Governance Proposal to Sell Property - 13806 Coit Rd, Cleveland, OH 44110.docx

Governance Proposal to Sell Property Property: 13806 Coit Rd, Cleveland, OH 44110 DAO Entity: Lofty Holding 13806 Coit Rd DAO LLC 1. Summary of Offer • Buyer: Pouya Nazarian (59th Street LLC / Lofty Holding 13806 Coit Road DAO LLC) • Purchase Price: $94,400 • Terms: As-is condition, contingent on a video walkthrough by a Magno Group agent • Closing: On or about October 14, 2025, with Golden Eagle Title as escrow agent • Earnest Money: $1,000 deposited in escrow • Inspection: Buyer retains inspection rights but is waiving repairs beyond latent defects 2. Inspection Findings Summary • Exterior: Broken/missing downspouts, water drainage issues, driveway deterioration, cracked/missing slabs, rotted porch, peeling paint, cracked mortar, shiplap siding with pest damage, balcony creaking. • Roof/Attic: Old shingles with granule loss, unsafe access, wiring hazards in attic (not recessed/bored through joists). • Windows/Doors: Many painted shut, broken locks, missing hardware, rear stair entry with no lock. • Plumbing: Water meter broken; mix of CPVC, PEX, and copper; brass fittings prone to corrosion; boiler vent pitched incorrectly (CO hazard). • HVAC: Furnace open-paneled, missing parts, unsealed exhaust vent, high humidity basement. • Electrical: Hanging junctions and wires; outdated knob-and-tube remnants. • Basement/Structure: Sagging joists due to poor sistering/blocking; painted-over past leaks; high humidity. • Pests: Groundhog on property, tree with carpenter pests posing risk, insect activity in exterior holes. • Conclusion: Major systems (roof, plumbing, electrical, HVAC, structure) require significant investment to stabilize. Significant deferred maintenance, safety hazards, and system repairs needed. Property is vacant and not rent-ready. Immediate Repairs Completed: Repairs of patching exterior holes (bullet removal and ripped or broken sections), water meter back in place, got water back on and controlled by in building shut - off valves, fixed some pipes, adjusted breaker box, fastened new junctions and dangling electrical, sealed some HVAC issues . Cracked water meter replaced by Cleveland Water. Utilities are currently on. Details and photos: https://drive.google.com/drive/folders/1OM-3bLSq39KBUj09f6m3nfvnJnDbEEhj?usp=drive_link https://drive.google.com/drive/folders/1JBfNekRTGIr_E1sg6haPbGEAcSU2wm3p?usp=share_link 3. Financial Summary Operating Cashflows & Balances DAO O.R. Paid to Yhome : $5,704.98 Yhome Due to Vendor: $(8,000.00) - work order invoice due directly to vendor , but we could not confirm work was done Yhome Paid to Aligned: $(12,100.00) DAO Capital Call Due to Yhome : $ 6 ,395.02 ($8,000 invoice removed) Aligned Operating Cash: $0 Insurance Due: $ 0 (Current) Taxes Due: $(2,297.55) Lofty Operating Cash: $(1,700.94) ECO Operating Cash: $( 4 , 331.11 ) DAO Net Cash (Capital Call): $( 14,724.62 ) ($8,000 invoice removed) Tokenization & Equity Tokens Outstanding: 1,971 Estimated Owners’ Equity: $85,995.00 DAO NAV per Token: $36. 16 ($8,000 invoice removed) If sold at $94,400, the net proceeds after closing costs will allow: • Settlement of outstanding DAO obligations at escrow. • Distribution of any remaining balance pro-rata to token holders. If rejected, the DAO must fund a capital call to cover deficits while continuing to hold the vacant property with major repair needs. This is an unrealistic prospect unless a hard money loan was secured against the property, which the PM cannot do. Interpretation: The property is operating at a net deficit, with outstanding obligations to Yhome and negative operating balances. A sale at $94,400 would allow the DAO to eliminate the negative cash position and recover value, though at a modest equity outcome compared to acquisition. 4. Comparative Market Analysis (CMA) / Broker Price Opinion AS - IS Value - $80k to $100k ARV $120k to $130 k https://www.dropbox.com/scl/fi/8b2e8yjju2mpmb1566qvt/Quick-CMA-Coit-Rd.pdf?rlkey=1x39xncnbnzi8q2jyco1tvdks&dl=0 5 . Voting Options Option 1: Accept the Offer • Approve sale of 13806 Coit Rd for $94,400 as-is, contingent on video walkthrough. • Authorize ECO Systems LLC c/o Earl Vanze Co as Authorized Representative to execute closing documents and settle all outstanding obligations . • Balance due to Yhome Nursing LLC shall be converted into EARLDAO shares and sent to Yhome, pending final settlement of all Yhome accounts across Lofty. • Cash shall be held in trust by Ecosystems Asset Recovery Lending DAO LLC F.B.O. Yhome Nursing LLC . • ECO Systems LLC shall be paid $1,000 as a one-time fee at closing for managing a vacant property and coordinating the sale on behalf of the DAO. • Remaining funds to be distributed to DAO members via share redemption on Lofty rails. • DAO LLC shall be subsequently terminated. Option 2: Reject the Offer • Decline current $94,400 offer. • Continue holding property. • Require immediate capital call to cover ~$21,590 deficits and allocate additional reserves for urgent repairs and stabilization. • Reconsider alternative sale, refinance, or renovation strategies. Recommendation: Accept the Offer. PM , sub-PM , and Agent concur that this is on the high end of what this property is worth as- is. Property is in a declining area, and t here is no realistic path to funding the necessary capital call to renovate the property.