MEMORANDUM
PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT
TO: Christine Aldridge, Partner, Deal Lead, Pinnacle Venture Fund II LP Tomas Medina, Vice President, Pinnacle Venture Fund II LP
FROM: Rachel Bernstein, Partner, Calderwood & Harkness LLP Leila Nazari, Associate, Calderwood & Harkness LLP
DATE: May 8, 2026
RE: Material Contracts Review — Quillen Technologies, Inc. — Series A Preferred Stock Financing
Matter No.: 1002-00002
Billing Code: 78412.001
Right-click to update Table of Contents
I. Executive Summary
The purpose of this memorandum is to summarize Calderwood & Harkness LLP's review of the material contracts of Quillen Technologies, Inc. ("Quillen" or the "Company") in connection with Pinnacle Venture Fund II LP's ("Pinnacle") proposed $14,000,000 lead investment in the Company's $22,500,000 Series A Preferred Stock financing (the "Series A Financing" or the "Financing"). This memorandum is intended to provide Pinnacle's deal team with a comprehensive assessment of the contractual landscape of the Company, to identify provisions of concern, and to recommend specific protective measures to be incorporated into the definitive transaction documents.
The scope of our review encompasses all contracts produced by Quillen and its outside counsel, Fenwick, Torres & Keane LLP (Gregory Navarro and Sophie Marchetti), in response to Calderwood & Harkness's due diligence request list transmitted on April 18, 2026. The due diligence period runs from April 18 through May 23, 2026. This memorandum covers all contracts reviewed through May 7, 2026. Supplemental memoranda will be prepared to the extent additional material contracts are produced or material developments arise prior to the anticipated closing date of June 15, 2026.
Overview Finding. Based on our review to date, we have not identified any material impediments to closing the Series A Financing. However, several provisions in the Company's existing contractual arrangements require attention from Pinnacle's deal team and should be addressed in the Stock Purchase Agreement ("SPA") and related transaction documents. Specifically, certain customer agreements and vendor contracts contain change-of-control and/or assignment clauses that, while not triggered by the Series A Financing itself, could be implicated in the event of a future acquisition or change-of-control transaction involving Quillen. Additionally, specific consent requirements—most notably from existing Series Seed Preferred stockholders in connection with the charter amendment—must be obtained prior to closing. We have identified these items throughout this memorandum and have included recommendations for SPA representations, warranties, and disclosure schedule items in Section XI below.
Company Background. Quillen Technologies, Inc. is a Delaware C-corporation incorporated on July 12, 2023 (Delaware Secretary of State File Number 7384219). The Company is headquartered at 88 Garrison Street, Floor 4, Boston, Massachusetts 02116. Quillen develops and commercializes "Mosaic," an artificial intelligence-driven portfolio analytics and risk-attribution software-as-a-service ("SaaS") platform. Mosaic is sold to institutional asset managers, pension consultants, and endowments, providing data-driven insights into portfolio construction, performance attribution, and risk factor analysis. As of the date of this memorandum, Quillen employs approximately 38 full-time equivalents ("FTEs") across engineering, sales and marketing, general and administrative, and executive functions. The Company reported Q1 2026 annualized recurring revenue ("ARR") of approximately $3,800,000 and last-twelve-months ("LTM") revenue of approximately $3,200,000. The Company's monthly cash burn rate is approximately $420,000, and as of March 31, 2026, the Company reported approximately $1,100,000 in cash on hand, representing approximately 2.6 months of runway absent the closing of the Series A Financing or other capital infusion.
II. Methodology and Scope of Review
A. Data Room and Document Production
All contracts reviewed in connection with this memorandum were produced via Fenwick, Torres & Keane LLP's virtual data room hosted on Thackeray Solutions. Calderwood & Harkness was granted access to the data room on April 21, 2026, and document production was substantially complete as of April 30, 2026, with certain supplemental productions received through May 5, 2026. We understand that additional documents remain outstanding and are expected to be produced prior to the conclusion of the due diligence period. Those outstanding items are identified in Section XII of this memorandum.
B. Categories of Contracts Reviewed
Our review covered the following categories of material contracts:
(A) Customer and SaaS subscription agreements, including master subscription agreements, order forms, service level agreements, and data processing addenda;
(B) Vendor and technology agreements, including cloud hosting agreements, data provider licenses, and software development tool licenses;
(C) Employment and consulting agreements, including founder employment agreements, key employee agreements, Confidential Information and Invention Assignment Agreements ("CIIAs"), and independent contractor agreements;
(D) Banking and financial agreements, including operating account agreements and convertible note purchase agreements;
(E) Real property leases;
(F) Convertible note and prior financing documents, including the Series Seed Preferred Stock purchase documents, Investors' Rights Agreement, Right of First Refusal and Co-Sale Agreement, Voting Agreement, and the convertible note purchase agreements and related amendments; and
(G) Miscellaneous agreements, including insurance policies and other arrangements brought to our attention during the review process.
C. Exclusions
Certain immaterial contracts with an annual value below $50,000 were not individually analyzed in this memorandum. These contracts were reviewed at a summary level, and no material provisions of concern were identified. Open-source software license dependencies, including the Company's use of Apache 2.0, MIT-licensed, and other open-source libraries in connection with the Mosaic platform, are addressed separately in our IP Due Diligence Memorandum dated May 5, 2026, prepared by Calderwood & Harkness's intellectual property practice group.
D. Applicable Review Standards
In reviewing the contracts described herein, we focused on identifying any provisions that:
(i) would be triggered by the Series A Financing, including the issuance of Series A Preferred Stock, the resulting change in the Company's capitalization structure, or the entry of new investors into the Company's governance arrangements;
(ii) contain change-of-control provisions that could be triggered by a future acquisition, merger, or similar transaction involving the Company;
(iii) impose exclusivity, non-compete, or most-favored-nation restrictions on the Company's ability to conduct its business;
(iv) restrict assignment or transfer of the contract, whether by operation of law or otherwise, including in connection with a merger, asset sale, or similar corporate transaction; or
(v) otherwise present a material risk to Pinnacle as a Series A investor, including provisions creating contingent liabilities, termination rights in favor of counterparties, or other obligations that could affect the Company's ability to operate its business following closing.
III. Customer / SaaS Subscription Agreements
A. Overview of Customer Contract Portfolio
Quillen has entered into master subscription agreements ("MSAs") with approximately 15 institutional clients for access to the Mosaic platform. The Company's customer base is predominantly composed of mid-size and large institutional asset managers, pension consultants, and university endowments, reflecting the Company's go-to-market strategy of targeting sophisticated institutional buyers with complex portfolio analytics needs.
The general structure of the Company's customer contracts follows a standard enterprise SaaS model. Each customer relationship is governed by an MSA that sets forth the general terms and conditions of use, data handling obligations, service level commitments, intellectual property ownership provisions, and liability limitations. Individual subscription commitments are documented through order forms executed under the MSA, specifying the scope of services, subscription tier (typically based on assets under management ("AUM") tiers and number of authorized user seats), subscription term, and pricing.
Subscription terms are typically 12 to 36 months in duration, with automatic renewal for successive 12-month periods unless either party provides written notice of non-renewal within a specified notice period (typically 60 to 90 days prior to the end of the then-current term). Multi-year commitments are generally offered to larger institutional customers at discounted rates.
Revenue Concentration. Based on the Company's internal revenue data provided in the data room, the top five customers by ARR represent an estimated 60% to 65% of the Company's total Q1 2026 ARR of approximately $3,800,000. The largest single customer is estimated to account for approximately 18% of total ARR, or approximately $684,000 on an annualized basis. While this level of revenue concentration is not unusual for an early-stage enterprise SaaS company, Pinnacle should be aware of the potential impact of any single customer loss on the Company's near-term financial performance.
Pricing. Subscription fees across the customer portfolio are generally structured as annual fees based on the customer's AUM tier (i.e., the aggregate assets under management analyzed on the Mosaic platform) and the number of authorized user seats. Pricing varies by customer, reflecting the Company's negotiation of individual enterprise deals. We have not identified any material pricing inconsistencies that would raise concerns, though we note the existence of a most-favored-nation pricing clause in one strategic partnership MSA, discussed in Section III.D below.
B. Key Terms and Provisions Across Customer Agreements
We set forth below a summary of the key terms and provisions observed across the customer MSAs reviewed to date.
Service Level Agreements (SLAs). The majority of the reviewed MSAs include uptime and availability commitments for the Mosaic platform. The standard SLA commitment observed across the customer portfolio is 99.5% monthly platform availability, measured excluding scheduled maintenance windows and force majeure events. Remedies for SLA breaches are generally limited to service credits (typically calculated as a percentage of monthly subscription fees), and in most cases, the MSA does not provide the customer with a right to terminate the agreement solely as a result of SLA failures unless such failures are persistent and material (e.g., failure to meet the SLA threshold for three or more consecutive months). This structure is consistent with market practice for enterprise SaaS agreements and limits the Company's exposure to termination risk arising from transient platform outages.
Data Handling and Confidentiality. The Mosaic platform processes customer portfolio-level data, including holdings, transaction data, performance metrics, and risk factor exposures. Given the sensitivity of this data, the Company's customer MSAs include robust data handling and confidentiality provisions. Data processing addenda ("DPAs") are appended to most enterprise MSAs, setting forth the parties' respective obligations with respect to the processing, storage, and security of customer data. The Company is obligated under several of the reviewed contracts to maintain its information security practices in accordance with SOC 2 standards established by the American Institute of Certified Public Accountants ("AICPA"). We note that the Company completed a SOC 2 Type I examination in January 2026, conducted by Pemberton & Associates CPAs LLP (engagement partner: Diane Stratton). A SOC 2 Type II examination is currently in process and is expected to be completed in Q3 2026. The completion of the Type II examination will strengthen the Company's compliance posture and its ability to meet contractual data security commitments to enterprise customers.
Limitation of Liability. The customer MSAs reviewed contain mutual limitation of liability provisions that are generally consistent with market practice. The typical liability cap is set at the aggregate fees paid by the customer during the 12-month period immediately preceding the event giving rise to the claim. Most agreements include standard carve-outs from the liability cap for claims arising from (a) intellectual property infringement, (b) data breaches or unauthorized disclosure of confidential information, and (c) breaches of confidentiality obligations. Consequential damages are generally excluded on a mutual basis, subject to the same carve-outs. We did not identify any customer MSAs containing uncapped liability provisions or other materially unfavorable liability terms.
intellectual Property Ownership. Across all reviewed customer MSAs, customer data uploaded to or processed by the Mosaic platform remains the exclusive property of the customer. Quillen retains all right, title, and interest in and to the Mosaic platform, including all underlying intellectual property, software, algorithms, and models. The Company is typically granted a limited license to use aggregated and anonymized usage data derived from customer interactions with the platform for purposes of product improvement, benchmarking, and analytics development. This structure is standard for enterprise SaaS platforms and does not raise concerns from an IP ownership perspective.
C. Change-of-Control and Assignment Provisions
Our review of the customer MSAs identified change-of-control and assignment provisions that warrant attention from Pinnacle's deal team.
Change-of-Control Clauses. Three of the Company's top five customer MSAs (by ARR contribution) contain change-of-control clauses that permit the customer to terminate the agreement upon the occurrence of a "change of control" of Quillen. In each case, the customer's termination right is exercisable upon written notice to Quillen, typically within 30 days following the customer's receipt of notice of the change-of-control event. In two of these three agreements, "change of control" is defined as the acquisition by any person or group of persons of 50% or more of the outstanding voting securities of Quillen, or the sale, lease, or other transfer of all or substantially all of the Company's assets. Under this definition, the Series A Financing—in which no single investor will acquire 50% or more of the Company's voting securities—should not constitute a "change of control" and should not trigger any termination rights.
However, one customer MSA, with a customer representing an estimated 12% of the Company's total ARR (approximately $456,000 annualized), defines "change of control" more broadly. Specifically, the relevant provision defines a "change of control" as any transaction or series of related transactions resulting in "a material change in the management or ownership structure" of Quillen. This language is notably broader than the standard 50% voting power threshold and could potentially be interpreted to encompass a wide range of corporate transactions, including future financing rounds that significantly alter the Company's equity ownership distribution or governance arrangements. While we do not believe that the Series A Financing, standing alone, constitutes a "material change in the management or ownership structure" of Quillen for purposes of this provision—given that the existing founders will retain their management positions and majority voting control of the Common Stock following closing—this language warrants ongoing monitoring in connection with future financing rounds, significant secondary sales of founder equity, or any M&A transaction.
Assignment Provisions. The customer MSAs reviewed are generally non-assignable by either party without the prior written consent of the other party. Approximately half of the reviewed agreements include standard carve-outs permitting assignment without consent in connection with a merger, consolidation, or sale of all or substantially all of the assigning party's assets, or to an affiliate of the assigning party. The remaining agreements do not include such carve-outs, meaning that any future acquisition of Quillen by merger or asset sale could require the Company (or its successor) to obtain customer consent to the assignment of these agreements. This is a common issue in venture-backed company acquisitions and is typically addressed at the time of any M&A transaction.
Recommendation. We recommend the following actions in connection with the Series A closing:
(a) Request that Quillen provide a complete schedule of all customer contracts containing change-of-control provisions, including a summary of the applicable definition of "change of control" in each such contract, for inclusion in the SPA disclosure schedules.
(b) Obtain confirmation from the Company and its counsel that the Series A Financing does not constitute a "change of control" under any customer MSA currently in effect, including the broadly-worded provision described above.
(c) Consider requesting representations and warranties in the SPA to the effect that (i) no customer termination rights are triggered by the execution and consummation of the Series A Financing, and (ii) the Company has not received any notice from any customer indicating an intent to terminate or not renew any material customer contract.
(d) Include a covenant in the SPA or Investors' Rights Agreement requiring the Company to provide Pinnacle with prompt notice of any customer termination or non-renewal of a contract representing more than 5% of the Company's ARR.
D. Exclusivity and Non-Compete Provisions
We did not identify any customer agreement that contains exclusivity provisions prohibiting Quillen from providing the Mosaic platform or similar analytics services to other institutional asset managers, including competitors of the customer. This is a favorable finding, as such provisions could materially limit the Company's addressable market and growth trajectory.
One strategic partnership MSA includes a limited most-favored-nation ("MFN") pricing clause. Under this provision, for a period of 24 months from the effective date of the agreement, Quillen is obligated to offer the counterparty pricing terms no less favorable than those offered to any comparable new customer subscribing to a similar scope of services and usage tier. Based on our review of the effective date of this agreement, the MFN period is expected to expire in approximately mid-2027. While MFN clauses of this nature can constrain pricing flexibility during their term, the limited duration and scope of this provision do not present a material risk to the Company's pricing strategy. We recommend that Quillen's management be made aware of this obligation in connection with any upcoming customer negotiations to ensure compliance during the remaining term.
No non-compete restrictions were identified in any customer contract.
E. Outstanding Disputes or Termination Notices
We have not identified any pending disputes, claims, or termination notices in the customer contract portfolio as of the date of this review. Company counsel, Gregory Navarro of Fenwick, Torres & Keane LLP, has confirmed that no material customer disputes are outstanding and that no customer has delivered a notice of termination or non-renewal of any MSA during the prior 12 months. Further, counsel has confirmed that no material customer churn events (defined for these purposes as the loss of any customer representing more than 5% of ARR) occurred during the prior 12-month period. This is a favorable finding from a contract risk perspective.
IV. Vendor and Technology Agreements
A. Cloud Hosting Agreement
Quillen hosts the Mosaic platform on a major cloud infrastructure service pursuant to a standard enterprise agreement. The cloud hosting relationship is a critical component of the Company's technology stack and represents a significant portion of the Company's monthly operating expenses.
Term and Pricing. The current cloud hosting agreement has a 3-year commitment term with volume-based pricing tied to the Company's usage of compute, storage, and data transfer resources. The current term is expected to expire in approximately Q3 2026, and the Company has indicated that it expects to negotiate a renewal on substantially similar or improved terms. We recommend that Pinnacle monitor the renewal process to ensure continuity of service and to evaluate any changes in pricing or terms.
Change-of-Control Provisions. The cloud hosting agreement contains a standard change-of-control provision that is consistent with the cloud provider's enterprise customer terms. Importantly, the provision does not restrict equity financing transactions of the type contemplated by the Series A Financing. Assignment of the agreement is permitted in connection with a merger, acquisition, or corporate reorganization of the customer, subject to standard notice requirements. No consent from the cloud provider is required in connection with the closing of the Series A Financing.
Annual Spend. Based on the Company's internal financial data, annual spend on cloud hosting is estimated at $480,000 to $540,000, making it one of the most significant line items in the Company's operating budget and a substantial component of the Company's monthly burn rate of approximately $420,000.
Data Residency. The cloud hosting agreement includes a contractual commitment to maintain all customer data within data centers located in the United States. This commitment is consistent with the data residency requirements contained in several of the Company's customer MSAs and DPAs. We did not identify any data residency issues or conflicts.
Exclusivity. The agreement does not contain any exclusivity obligations requiring Quillen to use the cloud provider as its sole hosting provider.
B. Data Provider Agreements
Quillen licenses financial market data and benchmarking datasets from two third-party data providers for integration into the Mosaic platform's analytics capabilities. These data feeds are integral to the platform's core functionality and are used to support risk factor analysis, performance benchmarking, and portfolio attribution features.
Data Provider 1. Quillen maintains an enterprise data license with its primary financial data provider. The agreement has an annual fee of approximately $180,000 and a 2-year initial term. The agreement includes restrictions on the redistribution of raw data to end customers; however, the Company's use of the data for purposes of generating derived analytics, aggregated insights, and benchmarking output is expressly permitted under the license. We have reviewed the relevant license grant provisions and believe that the Company's current use of the data within the Mosaic platform is consistent with the permitted scope of the license.
Key Risk — Termination for Convenience. The Data Provider 1 agreement includes a termination-for-convenience clause permitting the data provider to terminate the agreement upon 90 days' prior written notice to Quillen, without cause. The loss of this data feed could materially affect the Mosaic platform's analytics capabilities, particularly with respect to benchmark comparisons and risk factor decomposition. While we understand that alternative financial data sources exist in the market, transitioning to a new data provider would require development effort and could result in service disruptions. We recommend that Pinnacle confirm with Quillen management the availability of alternative data sources and the Company's contingency plans in the event of termination by Data Provider 1. This risk should be discussed with the Company's CTO, Julian Voss, as part of the ongoing diligence process.
Data Provider 2. Quillen also licenses financial data through an API-based access arrangement with a second data provider. The annual fee is approximately $95,000 under a 1-year auto-renewing term. The agreement does not contain a change-of-control clause. Assignment is restricted under standard non-assignment provisions, with a carve-out permitting assignment to affiliates of the Company. We did not identify any material provisions of concern in this agreement.
C. Software and Development Tool Licenses
Quillen maintains various commercial software licenses for development tools, project management platforms, internal communication tools, and other operational infrastructure. All reviewed licenses are subject to standard commercial terms and conditions. We did not identify any change-of-control restrictions, assignment limitations, or other provisions that would be triggered by the Series A Financing or that would present material risk to Pinnacle as an investor. Annual aggregate spend on software and development tool licenses was not individually material.
As noted above, open-source software dependencies—including the Company's use of libraries licensed under the Apache License 2.0, MIT License, and other permissive open-source licenses—are addressed separately in our IP Due Diligence Memorandum dated May 5, 2026. Importantly, no copyleft or GPL-licensed dependencies were flagged in that review, which is a favorable finding with respect to the Company's ability to maintain its proprietary rights in the Mosaic platform codebase.
V. Employment Agreements
A. Founder Employment Agreements
1. Dr. Amara Osei, Co-Founder and Chief Executive Officer
Dr. Amara Osei serves as the Company's Co-Founder and Chief Executive Officer. Dr. Osei's employment is governed by an employment agreement dated July 12, 2023—the date of the Company's incorporation—and a Confidential Information and Invention Assignment Agreement ("CIIA") executed on the same date. The employment agreement provides for at-will employment, meaning that either the Company or Dr. Osei may terminate the employment relationship at any time, with or without cause, subject to the terms of the agreement. The agreement provides for a base salary and standard employee benefits.
Dr. Osei currently holds 3,200,000 shares of the Company's Common Stock, representing, together with Julian Voss's holdings, a substantial majority of the Company's outstanding Common Stock. In connection with the Series A Financing, Dr. Osei's existing shares are proposed to be made subject to a 4-year vesting schedule with a 1-year cliff. As consideration for Dr. Osei's service to the Company since its founding, the proposed vesting arrangement provides for a 25% vesting credit for time served. Given that Dr. Osei has served as CEO for approximately 35 months since the Company's incorporation in July 2023 (through the anticipated closing date), the 25% credit would result in approximately 8.75 months of vesting credit being applied at closing. This is consistent with standard market practice for founder re-vesting arrangements in connection with Series A financings.
Dr. Osei's CIIA includes a non-solicitation covenant restricting Dr. Osei from soliciting the Company's employees for a period of 12 months following termination of employment. The CIIA also includes a non-competition covenant prohibiting Dr. Osei from engaging in competitive activity for 12 months post-termination. The enforceability of this non-competition covenant is subject to the analysis set forth below.
2. Julian Voss, Co-Founder and Chief Technology Officer
Julian Voss serves as the Company's Co-Founder and Chief Technology Officer. Mr. Voss's employment is governed by an employment agreement also dated July 12, 2023, containing substantially similar terms to Dr. Osei's agreement. Mr. Voss's employment is at-will, with a base salary and standard benefits.
Mr. Voss currently holds 2,800,000 shares of the Company's Common Stock. As with Dr. Osei, Mr. Voss's existing shares are proposed to be made subject to a 4-year vesting schedule with a 1-year cliff in connection with the Series A Financing, with the same 25% vesting credit for time served (approximately 8.75 months of credit applied at closing). Mr. Voss has executed a CIIA containing non-solicitation and non-competition provisions identical to those in Dr. Osei's CIIA.
3. Note on Non-Competition Provisions and Massachusetts Law
Both Dr. Osei and Mr. Voss are subject to 12-month post-termination non-competition covenants under their respective CIIAs. These provisions are governed by Massachusetts law, as both founders are employed in Massachusetts.
Massachusetts enacted the Noncompetition Agreement Act (Mass. Gen. Laws ch. 149, § 24L), effective October 1, 2018, which imposes specific requirements on the enforceability of non-competition agreements with employees. Among other requirements, the Act mandates that enforceable non-competition agreements must be supported by independent consideration (if entered into after the commencement of employment), must be limited to 12 months in duration, and must include a "garden leave" provision requiring the employer to pay the employee at least 50% of the employee's highest base salary during the restricted period, or other mutually agreed-upon consideration. Non-competition agreements that do not comply with these requirements may be deemed unenforceable.
Because the founders' employment agreements and CIIAs were entered into on the date of incorporation (July 12, 2023), the commencement of employment itself may constitute sufficient consideration for the non-compete provisions. However, we recommend that the Company and its counsel confirm that the non-competition covenants comply with all applicable requirements of the Massachusetts Noncompetition Agreement Act, including the garden leave or alternative consideration requirement. This issue should be addressed in the SPA representations, and any non-compliance should be disclosed on the appropriate disclosure schedule.
B. Key Employee Employment Agreement — Priya Chandrasekar
Priya Chandrasekar serves as the Company's Vice President of Product and is a key member of the Company's leadership team. Ms. Chandrasekar's employment is governed by an employment agreement dated January 2025, providing for at-will employment, a base salary, and standard benefits.
Ms. Chandrasekar holds 400,000 shares of the Company's Common Stock, subject to a standard 4-year vesting schedule with a 1-year cliff measured from her January 2025 start date. Ms. Chandrasekar has executed a CIIA covering confidential information and invention assignment obligations. The CIIA includes a 12-month post-termination non-solicitation of employees covenant but does not include a non-competition covenant, which is consistent with current best practices for non-founder employee hires in Massachusetts.
There are no sign-on bonus clawback provisions in Ms. Chandrasekar's employment agreement. Standard severance provisions are included but are not material in the context of this review.
C. General Employee Matters
As of the date of this memorandum, Quillen employs approximately 38 FTEs, allocated across the following functions: 24 in engineering, 6 in sales and marketing, 5 in general and administrative, and 3 in executive roles (Dr. Osei, Mr. Voss, and Ms. Chandrasekar). Company counsel has represented that all employees have executed CIIAs covering confidential information, intellectual property assignment, and post-employment restrictive covenants (non-solicitation of employees). The Company does not have any collective bargaining agreements and does not employ a unionized workforce.
2023 Equity Incentive Plan. The Company adopted the 2023 Equity Incentive Plan (the "Plan") in connection with its incorporation. The Plan currently authorizes the issuance of up to 2,000,000 shares of Common Stock pursuant to stock option grants and other equity awards. As of the date of this memorandum, options to purchase 1,200,000 shares have been granted to employees under the Plan, with 800,000 shares remaining unissued and available for future grants. All option grants reviewed are subject to standard 4-year vesting with a 1-year cliff.
In connection with the Series A Financing, the Company proposes to expand the Plan by an additional 1,000,000 shares, increasing the total authorized share pool to 3,000,000 shares. Following this expansion and accounting for the 1,200,000 options already granted, the Company would have 1,800,000 shares available for future grants under the Plan. This expanded option pool is intended to provide the Company with sufficient equity compensation capacity to attract and retain key talent during the next phase of growth.
Recommendation. We recommend that Pinnacle request copies of all outstanding option agreements under the Plan for inclusion in the disclosure schedule verification process, including the exercise prices, vesting schedules, and any acceleration provisions applicable to each grant. Specifically, we recommend confirming that no option grants contain acceleration provisions that would be triggered by the closing of the Series A Financing (e.g., single-trigger acceleration upon a change-of-control event or equity financing). Based on our review of the option grant forms provided in the data room, we have not identified any such provisions, but complete copies of all individual option agreements have not yet been produced.
VI. Consulting Agreements
Quillen has engaged a small number of independent contractors, primarily for specialized machine learning engineering and data science work. This is consistent with the Company's engineering-intensive product development activities and its practice of supplementing its in-house engineering team with specialized external expertise on a project basis.
We reviewed three consulting agreements currently in effect. All three agreements include the following key provisions:
(a) intellectual property assignment: All work product created by the consultant in the course of performing services for Quillen is assigned to the Company. The IP assignment clauses are clearly drafted and do not contain carve-outs or limitations that would leave residual IP rights with the consultants.
(b) Confidentiality obligations: Each consultant is bound by confidentiality obligations covering the Company's proprietary information, customer data, and trade secrets, with standard survival provisions extending beyond the termination of the consulting engagement.
(c) Termination at will: Each consulting agreement is terminable by either party upon written notice, without cause, subject to payment for services rendered through the termination date.
None of the reviewed consulting agreements contain change-of-control provisions or exclusivity obligations. The aggregate annual consulting spend across all current engagements is estimated at $150,000 to $200,000.
Contractor Classification Risk. We note that the classification of workers as independent contractors rather than employees carries inherent legal risk under both federal and state law. Massachusetts applies a stringent three-part test for independent contractor classification under Mass. Gen. Laws ch. 149, § 148B, which presumes that a worker is an employee unless the engaging entity can demonstrate that: (i) the individual is free from the employer's control and direction in performing the services; (ii) the services are performed outside the usual course of the employer's business; and (iii) the individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as the services performed. Given that the Company's consultants are primarily performing machine learning and data science work—which is closely related to the Company's core engineering activities—the second prong of this test may warrant further analysis. We recommend that Pinnacle request confirmation from Fenwick, Torres & Keane LLP that all independent contractors have been properly classified under applicable federal and Massachusetts law, and that any misclassification risk be addressed in the SPA representations and disclosure schedules.
VII. Banking and Financial Agreements
A. Crescent National Bank — Operating Account Agreement
Quillen maintains its primary operating and business deposit account at Crescent National Bank, located in Boston, Massachusetts. The operating account is governed by a standard commercial deposit account agreement that does not contain any restrictive covenants, liens, or security interests on the Company's account balances. No change-of-control provisions are present in the account agreement, and no consent from Crescent National Bank is required in connection with the closing of the Series A Financing or any equity financing transaction.
As of March 31, 2026, the Company reported cash on hand of approximately $1,100,000. Based on the Company's monthly burn rate of approximately $420,000, this represents approximately 2.6 months of remaining cash runway absent the closing of the Series A Financing or other capital infusion. The limited remaining runway underscores the importance of an orderly and timely closing of the Series A Financing.
B. Convertible Notes
1. Overview. The Company has outstanding convertible promissory notes in the aggregate principal amount of $1,500,000 (the "Notes"), issued on March 15, 2024. The Notes were originally scheduled to mature on March 15, 2026, but the maturity date was extended to June 30, 2026 pursuant to an amendment executed by the Company and all note holders. The Notes accrue simple interest at a rate of 6% per annum.
2. Note Holders
The Notes were purchased by the following holders:
(a) Harborview Angel Syndicate LLC: $750,000 principal amount. Contact: Margaret "Peggy" Dunlap, Managing Member.
(b) Caldwell Family Office LLC: $500,000 principal amount. Contact: Nathan Caldwell, Principal.
(c) Dr. Lawrence Hu: $250,000 principal amount.
All Notes were funded via wire transfer through the Company's operating account at Crescent National Bank.
3. Conversion Mechanics
The Notes contain standard conversion provisions providing for automatic conversion upon the closing of a "Qualified Financing," defined in the note purchase agreements as an equity financing resulting in gross proceeds to the Company of at least $5,000,000. The Series A Financing, with aggregate gross proceeds of $22,500,000, clearly satisfies the Qualified Financing threshold, and the Notes will automatically convert upon closing without the need for any additional consent or approval from the note holders.
The conversion price applicable to the Notes is the lower of:
(i) the discount price, calculated as the per-share price paid by new investors in the Qualified Financing multiplied by 80% (reflecting a 20% discount). Based on an assumed Series A price of $5.00 per share, the discount price would be $5.00 × 0.80 = $4.00 per share; and
(ii) the cap price, calculated as the valuation cap divided by the fully-diluted pre-money capitalization of the Company. The valuation cap is $25,000,000. Based on a fully-diluted pre-money share count of 12,500,000 shares, the cap price is $25,000,000 ÷ 12,500,000 = $2.00 per share.
Because the cap price of $2.00 per share is lower than the discount price of $4.00 per share, the cap price controls, and the Notes will convert at $2.00 per share of Series A Preferred Stock.
4. Estimated Conversion Amount
Assuming a closing date of June 15, 2026, accrued interest on the Notes through closing is estimated as follows:
• Principal: $1,500,000
• Interest rate: 6% simple interest per annum
• Interest accrual period: March 15, 2024 to June 15, 2026 (27 months, or 2.25 years)
• Estimated accrued interest: $1,500,000 × 6% × (27/12) = $202,500
• Total conversion amount (principal + accrued interest): $1,702,500
• Shares issued on conversion: $1,702,500 ÷ $2.00 = 851,250 shares of Series A Preferred Stock
5. Consent Requirements
The note purchase agreements do not require any additional consent from the note holders for conversion upon a Qualified Financing. Conversion is automatic and self-executing upon the closing of the Series A Financing. No side letters or additional agreements with the note holders were identified in the data room that would modify the conversion terms or create additional rights or obligations.
Recommendation. We recommend confirming that the note purchase agreements and the maturity extension amendment do not contain any anti-dilution protections, participation rights, information rights, board observer rights, or other side rights that would survive the conversion of the Notes into Series A Preferred Stock at closing. A detailed analysis of the conversion mechanics and capitalization impact of the Notes is set forth in our separate Convertible Note Conversion Analysis Memorandum dated May 6, 2026.
C. No Outstanding Debt
Other than the convertible Notes described above, we have not identified any outstanding term loans, revolving credit facilities, lines of credit, equipment financing arrangements, or other forms of indebtedness in the Company's contractual portfolio. Company counsel, Gregory Navarro of Fenwick, Torres & Keane LLP, has confirmed that there are no liens, security interests, pledges, or other encumbrances on the Company's assets.
We note that the proposed Amended and Restated Certificate of Incorporation to be filed in connection with the Series A Financing will include protective provisions requiring the consent of the holders of a majority of the outstanding shares of Series A Preferred Stock (voting as a separate class) before the Company may incur any indebtedness exceeding $500,000, other than equipment financing and trade payables incurred in the ordinary course of business. This protective provision will provide Pinnacle with appropriate oversight over any future borrowing activity by the Company.
VIII. Real Property Lease
Quillen leases its office space at 88 Garrison Street, Floor 4, Boston, Massachusetts 02116 pursuant to a commercial office lease agreement. The lease has a 3-year term, commencing approximately mid-2023 in connection with the Company's founding, with an expected expiration in approximately mid-2026. The lease includes a renewal option granting the Company the right to extend the lease for an additional period of 2 years upon written notice to the landlord, subject to the terms and conditions set forth in the lease.
The monthly base rent under the lease is approximately $18,000, representing an annual lease expense of approximately $216,000. This figure is consistent with prevailing commercial office rents in the Garrison Street area of Boston's Back Bay neighborhood for comparable Class B office space.
Assignment and Subletting. The lease restricts assignment by the tenant without the landlord's prior written consent. Subletting is permitted with the landlord's prior written approval, which is not to be unreasonably withheld, conditioned, or delayed. Importantly, the assignment restriction is triggered only by an assignment of the lease itself—that is, a transfer of the tenant's rights and obligations under the lease to a third party. A change in the equity ownership of the tenant entity (i.e., the issuance of Series A Preferred Stock to new investors) does not constitute an assignment of the lease and does not trigger the consent requirement. This is consistent with the standard treatment of entity-level ownership changes under commercial lease agreements.
Change-of-Control Provisions. The lease does not contain a change-of-control provision that would be triggered by the Series A Financing or by any future change in the Company's equity ownership structure. The only restriction on the Company's ability to continue occupying the premises relates to formal assignment or subletting of the lease.
Recommendation. No action is required in connection with the Series A closing. However, we note that the lease is approaching its initial expiration date, and the Company will need to decide whether to exercise its renewal option in the near term. We recommend that this decision be flagged as a post-closing operational matter for the Company's management team and Pinnacle's portfolio team. In the event of a future acquisition of Quillen by merger, the surviving entity's assumption of the lease may require landlord consent depending on the structure of the transaction, and Pinnacle should be aware of this potential requirement in connection with any future exit planning.
IX. Prior Financing Documents
A. Series Seed Preferred Stock
The Company completed its Series Seed Preferred Stock financing in October 2023, raising aggregate gross proceeds of $3,000,000 through the issuance of 2,500,000 shares of Series Seed Preferred Stock at a price of $1.20 per share. The Series Seed investors are as follows:
(a) Harborview Angel Syndicate LLC: 1,500,000 shares of Series Seed Preferred Stock, representing $1,800,000 in aggregate investment. Contact: Margaret "Peggy" Dunlap, Managing Member.
(b) Ridgepoint Seed Partners LP: 1,000,000 shares of Series Seed Preferred Stock, representing $1,200,000 in aggregate investment. Contact: Aaron Fitch, General Partner.
The Series Seed financing was documented through a standard set of venture financing documents, including a Series Seed Preferred Stock Purchase Agreement, an Investors' Rights Agreement, a Right of First Refusal and Co-Sale Agreement, and a Voting Agreement. These existing agreements will be amended and restated in connection with the Series A Financing to incorporate the Series A investors, including Pinnacle, as parties and to reflect the updated terms negotiated in connection with the Series A round.
The Company's existing Certificate of Incorporation sets forth the rights, preferences, and privileges of the Series Seed Preferred Stock. This certificate will be replaced by an Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State at or prior to the closing of the Series A Financing. The Amended and Restated Certificate of Incorporation will establish the Series A Preferred Stock, including its liquidation preference, dividend rights, conversion rights, anti-dilution protections, and protective provisions, while also amending the terms applicable to the Series Seed Preferred Stock as necessary.
Consent Requirement. Under the existing Certificate of Incorporation and the Delaware General Corporation Law, the filing of the Amended and Restated Certificate of Incorporation requires the approval of the holders of a majority of the outstanding shares of Series Seed Preferred Stock, voting as a separate class. This consent is expected to be obtained via a written consent of stockholders executed by Harborview Angel Syndicate LLC and Ridgepoint Seed Partners LP prior to or simultaneously with the closing. We are coordinating with Fenwick, Torres & Keane LLP to ensure that the requisite stockholder consent is properly documented and executed in advance of closing.
B. Convertible Note Documents
The Company's outstanding convertible notes are described in detail in Section VII.B above. No additional material terms or provisions were identified in the convertible note purchase agreements or the maturity extension amendment beyond those discussed in that section.
X. Contracts Requiring Consent or Action in Connection with Series A
The following table summarizes the contracts that require consent, notice, or other action in connection with the closing of the Series A Financing:
Based on our review, the consent actions required for closing are limited in scope and are not expected to present obstacles to a timely closing. The Series Seed stockholder consent is a standard procedural requirement and is expected to be executed without difficulty given that Harborview Angel Syndicate LLC, a Series Seed investor, is also a convertible note holder and is expected to be supportive of the Series A Financing.
XI. Recommendations for SPA Representations and Disclosure Schedules
A. Representations to Request from the Company
Based on our review of the Company's material contracts, we recommend that the following representations and warranties be included in the Stock Purchase Agreement to be executed in connection with the Series A Financing:
1. No Breach or Default. A representation that no material contract to which the Company is a party has been breached by the Company or, to the Company's knowledge, by any counterparty, and that no material contract has been terminated or is subject to any pending notice of termination, dispute, or claim.
2. No Consent Required / No Default Triggered by Financing. A representation that the execution and delivery of the Series A transaction documents and the consummation of the Series A Financing (including the issuance of Series A Preferred Stock and the conversion of the outstanding convertible notes) will not (a) require any consent, approval, or waiver under any material contract (other than consents that have been obtained or will be obtained at or prior to closing), or (b) constitute a default, breach, or event of default under, or give rise to any right of termination, acceleration, or modification of, any material contract.
3. Employee IP Assignments. A representation that all current employees of the Company have executed Confidential Information and Invention Assignment Agreements, and that all intellectual property created by consultants and independent contractors in the course of performing services for the Company has been properly and irrevocably assigned to the Company pursuant to written agreements.
4. No Liens or Encumbrances. A representation that there are no outstanding liens, security interests, pledges, mortgages, or other encumbrances on any of the Company's assets, other than as set forth on the applicable disclosure schedule.
5. Compliance of Restrictive Covenants. A representation regarding the Company's compliance with applicable law in connection with the non-competition agreements entered into with the Company's founders and employees, including compliance with the Massachusetts Noncompetition Agreement Act.
6. Material Contracts. A representation that the disclosure schedules set forth a complete and accurate list of all material contracts to which the Company is a party, and that true, correct, and complete copies of all such contracts have been made available to the Investors.
B. Disclosure Schedule Items
We recommend that the following disclosure schedules be prepared by the Company and its counsel and provided to Pinnacle for review in connection with the execution of the SPA:
1. Schedule of Material Contracts. A complete list of all material contracts to which the Company is a party, including all customer MSAs, vendor and technology agreements, employment agreements, consulting agreements, real property leases, and financial agreements.
2. Schedule of Change-of-Control Provisions. A list of all material contracts containing change-of-control provisions, together with a description of the definition of "change of control" applicable to each such contract and the consequences triggered by a change-of-control event (e.g., termination right, consent requirement, notice obligation).
3. Schedule of Assignment Restrictions. A list of all material contracts containing restrictions on assignment or transfer, including those that do not include standard carve-outs for assignments in connection with mergers, acquisitions, or corporate reorganizations.
4. Schedule of Significant Customer Contracts. A list of all customer contracts representing more than 5% of the Company's ARR, together with a summary of key terms, expiration dates, and renewal provisions.
5. Schedule of Outstanding Options. A list of all outstanding stock options granted under the 2023 Equity Incentive Plan, including the name of each option holder, the number of shares subject to each option, the exercise price per share, the grant date, and the applicable vesting schedule.
6. Schedule of Convertible Instruments. A list of all outstanding convertible instruments, including the convertible notes described in Section VII.B, together with any warrants, convertible securities, or other instruments convertible into or exercisable for shares of the Company's capital stock.
7. Schedule of Real Property Leases. A list of all real property leases to which the Company is a party, including the lease address, landlord, lease term, monthly rent, and renewal options.
8. Schedule of Insurance Policies. A list of all insurance policies maintained by the Company, including general liability, professional liability (errors and omissions), cyber/data breach liability, directors' and officers' liability, workers' compensation, and property insurance. The specific terms of the Company's insurance coverage are to be confirmed separately and are not addressed in this memorandum.
XII. Open Items and Follow-Up
The following items remain outstanding as of the date of this memorandum and are expected to be resolved prior to the conclusion of the due diligence period:
1. Additional Customer MSAs. We are awaiting copies of two additional customer MSAs that were recently executed in Q1 2026. Company counsel has indicated that these contracts will be produced to the data room promptly. Upon receipt, we will review these agreements for consistency with the terms described in Section III above and will issue a supplemental memorandum if any material provisions of concern are identified.
2. Independent Contractor Classification Confirmation. We are awaiting confirmation from Fenwick, Torres & Keane LLP that all independent contractors engaged by the Company have been properly classified under applicable federal and Massachusetts state law, including under the three-part test set forth in Mass. Gen. Laws ch. 149, § 148B.
3. Landlord Contact Information. We are awaiting landlord contact information to confirm that no change-of-control or consent issues would arise in an assignment scenario involving the office lease at 88 Garrison Street, Floor 4, Boston, MA. This is relevant primarily in the context of a future M&A transaction rather than the Series A Financing itself.
4. Interim Period Review. A final review of any contracts entered into by the Company between May 7, 2026 (the date through which this memorandum covers) and the anticipated closing date of June 15, 2026 will be conducted. We have requested that the Company provide prompt notice of any new material contracts executed during this interim period.
5. Cross-Reference with Other Diligence Workstreams. The findings in this memorandum should be cross-referenced with the following related diligence memoranda for completeness and consistency:
(a) IP Due Diligence Memorandum, dated May 5, 2026 (Calderwood & Harkness LLP);
(b) Privacy & Data Security Due Diligence Memorandum, to be prepared by Rachel Bernstein, expected date May 12, 2026;
(c) Convertible Note Conversion Analysis Memorandum, dated May 6, 2026 (Calderwood & Harkness LLP); and
(d) Capitalization Review & Cap Table Analysis (in process).
XIII. Conclusion
Based on our review of the material contracts of Quillen Technologies, Inc. through May 7, 2026, we have not identified any material impediment to the closing of the $22,500,000 Series A Preferred Stock financing in which Pinnacle Venture Fund II LP proposes to invest $14,000,000 as lead investor. The issuance of Series A Preferred Stock does not appear to trigger any change-of-control provisions under the Company's existing material contracts, as no single investor will acquire 50% or more of the Company's outstanding voting securities in connection with the Financing. The outstanding convertible notes will convert automatically upon closing as a Qualified Financing, and the required consent of the Series Seed Preferred stockholders for the charter amendment is expected to be obtained via written consent without difficulty.
The key areas of ongoing attention identified in this review are as follows:
(i) Broadly-Defined Change-of-Control Clause. One customer MSA (representing approximately 12% of ARR) defines "change of control" to include any transaction resulting in "a material change in the management or ownership structure" of Quillen. While this provision is not triggered by the Series A Financing, it should be monitored closely in connection with any future financing, secondary equity sale, or M&A transaction.
(ii) Founder Non-Competition Agreements. The enforceability of the 12-month post-termination non-competition covenants in the founders' CIIAs is subject to compliance with the Massachusetts Noncompetition Agreement Act, including the garden leave requirement. Compliance should be confirmed by the Company and its counsel.
(iii) Upcoming Lease Renewal. The Company's office lease at 88 Garrison Street is approaching its initial expiration date and will require a renewal decision in the near term. This is a post-closing operational matter that should be addressed by the Company's management.
(iv) Data Provider 1 Termination-for-Convenience Risk. The Company's primary financial data provider may terminate the data license on 90 days' notice without cause. The availability of alternative data sources and the Company's contingency plans should be confirmed with the CTO.
The recommended representations, warranties, and disclosure schedule items identified in Section XI of this memorandum should be incorporated into the definitive Stock Purchase Agreement and ancillary transaction documents. We anticipate that the initial drafts of the definitive documents will be circulated for review on or about the target date of May 16, 2026.
We will continue to review any additional contracts produced during the remainder of the due diligence period and will issue supplemental memoranda as appropriate. We are available to discuss any questions or concerns arising from this memorandum at your convenience.