PURE Carbon Tracker Note

What the Note Is

The PURE Carbon Tracker Note is a GenTwo-issued structured product that provides economic exposure to a defined reference portfolio.

Investors do not directly hold the underlying assets. Instead, they hold a note issued by a segregated portfolio entity, with returns linked to the performance of the underlying portfolio.

The product tracks value through the Certificate Level, which reflects the aggregated value of the portfolio net of fees, expenses and operational costs.

Returns are delivered through:

• Fixed quarterly coupon payments
• Portfolio-linked redemption value
• Optional settlement in verified carbon certificates

Underlying Portfolio

The reference portfolio consists of:

• PURE tokens (primary component)
• USD cash reserve (supporting component)

PURE tokens are digital carbon units issued via the UK Carbon Registry and stored within Thomas Murray infrastructure. Each token represents quantified carbon mitigation generated by verified technology.

The portfolio provides exposure to the lifecycle of carbon asset creation, from initial issuance through to verified carbon certificate generation.

Investment Rationale

The PURE Carbon Tracker Note provides a structured route into carbon markets through:

• Income generation: Fixed 10% USD coupon
• Carbon exposure: Participation in tokenised carbon asset performance
• Real asset linkage: Conversion into verified carbon certificates
• Structured access: Delivered via a securitised note format

The structure enables noteholders to access a traditionally fragmented and illiquid market through a single instrument.

Risks

Investment in the PURE Carbon Tracker Note involves risks, including:

• Issuer Risk: Investors are exposed to the credit risk of the issuing entity and may lose all capital if the issuer defaults.
• Coupon Risk: Coupon payments are funded from portfolio assets and may reduce capital value.
• Liquidity Risk: There may be limited or no ability to sell prior to maturity.
• Valuation Risk: The value of tokenised carbon assets can fluctuate and may be difficult to determine with precision.
• Regulatory Risk: Carbon markets and tokenised assets are subject to evolving regulation.

Investors may lose part or all of their invested capital.

Important Information

• Private placement only
• Not a collective investment scheme
• Note holders are exposed to issuer risk
• Secondary market liquidity is limited and not guaranteed

GenTwo

GenTwo provides the securitisation framework through which the product is issued.

GenTwo specialises in the creation of structured financial products linked to traditional and alternative assets, including digital assets.

Within this structure, GenTwo enables:

• The creation of a bankable structured product wrapper
• Standardised issuance via a Tracker Certificate format
• Integration of non-traditional assets into a recognised financial instrument
• Defined legal and operational structure for noteholder exposure

This framework allows the underlying carbon assets to be accessed through a familiar structured product format.

Archax

Archax is the regulated market infrastructure supporting the product.

Archax operates as an FCA-registered digital asset exchange and custodian, providing institutional-grade infrastructure for digital securities and tokenised assets.

Its role within the structure includes:

• Secure custody of PURE tokens and converted carbon certificates within a regulated framework
• Provision of pricing data contributing to the Certificate Level calculation
• Supporting visibility and access to the instrument within a regulated trading environment
• Enabling institutional-grade settlement processes and noteholder reporting

UK Carbon Registry

UK Carbon Registry provides the registry infrastructure underpinning the carbon assets within the portfolio.

The registry is responsible for:

• Issuing PURE tokens representing carbon mitigation units
• Maintaining records of token ownership and lifecycle
• Recording independently verified carbon mitigation outcomes
• Registering verified (ex-post) carbon certificates following validation

The registry acts as the layer connecting tokenised assets with verified environmental outcomes.

Flowchain

Flowchain is the project developer responsible for generating the underlying carbon mitigation.

Flowchain develops water recovery infrastructure that reduces large-scale water waste and the energy intensity required to process and distribute it. By capturing real-time system data, the platform converts operational efficiency into measurable CO₂e emissions reductions. With an estimated 45 trillion litres of water wasted globally each year, Flowchain's approach links water recovery directly to quantifiable climate impact.

Within the product structure, Flowchain is responsible for:

• Delivering measurable reductions in CO₂e emissions
• Recording emissions reduction data at source through integrated systems
• Managing the infrastructure that underpins carbon asset creation
• Providing the operational data required for independent validation

This ensures that the underlying carbon assets are based on measurable, real-world activity.

Carbon Market Relevance

Carbon markets are evolving toward increased standardisation, verification, and integration with financial markets.

The PURE Carbon Tracker Note sits at the intersection of:

• Carbon certificate generation
• Digital asset infrastructure
• Structured financial products

The structure supports corporate carbon management and reporting frameworks, including mechanisms such as the ETS and Carbon Border Adjustment Mechanism (CBAM), by providing exposure to verified carbon mitigation activity.

How the Structure Works

• Participants subscribe to the Tracker Note
• Capital is allocated to a portfolio of PURE tokens and cash
• Tokens represent carbon mitigation generated by infrastructure
• Carbon mitigation is verified and converted into carbon certificates
• Noteholders receive:

• Quarterly coupon payments
• Final value linked to portfolio performance
• Optional delivery of carbon certificates