Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze the applicability of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), 15 U.S.C. § 18a, to the proposed acquisition by Meridian Precision Diagnostics, Inc. ("Buyer" or "Meridian") of certain assets constituting the OncuPath™ companion diagnostics assay line (the "OncuPath Business") from our client, Genome Dx Therape

II. Transaction Overview A. The Seller Genome Dx Therapeutics Inc. ("GDT") is a Delaware corporation headquartered at 4150 Campus Point Court, Suite 400, San Diego, California 92121. GDT develops and commercializes genomic profiling assays for oncology and rare-disease applications. The company's product portfolio includes multi-gene expression assays, next-generation sequencing panels, and companion diagnostics used

III. HSR Act Statutory Framework A. Overview of the HSR Act and Premerger Notification Requirements

Section 7A of the Clayton Act, 15 U.S.C. § 18a, as amended by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, Pub. L. No. 94-435, Title II, 90 Stat. 1390 (1976), requires that parties to certain acquisitions of voting securities, assets, or interests in unincorporated entities file premerger notification with the FTC and the Antitrust Division of the DOJ and observe a statutory waiting period before consumm

IV. Size-of-Transaction Test A. 2023 Filing Thresholds As revised for 2023 pursuant to the FTC's annual adjustment published in the Federal Register at 88 Fed. Reg. 5,572 (January 27, 2023), the HSR Act filing thresholds are as follows: A transaction is potentially reportable if it is valued at more than $111.4 million (subject to the size-of-person test). A transaction valued at more than $445.5 million is reportabl

V. Size-of-Person Test A. Applicable Threshold Because the transaction is valued between $111.4 million and $445.5 million, the size-of-person test must also be met for the filing obligation to be triggered. Under the 2023 thresholds, the size-of-person test requires that one person involved in the transaction have total assets or annual net sales of at least $222.7 million and that the other person have total assets

1. The Acquired Person GDT is the entity whose assets are being sold in the proposed transaction. However, under 16 C.F.R. § 801.1(a)(1), the "person" for HSR purposes is defined broadly to include the ultimate parent entity and all entities that the ultimate parent entity controls. "Control" is defined in 16 C.F.R. § 801.1(b) as, among other things, holding 50% or more of the outstanding voting securities of an issu

2. The Acquiring Person Meridian Precision Diagnostics, Inc. is the entity acquiring the OncuPath Business. Based on the information available to us, Meridian is a standalone corporation that is not controlled by any parent entity, controlling stockholder, or other entity holding 50% or more of its outstanding voting securities. Accordingly, Meridian is treated as its own UPE, and the "acquiring person" for HSR purpo

VI. Exemptions Analysis A. Potentially Applicable Exemptions The HSR Act and its implementing regulations provide a number of exemptions from the filing requirement for certain categories of transactions. See 15 U.S.C. § 18a(c); 16 C.F.R. Part 802. We have reviewed each potentially applicable exemption to determine whether any would relieve the parties of the obligation to file in connection with this transaction.

Section 802.1 — Acquisition of Realty. This exemption applies to the acquisition of certain categories of real property, including new facilities for the production of goods or services and unproductive real property. The assets being acquired in the OncuPath Business are primarily intellectual property, contracts, equipment, regulatory filings, inventory, and goodwill. Although certain real property interests (e.g.,

Section 802.2 — Acquisitions of Goods and Realty in the Ordinary Course of Business. This exemption applies to acquisitions of goods transferred in the ordinary course of business. The acquisition of an entire business line — including intellectual property, regulatory filings, contracts, and goodwill — is plainly not an acquisition of goods in the ordinary course. This exemption does not apply.

Section 802.4 — Transfers to or from Federal, State, or Local Agencies. Neither party is a governmental agency. This exemption does not apply.

Section 802.5 — Acquisitions by Certain Regulated Entities. While the companion diagnostics industry is subject to FDA regulation and CMS reimbursement policies, neither party is an entity of the type regulated under the exemption provisions (e.g., banks, savings institutions, or common carriers). No exemption for assets used in regulated industries would apply to companion diagnostics. This exemption does not apply.

Section 802.6 — Foreign Assets and Section 802.50–802.52 — Foreign Transactions. The OncuPath Business is conducted within the United States, and both parties are domestic corporations. The foreign transaction exemptions are inapplicable.

Section 802.30 — Intraperson Transactions. The transaction is between unaffiliated parties and does not involve a transfer within a single corporate family. This exemption does not apply.

Section 802.63 — Certain Acquisitions of Carbon-Based Mineral Reserves. Not applicable. We have also considered whether any other exemption under 15 U.S.C. § 18a(c) might apply, including exemptions for acquisitions solely for investment purposes (not applicable, as Meridian is acquiring the OncuPath Business for operational purposes) and exemptions for acquisitions of non-voting securities (not applicable, as the tr

VII. Filing Requirements and Procedures A. Filing Parties Both the acquiring person (Meridian, through its UPE) and the acquired person (Pinnacle/GDT, through the UPE of GDT, i.e., PBP GP III, LLC) are required to file HSR Notification and Report Forms. Each party files its own form, and both filings must be submitted to both the FTC and the DOJ. Our firm, Calderwood & Harkness LLP, will coordinate the preparation an

VIII. Timing Considerations and Early Termination Strategy A. Waiting Period Mechanics The statutory thirty-day waiting period commences on the day after the date on which both parties' complete HSR filings have been received by both the FTC and the DOJ. The waiting period is measured in calendar days, not business days. If the thirtieth day falls on a Saturday, Sunday, or federal holiday, the waiting period is exten

1. Complementary Product Portfolios. Meridian's existing diagnostics product menu and the OncuPath assay line employ distinct technology platforms and serve largely non-overlapping clinical indications. The acquisition expands Meridian's product offerings rather than consolidating competing products.

2. Fragmented Market Structure. The companion diagnostics market features numerous competitors, including both large integrated diagnostics companies and smaller specialized players. No single market participant holds a dominant share.

3. No Prior Antitrust Issues. We are not aware of any prior antitrust investigations, consent orders, or enforcement actions involving GDT, Pinnacle, or Meridian in the diagnostics space.

4. Transaction Size. While the $140 million transaction value is above the filing threshold, it is relatively modest compared to the large-scale diagnostics transactions that have historically attracted antitrust scrutiny.

5. Pro-Competitive Effects. The transaction is expected to generate pro-competitive efficiencies, including accelerated development of next-generation companion diagnostics assays, broader patient access to precision oncology testing, and enhanced competitive positioning against larger integrated diagnostics platforms. In the unlikely event that a Second Request were issued, the waiting period would be extended until

IX. Coordination with Buyer's Counsel Effective coordination between our firm and Buyer's counsel, Whitfield Sayer & Gregg LLP, is essential to ensure that both parties' HSR filings are complete, consistent, and filed simultaneously. We recommend the following coordination steps:

1. Draft Sharing. Calderwood & Harkness will share drafts of GDT/Pinnacle's HSR Form with Whitfield Sayer & Gregg for review and consistency on overlapping items, including the transaction description, purchase price calculation, description of acquired assets, and NAICS code classifications. Buyer's counsel will reciprocally share drafts of Meridian's filing.

2. Mutual Agreement on Early Termination. Both parties should confirm their mutual agreement to request early termination of the waiting period in their respective filings. We have discussed this with Jonathan Whitfield, and Buyer's counsel has confirmed that Meridian intends to request early termination.

3. Item 4 Document Coordination. Calderwood & Harkness will advise GDT's General Counsel, Rebecca Chiang, and Pinnacle's Board Chair, Nathaniel Hargrove, regarding the scope of the Item 4 document obligation and the need to identify, preserve, and produce all responsive documents. Item 4 documents prepared by or for GDT officers and directors — including board presentations, management analyses, and financial advisor

4. Filing Logistics. Both filings should be submitted electronically through the FTC's e-filing system on May 18, 2023. We will coordinate with Buyer's counsel to confirm simultaneous submission.

5. Ongoing Communication. Following submission, both firms should maintain open lines of communication regarding any questions or requests from the FTC or DOJ, including any informal inquiries or voluntary access letter requests that may arise during the review process.

X. Client Action Items To ensure timely and complete filing of the HSR Notification and Report Form, we request that the client and its affiliates take the following actions on an expedited basis:

1. Item 4 Document Collection. Rebecca Chiang, GDT's General Counsel, and Nathaniel Hargrove, Pinnacle Board Chair, should oversee the compilation of all documents responsive to Item 4 of the HSR Form. This includes, without limitation, board materials from the May 8, 2023 GDT Board of Directors meeting at which the transaction was approved, any written consents or resolutions relating to the transaction, and any str

2. Brindoval Partners Materials. Victor Sandoval (Managing Director) and Elaine Cho (Vice President) at Brindoval Partners LLC should be contacted to collect copies of any investment banker presentations, competitive analyses, valuation analyses, buyer landscape assessments, or other materials prepared by Brindoval in connection with the OncuPath sale process that are responsive to the Item 4 requirement. Any present

3. UPE Confirmation. Pinnacle should confirm the organizational and ownership structure of Pinnacle Biosciences Partners GP III, LLC for purposes of the UPE determination. Specifically, we need to confirm (i) the ownership interests (percentage and class) held by each managing partner (Nathaniel Hargrove and Priya Ramanathan) in PBP GP III, LLC, (ii) whether any single individual or entity holds a 50% or greater inte

4. Signature Pages. Authorized signatories for GDT and for PBP GP III, LLC should execute the signature pages for the HSR Notification and Report Form. The form must be signed by the UPE or an authorized representative. We will circulate the signature pages for execution once the filing is substantially complete.

5. Filing Fee. Confirm that the filing fee obligation rests with the Buyer pursuant to Section 8.3(b) of the APA and coordinate with Buyer's counsel to ensure timely payment of the $125,000 filing fee.

6. Revenue and Financial Data. GDT's finance team should prepare and provide (i) GDT consolidated revenue data by NAICS code for FY 2022, (ii) revenue data for the OncuPath Business for FY 2022, and (iii) GDT consolidated balance sheet data as of the most recently completed fiscal year. Pinnacle should provide comparable data for the PBP GP III/PBP III person, including aggregated revenue and asset data for all entit

XI. Post-Filing Update Added May 19, 2023; Updated June 23, 2023; Further Updated August 9, 2023 A. Filing Confirmation Both parties filed their respective HSR Notification and Report Forms on May 18, 2023, as planned. Meridian's filing was submitted by Whitfield Sayer & Gregg LLP, and GDT/Pinnacle's filing was submitted by Calderwood & Harkness LLP. Both filings were submitted electronically through the FTC's e-fili

XII. Conclusion The $140,000,000 asset purchase of the OncuPath™ companion diagnostics assay line by Meridian Precision Diagnostics, Inc. from Genome Dx Therapeutics Inc. was reportable under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Both the size-of-transaction test (total consideration of $140,000,000 exceeded the 2023 threshold of $111.4 million) and the size-of-person test (both partie