This supplement is the institutional follow-up to the Phase 1 investor brief. Its purpose is to explain in detail what sits behind the return outputs, how the downside is bounded, how capital is deployed, and why Phase 1 can be both a stand-alone deal and the foundation for later phases.
| Parameter | Position | Why It Matters |
|---|---|---|
| Geography | Turks & Caicos Islands only | Phase 1 plan is single-market |
| Total Capitalization | $10,000,000 | $5M investor cash + $5M sponsor in-kind — no other capital |
| Debt | Zero at launch and throughout base case | Simplifies underwriting; eliminates leverage risk |
| Continue MOIC / IRR | 7.24× / 71.6% | On $5M investor cash basis through 2035 |
| Buyout MOIC / IRR | 1.75× / 42.1% | At 2029 exit (Year 3) |
| Hurdle | 1.75× MOIC or 25% IRR | Whichever is reached first |
| Payback Year | 2029 (Year 3) | Year 4 is the downside timing |
| Prototype Role | Proof/demo assets — no sale proceeds in base case | Factory revenue is the earnings floor |
The investor case is built on visible cash events first. Long-duration platform upside is not required for Phase 1 to work.
The total Phase 1 capitalization is $10,000,000 exactly — $5.0M of investor cash equity and $5.0M of sponsor in-kind contribution. The investor cash is fully deployed across factory capex, working capital, materials, fees, and a protected opening liquidity floor. The sponsor in-kind comprises machinery/PP&E and graphene inventory contributed at close. Every dollar is accounted for; the numbers balance to $10M.
Investor Cash — $5,000,000
| Use | Amount | % |
|---|---|---|
| Factory CapEx — cash funded | $1,690,000 | 33.8% |
| Launch working capital | $850,000 | 17.0% |
| Initial materials / reserves | $500,000 | 10.0% |
| Fees / contingency / close | $250,000 | 5.0% |
| Opening liquidity floor | $1,710,000 | 34.2% |
| TOTAL | $5,000,000 | 100% |
Sponsor In-Kind — $5,000,000
| Component | Amount | % |
|---|---|---|
| Machinery / PP&E | $3,000,000 | 60% |
| Graphene inventory | $2,000,000 | 40% |
| TOTAL | $5,000,000 | 100% |
Prototype homes: 2 × $300K proof/demo assets. No sale proceeds in base case. Factory revenue is the earnings floor, not prototype monetization.
The operating story is intentionally conservative in shape. Negative Year 1 EBITDA is deliberate — it is the honest shape of a first-market industrial build, and it is more credible than a model that assumes immediate premium-margin performance at launch.
| Year | Revenue | EBITDA | EBITDA Margin | Utilization | Wtd ASP/CY |
|---|---|---|---|---|---|
| 2026 | $2.9M | ($1.8M) | -63% | 15% | $708 |
| 2027 | $14.4M | $4.5M | 31% | 65% | $782 |
| 2028 ★ | $20.6M | $9.2M | 44% | 75% | $876 |
| 2029 | $25.3M | $12.1M | 48% | 80% | $960 |
| 2030 | $29.9M | $15.9M | 53% | 80% | $1,079 |
| 2035 | $57.2M | $33.8M | 59% | 80% | $1,575 |
★ 2028 is the first clear conversion year. The operating approach is mechanical: fixed-cost absorption first, then volume, mix, and margin quality.
Continue Case — Stay-In Through 2035
- 100% preferred until 1.75× MOIC or 25% IRR hurdle
- 20% continuing share retained post-hurdle
- Distributions compound annually from 2026
- Continue MOIC: 7.24×
- Continue IRR: 71.6%
- Favors investors with longer-duration preference
Buyout Case — Clean 2029 Exit
- Continuing interest bought out at 2029
- Buyout MOIC: 1.75×
- Buyout IRR: 42.1%
- Higher annualized speed vs. continue case
- Favors investors wanting defined exit timeline
Both paths are anchored in actual distributions, not speculative platform assumptions. Returns are on $5M investor cash basis.
| Scenario | Continue MOIC | Continue IRR | Buyout MOIC | Buyout IRR | Meaning |
|---|---|---|---|---|---|
| Downside | 1.47× | 9.7% | 1.33× | 12.1% | Prototype delays, slower mix shift, higher reserve retention |
| Base | 7.24× | 71.6% | 1.75× | 42.1% | Current approved workbook — governing figures |
| Upside | 1.98× | 18.3% | 1.67× | 22.1% | Faster commercialization, earlier mix improvement |
Base scenario returns are on $5M investor cash basis from the TCI Pro Forma V6. Downside/upside scenarios reference the supplement exhibit overlay on total-raise basis.
| Risk | Why It Matters | Mitigation | Residual |
|---|---|---|---|
| Prototype Timing | Delays push payback Year 3→4; most important near-term variable | Conservative scheduling; two prototypes; gated drawdown | Moderate |
| Revenue Ramp | Operating cash depends on early conversion | TCI-only focus; existing operator base; demand discipline | Moderate |
| QC / Proof System | Quality failure erodes commercial trust irreversibly | Stop-ship authority; test cadence; NCR closure; bounded warranties | Low–Mod |
| CapEx Control | Overruns reduce distributable cash | Reserve line; contingency; milestone-linked drawdown | Low–Mod |
| Hurricane / Supply | Island ops require built-in continuity | Inventory buffers; critical-spares matrix; continuity playbooks | Moderate |
Governance: Board rights, reserved matters, weekly/monthly/quarterly reporting cadence, institutional-grade documentation from day one.