Contract analysis

I. Executive Summary This memorandum summarizes the transfer pricing analysis performed by Calderwood & Harkness LLP in coordination with Caldwell & Pryce Advisory LLC ("Caldwell & Pryce") in connection with the Channel Reseller Program Agreement (the "Agreement") between Lumos Analytics Inc. ("Lumos"), a Delaware C-Corporation headquartered at 4700 Sandhill Road, Suite 300, Palo Alto, California 94304, and Meridian

II. Background and Transaction Structure A. Parties and Relationship Lumos Analytics Inc. Lumos is a Delaware C-Corporation operating as a software-as-a-service ("SaaS") and financial technology company. Lumos's principal product is the Lumos Prism™ platform, an AI-powered financial analytics and risk-modeling SaaS solution marketed to enterprise customers in the financial services, insurance, and corporate treasury

III. Applicable Transfer Pricing Framework A. U.S. Transfer Pricing Rules The principal U.S. transfer pricing authority is Section 482 of the Internal Revenue Code ("IRC") and the Treasury Regulations promulgated thereunder (Treas. Reg. §§ 1.482-1 through 1.482-9). Section 482 grants the Internal Revenue Service ("IRS") the authority to distribute, apportion, or allocate gross income, deductions, credits, and allowan

1. Comparable Uncontrolled Price (CUP) Method — comparing the price in the controlled transaction to the price in a comparable uncontrolled transaction;

2. Resale Price Method — applying the margin that a distributor earns on resale to determine an arm's-length purchase price;

3. Cost Plus Method — adding an appropriate markup to costs incurred by the supplier;

4. Transactional Net Margin Method (TNMM) — comparing the net profit margin of the tested party to those of comparable independent enterprises; and

5. Transactional Profit Split Method — splitting the combined profits of the associated enterprises in a manner consistent with what independent enterprises would have agreed. The OECD Guidelines establish a hierarchy of methods, with the CUP method generally preferred where reliable comparable uncontrolled transactions exist. The selection of the CUP method in this engagement is consistent with this hierarchy and is

IV. Transfer Pricing Methodology: Comparable Uncontrolled Price (CUP) Method A. Selection of the CUP Method Caldwell & Pryce selected the Comparable Uncontrolled Price (CUP) method as the most reliable method for benchmarking the 30% reseller discount in the Agreement. The CUP method was selected on the basis of the following rationale: The CUP method is generally regarded as the most direct and reliable of the five

V. MAC Schedule and Ramp-Up Pricing Considerations The escalating Minimum Annual Commitment schedule set forth in the Agreement warrants specific discussion in the context of transfer pricing, as ramp-up and volume-escalation structures can present transfer pricing risks if they are not supported by commercial rationale and market comparables. The MAC schedule reflects a commercially reasonable ramp-up structure over

VI. Consistency with EU Competition Law Although this memorandum focuses on transfer pricing, it is worth noting the interaction between the transfer pricing analysis and the EU competition law analysis of the Agreement. A separate memorandum prepared by Howard Bellamy analyzes the Agreement under Article 101 of the Treaty on the Functioning of the European Union ("TFEU") and the Vertical Block Exemption Regulation (

VII. Withholding Tax and VAT Interaction The transfer pricing analysis set forth in this memorandum should be read in conjunction with the Tax Structuring Memorandum prepared by Leila Nazari and Robert Jansen (maintained separately in the closing binder under Matter No. 1008-00010), which addresses the withholding tax implications for cross-border payments from Meridian (Germany) to Lumos (United States), as well as

VIII. Documentation Requirements and Compliance A. U.S. Documentation Contemporaneous transfer pricing documentation should be maintained in compliance with Treasury Regulation § 1.6662-6 to preserve the availability of the "reasonable cause and good faith" defense to accuracy-related penalties under IRC § 6662(e). Although this penalty provision is directed at controlled transactions between related parties, maintai

1. Annual Review of Actual Pricing Outcomes vs. MAC Commitments. Following the close of each contract year, actual resale volumes, pricing, and revenue should be compared to the MAC commitments to identify any material deviations that could affect the transfer pricing analysis. The first such review should be conducted after Year 1 actuals are available.

2. Periodic Benchmarking Refresh. The CUP benchmarking study should be refreshed every three years, or sooner if material changes occur in the arrangement, the parties' functional profiles, or the EMEA SaaS distribution market. The first benchmarking refresh is recommended for the period ending March 31, 2027 (the conclusion of Year 3).

3. Regulatory Updates. The transfer pricing documentation should be updated in the event of material changes to the OECD Guidelines (including developments under the OECD Pillar One and Pillar Two frameworks), U.S. Treasury Regulations, or German transfer pricing rules. The Calderwood & Harkness engagement team will monitor relevant regulatory developments and advise Lumos as appropriate.

4. Coordination with Caldwell & Pryce. Caldwell & Pryce should be engaged for annual compliance reviews in coordination with Calderwood & Harkness. These reviews should be timed to coincide with the preparation of Lumos's annual tax filings and should be completed in advance of the filing deadlines to ensure that the transfer pricing position is reflected consistently.

IX. Coordination with Caldwell & Pryce Advisory LLC Caldwell & Pryce Advisory LLC (Ingrid Svensson, Managing Director) was engaged as the transfer pricing and international tax advisor to Lumos in connection with the Agreement. The engagement was coordinated with and supervised by the Calderwood & Harkness engagement team. The following timeline summarizes the key milestones in the coordination process: The Caldwell

X. Risk Assessment and Recommendations A. Transfer Pricing Risk Overall Risk Assessment: LOW. The transfer pricing risk associated with the 30% reseller discount under the Agreement is assessed as low based on the following factors: • The 30% reseller discount falls within the interquartile range (22%–38%) of the CUP benchmarking study and is positioned near the median of the comparable set. A price at or near the me

1. Maintain Contemporaneous Documentation. The Caldwell & Pryce transfer pricing memorandum dated March 15, 2024 should be maintained as contemporaneous documentation supporting the arm's-length nature of the 30% reseller discount. This memorandum should be stored in the closing binder for Matter No. 1008-00010 and should be readily accessible in the event of an inquiry from the IRS or German tax authorities.

2. Consistent Tax Filings. Lumos's annual U.S. federal and state income tax filings should reflect the transfer pricing position consistently, including the revenue recognized from the Agreement and the corresponding cost and margin allocations. Any inconsistencies between the tax filings and the transfer pricing documentation could undermine the defensibility of the position.

3. Auditor Coordination. Calderwood & Harkness should coordinate with Whitmore Paige & Co. LLP (Audit Partner: Gregory Chen) to ensure that the transfer pricing documentation is reflected in the audit workpapers and that the transfer pricing position is consistent with Lumos's financial statement disclosures, including the provision for income taxes.

4. German Local-File Documentation. Meridian should be advised, through its German legal counsel Kessler Hartmann Rechtsanwälte PartG mbB (Dr. Stefan Kessler, lead partner), of the need to prepare and maintain corresponding German local-file documentation in compliance with § 90 Abs. 3 AO and the GAufzV. This documentation should be prepared from Meridian's perspective and should be consistent with the conclusions of

5. Annual Transfer Pricing Review. An annual transfer pricing review should be scheduled with Caldwell & Pryce, with the first review to be conducted after Year 1 actuals are available. The first quarterly MAC payment is due after June 15, 2024, and the first annual review should be conducted following the close of Year 1 (March 31, 2025). The reviews should compare actual pricing outcomes to the MAC schedule, assess

6. Point of Contact. Robert Jansen should be retained as the primary point of contact within Calderwood & Harkness for ongoing transfer pricing coordination under Matter No. 1008-00010. All communications with Caldwell & Pryce, Whitmore Paige, and Lumos's internal tax function regarding transfer pricing matters should be channeled through Robert to ensure consistency and privilege maintenance.

XI. Conclusion Based on the analysis set forth in this memorandum and in the Caldwell & Pryce transfer pricing memorandum dated March 15, 2024, we conclude as follows: The 30% reseller discount under the Channel Reseller Program Agreement between Lumos Analytics Inc. and Meridian Data Solutions GmbH is consistent with the arm's-length standard as established by the Comparable Uncontrolled Price (CUP) method. The 30%