Contract analysis

1. No Admission of Materiality. The inclusion of any item, matter, or information in these Schedules does not constitute an admission by the Company, the Sellers, or the Sellers' Representative that such item, matter, or information is material, has had or would reasonably be expected to have a Material Adverse Effect, or is otherwise required to be disclosed under the Agreement. Certain items and matters are disclos

2. Cross-References and Deemed Disclosures. The section and subsection headings in these Schedules correspond to the section and subsection numbers of the representations and warranties in Article III of the Agreement. The disclosure of any item, matter, or information under a particular Schedule shall be deemed to be disclosed under each other Schedule to the extent the relevance of such disclosure to such other Sch

3. Qualified by the Agreement. The information set forth in these Schedules is qualified in its entirety by the specific language of the representations and warranties set forth in the Agreement. Nothing in these Schedules is intended to, nor shall it be construed to, broaden the scope of any representation or warranty contained in the Agreement, or to create any representation or warranty not expressly set forth in

4. No Independent Representations or Warranties. Nothing in these Schedules constitutes a representation or warranty of the Company, the Sellers, or the Sellers' Representative, except as and to the extent expressly set forth in the Agreement. These Schedules are not intended to, and shall not be construed to, constitute an independent source of obligations or liabilities on the part of the Company, the Sellers, or t

5. Documents and Summaries. Where these Schedules make reference to specific documents, agreements, instruments, or other written materials, such references are to documents that have been made available to the Buyer and its representatives in the electronic data room maintained by Whitmore Crane & Pfeiffer LLP on Crestline Solutions (the "Data Room"). All summaries or descriptions of such documents contained in thes

6. Headings. The headings contained in these Schedules are for reference purposes only and shall not affect in any way the meaning or interpretation of these Schedules.

7. Currency; Estimates. All dollar amounts set forth herein are expressed in United States dollars. Where amounts are described as "approximately" or "estimated," such amounts are based on the best information available to the Company and the Sellers as of the date hereof and are subject to adjustment in the ordinary course. SCHEDULE 3.1 Organization and Good Standing The following information is disclosed with respe

1. Board Approval. Resolutions approving the transactions contemplated by the Agreement, including the execution and delivery of the Agreement and the consummation of the transactions contemplated thereby, were duly adopted by unanimous written consent of the Board of Directors of the Company, dated August 18, 2024. Copies of such resolutions have been made available in the Data Room (reference: 1.01.003).

2. Stockholder Approval. Written consents of stockholders holding at least 65% of the outstanding shares of common stock of the Company were obtained on August 20, 2024. The following stockholders executed written consents: • Dr. Marcus Ellsworth — 2,845,900 shares (38.2%) • Pennfield Growth Partners, LP — 2,235,000 shares (30.0%) • Arch Hill Ventures Fund II, LLC — 1,490,000 shares (20.0%) The foregoing stockholders

3. No Anti-Takeover Devices. The Company has not adopted any shareholder rights plan, "poison pill," or similar anti-takeover device or measure. The Company's certificate of incorporation and bylaws do not contain any supermajority voting requirement or other provision that would impede, delay, or prevent the consummation of the transactions contemplated by the Agreement, other than the stockholder approval described

1. Stockholders' Agreement, dated as of September 15, 2020, by and among the Company, Dr. Marcus Ellsworth, Pennfield Growth Partners, LP, Arch Hill Ventures Fund II, LLC, and Catherine Pryor (the "Stockholders' Agreement"). The Stockholders' Agreement provides for, among other things: • Board composition rights (including the right of each of Dr. Marcus Ellsworth, Pennfield Growth Partners, LP, and Arch Hill Venture

2. Investor Rights Agreement, dated as of September 15, 2020, by and among the Company, Pennfield Growth Partners, LP, and Arch Hill Ventures Fund II, LLC. The Investor Rights Agreement is substantially co-terminus with the Stockholders' Agreement and will terminate upon consummation of the transactions contemplated by the Agreement. A copy of the Investor Rights Agreement has been made available in the Data Room (re

3. Board Observer Rights. Arch Hill Ventures Fund II, LLC holds board observer rights pursuant to Section 3.4 of the Stockholders' Agreement. Such observer rights are currently exercised by Samuel Nakamura, Managing Director of Arch Hill Ventures Fund II, LLC. These observer rights will terminate upon termination of the Stockholders' Agreement at Closing. No other voting agreements, voting trusts, proxies, stockholde

1. Titanium Precision Components, Inc. ("TPC") The Exclusive Supply Agreement, dated as of March 15, 2022 (the "TPC Supply Agreement"), between the Company and Titanium Precision Components, Inc., 215 Industrial Park Drive, Lancaster, PA 17601, contains a change-of-control provision in Section 12.3 thereof. Section 12.3 of the TPC Supply Agreement requires the prior written consent of TPC to any direct or indirect ch

2. OrthoLink Distribution, LLC The Distribution Agreement, dated as of January 1, 2023 (the "OrthoLink Agreement"), between the Company and OrthoLink Distribution, LLC, 9400 Snowden River Parkway, Suite 300, Columbia, MD 21045, contains a change-of-control notification provision in Section 15.2 thereof. Section 15.2 of the OrthoLink Agreement requires the Company to provide not less than thirty (30) days' prior writt

3. Ironclad Commercial Lending, LLC The Revolving Credit Agreement, dated as of June 1, 2021 (the "Credit Agreement"), between the Company and Ironclad Commercial Lending, LLC, 600 Travis Street, Suite 2200, Houston, TX 77002, contains a change-of-control event of default provision in Section 7.01(h) thereof. Under Section 7.01(h) of the Credit Agreement, any change of control of the Company (as defined therein) cons

1. Capital Expenditures. In the ordinary course of business, the Company has made capital expenditures for manufacturing equipment and facility improvements at its manufacturing facility located at 45 Forge Creek Road, Exton, PA 19341. Aggregate capital expenditures incurred year-to-date through the date hereof are approximately $1,200,000. These capital expenditures were incurred in the ordinary course of the Compan

2. New Employment Offer Letters. The Company entered into two new employment offer letters for engineering staff members in the ordinary course of business. The aggregate annual base salary commitments under such offer letters are approximately $320,000. Both positions are for mechanical engineers supporting the ArthroNav development program, and the compensation terms are consistent with market rates for comparable

3. Increased R&D Spending — ArthroNav Platform. The Company has increased its research and development spending in connection with the development of the ArthroNav Robotic-Assisted Arthroscopy System (Generation 1.0). This increased spending is associated with (i) the preparation for and completion of a pre-submission (Q-Sub) meeting with the U.S. Food and Drug Administration held in March 2024, (ii) continued engine

1. Exclusive Supply Agreement • Date: March 15, 2022 • Parties: The Company and Titanium Precision Components, Inc. ("TPC"), 215 Industrial Park Drive, Lancaster, PA 17601 • Subject Matter: Exclusive supply of titanium instrument housings and related precision-machined titanium components for the Company's arthroscopic blade and shaver products • Term: Five (5) years, expiring March 14, 2027, with an option to renew

2. Distribution Agreement • Date: January 1, 2023 • Parties: The Company and OrthoLink Distribution, LLC, 9400 Snowden River Parkway, Suite 300, Columbia, MD 21045 • Subject Matter: Distribution of the Company's PrecisionBlade product line in the United States • Term: Three (3) years, expiring December 31, 2025, with automatic one-year renewals unless either party provides 90 days' prior written notice of non-renewal

3. License Agreement (Polytechnic Innovations) • Date: July 1, 2020 • Parties: Polytechnic Innovations, Ltd. (Innovation Centre, 12 Banbury Road, Oxford, OX2 6NN, United Kingdom) and the Company • Subject Matter: License of background intellectual property relating to robotic surgical navigation technology for use in the Company's ArthroNav platform • Term: Co-extensive with the life of the licensed patents • Royalty

4. Revolving Credit Agreement • Date: June 1, 2021 • Parties: The Company and Ironclad Commercial Lending, LLC, 600 Travis Street, Suite 2200, Houston, TX 77002 • Subject Matter: $12,000,000 revolving credit facility secured by substantially all assets of the Company • Outstanding Balance: Approximately $7,341,822.16 as of the date hereof • Interest Rate: Variable rate based on the Secured Overnight Financing Rate (S

5. Office Lease — 780 Keystone Boulevard • Landlord: Keystone Boulevard Associates, LP • Details: As described in Schedule 3.9(b) • Data Room reference: 4.01.001

6. Manufacturing Facility Lease — 45 Forge Creek Road • Landlord: Forge Creek Industrial, LLC • Details: As described in Schedule 3.9(b) • Data Room reference: 4.01.002

7. Stockholders' Agreement • Date: September 15, 2020 • Parties: The Company, Dr. Marcus Ellsworth, Pennfield Growth Partners, LP, Arch Hill Ventures Fund II, LLC, and Catherine Pryor • Details: As described in Schedule 3.3(d) • Status: Terminates automatically upon consummation of the transactions contemplated by the Agreement • Data Room reference: 1.01.005

8. Employment Agreements / Offer Letters with Key Management Employment and compensation arrangements with the Company's key management personnel, as described in Schedule 3.15(b). Copies of all employment agreements and offer letters for key management have been made available in the Data Room (references: 7.01.004 through 7.01.008). New employment agreements for certain key employees to become effective at Closing

9. Confidentiality and Invention Assignment Agreements The Company's standard form Confidentiality and Invention Assignment Agreement, which has been executed by all employees and independent contractors with access to the Company's proprietary information and trade secrets. A copy of the standard form agreement has been made available in the Data Room (reference: 7.01.001).

10. ISO 13485:2016 Certification Agreement • Certification Body: Pinnacle Conformity Assessment Services, LLC • Certificate Number: PCA-2022-04819 • Scope: Design, development, manufacture, and distribution of single-use arthroscopic blades and powered shaver systems for arthroscopic surgery • Valid Through: April 2025 • Recertification Audit: Scheduled for Q1 2025 • Data Room reference: 6.01.011 The Company is not i