1037-00006 · Solstice Biomedical Devices Ltd · Diligence

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CONFIDENTIAL — SUBJECT TO NON-DISCLOSURE AGREEMENT

PRELIMINARY DUE DILIGENCE REQUEST LIST

In Connection with the Proposed Acquisition of Meridian Surgical Technologies, Inc. by Solstice Biomedical Devices Ltd.

Prepared by:

Calderwood & Harkness LLP 590 Lexington Avenue, 35th Floor New York, NY 10022

Tiffany Rosenthal — Lead Associate, Mergers & Acquisitions Andrew Fitzpatrick — Working Associate, Mergers & Acquisitions

Matter Number: 1037-00006

May 13, 2024

Addressed to:

Meridian Surgical Technologies, Inc. 780 Keystone Boulevard, Suite 200 King of Prussia, PA 19406

Attention: Dr. Marcus Ellsworth, Chief Executive Officer

David Hensley, Chief Financial Officer

cc:

Whitmore Crane & Pfeiffer LLP One Liberty Place 1650 Market Street, Suite 3600 Philadelphia, PA 19103

Attention: Jonathan Whitmore, Esq.

Ryan Dowd, Esq.

CONFIDENTIAL — SUBJECT TO NON-DISCLOSURE AGREEMENT DATED APRIL 22, 2024

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INTRODUCTORY INSTRUCTIONS AND GENERAL NOTES

This Preliminary Due Diligence Request List (this "Request List") is being delivered on behalf of Solstice Biomedical Devices Ltd. ("Solstice" or "SBD") and its wholly owned subsidiary Solstice Biomedical, Inc. ("SBI," and together with Solstice, the "Buyer") in connection with the proposed acquisition by the Buyer of one hundred percent (100%) of the outstanding common stock and vested options of Meridian Surgical Technologies, Inc. ("Meridian" or the "Company") (the "Transaction"). This Request List has been prepared by Calderwood & Harkness LLP ("C&H"), legal counsel to the Buyer, to facilitate the Buyer's legal, financial, commercial, and regulatory due diligence investigation of the Company.

Virtual Data Room. The Company is requested to upload all responsive documents and materials to the virtual data room (the "Data Room") that has been established for this Transaction on the Crestline Solutions platform. Access credentials and user permissions have been coordinated separately between the parties' respective counsel. The Company is asked to organize the Data Room index so that it mirrors, to the greatest extent practicable, the category and item numbering set forth in this Request List. For example, documents responsive to Item 3.8 should be placed in a folder labeled "3 — Financial Information / 3.8 — Schedule of Indebtedness." This organization will materially facilitate the diligence review process and reduce the need for follow-up requests.

Preliminary Nature of This Request List. This Request List is preliminary in nature. As the Buyer's diligence investigation progresses and as additional information becomes available, supplemental requests may be issued from time to time. The Company should not interpret the absence of a specific request as an indication that the Buyer does not require such information; rather, the Buyer reserves the right to request additional categories of documents and information as it deems necessary or appropriate.

Privileged and Confidential Materials. To the extent that any responsive documents or categories of documents are subject to attorney-client privilege, attorney work-product protection, or other confidentiality restrictions that the Company believes limit or prohibit disclosure, the Company is requested to identify such documents by category and provide a general description of the nature and subject matter of the withheld materials, together with the basis for the claimed privilege or restriction. The parties will work together in good faith to determine whether such materials can be produced pursuant to appropriate protections, including a common-interest or joint-defense arrangement, if applicable.

"Not Applicable" Responses. If any category or sub-item in this Request List is not applicable to the Company or its business, the Company is requested to affirmatively note "N/A" in the corresponding Data Room folder or in a master response index, rather than leaving the folder or entry blank. Affirmative confirmation that a category is not applicable is important to ensure completeness of the diligence record and to avoid unnecessary follow-up inquiries.

Time Period. Unless otherwise specified with respect to a particular item, the Company is requested to provide responsive documents and information covering the last five (5) completed fiscal years of the Company (i.e., fiscal year 2019 through fiscal year 2023) and the year-to-date period in fiscal year 2024 (through the most recent date for which information is available). Where a particular item specifies a different time period, the specified period shall control.

Contacts. All questions regarding this Request List, including questions regarding the scope or interpretation of any particular item, should be directed to the following individuals at Calderwood & Harkness LLP:

Tiffany Rosenthal, Lead Associate, Mergers & Acquisitions Telephone: (212) 555-4710

Email: trosenthal@calderwoodharkness.com

Andrew Fitzpatrick, Working Associate, Mergers & Acquisitions Telephone: (212) 555-4722

Email: afitzpatrick@calderwoodharkness.com

We appreciate the Company's prompt attention to this Request List and look forward to working cooperatively with the Company and its counsel to facilitate an efficient and thorough diligence process.

CATEGORY 1: CORPORATE ORGANIZATION AND GOVERNANCE

1.1 Certificate of Incorporation (including all certificates of amendment, certificates of correction, and any restated certificates of incorporation) of Meridian Surgical Technologies, Inc., as filed with the Secretary of State of the State of Delaware. The Company's Delaware File Number is 5819734. Please include the original Certificate of Incorporation and each subsequent amendment or restatement filed through the date hereof.

1.2 Current Bylaws of the Company, as amended and/or restated through the date hereof, including all amendments, supplements, and modifications thereto. If the Bylaws have been amended and restated, please provide both the current restated version and any separate amendment documents adopted since the last restatement.

1.3 Certificates of good standing or certificates of existence (or their equivalent) from the Secretary of State of the State of Delaware (the Company's state of incorporation) and from the Secretary of the Commonwealth of Pennsylvania and each other state or jurisdiction in which the Company is qualified, registered, or authorized to transact business as a foreign corporation, in each case dated no more than thirty (30) days prior to the date hereof.

1.4 A complete list of all jurisdictions (including U.S. states, territories, and foreign countries) in which the Company is qualified, registered, or authorized to do business as a foreign corporation, together with copies of all certificates of authority or similar filings evidencing such qualifications. Please also identify any jurisdictions in which the Company previously held a foreign qualification that has been withdrawn or allowed to lapse.

1.5 Complete and accurate copies of the minutes of all meetings of the Board of Directors of the Company and all committees of the Board of Directors (including, without limitation, any audit committee, compensation committee, nominating and governance committee, or special committee) for the last five (5) fiscal years (FY2019 through FY2023) and year-to-date FY2024, together with copies of all written consents of the Board of Directors or any committee thereof executed in lieu of meetings during such period.

1.6 Complete and accurate copies of the minutes of all meetings of the stockholders of the Company for the last five (5) fiscal years (FY2019 through FY2023) and year-to-date FY2024, together with copies of all written consents of the stockholders executed in lieu of meetings during such period. Please include copies of all notices, waivers of notice, and proxy materials distributed in connection with any such meetings.

1.7 A current list of all directors and officers of the Company, including the following information for each individual: full legal name, title and position(s) held, date of initial appointment or election, term of service (including expiration date, if applicable), and committee assignments. For the avoidance of doubt, we understand the current Board of Directors to be composed of the following individuals:

(a) Dr. Marcus Ellsworth — Chairman of the Board and Chief Executive Officer;

(b) Catherine Pryor — Director, President and Chief Operating Officer;

(d) Diana Whitfield — Director (designee of Pennfield Growth Partners, LP); and

(e) Dr. Eleanor Vickers — Independent Director.

Please confirm this composition and identify any changes that have occurred or are anticipated. In addition, please identify any board observer rights or arrangements currently in effect, including, without limitation, any observer rights held by Samuel Nakamura in connection with the investment by Arch Hill Ventures Fund II, LLC, and provide copies of any agreements or letters establishing such observer rights.

1.8 A comprehensive organizational chart showing the Company and all of its subsidiaries (if any), divisions, branches, and affiliated entities, together with an indication of the ownership percentage and jurisdiction of organization for each entity. If the Company has no subsidiaries or affiliated entities, please so confirm.

1.9 Copies of any and all stockholders' agreements, investors' rights agreements, registration rights agreements, voting agreements, rights of first refusal and co-sale agreements, management rights letters, information rights letters, or similar governance, voting, or transfer restriction agreements among the stockholders of the Company and/or between the Company and any of its stockholders, together with all amendments, supplements, waivers, and side letters thereto.

1.10 Copies of any powers of attorney, agency agreements, or similar instruments of authorization currently in effect, pursuant to which any person has been authorized to act on behalf of the Company. If no such instruments are currently in effect, please so confirm.

1.11 Records of any name changes, mergers, consolidations, reorganizations, recapitalizations, statutory conversions, or similar corporate transactions involving the Company at any time during its existence, including copies of all certificates, agreements, plans of merger, and related filings.

CATEGORY 2: CAPITALIZATION AND EQUITY

2.1 A current capitalization table for the Company, showing all authorized, issued, and outstanding shares of capital stock, by class and series. We understand the Company's capital structure to be as follows: 10,000,000 shares of common stock authorized; 7,450,000 shares of common stock issued and outstanding; no shares of preferred stock authorized or outstanding. Please confirm these figures or provide any necessary corrections. The capitalization table should also reflect all outstanding stock options, warrants, convertible securities, and other rights to acquire equity securities of the Company, together with the number of shares reserved for issuance under the Company's equity incentive plans and the number of shares available for future grants.

2.2 A complete and accurate stock ledger and all transfer records for all outstanding shares of capital stock of the Company, from the date of incorporation through the present.

2.3 A list of all holders of outstanding shares of capital stock of the Company, including the number of shares held by each holder and the percentage of the total outstanding shares represented by each holder's shares. We understand the current ownership to be as follows:

Please confirm these figures or provide any necessary corrections. With respect to the "Other Management and Employees" category, please provide a detailed breakdown showing the name of each individual holder and the number of shares held by such individual.

2.4 Copies of all stock option plans, equity incentive plans, stock purchase plans, phantom equity plans, stock appreciation rights plans, profit interest plans, or similar equity-based or equity-linked compensation arrangements maintained by the Company, including, without limitation, the Meridian Surgical Technologies, Inc. 2019 Equity Incentive Plan (the "2019 Plan"). For each such plan, please provide the following: the plan document, as amended through the date hereof; copies of the board and stockholder resolutions approving the plan and any amendments thereto; a summary of the material terms of the plan (including total shares reserved, share counting provisions, vesting parameters, and acceleration provisions); and the current number of shares available for future grants.

2.5 A complete schedule of all outstanding stock options, warrants, convertible notes or other convertible securities, and any other rights to acquire equity securities of the Company, including, for each outstanding award or right, the following information: the name of the holder; the type of award; the date of grant or issuance; the number of shares subject to the award; the exercise price or conversion price (as applicable); the vesting commencement date; the vesting schedule (including any cliff vesting and acceleration provisions); the current vesting status (number of shares vested and unvested as of the date hereof); the expiration date; and any special terms or conditions. We understand that there are currently 550,000 shares of common stock subject to outstanding vested options under the 2019 Plan, with a weighted-average exercise price of $4.80 per share. Please confirm these figures and provide the detailed schedule requested above.

2.6 Copies of all individual stock option agreements, restricted stock purchase agreements, restricted stock unit agreements, and other individual equity award agreements entered into between the Company and any current or former employee, director, consultant, or other service provider, together with any amendments or modifications thereto. Please include any early exercise agreements, repurchase agreements, or Section 83(b) election filings associated with such awards.

2.7 Copies of all stock certificates (front and back) issued by the Company that are currently outstanding, or, if shares are held in uncertificated or book-entry form, evidence of such uncertificated holdings (e.g., DRS statements or book-entry confirmations from the Company's transfer agent). Please also describe the text of all legends appearing on any outstanding stock certificates or applicable to uncertificated shares, including any legends relating to transfer restrictions, securities law restrictions, or contractual lock-up or co-sale obligations.

2.8 Copies of any agreements, instruments, or provisions (whether in the Certificate of Incorporation, any stockholders' agreement, or otherwise) relating to preemptive rights, anti-dilution protections, weighted-average or full-ratchet adjustments, or rights of first refusal on equity issuances, together with any waivers of such rights previously granted.

2.9 Documentation of all prior issuances of equity securities by the Company, including, for each issuance: copies of the board and stockholder resolutions authorizing the issuance; copies of subscription agreements, stock purchase agreements, or other investment documents; a description of the consideration received; and documentation of compliance with applicable federal and state securities laws, including copies of any Form D filings, state blue sky filings, or other exemption filings made in connection with such issuances.

CATEGORY 3: FINANCIAL INFORMATION

3.1 Audited financial statements for fiscal years 2021, 2022, and 2023, including, for each fiscal year, the following: balance sheet (statement of financial position); income statement (statement of operations); statement of cash flows; statement of stockholders' equity (or statement of changes in equity); and all accompanying notes and schedules. Please also provide the independent auditor's report accompanying each set of audited financial statements. We understand that the Company's independent auditors are Dunfield & Associates, P.C. (Howard Dunfield, Managing Partner). Please confirm the identity of the independent auditors and indicate whether there have been any changes in auditors during the period covered by this request.

3.2 Unaudited interim financial statements (including balance sheet, income statement, and statement of cash flows) for all quarterly periods in fiscal year 2024 through the most recently completed quarter. If interim financial statements are prepared on a monthly basis, please also provide the monthly statements for FY2024 year-to-date.

3.3 Management-prepared monthly financial reports, internal financial packages, management dashboards, and operating metric reports for the last twenty-four (24) months (i.e., from approximately May 2022 through April 2024, or the most recent month-end available). These materials should include, to the extent regularly prepared, budget-to-actual variance analyses, key performance indicators, and management commentary on financial results.

3.4 Annual operating budgets and financial projections for fiscal year 2024 and fiscal year 2025, together with any long-range strategic plan, five-year financial model, or other forward-looking financial analyses prepared by or on behalf of the Company's management. Please identify the key assumptions underlying any projections provided.

3.5 A detailed listing and aging schedule of accounts receivable as of the most recent month-end, including the name of each debtor (or, for customers, a coded identifier if the Company prefers to provide a key separately), the invoice amount, the invoice date, the payment terms, and the number of days outstanding. Please also provide a schedule of any allowances for doubtful accounts or bad debt reserves, together with a description of the methodology used to calculate such reserves.

3.6 A detailed listing and aging schedule of accounts payable as of the most recent month-end, including the name of each creditor, the invoice amount, the invoice date, the payment terms, and the number of days outstanding.

3.7 A schedule of inventory by category (raw materials, work-in-process, and finished goods) as of the most recent month-end, including the valuation methodology applied (e.g., FIFO, weighted average cost) and a description of any inventory reserves, write-downs, or obsolescence provisions. Please also provide a description of the Company's inventory management practices, including cycle count procedures and any recent physical inventory counts.

3.8 A schedule of all indebtedness of the Company, including credit facilities, revolving lines of credit, term loans, promissory notes, notes payable, capital leases (or finance leases under ASC 842), letters of credit, guarantees, and other obligations for borrowed money. For each item of indebtedness, please provide: the lender or counterparty; the original principal amount; the current outstanding balance; the interest rate; the maturity date; the collateral or security, if any; and any financial covenants or other restrictive covenants. Specifically, please provide complete documentation relating to the Company's existing revolving credit facility with Ironclad Commercial Lending, LLC (we understand this to be a $12,000,000 facility), including:

(a) the credit agreement, as amended through the date hereof;

(b) all amendments, waivers, and consent letters;

(d) a schedule of the current outstanding balance and available borrowing capacity;

(e) all compliance certificates delivered by the Company to the lender during the last twelve (12) months; and

(f) any correspondence with the lender regarding defaults, potential defaults, or covenant compliance issues.

3.9 A schedule of all capital expenditures made by the Company during fiscal years 2021, 2022, and 2023, together with the budgeted capital expenditures for fiscal years 2024 and 2025. The schedule should categorize capital expenditures by type (e.g., machinery and equipment, leasehold improvements, IT systems, tooling, and other), and identify any individual capital projects exceeding $100,000.

3.10 A summary of the Company's accounting policies, including the basis of accounting (GAAP), revenue recognition methodology (including the timing of revenue recognition for product sales and any service or licensing revenue), depreciation methods and useful lives, inventory valuation methodology, and any other significant accounting policies. Please describe any changes in accounting methods or policies adopted during the last three fiscal years, including any changes required by new accounting standards (e.g., ASC 606, ASC 842).

3.11 Copies of all management letters, internal control deficiency communications, and other written communications issued by the Company's independent auditors (Dunfield & Associates, P.C.) to the Company's management or Board of Directors during the last three fiscal years (FY2021 through FY2023). Please also provide copies of the Company's written responses to any such communications, if any.

3.12 A working capital analysis, including historical monthly calculations of Net Working Capital (as such term would customarily be defined in a stock purchase agreement — i.e., current assets minus current liabilities, subject to agreed inclusions and exclusions) for each of the last twelve (12) months. Please identify any seasonal patterns, unusual or non-recurring items, or other factors that may cause Net Working Capital to vary significantly from month to month. For reference, we understand that the target Net Working Capital figure being discussed in connection with the Transaction is approximately $11,500,000. Please provide any internal analyses prepared by the Company's management regarding the appropriate level of normalized working capital for the business.

3.13 A schedule of any off-balance-sheet liabilities, contingent liabilities, guarantees, indemnification obligations, or other contingent obligations of the Company that are not reflected on the Company's balance sheet, together with a description of the nature and estimated amount of each such item.

3.14 A revenue breakdown by product line and by geography for each of the last three fiscal years (FY2021, FY2022, and FY2023) and year-to-date FY2024. The product line breakdown should separately identify revenue from: (i) single-use arthroscopic blades (including PrecisionBlade products); (ii) powered shaver systems and accessories; and (iii) all other products and services. The geographic breakdown should separately identify revenue from: (i) the United States; (ii) Europe; and (iii) all other geographies. We understand that the Company's total revenue for FY2023 was approximately $87,000,000, and that FY2023 EBITDA was approximately $14,200,000. Please confirm these figures and provide a reconciliation of EBITDA to net income.

3.15 A description of all related-party transactions during the last five fiscal years, including any transactions between the Company and any of its officers, directors, stockholders (or their respective affiliates), or any entity in which any officer, director, or stockholder holds a material interest. For each such transaction, please describe the nature of the transaction, the parties involved, the dollar amount, and the terms and conditions.

CATEGORY 4: TAX MATTERS

4.1 Copies of the Company's federal income tax returns (Form 1120 or other applicable forms) and all state income and franchise tax returns for the last five fiscal years (FY2019 through FY2023), including all schedules, attachments, elections, and supporting workpapers. If any returns for the requested period have not yet been filed, please provide copies of any filed extensions and the most recent draft returns available.

4.2 A schedule of all federal, state, and local tax identification numbers maintained by the Company. The Company's federal Employer Identification Number (EIN) is 84-3192057. Please confirm and provide all state and local tax identification numbers.

4.3 Copies of all correspondence with the Internal Revenue Service (IRS) or any state or local tax authority during the last five years, including, without limitation: audit notices and examination letters; Information Document Requests (IDRs); Revenue Agent Reports (RARs); Notices of Proposed Adjustment; closing agreements; settlement agreements; private letter rulings; and technical advice memoranda. If no such correspondence has been received, please so confirm.

4.4 A schedule of all open, pending, or threatened tax audits, examinations, assessments, deficiency notices, or disputes with any federal, state, or local tax authority, together with a description of the issues involved and the current status. For each open tax year, please identify whether the applicable statute of limitations has been extended by agreement.

4.5 A schedule of all net operating loss (NOL) carryforwards, both federal and state, including the year of origination, the original amount, the amount utilized through FY2023, and the remaining balance as of the most recent tax year-end. We understand that the Company has utilized approximately $4,300,000 in federal NOLs through FY2023 and has remaining federal NOLs of approximately $1,100,000. Please confirm these figures and provide any analyses prepared by the Company or its tax advisors regarding applicable limitations on the utilization of such NOLs, including, without limitation, analyses of any prior ownership changes that may have triggered limitations under Section 382 of the Internal Revenue Code and any corresponding state NOL limitation analyses.

4.6 An analysis of any tax credit carryforwards available to the Company, including, without limitation, research and development (R&D) tax credits under Section 41 of the Internal Revenue Code, any state-level R&D credits, and any other tax credits, together with the year of origination, the amount generated, the amount utilized, and the remaining balance.

4.7 Copies of any tax sharing agreements, tax allocation agreements, tax indemnification agreements, or similar agreements between the Company and any other party, including any agreements with stockholders or their affiliates.

4.8 Copies of the Company's sales and use tax returns filed during the last three fiscal years for all applicable jurisdictions, together with a description of any pending or threatened sales or use tax audits, assessments, or disputes. Please also provide a description of the Company's sales tax nexus analysis and collection practices.

4.9 Copies of property tax assessments and payment records for all owned and leased properties for the last three fiscal years, including any property tax appeals, challenges, or reassessments.

4.10 Documentation of any elections previously made by the Company under Section 338 (including Section 338(g) and Section 338(h)(10)) of the Internal Revenue Code or any similar state or local tax elections, including copies of the election forms and any related analyses.

4.11 Copies of all state income tax and franchise tax returns filed by the Company in the Commonwealth of Pennsylvania, the State of New Jersey, and any other state or local jurisdiction in which the Company files or is required to file income or franchise tax returns, for the last five fiscal years (FY2019 through FY2023). Please confirm the Company's state NOL carryforward positions in Pennsylvania and New Jersey and provide any apportionment factor calculations used in determining state taxable income.

4.12 Any transfer pricing documentation, intercompany pricing studies, or cost-sharing agreements relevant to any cross-border arrangements in which the Company is a party. If the Company does not have any cross-border intercompany transactions, please so confirm.

4.13 Copies of payroll tax compliance records, including Forms 941 (Employer's Quarterly Federal Tax Return) for the last four quarters, W-2 forms and 1099 forms issued for the most recent calendar year, and documentation of any payroll tax audits or assessments.

CATEGORY 5: INTELLECTUAL PROPERTY

5.1 A comprehensive schedule of all issued and pending patents (both U.S. and foreign), including the following information for each patent or application: patent number (or application number, if pending); title of the invention; filing date; issue date (if issued); expiration date; the named inventors; the current assignee and chain of title; the prosecution status (for pending applications); and any maintenance fee status or annuity payment obligations. We understand the Company's patent portfolio includes the following:

(a) Fourteen (14) issued U.S. utility patents;

(b) Three (3) pending U.S. patent applications; and

Please confirm these figures and provide the detailed schedule described above. We specifically request complete documentation regarding U.S. Patent No. 11,432,887, titled "Robotic-Assisted Arthroscopic Navigation System and Method," issued August 2022, which we understand to be a key patent underlying the Company's ArthroNav platform.

5.2 A comprehensive schedule of all registered and pending trademarks and service marks (both U.S. and foreign), including, for each mark: the registration number (or application serial number, if pending); the mark (word mark or design); the registration date; the classes of goods and/or services covered; the filing basis; any renewal dates and maintenance filing deadlines; and the current status. We understand the Company holds U.S. trademark registrations for at least the following marks: "Meridian Surgical," "ArthroNav," and "PrecisionBlade." Please confirm and provide the complete schedule.

5.3 A schedule of all registered and pending copyrights (U.S. and foreign), including registration numbers, dates of registration, and descriptions of the copyrighted works. If the Company has not registered any copyrights, please so confirm and describe any significant copyrightable works created by or for the Company (e.g., software, technical documentation, marketing materials).

5.4 A schedule of all domain names owned or controlled by the Company, including the registrar, registration date, and expiration date for each domain. Please also provide a list of all social media accounts maintained by the Company (e.g., Westmark Health IT, Westvale Solutions, Northpoint Services Inc., Crowne Albany Partners LLC, Kestrel Services Inc.), including account handles and the identity of any individuals with administrative access.

5.5 A description of all material trade secrets, proprietary know-how, and confidential technical information owned or controlled by the Company, together with a description of the measures taken by the Company to maintain and protect the confidentiality and trade secret status of such information (e.g., restricted access controls, confidentiality agreements, employee training programs, physical and electronic security measures). We specifically request a description of the proprietary algorithms developed by the Company for real-time cartilage thickness mapping, which we understand to be core technology for the ArthroNav platform Generation 2.0 upgrade. Please describe the nature of the algorithms, the development status, the individuals involved in development, and the protective measures in place.

5.6 All patent prosecution files and correspondence with the United States Patent and Trademark Office (USPTO) and the European Patent Office (EPO), or any other foreign patent offices, including office actions, responses, interview summaries, examiner amendments, Information Disclosure Statements (IDS), and any inter partes review (IPR) or post-grant review (PGR) proceedings. Given the volume of these files, we would request that the Company prioritize production of the prosecution histories for the three (3) pending U.S. applications and for U.S. Patent No. 11,432,887.

5.7 Copies of all intellectual property license agreements under which the Company is a licensee, including all amendments, supplements, and side letters thereto. We specifically request a complete copy of the license agreement between the Company and Polytechnic Innovations, Ltd. (a United Kingdom-based entity) pursuant to which the Company has licensed certain background intellectual property in the field of robotic surgical navigation. We understand the material terms of this license to include a royalty of 2.5% of net sales of ArthroNav products and a term that is co-extensive with the life of the licensed patents. Please confirm these terms and provide the complete agreement.

5.8 Copies of all intellectual property license agreements under which the Company is a licensor or has granted any rights (exclusive or non-exclusive) to third parties to use the Company's intellectual property, including all amendments, supplements, and side letters thereto.

5.9 Copies of all intellectual property assignment agreements, including employee invention assignment agreements, contractor work-for-hire and IP assignment agreements, and any agreements pursuant to which the Company acquired intellectual property from third parties. Please also provide copies of the Company's standard form of employee proprietary information and inventions assignment agreement.

5.10 Records and documentation relating to any intellectual property disputes, opposition proceedings, interference proceedings, inter partes review proceedings, post-grant review proceedings, re-examinations, or other challenges to or involving the Company's intellectual property rights. We specifically request all documentation relating to the pending patent infringement action brought by Hartwell Orthopedic Solutions, Inc. against the Company, as described in further detail in Category 12 (Litigation) below.

5.11 Copies of any freedom-to-operate (FTO) opinions, non-infringement opinions, invalidity opinions, or infringement analyses prepared by outside patent counsel or by the Company's in-house patent team with respect to the Company's products or products under development. We recognize that such opinions may be subject to attorney-client privilege or work product protection; please identify any such materials on a privilege log in accordance with the instructions set forth in the Introductory Instructions above.

5.12 Copies of any agreements relating to the joint development, joint ownership, or co-invention of intellectual property with any third party, including any university or research institution collaborations.

5.13 Copies of any intellectual property insurance policies (e.g., patent infringement defense insurance, patent enforcement insurance), including policy declarations pages, coverage limits, and premium information. If the Company does not maintain any IP-specific insurance, please so confirm.

CATEGORY 6: REGULATORY AND FDA MATTERS

6.1 A comprehensive schedule of all FDA marketing authorizations held by the Company for currently marketed products, including all 510(k) clearances, Premarket Approval (PMA) approvals, De Novo classifications, Humanitarian Device Exemptions (HDEs), and any other types of FDA marketing authorizations. For each marketing authorization, please provide: the 510(k) clearance number (or other authorization number); the product name and description; the date of submission; the date of clearance or approval; the cleared indications for use; the identified predicate device(s) (for 510(k) clearances); and any conditions or restrictions on clearance or approval. This schedule should cover all currently marketed product lines, including single-use arthroscopic blades (PrecisionBlade products) and powered shaver systems.

6.2 Complete copies of all 510(k) submissions and all FDA clearance letters for currently marketed products. For 510(k) submissions, please provide the Premarket Notification submission (including all attachments, exhibits, performance data, and labeling) and the corresponding FDA clearance letter.

6.3 All documentation related to the ArthroNav Robotic-Assisted Arthroscopy System (Generation 1.0) and its regulatory pathway, including, without limitation:

(a) The pre-submission (Q-Sub) meeting request submitted to the FDA and the official minutes or feedback from the FDA resulting from the Q-Sub meeting, which we understand was completed in March 2024;

(b) The predicate device analysis, including the identification and justification of the predicate device (we understand the identified predicate to be the Marlowe Asset Management Robotic Surgical Assist System, 510(k) clearance number K203847);

(c) All design control documentation, including the design history file (DHF), design inputs, design outputs, design verification and validation records, and design transfer documentation;

(d) The planned 510(k) submission timeline and any submission preparation documents (we understand the Company is targeting a 510(k) submission in Q2 2025);

(e) Any clinical data, bench testing data, or biocompatibility data generated in support of the regulatory submission; and

(f) Any correspondence with the FDA regarding the ArthroNav system, including any additional information requests, deficiency letters, or informal communications.

6.4 All documentation related to the ArthroNav Software Module for Real-Time Cartilage Mapping (Generation 2.0 upgrade) regulatory strategy, including any analysis of whether the software module constitutes a new device requiring a separate 510(k) clearance or De Novo classification, or whether it may be marketed as an accessory or modification to the Generation 1.0 system. Please provide any regulatory strategy memoranda, FDA guidance document analyses, and internal decision documents related to the Generation 2.0 regulatory pathway.

6.5 Copies of all FDA inspection reports for the last five years, including Establishment Inspection Reports (EIRs), Inspectional Observations on Form FDA 483, Warning Letters, untitled letters, and any other enforcement or compliance-related correspondence from the FDA. We understand that the FDA's most recent inspection of the Company's Exton manufacturing facility was conducted in September 2023 and resulted in no Form 483 observations being issued. Please confirm this understanding and provide the EIR and any related correspondence.

6.6 Records of any FDA recalls (including voluntary recalls), corrections, removals, or field safety corrective actions initiated by the Company or required by the FDA during the last five years. Please also provide copies of all Medical Device Reports (MDRs) filed by the Company with the FDA during the last five years pursuant to 21 C.F.R. Part 803, together with a summary schedule identifying the product involved, the event date, the report type (initial, supplemental, or follow-up), and the nature of the adverse event or malfunction.

6.7 Copies of all FDA establishment registration filings (Form FDA 2891) and medical device listing filings (Form FDA 2892) currently on file with the FDA for the Company's facilities and products.

6.8 An overview of the Company's Quality Management System (QMS) documentation, including: the quality manual; an index or table of contents for all standard operating procedures (SOPs); the corrective and preventive action (CAPA) log for the last two years; and a summary of the complaint handling process, including the number of complaints received and the disposition of complaints for the last two years.

6.9 A copy of the Company's ISO 13485:2016 certificate and the most recent surveillance audit reports. We understand the certificate was issued by Pinnacle Conformity Assessment Services, LLC, certificate number PCA-2022-04819, and is valid through April 2025. Please confirm these details and provide copies of the certificate and all surveillance audit reports issued since the most recent certification audit. Please also describe the Company's plans for recertification or transition to any updated version of the ISO 13485 standard.

6.10 Copies of any correspondence with notified bodies, the European Medicines Agency (EMA), competent authorities in EU member states, or any other foreign regulatory authorities regarding the Company's products, including any registration, listing, or marketing authorization filings in foreign jurisdictions.

6.11 All CE marking documentation for products marketed in the European Union, including the applicable conformity assessment route, Declarations of Conformity, Technical Documentation summaries, and any Medical Device Regulation (EU MDR 2017/745) transition documentation. If the Company does not currently market any products under a CE mark, please so confirm.

6.12 Copies of any consent decrees, corporate integrity agreements, deferred prosecution agreements, plea agreements, or similar enforcement agreements with the FDA, the Department of Justice, the Department of Health and Human Services (including the Office of Inspector General), or any other federal, state, or foreign regulatory authority. If no such agreements exist, please so confirm.

6.13 All biocompatibility testing data (including ISO 10993 testing) and clinical data (including clinical study reports, literature reviews, and clinical evaluation reports) supporting the Company's current FDA clearances and the ArthroNav platform regulatory submissions.

CATEGORY 7: MATERIAL CONTRACTS AND COMMERCIAL AGREEMENTS

7.1 A schedule of all material contracts to which the Company is a party or by which it is bound. For purposes of this request, "material contracts" shall generally include (without limitation) any contract involving: (a) annual obligations or revenues of $250,000 or more; (b) a term of more than one year that is not terminable by the Company without penalty on ninety (90) days' or less notice; (c) exclusivity or most-favored-nation provisions; (d) change-of-control provisions; (e) non-competition or non-solicitation restrictions applicable to the Company; or (f) any other provision that is otherwise material to the business, operations, financial condition, or prospects of the Company. The schedule should include the contract title, parties, date, term, key financial terms, and a brief description of the subject matter.

7.2 Copies of all supply agreements, procurement agreements, manufacturing agreements, and sourcing agreements, together with all amendments, supplements, and statements of work thereunder. Please specifically include the Exclusive Supply Agreement between the Company and Titanium Precision Components, Inc. relating to titanium instrument housings, which we understand has a five-year term expiring in March 2027 and includes a minimum annual purchase commitment of approximately $3,200,000. For all supply arrangements, please identify any sole-source or single-source supply arrangements and describe the Company's supplier diversification and contingency plans for critical components.

7.3 Copies of all distribution agreements, dealer agreements, sales representative agreements, agency agreements, and marketing agreements, together with all amendments, supplements, and side letters thereunder. Please specifically include the Distribution Agreement between the Company and OrthoLink Distribution, LLC relating to U.S. distribution of PrecisionBlade products, which we understand has a three-year term expiring in December 2025 and grants OrthoLink exclusive distribution rights for the eastern United States. Please also provide any commission or fee schedules, territory maps, and performance-based provisions applicable to each such agreement.

7.4 Copies of all customer contracts, master purchase agreements, purchase orders (to the extent material or reflecting recurring relationships), and master supply agreements with hospitals, ambulatory surgery centers, integrated delivery networks, and group purchasing organizations (GPOs) that represent material revenue to the Company or that contain non-standard terms or conditions.

7.5 Copies of all joint venture agreements, partnership agreements, collaboration agreements, co-development agreements, co-promotion agreements, or strategic alliance agreements to which the Company is a party.

7.6 A schedule identifying all contracts to which the Company is a party that contain change-of-control provisions, consent requirements, anti-assignment clauses, or termination rights that would be triggered by the consummation of the Transaction (i.e., the acquisition of 100% of the outstanding equity of the Company). For each such contract, please describe the specific provision, the triggering event, and the consequences (e.g., consent required, notice required, automatic termination, acceleration of obligations). We specifically request the Company to identify the applicable change-of-control provisions in:

(a) the Exclusive Supply Agreement with Titanium Precision Components, Inc. (we understand that the consent of TPC is required); and

(b) the Distribution Agreement with OrthoLink Distribution, LLC (we understand that notice to OrthoLink is required).

7.7 A representative sample of non-disclosure agreements and confidentiality agreements entered into by the Company with third parties (including potential business partners, customers, vendors, and acquisition counterparties), together with a schedule identifying all such agreements currently in force.

7.8 Copies of all contracts with any governmental entity or government-affiliated entity (including the U.S. Department of Defense, the Veterans Health Administration, and any state or local governmental agencies), together with documentation of compliance with applicable government contracting regulations (e.g., FAR, DFAR, Buy American Act).

7.9 Copies of all contracts, agreements, or arrangements between the Company and any of its officers, directors, stockholders, or their respective affiliates (other than employment agreements and equity award agreements, which are addressed in Categories 10 and 2, respectively).

7.10 Copies of all other contracts involving aggregate payments or obligations exceeding $500,000 over the contract term that are not otherwise captured by the preceding items in this Category 7.

7.11 A description of any material contracts that are currently in default (or as to which any event has occurred that, with the giving of notice or the passage of time or both, would constitute a default), or that are the subject of pending renegotiation, dispute, or threatened termination by any party.

CATEGORY 8: REAL PROPERTY AND FACILITIES

8.1 A schedule of all real property owned by the Company in fee simple, including the street address, a general description of the property and improvements, the approximate square footage, and the current use. If the Company does not own any real property, please so confirm.

8.2 Copies of all real property leases and subleases to which the Company is a party (whether as lessee, sublessee, lessor, or sublessor), including all amendments, renewal letters, extension agreements, rent commencement letters, and estoppel certificates. We specifically request the following:

(a) The lease for the Company's headquarters located at 780 Keystone Boulevard, Suite 200, King of Prussia, PA 19406, together with all amendments and ancillary documents; and

(b) The lease or deed (as applicable) for the Company's manufacturing facility located at 45 Forge Creek Road, Exton, PA 19341, together with all amendments, ancillary documents, and (if owned) evidence of title.

For each lease, please identify the landlord, the lease commencement and expiration dates, the current monthly base rent, any scheduled rent escalations, any renewal options or expansion options, any tenant improvement allowances, and any security deposits.

8.3 Copies of any amendments, side letters, modifications, or waivers relating to any real property lease or sublease that are not included with the lease documents provided in response to Item 8.2.

8.4 Copies of any notices of default (whether given or received) under any real property lease or sublease during the last five years, together with any related correspondence and documentation of cure or resolution.

8.5 For any real property owned by the Company in fee simple: copies of the owner's title insurance policy; the most recent title commitment or title search report; the most recent survey (ALTA/NSPS or otherwise); and copies of any recorded easements, restrictions, covenants, or encumbrances affecting the property.

8.6 Copies of all zoning certifications, zoning variance approvals, conditional use permits, building permits, certificates of occupancy, and fire and safety inspection reports for all Company facilities.

8.7 Copies of any Phase I Environmental Site Assessments (ESAs) and Phase II Environmental Site Assessments conducted for any Company facility. We specifically request the Phase I ESA for the Exton manufacturing facility at 45 Forge Creek Road, Exton, PA 19341, prepared by Greenfield Environmental Consulting, LLC. We understand this report may be dated June 15, 2024; if the report has been completed, please provide a copy. If it has not yet been completed, please provide the most recent available environmental assessment for the Exton facility.

8.8 Copies of any capital improvement plans, deferred maintenance schedules, and facility condition assessments for all Company facilities, together with a description of any significant repairs, improvements, or upgrades planned for the next twelve (12) months.

CATEGORY 9: ENVIRONMENTAL, HEALTH, AND SAFETY

9.1 A schedule of all environmental permits, licenses, registrations, and approvals held by the Company for all of its facilities, including air quality permits, water discharge permits (NPDES or state equivalent), hazardous waste generator permits (EPA ID numbers), and any other permits required under federal, state, or local environmental laws. Please provide copies of all such permits.

9.2 Copies of all environmental audits, assessments, site investigations, remediation reports, and closure reports for the Company's facilities conducted during the last ten (10) years. We specifically request all documentation related to the historical de minimis cutting fluid spill at the Exton manufacturing facility that we understand occurred in 2019, including any incident reports, spill notifications, investigation reports, remediation actions taken, and the closure letter issued by the Pennsylvania Department of Environmental Protection (DEP) dated November 2019 confirming resolution of the matter.

9.3 Copies of all correspondence between the Company and any federal, state, or local environmental agency (including the U.S. Environmental Protection Agency, the Pennsylvania Department of Environmental Protection, and any other applicable agencies) regarding environmental compliance, enforcement actions, investigations, or information requests.

9.4 Records of any environmental claims, lawsuits, administrative proceedings, notices of violation, notices of potential responsibility, or citizen suit notices received by the Company or involving any Company facility.

9.5 Copies of the Company's hazardous materials management plans, hazardous waste manifests (for the last three years), waste disposal vendor contracts, and records of hazardous waste generation, storage, transportation, and disposal.

9.6 Copies of OSHA Logs (Form 300 — Log of Work-Related Injuries and Illnesses, and Form 300A — Summary of Work-Related Injuries and Illnesses) for all Company facilities for the last five years. Please also provide records of any OSHA inspections, citations, or penalty assessments during such period.

9.7 Copies of any compliance audits, risk assessments, or third-party assessments related to occupational health and safety conducted at any Company facility during the last five years.

9.8 Documentation of any underground storage tanks (USTs) or aboveground storage tanks (ASTs) currently or previously located at any Company facility, including registration records, inspection reports, closure reports, and any contamination assessments.

9.9 Copies of any environmental indemnification agreements (e.g., from prior owners or landlords of facilities), pollution legal liability insurance policies, or other environmental insurance coverage maintained by the Company. If the Company does not maintain any environmental insurance, please so confirm.

CATEGORY 10: EMPLOYMENT AND LABOR MATTERS

10.1 A complete list of all current employees of the Company (we understand the Company currently has approximately 312 employees), including the following information for each employee: full name; job title; department; date of hire; work location (e.g., King of Prussia headquarters, Exton manufacturing facility, or remote); classification as exempt or non-exempt under the Fair Labor Standards Act and applicable state law; annual base compensation (salary or hourly rate); target bonus amount or bonus eligibility; and any other material compensation elements. This list may be provided in spreadsheet format.

10.2 Copies of all employment agreements, executive offer letters, employment letters, change-in-control agreements, retention agreements, and separation or severance agreements for all current and former officers, directors, and key employees of the Company, together with all amendments and supplements thereto. We specifically request agreements for the following individuals:

(a) Dr. Marcus Ellsworth — Chief Executive Officer;

(b) Catherine Pryor — President and Chief Operating Officer;

(d) Dr. Raj Subramanian — Chief Technology Officer; and

(e) Linda Fontaine — Vice President, Quality and Regulatory Compliance.

10.3 Copies of all non-competition agreements, non-solicitation agreements, confidentiality agreements, and other restrictive covenant agreements entered into by the Company with current and former employees, officers, consultants, and independent contractors. If the Company uses a standard form of restrictive covenant agreement, please provide the current standard form and identify any material deviations for specific individuals.

10.4 Copies of all consulting agreements and independent contractor agreements currently in effect, together with a schedule identifying each consultant or independent contractor, the services provided, the compensation arrangement, and the term of engagement.

10.5 A copy of the Company's current employee handbook, together with all written personnel policies and procedures currently in effect (including, without limitation, policies regarding equal employment opportunity, anti-harassment, anti-discrimination, whistleblower protections, code of conduct, remote work, drug and alcohol use, social media use, data privacy, and disciplinary procedures). Please also provide any acknowledgment forms signed by employees confirming receipt of the handbook.

10.6 Copies of all collective bargaining agreements and related correspondence, side letters, or memoranda of understanding with any labor union or employee representative organization. If the Company's employees are not represented by any labor union and the Company is not party to any collective bargaining agreement, please so confirm. Please also confirm whether the Company has received any union organizing petitions or requests for voluntary recognition during the last five years.

10.7 Records of any unfair labor practice charges (filed with the NLRB or any state labor relations board), charges of discrimination (filed with the EEOC or any state or local fair employment practices agency), wage and hour claims, whistleblower claims, wrongful termination claims, or any other employment-related litigation, arbitration, or administrative proceedings involving the Company, its officers, or its directors during the last five years.

10.8 Documentation of worker classification determinations (employee vs. independent contractor) for any significant contractor relationships, including any IRS Form SS-8 filings, state agency classification rulings, or internal analyses.

10.9 A schedule of all current employees who are foreign nationals working under employment-based visas (e.g., H-1B, L-1, TN, O-1) or who hold permanent resident status obtained through employer sponsorship, together with copies of applicable visa petitions, approval notices, and any pending immigration applications. Please also confirm that the Company maintains current I-9 forms for all employees and describe any I-9 audits or compliance reviews conducted during the last three years.

10.10 A current organizational chart showing all departments, reporting relationships, and the names and titles of all managers and above.

CATEGORY 11: EMPLOYEE BENEFITS

11.1 Copies of all employee benefit plan documents currently maintained or contributed to by the Company, including health insurance plans, dental insurance plans, vision insurance plans, group life insurance plans, short-term and long-term disability insurance plans, flexible spending account (FSA) plans, health savings account (HSA) plans, and any other welfare benefit plans. For each plan, please provide the plan document (or insurance policy), the most current summary plan description (SPD), and any amendments or modifications adopted since the last SPD was distributed.

11.2 Complete documentation for all retirement plans maintained by the Company, including the Meridian Surgical Technologies, Inc. 401(k) Plan. Please provide:

(a) The plan document and any adoption agreement;

(b) The most current summary plan description (SPD) and any summaries of material modifications (SMMs);

(d) The most recent three years of Form 5500 annual return/report filings, including all schedules and attachments;

(e) The most recent IRS determination letter or opinion/advisory letter;

(f) The most recent plan audit report, if applicable (i.e., if the plan has 100 or more participants); and

(g) The identity and contact information for the plan's third-party administrator, which we understand to be Cornerstone Retirement Plan Services, Inc., 500 Office Center Drive, Suite 200, Fort Washington, PA 19034, as well as the identity of the plan trustee, recordkeeper, and investment advisor.

11.3 Confirmation that the Company does not maintain, contribute to, or have any obligation under any defined benefit pension plan, post-retirement health benefit plan, retiree life insurance plan, or any other plan or arrangement providing post-employment or post-retirement benefits (other than COBRA continuation coverage). If any such plan or obligation exists, please provide complete documentation thereof.

11.4 Copies of all bonus plans, incentive compensation plans, commission plans, sales incentive plans, profit-sharing plans, and other variable pay arrangements, including plan documents, written plan descriptions, and schedules of awards or payouts made for the last three fiscal years.

11.5 Copies of all deferred compensation plans or arrangements maintained by the Company, including any nonqualified deferred compensation plans, supplemental executive retirement plans (SERPs), or split-dollar life insurance arrangements. Please also provide documentation of the Company's compliance with Section 409A of the Internal Revenue Code with respect to all deferred compensation arrangements, including any Section 409A compliance review memoranda or correction filings.

11.6 Documentation of the Company's compliance with COBRA continuation coverage requirements, HIPAA portability an

CONFIDENTIAL — SUBJECT TO NON-DISCLOSURE AGREEMENT
PRELIMINARY DUE DILIGENCE REQUEST LIST
In Connection with the Proposed Acquisition of Meridian Surgical Technologies, Inc. by Solstice Biomedical Devices Ltd.
Prepared by:
Calderwood & Harkness LLP 590 Lexington Avenue, 35th Floor New York, NY 10022
Tiffany Rosenthal — Lead Associate, Mergers & Acquisitions Andrew Fitzpatrick — Working Associate, Mergers & Acquisitions
Matter Number: 1037-00006
May 13, 2024
Addressed to:
Meridian Surgical Technologies, Inc. 780 Keystone Boulevard, Suite 200 King of Prussia, PA 19406
Attention: Dr. Marcus Ellsworth, Chief Executive Officer
David Hensley, Chief Financial Officer
cc:
Whitmore Crane & Pfeiffer LLP One Liberty Place 1650 Market Street, Suite 3600 Philadelphia, PA 19103
Attention: Jonathan Whitmore, Esq.
Ryan Dowd, Esq.
CONFIDENTIAL — SUBJECT TO NON-DISCLOSURE AGREEMENT DATED APRIL 22, 2024
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INTRODUCTORY INSTRUCTIONS AND GENERAL NOTES
This Preliminary Due Diligence Request List (this "Request List") is being delivered on behalf of Solstice Biomedical Devices Ltd. ("Solstice" or "SBD") and its wholly owned subsidiary Solstice Biomedical, Inc. ("SBI," and together with Solstice, the "Buyer") in connection with the proposed acquisition by the Buyer of one hundred percent (100%) of the outstanding common stock and vested options of Meridian Surgical Technologies, Inc. ("Meridian" or the "Company") (the "Transaction"). This Request List has been prepared by Calderwood & Harkness LLP ("C&H"), legal counsel to the Buyer, to facilitate the Buyer's legal, financial, commercial, and regulatory due diligence investigation of the Company.
Virtual Data Room. The Company is requested to upload all responsive documents and materials to the virtual data room (the "Data Room") that has been established for this Transaction on the Crestline Solutions platform. Access credentials and user permissions have been coordinated separately between the parties' respective counsel. The Company is asked to organize the Data Room index so that it mirrors, to the greatest extent practicable, the category and item numbering set forth in this Request List. For example, documents responsive to Item 3.8 should be placed in a folder labeled "3 — Financial Information / 3.8 — Schedule of Indebtedness." This organization will materially facilitate the diligence review process and reduce the need for follow-up requests.
Preliminary Nature of This Request List. This Request List is preliminary in nature. As the Buyer's diligence investigation progresses and as additional information becomes available, supplemental requests may be issued from time to time. The Company should not interpret the absence of a specific request as an indication that the Buyer does not require such information; rather, the Buyer reserves the right to request additional categories of documents and information as it deems necessary or appropriate.
Privileged and Confidential Materials. To the extent that any responsive documents or categories of documents are subject to attorney-client privilege, attorney work-product protection, or other confidentiality restrictions that the Company believes limit or prohibit disclosure, the Company is requested to identify such documents by category and provide a general description of the nature and subject matter of the withheld materials, together with the basis for the claimed privilege or restriction. The parties will work together in good faith to determine whether such materials can be produced pursuant to appropriate protections, including a common-interest or joint-defense arrangement, if applicable.
"Not Applicable" Responses. If any category or sub-item in this Request List is not applicable to the Company or its business, the Company is requested to affirmatively note "N/A" in the corresponding Data Room folder or in a master response index, rather than leaving the folder or entry blank. Affirmative confirmation that a category is not applicable is important to ensure completeness of the diligence record and to avoid unnecessary follow-up inquiries.
Time Period. Unless otherwise specified with respect to a particular item, the Company is requested to provide responsive documents and information covering the last five (5) completed fiscal years of the Company (i.e., fiscal year 2019 through fiscal year 2023) and the year-to-date period in fiscal year 2024 (through the most recent date for which information is available). Where a particular item specifies a different time period, the specified period shall control.
Contacts. All questions regarding this Request List, including questions regarding the scope or interpretation of any particular item, should be directed to the following individuals at Calderwood & Harkness LLP:
Tiffany Rosenthal, Lead Associate, Mergers & Acquisitions Telephone: (212) 555-4710
Email: trosenthal@calderwoodharkness.com
Andrew Fitzpatrick, Working Associate, Mergers & Acquisitions Telephone: (212) 555-4722
Email: afitzpatrick@calderwoodharkness.com
We appreciate the Company's prompt attention to this Request List and look forward to working cooperatively with the Company and its counsel to facilitate an efficient and thorough diligence process.
CATEGORY 1: CORPORATE ORGANIZATION AND GOVERNANCE
1.1 Certificate of Incorporation (including all certificates of amendment, certificates of correction, and any restated certificates of incorporation) of Meridian Surgical Technologies, Inc., as filed with the Secretary of State of the State of Delaware. The Company's Delaware File Number is 5819734. Please include the original Certificate of Incorporation and each subsequent amendment or restatement filed through the date hereof.
1.2 Current Bylaws of the Company, as amended and/or restated through the date hereof, including all amendments, supplements, and modifications thereto. If the Bylaws have been amended and restated, please provide both the current restated version and any separate amendment documents adopted since the last restatement.
1.3 Certificates of good standing or certificates of existence (or their equivalent) from the Secretary of State of the State of Delaware (the Company's state of incorporation) and from the Secretary of the Commonwealth of Pennsylvania and each other state or jurisdiction in which the Company is qualified, registered, or authorized to transact business as a foreign corporation, in each case dated no more than thirty (30) days prior to the date hereof.
1.4 A complete list of all jurisdictions (including U.S. states, territories, and foreign countries) in which the Company is qualified, registered, or authorized to do business as a foreign corporation, together with copies of all certificates of authority or similar filings evidencing such qualifications. Please also identify any jurisdictions in which the Company previously held a foreign qualification that has been withdrawn or allowed to lapse.
1.5 Complete and accurate copies of the minutes of all meetings of the Board of Directors of the Company and all committees of the Board of Directors (including, without limitation, any audit committee, compensation committee, nominating and governance committee, or special committee) for the last five (5) fiscal years (FY2019 through FY2023) and year-to-date FY2024, together with copies of all written consents of the Board of Directors or any committee thereof executed in lieu of meetings during such period.
1.6 Complete and accurate copies of the minutes of all meetings of the stockholders of the Company for the last five (5) fiscal years (FY2019 through FY2023) and year-to-date FY2024, together with copies of all written consents of the stockholders executed in lieu of meetings during such period. Please include copies of all notices, waivers of notice, and proxy materials distributed in connection with any such meetings.
1.7 A current list of all directors and officers of the Company, including the following information for each individual: full legal name, title and position(s) held, date of initial appointment or election, term of service (including expiration date, if applicable), and committee assignments. For the avoidance of doubt, we understand the current Board of Directors to be composed of the following individuals:
(a) Dr. Marcus Ellsworth — Chairman of the Board and Chief Executive Officer;
(b) Catherine Pryor — Director, President and Chief Operating Officer;
(c) Gregory Ashford — Director (designee of Pennfield Growth Partners, LP);
(d) Diana Whitfield — Director (designee of Pennfield Growth Partners, LP); and
(e) Dr. Eleanor Vickers — Independent Director.
Please confirm this composition and identify any changes that have occurred or are anticipated. In addition, please identify any board observer rights or arrangements currently in effect, including, without limitation, any observer rights held by Samuel Nakamura in connection with the investment by Arch Hill Ventures Fund II, LLC, and provide copies of any agreements or letters establishing such observer rights.
1.8 A comprehensive organizational chart showing the Company and all of its subsidiaries (if any), divisions, branches, and affiliated entities, together with an indication of the ownership percentage and jurisdiction of organization for each entity. If the Company has no subsidiaries or affiliated entities, please so confirm.
1.9 Copies of any and all stockholders' agreements, investors' rights agreements, registration rights agreements, voting agreements, rights of first refusal and co-sale agreements, management rights letters, information rights letters, or similar governance, voting, or transfer restriction agreements among the stockholders of the Company and/or between the Company and any of its stockholders, together with all amendments, supplements, waivers, and side letters thereto.
1.10 Copies of any powers of attorney, agency agreements, or similar instruments of authorization currently in effect, pursuant to which any person has been authorized to act on behalf of the Company. If no such instruments are currently in effect, please so confirm.
1.11 Records of any name changes, mergers, consolidations, reorganizations, recapitalizations, statutory conversions, or similar corporate transactions involving the Company at any time during its existence, including copies of all certificates, agreements, plans of merger, and related filings.
CATEGORY 2: CAPITALIZATION AND EQUITY
2.1 A current capitalization table for the Company, showing all authorized, issued, and outstanding shares of capital stock, by class and series. We understand the Company's capital structure to be as follows: 10,000,000 shares of common stock authorized; 7,450,000 shares of common stock issued and outstanding; no shares of preferred stock authorized or outstanding. Please confirm these figures or provide any necessary corrections. The capitalization table should also reflect all outstanding stock options, warrants, convertible securities, and other rights to acquire equity securities of the Company, together with the number of shares reserved for issuance under the Company's equity incentive plans and the number of shares available for future grants.
2.2 A complete and accurate stock ledger and all transfer records for all outstanding shares of capital stock of the Company, from the date of incorporation through the present.
2.3 A list of all holders of outstanding shares of capital stock of the Company, including the number of shares held by each holder and the percentage of the total outstanding shares represented by each holder's shares. We understand the current ownership to be as follows:
Please confirm these figures or provide any necessary corrections. With respect to the "Other Management and Employees" category, please provide a detailed breakdown showing the name of each individual holder and the number of shares held by such individual.
2.4 Copies of all stock option plans, equity incentive plans, stock purchase plans, phantom equity plans, stock appreciation rights plans, profit interest plans, or similar equity-based or equity-linked compensation arrangements maintained by the Company, including, without limitation, the Meridian Surgical Technologies, Inc. 2019 Equity Incentive Plan (the "2019 Plan"). For each such plan, please provide the following: the plan document, as amended through the date hereof; copies of the board and stockholder resolutions approving the plan and any amendments thereto; a summary of the material terms of the plan (including total shares reserved, share counting provisions, vesting parameters, and acceleration provisions); and the current number of shares available for future grants.
2.5 A complete schedule of all outstanding stock options, warrants, convertible notes or other convertible securities, and any other rights to acquire equity securities of the Company, including, for each outstanding award or right, the following information: the name of the holder; the type of award; the date of grant or issuance; the number of shares subject to the award; the exercise price or conversion price (as applicable); the vesting commencement date; the vesting schedule (including any cliff vesting and acceleration provisions); the current vesting status (number of shares vested and unvested as of the date hereof); the expiration date; and any special terms or conditions. We understand that there are currently 550,000 shares of common stock subject to outstanding vested options under the 2019 Plan, with a weighted-average exercise price of $4.80 per share. Please confirm these figures and provide the detailed schedule requested above.
2.6 Copies of all individual stock option agreements, restricted stock purchase agreements, restricted stock unit agreements, and other individual equity award agreements entered into between the Company and any current or former employee, director, consultant, or other service provider, together with any amendments or modifications thereto. Please include any early exercise agreements, repurchase agreements, or Section 83(b) election filings associated with such awards.
2.7 Copies of all stock certificates (front and back) issued by the Company that are currently outstanding, or, if shares are held in uncertificated or book-entry form, evidence of such uncertificated holdings (e.g., DRS statements or book-entry confirmations from the Company's transfer agent). Please also describe the text of all legends appearing on any outstanding stock certificates or applicable to uncertificated shares, including any legends relating to transfer restrictions, securities law restrictions, or contractual lock-up or co-sale obligations.
2.8 Copies of any agreements, instruments, or provisions (whether in the Certificate of Incorporation, any stockholders' agreement, or otherwise) relating to preemptive rights, anti-dilution protections, weighted-average or full-ratchet adjustments, or rights of first refusal on equity issuances, together with any waivers of such rights previously granted.
2.9 Documentation of all prior issuances of equity securities by the Company, including, for each issuance: copies of the board and stockholder resolutions authorizing the issuance; copies of subscription agreements, stock purchase agreements, or other investment documents; a description of the consideration received; and documentation of compliance with applicable federal and state securities laws, including copies of any Form D filings, state blue sky filings, or other exemption filings made in connection with such issuances.
CATEGORY 3: FINANCIAL INFORMATION
3.1 Audited financial statements for fiscal years 2021, 2022, and 2023, including, for each fiscal year, the following: balance sheet (statement of financial position); income statement (statement of operations); statement of cash flows; statement of stockholders' equity (or statement of changes in equity); and all accompanying notes and schedules. Please also provide the independent auditor's report accompanying each set of audited financial statements. We understand that the Company's independent auditors are Dunfield & Associates, P.C. (Howard Dunfield, Managing Partner). Please confirm the identity of the independent auditors and indicate whether there have been any changes in auditors during the period covered by this request.
3.2 Unaudited interim financial statements (including balance sheet, income statement, and statement of cash flows) for all quarterly periods in fiscal year 2024 through the most recently completed quarter. If interim financial statements are prepared on a monthly basis, please also provide the monthly statements for FY2024 year-to-date.
3.3 Management-prepared monthly financial reports, internal financial packages, management dashboards, and operating metric reports for the last twenty-four (24) months (i.e., from approximately May 2022 through April 2024, or the most recent month-end available). These materials should include, to the extent regularly prepared, budget-to-actual variance analyses, key performance indicators, and management commentary on financial results.
3.4 Annual operating budgets and financial projections for fiscal year 2024 and fiscal year 2025, together with any long-range strategic plan, five-year financial model, or other forward-looking financial analyses prepared by or on behalf of the Company's management. Please identify the key assumptions underlying any projections provided.
3.5 A detailed listing and aging schedule of accounts receivable as of the most recent month-end, including the name of each debtor (or, for customers, a coded identifier if the Company prefers to provide a key separately), the invoice amount, the invoice date, the payment terms, and the number of days outstanding. Please also provide a schedule of any allowances for doubtful accounts or bad debt reserves, together with a description of the methodology used to calculate such reserves.
3.6 A detailed listing and aging schedule of accounts payable as of the most recent month-end, including the name of each creditor, the invoice amount, the invoice date, the payment terms, and the number of days outstanding.
3.7 A schedule of inventory by category (raw materials, work-in-process, and finished goods) as of the most recent month-end, including the valuation methodology applied (e.g., FIFO, weighted average cost) and a description of any inventory reserves, write-downs, or obsolescence provisions. Please also provide a description of the Company's inventory management practices, including cycle count procedures and any recent physical inventory counts.
3.8 A schedule of all indebtedness of the Company, including credit facilities, revolving lines of credit, term loans, promissory notes, notes payable, capital leases (or finance leases under ASC 842), letters of credit, guarantees, and other obligations for borrowed money. For each item of indebtedness, please provide: the lender or counterparty; the original principal amount; the current outstanding balance; the interest rate; the maturity date; the collateral or security, if any; and any financial covenants or other restrictive covenants. Specifically, please provide complete documentation relating to the Company's existing revolving credit facility with Ironclad Commercial Lending, LLC (we understand this to be a $12,000,000 facility), including:
(a) the credit agreement, as amended through the date hereof;
(b) all amendments, waivers, and consent letters;
(c) all security agreements, pledge agreements, guaranty agreements, and other collateral documents;
(d) a schedule of the current outstanding balance and available borrowing capacity;
(e) all compliance certificates delivered by the Company to the lender during the last twelve (12) months; and
(f) any correspondence with the lender regarding defaults, potential defaults, or covenant compliance issues.
3.9 A schedule of all capital expenditures made by the Company during fiscal years 2021, 2022, and 2023, together with the budgeted capital expenditures for fiscal years 2024 and 2025. The schedule should categorize capital expenditures by type (e.g., machinery and equipment, leasehold improvements, IT systems, tooling, and other), and identify any individual capital projects exceeding $100,000.
3.10 A summary of the Company's accounting policies, including the basis of accounting (GAAP), revenue recognition methodology (including the timing of revenue recognition for product sales and any service or licensing revenue), depreciation methods and useful lives, inventory valuation methodology, and any other significant accounting policies. Please describe any changes in accounting methods or policies adopted during the last three fiscal years, including any changes required by new accounting standards (e.g., ASC 606, ASC 842).
3.11 Copies of all management letters, internal control deficiency communications, and other written communications issued by the Company's independent auditors (Dunfield & Associates, P.C.) to the Company's management or Board of Directors during the last three fiscal years (FY2021 through FY2023). Please also provide copies of the Company's written responses to any such communications, if any.
3.12 A working capital analysis, including historical monthly calculations of Net Working Capital (as such term would customarily be defined in a stock purchase agreement — i.e., current assets minus current liabilities, subject to agreed inclusions and exclusions) for each of the last twelve (12) months. Please identify any seasonal patterns, unusual or non-recurring items, or other factors that may cause Net Working Capital to vary significantly from month to month. For reference, we understand that the target Net Working Capital figure being discussed in connection with the Transaction is approximately $11,500,000. Please provide any internal analyses prepared by the Company's management regarding the appropriate level of normalized working capital for the business.
3.13 A schedule of any off-balance-sheet liabilities, contingent liabilities, guarantees, indemnification obligations, or other contingent obligations of the Company that are not reflected on the Company's balance sheet, together with a description of the nature and estimated amount of each such item.
3.14 A revenue breakdown by product line and by geography for each of the last three fiscal years (FY2021, FY2022, and FY2023) and year-to-date FY2024. The product line breakdown should separately identify revenue from: (i) single-use arthroscopic blades (including PrecisionBlade products); (ii) powered shaver systems and accessories; and (iii) all other products and services. The geographic breakdown should separately identify revenue from: (i) the United States; (ii) Europe; and (iii) all other geographies. We understand that the Company's total revenue for FY2023 was approximately $87,000,000, and that FY2023 EBITDA was approximately $14,200,000. Please confirm these figures and provide a reconciliation of EBITDA to net income.
3.15 A description of all related-party transactions during the last five fiscal years, including any transactions between the Company and any of its officers, directors, stockholders (or their respective affiliates), or any entity in which any officer, director, or stockholder holds a material interest. For each such transaction, please describe the nature of the transaction, the parties involved, the dollar amount, and the terms and conditions.
CATEGORY 4: TAX MATTERS
4.1 Copies of the Company's federal income tax returns (Form 1120 or other applicable forms) and all state income and franchise tax returns for the last five fiscal years (FY2019 through FY2023), including all schedules, attachments, elections, and supporting workpapers. If any returns for the requested period have not yet been filed, please provide copies of any filed extensions and the most recent draft returns available.
4.2 A schedule of all federal, state, and local tax identification numbers maintained by the Company. The Company's federal Employer Identification Number (EIN) is 84-3192057. Please confirm and provide all state and local tax identification numbers.
4.3 Copies of all correspondence with the Internal Revenue Service (IRS) or any state or local tax authority during the last five years, including, without limitation: audit notices and examination letters; Information Document Requests (IDRs); Revenue Agent Reports (RARs); Notices of Proposed Adjustment; closing agreements; settlement agreements; private letter rulings; and technical advice memoranda. If no such correspondence has been received, please so confirm.
4.4 A schedule of all open, pending, or threatened tax audits, examinations, assessments, deficiency notices, or disputes with any federal, state, or local tax authority, together with a description of the issues involved and the current status. For each open tax year, please identify whether the applicable statute of limitations has been extended by agreement.
4.5 A schedule of all net operating loss (NOL) carryforwards, both federal and state, including the year of origination, the original amount, the amount utilized through FY2023, and the remaining balance as of the most recent tax year-end. We understand that the Company has utilized approximately $4,300,000 in federal NOLs through FY2023 and has remaining federal NOLs of approximately $1,100,000. Please confirm these figures and provide any analyses prepared by the Company or its tax advisors regarding applicable limitations on the utilization of such NOLs, including, without limitation, analyses of any prior ownership changes that may have triggered limitations under Section 382 of the Internal Revenue Code and any corresponding state NOL limitation analyses.
4.6 An analysis of any tax credit carryforwards available to the Company, including, without limitation, research and development (R&D) tax credits under Section 41 of the Internal Revenue Code, any state-level R&D credits, and any other tax credits, together with the year of origination, the amount generated, the amount utilized, and the remaining balance.
4.7 Copies of any tax sharing agreements, tax allocation agreements, tax indemnification agreements, or similar agreements between the Company and any other party, including any agreements with stockholders or their affiliates.
4.8 Copies of the Company's sales and use tax returns filed during the last three fiscal years for all applicable jurisdictions, together with a description of any pending or threatened sales or use tax audits, assessments, or disputes. Please also provide a description of the Company's sales tax nexus analysis and collection practices.
4.9 Copies of property tax assessments and payment records for all owned and leased properties for the last three fiscal years, including any property tax appeals, challenges, or reassessments.
4.10 Documentation of any elections previously made by the Company under Section 338 (including Section 338(g) and Section 338(h)(10)) of the Internal Revenue Code or any similar state or local tax elections, including copies of the election forms and any related analyses.
4.11 Copies of all state income tax and franchise tax returns filed by the Company in the Commonwealth of Pennsylvania, the State of New Jersey, and any other state or local jurisdiction in which the Company files or is required to file income or franchise tax returns, for the last five fiscal years (FY2019 through FY2023). Please confirm the Company's state NOL carryforward positions in Pennsylvania and New Jersey and provide any apportionment factor calculations used in determining state taxable income.
4.12 Any transfer pricing documentation, intercompany pricing studies, or cost-sharing agreements relevant to any cross-border arrangements in which the Company is a party. If the Company does not have any cross-border intercompany transactions, please so confirm.
4.13 Copies of payroll tax compliance records, including Forms 941 (Employer's Quarterly Federal Tax Return) for the last four quarters, W-2 forms and 1099 forms issued for the most recent calendar year, and documentation of any payroll tax audits or assessments.
CATEGORY 5: INTELLECTUAL PROPERTY
5.1 A comprehensive schedule of all issued and pending patents (both U.S. and foreign), including the following information for each patent or application: patent number (or application number, if pending); title of the invention; filing date; issue date (if issued); expiration date; the named inventors; the current assignee and chain of title; the prosecution status (for pending applications); and any maintenance fee status or annuity payment obligations. We understand the Company's patent portfolio includes the following:
(a) Fourteen (14) issued U.S. utility patents;
(b) Three (3) pending U.S. patent applications; and
(c) Six (6) issued European patents (granted via the European Patent Office).
Please confirm these figures and provide the detailed schedule described above. We specifically request complete documentation regarding U.S. Patent No. 11,432,887, titled "Robotic-Assisted Arthroscopic Navigation System and Method," issued August 2022, which we understand to be a key patent underlying the Company's ArthroNav platform.
5.2 A comprehensive schedule of all registered and pending trademarks and service marks (both U.S. and foreign), including, for each mark: the registration number (or application serial number, if pending); the mark (word mark or design); the registration date; the classes of goods and/or services covered; the filing basis; any renewal dates and maintenance filing deadlines; and the current status. We understand the Company holds U.S. trademark registrations for at least the following marks: "Meridian Surgical," "ArthroNav," and "PrecisionBlade." Please confirm and provide the complete schedule.
5.3 A schedule of all registered and pending copyrights (U.S. and foreign), including registration numbers, dates of registration, and descriptions of the copyrighted works. If the Company has not registered any copyrights, please so confirm and describe any significant copyrightable works created by or for the Company (e.g., software, technical documentation, marketing materials).
5.4 A schedule of all domain names owned or controlled by the Company, including the registrar, registration date, and expiration date for each domain. Please also provide a list of all social media accounts maintained by the Company (e.g., Westmark Health IT, Westvale Solutions, Northpoint Services Inc., Crowne Albany Partners LLC, Kestrel Services Inc.), including account handles and the identity of any individuals with administrative access.
5.5 A description of all material trade secrets, proprietary know-how, and confidential technical information owned or controlled by the Company, together with a description of the measures taken by the Company to maintain and protect the confidentiality and trade secret status of such information (e.g., restricted access controls, confidentiality agreements, employee training programs, physical and electronic security measures). We specifically request a description of the proprietary algorithms developed by the Company for real-time cartilage thickness mapping, which we understand to be core technology for the ArthroNav platform Generation 2.0 upgrade. Please describe the nature of the algorithms, the development status, the individuals involved in development, and the protective measures in place.
5.6 All patent prosecution files and correspondence with the United States Patent and Trademark Office (USPTO) and the European Patent Office (EPO), or any other foreign patent offices, including office actions, responses, interview summaries, examiner amendments, Information Disclosure Statements (IDS), and any inter partes review (IPR) or post-grant review (PGR) proceedings. Given the volume of these files, we would request that the Company prioritize production of the prosecution histories for the three (3) pending U.S. applications and for U.S. Patent No. 11,432,887.
5.7 Copies of all intellectual property license agreements under which the Company is a licensee, including all amendments, supplements, and side letters thereto. We specifically request a complete copy of the license agreement between the Company and Polytechnic Innovations, Ltd. (a United Kingdom-based entity) pursuant to which the Company has licensed certain background intellectual property in the field of robotic surgical navigation. We understand the material terms of this license to include a royalty of 2.5% of net sales of ArthroNav products and a term that is co-extensive with the life of the licensed patents. Please confirm these terms and provide the complete agreement.
5.8 Copies of all intellectual property license agreements under which the Company is a licensor or has granted any rights (exclusive or non-exclusive) to third parties to use the Company's intellectual property, including all amendments, supplements, and side letters thereto.
5.9 Copies of all intellectual property assignment agreements, including employee invention assignment agreements, contractor work-for-hire and IP assignment agreements, and any agreements pursuant to which the Company acquired intellectual property from third parties. Please also provide copies of the Company's standard form of employee proprietary information and inventions assignment agreement.
5.10 Records and documentation relating to any intellectual property disputes, opposition proceedings, interference proceedings, inter partes review proceedings, post-grant review proceedings, re-examinations, or other challenges to or involving the Company's intellectual property rights. We specifically request all documentation relating to the pending patent infringement action brought by Hartwell Orthopedic Solutions, Inc. against the Company, as described in further detail in Category 12 (Litigation) below.
5.11 Copies of any freedom-to-operate (FTO) opinions, non-infringement opinions, invalidity opinions, or infringement analyses prepared by outside patent counsel or by the Company's in-house patent team with respect to the Company's products or products under development. We recognize that such opinions may be subject to attorney-client privilege or work product protection; please identify any such materials on a privilege log in accordance with the instructions set forth in the Introductory Instructions above.
5.12 Copies of any agreements relating to the joint development, joint ownership, or co-invention of intellectual property with any third party, including any university or research institution collaborations.
5.13 Copies of any intellectual property insurance policies (e.g., patent infringement defense insurance, patent enforcement insurance), including policy declarations pages, coverage limits, and premium information. If the Company does not maintain any IP-specific insurance, please so confirm.
CATEGORY 6: REGULATORY AND FDA MATTERS
6.1 A comprehensive schedule of all FDA marketing authorizations held by the Company for currently marketed products, including all 510(k) clearances, Premarket Approval (PMA) approvals, De Novo classifications, Humanitarian Device Exemptions (HDEs), and any other types of FDA marketing authorizations. For each marketing authorization, please provide: the 510(k) clearance number (or other authorization number); the product name and description; the date of submission; the date of clearance or approval; the cleared indications for use; the identified predicate device(s) (for 510(k) clearances); and any conditions or restrictions on clearance or approval. This schedule should cover all currently marketed product lines, including single-use arthroscopic blades (PrecisionBlade products) and powered shaver systems.
6.2 Complete copies of all 510(k) submissions and all FDA clearance letters for currently marketed products. For 510(k) submissions, please provide the Premarket Notification submission (including all attachments, exhibits, performance data, and labeling) and the corresponding FDA clearance letter.
6.3 All documentation related to the ArthroNav Robotic-Assisted Arthroscopy System (Generation 1.0) and its regulatory pathway, including, without limitation:
(a) The pre-submission (Q-Sub) meeting request submitted to the FDA and the official minutes or feedback from the FDA resulting from the Q-Sub meeting, which we understand was completed in March 2024;
(b) The predicate device analysis, including the identification and justification of the predicate device (we understand the identified predicate to be the Marlowe Asset Management Robotic Surgical Assist System, 510(k) clearance number K203847);
(c) All design control documentation, including the design history file (DHF), design inputs, design outputs, design verification and validation records, and design transfer documentation;
(d) The planned 510(k) submission timeline and any submission preparation documents (we understand the Company is targeting a 510(k) submission in Q2 2025);
(e) Any clinical data, bench testing data, or biocompatibility data generated in support of the regulatory submission; and
(f) Any correspondence with the FDA regarding the ArthroNav system, including any additional information requests, deficiency letters, or informal communications.
6.4 All documentation related to the ArthroNav Software Module for Real-Time Cartilage Mapping (Generation 2.0 upgrade) regulatory strategy, including any analysis of whether the software module constitutes a new device requiring a separate 510(k) clearance or De Novo classification, or whether it may be marketed as an accessory or modification to the Generation 1.0 system. Please provide any regulatory strategy memoranda, FDA guidance document analyses, and internal decision documents related to the Generation 2.0 regulatory pathway.
6.5 Copies of all FDA inspection reports for the last five years, including Establishment Inspection Reports (EIRs), Inspectional Observations on Form FDA 483, Warning Letters, untitled letters, and any other enforcement or compliance-related correspondence from the FDA. We understand that the FDA's most recent inspection of the Company's Exton manufacturing facility was conducted in September 2023 and resulted in no Form 483 observations being issued. Please confirm this understanding and provide the EIR and any related correspondence.
6.6 Records of any FDA recalls (including voluntary recalls), corrections, removals, or field safety corrective actions initiated by the Company or required by the FDA during the last five years. Please also provide copies of all Medical Device Reports (MDRs) filed by the Company with the FDA during the last five years pursuant to 21 C.F.R. Part 803, together with a summary schedule identifying the product involved, the event date, the report type (initial, supplemental, or follow-up), and the nature of the adverse event or malfunction.
6.7 Copies of all FDA establishment registration filings (Form FDA 2891) and medical device listing filings (Form FDA 2892) currently on file with the FDA for the Company's facilities and products.
6.8 An overview of the Company's Quality Management System (QMS) documentation, including: the quality manual; an index or table of contents for all standard operating procedures (SOPs); the corrective and preventive action (CAPA) log for the last two years; and a summary of the complaint handling process, including the number of complaints received and the disposition of complaints for the last two years.
6.9 A copy of the Company's ISO 13485:2016 certificate and the most recent surveillance audit reports. We understand the certificate was issued by Pinnacle Conformity Assessment Services, LLC, certificate number PCA-2022-04819, and is valid through April 2025. Please confirm these details and provide copies of the certificate and all surveillance audit reports issued since the most recent certification audit. Please also describe the Company's plans for recertification or transition to any updated version of the ISO 13485 standard.
6.10 Copies of any correspondence with notified bodies, the European Medicines Agency (EMA), competent authorities in EU member states, or any other foreign regulatory authorities regarding the Company's products, including any registration, listing, or marketing authorization filings in foreign jurisdictions.
6.11 All CE marking documentation for products marketed in the European Union, including the applicable conformity assessment route, Declarations of Conformity, Technical Documentation summaries, and any Medical Device Regulation (EU MDR 2017/745) transition documentation. If the Company does not currently market any products under a CE mark, please so confirm.
6.12 Copies of any consent decrees, corporate integrity agreements, deferred prosecution agreements, plea agreements, or similar enforcement agreements with the FDA, the Department of Justice, the Department of Health and Human Services (including the Office of Inspector General), or any other federal, state, or foreign regulatory authority. If no such agreements exist, please so confirm.
6.13 All biocompatibility testing data (including ISO 10993 testing) and clinical data (including clinical study reports, literature reviews, and clinical evaluation reports) supporting the Company's current FDA clearances and the ArthroNav platform regulatory submissions.
CATEGORY 7: MATERIAL CONTRACTS AND COMMERCIAL AGREEMENTS
7.1 A schedule of all material contracts to which the Company is a party or by which it is bound. For purposes of this request, "material contracts" shall generally include (without limitation) any contract involving: (a) annual obligations or revenues of $250,000 or more; (b) a term of more than one year that is not terminable by the Company without penalty on ninety (90) days' or less notice; (c) exclusivity or most-favored-nation provisions; (d) change-of-control provisions; (e) non-competition or non-solicitation restrictions applicable to the Company; or (f) any other provision that is otherwise material to the business, operations, financial condition, or prospects of the Company. The schedule should include the contract title, parties, date, term, key financial terms, and a brief description of the subject matter.
7.2 Copies of all supply agreements, procurement agreements, manufacturing agreements, and sourcing agreements, together with all amendments, supplements, and statements of work thereunder. Please specifically include the Exclusive Supply Agreement between the Company and Titanium Precision Components, Inc. relating to titanium instrument housings, which we understand has a five-year term expiring in March 2027 and includes a minimum annual purchase commitment of approximately $3,200,000. For all supply arrangements, please identify any sole-source or single-source supply arrangements and describe the Company's supplier diversification and contingency plans for critical components.
7.3 Copies of all distribution agreements, dealer agreements, sales representative agreements, agency agreements, and marketing agreements, together with all amendments, supplements, and side letters thereunder. Please specifically include the Distribution Agreement between the Company and OrthoLink Distribution, LLC relating to U.S. distribution of PrecisionBlade products, which we understand has a three-year term expiring in December 2025 and grants OrthoLink exclusive distribution rights for the eastern United States. Please also provide any commission or fee schedules, territory maps, and performance-based provisions applicable to each such agreement.
7.4 Copies of all customer contracts, master purchase agreements, purchase orders (to the extent material or reflecting recurring relationships), and master supply agreements with hospitals, ambulatory surgery centers, integrated delivery networks, and group purchasing organizations (GPOs) that represent material revenue to the Company or that contain non-standard terms or conditions.
7.5 Copies of all joint venture agreements, partnership agreements, collaboration agreements, co-development agreements, co-promotion agreements, or strategic alliance agreements to which the Company is a party.
7.6 A schedule identifying all contracts to which the Company is a party that contain change-of-control provisions, consent requirements, anti-assignment clauses, or termination rights that would be triggered by the consummation of the Transaction (i.e., the acquisition of 100% of the outstanding equity of the Company). For each such contract, please describe the specific provision, the triggering event, and the consequences (e.g., consent required, notice required, automatic termination, acceleration of obligations). We specifically request the Company to identify the applicable change-of-control provisions in:
(a) the Exclusive Supply Agreement with Titanium Precision Components, Inc. (we understand that the consent of TPC is required); and
(b) the Distribution Agreement with OrthoLink Distribution, LLC (we understand that notice to OrthoLink is required).
7.7 A representative sample of non-disclosure agreements and confidentiality agreements entered into by the Company with third parties (including potential business partners, customers, vendors, and acquisition counterparties), together with a schedule identifying all such agreements currently in force.
7.8 Copies of all contracts with any governmental entity or government-affiliated entity (including the U.S. Department of Defense, the Veterans Health Administration, and any state or local governmental agencies), together with documentation of compliance with applicable government contracting regulations (e.g., FAR, DFAR, Buy American Act).
7.9 Copies of all contracts, agreements, or arrangements between the Company and any of its officers, directors, stockholders, or their respective affiliates (other than employment agreements and equity award agreements, which are addressed in Categories 10 and 2, respectively).
7.10 Copies of all other contracts involving aggregate payments or obligations exceeding $500,000 over the contract term that are not otherwise captured by the preceding items in this Category 7.
7.11 A description of any material contracts that are currently in default (or as to which any event has occurred that, with the giving of notice or the passage of time or both, would constitute a default), or that are the subject of pending renegotiation, dispute, or threatened termination by any party.
CATEGORY 8: REAL PROPERTY AND FACILITIES
8.1 A schedule of all real property owned by the Company in fee simple, including the street address, a general description of the property and improvements, the approximate square footage, and the current use. If the Company does not own any real property, please so confirm.
8.2 Copies of all real property leases and subleases to which the Company is a party (whether as lessee, sublessee, lessor, or sublessor), including all amendments, renewal letters, extension agreements, rent commencement letters, and estoppel certificates. We specifically request the following:
(a) The lease for the Company's headquarters located at 780 Keystone Boulevard, Suite 200, King of Prussia, PA 19406, together with all amendments and ancillary documents; and
(b) The lease or deed (as applicable) for the Company's manufacturing facility located at 45 Forge Creek Road, Exton, PA 19341, together with all amendments, ancillary documents, and (if owned) evidence of title.
For each lease, please identify the landlord, the lease commencement and expiration dates, the current monthly base rent, any scheduled rent escalations, any renewal options or expansion options, any tenant improvement allowances, and any security deposits.
8.3 Copies of any amendments, side letters, modifications, or waivers relating to any real property lease or sublease that are not included with the lease documents provided in response to Item 8.2.
8.4 Copies of any notices of default (whether given or received) under any real property lease or sublease during the last five years, together with any related correspondence and documentation of cure or resolution.
8.5 For any real property owned by the Company in fee simple: copies of the owner's title insurance policy; the most recent title commitment or title search report; the most recent survey (ALTA/NSPS or otherwise); and copies of any recorded easements, restrictions, covenants, or encumbrances affecting the property.
8.6 Copies of all zoning certifications, zoning variance approvals, conditional use permits, building permits, certificates of occupancy, and fire and safety inspection reports for all Company facilities.
8.7 Copies of any Phase I Environmental Site Assessments (ESAs) and Phase II Environmental Site Assessments conducted for any Company facility. We specifically request the Phase I ESA for the Exton manufacturing facility at 45 Forge Creek Road, Exton, PA 19341, prepared by Greenfield Environmental Consulting, LLC. We understand this report may be dated June 15, 2024; if the report has been completed, please provide a copy. If it has not yet been completed, please provide the most recent available environmental assessment for the Exton facility.
8.8 Copies of any capital improvement plans, deferred maintenance schedules, and facility condition assessments for all Company facilities, together with a description of any significant repairs, improvements, or upgrades planned for the next twelve (12) months.
CATEGORY 9: ENVIRONMENTAL, HEALTH, AND SAFETY
9.1 A schedule of all environmental permits, licenses, registrations, and approvals held by the Company for all of its facilities, including air quality permits, water discharge permits (NPDES or state equivalent), hazardous waste generator permits (EPA ID numbers), and any other permits required under federal, state, or local environmental laws. Please provide copies of all such permits.
9.2 Copies of all environmental audits, assessments, site investigations, remediation reports, and closure reports for the Company's facilities conducted during the last ten (10) years. We specifically request all documentation related to the historical de minimis cutting fluid spill at the Exton manufacturing facility that we understand occurred in 2019, including any incident reports, spill notifications, investigation reports, remediation actions taken, and the closure letter issued by the Pennsylvania Department of Environmental Protection (DEP) dated November 2019 confirming resolution of the matter.
9.3 Copies of all correspondence between the Company and any federal, state, or local environmental agency (including the U.S. Environmental Protection Agency, the Pennsylvania Department of Environmental Protection, and any other applicable agencies) regarding environmental compliance, enforcement actions, investigations, or information requests.
9.4 Records of any environmental claims, lawsuits, administrative proceedings, notices of violation, notices of potential responsibility, or citizen suit notices received by the Company or involving any Company facility.
9.5 Copies of the Company's hazardous materials management plans, hazardous waste manifests (for the last three years), waste disposal vendor contracts, and records of hazardous waste generation, storage, transportation, and disposal.
9.6 Copies of OSHA Logs (Form 300 — Log of Work-Related Injuries and Illnesses, and Form 300A — Summary of Work-Related Injuries and Illnesses) for all Company facilities for the last five years. Please also provide records of any OSHA inspections, citations, or penalty assessments during such period.
9.7 Copies of any compliance audits, risk assessments, or third-party assessments related to occupational health and safety conducted at any Company facility during the last five years.
9.8 Documentation of any underground storage tanks (USTs) or aboveground storage tanks (ASTs) currently or previously located at any Company facility, including registration records, inspection reports, closure reports, and any contamination assessments.
9.9 Copies of any environmental indemnification agreements (e.g., from prior owners or landlords of facilities), pollution legal liability insurance policies, or other environmental insurance coverage maintained by the Company. If the Company does not maintain any environmental insurance, please so confirm.
CATEGORY 10: EMPLOYMENT AND LABOR MATTERS
10.1 A complete list of all current employees of the Company (we understand the Company currently has approximately 312 employees), including the following information for each employee: full name; job title; department; date of hire; work location (e.g., King of Prussia headquarters, Exton manufacturing facility, or remote); classification as exempt or non-exempt under the Fair Labor Standards Act and applicable state law; annual base compensation (salary or hourly rate); target bonus amount or bonus eligibility; and any other material compensation elements. This list may be provided in spreadsheet format.
10.2 Copies of all employment agreements, executive offer letters, employment letters, change-in-control agreements, retention agreements, and separation or severance agreements for all current and former officers, directors, and key employees of the Company, together with all amendments and supplements thereto. We specifically request agreements for the following individuals:
(a) Dr. Marcus Ellsworth — Chief Executive Officer;
(b) Catherine Pryor — President and Chief Operating Officer;
(c) David Hensley — Chief Financial Officer;
(d) Dr. Raj Subramanian — Chief Technology Officer; and
(e) Linda Fontaine — Vice President, Quality and Regulatory Compliance.
10.3 Copies of all non-competition agreements, non-solicitation agreements, confidentiality agreements, and other restrictive covenant agreements entered into by the Company with current and former employees, officers, consultants, and independent contractors. If the Company uses a standard form of restrictive covenant agreement, please provide the current standard form and identify any material deviations for specific individuals.
10.4 Copies of all consulting agreements and independent contractor agreements currently in effect, together with a schedule identifying each consultant or independent contractor, the services provided, the compensation arrangement, and the term of engagement.
10.5 A copy of the Company's current employee handbook, together with all written personnel policies and procedures currently in effect (including, without limitation, policies regarding equal employment opportunity, anti-harassment, anti-discrimination, whistleblower protections, code of conduct, remote work, drug and alcohol use, social media use, data privacy, and disciplinary procedures). Please also provide any acknowledgment forms signed by employees confirming receipt of the handbook.
10.6 Copies of all collective bargaining agreements and related correspondence, side letters, or memoranda of understanding with any labor union or employee representative organization. If the Company's employees are not represented by any labor union and the Company is not party to any collective bargaining agreement, please so confirm. Please also confirm whether the Company has received any union organizing petitions or requests for voluntary recognition during the last five years.
10.7 Records of any unfair labor practice charges (filed with the NLRB or any state labor relations board), charges of discrimination (filed with the EEOC or any state or local fair employment practices agency), wage and hour claims, whistleblower claims, wrongful termination claims, or any other employment-related litigation, arbitration, or administrative proceedings involving the Company, its officers, or its directors during the last five years.
10.8 Documentation of worker classification determinations (employee vs. independent contractor) for any significant contractor relationships, including any IRS Form SS-8 filings, state agency classification rulings, or internal analyses.
10.9 A schedule of all current employees who are foreign nationals working under employment-based visas (e.g., H-1B, L-1, TN, O-1) or who hold permanent resident status obtained through employer sponsorship, together with copies of applicable visa petitions, approval notices, and any pending immigration applications. Please also confirm that the Company maintains current I-9 forms for all employees and describe any I-9 audits or compliance reviews conducted during the last three years.
10.10 A current organizational chart showing all departments, reporting relationships, and the names and titles of all managers and above.
CATEGORY 11: EMPLOYEE BENEFITS
11.1 Copies of all employee benefit plan documents currently maintained or contributed to by the Company, including health insurance plans, dental insurance plans, vision insurance plans, group life insurance plans, short-term and long-term disability insurance plans, flexible spending account (FSA) plans, health savings account (HSA) plans, and any other welfare benefit plans. For each plan, please provide the plan document (or insurance policy), the most current summary plan description (SPD), and any amendments or modifications adopted since the last SPD was distributed.
11.2 Complete documentation for all retirement plans maintained by the Company, including the Meridian Surgical Technologies, Inc. 401(k) Plan. Please provide:
(a) The plan document and any adoption agreement;
(b) The most current summary plan description (SPD) and any summaries of material modifications (SMMs);
(c) All amendments to the plan adopted since the most recent restatement;
(d) The most recent three years of Form 5500 annual return/report filings, including all schedules and attachments;
(e) The most recent IRS determination letter or opinion/advisory letter;
(f) The most recent plan audit report, if applicable (i.e., if the plan has 100 or more participants); and
(g) The identity and contact information for the plan's third-party administrator, which we understand to be Cornerstone Retirement Plan Services, Inc., 500 Office Center Drive, Suite 200, Fort Washington, PA 19034, as well as the identity of the plan trustee, recordkeeper, and investment advisor.
11.3 Confirmation that the Company does not maintain, contribute to, or have any obligation under any defined benefit pension plan, post-retirement health benefit plan, retiree life insurance plan, or any other plan or arrangement providing post-employment or post-retirement benefits (other than COBRA continuation coverage). If any such plan or obligation exists, please provide complete documentation thereof.
11.4 Copies of all bonus plans, incentive compensation plans, commission plans, sales incentive plans, profit-sharing plans, and other variable pay arrangements, including plan documents, written plan descriptions, and schedules of awards or payouts made for the last three fiscal years.
11.5 Copies of all deferred compensation plans or arrangements maintained by the Company, including any nonqualified deferred compensation plans, supplemental executive retirement plans (SERPs), or split-dollar life insurance arrangements. Please also provide documentation of the Company's compliance with Section 409A of the Internal Revenue Code with respect to all deferred compensation arrangements, including any Section 409A compliance review memoranda or correction filings.
11.6 Documentation of the Company's compliance with COBRA continuation coverage requirements, HIPAA portability an