Contract analysis

I. Executive Summary This memorandum responds to your email of October 28, 2024, in which you requested a comprehensive portfolio review and go-forward recommendation for the CryoNova cryoablation catheter patent family. You asked that our analysis be completed in advance of the year-end board meeting so that the board of directors of Solstice Biomedical Devices Ltd. ("SBD") may make an informed decision regarding th

II. Background A. Solstice Biomedical Devices Ltd. — Company Overview Solstice Biomedical Devices Ltd. ("SBD") is an Irish-headquartered private limited company registered with the Companies Registration Office under CRO No. 647832. The company's registered office is located at Unit 4, Liffey Innovation Campus, Parkgate Street, Dublin 8, D08 XR29, Ireland. SBD operates in the United States through its wholly owned su

III. Current Patent Family Status A. Summary Status Table The following table summarizes the current status of each application and patent in the CryoNova patent family as of the date of this memorandum: Each of these applications and the issued patent is discussed in greater detail below and in subsequent sections of this memorandum. SBD-001 (Parent Patent). U.S. Patent No. 11,284,561 issued on March 22, 2022, with

IV. Outstanding Office Action — CON-2 (U.S. 17/851,216) A. Summary of Examiner's Rejections On September 15, 2024, Examiner James R. Dougherty of Art Unit 3794 (Surgical Instruments — Cryotherapy) mailed a Non-Final Office Action in CON-2 (U.S. Application No. 17/851,216). The supervisory patent examiner for Art Unit 3794 is Linda M. Kowalski. The Office Action addresses all 20 pending claims and raises three grounds

1. Claims 1–8 — Rejection under 35 U.S.C. § 103 (Obviousness). Independent Claim 1 and dependent Claims 2–8 are rejected as being unpatentable under 35 U.S.C. § 103 as obvious over a combination of three prior-art references: • U.S. Patent No. 10,537,418 (assigned to Vantage Cryosurgical Systems, Inc.), which discloses a single-zone cryoablation balloon catheter system; • U.S. Patent No. 9,861,432 (also assigned to V

2. Claims 9–14 — Rejection under 35 U.S.C. § 112(a) (Written Description). Claims 9–14, which are directed to specific aspects of the impedance mapping calibration algorithm used in conjunction with the catheter, are rejected under 35 U.S.C. § 112(a) for alleged lack of written description support. The Examiner asserts that the specification does not provide sufficient detail regarding the calibration algorithm to de

3. Claims 15–20 — Objection (Allowable Subject Matter). Claims 15–20, which depend from rejected Claim 1, are objected to as depending from a rejected base claim. However, the Examiner has affirmatively indicated that Claims 15–20 contain allowable subject matter that would be allowable if rewritten in independent form including all of the limitations of the base claim and any intervening claims. This is a significan

Section 103 Rejection (Claims 1–8). The Examiner's obviousness rejection relies on combining three references — two from Vantage and one from Helios — to reach the claimed integration of impedance mapping electrodes with a multi-zone cryoablation catheter. We believe this combination is vulnerable to challenge on multiple grounds. First, the Vantage references disclose only single-zone balloon cryoablation systems, w

Section 112(a) Rejection (Claims 9–14). The Examiner's written-description rejection asserts insufficient disclosure of the impedance mapping calibration algorithm. We believe this rejection can be overcome. The impedance mapping calibration algorithm is disclosed in considerable detail in the parent specification (U.S. Patent No. 11,284,561), which is incorporated by reference in the CON-2 application. Specific pass

V. CON-1 Revival Analysis CON-1 (U.S. Application No. 17/702,489), titled "Methods of Cryoablation Using Variable-Zone Cooling Catheter," received a Notice of Allowance with Examiner's Amendment on April 10, 2023. A copy of the Notice of Allowance is attached as Appendix C. The small-entity issue fee of $540 was due on July 10, 2023. The fee was not paid, and the application was deemed abandoned as of July 11, 2023.

1. A petition statement, signed by an authorized representative of the applicant, attesting that the entire delay in paying the issue fee was unintentional;

2. Payment of the petition fee of $1,050 (small entity); and

3. Payment of the issue fee of $540 (small entity), together with any other required fees that were not timely paid. The total government fees for revival are thus $1,590 ($1,050 + $540). C&H's estimated professional fees for preparing and filing the petition, including drafting the petition statement and compiling the necessary documentation, are $4,500–$6,000. The total cost of reviving CON-1 is therefore estimated

VI. Scenario Analysis A. Scenario 1: Maintain Full Portfolio Description. Under Scenario 1, SBD would take all steps necessary to maintain and prosecute the entire CryoNova patent family, including: • Responding to the Non-Final Office Action in CON-2 (U.S. 17/851,216), including amending claims, traversing the Section 103 and Section 112(a) rejections, and preparing a Rule 132 Declaration from Dr. Aisling Connolly;

VII. Comparative Cost Summary The following table provides a side-by-side comparison of the estimated costs under each scenario: Note: All government fees are stated at the small-entity rate. SBD qualifies as a small entity (312 employees; no large-entity licensing obligation). Professional fee estimates are based on the current hourly rates of the C&H engagement team and the anticipated scope of work. Actual fees ma

VIII. Recommendation Based on the analysis set forth in this memorandum, Calderwood & Harkness LLP recommends that the SBD board of directors approve Scenario 2 — Selective Prosecution as the go-forward strategy for the CryoNova patent family. Our recommendation is grounded in the following considerations:

1. Preservation of the most commercially valuable IP assets at moderate cost. Scenario 2 maintains the two patent assets with the greatest intrinsic and licensing value: the issued Parent Patent (U.S. Patent No. 11,284,561), which provides foundational apparatus claims covering the CryoNova variable-zone cooling catheter system, and the pending CON-2 application (U.S. 17/851,216), which claims the integration of impe

2. Technology-agnostic licensing value of CON-2. CON-2's impedance mapping integration claims have commercial value that is independent of the CryoNova product's fate. The integration of real-time impedance sensing with cryoablation catheter platforms is an emerging industry trend, and CON-2's claims — if allowed — would be relevant to any competitor pursuing this integration, regardless of whether the specific CryoN

3. Avoidance of costs and uncertainty associated with CON-1 and CON-3. Reviving CON-1 would cost $6,090–$7,590 for method claims that substantially overlap with the Parent Patent's existing claims. Prosecuting CON-3 would involve speculative costs and uncertain patentability, particularly given the potential for Section 101 challenges to the algorithm claims. Scenario 2 eliminates both of these expenditures.

4. Credible licensing package for identified counterparties. The Parent Patent and an issued CON-2 patent would form a credible two-patent licensing package sufficient for meaningful discussions with Helios Surgical Technologies, Inc. and/or Vantage Cryosurgical Systems, Inc., both of which have been identified as potential licensing counterparties.

5. Cost manageability. The near-term cost of $20,380–$27,380 is manageable relative to SBD's €74.3 million annual revenue and represents a prudent investment in preserving IP assets that may generate licensing revenue or strategic value in the future.

6. Alignment with investor expectations. Pinnacle Health Ventures, SBD's largest institutional investor, has expressed interest in preserving the CryoNova IP for potential out-licensing. Scenario 2 is responsive to this interest while exercising appropriate cost discipline. We believe Scenario 2 strikes the optimal balance between cost efficiency and IP value preservation for SBD. If the board has questions regarding

IX. Immediate Action Items and Deadlines The following action items require attention in connection with the go-forward strategy for the CryoNova patent family. We have organized them in order of urgency. Action Item 1: File Extension of Time for CON-2 Deadline: Before January 15, 2025 (statutory response deadline for the Non-Final Office Action in CON-2) Action: File a three-month extension of time under 37 C.F.R. §