Contract analysis

I. Executive Summary This memorandum addresses the obligations of Solstice Biomedical Inc. ("SBI" or "Solstice US"), a Delaware corporation (EIN: 93-4718206) and wholly owned US subsidiary of Solstice Biomedical Devices Ltd. ("SBD" or the "Parent"), under the Physician Payments Sunshine Act, 42 U.S.C. § 1320a-7h (the "Sunshine Act"), and the implementing regulations promulgated by the Centers for Medicare & Medicaid

II. Statutory and Regulatory Background A. The Physician Payments Sunshine Act — Legislative Framework The Physician Payments Sunshine Act was enacted as Section 6002 of the Patient Protection and Affordable Care Act ("ACA"), Pub. L. No. 111-148, 124 Stat. 119 (2010), and is codified at 42 U.S.C. § 1320a-7h. Congress enacted the Sunshine Act based on findings that financial relationships between manufacturers of cove

III. SBI's Anticipated Reportable Transfers of Value — Year 1 Analysis A. Overview of Estimated Total Reportable Transfers Based on our review of SBI's proposed commercial plan, physician engagement strategy, and the budget projections provided by Marcus Reilly (VP US Commercial Operations) and Patrick Dunne (Marketing), Calderwood & Harkness estimates that SBI's total reportable transfers of value for Year 1 of US c

IV. CMS Manufacturer Registration and Reporting Mechanics A. CMS Manufacturer ID — Application Status Every applicable manufacturer must register with CMS through the CMS Enterprise Portal and obtain a unique CMS Manufacturer ID before it can submit Open Payments data. SBI submitted its CMS Manufacturer ID application in June 2024, and the application is currently pending. Theresa Brennan (US Regulatory Affairs) has

V. Distributor Pass-Through Reporting Obligations — Ascendant Distribution Solutions LLC A. Background SBI's exclusive US distributor is Ascendant Distribution Solutions LLC ("ADS"), a limited liability company organized under the laws of the State of Georgia. The distribution relationship is governed by the ADS Distribution Agreement (Ref. SBD-ADS-2024-0315), dated March 15, 2024, between SBI (as the US distribution

VI. Data-Collection and Tracking System Recommendations A. Centralized Tracking Platform The foundation of SBI's Open Payments compliance program should be a centralized aggregate spend tracking system that captures all categories of transfers of value with the required CMS data fields. This system must be operational before the October 1, 2024 launch date. The tracking platform should have the following capabilities

1. Consulting Agreements. Finance/Accounts Payable shall log each consulting payment against the executed Physician Consulting Agreement. At the time of consultant onboarding, the designated compliance contact shall collect the consultant's NPI and verify it against the CMS NPPES database. Each payment event (invoice, payment date, amount) shall be entered into the tracking platform within 5 business days of payment

2. Speaker Programs. Marketing (Patrick Dunne) shall implement a standardized event management workflow for all speaker programs, comprising the following steps: (a) Pre-event needs assessment: Documentation of the legitimate business need for the program, including target audience, educational objectives, and speaker selection rationale; (b) Attendee registration with NPI collection: All physician and non-physician-

3. Meals and Hospitality. Territory managers and regional directors shall submit expense reports that identify each covered recipient who received a meal or hospitality from SBI. Expense reports must include the covered recipient's full name, NPI, the date and location of the meal, the total meal cost, and the per-person allocation. Meal costs must be allocated on a per-person basis — they may not be split evenly amo

4. Travel and Lodging. Travel booked through SBI-approved travel vendors or reimbursed upon submission of receipts shall be attributed to the specific covered recipient who traveled. The tracking record shall include the covered recipient's name, NPI, travel dates, destination, airfare cost, hotel cost, ground transportation cost, and any other reimbursed travel expenses. Each component of travel expense (airfare, ho

5. Educational Grants. The grants committee shall maintain records of all educational grant applications received, the committee's evaluation and decision, the amount awarded, the recipient entity, and the terms and conditions of the grant. If the recipient is a teaching hospital, the transfer shall be reported as a "Grant" under Open Payments. All grants committee records shall be maintained in the tracking platform

6. Distributor Transfers (ADS). SBI shall receive a monthly data feed from ADS, pursuant to the amended Distribution Agreement provisions described in Section V.C. Upon receipt, the Open Payments Compliance Lead shall review the ADS data feed for completeness, accuracy, and consistency with SBI's data templates. Any discrepancies, missing fields, or questionable entries shall be flagged and resolved with ADS within 1