Contract analysis

I. Executive Summary The purpose of this memorandum is to summarize the key findings of the legal due diligence review conducted by Calderwood & Harkness LLP on behalf of our client, Lumos Analytics Inc. ("Lumos" or the "Buyer"), in connection with the proposed acquisition of Prismyx Data Solutions LLC ("Prismyx" or the "Target"). The proposed transaction is structured as a forward merger under Section 18-209 of the

II. Corporate Organization and Capitalization A. Formation and Good Standing Prismyx Data Solutions LLC is a limited liability company organized under the laws of the State of Delaware. The company was formed on September 14, 2020 upon the filing of its Certificate of Formation with the Delaware Secretary of State. Prismyx's principal place of business and headquarters is located at 1414 Walnut Street, Suite 310, Phi

III. Intellectual Property A. Overview. Prismyx's principal asset, and the primary driver of its business value, is its proprietary software platform marketed under the brand name "PrismLens." The PrismLens analytics plugin suite is a SaaS product that provides real-time data visualization, anomaly detection, and predictive trend overlay capabilities for financial data. The platform is designed to integrate with exis

IV. Material Contracts A. Customer Contracts — Overview Prismyx generates its revenue exclusively through recurring SaaS subscription agreements with institutional customers. For the fiscal year ended December 31, 2023, Prismyx reported total revenue of approximately $3,800,000, consisting entirely of recurring subscription fees. The company reported adjusted EBITDA of approximately $620,000 for the same period. Reve

V. Customer Concentration Risk As noted in the preceding sections, Prismyx's revenue base is significantly concentrated among a small number of customers. The following table summarizes the revenue contribution of the top three customers for the fiscal year ended December 31, 2023: This level of customer concentration presents a meaningful risk to the business. The loss of any one of the top three customers — and in

VI. Employment and Labor Matters A. Workforce Overview As of the date of this due diligence review, Prismyx employs a total of 22 individuals, all of whom are classified as W-2 employees. Employees are based in the Philadelphia, Pennsylvania metropolitan area or work remotely from various locations within the United States. The workforce includes software engineers, data scientists, product managers, customer success

VII. Litigation and Regulatory Matters A. Litigation. We conducted a comprehensive litigation search covering both state and federal courts in Delaware and Pennsylvania, as well as a review of the data room materials and officers' certifications. We did not identify any pending, threatened, or historical litigation, arbitration, or other legal proceedings involving Prismyx Data Solutions LLC, whether as plaintiff or

VIII. Tax Matters A. Entity Tax Status Prismyx Data Solutions LLC is a Delaware limited liability company with two members (Jonah Eberhardt and Talia Messina). The company is classified as a partnership for U.S. federal income tax purposes by default under the Treasury Regulations' entity classification rules (commonly known as the "check-the-box" regulations). We confirmed that Prismyx has not filed an election on I

IX. Insurance Prismyx maintains the following insurance policies, as evidenced by certificates of insurance provided in the data room: • Commercial General Liability Insurance: Provides coverage for bodily injury and property damage claims arising from Prismyx's business operations. Coverage limits appear reasonable for a company of Prismyx's size and industry. • Professional Liability / Errors & Omissions ("E&O") In

X. Real Property Prismyx does not own any real property. The company's sole real property interest is its commercial office lease at 1414 Walnut Street, Suite 310, Philadelphia, Pennsylvania 19102, which is described in detail in Section IV.G of this memorandum. As noted therein, the lease expires on January 31, 2026, and no landlord consent is expected to be required for the transfer of the lease to the surviving en

XI. Environmental Matters Prismyx is a software and SaaS company with no manufacturing operations, laboratory facilities, industrial processes, or physical product distribution activities. The company's sole physical premises is a leased commercial office space. Based on the nature of Prismyx's business and operations, we did not identify any environmental liabilities, environmental permits, hazardous materials handl

XII. Summary of Identified Risks and Recommendations The following is a summary of the key risks and issues identified during the due diligence review, organized by priority level, together with our recommendations for addressing each item in the definitive transaction documents and integration planning. A. Critical / High-Priority Items

1. Ardent Financial Technologies Change-of-Control Consent The Master SaaS Agreement with Ardent Financial Technologies, Inc. — Prismyx's largest customer, representing approximately 31% of total revenue ($1,178,000 ACV) — contains a change-of-control consent requirement that must be satisfied in connection with the proposed merger. Failure to obtain Ardent's prior written consent would entitle Ardent to terminate th

2. Customer Concentration The top three customers collectively represent approximately 61% of Prismyx's total 2023 revenue. Revenue concentration at this level exposes the business to significant risk from the loss or reduction of any single major customer relationship. Recommendation: The Merger Agreement should include representations regarding the status of material customer relationships, a pre-closing covenant t

3. Key Person Dependency on Founders Both co-founders — Jonah Eberhardt (anomaly detection engine architect, CEO) and Talia Messina (product development and customer integration lead, CTO) — are critical to the ongoing operations, technology development, and customer relationships of the business. Their departure would create significant operational risk. Recommendation: The retention earnout ($4,500,000) and 30-mont

4. Pending Patent Application (U.S. Patent Application No. 17/842,316) The sole patent application covering the anomaly detection engine — a core differentiator of the PrismLens platform — remains pending and has not been granted. There is no assurance the patent will issue, and the scope of claims may be narrowed during prosecution. Recommendation: The Merger Agreement should include specific disclosures regarding t

5. Incomplete Proprietary Information and Invention Assignment Agreements Signed PIIAs were located for only 18 of 22 current employees. The four employees lacking confirmed PIIAs include technical staff with access to proprietary source code and algorithms. Recommendation: Sellers should be required to obtain executed PIIAs from the four identified employees prior to closing. The Merger Agreement should include a re

6. Office Lease The office lease at 1414 Walnut Street, Suite 310, Philadelphia, PA, contains an assignment restriction with a standard merger/operation-of-law exception. The lease expires January 31, 2026. Recommendation: Confirm applicability of the merger exception to the assignment restriction. Provide landlord notice post-closing. Lumos should plan for the Philadelphia office footprint decision in connection wit

7. Trademark Maintenance Prismyx holds three active trademark registrations. Ongoing maintenance filings must be made to preserve the registrations. Recommendation: Lumos's IP team should calendar all upcoming maintenance filing deadlines for the three registrations and ensure timely filings following closing.

8. USPTO Recordation The transfer of the pending patent application and three trademark registrations to the surviving entity by operation of the merger should be recorded with the USPTO to maintain a clean chain of title. Recommendation: File appropriate assignment recordation documents with the USPTO promptly following closing.

XIII. Data Room Index and Materials Reviewed The following is a summary of the principal categories of documents and records reviewed during the due diligence period through the virtual data room maintained by Prismyx and its counsel, as well as through independent searches and public record reviews: Organizational Documents. Certificate of Formation, Amended and Restated Limited Liability Company Agreement (January

XIV. Conclusion and Next Steps Based on the diligence review summarized in this memorandum, Prismyx Data Solutions LLC presents a manageable diligence profile that is consistent with expectations for an early-stage SaaS company of its size, revenue base, and operational maturity. The Target's corporate structure is straightforward, its capitalization is clean, and its regulatory footprint is minimal. We did not ident

1. Definitive Merger Agreement. Proceed to the preparation and negotiation of the definitive Agreement and Plan of Merger, incorporating the recommendations set forth in this memorandum regarding representations and warranties, covenants, closing conditions, and indemnification provisions. We will circulate an initial draft to seller's counsel at Cartwright, Daugherty & Voss LLP (Sabrina Delvecchio) for review and co

2. Ardent Consent. Develop a strategy for engaging Ardent Financial Technologies regarding the change-of-control consent, in consultation with the founders and seller's counsel. Timing of outreach should be coordinated with the signing of the Merger Agreement.

3. Financial Diligence Coordination. Coordinate with Haverford & Keane, CPAs (Lorraine Chow, Engagement Partner) on the completion of the financial statement review and net working capital analysis. The target net working capital amount for the closing adjustment mechanism is $485,000.

4. Valuation and Deal Structuring. Coordinate with Bristow Farr Financial Advisory LLC (Arun Padmanabhan, Managing Director) on valuation analysis, purchase price allocation, and Section 1060 reporting.

5. Employment Agreements. Prepare and negotiate the Employment Agreements for Jonah Eberhardt and Talia Messina, incorporating the restrictive covenant and IP assignment provisions recommended in this memorandum.

6. Earnout Documentation. Finalize the earnout terms and mechanics, including the definition of PrismLens Net New ARR, the measurement methodology, the dispute resolution process, and the relationship between earnout payments and continued employment of the founders.

7. Pre-Closing PIIA Remediation. Confirm with seller's counsel that executed PIIAs will be obtained from the four identified employees prior to closing. We remain available to discuss any aspect of this memorandum and the identified findings at your convenience