Contract analysis

I. Executive Summary This memorandum recommends that Ironhaven Data Centers LLC ("IHDC") commission a comprehensive cost segregation study for the Stonebridge Data Center Campus (the "Campus" or "Project") upon or shortly after construction commencement. The Notice to Proceed ("NTP") target date under the Engineering, Procurement, and Construction ("EPC") Agreement with Titan-McAllister Construction Group, LLC is cur

II. Project Background A. Project Overview The Stonebridge Data Center Campus is a ground-up development of a 96-megawatt ("MW") critical IT load data center campus to be constructed across approximately 81.4 acres situated at the intersection of Belmont Ridge Road and Stonebridge Boulevard in unincorporated Loudoun County, Virginia 20148. The site comprises two contiguous parcels: the 62.0-acre Stonebridge Parcel an

III. What Is a Cost Segregation Study? A cost segregation study is an engineering-based analysis of the construction costs of a building or other real property improvement, conducted for the purpose of identifying individual building components and site improvements that qualify for depreciation over recovery periods shorter than the default period applicable to the building as a whole. Cost segregation is a well-est

IV. Scope of the Recommended Study A. Assets and Costs to Be Analyzed We recommend that the cost segregation study encompass the following categories of assets and expenditures: All four data center buildings (Buildings A through D). Each building represents approximately 120,000 square feet of shell and core space designed to support 24 MW of critical IT load. The study will analyze the structural components (shell,

V. Estimated Reclassification and Tax Benefit A. Estimated Reclassification Based on industry benchmarks for data center facilities, our experience with comparable mission-critical projects, and the specific scope and configuration of the Stonebridge Campus, we estimate that approximately $45,000,000 of the total depreciable basis in the Campus can be reclassified from the default 39-year nonresidential real property

VI. Timing Recommendation A. When to Commission the Study We recommend that IHDC engage the cost segregation firm upon or shortly after the issuance of the Notice to Proceed under the EPC Agreement (target NTP date: November 1, 2025). Early engagement — at or near the commencement of construction rather than after the buildings are completed — offers several important advantages: Review of design documents at the out

VII. Selection of Cost Segregation Firm We recommend that IHDC retain a nationally recognized, engineering-based cost segregation firm with specific experience in data center and mission-critical facility projects. The selection of an experienced, qualified firm is important not only for the quality of the analysis but also for the defensibility of the study in the event of an IRS examination. The following qualifica

VIII. State Tax Considerations A. Virginia Conformity The Commonwealth of Virginia generally conforms to the federal depreciation rules under the Internal Revenue Code, including the MACRS recovery periods and depreciation methods. However, Virginia has historically decoupled from certain provisions of the federal tax code, including, in prior years, the 100% bonus depreciation provisions enacted by the Tax Cuts and

IX. Interaction with Construction Loan and Capital Structure The cost segregation study has several points of interaction with the Project's capital structure and construction financing that should be noted: Capitalized construction-period interest under Section 263A. The $390,000,000 construction loan from Summit National Bank, N.A. (as Administrative Agent), Cascade Commercial Lending Corp., and Harborview Trust Co

X. Documentation and Audit Defense The cost segregation study should be conducted in strict accordance with the standards and best practices set forth in the IRS Audit Techniques Guide for Cost Segregation (2022 revision). Adherence to these standards is essential to ensure that the study's reclassifications are defensible in the event of an IRS examination of the Stonebridge Campus Holdings LLC or IHDC partnership r