APPENDIX B: TECHNICAL REFERENCE — FORMULAS AND CALCULATIONS

NOI Calculation

NOI = Total Revenue - Operating Expenses Where: Total Revenue = Room Revenue + F&B Revenue + Ancillary Revenue Operating Expenses = Rooms Dept + F&B Dept + Utilities + Maintenance + Property Tax + Insurance + Marketing + A&G + Other

Distribution Waterfall

Distributable Amount = NOI - Reserves - Priority Fees Reserves = NOI × 20% Priority Fees = Fiduciary Fee + Platform Fee Your Distribution = (Your HPOT / Total HPOT) × Distributable Amount

Key Hotel Metrics

ADR (Average Daily Rate) = Room Revenue / Rooms Sold Occupancy Rate = Rooms Sold / (Total Rooms × Days in Period) RevPAR = ADR × Occupancy = Room Revenue / Total Rooms Available NOI Margin = NOI / Total Revenue

Asset Coverage Ratio (ACR)

ACR = (Hotel Market Value + Reserve Fund Balance) / Total HPOT Issued Healthy: ACR ≥ 1.0 Warning: ACR < 1.0 Distressed: ACR < 0.8

NAV Per HPOT

NAV = (Hotel Value + Reserves - Liabilities) / Total HPOT Example: Hotel Value: $11,000,000 Reserves: $1,500,000 Liabilities: $100,000 Total HPOT: 10,000,000 NAV = ($11M + $1.5M - $0.1M) / 10M = $1.24 per HPOT

Yield Calculation

Annual Yield = (Annual Distribution / Investment) × 100% Example: Investment: $50,000 Annual Distribution: $10,250 Yield = ($10,250 / $50,000) × 100% = 20.5%

Disposition Proceeds

Net Proceeds = Sale Price - Transaction Costs - Liabilities Your Share = (Your HPOT / Total HPOT) × Net Proceeds Example: Sale Price: $14,200,000 Transaction Costs (7%): $994,000 Liabilities: $80,000 Net Proceeds: $13,126,000 Your HPOT: 50,000 (0.5% of 10M) Your Share: 0.5% × $13,126,000 = $65,630