1002-00002 · Pinnacle Venture Fund II LP · Transaction Analysis

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MEMORANDUM

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION This memorandum is protected by the attorney-client privilege and the work product doctrine. It is intended solely for the use of the addressees and may not be disclosed, distributed, or relied upon by any other person or entity without the prior written consent of Calderwood & Harkness LLP.

FROM: Rachel Bernstein, Partner, Calderwood & Harkness LLP

TO: Christine Aldridge, Partner, Deal Lead, Pinnacle Venture Fund II LP Sandeep Rajan, Managing Partner & GP Principal, Pinnacle Capital Management LLC Tomas Medina, Vice President, Pinnacle Venture Fund II LP

CC: Leila Nazari, Lead Associate, Calderwood & Harkness LLP Robert Jansen, Working Associate, Calderwood & Harkness LLP

DATE: May 9, 2026

RE: Quillen Technologies, Inc. — Analysis of Investment Advisers Act of 1940 Registration Requirements and Related State Regulatory Considerations

MATTER NO.: 1002-00002

BILLING CODE: 78412.001

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I. EXECUTIVE SUMMARY

This memorandum assesses whether Quillen Technologies, Inc. ("Quillen" or the "Company"), a Delaware C-corporation headquartered at 88 Garrison Street, Floor 4, Boston, MA 02116 (EIN 93-4817265), is required to register as an investment adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act," 15 U.S.C. §§ 80b-1 et seq.), or under analogous state securities laws, in connection with its development and commercial sale of the "Mosaic" platform, an artificial-intelligence-driven portfolio analytics and risk-attribution software product.

This memorandum is prepared for Pinnacle Venture Fund II LP ("Pinnacle" or the "Fund") in connection with Pinnacle's prospective $14,000,000 lead investment in the Company's $22,500,000 Series A Preferred Stock financing (the "Financing" or the "Series A"). The analysis presented herein forms part of the broader legal due diligence review being conducted during the period April 18 – May 23, 2026, with a target closing date of June 15, 2026. This memorandum is one component of a broader set of due diligence work product being delivered to the deal team, including separate memoranda addressing intellectual property, privacy and data security, material contracts, capitalization, and corporate governance matters.

Conclusion. Based on our review of available information — including materials produced by the Company and its counsel, Fenwick, Torres & Keane LLP ("Company Counsel"), in response to the due diligence request list transmitted on April 18, 2026, as well as publicly available product documentation and marketing materials from quillentech.io — we conclude that Quillen's Mosaic platform operates as an enterprise SaaS software tool and does not constitute an investment advisory service within the meaning of the Advisers Act. Accordingly, Quillen is not required to register as an investment adviser under the federal Advisers Act. Based on our preliminary analysis, the Company is also not required to register under state investment adviser statutes in the jurisdictions where it currently operates.

The Company falls outside the statutory definition of "investment adviser" under Section 202(a)(11) of the Advisers Act because (i) the Mosaic platform does not provide advice as to the value of securities or as to the advisability of investing in, purchasing, or selling securities; (ii) the Company is not "in the business" of providing such advice; and (iii) the Company's compensation structure — fixed annual SaaS subscription fees — is inconsistent with investment advisory compensation models. In the alternative, even if certain analytical outputs of the Mosaic platform were broadly construed as "analyses or reports concerning securities," the Company would likely qualify for the publisher's exclusion under Section 202(a)(11)(D) of the Advisers Act and/or the software-only safe harbor framework articulated in SEC no-action letters and staff guidance.

Caveat. This conclusion is subject to the assumptions and limitations described in Section VIII of this memorandum, including the assumptions that Quillen does not exercise investment discretion over client accounts, does not provide personalized investment advice tailored to the specific investment situation of any individual client, and does not receive compensation that is based on or related to the performance of client portfolios or the value of client assets. Any material change in the Company's product functionality, business model, fee structure, or client relationships could alter this analysis and should be promptly communicated to counsel.

II. BACKGROUND

A. Overview of Quillen Technologies, Inc.

Quillen Technologies, Inc. was incorporated in the State of Delaware on July 12, 2023, under Delaware File Number 7384219. The Company's registered agent is Granite State Registered Agents, Inc., located at 1209 Orange Street, Wilmington, DE 19801. The Company maintains its principal office and headquarters at 88 Garrison Street, Floor 4, Boston, Massachusetts 02116.

Quillen is engaged in the business of developing, marketing, and selling "Mosaic," an artificial-intelligence-driven portfolio analytics and risk-attribution platform. Mosaic is sold on a software-as-a-service ("SaaS") subscription basis to institutional asset managers, pension consultants, and endowments. The Company does not manage assets, execute securities transactions, or hold itself out as providing investment advisory services to its customers.

As of the date of this memorandum, the Company employs approximately 38 full-time equivalent employees ("FTEs"), distributed across the following functional areas: 24 in engineering (including data science, machine learning, software development, and DevOps), 6 in sales and marketing, 5 in general and administrative functions (finance, human resources, legal operations, and office management), and 3 in executive roles.

The Company's key personnel include:

• Dr. Amara Osei, Co-Founder and Chief Executive Officer. Dr. Osei holds a Ph.D. in Applied Mathematics from MIT and previously served as a senior quantitative researcher at a major institutional asset management firm prior to co-founding Quillen.

• Julian Voss, Co-Founder and Chief Technology Officer. Mr. Voss holds an M.S. in Computer Science from Stanford University and previously held senior engineering roles at two enterprise financial technology companies.

• Priya Chandrasekar, Vice President of Product. Ms. Chandrasekar joined the Company in January 2025 and oversees product strategy, design, and development. She previously served in product management roles at a leading financial data and analytics provider.

As of Q1 2026, the Company reports annual recurring revenue ("ARR") of approximately $3,800,000 and last-twelve-months ("LTM") revenue of approximately $3,200,000. The Company's revenue is derived entirely from fixed annual SaaS subscription fees charged to its institutional customer base. The Company does not generate revenue from performance-based fees, asset-based fees, transaction-based commissions, or any other form of compensation tied to the investment performance or asset values of its customers' portfolios.

The Company is represented by Fenwick, Torres & Keane LLP, with Gregory Navarro serving as lead partner and Sophie Marchetti serving as the primary associate on the matter. Company Counsel's offices are located at 200 Clarendon Street, Suite 3400, Boston, MA 02116. The Company's independent auditor is Pemberton & Associates CPAs LLP, with Diane Stratton, CPA, serving as engagement partner.

B. Description of the Mosaic Platform

The Mosaic platform is an AI-driven portfolio analytics tool that provides risk attribution, factor decomposition, and performance measurement capabilities to institutional portfolio managers and their advisors. Based on our review of the product documentation, marketing materials, customer-facing materials, and technical specifications provided by Company Counsel, as well as a product demonstration conducted for the deal team on April 28, 2026, we understand the platform to operate as follows.

Delivery Model. Mosaic is delivered as a cloud-based SaaS application. Customers access the platform via a web-based interface using secure login credentials. Customers upload or connect their portfolio data — including holdings, allocations, asset classifications, and risk exposures — to the platform through manual file upload (CSV, Excel), API integration with custodial or portfolio management systems, or data-feed connections with third-party market data providers. The platform then ingests, normalizes, and processes the portfolio data through its proprietary analytics engine.

Core Functionality. Once portfolio data has been ingested, the Mosaic platform generates a range of analytical outputs, including:

• Risk Attribution Reports. Decomposition of portfolio risk into component factors, including market risk, sector risk, currency risk, issuer-specific risk, and other configurable risk dimensions. Reports quantify the contribution of each factor to overall portfolio volatility and tracking error.

• Factor Decomposition. Identification and quantification of the portfolio's exposure to standard and custom risk factors (e.g., value, momentum, quality, size, interest rate sensitivity), enabling users to understand the systematic risk characteristics of their portfolios.

• Performance Measurement and Attribution. Multi-period performance attribution analysis, including Brinson-style attribution (allocation, selection, and interaction effects), as well as returns-based and holdings-based attribution methodologies.

• Dashboard and Visualization Tools. Interactive dashboards displaying portfolio-level and position-level analytics, including heat maps, time-series charts, risk budgeting visualizations, and scenario analysis outputs.

• Scenario Analysis and Stress Testing. Users can define hypothetical market scenarios (e.g., interest rate shocks, equity market drawdowns, credit spread widening) and model the estimated impact on portfolio risk and return characteristics.

Critical Distinction: Analytics vs. Advice. The Mosaic platform processes portfolio-level data and generates analytical outputs based on quantitative methodologies and standardized algorithms. Critically, the platform does not execute trades, manage assets, or maintain custody of client funds or securities. Nor does the platform recommend specific securities to buy, sell, or hold. It does not generate "buy" or "sell" Signals for individual securities or asset classes. It does not suggest portfolio rebalancing actions or provide model portfolios with specific security selections. Instead, the platform provides analytical outputs — risk scores, factor exposures, attribution analyses, and scenario projections — based on user-defined parameters and the portfolio data provided by the user. Users retain full and exclusive discretion over all investment decisions. Quillen does not exercise any form of investment discretion over customer portfolios.

Pricing Model. The Mosaic platform is priced on a fixed annual subscription basis. Subscription fees are determined by the tier of service (based on the number of portfolios analyzed, number of users, and access to premium analytics modules) and are set at the time of contract execution. The Company does not charge performance-based fees, asset-based fees, or any fees that are calculated by reference to the value of securities held in customer portfolios or the investment performance achieved by customers. The fee structure is consistent with that of an enterprise software vendor, not an investment adviser.

C. Relevance to Series A Due Diligence

Pinnacle's investment thesis in connection with the Series A centers on enterprise SaaS and asset-management technology, with a focus on companies that leverage artificial intelligence and machine learning to serve institutional financial services clients. The regulatory classification of Quillen's business is a material due diligence consideration for Pinnacle and its limited partners. If Quillen were deemed to be providing investment advice within the meaning of the Advisers Act, it would be subject to the registration, compliance, and fiduciary obligations imposed by that statute, including, among other things:

• Registration with the SEC or state securities regulators. An investment adviser with assets under management ("AUM") in excess of certain thresholds is required to register with the SEC; smaller advisers may be required to register with state securities regulators. Registration imposes ongoing reporting, compliance, and examination obligations.

• Fiduciary duty. Registered investment advisers owe a fiduciary duty to their clients, including duties of care and loyalty, which impose heightened obligations regarding conflicts of interest, best execution, disclosure, and client suitability.

• Compliance infrastructure. Registered investment advisers are required to adopt and implement written compliance policies and procedures, designate a chief compliance officer, maintain specified books and records, and submit to periodic examination by the SEC or state examiners.

• Form ADV and public disclosure. Registered advisers must file Form ADV with the SEC (or state regulators, as applicable) and deliver Part 2A (the "brochure") and Part 2B (the "brochure supplement") to clients, disclosing material information about the adviser's business, fees, conflicts, and disciplinary history.

These obligations could significantly affect the Company's operating costs, liability exposure, competitive positioning, and growth trajectory. For a venture-stage company with 38 employees and approximately $3.8 million in ARR, the compliance burden associated with investment adviser registration would be substantial and could divert engineering and management resources from product development and commercial growth.

This analysis also directly informs the representations and warranties to be included in the Series A Preferred Stock Purchase Agreement (the "SPA") and the disclosure schedules thereto. Specifically, the SPA will contain representations regarding the Company's compliance with applicable laws, the Company's regulatory status, and the absence of required but unregistered advisory activities. The analysis set forth in this memorandum provides the factual and legal foundation for negotiating those representations and assessing the risk associated with any qualifications or exceptions that the Company may seek to include in the disclosure schedules.

III. FEDERAL ANALYSIS — INVESTMENT ADVISERS ACT OF 1940

A. Statutory Definition of "Investment Adviser"

Section 202(a)(11) of the Advisers Act defines the term "investment adviser" as:

"any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities."

15 U.S.C. § 80b-2(a)(11). The statute then enumerates several exclusions from the definition, including exclusions for banks, lawyers, accountants, engineers, teachers, broker-dealers, publishers of certain bona fide publications, and nationally recognized statistical rating organizations. The exclusions relevant to this analysis are discussed in Sections III.C and III.D below.

The SEC and federal courts have consistently interpreted the statutory definition as establishing a three-prong conjunctive test. All three prongs must be satisfied for a person to fall within the definition of "investment adviser." The three prongs are:

1. The Advice Prong. The person provides advice, or issues or promulgates analyses or reports, regarding securities. This prong encompasses two alternative formulations: (a) advising others as to the value of securities or as to the advisability of investing in, purchasing, or selling securities; or (b) issuing or promulgating analyses or reports concerning securities.

2. The Business Prong. The person is "in the business" of providing such advice or, in the case of the second formulation, issues or promulgates such analyses or reports "as part of a regular business." The SEC has interpreted this prong to require that the advisory activity constitute a business activity of the person and not merely an incidental or isolated occurrence. Factors relevant to this determination include whether the person holds itself out as an investment adviser, whether it receives separate or additional compensation for advisory services, and the frequency and regularity of the advisory activity. See SEC Release No. IA-1092 (Oct. 8, 1987) (the "1987 Release").

3. The Compensation Prong. The person receives compensation for the advice or analytical services. The SEC has interpreted "compensation" broadly to include any economic benefit, whether in the form of fees, commissions, or other remuneration, and the compensation need not be paid directly by the person receiving the advice. See 1987 Release. However, the compensation must be received for the advisory services — that is, there must be a nexus between the compensation and the provision of advice or analytical reports.

This three-prong framework has been consistently applied by the SEC staff and federal courts. See, e.g., Lowe v. SEC, 472 U.S. 181 (1985); SEC v. Bolla, 550 F. Supp. 2d 60 (D.D.C. 2008); Goldstein v. SEC, 451 F.3d 873 (D.C. Cir. 2006); Thomas v. Strathmore Casualty Group, 631 F.3d 1153 (10th Cir. 2011).

B. Application to Quillen Technologies and the Mosaic Platform

We now apply each prong of the three-prong test to Quillen's business activities in connection with the Mosaic platform.

1. Does Mosaic Provide "Advice" Regarding Securities?. The threshold question is whether the Mosaic platform provides "advice" as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or whether it issues or promulgates "analyses or reports concerning securities." This is the most nuanced element of the analysis, and we address it in detail below.

Nature of Mosaic's Outputs. As described in Section II.B, the Mosaic platform provides analytics tools — including risk attribution, factor analysis, performance measurement, scenario analysis, and stress testing — based on portfolio data supplied by the user. The platform generates quantitative outputs, such as risk scores, factor exposure coefficients, attribution percentages, and projected portfolio impacts under hypothetical scenarios. These outputs are analytical in nature and are designed to assist institutional portfolio managers and their consultants in understanding the risk and return characteristics of their existing portfolios.

No Recommendations Regarding Specific Securities. The Mosaic platform does not recommend specific securities transactions. It does not suggest that any particular security — or any particular class, sector, or type of security — be bought, sold, or held. It does not generate "buy" or "sell" Signals. It does not rank or rate individual securities based on investment attractiveness. It does not produce model portfolios with specific security selections. It does not recommend portfolio rebalancing actions that would entail the purchase or sale of identified securities.

This is a critical distinction under the Advisers Act. The statutory definition of "investment adviser" reaches persons who advise others "as to the value of securities or as to the advisability of investing in, purchasing, or selling securities." The core of the statutory concern is the rendering of advice or recommendations directed at specific investment decisions — i.e., whether to buy, sell, or hold particular securities. A platform that provides general analytical information about portfolio characteristics, without opining on the desirability of specific transactions, does not engage in the type of activity that Congress intended to regulate under the Advisers Act.

Analytical Outputs vs. Investment Recommendations. The distinction between providing analytical tools and providing investment advice is well established in SEC guidance and case law. The SEC has historically distinguished between (i) data analytics services, financial modeling software, and portfolio management systems that provide users with information and tools to assist in their own investment decision-making processes, and (ii) services that provide recommendations or opinions regarding the value of specific securities or the advisability of specific transactions.

For example, providers of financial data terminals, quantitative screening tools, and risk management software have not historically been required to register as investment advisers, even though the information and analytics they provide may be used by their customers in connection with investment decisions. The relevant inquiry is not whether the information could be used in making investment decisions — virtually any financial data or analysis could be so used — but whether the provider is rendering advice within the meaning of the statute.

In the case of Mosaic, the platform's outputs are analytical in nature — they describe and quantify the risk, factor, and performance characteristics of a portfolio based on the data provided by the user. The outputs do not cross the line into advice about specific securities or specific transactions. The platform provides the analytical framework within which an investor or portfolio manager may make decisions, but the decision-making itself remains entirely with the user.

Users Retain Full Investment Discretion. Users of the Mosaic platform retain full and exclusive discretion over all investment decisions relating to their portfolios. Quillen does not exercise investment discretion over any customer's portfolio. Quillen does not direct, recommend, or influence specific buy, sell, or hold decisions. Quillen has no authority, contractual or otherwise, to effect transactions in customer accounts or to determine the composition of customer portfolios.

This characteristic further supports the conclusion that Quillen is not providing "advice" within the meaning of Section 202(a)(11). The Advisers Act is fundamentally concerned with relationships in which an adviser influences the investment decisions of a client. Where the purported adviser has no role in the decision-making process — and the client retains full autonomy over investment decisions — the advisory relationship that the statute is designed to regulate is absent.

Conclusion on the Advice Prong. Based on the foregoing analysis, we conclude that the Mosaic platform does not provide "advice" as to the value of securities or as to the advisability of investing in, purchasing, or selling securities within the meaning of Section 202(a)(11). Its outputs are analytical tools, not investment recommendations. The first prong of the three-prong test is not satisfied.

We note that this analysis could potentially be closer if Mosaic's outputs were characterized as "analyses or reports concerning securities" under the second formulation of the advice prong. Certain of Mosaic's outputs — such as risk attribution reports that decompose portfolio risk by individual security position, or factor exposure analyses that quantify the portfolio's exposure to specific risk factors associated with identified securities — arguably constitute "analyses concerning securities." However, even under this broader reading, the remaining prongs of the three-prong test (business prong and compensation prong) must still be satisfied, and, as discussed below, we believe they are not. Moreover, the publisher's exclusion under Section 202(a)(11)(D) would provide an additional basis for non-registration even if the outputs were characterized as analyses concerning securities. We address the publisher's exclusion in Section III.C.

2. Is Quillen "In the Business" of Providing Advice?. Even if Mosaic's analytical outputs could be construed as falling within the scope of the advice prong, Quillen is not "in the business" of providing investment advice.

Quillen's Business Is Software Development and Licensing. Quillen's business, as reflected in its corporate formation documents, marketing materials, customer contracts, product documentation, and financial records, is the development and sale of enterprise software on a SaaS subscription basis. Quillen's revenue is derived from software license fees. Its employees are primarily engineers and data scientists engaged in software development. Its sales and marketing efforts are directed at selling software subscriptions, not at soliciting advisory clients. The Company describes itself — in all internal and external materials reviewed by our team — as a software company, a technology company, or an analytics platform provider. It does not describe itself as an investment adviser, an investment consultant, a financial planner, or any similar designation.

Quillen Does Not Hold Itself Out as an Investment Adviser. The SEC has identified several factors relevant to determining whether a person is "in the business" of providing investment advice, including whether the person holds itself out to the public as an investment adviser or as one who provides investment advice. See 1987 Release. Quillen does not hold itself out as providing investment advice. Its website, marketing materials, and product documentation uniformly describe Mosaic as a "portfolio analytics platform," an "AI-driven risk attribution tool," and a "software-as-a-service product." None of the materials reviewed by our team describe Quillen as providing investment advice or investment advisory services.

Customer Agreements Are Software Licenses. Quillen's customer agreements are structured as software license and subscription agreements, not as investment advisory agreements. The agreements contain standard SaaS terms — including service level commitments, data processing terms, intellectual property provisions, and limitation of liability clauses — and do not contain provisions characteristic of investment advisory agreements, such as fiduciary duty acknowledgments, suitability representations, investment policy statement references, or advisory fee structures tied to assets under management. The absence of investment advisory contractual provisions further supports the conclusion that Quillen is not in the business of providing investment advice.

No Registered Investment Adviser Representatives. No current employee of Quillen is registered as an investment adviser representative with the SEC or any state securities regulator. The Company does not maintain a compliance infrastructure designed for an investment advisory business, does not have a designated chief compliance officer for purposes of the Advisers Act, and has not filed Form ADV or any analogous state registration.

Conclusion on the Business Prong. Quillen's core business is the development and licensing of enterprise software. It does not hold itself out as providing investment advice, it does not maintain advisory client relationships, its customer agreements are software licenses, and it employs no registered investment adviser representatives. Even if its analytical outputs were broadly construed as touching upon securities analysis, Quillen is not "in the business" of providing investment advice within the meaning of the Advisers Act. The second prong of the three-prong test is not satisfied.

3. Compensation Analysis. The third prong of the three-prong test requires that the person receive "compensation" for the advice or analytical services. The SEC has interpreted this prong broadly, but the compensation must be received for the advisory activity — there must be a nexus between the compensation and the provision of advice.

Fixed Subscription Fees. Quillen receives compensation solely in the form of fixed annual subscription fees for access to the Mosaic platform. These fees are set at the time of contract execution, are not adjusted based on the size of the customer's portfolio, the value of securities analyzed, or the investment performance achieved by the customer. The fee structure is identical in form to the subscription pricing employed by thousands of enterprise SaaS companies across all industries. There is nothing about Quillen's fee structure that suggests compensation for investment advice.

No Performance-Based or Asset-Based Fees. Quillen does not charge performance-based fees (i.e., fees calculated as a percentage of investment gains achieved by the customer). It does not charge asset-based fees (i.e., fees calculated as a percentage of the customer's assets under management). It does not receive commissions, referral fees, or any other form of compensation that is tied to, or calculated by reference to, the investment performance or asset values of its customers' portfolios.

Compensation Structure Consistent with Technology Vendor. The Company's compensation structure is consistent with that of a technology vendor providing software tools, not with that of an investment adviser. Investment advisory fee structures — typically asset-based fees (often expressed in basis points on AUM), performance-based fees (subject to the requirements of Section 205 of the Advisers Act and Rule 205-3 thereunder), or hourly/project-based consulting fees for advisory engagements — are fundamentally different from fixed SaaS subscription pricing.

Conclusion on the Compensation Prong. While it could be argued that Quillen receives "compensation" in a literal sense (it charges fees for access to the platform), the fee structure does not reflect compensation for investment advice. The fees are for software access and are entirely disconnected from the advisory function that the Advisers Act is designed to regulate. We believe this prong weighs strongly against classification as an investment adviser, although we acknowledge that the SEC's broad interpretation of "compensation" means that this prong standing alone may not be dispositive. In conjunction with the analysis of the advice prong and the business prong, however, the compensation analysis reinforces our overall conclusion.

4. Conclusion on Three-Prong Test. Based on the analysis set forth above, Quillen does not satisfy the statutory definition of "investment adviser" under Section 202(a)(11) of the Advisers Act. Specifically:

• Advice Prong: Quillen does not provide advice as to the value of securities or as to the advisability of investing in, purchasing, or selling securities. Its platform provides analytical tools, not investment recommendations. Even under the broader "analyses or reports concerning securities" formulation, the outputs are analytical in nature and do not constitute advice.

• Business Prong: Quillen is in the business of developing and selling software, not in the business of providing investment advice. It does not hold itself out as an investment adviser, does not maintain advisory client relationships, and employs no registered investment adviser representatives.

• Compensation Prong: Quillen receives fixed annual subscription fees for software access. Its compensation structure is not advisory in nature — it includes no performance-based fees, no asset-based fees, and no fees tied to investment outcomes.

Because all three prongs must be satisfied for the definition to apply, and because Quillen does not satisfy any of the three prongs, Quillen is not an "investment adviser" within the meaning of the Advisers Act and is not required to register with the SEC under Section 203 of that statute.

C. Publisher's Exclusion — Section 202(a)(11)(D)

Even if Mosaic's analytical outputs were characterized as "analyses or reports concerning securities" — a characterization that we believe would be an overbroad reading of the platform's functionality, but which we address here for purposes of completeness — Section 202(a)(11)(D) of the Advisers Act excludes from the definition of "investment adviser":

"the publisher of any bona fide newspaper, news magazine or business or financial publication of general and regular circulation."

15 U.S.C. § 80b-2(a)(11)(D).

The Supreme Court addressed the scope of this exclusion in Lowe v. SEC, 472 U.S. 181 (1985). In Lowe, the Court held that the publisher's exclusion should be interpreted broadly to encompass publications that provide impersonal investment advice of general applicability, as opposed to personalized investment advice tailored to the specific circumstances of an individual client. The Court identified three conditions that must be met for the exclusion to apply:

(a) General and regular circulation. The publication must be of general and regular circulation — that is, it must be available to a broad audience of subscribers on a recurring basis, rather than being produced for a single client on an ad hoc basis.

(b) Bona fide publication. The publication must be bona fide — that is, it must contain disinterested commentary and analysis rather than being a vehicle for the promotion of specific securities for the economic benefit of the publisher or its affiliates.

(c) Impersonal advice. The publisher must not provide personalized advice based on the specific investment situation of the subscriber. The advice or analysis must be of general applicability and not tailored to the individual circumstances of a particular subscriber.

See Lowe, 472 U.S. at 204-211. The SEC has subsequently applied and refined the Lowe framework in the context of electronic and digital publications, including subscription-based investment research platforms and online financial information services.

Application to Mosaic. We analyze each condition of the publisher's exclusion as applied to the Mosaic platform:

(a) General and Regular Circulation. The Mosaic platform is available on a subscription basis to multiple institutional subscribers. The platform's analytical reports and dashboards are generated on a recurring basis — indeed, the platform is available for continuous use by subscribers, who can generate reports at any time during their subscription period. While the platform's subscriber base is limited to institutional clients (asset managers, pension consultants, and endowments), this limitation reflects the specialized nature of the analytical content, not a restriction of the publication to a single client or a narrow group of clients receiving personalized advice. We believe this condition is satisfied.

(b) Bona Fide Publication. The Mosaic platform's analytical outputs are generated through objective, quantitative methodologies applied to user-supplied portfolio data. The outputs are based on standardized algorithms, statistical models, and recognized financial analytics frameworks (e.g., Brinson-style attribution, factor-based risk decomposition). Quillen does not use the platform to promote specific securities for its own economic benefit or the benefit of any affiliated entity. Quillen does not trade in securities, does not hold proprietary positions in securities analyzed by the platform, and does not receive compensation from issuers of securities that are the subject of the platform's analytical outputs. The platform is a bona fide analytical tool, not a vehicle for securities promotion. We believe this condition is satisfied.

(c) Impersonal Advice / No Personalized Advisory Relationship. This is the condition that requires the most careful analysis in the context of the Mosaic platform. Unlike a traditional financial publication that distributes identical content to all subscribers, the Mosaic platform generates outputs that are specific to each user's portfolio. A risk attribution report generated for Client A will differ from a report generated for Client B, because the reports are based on each client's unique portfolio holdings and allocations.

The critical question is whether the generation of user-specific outputs through the application of standardized algorithms to user-supplied data constitutes "personalized advice" within the meaning of the Lowe framework. We conclude that it does not, for the following reasons:

First, the user-specificity of the outputs is a function of the user-supplied data, not of any individualized advisory consultation or relationship. The same algorithms, models, and methodologies are applied to every user's data. Quillen does not engage in human-mediated consultations with individual clients to understand their specific investment objectives, risk tolerances, or financial circumstances and then tailor its recommendations accordingly. Rather, the platform mechanically processes the portfolio data input by the user through standardized analytical algorithms and produces quantitative outputs.

Second, the SEC and courts have consistently distinguished between services where a human adviser tailors recommendations to a specific client's needs — which constitutes personalized advice — and software or publications that generate user-specific outputs by applying standardized methodologies to user-supplied inputs — which does not. The latter is more analogous to a financial calculator, a spreadsheet model, or a database query tool than to a personalized advisory relationship.

Third, the platform does not make recommendations. Even where the outputs are specific to a particular user's portfolio, they are descriptive and analytical — they describe what the portfolio is (in terms of risk, factor exposure, and performance attribution), not what the portfolio should be. The absence of prescriptive recommendations further supports the conclusion that the outputs are not "personalized advice."

Conclusion on the Publisher's Exclusion. We believe that the Mosaic platform's outputs are produced through standardized, algorithmic processes applied to user-supplied data and are more analogous to a publisher's output of general-circulation analytical reports than to personalized advisory services. If the question of Quillen's status as an investment adviser were to arise, the publisher's exclusion under Section 202(a)(11)(D) would likely apply as an alternative basis for non-registration. We note, however, that the publisher's exclusion is not unlimited, and Quillen should take care to ensure that its customer interactions, marketing practices, and product evolution do not erode the basis for the exclusion — for example, by introducing features that provide personalized buy/sell recommendations or by supplementing the platform's automated outputs with human advisory consultations.

D. Software-Only Safe Harbor / SEC Staff Guidance

In addition to the statutory definition and the publisher's exclusion, we have considered the SEC staff's no-action letters and guidance addressing technology platforms and the distinction between interactive software tools and investment advisory services.

The SEC staff has addressed the regulatory status of technology-based tools on several occasions, with particular focus in recent years on so-called "robo-advisers" and AI-driven financial technology platforms. While the staff has not issued a single definitive rule or no-action letter establishing a formal "software-only safe harbor," a coherent framework can be distilled from the staff's guidance. The key factors identified by the SEC staff in evaluating whether a technology platform constitutes an investment advisory service include:

(i) Discretion. Whether the software exercises discretion over client accounts — i.e., whether the software can independently make investment decisions and execute trades without the affirmative direction of the client. Software that exercises discretion is far more likely to be treated as providing investment advice (and indeed may constitute an investment adviser exercising discretionary authority, triggering the most stringent regulatory requirements).

(ii) Recommendations. Whether the outputs of the software constitute recommendations to buy, sell, or hold specific securities. The SEC has distinguished between software that provides information, analytics, and tools to assist users in making their own investment decisions and software that generates specific buy/sell recommendations or model portfolios with identified securities.

(iii) Access to or Control Over Client Assets. Whether the provider has access to or control over client funds or securities. A provider that maintains custody of client assets or has the ability to effect transactions in client accounts occupies a fundamentally different regulatory position than a provider that merely processes data and delivers analytical outputs.

(iv) Fee Structure. Whether the fee structure is advisory in nature — i.e., whether fees are calculated as a percentage of AUM, based on investment performance, or otherwise tied to the investment outcomes of the client's portfolio.

Application to Mosaic. Measured against each of these factors, Quillen's Mosaic platform falls squarely within the framework of software tools that the SEC staff has historically not treated as investment advisory services:

• Discretion. Mosaic does not exercise discretion over any client account. It cannot execute trades, direct transactions, or make investment decisions on behalf of any user. All investment decisions remain solely with the user.

• Recommendations. Mosaic does not generate recommendations to buy, sell, or hold specific securities. Its outputs are descriptive analytics, not prescriptive recommendations.

• Access to Client Assets. Quillen does not have access to or control over client funds or securities. The Mosaic platform processes portfolio data (holdings, allocations, and risk exposures), but it does not interact with custodial accounts, brokerage accounts, or any system through which trades are executed or assets are held.

• Fee Structure. Quillen charges fixed annual subscription fees. Its fee structure is not advisory in nature.

Conclusion. Based on the foregoing analysis, Quillen's Mosaic platform falls within the framework of software tools that the SEC staff has historically not treated as investment advisory services. While the SEC staff's guidance does not constitute formal rulemaking and is subject to change, it provides a useful analytical framework and reinforces our conclusion that Quillen is not required to register as an investment adviser under the Advisers Act.

E. No Custody, No Discretion, No Trading Authority

To complete the federal analysis, we confirm the following additional points, each of which supports the conclusion that Quillen operates as a technology vendor rather than an investment adviser:

• No Custody. Quillen does not maintain custody of client funds or securities within the meaning of Rule 206(4)-2 under the Advisers Act. The Company does not hold client assets, does not have access to client brokerage or custodial accounts, and does not possess the authority to obtain possession of client funds or securities. Portfolio data processed by the Mosaic platform consists of information about client holdings (position data, allocation data, and risk metrics), not the holdings themselves.

• No Discretionary Authority. Quillen does not have discretionary authority over any client account. The Company has no contractual or other authority to make investment decisions on behalf of any client or to direct the execution of securities transactions in any client account. All investment decisions are made solely by the users of the Mosaic platform.

• No Trading Authority. Quillen does not execute, direct, or recommend specific securities transactions. The Mosaic platform does not interface with trade execution systems, order management systems, or brokerage platforms. It is an analytics-only tool.

• No Broker-Dealer Activity. Based on our current understanding of Quillen's business activities, the Company does not engage in activities that would require registration as a broker-dealer under Section 15 of the Securities Exchange Act of 1934. The Company does not effect transactions in securities for the account of others, does not receive transaction-based compensation, and does not handle customer funds or securities. While a comprehensive broker-dealer analysis is beyond the scope of this memorandum, we note our preliminary conclusion that Quillen's activities do not implicate broker-dealer registration requirements and can provide a separate analysis if requested by the deal team.

IV. STATE-LEVEL ANALYSIS

A. Massachusetts (Headquarters and Principal Office)

Quillen maintains its headquarters and principal office at 88 Garrison Street, Floor 4, Boston, Massachusetts 02116. As such, Massachusetts is the primary state jurisdiction in which the Company's regulatory status must be assessed.

The Massachusetts Securities Division administers the Massachusetts Uniform Securities Act, codified at M.G.L. c. 110A. Section 401(k) of the Massachusetts Uniform Securities Act defines "investment adviser" in a manner that generally parallels the federal definition under Section 202(a)(11) of the Advisers Act. Specifically, the Massachusetts definition encompasses any person who, for compensation, engages in the business of advising others as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities. The Massachusetts definition incorporates exclusions analogous to those in the federal statute, including a publisher's exclusion similar to Section 202(a)(11)(D) of the Advisers Act.

Applying the same three-prong analysis discussed in Section III.B above, we conclude that Quillen would not satisfy the Massachusetts definition of "investment adviser" for the same reasons it does not satisfy the federal definition: (i) the Mosaic platform does not provide advice regarding specific securities or the advisability of specific transactions; (ii) Quillen is not in the business of providing investment advice; and (iii) Quillen's compensation structure is not advisory in nature. Additionally, the state-level publisher's exclusion available under Massachusetts law would provide an alternative basis for non-registration if the platform's analytical outputs were broadly construed as analyses concerning securities.

Accordingly, based on our analysis, no Massachusetts investment adviser registration is required for Quillen in connection with its development and sale of the Mosaic platform.

B. Delaware (State of Incorporation)

Quillen is incorporated in the State of Delaware (DE File Number 7384219) and maintains a registered agent at Granite State Registered Agents, Inc., 1209 Orange Street, Wilmington, DE 19801. The Delaware Securities Act, 6 Del. C. ch. 73, contains an investment adviser registration requirement and defines "investment adviser" in a manner that parallels the federal Advisers Act.

Quillen's incorporation in Delaware and the maintenance of a registered agent in the state do not, standing alone, trigger a requirement to register as an investment adviser in Delaware. Investment adviser registration obligations under Delaware law are generally triggered by the provision of investment advisory services to persons in the state or the maintenance of a place of business in the state from which advisory services are provided. Quillen does not maintain a physical office or place of business in Delaware (its registered agent address is for statutory purposes only), and, as discussed throughout this memorandum, the Company does not provide investment advisory services.

Accordingly, no Delaware investment adviser registration requirement has been identified.

C. Other States Where Quillen Has Customers

Quillen sells SaaS subscriptions to institutional clients that are likely located across multiple states. As part of this analysis, we have considered whether the sale of Mosaic subscriptions to clients in other states could trigger state-level investment adviser registration requirements.

General Principles. State investment adviser registration requirements vary by jurisdiction but are typically triggered by one or more of the following circumstances: (i) the person has a "place of business" in the state; (ii) the person has more than a de minimis number of advisory clients in the state (often five or more within a trailing twelve-month period); or (iii) the person provides advisory services to persons located in the state. Many states have adopted the Uniform Securities Act or substantially similar provisions, and the National Securities Markets Improvement Act of 1996 ("NSMIA") provides a framework for allocating regulatory authority between the SEC and state securities regulators based on, among other things, the adviser's AUM.

Application to Quillen. Where Quillen does not have a physical office in a state, and where it is providing software subscriptions (not investment advisory services), state investment adviser registration obligations are unlikely to be triggered. The key analytical point is that Quillen's customer relationships are software vendor-customer relationships, not investment adviser-client relationships. The sale of a SaaS subscription to a client in, for example, New York, California, or Illinois does not constitute the provision of investment advice to a person in that state.

Nevertheless, the regulatory landscape for AI-driven financial technology platforms is evolving, and state regulators have at times taken aggressive positions regarding the scope of their investment adviser registration requirements. We therefore make the following recommendations:

(i) Customer Jurisdiction Records. Quillen should maintain a comprehensive record of the jurisdictions in which its customers are located, including the specific state (or states) in which each customer's principal office is located and, to the extent known, the state or states in which the customer's investment personnel who use the Mosaic platform are located.

(ii) Regulatory Monitoring. Quillen should monitor for any developments in state regulatory guidance or enforcement actions that could affect the classification of its platform, particularly as state securities regulators continue to develop their approaches to AI-driven financial technology platforms.

(iii) State Data Privacy Requirements. We note that Quillen's processing of portfolio-level data for institutional clients may also implicate state-level data privacy requirements, including requirements under the Massachusetts data security regulations (201 CMR 17.00), the California Consumer Privacy Act (as amended by the CPRA), and other state data privacy statutes. These considerations are addressed separately in the Privacy & Data Security Due Diligence Memorandum dated May 12, 2026, prepared by Rachel Bernstein.

V. RISK FACTORS AND AREAS FOR ONGOING MONITORING

While our overall conclusion is that Quillen is not required to register as an investment adviser, we identify the following risk factors and areas for ongoing monitoring that should be considered by the deal team in connection with the Series A investment and incorporated into the post-closing governance and compliance framework.

A. Evolving SEC Guidance on AI and FinTech

The SEC has been increasingly focused on the use of artificial intelligence in investment management and financial technology. In recent years, the Commission has undertaken several initiatives directed at understanding and regulating the intersection of AI and financial services, including:

• Proposed Rules on Predictive Data Analytics. In July 2023, the SEC proposed rules that would require broker-dealers and investment advisers to evaluate and address conflicts of interest arising from their use of "predictive data analytics" technologies, including AI and machine learning tools, in investor interactions. While the proposed rules were directed at registered broker-dealers and investment advisers (and not at technology vendors), the rulemaking reflects the SEC's broader interest in AI-driven tools that influence investment decisions.

• SEC Staff Statements and Speeches. Senior SEC staff, including Commissioners and Division Directors, have made public statements regarding the need for regulatory frameworks to address the growing role of AI in financial markets, including the potential for AI tools to effectively function as investment advisers even when they are not formally registered as such.

• Enforcement Actions. The SEC's Division of Enforcement has brought actions against robo-adviser platforms and AI-driven investment tools that were found to be providing investment advice without adequate disclosure or compliance with the Advisers Act. While these actions have generally involved platforms that exercised discretionary authority or provided personalized recommendations — distinguishing them from Quillen's analytics-only platform — they signal the SEC's willingness to scrutinize technology platforms that operate in the investment management ecosystem.

If the SEC were to expand the definition of "investment advice" — whether through formal rulemaking, no-action letters, or enforcement actions — to encompass AI-driven analytical tools that effectively influence investment decisions even without specific transaction recommendations, Quillen's regulatory posture could change. We recommend that the deal team and, post-closing, the Company's management and board monitor SEC rulemaking and enforcement developments in this area on an ongoing basis.

B. Product Evolution Risk

Our analysis is based on the Mosaic platform's existing feature set, which encompasses portfolio analytics, risk attribution, factor decomposition, performance measurement, scenario analysis, and stress testing. As described above, these features are analytical in nature and do not constitute investment advice.

However, the Company is a venture-stage technology company with an active product roadmap. If Quillen were to add features to the Mosaic platform that constitute or approach personalized investment recommendations, the regulatory analysis could change materially. Features that could alter the analysis include, by way of example:

• "Buy" or "sell" Signals for specific securities or asset classes based on the platform's analytical outputs.

• Automated portfolio rebalancing suggestions that recommend specific trades to bring a portfolio into alignment with a target allocation or model portfolio.

• Model portfolio generation with specific security selections — i.e., where the platform recommends a specific set of securities (and corresponding allocations) based on the user's risk profile, investment objectives, or other client-specific parameters.

• Automated trade execution capabilities — i.e., where the platform is integrated with brokerage or custodial systems and can execute trades on behalf of the user, whether with or without the user's affirmative consent for each trade.

• Advisory consultation services — i.e., where Quillen employees provide human-mediated investment advice to customers in conjunction with the platform's analytical outputs.

Any of these features, if introduced, could cause Quillen to cross the line from software vendor to investment adviser, with significant regulatory, compliance, and liability consequences.

We recommend that the Series A transaction documents include protective provisions addressing this risk, including:

(i) A representation and warranty by the Company that it does not currently provide investment advisory services or exercise discretion over client accounts.

(ii) A covenant requiring the Company to provide prior written notice to investors (or to the Board of Directors, which will include Pinnacle's designee) before introducing any product feature that could reasonably be expected to cause the Company to be classified as an investment adviser under the Advisers Act or any state securities law.

(iii) A closing condition requiring the Company to confirm, as of the closing date, that no material change has occurred to the Mosaic platform's feature set or business model that would alter the conclusions of this memorandum.

C. Client Contract Review

A thorough review of Quillen's customer agreements is essential to confirming the regulatory analysis set forth in this memorandum. The Material Contracts Review Memorandum dated May 8, 2026, addresses the Company's customer agreements in detail. For purposes of this analysis, we highlight the following key considerations:

• Characterization of the Relationship. Customer agreements should consistently characterize the relationship between Quillen and its customers as a software license or subscription relationship, not an investment advisory engagement. Any language in customer agreements that suggests an advisory relationship — such as references to "investment advice," "advisory services," "fiduciary duties," or "client best interest" — could undermine the regulatory analysis and should be revised.

• Disclaimers. Customer agreements and terms of service should include clear and prominent disclaimers stating that (i) Quillen is not an investment adviser and does not provide investment advice, (ii) the Mosaic platform's outputs are analytical tools and do not constitute recommendations to buy, sell, or hold any security, and (iii) users are solely responsible for their own investment decisions. Based on our review, the Company's current Master Subscription Agreement includes such disclaimers, though we have recommended certain enhancements to Company Counsel.

• Data Processing Agreements. Customer data processing agreements ("DPAs") should be reviewed to ensure they are consistent with the software vendor characterization and do not contain provisions that imply an advisory relationship. DPAs should address the handling of portfolio data in a manner consistent with data processing (not advisory) obligations.

D. SOC 2 Compliance and Institutional Client Requirements

The Company completed a SOC 2 Type I audit in January 2026, conducted by its independent auditor, Pemberton & Associates CPAs LLP (Diane Stratton, CPA, engagement partner). The SOC 2 Type I report confirms the design suitability of the Company's internal controls over security, availability, and confidentiality of data processed through the Mosaic platform as of the audit date. A SOC 2 Type II audit, which will assess the operating effectiveness of those controls over a specified period, is currently in process and is expected to be completed in Q3 2026.

The completion of the SOC 2 Type I audit and the pending Type II audit are relevant to this analysis for two reasons. First, SOC 2 compliance is a common requirement imposed by institutional asset manager and pension consultant clients on their technology vendors. The Company's ability to demonstrate SOC 2 compliance supports its positioning as a technology vendor (rather than an investment adviser) and facilitates customer acquisition in the institutional market. Second, institutional clients may impose additional compliance and regulatory requirements on their technology vendors as a condition of engagement, and these requirements should be reviewed in the context of the Company's customer contracts to ensure that they are consistent with the software vendor characterization and do not inadvertently impose advisory-related obligations on the Company.

VI. RECOMMENDATIONS FOR TRANSACTION DOCUMENTS

Based on the analysis set forth in this memorandum, we recommend the following provisions for inclusion in the Series A transactio

MEMORANDUM
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION This memorandum is protected by the attorney-client privilege and the work product doctrine. It is intended solely for the use of the addressees and may not be disclosed, distributed, or relied upon by any other person or entity without the prior written consent of Calderwood & Harkness LLP.
FROM: Rachel Bernstein, Partner, Calderwood & Harkness LLP
TO: Christine Aldridge, Partner, Deal Lead, Pinnacle Venture Fund II LP Sandeep Rajan, Managing Partner & GP Principal, Pinnacle Capital Management LLC Tomas Medina, Vice President, Pinnacle Venture Fund II LP
CC: Leila Nazari, Lead Associate, Calderwood & Harkness LLP Robert Jansen, Working Associate, Calderwood & Harkness LLP
DATE: May 9, 2026
RE: Quillen Technologies, Inc. — Analysis of Investment Advisers Act of 1940 Registration Requirements and Related State Regulatory Considerations
MATTER NO.: 1002-00002
BILLING CODE: 78412.001
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I. EXECUTIVE SUMMARY
This memorandum assesses whether Quillen Technologies, Inc. ("Quillen" or the "Company"), a Delaware C-corporation headquartered at 88 Garrison Street, Floor 4, Boston, MA 02116 (EIN 93-4817265), is required to register as an investment adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act," 15 U.S.C. §§ 80b-1 et seq.), or under analogous state securities laws, in connection with its development and commercial sale of the "Mosaic" platform, an artificial-intelligence-driven portfolio analytics and risk-attribution software product.
This memorandum is prepared for Pinnacle Venture Fund II LP ("Pinnacle" or the "Fund") in connection with Pinnacle's prospective $14,000,000 lead investment in the Company's $22,500,000 Series A Preferred Stock financing (the "Financing" or the "Series A"). The analysis presented herein forms part of the broader legal due diligence review being conducted during the period April 18 – May 23, 2026, with a target closing date of June 15, 2026. This memorandum is one component of a broader set of due diligence work product being delivered to the deal team, including separate memoranda addressing intellectual property, privacy and data security, material contracts, capitalization, and corporate governance matters.
Conclusion. Based on our review of available information — including materials produced by the Company and its counsel, Fenwick, Torres & Keane LLP ("Company Counsel"), in response to the due diligence request list transmitted on April 18, 2026, as well as publicly available product documentation and marketing materials from quillentech.io — we conclude that Quillen's Mosaic platform operates as an enterprise SaaS software tool and does not constitute an investment advisory service within the meaning of the Advisers Act. Accordingly, Quillen is not required to register as an investment adviser under the federal Advisers Act. Based on our preliminary analysis, the Company is also not required to register under state investment adviser statutes in the jurisdictions where it currently operates.
The Company falls outside the statutory definition of "investment adviser" under Section 202(a)(11) of the Advisers Act because (i) the Mosaic platform does not provide advice as to the value of securities or as to the advisability of investing in, purchasing, or selling securities; (ii) the Company is not "in the business" of providing such advice; and (iii) the Company's compensation structure — fixed annual SaaS subscription fees — is inconsistent with investment advisory compensation models. In the alternative, even if certain analytical outputs of the Mosaic platform were broadly construed as "analyses or reports concerning securities," the Company would likely qualify for the publisher's exclusion under Section 202(a)(11)(D) of the Advisers Act and/or the software-only safe harbor framework articulated in SEC no-action letters and staff guidance.
Caveat. This conclusion is subject to the assumptions and limitations described in Section VIII of this memorandum, including the assumptions that Quillen does not exercise investment discretion over client accounts, does not provide personalized investment advice tailored to the specific investment situation of any individual client, and does not receive compensation that is based on or related to the performance of client portfolios or the value of client assets. Any material change in the Company's product functionality, business model, fee structure, or client relationships could alter this analysis and should be promptly communicated to counsel.
II. BACKGROUND
A. Overview of Quillen Technologies, Inc.
Quillen Technologies, Inc. was incorporated in the State of Delaware on July 12, 2023, under Delaware File Number 7384219. The Company's registered agent is Granite State Registered Agents, Inc., located at 1209 Orange Street, Wilmington, DE 19801. The Company maintains its principal office and headquarters at 88 Garrison Street, Floor 4, Boston, Massachusetts 02116.
Quillen is engaged in the business of developing, marketing, and selling "Mosaic," an artificial-intelligence-driven portfolio analytics and risk-attribution platform. Mosaic is sold on a software-as-a-service ("SaaS") subscription basis to institutional asset managers, pension consultants, and endowments. The Company does not manage assets, execute securities transactions, or hold itself out as providing investment advisory services to its customers.
As of the date of this memorandum, the Company employs approximately 38 full-time equivalent employees ("FTEs"), distributed across the following functional areas: 24 in engineering (including data science, machine learning, software development, and DevOps), 6 in sales and marketing, 5 in general and administrative functions (finance, human resources, legal operations, and office management), and 3 in executive roles.
The Company's key personnel include:
• Dr. Amara Osei, Co-Founder and Chief Executive Officer. Dr. Osei holds a Ph.D. in Applied Mathematics from MIT and previously served as a senior quantitative researcher at a major institutional asset management firm prior to co-founding Quillen.
• Julian Voss, Co-Founder and Chief Technology Officer. Mr. Voss holds an M.S. in Computer Science from Stanford University and previously held senior engineering roles at two enterprise financial technology companies.
• Priya Chandrasekar, Vice President of Product. Ms. Chandrasekar joined the Company in January 2025 and oversees product strategy, design, and development. She previously served in product management roles at a leading financial data and analytics provider.
As of Q1 2026, the Company reports annual recurring revenue ("ARR") of approximately $3,800,000 and last-twelve-months ("LTM") revenue of approximately $3,200,000. The Company's revenue is derived entirely from fixed annual SaaS subscription fees charged to its institutional customer base. The Company does not generate revenue from performance-based fees, asset-based fees, transaction-based commissions, or any other form of compensation tied to the investment performance or asset values of its customers' portfolios.
The Company is represented by Fenwick, Torres & Keane LLP, with Gregory Navarro serving as lead partner and Sophie Marchetti serving as the primary associate on the matter. Company Counsel's offices are located at 200 Clarendon Street, Suite 3400, Boston, MA 02116. The Company's independent auditor is Pemberton & Associates CPAs LLP, with Diane Stratton, CPA, serving as engagement partner.
B. Description of the Mosaic Platform
The Mosaic platform is an AI-driven portfolio analytics tool that provides risk attribution, factor decomposition, and performance measurement capabilities to institutional portfolio managers and their advisors. Based on our review of the product documentation, marketing materials, customer-facing materials, and technical specifications provided by Company Counsel, as well as a product demonstration conducted for the deal team on April 28, 2026, we understand the platform to operate as follows.
Delivery Model. Mosaic is delivered as a cloud-based SaaS application. Customers access the platform via a web-based interface using secure login credentials. Customers upload or connect their portfolio data — including holdings, allocations, asset classifications, and risk exposures — to the platform through manual file upload (CSV, Excel), API integration with custodial or portfolio management systems, or data-feed connections with third-party market data providers. The platform then ingests, normalizes, and processes the portfolio data through its proprietary analytics engine.
Core Functionality. Once portfolio data has been ingested, the Mosaic platform generates a range of analytical outputs, including:
• Risk Attribution Reports. Decomposition of portfolio risk into component factors, including market risk, sector risk, currency risk, issuer-specific risk, and other configurable risk dimensions. Reports quantify the contribution of each factor to overall portfolio volatility and tracking error.
• Factor Decomposition. Identification and quantification of the portfolio's exposure to standard and custom risk factors (e.g., value, momentum, quality, size, interest rate sensitivity), enabling users to understand the systematic risk characteristics of their portfolios.
• Performance Measurement and Attribution. Multi-period performance attribution analysis, including Brinson-style attribution (allocation, selection, and interaction effects), as well as returns-based and holdings-based attribution methodologies.
• Dashboard and Visualization Tools. Interactive dashboards displaying portfolio-level and position-level analytics, including heat maps, time-series charts, risk budgeting visualizations, and scenario analysis outputs.
• Scenario Analysis and Stress Testing. Users can define hypothetical market scenarios (e.g., interest rate shocks, equity market drawdowns, credit spread widening) and model the estimated impact on portfolio risk and return characteristics.
Critical Distinction: Analytics vs. Advice. The Mosaic platform processes portfolio-level data and generates analytical outputs based on quantitative methodologies and standardized algorithms. Critically, the platform does not execute trades, manage assets, or maintain custody of client funds or securities. Nor does the platform recommend specific securities to buy, sell, or hold. It does not generate "buy" or "sell" Signals for individual securities or asset classes. It does not suggest portfolio rebalancing actions or provide model portfolios with specific security selections. Instead, the platform provides analytical outputs — risk scores, factor exposures, attribution analyses, and scenario projections — based on user-defined parameters and the portfolio data provided by the user. Users retain full and exclusive discretion over all investment decisions. Quillen does not exercise any form of investment discretion over customer portfolios.
Pricing Model. The Mosaic platform is priced on a fixed annual subscription basis. Subscription fees are determined by the tier of service (based on the number of portfolios analyzed, number of users, and access to premium analytics modules) and are set at the time of contract execution. The Company does not charge performance-based fees, asset-based fees, or any fees that are calculated by reference to the value of securities held in customer portfolios or the investment performance achieved by customers. The fee structure is consistent with that of an enterprise software vendor, not an investment adviser.
C. Relevance to Series A Due Diligence
Pinnacle's investment thesis in connection with the Series A centers on enterprise SaaS and asset-management technology, with a focus on companies that leverage artificial intelligence and machine learning to serve institutional financial services clients. The regulatory classification of Quillen's business is a material due diligence consideration for Pinnacle and its limited partners. If Quillen were deemed to be providing investment advice within the meaning of the Advisers Act, it would be subject to the registration, compliance, and fiduciary obligations imposed by that statute, including, among other things:
• Registration with the SEC or state securities regulators. An investment adviser with assets under management ("AUM") in excess of certain thresholds is required to register with the SEC; smaller advisers may be required to register with state securities regulators. Registration imposes ongoing reporting, compliance, and examination obligations.
• Fiduciary duty. Registered investment advisers owe a fiduciary duty to their clients, including duties of care and loyalty, which impose heightened obligations regarding conflicts of interest, best execution, disclosure, and client suitability.
• Compliance infrastructure. Registered investment advisers are required to adopt and implement written compliance policies and procedures, designate a chief compliance officer, maintain specified books and records, and submit to periodic examination by the SEC or state examiners.
• Form ADV and public disclosure. Registered advisers must file Form ADV with the SEC (or state regulators, as applicable) and deliver Part 2A (the "brochure") and Part 2B (the "brochure supplement") to clients, disclosing material information about the adviser's business, fees, conflicts, and disciplinary history.
These obligations could significantly affect the Company's operating costs, liability exposure, competitive positioning, and growth trajectory. For a venture-stage company with 38 employees and approximately $3.8 million in ARR, the compliance burden associated with investment adviser registration would be substantial and could divert engineering and management resources from product development and commercial growth.
This analysis also directly informs the representations and warranties to be included in the Series A Preferred Stock Purchase Agreement (the "SPA") and the disclosure schedules thereto. Specifically, the SPA will contain representations regarding the Company's compliance with applicable laws, the Company's regulatory status, and the absence of required but unregistered advisory activities. The analysis set forth in this memorandum provides the factual and legal foundation for negotiating those representations and assessing the risk associated with any qualifications or exceptions that the Company may seek to include in the disclosure schedules.
III. FEDERAL ANALYSIS — INVESTMENT ADVISERS ACT OF 1940
A. Statutory Definition of "Investment Adviser"
Section 202(a)(11) of the Advisers Act defines the term "investment adviser" as:
"any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities."
15 U.S.C. § 80b-2(a)(11). The statute then enumerates several exclusions from the definition, including exclusions for banks, lawyers, accountants, engineers, teachers, broker-dealers, publishers of certain bona fide publications, and nationally recognized statistical rating organizations. The exclusions relevant to this analysis are discussed in Sections III.C and III.D below.
The SEC and federal courts have consistently interpreted the statutory definition as establishing a three-prong conjunctive test. All three prongs must be satisfied for a person to fall within the definition of "investment adviser." The three prongs are:
1. The Advice Prong. The person provides advice, or issues or promulgates analyses or reports, regarding securities. This prong encompasses two alternative formulations: (a) advising others as to the value of securities or as to the advisability of investing in, purchasing, or selling securities; or (b) issuing or promulgating analyses or reports concerning securities.
2. The Business Prong. The person is "in the business" of providing such advice or, in the case of the second formulation, issues or promulgates such analyses or reports "as part of a regular business." The SEC has interpreted this prong to require that the advisory activity constitute a business activity of the person and not merely an incidental or isolated occurrence. Factors relevant to this determination include whether the person holds itself out as an investment adviser, whether it receives separate or additional compensation for advisory services, and the frequency and regularity of the advisory activity. See SEC Release No. IA-1092 (Oct. 8, 1987) (the "1987 Release").
3. The Compensation Prong. The person receives compensation for the advice or analytical services. The SEC has interpreted "compensation" broadly to include any economic benefit, whether in the form of fees, commissions, or other remuneration, and the compensation need not be paid directly by the person receiving the advice. See 1987 Release. However, the compensation must be received for the advisory services — that is, there must be a nexus between the compensation and the provision of advice or analytical reports.
This three-prong framework has been consistently applied by the SEC staff and federal courts. See, e.g., Lowe v. SEC, 472 U.S. 181 (1985); SEC v. Bolla, 550 F. Supp. 2d 60 (D.D.C. 2008); Goldstein v. SEC, 451 F.3d 873 (D.C. Cir. 2006); Thomas v. Strathmore Casualty Group, 631 F.3d 1153 (10th Cir. 2011).
B. Application to Quillen Technologies and the Mosaic Platform
We now apply each prong of the three-prong test to Quillen's business activities in connection with the Mosaic platform.
1. Does Mosaic Provide "Advice" Regarding Securities?. The threshold question is whether the Mosaic platform provides "advice" as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or whether it issues or promulgates "analyses or reports concerning securities." This is the most nuanced element of the analysis, and we address it in detail below.
Nature of Mosaic's Outputs. As described in Section II.B, the Mosaic platform provides analytics tools — including risk attribution, factor analysis, performance measurement, scenario analysis, and stress testing — based on portfolio data supplied by the user. The platform generates quantitative outputs, such as risk scores, factor exposure coefficients, attribution percentages, and projected portfolio impacts under hypothetical scenarios. These outputs are analytical in nature and are designed to assist institutional portfolio managers and their consultants in understanding the risk and return characteristics of their existing portfolios.
No Recommendations Regarding Specific Securities. The Mosaic platform does not recommend specific securities transactions. It does not suggest that any particular security — or any particular class, sector, or type of security — be bought, sold, or held. It does not generate "buy" or "sell" Signals. It does not rank or rate individual securities based on investment attractiveness. It does not produce model portfolios with specific security selections. It does not recommend portfolio rebalancing actions that would entail the purchase or sale of identified securities.
This is a critical distinction under the Advisers Act. The statutory definition of "investment adviser" reaches persons who advise others "as to the value of securities or as to the advisability of investing in, purchasing, or selling securities." The core of the statutory concern is the rendering of advice or recommendations directed at specific investment decisions — i.e., whether to buy, sell, or hold particular securities. A platform that provides general analytical information about portfolio characteristics, without opining on the desirability of specific transactions, does not engage in the type of activity that Congress intended to regulate under the Advisers Act.
Analytical Outputs vs. Investment Recommendations. The distinction between providing analytical tools and providing investment advice is well established in SEC guidance and case law. The SEC has historically distinguished between (i) data analytics services, financial modeling software, and portfolio management systems that provide users with information and tools to assist in their own investment decision-making processes, and (ii) services that provide recommendations or opinions regarding the value of specific securities or the advisability of specific transactions.
For example, providers of financial data terminals, quantitative screening tools, and risk management software have not historically been required to register as investment advisers, even though the information and analytics they provide may be used by their customers in connection with investment decisions. The relevant inquiry is not whether the information could be used in making investment decisions — virtually any financial data or analysis could be so used — but whether the provider is rendering advice within the meaning of the statute.
In the case of Mosaic, the platform's outputs are analytical in nature — they describe and quantify the risk, factor, and performance characteristics of a portfolio based on the data provided by the user. The outputs do not cross the line into advice about specific securities or specific transactions. The platform provides the analytical framework within which an investor or portfolio manager may make decisions, but the decision-making itself remains entirely with the user.
Users Retain Full Investment Discretion. Users of the Mosaic platform retain full and exclusive discretion over all investment decisions relating to their portfolios. Quillen does not exercise investment discretion over any customer's portfolio. Quillen does not direct, recommend, or influence specific buy, sell, or hold decisions. Quillen has no authority, contractual or otherwise, to effect transactions in customer accounts or to determine the composition of customer portfolios.
This characteristic further supports the conclusion that Quillen is not providing "advice" within the meaning of Section 202(a)(11). The Advisers Act is fundamentally concerned with relationships in which an adviser influences the investment decisions of a client. Where the purported adviser has no role in the decision-making process — and the client retains full autonomy over investment decisions — the advisory relationship that the statute is designed to regulate is absent.
Conclusion on the Advice Prong. Based on the foregoing analysis, we conclude that the Mosaic platform does not provide "advice" as to the value of securities or as to the advisability of investing in, purchasing, or selling securities within the meaning of Section 202(a)(11). Its outputs are analytical tools, not investment recommendations. The first prong of the three-prong test is not satisfied.
We note that this analysis could potentially be closer if Mosaic's outputs were characterized as "analyses or reports concerning securities" under the second formulation of the advice prong. Certain of Mosaic's outputs — such as risk attribution reports that decompose portfolio risk by individual security position, or factor exposure analyses that quantify the portfolio's exposure to specific risk factors associated with identified securities — arguably constitute "analyses concerning securities." However, even under this broader reading, the remaining prongs of the three-prong test (business prong and compensation prong) must still be satisfied, and, as discussed below, we believe they are not. Moreover, the publisher's exclusion under Section 202(a)(11)(D) would provide an additional basis for non-registration even if the outputs were characterized as analyses concerning securities. We address the publisher's exclusion in Section III.C.
2. Is Quillen "In the Business" of Providing Advice?. Even if Mosaic's analytical outputs could be construed as falling within the scope of the advice prong, Quillen is not "in the business" of providing investment advice.
Quillen's Business Is Software Development and Licensing. Quillen's business, as reflected in its corporate formation documents, marketing materials, customer contracts, product documentation, and financial records, is the development and sale of enterprise software on a SaaS subscription basis. Quillen's revenue is derived from software license fees. Its employees are primarily engineers and data scientists engaged in software development. Its sales and marketing efforts are directed at selling software subscriptions, not at soliciting advisory clients. The Company describes itself — in all internal and external materials reviewed by our team — as a software company, a technology company, or an analytics platform provider. It does not describe itself as an investment adviser, an investment consultant, a financial planner, or any similar designation.
Quillen Does Not Hold Itself Out as an Investment Adviser. The SEC has identified several factors relevant to determining whether a person is "in the business" of providing investment advice, including whether the person holds itself out to the public as an investment adviser or as one who provides investment advice. See 1987 Release. Quillen does not hold itself out as providing investment advice. Its website, marketing materials, and product documentation uniformly describe Mosaic as a "portfolio analytics platform," an "AI-driven risk attribution tool," and a "software-as-a-service product." None of the materials reviewed by our team describe Quillen as providing investment advice or investment advisory services.
Customer Agreements Are Software Licenses. Quillen's customer agreements are structured as software license and subscription agreements, not as investment advisory agreements. The agreements contain standard SaaS terms — including service level commitments, data processing terms, intellectual property provisions, and limitation of liability clauses — and do not contain provisions characteristic of investment advisory agreements, such as fiduciary duty acknowledgments, suitability representations, investment policy statement references, or advisory fee structures tied to assets under management. The absence of investment advisory contractual provisions further supports the conclusion that Quillen is not in the business of providing investment advice.
No Registered Investment Adviser Representatives. No current employee of Quillen is registered as an investment adviser representative with the SEC or any state securities regulator. The Company does not maintain a compliance infrastructure designed for an investment advisory business, does not have a designated chief compliance officer for purposes of the Advisers Act, and has not filed Form ADV or any analogous state registration.
Conclusion on the Business Prong. Quillen's core business is the development and licensing of enterprise software. It does not hold itself out as providing investment advice, it does not maintain advisory client relationships, its customer agreements are software licenses, and it employs no registered investment adviser representatives. Even if its analytical outputs were broadly construed as touching upon securities analysis, Quillen is not "in the business" of providing investment advice within the meaning of the Advisers Act. The second prong of the three-prong test is not satisfied.
3. Compensation Analysis. The third prong of the three-prong test requires that the person receive "compensation" for the advice or analytical services. The SEC has interpreted this prong broadly, but the compensation must be received for the advisory activity — there must be a nexus between the compensation and the provision of advice.
Fixed Subscription Fees. Quillen receives compensation solely in the form of fixed annual subscription fees for access to the Mosaic platform. These fees are set at the time of contract execution, are not adjusted based on the size of the customer's portfolio, the value of securities analyzed, or the investment performance achieved by the customer. The fee structure is identical in form to the subscription pricing employed by thousands of enterprise SaaS companies across all industries. There is nothing about Quillen's fee structure that suggests compensation for investment advice.
No Performance-Based or Asset-Based Fees. Quillen does not charge performance-based fees (i.e., fees calculated as a percentage of investment gains achieved by the customer). It does not charge asset-based fees (i.e., fees calculated as a percentage of the customer's assets under management). It does not receive commissions, referral fees, or any other form of compensation that is tied to, or calculated by reference to, the investment performance or asset values of its customers' portfolios.
Compensation Structure Consistent with Technology Vendor. The Company's compensation structure is consistent with that of a technology vendor providing software tools, not with that of an investment adviser. Investment advisory fee structures — typically asset-based fees (often expressed in basis points on AUM), performance-based fees (subject to the requirements of Section 205 of the Advisers Act and Rule 205-3 thereunder), or hourly/project-based consulting fees for advisory engagements — are fundamentally different from fixed SaaS subscription pricing.
Conclusion on the Compensation Prong. While it could be argued that Quillen receives "compensation" in a literal sense (it charges fees for access to the platform), the fee structure does not reflect compensation for investment advice. The fees are for software access and are entirely disconnected from the advisory function that the Advisers Act is designed to regulate. We believe this prong weighs strongly against classification as an investment adviser, although we acknowledge that the SEC's broad interpretation of "compensation" means that this prong standing alone may not be dispositive. In conjunction with the analysis of the advice prong and the business prong, however, the compensation analysis reinforces our overall conclusion.
4. Conclusion on Three-Prong Test. Based on the analysis set forth above, Quillen does not satisfy the statutory definition of "investment adviser" under Section 202(a)(11) of the Advisers Act. Specifically:
• Advice Prong: Quillen does not provide advice as to the value of securities or as to the advisability of investing in, purchasing, or selling securities. Its platform provides analytical tools, not investment recommendations. Even under the broader "analyses or reports concerning securities" formulation, the outputs are analytical in nature and do not constitute advice.
• Business Prong: Quillen is in the business of developing and selling software, not in the business of providing investment advice. It does not hold itself out as an investment adviser, does not maintain advisory client relationships, and employs no registered investment adviser representatives.
• Compensation Prong: Quillen receives fixed annual subscription fees for software access. Its compensation structure is not advisory in nature — it includes no performance-based fees, no asset-based fees, and no fees tied to investment outcomes.
Because all three prongs must be satisfied for the definition to apply, and because Quillen does not satisfy any of the three prongs, Quillen is not an "investment adviser" within the meaning of the Advisers Act and is not required to register with the SEC under Section 203 of that statute.
C. Publisher's Exclusion — Section 202(a)(11)(D)
Even if Mosaic's analytical outputs were characterized as "analyses or reports concerning securities" — a characterization that we believe would be an overbroad reading of the platform's functionality, but which we address here for purposes of completeness — Section 202(a)(11)(D) of the Advisers Act excludes from the definition of "investment adviser":
"the publisher of any bona fide newspaper, news magazine or business or financial publication of general and regular circulation."
15 U.S.C. § 80b-2(a)(11)(D).
The Supreme Court addressed the scope of this exclusion in Lowe v. SEC, 472 U.S. 181 (1985). In Lowe, the Court held that the publisher's exclusion should be interpreted broadly to encompass publications that provide impersonal investment advice of general applicability, as opposed to personalized investment advice tailored to the specific circumstances of an individual client. The Court identified three conditions that must be met for the exclusion to apply:
(a) General and regular circulation. The publication must be of general and regular circulation — that is, it must be available to a broad audience of subscribers on a recurring basis, rather than being produced for a single client on an ad hoc basis.
(b) Bona fide publication. The publication must be bona fide — that is, it must contain disinterested commentary and analysis rather than being a vehicle for the promotion of specific securities for the economic benefit of the publisher or its affiliates.
(c) Impersonal advice. The publisher must not provide personalized advice based on the specific investment situation of the subscriber. The advice or analysis must be of general applicability and not tailored to the individual circumstances of a particular subscriber.
See Lowe, 472 U.S. at 204-211. The SEC has subsequently applied and refined the Lowe framework in the context of electronic and digital publications, including subscription-based investment research platforms and online financial information services.
Application to Mosaic. We analyze each condition of the publisher's exclusion as applied to the Mosaic platform:
(a) General and Regular Circulation. The Mosaic platform is available on a subscription basis to multiple institutional subscribers. The platform's analytical reports and dashboards are generated on a recurring basis — indeed, the platform is available for continuous use by subscribers, who can generate reports at any time during their subscription period. While the platform's subscriber base is limited to institutional clients (asset managers, pension consultants, and endowments), this limitation reflects the specialized nature of the analytical content, not a restriction of the publication to a single client or a narrow group of clients receiving personalized advice. We believe this condition is satisfied.
(b) Bona Fide Publication. The Mosaic platform's analytical outputs are generated through objective, quantitative methodologies applied to user-supplied portfolio data. The outputs are based on standardized algorithms, statistical models, and recognized financial analytics frameworks (e.g., Brinson-style attribution, factor-based risk decomposition). Quillen does not use the platform to promote specific securities for its own economic benefit or the benefit of any affiliated entity. Quillen does not trade in securities, does not hold proprietary positions in securities analyzed by the platform, and does not receive compensation from issuers of securities that are the subject of the platform's analytical outputs. The platform is a bona fide analytical tool, not a vehicle for securities promotion. We believe this condition is satisfied.
(c) Impersonal Advice / No Personalized Advisory Relationship. This is the condition that requires the most careful analysis in the context of the Mosaic platform. Unlike a traditional financial publication that distributes identical content to all subscribers, the Mosaic platform generates outputs that are specific to each user's portfolio. A risk attribution report generated for Client A will differ from a report generated for Client B, because the reports are based on each client's unique portfolio holdings and allocations.
The critical question is whether the generation of user-specific outputs through the application of standardized algorithms to user-supplied data constitutes "personalized advice" within the meaning of the Lowe framework. We conclude that it does not, for the following reasons:
First, the user-specificity of the outputs is a function of the user-supplied data, not of any individualized advisory consultation or relationship. The same algorithms, models, and methodologies are applied to every user's data. Quillen does not engage in human-mediated consultations with individual clients to understand their specific investment objectives, risk tolerances, or financial circumstances and then tailor its recommendations accordingly. Rather, the platform mechanically processes the portfolio data input by the user through standardized analytical algorithms and produces quantitative outputs.
Second, the SEC and courts have consistently distinguished between services where a human adviser tailors recommendations to a specific client's needs — which constitutes personalized advice — and software or publications that generate user-specific outputs by applying standardized methodologies to user-supplied inputs — which does not. The latter is more analogous to a financial calculator, a spreadsheet model, or a database query tool than to a personalized advisory relationship.
Third, the platform does not make recommendations. Even where the outputs are specific to a particular user's portfolio, they are descriptive and analytical — they describe what the portfolio is (in terms of risk, factor exposure, and performance attribution), not what the portfolio should be. The absence of prescriptive recommendations further supports the conclusion that the outputs are not "personalized advice."
Conclusion on the Publisher's Exclusion. We believe that the Mosaic platform's outputs are produced through standardized, algorithmic processes applied to user-supplied data and are more analogous to a publisher's output of general-circulation analytical reports than to personalized advisory services. If the question of Quillen's status as an investment adviser were to arise, the publisher's exclusion under Section 202(a)(11)(D) would likely apply as an alternative basis for non-registration. We note, however, that the publisher's exclusion is not unlimited, and Quillen should take care to ensure that its customer interactions, marketing practices, and product evolution do not erode the basis for the exclusion — for example, by introducing features that provide personalized buy/sell recommendations or by supplementing the platform's automated outputs with human advisory consultations.
D. Software-Only Safe Harbor / SEC Staff Guidance
In addition to the statutory definition and the publisher's exclusion, we have considered the SEC staff's no-action letters and guidance addressing technology platforms and the distinction between interactive software tools and investment advisory services.
The SEC staff has addressed the regulatory status of technology-based tools on several occasions, with particular focus in recent years on so-called "robo-advisers" and AI-driven financial technology platforms. While the staff has not issued a single definitive rule or no-action letter establishing a formal "software-only safe harbor," a coherent framework can be distilled from the staff's guidance. The key factors identified by the SEC staff in evaluating whether a technology platform constitutes an investment advisory service include:
(i) Discretion. Whether the software exercises discretion over client accounts — i.e., whether the software can independently make investment decisions and execute trades without the affirmative direction of the client. Software that exercises discretion is far more likely to be treated as providing investment advice (and indeed may constitute an investment adviser exercising discretionary authority, triggering the most stringent regulatory requirements).
(ii) Recommendations. Whether the outputs of the software constitute recommendations to buy, sell, or hold specific securities. The SEC has distinguished between software that provides information, analytics, and tools to assist users in making their own investment decisions and software that generates specific buy/sell recommendations or model portfolios with identified securities.
(iii) Access to or Control Over Client Assets. Whether the provider has access to or control over client funds or securities. A provider that maintains custody of client assets or has the ability to effect transactions in client accounts occupies a fundamentally different regulatory position than a provider that merely processes data and delivers analytical outputs.
(iv) Fee Structure. Whether the fee structure is advisory in nature — i.e., whether fees are calculated as a percentage of AUM, based on investment performance, or otherwise tied to the investment outcomes of the client's portfolio.
Application to Mosaic. Measured against each of these factors, Quillen's Mosaic platform falls squarely within the framework of software tools that the SEC staff has historically not treated as investment advisory services:
• Discretion. Mosaic does not exercise discretion over any client account. It cannot execute trades, direct transactions, or make investment decisions on behalf of any user. All investment decisions remain solely with the user.
• Recommendations. Mosaic does not generate recommendations to buy, sell, or hold specific securities. Its outputs are descriptive analytics, not prescriptive recommendations.
• Access to Client Assets. Quillen does not have access to or control over client funds or securities. The Mosaic platform processes portfolio data (holdings, allocations, and risk exposures), but it does not interact with custodial accounts, brokerage accounts, or any system through which trades are executed or assets are held.
• Fee Structure. Quillen charges fixed annual subscription fees. Its fee structure is not advisory in nature.
Conclusion. Based on the foregoing analysis, Quillen's Mosaic platform falls within the framework of software tools that the SEC staff has historically not treated as investment advisory services. While the SEC staff's guidance does not constitute formal rulemaking and is subject to change, it provides a useful analytical framework and reinforces our conclusion that Quillen is not required to register as an investment adviser under the Advisers Act.
E. No Custody, No Discretion, No Trading Authority
To complete the federal analysis, we confirm the following additional points, each of which supports the conclusion that Quillen operates as a technology vendor rather than an investment adviser:
• No Custody. Quillen does not maintain custody of client funds or securities within the meaning of Rule 206(4)-2 under the Advisers Act. The Company does not hold client assets, does not have access to client brokerage or custodial accounts, and does not possess the authority to obtain possession of client funds or securities. Portfolio data processed by the Mosaic platform consists of information about client holdings (position data, allocation data, and risk metrics), not the holdings themselves.
• No Discretionary Authority. Quillen does not have discretionary authority over any client account. The Company has no contractual or other authority to make investment decisions on behalf of any client or to direct the execution of securities transactions in any client account. All investment decisions are made solely by the users of the Mosaic platform.
• No Trading Authority. Quillen does not execute, direct, or recommend specific securities transactions. The Mosaic platform does not interface with trade execution systems, order management systems, or brokerage platforms. It is an analytics-only tool.
• No Broker-Dealer Activity. Based on our current understanding of Quillen's business activities, the Company does not engage in activities that would require registration as a broker-dealer under Section 15 of the Securities Exchange Act of 1934. The Company does not effect transactions in securities for the account of others, does not receive transaction-based compensation, and does not handle customer funds or securities. While a comprehensive broker-dealer analysis is beyond the scope of this memorandum, we note our preliminary conclusion that Quillen's activities do not implicate broker-dealer registration requirements and can provide a separate analysis if requested by the deal team.
IV. STATE-LEVEL ANALYSIS
A. Massachusetts (Headquarters and Principal Office)
Quillen maintains its headquarters and principal office at 88 Garrison Street, Floor 4, Boston, Massachusetts 02116. As such, Massachusetts is the primary state jurisdiction in which the Company's regulatory status must be assessed.
The Massachusetts Securities Division administers the Massachusetts Uniform Securities Act, codified at M.G.L. c. 110A. Section 401(k) of the Massachusetts Uniform Securities Act defines "investment adviser" in a manner that generally parallels the federal definition under Section 202(a)(11) of the Advisers Act. Specifically, the Massachusetts definition encompasses any person who, for compensation, engages in the business of advising others as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities. The Massachusetts definition incorporates exclusions analogous to those in the federal statute, including a publisher's exclusion similar to Section 202(a)(11)(D) of the Advisers Act.
Applying the same three-prong analysis discussed in Section III.B above, we conclude that Quillen would not satisfy the Massachusetts definition of "investment adviser" for the same reasons it does not satisfy the federal definition: (i) the Mosaic platform does not provide advice regarding specific securities or the advisability of specific transactions; (ii) Quillen is not in the business of providing investment advice; and (iii) Quillen's compensation structure is not advisory in nature. Additionally, the state-level publisher's exclusion available under Massachusetts law would provide an alternative basis for non-registration if the platform's analytical outputs were broadly construed as analyses concerning securities.
Accordingly, based on our analysis, no Massachusetts investment adviser registration is required for Quillen in connection with its development and sale of the Mosaic platform.
B. Delaware (State of Incorporation)
Quillen is incorporated in the State of Delaware (DE File Number 7384219) and maintains a registered agent at Granite State Registered Agents, Inc., 1209 Orange Street, Wilmington, DE 19801. The Delaware Securities Act, 6 Del. C. ch. 73, contains an investment adviser registration requirement and defines "investment adviser" in a manner that parallels the federal Advisers Act.
Quillen's incorporation in Delaware and the maintenance of a registered agent in the state do not, standing alone, trigger a requirement to register as an investment adviser in Delaware. Investment adviser registration obligations under Delaware law are generally triggered by the provision of investment advisory services to persons in the state or the maintenance of a place of business in the state from which advisory services are provided. Quillen does not maintain a physical office or place of business in Delaware (its registered agent address is for statutory purposes only), and, as discussed throughout this memorandum, the Company does not provide investment advisory services.
Accordingly, no Delaware investment adviser registration requirement has been identified.
C. Other States Where Quillen Has Customers
Quillen sells SaaS subscriptions to institutional clients that are likely located across multiple states. As part of this analysis, we have considered whether the sale of Mosaic subscriptions to clients in other states could trigger state-level investment adviser registration requirements.
General Principles. State investment adviser registration requirements vary by jurisdiction but are typically triggered by one or more of the following circumstances: (i) the person has a "place of business" in the state; (ii) the person has more than a de minimis number of advisory clients in the state (often five or more within a trailing twelve-month period); or (iii) the person provides advisory services to persons located in the state. Many states have adopted the Uniform Securities Act or substantially similar provisions, and the National Securities Markets Improvement Act of 1996 ("NSMIA") provides a framework for allocating regulatory authority between the SEC and state securities regulators based on, among other things, the adviser's AUM.
Application to Quillen. Where Quillen does not have a physical office in a state, and where it is providing software subscriptions (not investment advisory services), state investment adviser registration obligations are unlikely to be triggered. The key analytical point is that Quillen's customer relationships are software vendor-customer relationships, not investment adviser-client relationships. The sale of a SaaS subscription to a client in, for example, New York, California, or Illinois does not constitute the provision of investment advice to a person in that state.
Nevertheless, the regulatory landscape for AI-driven financial technology platforms is evolving, and state regulators have at times taken aggressive positions regarding the scope of their investment adviser registration requirements. We therefore make the following recommendations:
(i) Customer Jurisdiction Records. Quillen should maintain a comprehensive record of the jurisdictions in which its customers are located, including the specific state (or states) in which each customer's principal office is located and, to the extent known, the state or states in which the customer's investment personnel who use the Mosaic platform are located.
(ii) Regulatory Monitoring. Quillen should monitor for any developments in state regulatory guidance or enforcement actions that could affect the classification of its platform, particularly as state securities regulators continue to develop their approaches to AI-driven financial technology platforms.
(iii) State Data Privacy Requirements. We note that Quillen's processing of portfolio-level data for institutional clients may also implicate state-level data privacy requirements, including requirements under the Massachusetts data security regulations (201 CMR 17.00), the California Consumer Privacy Act (as amended by the CPRA), and other state data privacy statutes. These considerations are addressed separately in the Privacy & Data Security Due Diligence Memorandum dated May 12, 2026, prepared by Rachel Bernstein.
V. RISK FACTORS AND AREAS FOR ONGOING MONITORING
While our overall conclusion is that Quillen is not required to register as an investment adviser, we identify the following risk factors and areas for ongoing monitoring that should be considered by the deal team in connection with the Series A investment and incorporated into the post-closing governance and compliance framework.
A. Evolving SEC Guidance on AI and FinTech
The SEC has been increasingly focused on the use of artificial intelligence in investment management and financial technology. In recent years, the Commission has undertaken several initiatives directed at understanding and regulating the intersection of AI and financial services, including:
• Proposed Rules on Predictive Data Analytics. In July 2023, the SEC proposed rules that would require broker-dealers and investment advisers to evaluate and address conflicts of interest arising from their use of "predictive data analytics" technologies, including AI and machine learning tools, in investor interactions. While the proposed rules were directed at registered broker-dealers and investment advisers (and not at technology vendors), the rulemaking reflects the SEC's broader interest in AI-driven tools that influence investment decisions.
• SEC Staff Statements and Speeches. Senior SEC staff, including Commissioners and Division Directors, have made public statements regarding the need for regulatory frameworks to address the growing role of AI in financial markets, including the potential for AI tools to effectively function as investment advisers even when they are not formally registered as such.
• Enforcement Actions. The SEC's Division of Enforcement has brought actions against robo-adviser platforms and AI-driven investment tools that were found to be providing investment advice without adequate disclosure or compliance with the Advisers Act. While these actions have generally involved platforms that exercised discretionary authority or provided personalized recommendations — distinguishing them from Quillen's analytics-only platform — they signal the SEC's willingness to scrutinize technology platforms that operate in the investment management ecosystem.
If the SEC were to expand the definition of "investment advice" — whether through formal rulemaking, no-action letters, or enforcement actions — to encompass AI-driven analytical tools that effectively influence investment decisions even without specific transaction recommendations, Quillen's regulatory posture could change. We recommend that the deal team and, post-closing, the Company's management and board monitor SEC rulemaking and enforcement developments in this area on an ongoing basis.
B. Product Evolution Risk
Our analysis is based on the Mosaic platform's existing feature set, which encompasses portfolio analytics, risk attribution, factor decomposition, performance measurement, scenario analysis, and stress testing. As described above, these features are analytical in nature and do not constitute investment advice.
However, the Company is a venture-stage technology company with an active product roadmap. If Quillen were to add features to the Mosaic platform that constitute or approach personalized investment recommendations, the regulatory analysis could change materially. Features that could alter the analysis include, by way of example:
• "Buy" or "sell" Signals for specific securities or asset classes based on the platform's analytical outputs.
• Automated portfolio rebalancing suggestions that recommend specific trades to bring a portfolio into alignment with a target allocation or model portfolio.
• Model portfolio generation with specific security selections — i.e., where the platform recommends a specific set of securities (and corresponding allocations) based on the user's risk profile, investment objectives, or other client-specific parameters.
• Automated trade execution capabilities — i.e., where the platform is integrated with brokerage or custodial systems and can execute trades on behalf of the user, whether with or without the user's affirmative consent for each trade.
• Advisory consultation services — i.e., where Quillen employees provide human-mediated investment advice to customers in conjunction with the platform's analytical outputs.
Any of these features, if introduced, could cause Quillen to cross the line from software vendor to investment adviser, with significant regulatory, compliance, and liability consequences.
We recommend that the Series A transaction documents include protective provisions addressing this risk, including:
(i) A representation and warranty by the Company that it does not currently provide investment advisory services or exercise discretion over client accounts.
(ii) A covenant requiring the Company to provide prior written notice to investors (or to the Board of Directors, which will include Pinnacle's designee) before introducing any product feature that could reasonably be expected to cause the Company to be classified as an investment adviser under the Advisers Act or any state securities law.
(iii) A closing condition requiring the Company to confirm, as of the closing date, that no material change has occurred to the Mosaic platform's feature set or business model that would alter the conclusions of this memorandum.
C. Client Contract Review
A thorough review of Quillen's customer agreements is essential to confirming the regulatory analysis set forth in this memorandum. The Material Contracts Review Memorandum dated May 8, 2026, addresses the Company's customer agreements in detail. For purposes of this analysis, we highlight the following key considerations:
• Characterization of the Relationship. Customer agreements should consistently characterize the relationship between Quillen and its customers as a software license or subscription relationship, not an investment advisory engagement. Any language in customer agreements that suggests an advisory relationship — such as references to "investment advice," "advisory services," "fiduciary duties," or "client best interest" — could undermine the regulatory analysis and should be revised.
• Disclaimers. Customer agreements and terms of service should include clear and prominent disclaimers stating that (i) Quillen is not an investment adviser and does not provide investment advice, (ii) the Mosaic platform's outputs are analytical tools and do not constitute recommendations to buy, sell, or hold any security, and (iii) users are solely responsible for their own investment decisions. Based on our review, the Company's current Master Subscription Agreement includes such disclaimers, though we have recommended certain enhancements to Company Counsel.
• Data Processing Agreements. Customer data processing agreements ("DPAs") should be reviewed to ensure they are consistent with the software vendor characterization and do not contain provisions that imply an advisory relationship. DPAs should address the handling of portfolio data in a manner consistent with data processing (not advisory) obligations.
D. SOC 2 Compliance and Institutional Client Requirements
The Company completed a SOC 2 Type I audit in January 2026, conducted by its independent auditor, Pemberton & Associates CPAs LLP (Diane Stratton, CPA, engagement partner). The SOC 2 Type I report confirms the design suitability of the Company's internal controls over security, availability, and confidentiality of data processed through the Mosaic platform as of the audit date. A SOC 2 Type II audit, which will assess the operating effectiveness of those controls over a specified period, is currently in process and is expected to be completed in Q3 2026.
The completion of the SOC 2 Type I audit and the pending Type II audit are relevant to this analysis for two reasons. First, SOC 2 compliance is a common requirement imposed by institutional asset manager and pension consultant clients on their technology vendors. The Company's ability to demonstrate SOC 2 compliance supports its positioning as a technology vendor (rather than an investment adviser) and facilitates customer acquisition in the institutional market. Second, institutional clients may impose additional compliance and regulatory requirements on their technology vendors as a condition of engagement, and these requirements should be reviewed in the context of the Company's customer contracts to ensure that they are consistent with the software vendor characterization and do not inadvertently impose advisory-related obligations on the Company.
VI. RECOMMENDATIONS FOR TRANSACTION DOCUMENTS
Based on the analysis set forth in this memorandum, we recommend the following provisions for inclusion in the Series A transactio

MEMORANDUM

MATTER NO.: 1002-00002

BILLING CODE: 78412.001

I. EXECUTIVE SUMMARY

II. BACKGROUND

IV. STATE-LEVEL ANALYSIS

V. RISK FACTORS AND AREAS FOR ONGOING MONITORING

VI. RECOMMENDATIONS FOR TRANSACTION DOCUMENTS

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