HealthpointCapital Management LLC – Policy for Responsible Investing

Purpose

HealthpointCapital Management LLC (and collectively with its managed Funds, “HPC”, or the “Company”) believes that thoughtful management of environmental, social and governance (ESG) issues is a critical part of our long-term success. As a result, we incorporate these business-relevant considerations in our investment process to 1) create and protect value in our portfolio companies; 2) ensure our ability to deliver superior results on behalf of limited partners, shareholders, consistent with our fiduciary duties, and 3) effect a positive societal impact to stakeholders at large.

As healthcare industry investors, we operate in a marketplace facing broad-based opportunities and challenges, including but not limited to population ageing, rising co-morbidities, changing patient demands, including increasing patient-consumerism, ascent of digital technologies, supply chain concerns, competition for healthcare workers, highly regulated product approval, patient protection and data security requirements, disparities in the availability, accessibility and cost of care, and generally rising cost of care globally – all of which affect virtually every industry participant - and in many ways, every single person - around the world. The paramount importance of the healthcare industry is universally recognized, with Good Health and Well Being as no. 3 (out of 17) U.N. Sustainable Development Goals.

We believe that responsible investing against this backdrop requires a complex understanding of these processes and a commitment to integrating ESG considerations and UN PRI approaches in our investing processes. Our key goals of delivering better care at lower cost, by enabling sustainable commercialization of novel healthcare technologies that improve both patient health outcome and healthcare economics, is crucial to both strong financial results and positive societal impact.

Objectives

We will invest responsibly by:

• Reflecting material ESG, regulatory and healthcare compliance regulations and considerations in our decision-marking and investment processes
• Communicating our responsible investment practices, goals and progress transparently to limited partners, current and prospective portfolio companies and shareholders and other relevant stakeholders;
• Advancing consistent and thoughtful investment policies and processes, including through collaboration with industry stakeholders, including organizations such as AdvaMed and AAOS;
• Maintaining robust internal governance and compliance culture

Scope and Limitations

This policy establishes HPC’s responsible investing framework and approach. Where appropriate, tailored processes, aligned with this policy, will be designed to support the specific investment objectives of a particular investment, including our ability to monitor ESG-related performance and other factors.

This policy is reviewed annually and subject to change as deemed necessary.

Roles and Responsibilities

Accountability for implementing this Policy rests with the entire HPC team, with oversight by the Company’s senior leadership and Managing Partners. Our investment committee is tasked with and responsible for identifying, evaluating and managing ESG-related risk and opportunities in potential and current investments. As necessary, the HPC team is to work closely with subject-matter experts who can ask as resource to both HPC and portfolio companies.

Transparency and Stakeholder Engagement

HPC strives to be transparent in its approach to material ESG-related reporting. The format of this reporting may include written reports, informal verbal updates and confidential reports on Fund or portfolio company level to limited partners or shareholders.

Process for Responsible Investing

Our responsible investing policies are based on materiality-driven approach during diligence and hold period, allowing each portfolio company and HPC to focus on business-relevant topics that HPC determines are most significant in protecting and measuring a company’s value, both pre- and post-investment:

Based on our experience in the healthcare industry and musculoskeletal healthcare in particular, we have engaged with a variety of stakeholders identified the following considerations that we believe capture value-creation opportunities, mitigates risks and satisfy material ESG-related objectives in our industry, deemed as “Our Approach”:

• Deliver an unparalleled combination of tailored growth capital and sector-specific healthcare management know-how
• Provide companies that offer novel, safe, effective and validated healthcare technologies with the resources to grow and reach patients in need in a cost-effective manner
• Manage daily company activities to ensure the highest quality of patient care, protect employees health and safety, and contribute to the development of local communities
• Attract and retain the best professionals to strengthen the healthcare sector and the overall economy
• Commit to fair employment practices, diversity, inclusion, and fairness of pay
• At exit, partner with the best-of-breed strategic acquirers, with global footprints, to ensure the maximum positive impact on patient health around the world.

Conclusion

By implementing this Policy, HPC is not only fulfilling its fiduciary obligations but implementing commitment to best practices for responsible investment. We strongly believe this Policy and the consideration of ESG factors and sustainability risks into our investment process, we can make better investment decisions and contribute to societal sustainability goals. This policy will be made available to current and potential LPs and updated as necessary to reflect changes in law and Company policies.