Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze the United States federal income tax consequences — and, in summary fashion, the state income tax consequences — to Arbor Health Technologies Inc. ("AHT" or the "Company"), a Delaware C-corporation (EIN: 47-3891205), of using approximately $65,000,000 of the net proceeds from its February 2024 initial public offering on the New York Stock Exchange (the

1. Principal Repayment. The repayment of approximately $65,000,000 of outstanding principal on the Credit Facility does not give rise to taxable income or a deductible expense to AHT. The repayment is a return of borrowed capital and has neutral tax consequences.

2. Accrued Interest. Accrued but unpaid interest on the Credit Facility through the payoff date is deductible upon accrual (AHT being an accrual-method taxpayer) as business interest expense under Section 163 of the Internal Revenue Code of 1986, as amended (the "Code"), subject to the business interest expense limitation under Section 163(j). Based on available financial data, the interest expense is expected to be

3. Original Issue discount. No original issue discount ("OID") issues arise under the revolving credit facility structure, as each draw was made at par with no discount, warrant coverage, or conversion features.

4. Prepayment Premium. No prepayment premium or make-whole amount is payable under the terms of the Facility, and therefore no associated tax consequence arises.

5. UCC Lien Release. The release of liens securing the Credit Facility has no federal income tax consequences to AHT. No gain, loss, or basis adjustment results from the release.

6. State Tax. State income tax treatment across AHT's ten nexus states generally conforms to the federal treatment described herein, with certain state-specific considerations noted below. Each of these conclusions is discussed in greater detail in the sections that follow.

II. Background: The Keypoint Credit Facility A. Facility Terms The Credit Facility was entered into on March 15, 2022 pursuant to that certain Credit Agreement, dated as of March 15, 2022 (the "Credit Agreement"), by and among: • Borrower: Arbor Health Technologies Inc., a Delaware corporation; • Administrative Agent: Keypoint National Bank, N.A., a national banking association organized under the laws of the United

III. Tax Treatment of Principal Repayment A. General Rule — Non-Deductibility of Principal Repayments Under fundamental and well-established principles of federal income tax law, the repayment of loan principal does not constitute a deductible expense to the borrower. This principle derives from the basic symmetry of debt in the tax system: because a borrower does not include the proceeds of a loan in gross income wh

IV. Tax Treatment of Accrued Interest A. AHT's Method of Accounting for Interest AHT is an accrual-method taxpayer for federal income tax purposes. Under the accrual method of accounting, an expense is deductible in the taxable year in which all three requirements of the "all events test" are satisfied: (1) all events have occurred that establish the fact of the liability; (2) the amount of the liability can be deter

Section 163(j) of the Code, as substantially amended by the Tax Cuts and Jobs Act of 2017 ("TCJA"), Pub. L. No. 115-97, imposes a limitation on the deduction for "business interest expense" for each taxable year. Under Section 163(j)(1), the deduction for business interest expense is limited to the sum of: (i) the taxpayer's "business interest income" for the taxable year; (ii) 30% of the taxpayer's "adjusted taxable

Section 263A of the Code requires the capitalization of certain costs, including interest, that are allocable to the production of "designated property." Designated property includes real property and tangible personal property with an estimated production period exceeding two years, or tangible personal property with an estimated production period exceeding one year and a cost exceeding $1,000,000. See Code § 263A(f

V. Original Issue discount Analysis A. General OID Framework Sections 1271 through 1275 of the Code set forth the rules governing the treatment of original issue discount. OID arises when a debt instrument is issued at a price below its "stated redemption price at maturity" (generally, the sum of all payments due under the instrument other than "qualified stated interest"). See Code § 1273(a). Where OID exists, the l

VI. Prepayment Premium / Make-Whole Analysis A. Facility Terms — No Prepayment Premium The Keypoint revolving Credit Facility, as originally entered into on March 15, 2022, and as amended by the First Amendment dated January 18, 2024, does not impose any prepayment premium, make-whole payment, yield maintenance fee, or other charge in connection with the voluntary prepayment of outstanding revolving loans. Section [●

VII. Treatment of Loan Origination Costs and Unamortized Debt Issuance Costs A. AHT's Deferred Financing Costs AHT incurred loan origination fees, commitment fees, legal fees, and other transaction costs in connection with the establishment of the Keypoint revolving Credit Facility on March 15, 2022. These costs include, among others, arrangement fees paid to the Administrative Agent, upfront commitment fees paid to

VIII. UCC Lien Release — Tax Implications A. Nature of the Liens The Keypoint revolving Credit Facility is secured by liens and security interests in substantially all assets of AHT. These security interests were granted by AHT to the Administrative Agent (for the benefit of the lenders) pursuant to a Security Agreement entered into concurrently with the Credit Agreement on March 15, 2022. The collateral includes, wi

IX. Treatment of Costs Incurred in Connection with the First Amendment A. Amendment Costs In connection with the negotiation and execution of the First Amendment to the Credit Agreement dated January 18, 2024, AHT incurred the following categories of costs: • Legal fees paid to Calderwood & Harkness LLP (125 Broad Street, New York, New York 10004) for the preparation, negotiation, and documentation of the First Amend

X. State Income Tax Considerations AHT has established nexus and files income or franchise tax returns in the following ten states:

10. Georgia The state income tax treatment of the Credit Facility repayment and associated interest deduction is summarized as follows: Principal Repayment. The repayment of the approximately $65,000,000 principal balance on the Keypoint Credit Facility has no state income tax consequence in any of the ten nexus states listed above. This is consistent with federal treatment. No state imposes an income tax on the repa

XI. Impact on Use of Proceeds Disclosure The Company's Registration Statement on Form S-1 (as amended) and the Rule 424(b)(4) final prospectus, filed with the Securities and Exchange Commission on February 9, 2024, include a "Use of Proceeds" section that specifically discloses the Company's intention to use approximately $65,000,000 of the net IPO proceeds for the repayment of the outstanding balance on the Keypoint

XII. Summary of Conclusions Based on the foregoing analysis, our conclusions with respect to the federal income tax treatment of the repayment of the Keypoint revolving Credit Facility from IPO proceeds are as follows:

1. Principal Repayment (approximately $65,000,000). The repayment of principal is not deductible and does not give rise to taxable income. The treatment is tax-neutral, consistent with the general principle that the repayment of borrowed capital is neither income nor deduction. The source of funds (equity proceeds from the IPO) does not alter this conclusion, as the IPO proceeds are not taxable income to AHT under Se

2. Accrued Interest (estimated approximately $572,000 for the January 1 – February 13, 2024 stub period). Accrued interest is deductible as business interest expense under Section 163 in AHT's FY2024 taxable year (interest accrued in FY2023 was properly deductible in FY2023), subject to the Section 163(j) business interest expense limitation. Based on AHT's financial profile — FY2023 Adjusted EBITDA of $138,700,000 a

3. Original Issue discount. No OID arises. Each draw under the revolving Credit Facility was made at par (100% of face value), with no discount, warrant coverage, conversion feature, or other equity-linked component.

4. Prepayment Premium. No prepayment premium, make-whole payment, or yield maintenance fee is payable under the terms of the Keypoint Credit Facility. Accordingly, no tax consequence arises from this aspect of the transaction.

5. Unamortized Debt Issuance Costs. AHT should continue to amortize deferred financing costs associated with the Credit Facility on a ratable basis over the remaining facility term through March 15, 2027. The partial repayment of the drawn balance does not terminate the revolving commitment and therefore does not accelerate the amortization of deferred financing costs.

6. UCC Lien Release. The release of liens and security interests on AHT's assets in connection with the repayment has no federal income tax consequences. No gain, loss, income, deduction, or basis adjustment results from the release.

7. First Amendment Costs. Costs incurred in connection with the First Amendment to the Credit Agreement are generally amortizable as additional deferred financing costs over the remaining facility term through March 15, 2027, to the extent attributable to the credit facility amendment. Costs attributable to the IPO itself should be treated as non-deductible equity issuance costs. A reasonable allocation should be mad

8. State Income Tax. State income tax treatment generally conforms to the federal treatment described above across AHT's ten nexus states. State-specific conformity to Section 163(j) should be confirmed by AHT's state tax return preparer for FY2023 and FY2024. Related-party interest addback provisions are not applicable (Keypoint and Stonemill are unrelated third-party lenders). The Texas margin tax does not allow a

XIII. Limitations and Qualifications This memorandum has been prepared by Calderwood & Harkness LLP for the internal use of the AHT IPO deal team at Calderwood & Harkness LLP and Arbor Health Technologies Inc. The analysis and conclusions set forth herein are subject to the following limitations and qualifications:

1. Scope. This memorandum addresses the United States federal income tax consequences of the repayment of the Keypoint Credit Facility from IPO proceeds and provides a general overview of state income tax considerations in the ten states in which AHT has established nexus. This memorandum does not address foreign, local, payroll, excise, sales, use, transfer, stamp, or other non-income tax consequences that may arise

2. Authorities. The analysis set forth herein is based on the Internal Revenue Code of 1986, as amended, Treasury Regulations promulgated thereunder, published rulings and administrative pronouncements of the Internal Revenue Service, and judicial authorities, in each case as in effect as of the date of this memorandum. These authorities are subject to change, possibly with retroactive effect, which could affect the

3. Factual Assumptions. The estimated financial figures used in this memorandum — including the outstanding drawn balance of approximately $65,000,000, the per diem interest rate, the estimated stub-period interest of approximately $572,000, and AHT's FY2023 financial results (Adjusted EBITDA of $138,700,000 and net income of $41,300,000) — are based on information provided by AHT management (David Halderman, Chief F

4. Section 163(j) Computation. The formal Section 163(j) computation for FY2023 and FY2024 must be prepared by AHT's tax return preparer based on the Company's complete taxable income and the prescribed adjustments. The expectation of full deductibility expressed in this memorandum is based on currently available financial data and is subject to confirmation through the formal computation.

5. Not a Tax Opinion. This memorandum does not constitute a formal tax opinion rendered by Calderwood & Harkness LLP. It is an internal analytical memorandum prepared for the benefit of the deal team and the client. This memorandum should not be relied upon by any third party, and no third-party beneficiary rights are created hereby. • We trust this memorandum is helpful. Please do not hesitate to contact us if you h