Rachel,
We have received formal notice from Whitfield Barrow & Co., LLC, acting as Representative of the several underwriters, exercising the overallotment option in full pursuant to Section 2 of the Underwriting Agreement dated February 8, 2024. A copy of the notice is attached for Arbor Health's records.
**Exercise Details**
The exercise covers the full 15% overallotment option, as summarized below:
- Additional shares: 3,000,000 shares of common stock (15% of the 20,000,000 base offering shares) - Public offering price: $20.00 per share - Underwriting discount: $1.20 per share (6.0%) - Net price to the Company: $18.80 per share - Aggregate gross proceeds (overallotment): $60,000,000 - Aggregate net proceeds to the Company (overallotment, before expenses): $56,400,000 - Total underwriting discount on overallotment shares: $3,600,000
On a combined basis, including the base offering and overallotment:
- Total gross proceeds: $460,000,000 - Total net proceeds to the Company (before expenses): $432,400,000
**Settlement**
Settlement of the overallotment shares is scheduled for March 1, 2024 (Friday). All closing deliverables for the overallotment closing will need to be prepared and delivered by that date.
**Post-IPO Share Count**
Upon issuance of the overallotment shares, total shares of AHT common stock outstanding will be 103,000,000 (80,000,000 pre-IPO + 20,000,000 base offering + 3,000,000 overallotment).
**Next Steps**
We are preparing the overallotment closing checklist and will circulate it shortly. Key deliverables for the overallotment closing will include:
1. Board resolutions authorizing the issuance of the 3,000,000 overallotment shares — we will prepare a draft for the Board's consideration and send it across today or first thing tomorrow morning. 2. Bring-down officers' certificate from Dr. Nathaniel Rourke (CEO) and David Halderman (CFO). 3. Bring-down comfort letter from Kellerman & Associates LLP. 4. Bring-down negative assurance letter from Calderwood & Harkness. 5. Cross-receipt confirming delivery of 3,000,000 shares against payment of $56,400,000. 6. Prospectus supplement reflecting the overallotment exercise.
On the operational side, we will coordinate with Continental Share Services, Inc. to arrange for issuance of the additional shares and DTC settlement, and will work with Meridian Hale & Quivorn LLP (underwriters' counsel) and Kellerman & Associates on their respective deliverables. We will also confirm with NYSE that the additional shares will be listed under ticker ARHT.
Could you please confirm the availability of Dr. Rourke and David to execute the officers' certificate and board resolutions ahead of the March 1 settlement? Given the tight timeline, it would be helpful to have their schedules locked down by end of day tomorrow at the latest.
Ted is available to discuss if you or David have any questions.
Best regards,
Eric Johannsen Associate Calderwood & Harkness LLP 125 Broad Street New York, NY 10004 T: (212) 558-3744 E: ejohanssen@calderwoodharkness.com
*Attachment: Whitfield Barrow & Co., LLC — Notice of Exercise of Overallotment Option (dated February 27, 2024)*