Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze whether the initial public offering of common stock of Arbor Health Technologies Inc. ("AHT" or the "Company"), which closed on February 13, 2024, constitutes an "ownership change" within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"). This analysis is being prepared in connection with the Company's obligation

II. Background A. The Company Arbor Health Technologies Inc. is a corporation organized under the laws of the State of Delaware. The Company's Federal Employer Identification Number is 47-3891205. AHT is headquartered at 275 Kendall Avenue, Suite 1400, Cambridge, Massachusetts 02142. Founded in 2014 by Dr. Nathaniel Rourke and Margaret "Meg" Tsujimoto, AHT operates a cloud-based clinical decision support and populati

III. Applicable Legal Framework A. Section 382 Overview

Section 382 of the Code imposes limitations on the ability of a "loss corporation" to utilize its pre-change losses and certain other tax attributes following an "ownership change." The purpose of Section 382 is to prevent the trafficking in corporate tax losses — that is, the acquisition of a corporation with significant NOLs or other tax attributes primarily for the purpose of using those attributes to offset the i

Section 382(a) provides the general rule: If a loss corporation has an ownership change, the amount of the taxable income of the new loss corporation for any post-change year which may be offset by pre-change losses shall not exceed the "Section 382 limitation" for such year. The Section 382 limitation is generally computed as the product of (i) the value of the stock of the old loss corporation immediately before th

Section 383 of the Code extends the annual limitation to pre-change credits, including R&D credits under Section 41, unused general business credits under Section 38, alternative minimum tax credits, and capital loss carryforwards. Where Section 383 applies, the Section 382 limitation is first applied to offset pre-change losses against taxable income; any remaining limitation is then converted to a credit equivalent

IV. Pre-IPO Ownership Structure A. Pre-IPO Capitalization Immediately prior to the closing of the IPO on February 13, 2024, the Company had 80,000,000 shares of common stock issued and outstanding. The Company's certificate of incorporation, as amended and restated in connection with the IPO, authorized the issuance of up to 120,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of pref

V. Post-IPO Ownership Structure A. Base Offering (February 13, 2024 Closing) On the closing of the base offering on February 13, 2024, the Company issued 20,000,000 shares of common stock to public investors. All shares were newly issued primary shares; no secondary shares were sold by existing stockholders. The total number of shares of common stock outstanding immediately following the base offering closing was 100

VI. Ownership Change Calculation A. Identification of 5-Percent Shareholders with Increases The ownership change test under Section 382(g)(1) requires the identification of all 5-percent shareholders whose ownership percentages increased during the testing period. Only increases — not decreases — are counted in the aggregation. Based on the analysis set forth above, the following 5-percent shareholders are identified

VII. Impact on Tax Attributes A. R&D Tax Credit Carryforward Because no ownership change has occurred in connection with the IPO, AHT's cumulative federal R&D tax credit carryforward of $12,400,000 under Sections 38 and 41 of the Code is fully preserved. The Company may continue to utilize these credits to offset its federal income tax liability without any annual limitation under Section 383. Additionally, the $8,70

VIII. Assumptions and Limitations This analysis is subject to the following assumptions and limitations, which should be carefully noted:

1. Reliance on Company-Provided Information. This analysis is based on information provided by the Company regarding its capitalization and equity issuance history, including the pre-IPO capitalization table, the terms of the IPO, and the absence of material ownership shifts during the testing period. We have not independently verified the accuracy or completeness of this information.

2. Management Representations. We have relied on representations of AHT management, including David Halderman, Chief Financial Officer, and Rachel Moynihan, General Counsel and Corporate Secretary, that (a) no transfers of stock among existing holders during the testing period resulted in any holder crossing the 5% ownership threshold (other than those holders identified herein as pre-existing 5-percent shareholders)

3. Treatment of Outstanding Options. We have assumed that outstanding stock options under the Company's 2014 Stock Incentive Plan are not treated as exercised for purposes of the Section 382 ownership change analysis, in accordance with the applicable provisions of Treasury Regulation § 1.382-4(d). This assumption is based on a review of the relevant factors under the regulations and a determination that the conditio

4. Scope of Analysis. This memorandum addresses only whether the IPO constitutes an ownership change under Section 382 of the Code. It does not address the separate and distinct question of whether any future transaction — including, without limitation, secondary offerings, block trades following lock-up expiration, share repurchase programs, mergers, acquisitions, or other corporate transactions — could trigger an o

5. Ownership Records. We have not performed a comprehensive review of the Company's ownership records for the full testing period. Such a review should be conducted by the Company's tax department, with the assistance of Kellerman & Associates LLP, the Company's independent registered public accounting firm, to verify the accuracy of the information on which this analysis is based.

6. Federal Tax Analysis Only. This analysis addresses only federal income tax consequences under the Code. State and local tax conformity with Section 382 varies by jurisdiction, and certain states may apply different or additional ownership change tests. State-level analysis is beyond the scope of this memorandum.

7. No Ruling or Opinion. This memorandum does not constitute a request for a ruling from the Internal Revenue Service, nor does it constitute a formal opinion of counsel. The conclusions set forth herein are based on our interpretation of the Code, the Treasury Regulations, and applicable administrative guidance as of the date of this memorandum. The law in this area is complex and, in certain respects, subject to di

IX. Recommendations Based on the analysis set forth in this memorandum, we make the following recommendations to the Company:

1. Implementation of Ongoing Section 382 Monitoring Procedures. The Company should establish and implement formal procedures for the ongoing monitoring of ownership changes for purposes of Section 382. These procedures should include, at a minimum: (a) Schedule 13D and 13G Monitoring. The Company should monitor all Schedule 13D and Schedule 13G filings made with the SEC by beneficial owners of the Company's common st

2. Post-Lock-Up Monitoring. Particular attention should be paid following the expiration of the 180-day lock-up period on August 6, 2024. Upon lock-up expiration, approximately 80,000,000 pre-IPO shares will become freely tradeable (subject to Rule 144 volume limitations for affiliates), including the 28,000,000 shares held by Brindoval Trelvon Partners Fund IV, L.P. and the 16,000,000 shares held by Ridgeline Growth

3. Pre-Transaction Tax Review. Any planned secondary offering, share repurchase program, or other transaction that could affect 5-percent shareholder ownership percentages should be reviewed in advance by tax counsel for Section 382 implications. This review should be conducted sufficiently in advance of the proposed transaction to allow for structuring alternatives, if necessary, to avoid triggering an ownership cha

4. Consideration of Section 382 Protective Provisions. The Company should consider whether to adopt a Section 382 rights plan (sometimes referred to as a "poison pill" for tax purposes) or a charter provision restricting transfers that would cause or contribute to an ownership change. Such provisions are designed to deter large-scale share accumulations that could trigger an ownership change by imposing dilutive cons

X. Conclusion Based on the analysis set forth in this memorandum, we conclude that the initial public offering of 23,000,000 shares of common stock of Arbor Health Technologies Inc. — consisting of 20,000,000 shares in the base offering (closed February 13, 2024) and 3,000,000 shares upon exercise of the overallotment option (settled March 1, 2024) — does not constitute an "ownership change" within the meaning of Sec

4. The pre-existing public group consists of all pre-IPO shareholders individually holding less than 5% of the outstanding common stock: David Halderman (2,400,000 shares), Dr. Priya Subramanian (1,600,000 shares), Rachel Moynihan (1,200,000 shares), and other pre-IPO holders (8,400,000 shares).

5. The new public group consists of all purchasers of shares in the IPO base offering and overallotment, none of whom individually holds 5% or more of the outstanding common stock.

6. Percentage changes are measured from the lowest ownership percentage during the applicable three-year testing period. For all pre-existing shareholders, the lowest percentage is their pre-IPO percentage (no material changes in ownership occurred during the testing period prior to the IPO). For the new public group, the lowest percentage is 0%. EXHIBIT B SECTION 382 TESTING PERIOD TIMELINE The following timeline id