Rachel, Jonathan, Graham, Richard —
I hope this finds you all well. I am writing to circulate the agenda and advance materials for the organizational meeting for the proposed initial public offering of common stock of Arbor Health Technologies Inc. on the New York Stock Exchange. As you know, the engagement was formally opened on August 21, 2023, and we are pleased to be moving forward with the kick-off.
The organizational meeting is confirmed for **Friday, September 15, 2023, at 10:00 AM ET**, and will be held in person at Calderwood & Harkness's offices at 125 Broad Street, New York, NY 10004. For those unable to attend in person, we will provide a dial-in and videoconference option — I will circulate those details separately. Theodore Langston will chair the meeting.
By way of brief background for the full working group, Arbor Health Technologies is a healthcare services and SaaS company headquartered in Cambridge, Massachusetts, with approximately 3,400 employees, serving over 1,200 hospital systems across 42 states. The company's financial profile is strong — FY2023 revenue of $612.4 million, reflecting approximately 28% year-over-year growth — and the working group believes the proposed timeline, while ambitious, is well within reach. The offering is currently contemplated as all-primary, with no secondary sales by existing stockholders anticipated at this time.
**Expected Attendees**
We expect the following individuals to attend the organizational meeting. Please confirm your attendance and let me know if there are additional attendees from your respective teams who should be included:
*Arbor Health Technologies Inc. (Issuer):* - Dr. Nathaniel Rourke, Co-Founder, Chairman & CEO - David Halderman, CFO - Rachel Moynihan, General Counsel & Corporate Secretary - Margaret "Meg" Tsujimoto, Co-Founder & CTO (for technology/platform discussion)
*Whitfield Barrow & Co. (Lead Left Bookrunner):* - Jonathan Pritchett, Managing Director, ECM - Sarah Langley-Kwan, Director, Healthcare ECM
*Calloway Pierce Securities (Joint Bookrunner):* - Marcus Delgado, Managing Director, Healthcare IB - Anita Pham, Vice President, ECM Syndicate
*Velthorn Capital Partners (Joint Bookrunner):* - Robert Acheson, Managing Director, Tech & Healthcare ECM
*Pemberton Wallis (Co-Manager):* - Elena Vasquez, Director, ECM
*Calderwood & Harkness LLP (Issuer's Counsel):* - Theodore Langston, Responsible Partner, Capital Markets - Vivienne St. Claire, Partner, Capital Markets - Eric Johannsen, Lead Associate - Claire Dempsey, Associate - Sylvia Hartwell, Partner, Tax (for tax workstream discussion)
*Meridian Hale & Quivorn LLP (Underwriters' Counsel):* - Graham Neville, Lead Partner - Kathryn Brennan, Senior Associate
*Kellerman & Associates LLP (Independent Auditors):* - Richard Olander, Lead Engagement Partner - Sonia Melendez, Audit Senior Manager
Additionally, representatives of Brindoval Trelvon Partners (Leonard Corbett and/or Diana Coltrane) and Ridgeline Growth Equity (Howard Feng) have been invited separately and will confirm their attendance directly.
**Attached Materials**
Please find attached the following three documents for advance review ahead of Friday's meeting:
1. **Organizational Meeting Agenda** — a detailed agenda covering all topics to be addressed, including transaction overview, registration statement workstreams, due diligence planning, corporate governance and restructuring matters, tax, and next steps. 2. **Proposed IPO Timeline** — an indicative milestone schedule from engagement opening through closing and lock-up expiration. 3. **Responsibility Matrix** — a draft matrix identifying lead and supporting parties for each major workstream, with target completion dates.
These materials are in draft form, and we welcome input from all members of the working group. Please review them in advance and come prepared with any questions, additions, or suggested revisions.
**Next Steps**
I would appreciate it if each party could (i) confirm attendance and (ii) identify any additional attendees by **end of day Wednesday, September 13**. A separate calendar invitation will follow. The agenda may be supplemented based on input received from the working group prior to Friday.
Hard copies of all materials will be available at the meeting. If you have any logistics questions in the meantime, please do not hesitate to reach out to me directly.
Thank you, and we look forward to a productive meeting on Friday.
Best regards,
Eric Johannsen Calderwood & Harkness LLP 125 Broad Street New York, NY 10004 Direct: (212) 558-3742 Mobile: (917) 604-8819 ejohannsen@calderwoodharkness.com
---
**ATTACHMENT 1**
**ARBOR HEALTH TECHNOLOGIES INC.** **Proposed Initial Public Offering of Common Stock** **Organizational Meeting Agenda** **September 15, 2023, 10:00 AM ET** **Calderwood & Harkness LLP, 125 Broad Street, New York, NY 10004**
---
**I. Introductions and Roles**
- Introductions of all working group members - Confirmation of roles: - **Arbor Health Technologies Inc.** — Issuer (Delaware corporation, headquartered at 275 Kendall Avenue, Suite 1400, Cambridge, MA 02142) - **Whitfield Barrow & Co.** — Lead left bookrunner and representative of the underwriters - **Calloway Pierce Securities** — Joint bookrunner - **Velthorn Capital Partners** — Joint bookrunner - **Pemberton Wallis** — Co-manager - **Calderwood & Harkness LLP** — Issuer's counsel - **Meridian Hale & Quivorn LLP** — Underwriters' counsel - **Kellerman & Associates LLP** — Independent registered public accounting firm - **Continental Share Services, Inc.** — Transfer agent and registrar - **Toppan Quillon Health IT** — Financial printer and EDGAR filing agent
**II. Transaction Overview and Offering Structure**
- **Proposed Offering:** Initial public offering of shares of common stock, par value $0.001 per share, on the New York Stock Exchange - **Offering Type:** All-primary offering; no secondary sales by existing stockholders are anticipated at this time - **Anticipated Offering Size:** To be determined closer to filing; currently estimated at approximately $400 million base deal - **Overallotment Option:** Standard 15% greenshoe to be granted to the underwriters - **Pre-IPO Capitalization:** - Authorized shares of common stock: 120,000,000 - Outstanding shares: 80,000,000 - **Pre-IPO Investor Overview:**
| Stockholder
- **Listing Venue:** New York Stock Exchange - **Proposed Ticker Symbol:** ARHT - **Use of Proceeds Discussion:** - Repayment of approximately $65 million outstanding on the Keypoint National Bank revolving credit facility - Product development and R&D investment - Potential acquisitions - General corporate purposes
**III. Registration Statement Workstreams and Drafting Plan**
- **Form:** S-1 registration statement under the Securities Act of 1933, as amended - **Strategy:** Confidential submission to the SEC under the JOBS Act (emerging growth company analysis to be conducted; if AHT does not qualify, confidential submission process under the applicable SEC rules), followed by public filing - **Key S-1 Sections and Drafting Responsibilities:**
| Section
- **Target for First Draft S-1 Circulation:** October 2, 2023 - C&H to maintain an internal S-1 disclosure checklist (Regulation S-K items) throughout the process
**IV. Proposed IPO Timeline**
- Walk-through of the proposed indicative timeline (see Attachment 2) - Key milestones to emphasize: - Confidential submission target: mid-November 2023 - Public filing target: January 2024 - Pricing target: February 2024 - Discussion of dependencies and critical path items
**V. Due Diligence Plan**
- **Business Due Diligence Sessions:** To be scheduled with AHT management (Dr. Rourke, Ms. Tsujimoto, Mr. Halderman, Dr. Subramanian) covering the following key topics: - Platform technology and product roadmap - Customer concentration and key customer relationships - Revenue recognition policies and metrics - Regulatory environment (HIPAA, state regulations, FDA considerations if applicable) - Cybersecurity and data privacy - Competitive landscape - **Legal Due Diligence:** C&H to conduct comprehensive review of: - Material contracts - Litigation and threatened claims - intellectual property portfolio - Regulatory compliance - Employment matters - Real property - **Financial Due Diligence:** Kellerman to address: - FY2023 audit status and timeline - Comfort letter procedures - Selected financial data and supplemental schedules - **Underwriters' Due Diligence:** Whitfield Barrow and Meridian Hale to coordinate banker due diligence sessions - **D&O Questionnaires:** C&H to distribute to all 7 board members and 5 executive officers; target return date: end of September 2023
**VI. Corporate Governance and Pre-IPO Restructuring**
- **Amended and Restated Certificate of Incorporation** — to be filed at closing: - Authorize expanded share capital: 400,000,000 shares of common stock; 50,000,000 shares of preferred stock ("blank check") - Anti-takeover provisions: - No stockholder action by written consent - Supermajority vote required to amend bylaws - Advance notice provisions for stockholder proposals - Section 203 of the DGCL (business combinations) - **Amended and Restated Bylaws:** - Classified board of directors (three classes, staggered three-year terms) - Advance notice provisions (90–120 day window for stockholder proposals) - Enhanced indemnification provisions for directors and officers - **Board Committee Charters:** - Audit Committee - Compensation Committee - Nominating & Corporate Governance Committee - All to comply with NYSE Listed Company Manual Section 303A - **Corporate Governance Guidelines and Code of Business Conduct and Ethics** — to be adopted effective upon IPO - **Board Composition Review:** - Current 7-member board - Independence determinations required under NYSE rules - Carolyn Whittemore and Dr. Samuel Obadina expected to qualify as independent directors - Controlled company exception analysis to be conducted for sponsor-designated directors - **Equity Incentive Plans:** - New **2024 Equity Incentive Plan** and **2024 Employee Stock Purchase Plan** to be adopted by the Board and approved by stockholders prior to IPO effectiveness - Hargrove Prindaux Advisory Group (compensation consultant) advising the Compensation Committee on IPO-readiness compensation matters - Existing **2014 Stock Incentive Plan:** - Authorized shares: 12,000,000 - Granted (options): 11,200,000 - Vested: 8,400,000 - Weighted average exercise price: $3.25 per share
**VII. Stockholder Agreements**
- **Amended and Restated Investors' Rights Agreement** (dated October 22, 2020): - Terminates upon a Qualified IPO (defined as >$200 million in gross proceeds on a national securities exchange) - **Amended and Restated Voting Agreement:** - Terminates upon IPO - **Registration Rights Agreement** — to be amended and restated effective upon IPO: - Demand registration rights: 2 demands for Brindoval Trelvon Partners and Ridgeline Growth Equity - Piggyback registration rights - S-3 shelf registration rights available 12 months post-IPO - 180-day standstill period coterminous with lock-up - **Lock-Up Agreements:** - 180-day lock-up period - Applicable to all directors, officers, and holders of ≥1% of pre-IPO shares - Approximately 45 signatories, covering approximately 80,000,000 shares - In favor of Whitfield Barrow & Co. as Representative of the underwriters - Standard exceptions: estate planning transfers, Rule 10b5-1 trading plans, open market purchases post-IPO, tax withholding on RSU vesting (up to 10% of shares vesting)
**VIII. Underwriting Agreement Framework**
- Whitfield Barrow (as Representative) to prepare initial draft of the underwriting agreement - C&H to review and negotiate on behalf of the issuer; Meridian Hale to represent the underwriters - Key negotiation topics to be flagged: - Scope of indemnification provisions - Qualification of representations and warranties - Conditions precedent to closing - Termination triggers (market-out, force majeure) - Lock-up release mechanics - **Comfort Letter Procedures:** Kellerman to provide SAS 72 comfort letter addressed to the underwriters - **FINRA Filing:** Whitfield Barrow to coordinate FINRA Corporate Financing Department filing
**IX. Credit Facility Amendment**
- **Existing Facility:** $150 million senior secured revolving credit facility with Keypoint National Bank, N.A. (as Administrative Agent) and Stonemill Capital Bank (syndicate member) - Entered: March 15, 2022 - Maturity: March 15, 2027 - Interest rate: SOFR + 200 bps - Currently drawn: approximately $65 million - **Amendment Required Prior to IPO:** - Change of control definition — exclude IPO from triggering event - Permitted equity issuance carve-out - Mandatory prepayment provisions — coordinate with use of proceeds - C&H to lead negotiation with Keypoint National Bank; target execution of amendment in January 2024 - Payoff of outstanding balance (~$65 million) from IPO proceeds as part of use of proceeds
**X. D&O Insurance**
- IPO D&O insurance program to be placed prior to effectiveness of the Registration Statement - Discussion of target tower size and carrier selection (primary and excess layers) - C&H to review policy terms and conditions once a binder is in place
**XI. Tax Matters**
- Sylvia Hartwell (C&H Tax) to prepare the following: - **Section 382 Ownership Change Analysis:** Impact of the IPO on net operating losses and R&D credit carryforwards (AHT has $12.4 million in cumulative R&D credit carryforward) - **Equity Compensation Tax Memorandum:** Section 409A compliance, Section 83(b) elections (14 employees), ISO/NQSO treatment, Section 162(m) deductibility limitations, ESPP Section 423 qualification - **State Tax Nexus Analysis:** AHT currently files in 10 states (MA, NY, CA, TX, IL, FL, PA, OH, NJ, GA) - **Tax Treatment of Credit Facility Repayment** from IPO proceeds
**XII. Printing and EDGAR**
- Toppan Quillon Health IT engaged as financial printer and EDGAR filing agent - Coordination on typesetting, EDGAR conversion (XBRL/iXBRL tagging), and filing logistics - Blue sky survey to be prepared
**XIII. Transfer Agent**
- Continental Share Services, Inc. confirmed as transfer agent and registrar - DTC eligibility to be confirmed prior to closing
**XIV. Next Steps and Action Items**
| Action Item
---
**ATTACHMENT 2**
**ARBOR HEALTH TECHNOLOGIES INC.** **Proposed Initial Public Offering** **Indicative Timeline** **(DRAFT — Subject to Change)**
---
| Target Date
*Note: This timeline is indicative and subject to SEC review timing, market conditions, and working group progress. All dates are targets only.*
---
**ATTACHMENT 3**
**ARBOR HEALTH TECHNOLOGIES INC.** **IPO Responsibility Matrix** **(DRAFT)**
---
| #
---
*This matrix is a working draft and will be updated as the process progresses. Please direct any questions or suggested revisions to Eric Johannsen at ejohannsen@calderwoodharkness.com.*