SI · SHOULDER INNOVATIONS, INC.

This lease represents a strategic, long-term infrastructure investment to consolidate and scale operations under a dedicated corporate headquarters. The 15,200-square-foot facility—combining office and warehouse functions—addresses anticipated growth needs and replaces potentially fragmented or leased interim spaces. With a 10-year initial term and two five-year extension options, the agreement locks in location and capacity while preserving flexibility for future expansion via negotiated rights. The $4.4 million in committed rent reflects a significant, predictable operating expense over the decade, directly impacting future SG&A and cash flow from operations. The $0.5 million construction down payment signals near-term capital deployment ahead of occupancy, distinct from recurring rent obligations, and underscores the Company’s commitment to the project’s execution. Occupancy is expressly conditioned on regulatory approval (certificate of occupancy) and contractual completion milestones—not a fixed calendar date—introducing execution risk; any delay beyond Q4 2027 would defer associated operational benefits and cost recognition. As no financing arrangements, tenant improvements funded by landlord, or rent abatement periods are disclosed, investors should anticipate full rent commencement upon occupancy without offsetting concessions.