1037-00006
· Solstice Biomedical Devices Ltd · Closing
closing-statement.xlsx
DOCUMENT
M&A / Corporate
[sheet: Cover]
| Field | Value |
| Transaction | Stock Purchase of 100% of Outstanding Common Stock and Vested Options of Meridian Surgical Technologies, Inc. |
| Buyer | Solstice Biomedical, Inc. (a wholly owned subsidiary of Solstice Biomedical Devices Ltd.) |
| Buyer Address | 1200 Innovation Drive, Suite 400, Wilmington, DE 19801 |
| Target / Company | Meridian Surgical Technologies, Inc. |
| Target Address | 780 Keystone Boulevard, Suite 200, King of Prussia, PA 19406 |
| Target EIN | 84-3192057 |
| Target Delaware File No. | 5819734 |
| Sellers' Representative | Dr. Marcus Ellsworth |
| Stock Purchase Agreement Date | August 20, 2024 |
| Closing Date | October 31, 2024 |
| Governing Law | State of Delaware |
| Escrow Agent | Keystone Escrow Services, Inc. |
| Buyer's Counsel | Calderwood & Harkness LLP |
| Sellers' Counsel | Whitmore Crane & Pfeiffer LLP |
| Buyer's Financial Advisor | Bancroft Sloane & Co. |
| Sellers' Financial Advisor | Pennfield Capital Management, LLC |
| Prepared By | Andrew Fitzpatrick, Calderwood & Harkness LLP |
| Matter No. | 1037-00006 |
| Date of Statement | October 31, 2024 |
| Status | Estimated — Subject to Post-Closing Net Working Capital True-Up |
[sheet: Closing Consideration]
| Line Item | Reference / Note | Amount ($) |
| Base Purchase Price (Aggregate Equity Value) | SPA Section 2.1 | 220000000 |
Less: Adjustments Deducted from Base Purchase Price
| Indemnity Escrow Amount (12% of Base Purchase Price) | SPA Section 2.3(a); Escrow Agreement | -26400000 |
| Ironclad Payoff Amount (Meridian existing revolving credit facility) | Payoff Letter dated October 28, 2024; Ironclad Commercial Lending, LLC | -7341822.16 |
| Sellers' Transaction Expenses (see Schedule A) | SPA Section 2.4 | -4825000 |
| Subtotal of Deductions | -38566822.16 |
Plus: Adjustments Added to Base Purchase Price
| Estimated Net Working Capital Adjustment | See NWC Calculation tab | 675000 |
| Target Net Working Capital | SPA Section 2.5 | 11500000 |
| Estimated Closing Net Working Capital | Per Company's estimate | 12175000 |
| Estimated NWC Surplus (Estimated Closing NWC minus Target NWC) | 675000 | |
| Estimated Closing Cash Consideration Payable to Sellers | = $220,000,000 - $26,400,000 - $7,341,822.16 - $4,825,000 + $675,000 | 182108177.84 |
MEMORANDUM ITEMS (Funded by Buyer — Not Deducted from Seller Consideration):
| Earnout Escrow Reserve (funded by Buyer) | SPA Section 2.3(b); Escrow Agreement | 2500000 |
| RWI Premium (Ridgeline Mutual Insurance Company; Policy No. RMI-RWI-2024-08172) | Buyer obligation | 1232000 |
| D&O Tail Policy Premium (Northbridge Specialty Insurance Co. via Caldwell Risk Advisors, Inc.) | Buyer obligation; SPA Section 6.7 | 385000 |
| Buyer Transaction Costs (estimated) | Buyer obligation | 3500000 |
| Total Escrow Deposits at Closing | Indemnity Escrow + Earnout Escrow Reserve | 28900000 |
Note: Estimated Closing Cash Consideration is subject to post-closing Net Working Capital true-up within 90 days of Closing (due by January 29, 2025). Independent accounting referee for NWC disputes: Hargrove Bennett LLP (Margaret Chen, CPA).
[sheet: Schedule A - Sellers Expenses]
| Payee | Description | Amount ($) |
| Whitmore Crane & Pfeiffer LLP | Legal fees and expenses — Sellers' counsel | 2150000 |
| Pennfield Growth Partners, LP (advisory) | Financial advisory fees payable to Pennfield Capital Management, LLC | 1800000 |
| Dunfield & Associates, P.C. | Consent and comfort letter fees — Target's independent auditors | 275000 |
| Miscellaneous (various) | Transfer taxes, filing fees, printing, data room costs, and other miscellaneous Sellers' expenses | 600000 |
| TOTAL SELLERS' TRANSACTION EXPENSES | 4825000 |
[sheet: Per-Share Allocation]
| Seller / Holder | Type | Shares or Options Held | % of Fully Diluted Shares | Pro Rata Share of Aggregate Consideration ($220M) | Less: Escrow Holdback (Pro Rata share of $26,400,000) | Less: Pro Rata Share of Ironclad Payoff ($7,341,822.16) | Less: Pro Rata Share of Sellers' Transaction Expenses ($4,825,000) | Plus: Pro Rata Share of NWC Surplus ($675,000) | Estimated Net Closing Payment |
| Dr. Marcus Ellsworth | Common Stock | 2845900 | 35.57375% | 78262250 | 9391470 | 2611950.38 | 1716415.63 | 240122.19 | 64882536.18 |
| Pennfield Growth Partners, LP | Common Stock | 2235000 | 27.93750% | 61462500 | 7375500 | 2051084.95 | 1347984.38 | 188503.13 | 50876433.8 |
| Arch Hill Ventures Fund II, LLC | Common Stock | 1490000 | 18.62500% | 40975000 | 4917000 | 1367389.97 | 898656.25 | 125668.75 | 33917622.53 |
| Catherine Pryor | Common Stock | 372500 | 4.65625% | 10243750 | 1229250 | 341847.49 | 224664.06 | 31417.19 | 8479405.64 |
| Other Management & Employees (common) | Common Stock | 506600 | 6.33250% | 13931500 | 1671780 | 464912.36 | 305503.25 | 42744.94 | 11532049.33 |
| Option Holders (aggregate; 550,000 vested options) | Stock Options (net of exercise) | 550000 | 6.87500% | 15125000 | 1815000 | 504636.52 | 331776.56 | 46393.75 | 12519980.67 |
| Less: Aggregate Exercise Price Offset | -2640000 | -2640000 | |||||||
| Net Option Holder Payment | 12485000 | 1815000 | 504636.52 | 331776.56 | 46393.75 | 9879980.67 | |||
| TOTALS | 8000000 | 100.0000% | 220000000 | 26400000 | 7341822.16 | 4825000.13 | 674849.95 | 182108177.84 |
Note: Per-share consideration (fully diluted) = $220,000,000 / 8,000,000 = $27.50 per share. Option holders receive net per-option cancellation consideration of $22.70 ($27.50 - $4.80 weighted-average exercise price). Totals may reflect minor rounding differences.
[sheet: Option Holder Detail]
| Description | Value |
| Total Options Outstanding (all vested as of Closing Date) | 550000 |
| Weighted-Average Exercise Price per Option | $4.80 |
| Per-Share Merger Consideration (fully diluted: $220,000,000 / 8,000,000) | $27.50 |
| Net Per-Option Cancellation Consideration ($27.50 - $4.80) | $22.70 |
| Aggregate Option Cancellation Payment (550,000 × $22.70) | $12,485,000.00 |
| Aggregate Exercise Price Offset (550,000 × $4.80) | $2,640,000.00 |
| Gross Notional Value (550,000 × $27.50) | $15,125,000.00 |
| Remaining Consideration to Common Stockholders ($220,000,000 - $12,485,000) | $207,515,000.00 |
| Per-Share Amount to Common Stockholders ($207,515,000 / 7,450,000) | $27.8544 |
Plan Reference: Meridian 2019 Equity Incentive Plan
Total Authorized Shares under Plan
All options vested; no unvested options outstanding
[sheet: NWC Calculation]
Line Item
ESTIMATED CLOSING NET WORKING CAPITAL
Current Assets (per SPA definition):
| Cash and cash equivalents | Estimated as of 10/31/2024 | 3215000 |
| Accounts receivable, net | Estimated as of 10/31/2024 | 8740000 |
| Inventory | Estimated as of 10/31/2024 | 4620000 |
| Prepaid expenses and other current assets | Estimated as of 10/31/2024 | 1385000 |
| Total Estimated Current Assets (per SPA NWC definition) | 17960000 |
Less: Current Liabilities (per SPA definition):
| Accounts payable | Estimated as of 10/31/2024 | 2890000 |
| Accrued expenses and other current liabilities | Estimated as of 10/31/2024 | 1945000 |
| Deferred revenue (current portion) | Estimated as of 10/31/2024 | 950000 |
| Total Estimated Current Liabilities (per SPA NWC definition) | 5785000 | |
| Estimated Closing Net Working Capital | Current Assets less Current Liabilities | 12175000 |
| Target Net Working Capital | SPA Section 2.5 | 11500000 |
| Estimated NWC Adjustment (Surplus / (Deficit)) | Estimated Closing NWC minus Target NWC | 675000 |
| Direction of Adjustment: | Surplus — added to closing payment to Sellers |
POST-CLOSING TRUE-UP:
| True-Up Period | 90 days post-Closing |
| True-Up Deadline | January 29, 2025 |
| Independent Accounting Referee (if disputed) | Hargrove Bennett LLP; Contact: Margaret Chen, CPA |
| Referee Address | 1735 Market Street, Suite 2800, Philadelphia, PA 19103 |