Contract analysis

I. Executive Summary The purpose of this memorandum is to set forth the proposed allocation of the $620,000,000 base purchase price — together with assumed liabilities treated as additional consideration under Internal Revenue Code ("IRC") § 1060 and Treasury Regulations ("Treas. Reg.") § 1.1060-1 — among the seven residual asset classes prescribed by IRC § 338(b)(5) and the regulations thereunder, as applicable to a

II. Transaction Overview Parties Purchaser. Ardent Healthcare Acquisition Corp. (the "Buyer" or "Acquisition Sub") is a Delaware corporation formed on January 22, 2024, for the sole purpose of consummating this acquisition. Buyer's Delaware File Number is 7129384 and its Employer Identification Number (EIN) is 93-2184720. Buyer is a wholly owned subsidiary of Ardent Capital Partners III LP (the "Fund"), a Delaware li

III. Legal Framework — IRC § 1060 and the Residual Method A. Overview of IRC § 1060 IRC § 1060 governs the allocation of consideration in any "applicable asset acquisition." An applicable asset acquisition is defined under § 1060(c) as any transfer of assets that constitutes a trade or business (within the meaning of § 1060(c)(2)) and with respect to which the transferee's basis in such assets is determined wholly by

Section 197 Intangibles (Classes VI and VII). All § 197 intangibles acquired in an applicable asset acquisition — including goodwill, going concern value, customer-based intangibles, workforce in place, trademarks, trade names, covenants not to compete, and other enumerated intangibles — are amortizable on a straight-line basis over a 15-year period beginning in the month the intangible is acquired. In the present tr

IV. Description of Acquired Assets by Class A. Class I — Cash and Cash Equivalents Cash and cash equivalents are expressly excluded from the transaction. CPI retains all cash, demand deposits, money market funds, and other cash equivalents held as of the closing date. Accordingly, no portion of the purchase price is allocated to Class I assets. Proposed Allocation to Class I: $0. B. Class II — Actively Traded Persona

1. PeakConnect Patient-Engagement Software Platform CPI has developed and deployed a proprietary software platform known as "PeakConnect," which serves as the company's patient engagement, scheduling, outcomes tracking, and clinical documentation system. PeakConnect was developed internally by CPI's technology team beginning in approximately 2016, with significant enhancements deployed in 2019 and 2021. The platform

2. Trademarks and Trade Names The following trademark and trade name assets are being acquired in the transaction: (a) PeakConnect Registered Trademark. CPI holds a registered trademark for "PeakConnect" with the United States Patent and Trademark Office, Registration No. 5,412,887. The registration is in good standing and covers goods and services related to healthcare software platforms and patient engagement tools

3. Patient Lists and Patient Relationships CPI's patient base across its 37 clinics represents a substantial intangible asset. CPI served approximately 187,000 unique patients in the twelve-month period ended December 31, 2023, with a significant portion of revenue derived from recurring patients (patients returning for multiple episodes of care, follow-up visits, or treatment across multiple clinical disciplines). C

4. Assembled Workforce CPI employs approximately 2,100 individuals across its 37 clinic locations and its Nashville headquarters. The workforce includes approximately 1,450 licensed clinicians (physical therapists, occupational therapists, speech-language pathologists, licensed clinical social workers, licensed professional counselors, and behavioral health technicians) and approximately 650 administrative, support,

5. Favorable Lease Terms CPI operates all 37 of its clinics under triple-net lease arrangements with third-party landlords. CPI does not own any real property. To the extent that any of these leases have rental rates that are below current market rates — i.e., the contractual rent is less than the rent that would be payable under a lease negotiated at arm's length as of the closing date — the present value of the bel

6. Non-Competition Agreements As a condition to closing, two key individuals — Dr. Randall J. Whitfield (Founder and CEO, 52% equity holder) and Elaine Whitfield-Torres (Co-Founder and CCO, 18% equity holder) — will each enter into non-competition and non-solicitation agreements with Buyer. The material terms of the non-compete agreements, as currently contemplated, are as follows: (a) Restrictive Period: Three (3) y

7. Healthcare Licenses, Permits, and Provider Enrollments CPI holds various state healthcare licenses and permits across its seven states of operation, including facility licenses, clinical practice registrations, and other regulatory authorizations required for the operation of outpatient rehabilitation and behavioral health clinics. In addition, CPI holds Medicare and Medicaid provider enrollment numbers — known as

8. Total Proposed Class VI Allocation Based on the foregoing analysis, the aggregate preliminary allocation to Class VI intangible assets is as follows: The midpoint estimate of $118,000,000 is used for purposes of this preliminary allocation. All Class VI intangibles are amortizable on a straight-line basis over 15 years under IRC § 197, commencing in the month of closing. At $118,000,000, the annual amortization de

V. Proposed Preliminary Allocation Summary Table The following table summarizes the proposed preliminary purchase price allocation across all seven asset classes. All figures are estimates and are subject to the qualifications set forth throughout this memorandum. The Class VI allocation is further broken down as follows: Total Allocable Consideration: The total preliminary allocable consideration of approximately $6