Cornerstone Sheet Metal & Fabrication, Inc.

March 18, 2026 · Report No. LL-2026-0142

Dennis Welch
Senior Vice President, SBA Division Manager
Frandsen Bank & Trust

Dear Mr. Welch,

At your request, Lukes & Lukes has prepared a certified appraisal of the machinery, equipment, vehicles, and tooling owned and operated by Cornerstone Sheet Metal & Fabrication, Inc. (the “subject assets”). This appraisal has been developed and reported in conformity with the 2024 edition of the Uniform Standards of Professional Appraisal Practice (USPAP), including Standards 7 and 8 governing the development and reporting of a personal property appraisal.

The interest appraised is the fee simple interest in the subject assets, valued as is, where is, as of the effective date of March 14, 2026. The intended users of this report are Frandsen Bank & Trust, the U.S. Small Business Administration, and the borrower. The intended use is to assist the lender and the SBA in their evaluation of the subject assets as collateral in connection with a financing decision. Use of this report for any other purpose, or by any other party, is not intended and is not authorized.

Based on the investigation, analysis, and reasoning described in this report, and subject to the assumptions and limiting conditions stated herein, it is our opinion that, as of the effective date, the subject assets reflect the following values:

This report contains 122 line items, a value-weighted analysis of remaining useful life by asset category, the scope of work performed, the approaches to value considered, and the assumptions and limiting conditions on which our opinions rely. We appreciate the opportunity to be of service and welcome any questions.

What this report contains

1. 01Summary of Salient FactsThe assignment, intended use, and reported values at a glance04
2. 02Engagement Overview & Scope of WorkWhat we were engaged to do and how we did it05
3. 03Market Trends & Value ConsiderationsThe market context behind the opinion of value06
4. 04Valuation Approaches & MethodsApproaches considered, condition rating, and reconciliation07
5. 05Assumptions & Limiting ConditionsThe basis on which these opinions are offered08
6. 06Certification & Appraiser QualificationsOur signed certification and credentials09
7. 07Useful Life Analysis & Asset SummaryRemaining life by category, the full asset schedule, and photographs11
8. +Included With Every ReportYour 24/7 online vault and two years of asset-specific signals18

Summary of salient facts

Engagement overview & scope of work

The assignment

Lukes & Lukes was engaged by Dennis Welch of Frandsen Bank & Trust to develop an opinion of the Fair Market Value and Orderly Liquidation Value of the machinery, equipment, vehicles, and tooling of Cornerstone Sheet Metal & Fabrication, Inc.. On March 12, 2026, the appraiser conducted an on-site inspection of the subject assets at the company’s facility.

About the business

Cornerstone Sheet Metal & Fabrication, Inc. is a licensed, bonded, and insured commercial sheet-metal and HVAC fabrication contractor in the Minneapolis–St. Paul metropolitan area. The company has operated for more than two decades and performs custom commercial sheet-metal work, ductwork, architectural metal, and field installation, supported by an in-house fabrication shop and a service fleet.

One report, on-site or desktop

Lukes & Lukes issues a single, unified certified report regardless of whether value is developed through an on-site inspection or a desktop analysis. The method of data collection used for a given assignment is disclosed in the Summary of Salient Facts, and where a desktop analysis relies on information furnished by others, the relevant extraordinary assumptions are stated plainly. For this assignment, the appraiser performed a personal, on-site inspection of the subject assets.

How the work was performed

The on-site inspection gathered descriptive information for each asset, including the manufacturer, model and serial numbers, age, hours or mileage, condition and appearance, and attachments or controls that contribute to or detract from value. Where available, the appraiser also considered asset lists, purchase invoices, depreciation schedules, maintenance records, and conversations with company personnel.

The analysis weighed recent transactions and current offerings for comparable assets, along with conditions affecting demand in the industries where the assets are used. Research drew on auction-result and dealer databases, published price guides, and direct contact with parties knowledgeable about the assets. The indications were reconciled into the final opinions of value.

Assets located off-site at inspection

Certain vehicles, trailers, and field tooling were deployed to active job sites at the time of inspection. For these items, the appraiser relied on the company’s records (year, make, model, identification, hours or mileage) and on the reasonable assumption that assets in active service are in working condition consistent with the condition ratings assigned.

Grouping and identification

Similar low-value items (hand tools, fixtures, racking, and material-handling accessories) may be combined into lots or groups as appropriate to the assignment. Identification plates may be missing, altered, or obscured; reported serial and model numbers should not be relied upon for security-interest recording without independent confirmation. Ages reported as “circa” are approximate.

What is excluded

Excluded are real estate and leasehold improvements; inventory and consumables; intangibles, licenses, and software; cash and accounts; and any third-party, employee-owned, or leased assets unless specifically identified and requested. This appraisal does not address the structural, mechanical, environmental, or regulatory condition of any asset, and inclusion of an item is not an opinion of title, ownership, or the right to transfer it. No UCC or title searches were performed.

Market trends & value considerations

Three forces shape what used machinery and equipment is worth: the condition of the specific assets, the size of the resale market for similar items, and the direction of the industries that use them.

Condition of the assets

Each line item was reviewed and assigned a condition rating reflecting its operation and function, wear, age, hours or mileage, and how its technology fits current industry standards. Particular attention was paid to controls on machine tools, where technological change has a pronounced effect on value. These ratings are summarized in Section 04 and applied throughout the asset schedule.

Size of the resale market

Sheet-metal and HVAC fabrication is a broad, active industry. The U.S. Census Bureau classifies the subject’s primary activity within NAICS 332322 (Sheet Metal Work Manufacturing), part of the much larger Fabricated Metal Product Manufacturing group. The breadth of this market supports a moderately strong pool of buyers for general fabrication machinery, welding equipment, and roll-forming and braking equipment of the kind held by the subject.

Industry and economic trends

Demand for fabricated sheet-metal products tracks commercial construction, mechanical contracting, and industrial activity, all of which have remained resilient in the upper Midwest. Two trends bear on value. First, steel and aluminum input costs and trade policy move replacement cost, which in turn supports the cost-approach indications for newer, specialized machines. Second, automation and CNC controls continue to raise the bar for shop productivity, which gradually erodes demand for older, manually controlled equipment even when it remains serviceable. Both effects have been considered in the opinions reported on individual assets.

Valuation considerations

Unless value is reported on an in-place, in-use basis, buyers of used equipment bear the cost and risk of removal: de-installation, rigging, transport, and re-installation. These costs reduce what a buyer will pay and have been weighed by the appraiser. Value can also be depressed when a large quantity of similar assets reaches the market in a narrow window, as can occur in a liquidation. Custom, special-purpose, or installed assets may require a buyer to arrange financing, removal, and suitable plant space, lengthening the time to sell. Every effort has been made to reach supportable conclusions; some items may sell for more and others for less, and no opinion guarantees a result in any particular sale.

Valuation approaches & methods

Three approaches to value are recognized for machinery and equipment. All three were considered; the approaches most applicable to these assets were weighted in the final opinion.

Definitions of the values reported

Approaches considered

Reconciliation

For this assignment, as with most machinery and equipment appraisals, primary weight was given to the Sales Comparison and Cost approaches, supported by the appraiser’s direct knowledge of the relevant markets. The Income Approach was considered and found not applicable at the individual-asset level. Research sources included auction-result databases, dealer and factory price inquiries, published price guides, and conversations with company personnel and industry participants. No deduction has been made for sale or liquidation expenses, holding costs, or occupancy unless specifically noted.

Condition rating scale

A numerical condition code was assigned to each asset or group. The code drives both the opinion of value and the remaining-useful-life analysis in Section 07.

Assumptions & limiting conditions

USPAP reporting requirements

This appraisal has been developed and reported in conformity with the 2024 edition of USPAP. It is communicated as an Appraisal Report under Standards Rule 8-2(a) and presents a summary of the data, analysis, and reasoning that support the opinions of value. The depth of discussion is keyed to the intended use and intended users identified in this report.

Permitted use of this report

This report was prepared for the client and intended users stated herein and only for the stated intended use. Under USPAP, an appraisal may not be re-addressed, transferred, or assigned to another party, or relied upon for a different purpose, by changing the client name on a completed report. An appraisal ordered for a financing decision, for example, is not valid for a marital, partnership, or tax matter, and vice versa. Possession of this report does not carry the right of publication or use by anyone other than an intended user, for the intended use, without the appraiser’s written consent.

Assumptions and limiting conditions

• This appraisal is valid only for the intended use stated herein. Any other use or reliance by any party is invalid. If the report is provided to a third party, it must be provided in its entirety, including all narrative, schedules, and limiting conditions.
• An appraisal is a professional opinion, not a guarantee. Reasonable appraisers may differ. The opinions are based on the appraiser’s best judgment and are not a warranty that any asset will realize the reported value in a sale.
• The opinions are based on conditions and information current as of the effective date. No opinion is offered as to future value, and the appraiser assumes no obligation to update the report for events occurring after that date.
• Information furnished by the client or others (asset lists, invoices, hours, mileage, and similar) is assumed to be accurate and reliable. The appraiser has not audited and cannot guarantee such information.
• Liquidation values assume a competent party conducts the disposition with appropriate advertising and marketing for the situation in order to maximize recovery.
• No consideration has been given to environmental or hazardous-material conditions, which may affect marketability and value. The assets are assumed free of such conditions unless stated.
• Title, ownership, and the status of any liens or UCC filings are assumed as represented by management and were not independently verified; no opinion of title is rendered.
• The client shall notify the appraiser of any apparent error or omission within 30 days of delivery so it may be addressed before the report is relied upon. The appraiser reserves the right to correct clerical, descriptive, or calculation errors.
• The appraiser’s liability for any claim arising from this engagement is limited to the fee paid for the assignment. The appraiser is not obligated to provide testimony or attend any proceeding relating to this report unless arranged separately, in writing, at additional cost.
• Additional assumptions or conditions may be stated elsewhere in this report in connection with specific assets.

Appraiser’s certification

I certify that, to the best of my knowledge and belief:

• The statements of fact contained in this report are true and correct.
• The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.
• I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved.
• I have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.
• I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.
• My engagement in this assignment was not contingent upon developing or reporting predetermined results.
• My compensation is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.
• My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.
• I have made a personal, on-site inspection of the property that is the subject of this report.
• No one provided significant personal property appraisal assistance to the person signing this certification.

Jared Lukes, CMEA

Lead appraiser and CEO of Lukes & Lukes, an independent, nationwide machinery and equipment appraisal firm.

Jared Lukes develops and signs the firm’s opinions of value as a NEBB-certified Machinery & Equipment Appraiser (CMEA), reporting under USPAP. He came to appraisal from highly regulated technology, where documentation has to satisfy examiners as well as readers, and from years rebuilding customer-service operations. Both habits carry into the work: scrutiny in the report, and an engagement communicated clearly from first call to delivered report.

Useful life analysis

At the client’s request, we developed the remaining useful life of the subject assets, expressed in years of probable service remaining, analyzed by category and weighted by each category’s share of total Fair Market Value.

Remaining useful life is the period from the effective date to an asset’s expected retirement from service. Age alone does not determine it: a lightly used ten-year-old machine of current technology can outlast a heavily used two-year-old machine subjected to a harsh duty cycle and deferred maintenance. The appraiser’s condition rating for each asset (Section 04) drives the remaining-life estimate, which is then aggregated by category.

Estimates assume continued maintenance and no material change in technology, regulation, or market conditions. The portfolio figure is the value-weighted average of the category lives.

Representative asset photographs

Photographs are representative of the asset classes inspected. The complete per-item photo galleries are available in the secure online edition of this report.

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