Contract analysis

I. Purpose and Scope This memorandum summarizes and critically evaluates the confidential patent portfolio valuation report (the "Ridgeline Report") prepared by Dr. Arthur Gaines, Principal, Ridgeline IP Analytics LLC, 8300 Greensboro Drive, Suite 750, McLean, Virginia 22102. The Ridgeline Report was commissioned by Solstice Biomedical Devices Ltd. ("Solstice" or the "Client") through this firm, Calderwood & Harkness

II. Background and Engagement of Ridgeline IP Analytics LLC A. Engagement Details Ridgeline IP Analytics LLC ("Ridgeline") was retained by C&H on behalf of Solstice in early May 2025, specifically for the purpose of providing an independent patent portfolio valuation to inform settlement negotiations. The engagement was initiated following the exchange of initial settlement demands by Apex's counsel, Hargrove, Tate &

III. Summary of Ridgeline Report Findings A. Individual Patent Valuations Ridgeline assessed the fair market value of each of the three asserted patents individually, taking into account the remaining patent life, claim scope as narrowed by the Court's claim construction rulings, invalidity risks, design-around availability, and the commercial significance of the patented technology in the trocar market. The patent-b

1. U.S. Patent No. 9,814,237 ("the '237 Patent"). Title: "Locking Seal Assembly for Minimally Invasive Surgical Access Device" Issue Date: November 14, 2017 Expiration Date: June 22, 2035 Asserted Claims: 1, 3, 7, 12 Ridgeline assessed a fair market value range for the '237 Patent of $3.2 million to $5.1 million. This valuation reflects a remaining patent life of approximately ten years, moderate claim breadth follow

2. U.S. Patent No. 10,271,884 ("the '884 Patent"). Title: "Retractable Blade Deployment Mechanism for Trocar Systems" Issue Date: April 30, 2019 Expiration Date: September 15, 2036 Asserted Claims: 1, 2, 5, 9, 14 Ridgeline assessed a fair market value range for the '884 Patent of $4.8 million to $7.6 million, making it the highest-value patent among the three asserted patents. The '884 Patent covers the core mechanic

3. U.S. Patent No. 10,932,105 ("the '105 Patent"). Title: "Integrated Insufflation Valve and Seal for Laparoscopic Trocar" Issue Date: March 2, 2021 Expiration Date: January 10, 2038 Asserted Claims: 1, 4, 8 Ridgeline assessed a fair market value range for the '105 Patent of $1.9 million to $3.3 million. Although the '105 Patent has the longest remaining patent life of the three asserted patents (approximately 13 yea

4. Aggregate Valuation of the Three Asserted Patents. On a combined basis, Ridgeline assessed the aggregate fair market value of the three asserted patents at a range of $9.9 million to $16.0 million, with a midpoint estimate of $12.5 million. It is important to note that this figure represents the total value of the three patents across all potential licensees and uses — that is, the patents' value to the patent own

IV. Analysis and Application to Settlement Negotiations A. Comparison to Apex's Damages Claim Hugh Danaher of Keystone Valuation Advisors LLC submitted a damages expert report on behalf of Apex dated February 14, 2025, in which he opines that a reasonable royalty for Solstice's alleged infringement of the three asserted patents is $31,800,000. This figure, which forms the foundation of Apex's settlement demands, impl

V. Assessment of Ridgeline's Methodology and Reliability A. Strengths. Ridgeline's methodology and analysis exhibit several noteworthy strengths that enhance the reliability and utility of the Ridgeline Report for settlement negotiation purposes. Comprehensive comparable transaction database. Ridgeline's identification and analysis of seventeen comparable patent license transactions in the minimally invasive surgical

VI. Recommendations Based on our review and analysis of the Ridgeline Report, and in consideration of the broader litigation context and settlement dynamics, we make the following recommendations:

1. Settlement Valuation Support. The Ridgeline Report confirms that the $8,750,000 lump sum and 3.75% running royalty rate are within commercially reasonable ranges for a non-exclusive license to the three asserted patents in the context of a litigation-driven settlement. We recommend using Ridgeline's analysis, together with the Georgia-Pacific Factor Analysis Memorandum dated May 20, 2025, as the evidentiary and an

2. Negotiation Leverage on Running Royalty. Ridgeline's midpoint royalty rate of 3.35% and the comparable transaction median of 3.4% suggest that there may be a basis to seek a modest rate reduction in the final Definitive Settlement Agreement currently being drafted for execution by June 16, 2025. Specifically, Solstice could propose reducing the running royalty from 3.75% to 3.5% or, ideally, to the 3.35% midpoint

3. Covenant Not to Sue Value. We strongly recommend emphasizing to the Client the significant and largely uncaptured value of the covenant not to sue covering the full twenty-patent Apex Trocar Patent Family. Ridgeline's analysis implies that the non-asserted patents represent $18 million to $29 million in value, and the covenant not to sue effectively transfers that value to Solstice in the form of freedom-to-operat

4. Document Retention. The Ridgeline Report should be maintained as privileged attorney work product and treated with the highest level of confidentiality. It should not be shared with Apex or its counsel, Hargrove, Tate & Bennington LLP, under any circumstances, nor should its existence or contents be disclosed in any pleading, correspondence, or communication with opposing counsel or the Court. Copies of the Ridgel

5. Coordination with Tax Analysis. The tax implications memorandum currently in preparation (target delivery date June 9, 2025) should carefully consider the characterization of the lump-sum payment and running royalties for U.S. and Irish tax purposes. In particular, the tax analysis should address: (a) whether the lump-sum payment is properly characterized as a settlement payment, a royalty, or a capital payment, a