Contract analysis

From: Eric Johannsen <ejohannsen@calderwoodharkness.com> To: Rachel Moynihan <rmoynihan@arborhealth.com> Cc: Theodore Langston <tlangston@calderwoodharkness.com> Date: Mon, 02 Oct 2023 06:47:00 -0000 Subject: Arbor Health Technologies Inc. — First Draft Registration Statement on Form S-1 for Review and Comment

On behalf of Calderwood & Harkness, please find attached the first draft of the Registration Statement on Form S-1 for Arbor Health Technologies Inc. ("AHT" or the "Company") (SEC File No. to be assigned upon filing) in connection with AHT's proposed initial public offering of shares of common stock on the New York Stock Exchange. This draft was prepared following the organizational meeting held on September 15, 2023

The draft S-1 covers all required Regulation S-K disclosures, including the following key sections:

- **Prospectus Summary** — Business overview of the Company's cloud-based clinical decision support and population health management platform, revenue cycle management outsourcing services, and real-time analytics services, serving over 1,200 hospital systems and physician groups across 42 states with approximately 3,400 employees as of December 31, 2023. - **Risk Factors** - **Use of Proceeds** — Preliminary allocat

Please note that the draft does **not** yet include an estimated price range — that will be added in a subsequent filing once underwriter valuation work is further advanced. Additionally, financial statement exhibits are currently in placeholder form; we are working with Richard and Sonia at Kellerman & Associates to finalize the audited financial statements for inclusion.

**Equity Compensation Plans — Flagged Items**

The draft includes descriptions of the following equity compensation arrangements:

- **2014 Stock Incentive Plan** — 12,000,000 shares authorized; 11,200,000 granted as options; 8,400,000 vested; weighted average exercise price of $3.25 per share. - **Proposed 2024 Equity Incentive Plan** — Anticipated to reserve 10% of post-IPO outstanding shares; to be adopted by the Board prior to public filing. - **Proposed 2024 Employee Stock Purchase Plan** — Anticipated to reserve 2% of post-IPO outstanding

The share reserve numbers for both proposed plans will be finalized once the post-IPO share count is determined. Rachel and David, we would appreciate your careful review of the equity compensation disclosure in particular. Separately, Sylvia Hartwell on our team will circulate her analysis of Section 409A compliance, 83(b) election status for the 14 applicable employees, and related tax matters.

**Open Items Requiring Working Group Input**

We have identified a number of open items that require input from specific members of the working group:

1. **Kellerman & Associates (Richard / Sonia):** We would appreciate confirmation of the timeline for delivery of the audited FY2023 financial statements and consent letter. We also need to align on the non-GAAP reconciliation presentation, specifically the Adjusted EBITDA definition and the adjustments to be included.

2. **AHT Management (Rachel / David):** Several bracketed sections in the risk factors, MD&A, and related party transactions sections require management input and factual verification. These sections are **highlighted in yellow** in the attached draft for ease of identification.

3. **Whitfield Barrow (Jonathan / Sarah):** We would welcome underwriter comments on the prospectus summary, risk factor ordering and specificity, and use of proceeds language. We are also flagging that we will need to coordinate on the underwriting section once syndicate composition and economics are finalized. The current draft reflects Whitfield Barrow as lead left bookrunner, with Calloway Pierce Securities, Velt

4. **Meridian Hale & Quivorn (Graham / Kathryn):** We would appreciate underwriters' counsel review of the draft, with particular focus on the underwriting section, lock-up provisions (the draft contemplates a 180-day lock-up period covering all directors, officers, and holders of 1% or more of pre-IPO shares — approximately 80,000,000 shares), indemnification provisions, and description of capital stock.

As a separate note, Calderwood & Harkness is currently in discussions with Keypoint National Bank regarding a potential amendment to the credit agreement in connection with the IPO, specifically addressing the change of control definition and a permitted equity issuance carve-out. We will circulate a separate update on that workstream.

As a reminder, per the timeline discussed at the organizational meeting, the target date for confidential submission of the draft S-1 to the SEC is **November 10, 2023**. In order to meet that target, we respectfully request that **all parties return comments by Monday, October 16, 2023** (two weeks from today).

Calderwood & Harkness will consolidate all comments and circulate a revised draft the week of October 23 for a further round of review before submission. We also plan to hold an all-hands drafting call the week of October 23 to discuss any outstanding issues; a calendar invitation will follow.

We ask that comments be provided in one of the following formats:

- **Preferred:** Redline / tracked changes directly in the attached Word document; or - **Alternative:** A separate memorandum with specific section references.

All comments should be directed to me and Claire Dempsey at Calderwood & Harkness, and we will compile and coordinate across the working group. Please **do not circulate the draft beyond the working group** — this is confidential pre-filing material.

- Arbor Health Technologies Inc. — Draft Registration Statement on Form S-1 (October 2, 2023) [Word document]

Please also note that a comprehensive S-1 disclosure checklist (Regulation S-K) is being maintained separately by Calderwood & Harkness and will be circulated to the group shortly.

We are available by phone or email to discuss any questions. Thank you, and we look forward to receiving the group's comments.

Eric Johannsen Calderwood & Harkness LLP 125 Broad Street New York, NY 10004 Tel: (212) 558-3742 ejohannsen@calderwoodharkness.com