanda RSA, $931,014 in related party receivable, $1,005,787 in short term loan receivable, $39,282 in short term investments, and $116,526 in prepaid and other assets are not liquid assets. Hence $7,995,201 represents liquid current assets. The ability of the Company to receive cash from current investments in carbon credit projects is dependent on the timing of estimated carbon credit issuances and sales. All of the Company's current financial liabilities have contractual maturities of less than 90 days and are subject to normal trade terms.

Market risk

Market risk is the risk of loss that may arise from changes in market forces including, but not limited to, interest rates, equity prices, voluntary carbon credit prices and foreign exchange.

Foreign currency risk

As at September 30, 2025, the Company is exposed to foreign currency risk with respect to Canadian and Barbadian dollar assets with a total balance of $150,355. The Company is also exposed to predominantly Canadian and Barbadian dollar liabilities with a total balance of $8,653,452. Most of this exposure relates to the current and deferred tax liability amount totalling $8,640,089, which is the estimate income tax on current and future proceeds from the sale of carbon credits.

As at December 31, 2024, the Company was exposed to foreign currency risk with respect to Canadian and Barbadian dollar assets with a total balance of $203,692. The Company is also exposed to Canadian and Barbadian dollar denominated liabilities with a total balance of $8,647,326. Most of this exposure relates to the current and deferred tax liability amount totalling $8,154,364, which is the estimate income tax on current and future proceeds from the sale of carbon credits.

Sensitivity analysis

The Company is exposed to foreign currency risk on fluctuations of financial instruments related to cash and cash equivalents, short term investments, other receivables, and accounts payable and accrued liabilities, and current and deferred tax liabilities.

As at September 30, 2025, the net income would have decreased by $432,673 had the United States and Barbados dollar strengthened by 5%. Had the US and Barbados dollar weakened by 5% at September 30, 2025, the net income would have increased by $432,673.

These changes are based on the results of foreign exchange gains/losses on translation of financial instruments related to cash and cash equivalents, investments, and accounts payable and accrued liabilities.

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

15. Related party transactions

Abaxx Technologies Inc.

Abaxx is a related party to the Company as a result of the board of directors of the companies having two directors in common and Abaxx's significant ownership of common shares of the Company.

During the nine months ended September 30, 2025, the Company was invoiced approximately $234,506 (2024 – $231,821) from Abaxx for marketing, promotional and consulting services provided to the Company. Abaxx also invoiced $45,279 (2024 - $593,959) in royalty license fee for the realized cash settled gains on investments in carbon credit projects. The royalty license fee was netted against the outstanding loan with Abaxx while the marketing, promotional and consulting fees are accrued and paid in cash when invoiced.

As at September 30, 2025, $931,014 (2024 – $1,003,699) was the outstanding loan balance receivable from Abaxx. This loan originated from September 2024. $62,019 (2024 – $3,699) in interest income was recognized during the nine months ended September 30, 2025 in relation to the loan.

$20,871 (2024 – $3,699) in interest income was recognized during the three months ended September 30, 2025 in relation to the loan. The loan originally matured on September 16, 2025, bearing an annualized interest rate of 9%, compounded monthly. Subsequent to maturity on September 16, 2025, the annualized interest rate increased to 15% on the amount of principal and interest outstanding.

In January 2025, the Company and Abaxx amended the share purchase and sale agreement, whereby the Company agreed to purchase such number of common shares of the Company owned by Abaxx equal to the aggregate purchase price of $1,550,000 (inclusive of $550,000 from the December 2024 original agreement) divided by the per share market value on closing, which was expected to occur in March 2025. The additional $1,000,000 purchase price was paid to Abaxx in advance of closing and the aggregate purchase price of $1,550,000 was subsequently returned to the Company in connection with the termination of transaction by Abaxx in January 2025.

In connection to the amended share purchase agreement, an extension fee of $75,000 was charged to Abaxx, which Abaxx paid upon termination of the agreement.

In May 2025, the Company purchased and cancelled 3.7 million shares from Abaxx for an amount of $1,122,642 as per the amended share purchase and sale agreement.

In October 2025, Abaxx fully settled its obligations to the Company. Refer to Note 17 – Subsequent Events for more information.

16. Commitments

India ARR Project payments

With respect to the India ARR Project, BCCPC has, subject to conditions and achievement of project milestones, contractual commitments to make aggregate payments totalling $13,621,033 in various tranches over the life of the project. As at September 30, 2025, the remaining contractual commitments were $6,921,033. These payments are anticipated to be due by October 2032, staged, partially funded by

Base Carbon Inc.
Notes to Unaudited Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2025, and 2024
(Expressed in United States Dollars)

anticipated future carbon credit sales proceeds, and based on various conditions precedent / project milestones.

The Company had no other material contractual payment commitments during the nine months ended September 30, 2025.

17. Subsequent events

In October 2025, the Secured Debenture was amended and restated to extend the maturity date to November 15, 2025, with an extension fee of $100,000 payable to BCCPC.

In October 2025, Abaxx fully settled its obligations to the Company.

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Base Carbon — Interim / Quarterly Report 2025

48096_rns_2025-11-04_58218a9f-7790-440b-844d-b851487ceec4.pdf

basecarbon

BASE CARBON INC.

1. Nature of operations

2. Basis of preparation

(a) Statement of compliance

(b) Going concern

(c) Basis of measurement

4. Short term loan receivable

5. Related party receivable

6. Carbon credit inventory

7. Investments in carbon credit projects

Categorization of current and non-current investment balances in carbon credit projects

Rwanda Cookstoves Project

Unrealized gain on investment in Rwanda Cookstoves Project

Vietnam Household Devices Project

Realized cash settled gains on investment in the Vietnam Household Devices Project

Unrealized loss on investment in Vietnam Household Devices Project

Current and non-current investment balance for the Vietnam Household Devices Project

DCF Model Sensitivity Analysis

India Afforestation, Reforestation, and Revegetation (ARR) Project

8. Rwanda Revenue Share Asset (“RSA”)

9. Income tax expense, income tax liability, and deferred income tax liability

10. Share capital

Common Shares

(a) Authorized

(b) Issued

(c) Exercised

(d) Repurchased and cancelled under NCIB

(e) Repurchased and Cancelled Under Share Purchase Agreements

11. Contributed surplus stock options

12. Earnings (loss) per share

13. Capital management

14. Fair Value and Risk Management

Fair value

Credit risk

Liquidity risk

Market risk

Foreign currency risk

Sensitivity analysis

15. Related party transactions

Abaxx Technologies Inc.

16. Commitments

India ARR Project payments

17. Subsequent events

More from Base Carbon

Base Carbon Interim / Quarterly Report 2025