Confidential Information Memorandum

Business: Desert Sun HVAC

Prepared For: Prospective Acquirers

Prepared By: ClearValue Advisory · AI-Powered Business Analysis · strategy specialist

Date: May 9, 2026

Confidentiality Notice: This document contains confidential and proprietary information provided by the business for the purpose of evaluating a potential acquisition. By receiving this document, the recipient agrees not to reproduce, distribute, or use the information contained herein for any purpose other than evaluating the potential acquisition of Desert Sun HVAC. All information is self-reported by the business owner and has not been independently verified.

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TABLE OF CONTENTS

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• Business Overview .................... 1
• Products & Services .................. 2
• Market & Territory ................... 3
• Operations Overview .................. 4
• Locations & Facilities ............... 5
• Team Overview ........................ 6
• Financial Highlights ................. 7
• Transaction Overview ................. 8
• Why This Listing ..................... 9
• Disclaimer .......................... 10

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SECTION 1: BUSINESS OVERVIEW

Desert Sun HVAC is a Nevada-based HVAC contracting business with 22 years of continuous operation in the residential and light-commercial market. The company provides heating, ventilation, and air conditioning installation, repair, and recurring maintenance services to a customer base of approximately 1,800 active residential accounts and 24 light-commercial accounts. Desert Sun HVAC has grown revenue from $1,600,000 in 2023 to $2,400,000 in 2025 — a 22.47% compound annual growth rate [CALCULATED] — driven by a combination of organic account growth, contract renewal retention, and service area expansion. Sixty percent of revenue is derived from recurring maintenance contracts, providing a predictable revenue base that reduces buyer transition risk and supports favorable SBA financing terms. The business has operated in the Nevada market for over two decades, establishing brand recognition, customer relationships, and service infrastructure that represent meaningful barriers to entry for new competitors entering the market.

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SECTION 2: PRODUCTS & SERVICES

Desert Sun HVAC operates a dual-revenue model combining recurring maintenance services with project-based installation and repair work:

Recurring Maintenance Contracts (60% of Revenue — ~$1,440,000 in 2025)

The recurring segment is built on a residential and light-commercial maintenance contract program that provides scheduled preventive maintenance visits, priority service scheduling, and preferential pricing for enrolled customers. Across 1,800 active residential accounts, maintenance contracts represent a contracted annuity-style revenue stream with annual renewal cycles. The Nevada climate — characterized by extreme summer heat and significant seasonal temperature swings — creates near-mandatory demand for HVAC maintenance, supporting strong contract retention rates. Industry benchmark — not specific to this Company; broker to verify against current comp data.

Project-Based Installation & Repair (40% of Revenue — ~$960,000 in 2025)

The project segment covers new HVAC system installations, equipment replacement, and repair services. This segment operates as both a standalone revenue stream and a pipeline for future maintenance contract enrollments — customers who purchase and install new equipment through Desert Sun HVAC become natural candidates for ongoing service contracts. The repair component has grown in significance nationally, with repairs representing 31.3% of HVAC revenue in 2025 vs. 21.6% in 2021 [per supplied market data], consistent with Desert Sun HVAC's service-oriented model.

Emergency Services

Desert Sun HVAC offers 24-hour emergency response, operating beyond the standard weekday and Saturday schedule. This capability differentiates the business from competitors with standard-hours-only service and creates a defensible premium pricing position for emergency calls — a meaningful component of revenue in a desert climate where HVAC failures during summer carry immediate household health implications.

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SECTION 3: MARKET & TERRITORY

Desert Sun HVAC operates in Nevada, a state characterized by extreme desert climate conditions that create among the highest per-capita HVAC demand environments in the United States. The U.S. HVAC systems market was valued at $31.7 billion in 2025 and is projected to grow at 7.0%–7.7% CAGR through 2033 [per supplied market data] — industry benchmark, not specific to this Company; broker to verify against current comp data. Desert Sun HVAC's three-year revenue growth rate of 22.47% [CALCULATED] significantly outpaces these market averages, indicating active market share capture in its territory.

The Nevada residential market is supported by over 3 million HVAC system replacements annually nationwide [per supplied market data], with the desert Southwest representing a disproportionately high-demand region due to accelerated equipment wear under extreme heat load conditions. Retrofit and replacement projects account for 62.5% of total U.S. HVAC equipment market activity [per supplied market data], consistent with Desert Sun HVAC's service model which is centered on existing residential stock rather than new construction.

The addressable customer base within Desert Sun HVAC's service territory is [INSUFFICIENT DATA — specific geographic service radius and estimated total addressable residential and commercial accounts not captured at intake]. The existing 1,800 residential and 24 commercial accounts represent the current penetrated base; the total addressable market within the service territory would be a function of residential housing units and commercial square footage, which the acquiring party should assess during diligence.

Missing inputs — Total addressable market and named competitors: Not captured at intake. Impact: CIM market narrative cannot quantify remaining market opportunity or name specific competitive dynamics. Broker action: ask owner to estimate total service territory (radius in miles or named city/county coverage) and name 2–3 primary direct competitors.

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SECTION 4: OPERATIONS OVERVIEW

Desert Sun HVAC operates on a structured daily service model with scheduled maintenance calls, installation project management, repair dispatching, and after-hours emergency response. The business is open weekdays 7:00 a.m. to 6:00 p.m. and Saturdays 8:00 a.m. to 2:00 p.m., with 24-hour emergency availability — a service commitment that requires technician on-call rotation and dispatch infrastructure beyond standard business hours.

The operational workflow is supported by 10 full-time and 2 part-time employees covering field technician, dispatch, scheduling, and office functions. The business does not utilize independent contractors, providing direct control over service quality, licensing compliance, and customer-facing performance standards. Installation SOPs are documented, providing a foundation for technician training and quality consistency on the largest-ticket work the company performs. A customer-service playbook is in development; completion of this document is identified as a pre-listing priority.

Technology systems in use were not detailed at intake [INSUFFICIENT DATA]; the acquiring party should request a full technology stack disclosure during diligence, including field service management platform, CRM, accounting software, and communication tools. The business holds the licenses and certifications appropriate for HVAC contracting in Nevada [INSUFFICIENT DATA — specific license numbers and certifications not captured]; a buyer should verify license transferability and any state-required continuing education obligations as part of standard diligence.

Missing inputs — Technology stack and license details: Not captured at intake. Broker action: confirm field service management platform, CRM, accounting software in use; obtain HVAC contractor license number and confirm assignment/transfer procedure under Nevada state law.

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SECTION 5: LOCATIONS & FACILITIES

This is a single-location business [VERIFIED — owner-stated].

Missing inputs — Location and lease details: Address, own/lease status, monthly rent, lease expiration date, renewal options, and transferability clause are all uncaptured. Impact: Buyers and SBA lenders require lease detail to assess facility stability; a lease expiring within 24 months requires a -0.20x multiple adjustment and triggers an SBA lender flag. This is a critical gap that must be resolved before the CIM is distributed to prospective buyers. Broker action: obtain a copy of the current lease, confirm landlord identity, monthly rent, expiration date, renewal options, and whether the lease includes an assignment clause allowing transfer to a new owner.

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SECTION 6: TEAM OVERVIEW

No independent contractors; no family payroll [VERIFIED — owner-stated]

Missing inputs — Employee detail: Individual roles, tenure, compensation ranges, and key-person retention likelihood for the 10 FT and 2 PT employees were not captured at intake. Impact: Team Overview in the CIM reads at a "headcount only" level rather than a buyer-ready staffing profile; buyers will ask about the tenure and transferability of technicians specifically. Broker action: ask the owner to provide role descriptions, approximate tenure, and compensation range for the top 3–5 employees — particularly field technicians and any office/dispatch staff.

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SECTION 7: FINANCIAL HIGHLIGHTS

Weighted SDE (50/30/20 weighting): $500,268 [CALCULATED]

3-Year Revenue CAGR: 22.47% [CALCULATED]

Revenue Quality: 60% recurring maintenance contracts / 40% project-based

Note: 2023 and 2024 net profit figures are pro-rated from the 2025 margin of 15.83%; actual figures from tax returns will be provided during buyer diligence. Full SDE reconstruction and add-back detail are available in the Valuation Report and SDE Normalization Schedule.

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SECTION 8: TRANSACTION OVERVIEW

SBA Payment Calculation (for transparency):

Rate per month: 10.25% / 12 = 0.008542 | Loan: $1,463,282 | Term: 120 months

Monthly Payment = $1,463,282 × [0.008542 × (1.008542)^120] / [(1.008542)^120 – 1] = $19,541 [CALCULATED]

Desert Sun HVAC qualifies for SBA 7(a) financing with a 2.13x DSCR — significantly above the 1.25x lender minimum — making this an accessible acquisition for a qualified buyer with $162,587 in equity. A buyer who acquires at the asking price of $1,625,869, finances 90% through SBA, and operates at the current Weighted SDE of $500,268 will generate $265,781 in Year-1 post-debt-service cash flow [CALCULATED] — a 163.5% cash-on-cash return on the initial equity investment of $162,587 in the first year of ownership alone. This is among the most compelling buyer economics available in the HVAC contractor market for a business of this revenue scale and revenue quality.

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SECTION 9: WHY THIS LISTING

Desert Sun HVAC represents a rare combination of operating tenure, revenue quality, and growth momentum that is increasingly difficult to find in the Nevada HVAC market at this price point. Twenty-two years of operating history, a 60% recurring-revenue model built on 1,800 active residential maintenance contracts, and a 22.47% three-year revenue CAGR together form a business with genuine durability and demonstrated growth capability — not merely a stable lifestyle business. The SBA-accessible entry point of $162,587 down, combined with $265,781 in Year-1 post-debt-service cash flow, makes this an exceptional acquisition for an owner-operator buyer seeking immediate, substantial income with a clear path to further value creation through commercial expansion, geographic growth, and continued contract penetration. With a motivated, retirement-driven seller available for a 90-day transition and a market tailwind from Nevada's climate-intensive HVAC demand environment, Desert Sun HVAC is positioned for a well-structured, professionally executed transaction in the seller's stated 12-month timeline.

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SECTION 10: DISCLAIMER

This Confidential Information Memorandum has been Prepared By: ClearValue Advisory · AI-Powered Business Analysis Platform based on information self-reported by the business owner during an AI-powered assessment process. All financial figures are self-reported and unverified unless explicitly noted. This document does not constitute a formal business appraisal, USPAP-compliant valuation, certified opinion of value, or licensed professional advice of any kind. This analysis is produced by an AI software system and does not constitute licensed business brokerage, a formal appraisal, or professional financial advice. ClearValue Advisory's AI-powered analysis platform is-powered business analysis platform — not a licensed broker or appraiser. Prospective buyers should conduct their own independent due diligence, engage qualified legal and financial advisors, and verify all financial and operational representations directly with the seller before making any acquisition decision. All information contained herein is confidential and may not be reproduced or distributed without written consent.

Prepared By: ClearValue Advisory · AI-Powered Business Analysis Platform · AI-Powered Business Analysis · strategy specialist · May 9, 2026

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DISCLAIMER: This assessment is based on self-reported, unverified information. It does not constitute a formal business appraisal, certified valuation, or USPAP-compliant opinion of value. ClearValue Advisory is not a licensed appraiser. All sales are final. Full terms at strategy specialist/terms. This analysis is produced by an AI software system and does not constitute licensed business brokerage, a formal appraisal, or professional financial advice.