NPX-100 METHODOLOGY Cross-Industry Fiduciary Intelligence Index v2.0.0 -- Ratified 2026-07-01 Published by AEQUARA . New York, NY Contact: hello@aequara.ai Index page: https://aequara.ai/npx-100.html SUPERSESSION NOTICE This document supersedes NPX-100 methodology v1.0.0 (ratified 2026-07-01, same date). v1.0.0 governed a financial-sector-only index. v2.0.0 expands the universe to all industries globally. The financial-sector methodology migrates to the NPX-Financial-50 sub-index as a bespoke derivative of this document. v1.0.0 is preserved at /npx-100-methodology-v1.0.0.txt for archival and audit purposes; its hash (13589f6abbd8b43017fd30df240fa7edb9c562bb46b87688b1a26b066c7d7349) remains in the registry as a superseded entry. ------------------------------------------------------------------------ S1 OVERVIEW AND PURPOSE The NPX-100 is AEQUARA's flagship corporate intelligence index. It identifies the 100 companies in the world -- from any sector, any geography, any size -- that best demonstrate calibrated judgment, honest disclosure, and durable management quality. NPX-100 is a calibration instrument, not a performance instrument. It does not measure total return, market capitalization, or revenue growth. It measures whether management teams make accurate, honest, verifiable claims about the future and their own businesses -- and whether the structures around them (governance, audit, incentives) support or undermine that discipline. The index is: - Anti-issuer-pay: no company pays for NPX-100 coverage, inclusion, or score improvement - Methodology-hash stable: the SHA-256 of this document is published with every quarterly cycle; operational amendments do not rotate the hash - Brier-tracked: all scoring predictions are registered before resolution and scored against ground truth - Error-published: all prior-cycle errors are disclosed at the next publication - Sector-agnostic: GICS sector is used for relative normalization, not for inclusion criteria - Geography-agnostic: any publicly listed company with English-language public filings is eligible - Cross-industry: no sector is excluded beyond the eligibility gate in S4 Academic foundations: the Brier scoring rule (Brier 1950), accruals anomaly (Sloan 1996), economic moat framework (Morningstar), ISS Governance QualityScore four-pillar structure, and earnings variability as a quality signal (MSCI Quality Index methodology). ------------------------------------------------------------------------ S2 INDEX FAMILY The NPX family is structured as follows: NPX-100 (this document) The cross-industry flagship. Global. All sectors. Top 100 by composite score subject to the eligibility gate. First publication 2027-02-04. NPX-Exemplar A floating sub-set of NPX-100 constituents scoring 103 or above. Count floats with the composition of NPX-100; typically 10-20 companies. Published simultaneously with NPX-100. Inherits NPX-100 methodology entirely. NPX-Financial-50 Dedicated sub-index for publicly listed companies in the financials sector (GICS sector 40) -- asset managers, banks, insurers, and trust companies. Uses a bespoke derivative of this methodology with sector-adapted axis criteria (Fiduciary Alignment replaces Capital Discipline; regulatory capital guidance replaces earnings guidance for FC; loan-loss reserving honesty is a scored EC sub-metric). The 13 firms under evaluation in the NPX-100 v1.0.0 founding cohort (2026-07-01) transition to NPX-Financial-50 evaluation. First publication 2027-02-04. NPX-Technology-50 (planned 2027) Information Technology (GICS 45) companies with 5 or more years operating history and positive operating income. Product roadmap accuracy is the key FC sub-metric. R&D ROI replaces general capex quality in the CD axis. Pre-revenue and pre-profit companies are excluded. Methodology to be ratified and hashed before first publication. NPX-Consumer-Staples-30 (planned 2027) Consumer Staples (GICS 30) companies. High guidability and long operating histories make this the highest-signal sector for the FC axis. Target count: 30. NPX-Industrial-50 (planned 2027) Industrials (GICS 20) companies. Backlog conversion rate is a core FC sub-metric. Target count: 50. NPX-Healthcare-30 (planned 2028) Healthcare (GICS 35) companies with approved and marketed products. Pre-revenue pipeline-only companies are excluded. Clinical trial timeline accuracy is the key FC sub-metric. Target count: 30. NPX-Americas, NPX-EMEA, NPX-APAC (planned 2028) Regional cuts of NPX-100, using the same methodology with no axis modification. Target counts TBD based on qualifying pool depth. All sub-indices: - Publish quarterly on the same first-Tuesday-of-Feb/May/Aug/Nov schedule - Are anti-issuer-pay - Use methodology-hash-stable canonical documents - Require Trustee Tier co-signature for methodology hash rotations ------------------------------------------------------------------------ S3 UNIVERSE DEFINITION S3.1 Eligible companies A company is eligible for NPX-100 universe screening if ALL of the following hold: (a) Publicly listed on a recognized exchange -- any exchange in any jurisdiction, provided the exchange requires audited annual filings (b) Annual reports, earnings guidance, and governance disclosures are available in English -- as primary filings, official translations, or English-language investor relations publications (c) Market capitalization USD 500 million or above as of the most recent reconstitution date (d) At least 5 consecutive years of operating history with audited financials (e) Positive operating income in at least 3 of the trailing 5 fiscal years S3.2 Coverage Primary exchanges covered: NYSE, NASDAQ, LSE (London), Euronext (Paris, Amsterdam, Brussels, Dublin), Deutsche Borse (Frankfurt), Tokyo Stock Exchange, Hong Kong Stock Exchange, Australian Securities Exchange (ASX), Toronto Stock Exchange (TSX), Swiss Exchange (SIX), Nasdaq Stockholm. Coverage may expand by ratified amendment. Secondary listings are counted toward the primary exchange of origin. S3.3 Sector and geography neutrality No sector, geographic region, or company size is excluded from NPX-100 beyond the eligibility criteria in S3.1. However, sectors with structurally opaque accounting (e.g., pre-revenue biotech, early-stage growth companies not yet meeting the operating-income screen) are excluded by the profitability gate in S3.1(e), which is intended and should not be overridden by committee discretion. GICS sector classification is used for sector-relative normalization (S7) only. S3.4 Scope of the initial evaluation (2026 founding cycle) The founding cycle begins 2026-07-01. The steward panel evaluates companies submitted by the editorial board and by founding subscribers from any sector and geography meeting S3.1 criteria. No candidates are pre-selected or pre-committed. The first scored watch list (companies scoring 85 or above) is delivered to founding subscribers on 2026-11-04. The first full constituent publication is 2027-02-04. ------------------------------------------------------------------------ S4 ELIGIBILITY GATE -- HARD SCREENS The following conditions are DISQUALIFYING. Any company meeting one or more is ineligible for the current publication cycle regardless of composite score. Hard screens are re-evaluated at each quarterly reconstitution. GATE-1 Active SEC enforcement action, FCA enforcement action, or equivalent national securities-regulator enforcement action that has not been resolved by court order, consent agreement, or regulatory determination. Companies under investigation but not yet charged are not disqualified but receive a negative Controversy flag (S11). GATE-2 Material restatement of more than 2 fiscal years of audited financials within the trailing 5 fiscal years. A restatement of a single fiscal year following prompt and transparent disclosure is NOT a gate trigger but reduces the GV and EC axis scores. GATE-3 Going-concern audit opinion on any of the trailing 2 annual reports. GATE-4 Active criminal indictment of the CEO, CFO, or a majority of the board filed within the trailing 3 years and not yet resolved. GATE-5 Finding of securities fraud by a court of competent jurisdiction within the trailing 7 years. GATE-6 No audited English-language annual report filed within the prior 15 months. The steward panel may waive GATE-1 or GATE-4 by unanimous vote if it determines the action is frivolous or politically motivated, with full written rationale published in the quarterly artifacts. ------------------------------------------------------------------------ S5 DATA SOURCES Primary (all axes): - SEC EDGAR: 10-K (annual report), 10-Q (quarterly), 8-K (material events), DEF 14A (proxy statement) -- US-listed companies - UK Companies House + FCA annual reports -- UK-listed companies - ESEF (European Single Electronic Format) filings on ESMA's ESEF reporting database -- EU-listed companies - EDINET (Japan) + official English investor relations publications -- Japan-listed companies - ASX announcements platform -- Australian-listed companies - Company investor relations websites (English) -- all jurisdictions - GICS sector classification: S&P Global and MSCI joint standard (current edition) Secondary (specific axes): - Earnings call transcripts (Seeking Alpha, company IR sites): FC axis - Management guidance databases (Bloomberg, Refinitiv): FC axis calibration - Glassdoor Employer Reviews, LinkedIn Workforce Report: SK axis (supplementary) - Patent databases (USPTO, EPO): DH axis (supplementary) - Audit firm reports and PCAOB inspection records: GV axis (audit sub-criterion) - Restatement databases (Stanford Securities Class Action Clearinghouse): EQ and GV - ISS Governance QualityScore reports (where available): GV axis (cross-reference) Verification principle: all primary-axis scores must be supportable by citation to a specific publicly available document with a URL, filing reference, or archive date. Scores that cannot be cited to a primary source must be marked UNVERIFIED and carry a ceiling of PARTIAL. ------------------------------------------------------------------------ S6 SCORING FRAMEWORK -- EIGHT AXES Each axis is scored on a 0-100 scale by the steward panel using the criteria below. Score bands within each axis: FULL (75-100) Exceptional; practices that are industry-leading and clearly documented in primary sources. The company demonstrates this criterion without ambiguity. PARTIAL (40-74) Adequate; practices exist but have material gaps, limited documentation, or show recent deterioration. Committee judgment required. MINIMAL (0-39) Below threshold; absent, undisclosed, or negatively evidenced. A score below 40 on any axis prevents eligibility for NPX-100 constituent status. Watch-list eligibility (85+ composite) requires all axes at 25 or above. ------------------------------------------------------------------------ S6.1 FC -- FORECAST CALIBRATION (weight: 22%) Purpose: Measures whether management's own forward-looking statements -- earnings guidance, revenue guidance, capex plans, strategic targets, product launch timelines -- are subsequently realized at the rate and with the specificity that a calibrated forecaster would achieve. This is AEQUARA's core differentiator axis. No mainstream index currently scores guidance accuracy in a Brier-calibrated framework. The FC axis penalizes both systematic overconfidence (stated ranges are too narrow relative to outcomes) and systematic sandbagging (stated ranges so conservative they are trivially beaten -- a form of disclosure dishonesty). Sub-criteria and scoring signals: FC-1 Guidance accuracy (50% of FC composite) Trailing 12 quarters of material guidance items (EPS, revenue, operating income, operating margin). Score the hit rate: a guidance item is "hit" if the realized outcome falls within the stated guidance range. FULL (75-100): Hit rate 80% or above across trailing 12 quarters; no evidence of systematic sandbagging (see FC-2); at least 8 of 12 quarters had a guidance range of 10% of midpoint or narrower. PARTIAL (40-74): Hit rate 60-79%; or hit rate 80%+ but with sandbagging evidence; or guidance provided with wide ranges (over 15% of midpoint). MINIMAL (0-39): Hit rate below 60%; or no material guidance provided for 3 or more trailing quarters; or guidance was systematically reversed before the period ended. FC-2 Sandbagging detection A company that consistently beats guidance by more than 10% of the midpoint across multiple periods is sandbagging. Systematic sandbagging is penalized: if median beat exceeds 12% for 8 or more of 12 trailing quarters, FC score is capped at 65 regardless of hit rate. Cap is removed if the company provides documented explanation of its forecast range methodology. FC-3 Guidance specificity (30% of FC composite) FULL (75-100): Quantified guidance with stated ranges 10% of midpoint or narrower for all three primary metrics (revenue, EPS/operating income, margin). PARTIAL (40-74): Partial quantification; one or two primary metrics guided; or all three guided but with ranges exceeding 15% of midpoint. MINIMAL (0-39): Only qualitative guidance; or no guidance provided; or guidance explicitly withdrawn in the trailing year. FC-4 Strategic forecast follow-through (20% of FC composite) When management announces a strategic target with a timeline, track resolution. FULL (75-100): 75% or more of stated strategic targets with timelines were achieved within the stated timeline, or explicitly revised with documented rationale before the deadline. PARTIAL (40-74): 50-74% resolution rate; or limited evidence of stated strategic targets with timelines. MINIMAL (0-39): Below 50% resolution rate; or strategic targets with no documented follow-up; or no strategic targets with verifiable timelines in 5 years of filings. ------------------------------------------------------------------------ S6.2 EQ -- EARNINGS QUALITY (weight: 18%) Purpose: Measures whether reported earnings are backed by cash flows, free of accounting manipulation, and stable relative to the company's operating environment. Anchored in the accruals anomaly (Sloan 1996) and MSCI Quality methodology (earnings variability). The EQ axis is the forensic-accounting honesty signal of the index. Sub-criteria: EQ-1 Accruals ratio (primary forensic signal) The accruals ratio = (Change in Net Operating Assets) / (Average Total Assets). High accruals mean earnings are driven by non-cash accounting estimates rather than cash flows, elevating manipulation risk. Computed over trailing 3 fiscal years. Scored sector-relative within GICS sector (S7). FULL (75-100): Accruals ratio consistently below the sector median; or accruals ratio below 5% in absolute terms in all 3 trailing years. PARTIAL (40-74): Accruals ratio near sector median; or one year above sector median with subsequent improvement. MINIMAL (0-39): Accruals ratio persistently above sector 75th percentile; or Beneish M-Score flagging elevated manipulation probability (M-Score above -1.78); or restatement in trailing 3 years. EQ-2 FCF/earnings conversion Ratio of free cash flow to reported net income, trailing 3-year average. Earnings backed by cash are more reliable than accrual-heavy earnings. FULL (75-100): FCF/Net Income 0.90 or above in all 3 trailing years. PARTIAL (40-74): FCF/Net Income between 0.65 and 0.89; or one year below 0.65 with documented cyclical explanation. MINIMAL (0-39): FCF/Net Income below 0.65 in 2 or more of 3 trailing years; or persistent negative FCF with positive reported earnings. EQ-3 Earnings variability (stability) Standard deviation of year-over-year EPS growth, trailing 5 fiscal years. Measured sector-relative (S7). Low variability signals genuine management quality. NOTE: earnings smoothing via manipulation is penalized via EQ-1; only genuine operating stability is rewarded here. FULL (75-100): EPS growth standard deviation in the bottom third of GICS sector peers; no years where management characterized a recurring charge as non-recurring and then repeated it. PARTIAL (40-74): EPS variability near sector median; or high variability explained by commodity-price exposure (mitigating for Energy and Materials). MINIMAL (0-39): EPS variability in top third of sector peers; or management has characterized multiple recurring charges as non-recurring. EQ-4 Audit quality Assessed from PCAOB inspection reports (US-listed), FRC audit quality reports (UK), or equivalent regulatory body. Auditor identity and tenure. FULL (75-100): Big-4 or equivalent top-tier auditor; no PCAOB inspection deficiencies related to this company in trailing 5 years; auditor tenure between 3 and 15 years. PARTIAL (40-74): Non-Big-4 but established firm with clean inspection record; or Big-4 with one minor deficiency unrelated to core audit opinion. MINIMAL (0-39): Material weakness in internal controls disclosed; or adverse audit opinion on internal controls; or auditor tenure over 20 years with no documented re-tendering; or tenure under 2 years without reason. ------------------------------------------------------------------------ S6.3 CD -- CAPITAL DISCIPLINE (weight: 15%) Purpose: Measures whether management allocates capital in a way that generates returns above the cost of capital, makes sound acquisition decisions, and returns excess cash at appropriate valuations. Anchored in Morningstar's ROIC-vs-WACC excess-returns framework. Sub-criteria: CD-1 ROIC-vs-WACC spread (primary) Return on invested capital minus estimated weighted-average cost of capital. Trailing 5-year average. Computed sector-relative for capital-intensive vs. asset-light industries. Positive spread = value creation. FULL (75-100): ROIC exceeds WACC by 300bps or more in 4 of 5 trailing years; positive spread trend (improving or stable). PARTIAL (40-74): ROIC exceeds WACC by 100-299bps; or inconsistent spread; or spread declining from prior period. MINIMAL (0-39): ROIC at or below WACC for majority of trailing 5 years; or negative ROIC on trailing-year basis. CD-2 M&A track record Assessed from post-acquisition ROIC evolution, goodwill impairment history, and management commentary on deal outcomes. FULL (75-100): No goodwill impairments above 5% of acquisition price in trailing 7 years; stated synergy targets achieved where verifiable; or no acquisitions (neutral -- scored at median). PARTIAL (40-74): One goodwill impairment of 5-20% of acquisition price; or synergy targets partially achieved with documented shortfall. MINIMAL (0-39): Multiple goodwill impairments; or impairment above 20% of acquisition price; or management repeatedly revised synergy targets downward without public acknowledgment. CD-3 Capital return discipline Quality of buyback and dividend decisions: timing, sustainability, and stated rationale. FULL (75-100): No dividend cuts in trailing 7 years; buyback timing shows no evidence of systematic top-of-cycle over-buying; capital return policy explicitly documented with stated criteria. PARTIAL (40-74): One dividend reduction with documented rationale; or buyback timing neutral relative to sector peers. MINIMAL (0-39): Multiple dividend cuts; or active buybacks at extreme valuations followed by equity issuance at lower valuations; or no documented capital return policy. CD-4 FCF yield and reinvestment quality Free cash flow as percentage of enterprise value (trailing year), and quality of reinvestment decisions (R&D efficiency, maintenance vs. growth capex disclosure). FULL (75-100): FCF yield above 3% (or reinvestment-stage explanation if below 3%); company discloses maintenance vs. growth capex split; R&D efficiency tracked and disclosed. PARTIAL (40-74): FCF yield 1-3%; or reinvestment-stage but no explicit R&D efficiency tracking. MINIMAL (0-39): Negative FCF for 3 or more consecutive years without explicit investment-stage framing; or no capex or R&D disclosure. ------------------------------------------------------------------------ S6.4 GV -- GOVERNANCE INTEGRITY (weight: 15%) Purpose: Measures the quality of corporate governance structures. Decomposed per ISS Governance QualityScore pillars: board, compensation, shareholder rights, and audit oversight. Restatement history and material weaknesses are scored here. Each of the four GV sub-criteria is scored 0-100, then averaged for the GV axis score. GV-1 Board structure FULL (75-100): 75% or more independent directors; fully independent audit, compensation, and nominating committees; no classified board (or annual director elections); no director serves on more than 4 public company boards; gender and experience diversity evidenced. PARTIAL (40-74): 50-74% independent directors; or one committee not fully independent; or classified board with otherwise strong practices. MINIMAL (0-39): Below 50% independent directors; insider-dominated board; audit committee includes executive directors; CEO also serves as board chair without lead independent director. GV-2 Executive compensation alignment FULL (75-100): 70% or more of CEO compensation is performance-linked; most recent say-on-pay vote 90% or above; no option repricing in trailing 7 years; termination benefits of 3x base-plus-target-bonus or less. PARTIAL (40-74): 50-69% performance-linked; say-on-pay 70-89%; or one say-on-pay below 70% in trailing 5 years with subsequent correction. MINIMAL (0-39): Below 50% performance-linked; say-on-pay below 70% with no correction; excessive termination benefits; option repricing history. GV-3 Shareholder rights FULL (75-100): Single-class share structure with equal voting rights; no poison pill or pill adopted with shareholder approval and sunset provision; majority voting for director election; shareholders may call special meetings with 25% or less ownership threshold. PARTIAL (40-74): Dual-class structure with a published sunset provision; or poison pill adopted with shareholder ratification; or supermajority requirements for specific extraordinary transactions only. MINIMAL (0-39): Unmitigated dual-class structure with no sunset; or entrenched poison pill without shareholder approval; or supermajority over 66% required for routine shareholder actions. GV-4 Audit and risk oversight FULL (75-100): No material weakness in internal controls in trailing 5 years; no restatement in trailing 5 years; non-audit fees below 50% of audit fees; audit committee meets 4 or more times per year (disclosed). PARTIAL (40-74): One material weakness disclosed and remediated within 12 months; or non-audit fees 50-75% of audit fees with documented independence rationale. MINIMAL (0-39): Unremediated material weakness; or multiple restatements in trailing 5 years; or non-audit fees exceed audit fees. ------------------------------------------------------------------------ S6.5 ST -- STRATEGIC TRANSPARENCY (weight: 10%) Purpose: Measures whether the company's stated strategy is specific, measurable, and falsifiable -- and whether the company follows through on stated priorities, publishes amendments honestly, and communicates changes without obscuring the delta. Sub-criteria: ST-1 Strategic plan specificity FULL (75-100): Quantified strategic targets (e.g., "reach operating margin of X% by year Y") publicly disclosed in annual report or dedicated investor day; targets are tracked in subsequent quarterly disclosures. PARTIAL (40-74): Some quantified targets but others vague; or investor days held without published quantified commitments; or targets disclosed but not tracked subsequently. MINIMAL (0-39): Strategic communication is entirely qualitative with no falsifiable targets; or investor days suspended for 3 or more consecutive years without documented reason. ST-2 Follow-through and amendment honesty FULL (75-100): Strategic amendments are disclosed proactively with explicit comparison to prior stated strategy; "what changed and why" is answered in a public document; CEO letter acknowledges prior targets when revising them. PARTIAL (40-74): Strategy changed without explicit comparison to prior; or prior targets quietly removed from reporting without acknowledgment. MINIMAL (0-39): Strategy changed repeatedly with no documentation of what changed; or prior stated targets removed from filings without acknowledgment. ST-3 Segment and reporting consistency FULL (75-100): Segment structure unchanged for 5 or more consecutive years; or segment changes disclosed with full restatement of prior periods; changes driven by documented operational restructuring. PARTIAL (40-74): One segment restructuring with partial prior-period restatement; or a recent restructuring under 2 years with documented rationale. MINIMAL (0-39): Multiple segment restructurings in 5 years without adequate prior-period restatement; or segment reporting changed after a period of underperformance in a then-disclosed segment. ------------------------------------------------------------------------ S6.6 EC -- ERROR CULTURE (weight: 8%) Purpose: Measures whether the company publicly acknowledges mistakes, quantifies the error and its source, corrects course publicly, and learns from failure. A calibrated organization's willingness to acknowledge error is as important as its ability to avoid error. This axis has no established precedent in mainstream indexing -- it is novel and unique to NPX-100. Sub-criteria: EC-1 CEO letter candor Annual CEO/chairman letter (or equivalent) reviewed for: (a) direct first-person acknowledgment of past failures, (b) quantification of the failure, (c) described corrective action. FULL (75-100): At least 2 of 5 trailing letters explicitly acknowledge a material failure with quantification and stated correction; no evidence of exclusively success-narrative framing. PARTIAL (40-74): One letter acknowledges a material failure; or failures acknowledged but not quantified; or language is passive ("market conditions prevented..."). MINIMAL (0-39): No acknowledgment of material failure in 5 trailing letters; or all failures attributed to external macro factors with no internal self-assessment. EC-2 Forecast error disclosure When guidance is materially missed (more than 10% of midpoint), does management explicitly acknowledge the miss with explanation? FULL (75-100): Every material miss in the trailing 8 quarters was accompanied by an explicit "we guided X, we achieved Y, here is why" disclosure in the earnings call transcript or filing. PARTIAL (40-74): Most (75% or above) material misses acknowledged; or acknowledged with exclusively external attribution. MINIMAL (0-39): Material misses not acknowledged; or management redirects discussion from guidance misses without addressing the delta. EC-3 Project failure transparency When a material strategic project (acquisition, product launch, market expansion) fails, is the failure disclosed proactively with quantified impact? FULL (75-100): Material project failures disclosed within 2 quarters of determination with quantified write-down and corrective plan; no evidence of slow-drip disclosure designed to minimize attention. PARTIAL (40-74): Failures disclosed but not proactively; disclosed only when required by accounting rules; or insufficient quantification. MINIMAL (0-39): Failures not disclosed until forced by regulatory review or litigation; or disclosed with only boilerplate language. ------------------------------------------------------------------------ S6.7 SK -- STAKEHOLDER TRUST (weight: 7%) Purpose: Measures whether the company maintains genuine trust with its employees, customers, and suppliers. High retention signals alignment; dysfunction here often precedes governance failures. Sub-criteria: SK-1 Employee engagement and retention FULL (75-100): Glassdoor overall rating 4.0 or above (or equivalent published measure); CEO approval 80% or above; voluntary turnover below industry median where disclosed; no major labor actions in trailing 3 years. PARTIAL (40-74): Glassdoor rating 3.5-3.9; or one significant labor action resolved without structural change; or employee metrics not publicly disclosed. MINIMAL (0-39): Glassdoor rating below 3.5; or major unresolved labor actions; or evidence of systematic employee misconduct suppression. SK-2 Customer trust FULL (75-100): Customer retention 90% or above (disclosed); or published NPS of 50 or above; or industry leadership in customer satisfaction rankings; no material customer disputes or class actions in trailing 5 years. PARTIAL (40-74): Customer metrics disclosed but below threshold; or no public disclosure but no material disputes. MINIMAL (0-39): Material class-action litigation from customers in trailing 5 years; or evidence of systematic misrepresentation to customers documented by regulators; or published NPS below 0. SK-3 Supplier stability FULL (75-100): Supplier payment terms disclosed; no documented pattern of forced renegotiation under duress; supply chain stability evidenced by absence of major disruptions caused by relationship failures. PARTIAL (40-74): Limited disclosure but no documented supplier conflicts; or one documented supplier dispute resolved. MINIMAL (0-39): Documented pattern of forcing supplier renegotiation under market leverage; or supplier disputes cited as material risks in multiple consecutive filings. ------------------------------------------------------------------------ S6.8 DH -- DURABILITY HORIZON (weight: 5%) Purpose: Measures whether the company has structural competitive advantages that allow it to sustain returns above the cost of capital over the long term. Anchored in Morningstar's five moat sources (intangible assets, switching costs, network effects, cost advantage, efficient scale) and their ROIC-WACC excess-returns operationalization. Sub-criteria: DH-1 Economic moat evidence Evidence of structural competitive advantage from any of: (i) intangible assets, (ii) switching costs, (iii) network effects, (iv) cost advantage, (v) efficient scale. FULL (75-100): At least one moat source is clearly documentable from public filings and has been persistent for 5 or more years; the moat source is reflected in above-sector ROIC-WACC spread (CD-1). PARTIAL (40-74): Moat evidence is mixed or early-stage; or ROIC-WACC spread is positive but trending toward zero. MINIMAL (0-39): No documentable moat source; ROIC at or below WACC; or business model evidences high substitutability. DH-2 Long-term investment sustainability R&D investment as percentage of revenue (technology, healthcare, industrials); or brand investment and maintenance (consumer); or infrastructure capex relative to depreciation (capital-intensive industries). Trailing 5-year trend. Scored sector-relative (S7). FULL (75-100): Long-term investment (R&D + capex) as percentage of revenue is stable or growing in trailing 5 years; not below sector median; company discloses explicit long-term investment rationale. PARTIAL (40-74): Investment stable but near sector median; or declining but with documented cyclical explanation. MINIMAL (0-39): Long-term investment declining materially below sector median without documented cyclical explanation; or company explicitly sacrificing long-term investment for short-term EPS management. DH-3 Capital structure and regulatory durability FULL (75-100): Net debt/EBITDA below sector median or explicitly justified; investment-grade credit rating where rated; no material regulatory license risk cited in recent filings; no covenant violations in trailing 5 years. PARTIAL (40-74): Net debt/EBITDA near sector median; or sub-investment-grade with improving trend; or one covenant waiver with documented remediation. MINIMAL (0-39): Net debt/EBITDA materially above sector median with no deleveraging plan; or sub-investment-grade with deteriorating trend; or material regulatory license risk prominently disclosed. ------------------------------------------------------------------------ S7 SECTOR-RELATIVE Z-SCORING The following axes and sub-criteria are computed sector-relative (within GICS sector) before being incorporated into the composite: - EQ-1 (Accruals ratio): sector-relative within GICS sector - EQ-3 (Earnings variability): sector-relative within GICS sector - CD-1 (ROIC-WACC spread): sector-relative for capital-intensive vs. asset-light - DH-2 (Long-term investment percentage): sector-relative within GICS sector Sector-relative scoring converts raw values to sector-percentile z-scores before applying FULL/PARTIAL/MINIMAL bands. This ensures that a bank's leverage structure is compared to other banks, not to software companies. For sectors with fewer than 10 companies in the NPX universe, sector-relative scoring falls back to market-wide comparison. The steward panel must document this fallback in the quarterly artifacts. ------------------------------------------------------------------------ S8 COMPOSITE FORMULA C = (FC x 0.22) + (EQ x 0.18) + (CD x 0.15) + (GV x 0.15) + (ST x 0.10) + (EC x 0.08) + (SK x 0.07) + (DH x 0.05) + B Where: FC = Forecast Calibration axis score (0-100) EQ = Earnings Quality axis score (0-100) CD = Capital Discipline axis score (0-100) GV = Governance Integrity axis score (0-100) ST = Strategic Transparency axis score (0-100) EC = Error Culture axis score (0-100) SK = Stakeholder Trust axis score (0-100) DH = Durability Horizon axis score (0-100) B = Bonus points (0-5; see below) Bonus points (B): +2 Third-party independent attestation of the company's forecast calibration methodology or prediction record (e.g., GIPS verification, registered Brier- tracked prediction record by a recognized third party) +1 Published ISSB-aligned or TCFD-aligned sustainability disclosure with independently assured climate metrics +1 CEO letter publicly acknowledges at least one quantified past material mistake with documented corrective outcome (miss above 5% of stated target, acknowledged in the following year's letter with stated outcome and correction) +1 Company has a publicly disclosed, independently verified track record of its own forward-looking statements (a company-maintained prediction ledger analogous to AEQUARA's Brier Ledger) Minimum axis floor: any axis scoring below 40 (MINIMAL band) prevents constituent eligibility. The company may appear on the watch list if composite is 85 or above and all axes are at 25 or above, but cannot enter the constituent band until no axis is below 40. Maximum composite before bonus: 100. Maximum composite with bonus: 105. ------------------------------------------------------------------------ S9 SCORE BANDS Below 75 Not tracked. Below minimum engagement threshold. 75-84 Engagement pool. Tracked but not watch-list eligible. Steward commentary not published. 85-96 Watch list. Published quarterly to founding subscribers and Trustee Tier. Steward commentary available to Trustee Tier. 97-100 Constituent band. Eligible for NPX-100 constituent roster. Subject to eligibility gate (S4). Full steward commentary published. 101-105 Exemplar band. Constituent of both NPX-100 and NPX-Exemplar. Exemplar band requires at least 1 bonus point. Operational band: 97-105. A company that drops from Constituent band to 93-96 is placed on a "Review" list before removal. A company at 85-96 may be added if it crosses 97 at reconstitution with no prior-quarter flags. ------------------------------------------------------------------------ S10 CONSTITUENT PROTOCOL S10.1 Target count The NPX-100 targets 100 constituents. The constituent count is determined by: (a) All companies clearing the eligibility gate (S4), and (b) Scoring in the constituent band (97-105), and (c) Ranked by composite score descending. If fewer than 100 companies clear the gate and constituent band, the index publishes with fewer constituents. The index will NEVER include a company that fails the eligibility gate or scores below 97, even to maintain a round constituent count. S10.2 Pool size disclosure At every quarterly publication, AEQUARA publishes the size of the qualifying pool -- the number of companies that cleared the eligibility gate and scored 97 or above. This pool size is itself a quarterly signal of aggregate corporate integrity across the scored universe. S10.3 Reconstitution Quarterly, on the first Tuesday of February, May, August, and November. Reconstitution decisions are final as of market close on the Friday prior. Changes effective as of the publication date. S10.4 Buffer rule A company already in the constituent band is not removed until its composite drops below 94 (a 3-point buffer below the 97 constituent threshold). New entrants must score 97 or above at reconstitution. S10.5 Fast-exit rule Any constituent that triggers an eligibility gate condition (S4) is removed immediately, not at the next quarterly reconstitution. An interim announcement is published within 5 business days. ------------------------------------------------------------------------ S11 CONTROVERSY AND INCIDENT POLICY S11.1 Controversy flag A Controversy Flag is issued when a company is under credible regulatory investigation but has not yet been formally charged (GATE-1 threshold not yet met), or when a material allegation is publicly reported by a recognized news source or regulatory body. The flag: - Is disclosed in the quarterly artifacts alongside the company's score - Reduces the GV and EC axis scores by up to 10 points each (steward discretion) - Does not automatically remove a constituent unless gate conditions are met S11.2 Controversy decay A Controversy Flag for a resolved incident decays over 3 years: Year 1 post-resolution: full GV/EC penalty retained Year 2 post-resolution: 50% of penalty retained Year 3 post-resolution: 25% of penalty retained Year 4+: flag removed; incident enters historical record only S11.3 Severity tiers Tier 1: Minor regulatory fine below 1% of annual revenue -- Controversy flag only Tier 2: Major regulatory fine 1% of annual revenue or above, or material class action -- GV and EC axis penalties up to 15 points each Tier 3: Fraud finding or securities enforcement action -- GATE-1 or GATE-5 trigger; immediate removal from constituent roster ------------------------------------------------------------------------ S12 QUARTERLY RITUAL Quarterly publication occurs on the first Tuesday of February, May, August, and November. The date does not move for any reason. If the first Tuesday falls on a market holiday, publication moves to the following Wednesday. Eight artifacts published each cycle: ARTIFACT-1 Constituent roster with composite scores and axis breakdown ARTIFACT-2 Methodology hash (SHA-256 of the canonical methodology document), confirmed unchanged or rotated with documented new-family declaration ARTIFACT-3 Brier ledger for prior-cycle predictions -- every prior prediction resolved against realized outcomes; accuracy statistics published ARTIFACT-4 New-cycle predictions -- quantified forward assessments with stated horizons and confidence levels, to be scored at next cycle ARTIFACT-5 Steward commentary -- per-constituent changes, rationale for additions and removals, aggregate pool size disclosure ARTIFACT-6 Error disclosure -- all errors in prior-cycle scoring subsequently identified; corrective actions taken ARTIFACT-7 Revenue and conflict-of-interest disclosure -- all revenue from constituent-adjacent sources, all steward conflicts, all waivers of gate conditions and their rationale ARTIFACT-8 Sub-index roll -- NPX-Exemplar constituent list; NPX-Financial-50 constituent list and delta; preview of other active sub-indices Trustee Tier subscribers receive all eight artifacts 24 hours early. The embargo is lifted simultaneously for all other subscribers at 9:00 AM Eastern Time on the publication date. ------------------------------------------------------------------------ S13 ANTI-ISSUER-PAY FIREWALL No company, fund, financial sponsor, investor, or intermediary may pay AEQUARA for: - NPX-100 inclusion or exclusion of any specific company - Score improvement, score review, or score appeal outside the published appeal process - Advance information about scores, constituent changes, or score methodology beyond what is available to all subscribers - Advisory services that would create an incentive to improve an NPX score AEQUARA's revenue from NPX-100 is derived from subscriber access fees, Trustee Tier memberships, and index licensing for replication products. No constituent-specific revenue. AEQUARA stewards who hold material financial positions in any scored company must recuse from that company's scoring and disclose the position in ARTIFACT-7. ------------------------------------------------------------------------ S14 METHODOLOGY HASH PROTOCOL This document is the canonical methodology for NPX-100 v2.0.0. Its SHA-256 hash is computed over the UTF-8-encoded contents of this plain-text canonical file with Unix LF line endings, per the command: sha256sum npx-100-methodology-v2.0.0.txt (Linux/Mac) Get-FileHash npx-100-methodology-v2.0.0.txt -Algorithm SHA256 (PowerShell) The resulting hash is published: - At the top of ARTIFACT-2 every quarterly cycle - In the hash registry at https://aequara.ai/hash.html - On the index methodology page at https://aequara.ai/npx-100-methodology.html Hash rotation policy: - Operational amendments (governance, cadence, editorial procedures): versioned without rotating the hash - Methodology changes (axis weights, axis definitions, composite formula, score bands, universe definition): require a new index family and a new canonical document, producing a new hash - Hash rotations require co-signature from at least 3 Trustee Tier custodians and unanimous steward panel approval Prior methodology hash (superseded): v1.0.0 (ratified 2026-07-01, superseded by this document): 13589f6abbd8b43017fd30df240fa7edb9c562bb46b87688b1a26b066c7d7349 That hash remains in the registry as a SUPERSEDED entry. The v1.0.0 document remains available at /npx-100-methodology-v1.0.0.txt for archival purposes. ------------------------------------------------------------------------ S15 AMENDMENT POLICY S15.1 Operational amendments (no hash rotation) - Changes to the list of covered exchanges (S3.2) - Publication cadence adjustments for market holidays - Trustee co-signature roster updates - Editorial procedures for source citation - Controversy decay period adjustments within a +/- 12-month range - Clarifying language in scoring criteria that does not change the scoring outcome S15.2 Methodology changes (new index family, hash rotation) - Any change to axis weights - Any change to the composite formula - Any change to the eligibility gate conditions - Any change to score bands or the operational band - Any change to axis definitions that would materially alter scoring outcomes - Addition or removal of an axis - Changes to the universe definition (S3.1 criteria) S15.3 Deprecation horizon When a new index family is declared, the prior family runs in parallel for a minimum of 2 quarterly cycles before the prior family is retired. ------------------------------------------------------------------------ S16 NPX FAMILY MAP NPX-100 Flagship . cross-industry . global . target 100 . v2.0.0 NPX-Exemplar Sub-set of NPX-100 . score 103 or above . count floats NPX-Financial-50 Financials sector . bespoke derivative . target 50 NPX-Technology-50 Tech sector . planned v1.0 2027 . target 50 NPX-Consumer-30 Consumer Staples . planned v1.0 2027 . target 30 NPX-Industrial-50 Industrials . planned v1.0 2027 . target 50 NPX-Healthcare-30 Healthcare . planned v1.0 2028 . target 30 Sub-indices use GICS sector taxonomy (11 sectors . 25 industry groups . 74 industries . 163 sub-industries). GICS classification per S&P Global / MSCI joint standard, current edition. ------------------------------------------------------------------------ S17 INAUGURAL CYCLE -- 2026 FOUNDING EVALUATION S17.1 Evaluation status As of 2026-07-01 (this methodology's ratification date), the founding evaluation is open. The steward panel is evaluating companies from the eligible universe (S3.1) across all sectors and geographies. No scores have been published. The constituent list does not yet exist. S17.2 Founding subscriber deliverable On 2026-11-04, founding subscribers receive the first pilot watch list: companies that have cleared the eligibility gate and scored 85 or above on the composite. This is not a constituent list. It is the watch list. S17.3 First publication The first full NPX-100 quarterly cycle publishes on 2027-02-04 (first Tuesday of February 2027). All eight artifacts will be published simultaneously. S17.4 Founding cohort transition The 13 firms under evaluation in the v1.0.0 founding cohort (Amalgamated Financial Corp, Baillie Gifford, Boston Common Asset Management, Brandes Investment Partners, Calvert Research and Management, Dimensional Fund Advisors LP, First Affirmative Financial Network, Northern Trust Corporation, Parnassus Investments, T. Rowe Price Group Inc, TIAA, Trillium Asset Management, Vanguard Group Inc) are transitioning to NPX-Financial-50 evaluation under the NPX-Financial-50 bespoke methodology. They are not candidates for NPX-100 v2.0.0 in the current evaluation cycle. This transition reflects the change from a financial-sector-only index (v1.0.0) to a cross-industry index (v2.0.0). ------------------------------------------------------------------------ END OF CANONICAL DOCUMENT NPX-100 METHODOLOGY v2.0.0 Ratified 2026-07-01 AEQUARA . New York, NY . hello@aequara.ai . https://aequara.ai/npx-100.html