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MEMORANDUM

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

FROM: Claire Dempsey, Working Associate, Capital Markets, Calderwood & Harkness LLP

TO: Theodore Langston, Responsible Partner Vivienne St. Claire, Billing Partner Eric Johannsen, Lead Associate

DATE: February 6, 2024

RE: Arbor Health Technologies Inc. — Lock-Up Agreement Analysis and Market Comparison

MATTER NO.: 1010-00002

CLIENT: Arbor Health Technologies Inc.

PURPOSE: This memorandum analyzes the lock-up terms negotiated for the Arbor Health Technologies Inc. (NYSE: ARHT) initial public offering in connection with the Underwriting Agreement with Whitfield Barrow & Co., LLC, as Representative of the several underwriters, and compares those terms against recent healthcare services and SaaS IPO precedents from 2023–2024. The memorandum is intended to inform the deal team of the market positioning of the AHT lock-up structure and to support discussions with the client and the underwriters. This memorandum does not address the broader Underwriting Agreement, the Amended and Restated Registration Rights Agreement, or the 2024 Equity Incentive Plan except to the extent relevant to the lock-up analysis.

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I. Executive Summary

AHT's lock-up arrangement consists of a 180-day lock-up period commencing on the date of the final prospectus, which is expected to be February 8, 2024, and expiring on August 6, 2024. The lock-up agreements have been executed in favor of Whitfield Barrow & Co., LLC, in its capacity as Representative of the several underwriters participating in the offering.

Approximately 45 individuals and entities have executed lock-up agreements, covering approximately 80,000,000 pre-IPO shares, which represents 100% of the pre-IPO shares of common stock outstanding. The lock-up parties include the following categories of holders:

• All directors: Dr. Nathaniel Rourke (Co-Founder, Chairman & CEO), Margaret Tsujimoto (Co-Founder & CTO), Leonard Corbett, Diana Coltrane, Howard Feng, Carolyn Whittemore, and Dr. Samuel Obadina.

• All executive officers: Dr. Nathaniel Rourke, Margaret Tsujimoto, David Halderman (CFO), Rachel Moynihan (General Counsel & Corporate Secretary), and Dr. Priya Subramanian (Chief Medical Officer).

• Pre-IPO institutional investors: Brindoval Trelvon Partners Fund IV, L.P. (holding approximately 28,000,000 shares) and Ridgeline Growth Equity Fund III, LLC (holding approximately 16,000,000 shares).

• All other holders of 1% or more of the pre-IPO shares outstanding, including certain employees, advisors, and former employees holding shares pursuant to prior equity grants.

The 180-day duration and the exception structure negotiated for the AHT lock-up are consistent with market standard for healthcare services and SaaS IPOs. We note, however, that a trend toward shortened lock-up periods (90 days) has emerged in certain technology sub-sectors during 2023–2024, although this trend has not meaningfully penetrated the healthcare services or SaaS segments.

To contextualize the AHT lock-up terms, Calderwood & Harkness reviewed the publicly available lock-up terms from eight recent comparable IPOs in the healthcare services, health IT, and SaaS sectors that priced between January 2023 and January 2024. The key findings from this comparison are summarized as follows:

• Seven of eight comparables (87.5%) used a 180-day lock-up period, with only one comparable (Orion Platform Technologies Corp.) using a 90-day lock-up with an early release provision. AHT's 180-day duration is squarely within the prevailing standard.

• AHT's four exception carve-outs — estate planning transfers, pre-existing 10b5-1 plans, open market post-IPO acquisitions, and RSU tax withholding (up to 10% of locked-up shares) — are in line with, or slightly narrower than, the median exception package among comparables.

• The RSU tax withholding exception at 10% of locked-up shares, calculated on a per-holder basis, is increasingly common and sits at the median of the comparable set, where thresholds ranged from 5% to 15%.

• Only one comparable included a stock-price-based automatic early release trigger, confirming that AHT's absence of such a provision is consistent with the overwhelming majority of recent precedents.

In sum, we conclude that the AHT lock-up structure does not present any material departures from market practice and should be well-received by investors and analysts covering the healthcare services and SaaS sectors.

II. Overview of AHT Lock-Up Terms

A. Parties and Coverage

Lock-up agreements have been executed by approximately 45 individuals and entities, encompassing the full universe of pre-IPO shareholders of Arbor Health Technologies Inc. The Form of Lock-Up Agreement, which is attached as Exhibit A to the Underwriting Agreement and filed as an exhibit to the Registration Statement on Form S-1, governs the terms applicable to each signatory. All signatories have executed the same form, and no separate or modified lock-up terms have been negotiated for any individual lock-up party, with the exception of the side letter described in Section II.E below relating to pre-existing Rule 10b5-1 trading plans.

The following table sets forth the principal lock-up signatories and their respective share counts:

The total number of shares subject to the lock-up is approximately 80,000,000, representing 100% of the 80,000,000 shares of common stock outstanding on a pre-IPO basis. Following the completion of the IPO, including the full exercise of the underwriters' 3,000,000-share overallotment option (the "greenshoe"), the Company will have approximately 103,000,000 shares of common stock outstanding (comprising 80,000,000 pre-IPO shares plus 20,000,000 shares sold in the primary offering plus 3,000,000 greenshoe shares). Accordingly, the 80,000,000 locked-up shares will represent approximately 77.67% of total post-IPO shares outstanding.

The concentration of ownership among the principal lock-up parties is notable. Brindoval Trelvon Partners Fund IV, L.P. will hold approximately 27.18% of post-IPO outstanding shares, and Ridgeline Growth Equity Fund III, LLC will hold approximately 15.53%. Together, these two institutional investors will hold approximately 42.72% of the post-IPO outstanding shares. Dr. Rourke and Ms. Tsujimoto will hold approximately 12.43% and 9.32%, respectively. This concentrated ownership profile is a significant factor in the market's expectations regarding aftermarket trading dynamics and underscores the importance of a robust lock-up structure.

B. Lock-Up Period

The lock-up period is 180 days, measured from the date of the final prospectus relating to the IPO. The Registration Statement on Form S-1 (File No. 333-276541) is expected to be declared effective by the Securities and Exchange Commission on February 8, 2024, which is also the expected pricing date and the date on which the final prospectus will be issued. Accordingly, the lock-up period is expected to commence on February 8, 2024 and expire on August 6, 2024.

It is important to note that the lock-up period runs from the prospectus date (February 8, 2024), not from the closing date of the offering (expected to be February 13, 2024). This is the standard market convention for IPO lock-up agreements, as confirmed by our review of comparable precedents. The five-day gap between pricing and closing is typical for a firm commitment underwritten offering and reflects the standard T+5 settlement cycle. The measurement of the lock-up from the prospectus date, rather than the closing date, ensures that the lock-up period begins at the earliest possible moment when public market trading commences, thereby providing the maximum period of aftermarket price stability.

C. Beneficiary. The lock-up agreements are executed in favor of Whitfield Barrow & Co., LLC, in its capacity as Representative of the several underwriters for the offering. The syndicate of underwriters consists of Whitfield Barrow & Co., LLC (as lead bookrunner and Representative), Calloway Pierce Securities LLC, Velthorn Capital Partners Inc., and Pemberton Wallis LLC. Notwithstanding the participation of multiple underwriters in the syndicate, only Whitfield Barrow, in its capacity as Representative, has the authority to grant waivers of, or releases from, the lock-up restrictions. This centralized waiver authority is standard market practice and avoids the potential for inconsistent or conflicting waiver decisions among syndicate members.

The lock-up agreements are contractual arrangements between each lock-up party and Whitfield Barrow as Representative. AHT itself is not a party to the lock-up agreements, though the Company has undertaken in the Underwriting Agreement to enforce certain related restrictions, including prohibitions on the issuance of additional shares during the lock-up period (subject to customary exceptions for equity compensation plans and acquisitions), as more fully described in the Underwriting Agreement.

D. Scope of Restrictions

The lock-up agreements impose a comprehensive set of restrictions on the disposition of locked-up shares and related securities. Specifically, during the lock-up period, each lock-up party is prohibited from undertaking any of the following actions, whether directly or indirectly:

(a) offering, pledging, selling, or contracting to sell any shares of common stock or any securities convertible into, or exercisable or exchangeable for, shares of common stock;

(b) purchasing any option or contract to sell, or selling any option or contract to purchase, any shares of common stock or any securities convertible into, or exercisable or exchangeable for, shares of common stock;

(c) granting any option, right, or warrant to purchase any shares of common stock or any securities convertible into, or exercisable or exchangeable for, shares of common stock;

(d) otherwise transferring or disposing of any shares of common stock or any securities convertible into, or exercisable or exchangeable for, shares of common stock;

(e) entering into any swap, hedge, or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of shares of common stock, regardless of whether any such transaction is to be settled in shares, cash, or otherwise; or

(f) making any demand for, or exercising any right with respect to, the registration of any shares of common stock or any securities convertible into, or exercisable or exchangeable for, shares of common stock under the Securities Act of 1933, as amended.

The restriction described in clause (f) above is consistent with, and runs coterminously with, the 180-day standstill provision set forth in Section 4.1(b) of the Amended and Restated Registration Rights Agreement among AHT, Brindoval Trelvon Partners, Ridgeline Growth Equity, and certain other stockholders.

The scope of the lock-up restrictions extends to all shares of common stock beneficially owned by the lock-up party as of the date of execution of the lock-up agreement, as well as any shares of common stock acquired by the lock-up party during the lock-up period upon the exercise of stock options, the settlement of restricted stock units, or otherwise. This "after-acquired shares" provision ensures that the lock-up cannot be circumvented through the exercise of equity awards during the restricted period.

E. Permitted Exceptions

The Form of Lock-Up Agreement contains four enumerated exceptions to the lock-up restrictions, each of which is subject to specific conditions and limitations:

1. Estate Planning Transfers. A lock-up party may transfer locked-up shares to immediate family members, trusts established for the benefit of the lock-up party or the lock-up party's immediate family members, or other estate-planning vehicles, provided that (i) each donee or transferee executes a lock-up agreement on terms substantially identical to the Form of Lock-Up Agreement for the remaining duration of the lock-up period, (ii) no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended, reporting a reduction in beneficial ownership is required or voluntarily made in connection with the transfer, and (iii) the lock-up party does not otherwise make any public announcement or disclosure of the transfer during the lock-up period. This exception is designed to accommodate routine estate planning activities by founders, executives, and other individual lock-up parties without creating a perception of insider selling in the public markets.

2. Pre-Existing Rule 10b5-1 Trading Plans. Sales of locked-up shares may be made pursuant to a trading plan established in compliance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, provided that such plan was in existence prior to the date of the lock-up agreement and was disclosed in the Registration Statement on Form S-1. This exception applies specifically to pre-existing plans; the lock-up agreement prohibits the establishment of new Rule 10b5-1 plans during the lock-up period. As of the date of this memorandum, the S-1 Registration Statement discloses the existence of pre-existing 10b5-1 plans for Dr. Nathaniel Rourke and Margaret Tsujimoto. A side letter from Whitfield Barrow & Co., LLC, dated January 29, 2024, confirms the specific parameters of these plans, including the maximum number of shares that may be sold thereunder during the lock-up period and the pricing and volume conditions applicable to such sales. The use of a dedicated side letter to confirm 10b5-1 plan parameters, rather than relying solely on the general exception language in the Form of Lock-Up Agreement, provides additional specificity and certainty for both the lock-up parties and the Representative.

3. Open Market Post-IPO Acquisitions. Shares of common stock acquired by a lock-up party in open market transactions after the closing of the IPO are not subject to the lock-up restrictions. This exception recognizes that shares purchased in the open market following the IPO are not "pre-IPO" shares and do not carry the same aftermarket overhang concerns. The exception applies only to shares acquired in the open market and does not extend to shares acquired through private transactions, block trades, or other off-market mechanisms.

4. RSU Tax Withholding. A lock-up party may sell or withhold up to 10% of the lock-up party's locked-up shares to satisfy tax withholding obligations arising in connection with the vesting of restricted stock units during the lock-up period. This exception addresses the practical reality that RSU vesting events may trigger significant tax obligations that must be funded through share sales or share withholding. The 10% cap is calculated on a per-holder basis, not in the aggregate across all lock-up parties. For example, Dr. Rourke, who holds 12,800,000 locked-up shares, would be permitted to sell or withhold up to 1,280,000 shares for RSU tax withholding purposes during the lock-up period.

The lock-up agreement does not include certain exceptions that appear in some comparable precedents, including (i) a charitable donation exception, (ii) a stock-for-stock merger exception, and (iii) a de minimis transfer exception. The absence of these exceptions is discussed further in Section IV.B below.

F. Early Release and Waiver Mechanics

Whitfield Barrow & Co., LLC, as Representative of the several underwriters, has sole discretion to waive the lock-up restrictions, in whole or in part, with respect to any lock-up party, at any time during the lock-up period. The waiver authority is vested exclusively in the Representative, and no other party — including AHT, the other underwriters in the syndicate, or the lock-up parties themselves — has the power to grant a waiver or release.

The lock-up agreement does not include any automatic early release trigger, such as a stock-price-based provision that would permit a partial release of locked-up shares if the trading price of AHT common stock exceeds a specified multiple of the IPO price for a defined number of trading days. As discussed in Section IV.D below, such provisions are uncommon in healthcare services and SaaS IPOs and were found in only one of eight comparable precedents reviewed.

Any decision by Whitfield Barrow to grant a waiver or early release would implicate FINRA Rule 5131(d), which imposes restrictions on the publication of research reports by the underwriters' research analysts in connection with lock-up releases and expirations. These restrictions are discussed in detail in Section V below.

From a governance perspective, we recommend that AHT's Board of Directors (or an appropriate committee thereof) adopt a policy requiring board-level approval of any early release request prior to submission to Whitfield Barrow. While the lock-up agreements themselves do not require such approval — the waiver authority rests solely with the Representative — a board-level approval process would ensure appropriate oversight and would demonstrate sound governance practices in connection with any potential insider sales during the restricted period.

III. Market Comparison: Recent Healthcare Services and SaaS IPO Lock-Up Terms (2023–2024)

A. Methodology. To assess the market positioning of the AHT lock-up structure, Calderwood & Harkness reviewed the publicly available lock-up terms from eight comparable IPOs in the healthcare services, health IT, and SaaS sectors that priced between January 2023 and January 2024. Data was sourced from Registration Statements on Form S-1, underwriting agreements, and final prospectuses filed with the Securities and Exchange Commission through the EDGAR system. Additional reference was made to publicly available offering summaries and research reports to confirm deal terms.

The comparable set was selected based on the following criteria:

(i) Industry alignment: The issuer operates in the healthcare services, health information technology, or SaaS sectors, with a primary focus on companies whose business models share characteristics with AHT (i.e., technology-enabled healthcare services platforms).

(ii) Deal size: Gross proceeds in the range of $200 million to $750 million, which brackets the AHT offering (expected gross proceeds of approximately $460 million, including full exercise of the greenshoe at an assumed IPO price of $20.00 per share).

(iii) Listing venue: Listed on the New York Stock Exchange or the Nasdaq Stock Market.

All company names used in the comparison are fictional composites created for internal reference purposes. The underlying data points reflect actual market terms observed in publicly filed documents, but have been presented using composite names to protect the confidentiality of our analysis and to avoid any implication that specific named companies have been the subject of Calderwood & Harkness client engagements.

B. Comparison Table of 8 Comparable Recent Offerings

The following table summarizes the principal lock-up terms of the eight comparable offerings:

C. Summary Observations from Comparison Table

The following observations emerge from the comparison of AHT's lock-up terms against the eight comparable offerings:

Duration. Seven of eight comparables (87.5%) used a 180-day lock-up period. Only one comparable — Orion Platform Technologies Corp. — used a 90-day lock-up period, and that offering was a $600 million deal with a larger-than-average public float. The 180-day standard remains dominant in the healthcare services and SaaS sectors. The 90-day trend that has attracted attention in the financial press is more prevalent in pure-play consumer technology and fintech sectors, where post-IPO trading volume expectations are generally higher and where institutional investor bases may be more diversified. AHT's 180-day period is firmly within the prevailing market standard.

Estate planning exception. This exception is universal across the comparable set. All eight comparables included an estate planning transfer exception, and all required the donee or transferee to execute a lock-up agreement on substantially identical terms for the remaining duration of the lock-up period. AHT's estate planning exception is fully consistent with this uniform market practice.

10b5-1 plan exception. Seven of eight comparables (87.5%) included an exception for sales pursuant to pre-existing Rule 10b5-1 trading plans. Only one comparable — Birchwood Digital Health Inc. — did not include this exception. The inclusion of a 10b5-1 plan exception is now effectively market standard, reflecting the widespread adoption of Rule 10b5-1 plans by corporate insiders and the SEC's recent amendments to Rule 10b5-1 (effective February 27, 2023) that have heightened the regulatory framework governing such plans. AHT's inclusion of this exception is consistent with the clear majority approach.

Open market acquisition exception. Seven of eight comparables (87.5%) included an exception for shares acquired in the open market after the closing of the IPO. One comparable — Summit Care Informatics Inc. — did not include this exception, which may reflect a more conservative approach by that issuer's underwriting syndicate. AHT's inclusion of this exception is consistent with the predominant market practice.

RSU tax withholding exception. Seven of eight comparables (87.5%) included an RSU tax withholding carve-out. Only one comparable — Pinnacle SaaS Holdings Inc. — did not include this exception, which may be attributable to the fact that Pinnacle's equity compensation program at the time of its IPO was options-based rather than RSU-based. Among the seven comparables that included an RSU tax withholding exception, the cap on permitted sales or withholdings ranged from 5% to 15% of locked-up shares. The most common threshold was 10%, which appeared in four of seven comparables. AHT's 10% threshold is at the median of the comparable set and reflects the market consensus for this type of exception.

Early release triggers. Only one of eight comparables (12.5%) — Marlowe Asset Management MedTech Solutions LLC — included a stock-price-based automatic early release trigger. Marlowe Asset Management's provision permitted a 25% early release at 90 days if the stock price exceeded 150% of the IPO price for 20 of 30 consecutive trading days. This type of structure is uncommon in healthcare services and SaaS IPOs and is more frequently seen in SPAC de-SPAC transactions and sponsor-heavy offerings where pre-IPO institutional investors negotiate for accelerated liquidity opportunities. AHT's absence of an automatic early release trigger is consistent with the overwhelming majority of comparables and with the general preferences of healthcare services and SaaS sector underwriters.

Beneficiary structure. Five of eight comparables specified the "Representative" of the underwriters as the beneficiary and holder of waiver authority; three specified the "lead bookrunner" specifically. These terms are functionally equivalent in all cases reviewed, as the lead bookrunner typically serves as Representative in the underwriting agreement. AHT's structure, under which Whitfield Barrow serves as both lead bookrunner and Representative, is standard.

IV. Analysis of Key Terms

A. 180-Day Duration: Market Positioning

The 180-day lock-up period negotiated for the AHT offering is squarely within market standard for healthcare services and SaaS IPOs. As discussed in Section III.C above, seven of eight comparable offerings (87.5%) employed a 180-day lock-up period. This duration has been the de facto standard for IPO lock-ups since the late 1990s and continues to serve as the default expectation among institutional investors, sell-side research analysts, and underwriting syndicates in these sectors.

The recent trend toward shortened 90-day lock-ups warrants discussion, as AHT and its pre-IPO investors may receive inquiries about this development. Based on our review, the 90-day trend has been concentrated in the following categories of offerings:

(i) Pure-play technology companies with strong post-IPO trading volume expectations, where underwriters are confident that aftermarket liquidity will be sufficient to absorb insider selling without significant price dislocation;

(ii) Companies with large public floats (greater than 30% of total post-IPO shares outstanding), where the ratio of locked-up shares to freely tradeable shares is lower and the potential for overhang is correspondingly reduced; and

(iii) Offerings with significant secondary components, where selling stockholders have already achieved partial liquidity in the IPO itself and where a shorter post-IPO restriction period was negotiated as part of a broader package of selling stockholder accommodations.

AHT does not fit any of these profiles. The public float at IPO represents approximately 22.33% of post-IPO shares outstanding (23,000,000 shares of 103,000,000 total, including greenshoe), which is below the median float percentage for companies that have adopted 90-day lock-ups. The IPO is structured as an entirely primary offering with no secondary component — neither Brindoval Trelvon Partners nor Ridgeline Growth Equity is selling shares in the offering. Given the relatively concentrated insider ownership and the absence of secondary selling, a 180-day lock-up period is appropriate and arguably necessary to support aftermarket price stability.

The potential consequences of early insider selling are particularly acute in the case of AHT. Brindoval Trelvon Partners Fund IV (holding approximately 27.18% of post-IPO outstanding shares) and Ridgeline Growth Equity Fund III (holding approximately 15.53% of post-IPO outstanding shares) together hold approximately 42.72% of the total post-IPO outstanding shares. Early release of such large blocks — or even the perception that such release might occur — could create significant overhang risk, potentially depressing AHT's stock price and undermining investor confidence in the stability of the shareholder base. The 180-day lock-up provides a substantial buffer period during which the Company can establish a public market trading track record, report at least one full quarter of earnings as a public company, and develop relationships with buy-side and sell-side analysts.

B. Exception Carve-Outs: Comparison to Market

AHT's four lock-up exceptions — estate planning transfers, pre-existing 10b5-1 plans, open market post-IPO acquisitions, and RSU tax withholding at 10% of locked-up shares — align with the most commonly observed exception package across the eight comparable offerings reviewed. Each of AHT's four exceptions appears in at least seven of the eight comparables, confirming that AHT's exception structure reflects the prevailing market consensus.

However, it is worth noting certain exceptions that appear in some comparable offerings but are absent from the AHT lock-up agreement:

(i) Charitable donation exception. Approximately 25% of the broader universe of 2023–2024 IPOs reviewed by Calderwood & Harkness (beyond the eight healthcare/SaaS comparables discussed above) included a specific exception permitting charitable donations of locked-up shares, typically subject to the same donee lock-up requirement applicable to estate planning transfers. This exception was not included in any of the eight healthcare/SaaS comparables reviewed for this memorandum, and its absence from the AHT lock-up is not unusual for a deal of this type. If any AHT lock-up party wishes to make a charitable donation during the lock-up period, a waiver request would need to be submitted to Whitfield Barrow.

(ii) Stock-for-stock merger exception. Some lock-up agreements include an exception permitting the tender of locked-up shares in connection with a bona fide third-party merger, acquisition, or tender offer for the issuer. This exception is more commonly seen in larger-cap IPOs where the possibility of a change-of-control transaction during the lock-up period is considered non-trivial. The exception was not included in the AHT lock-up, which is consistent with the approach taken by the majority of comparables in the healthcare/SaaS sector.

(iii) De minimis transfer exception. Certain lock-up agreements permit transfers of a small number of shares (typically subject to a dollar-value cap, such as $100,000 or $250,000) without restriction. This exception is relatively uncommon in the healthcare/SaaS comparables reviewed and was not included in the AHT lock-up.

These omissions are not unusual for a deal of this size and profile, and they are consistent with Whitfield Barrow's standard form lock-up agreement. The narrower exception set provides Whitfield Barrow with greater control over potential lock-up releases and reduces the risk of unintended market signals from insider transactions during the restricted period.

With respect to the 10b5-1 plan exception specifics, the AHT lock-up structure includes an additional layer of specificity in the form of the side letter from Whitfield Barrow dated January 29, 2024, which confirms the permitted parameters for the pre-existing 10b5-1 trading plans established by Dr. Nathaniel Rourke and Margaret Tsujimoto. The use of a dedicated side letter, rather than reliance solely on the general exception language in the Form of Lock-Up Agreement, provides greater certainty as to the permissible scope of trading activity during the lock-up period and reduces the potential for disputes between the lock-up parties and the Representative regarding the interpretation of the exception. Based on our review of comparable precedents, this level of specificity — a dedicated side letter — is seen in approximately half of the comparable deals where founders or CEOs have pre-existing 10b5-1 plans at the time of the IPO. The other half rely on the general exception language alone, which can create ambiguity regarding the permissible volume and timing of trades.

C. RSU Tax Withholding Exception

The RSU tax withholding exception in the AHT lock-up agreement permits each lock-up party to sell or withhold up to 10% of the lock-up party's locked-up shares to satisfy tax withholding obligations arising from the vesting of restricted stock units during the lock-up period. As noted in Section III.C above, this 10% threshold is at the median of the comparable set, where caps ranged from 5% (Summit Care Informatics) to 15% (Cascadia Health Analytics).

This exception has become increasingly important in recent IPO practice as companies have shifted from stock-option-heavy to RSU-heavy compensation programs. RSUs, unlike stock options, trigger a taxable event upon vesting (rather than exercise), which means that employees and executives may face significant tax obligations at predetermined vesting dates that are beyond their control. Without an RSU tax withholding exception, lock-up parties might be unable to fund these tax obligations, potentially resulting in tax delinquencies or the need for personal borrowing at unfavorable terms.

For AHT, this exception is practically significant. The Company's 2024 Equity Incentive Plan, which will become effective upon the IPO, reserves 10,300,000 shares for issuance, and the plan contemplates RSU grants to employees and executives that may include vesting tranches falling within the 180-day lock-up period. The RSU vesting schedule for the initial equity grants under the 2024 plan has not been finalized as of the date of this memorandum, but based on discussions with David Halderman (CFO), it is anticipated that an initial tranche of RSU grants will vest approximately 90 days following the IPO, which would fall squarely within the lock-up period.

An important structural note: the lock-up agreement specifies that the 10% cap is calculated on a per-holder basis, not in the aggregate across all lock-up parties. This means that each individual lock-up party is permitted to sell or withhold up to 10% of that party's own locked-up shares. For example:

• Dr. Nathaniel Rourke (12,800,000 locked-up shares): up to 1,280,000 shares

• Margaret Tsujimoto (9,600,000 locked-up shares): up to 960,000 shares

• David Halderman (2,400,000 locked-up shares): up to 240,000 shares

• Rachel Moynihan (1,200,000 locked-up shares): up to 120,000 shares

• Dr. Priya Subramanian (1,600,000 locked-up shares): up to 160,000 shares

The per-holder calculation methodology is the standard approach in the comparable set and is preferable from the Company's perspective, as it avoids the administrative complexity of tracking aggregate usage across all lock-up parties and ensures that each individual's tax obligations can be addressed independently.

D. Absence of Automatic Early Release Trigger

The AHT lock-up agreement does not include a stock-price-based or other automatic early release provision. This is consistent with seven of eight comparables reviewed, none of which included such a provision. Only one comparable — Marlowe Asset Management MedTech Solutions LLC — included an automatic early release trigger, structured as follows: if the closing price of the company's common stock exceeded 150% of the IPO price for 20 of any 30 consecutive trading days following the 90th day after the IPO, 25% of each lock-up party's locked-up shares would be automatically released from the lock-up restrictions.

Whitfield Barrow's standard form lock-up agreement does not include automatic early release provisions, and such provisions are typically negotiated by pre-IPO financial sponsors seeking accelerated liquidity pathways. In the case of Marlowe Asset Management MedTech Solutions, the early release trigger was reportedly negotiated at the insistence of the company's lead pre-IPO sponsor, which held approximately 40% of post-IPO shares and sought a mechanism to achieve partial liquidity without submitting a formal waiver request to the lead bookrunner.

In the AHT context, neither Brindoval Trelvon Partners nor Ridgeline Growth Equity requested an automatic early release provision during the lock-up negotiation process. This is consistent with the understanding that neither sponsor is selling shares in the IPO and both intend to maintain long-term positions in AHT. The absence of a secondary component in the offering further supports the appropriateness of omitting an automatic early release trigger, as the sponsors' liquidity expectations are oriented toward a post-lock-up timeframe.

From a market perception standpoint, the absence of an automatic early release provision signals confidence in the long-term value proposition of the Company and avoids the potentially adverse signal that would be sent by a provision designed to accelerate insider selling. Institutional investors and research analysts in the healthcare services and SaaS sectors generally view the absence of early release triggers favorably, as it suggests alignment between insider and public shareholder interests.

E. Interaction with Registration Rights Agreement

The Amended and Restated Registration Rights Agreement among AHT, Brindoval Trelvon Partners Fund IV, L.P., Ridgeline Growth Equity Fund III, LLC, Dr. Nathaniel Rourke, Margaret Tsujimoto, and certain other stockholders (the "Registration Rights Agreement") contains a 180-day standstill provision that runs coterminously with the lock-up period. Specifically, Section 4.1(b) of the Registration Rights Agreement provides that no holder may exercise demand registration rights, short-form registration rights, or piggyback registration rights during the 180-day period following the date of the final prospectus.

This standstill provision operates independently of, but in conjunction with, the lock-up agreements. While the lock-up agreements restrict the transfer and disposition of shares, the registration rights standstill restricts the ability of holders to compel the Company to register shares for resale under the Securities Act. Together, these two sets of restrictions create a unified and comprehensive restriction period through August 6, 2024, during which pre-IPO stockholders may neither sell locked-up shares nor demand that the Company facilitate such sales through a registered offering.

In addition, the Registration Rights Agreement provides that S-3 shelf registration rights are not available until 12 months following the closing of the IPO (i.e., no earlier than February 2025). This means that even after the lock-up expires on August 6, 2024, Brindoval Summit and Ridgeline will not be able to effect a registered shelf takedown offering until at least February 2025. During the intervening period (August 2024 through February 2025), any sales by these institutional holders would need to be conducted through Rule 144 transactions, subject to applicable volume limitations, manner-of-sale requirements, and public information conditions.

The interplay between the lock-up agreements and the Registration Rights Agreement should be highlighted in investor communications and in the Company's quarterly and annual reports, as the timing and mechanics of insider selling opportunities are of significant interest to public market investors.

V. FINRA Rule 5131 Considerations

FINRA Rule 5131(d) imposes restrictions on the publication of research reports by underwriters' research analysts in connection with lock-up expirations and early releases. The rule is designed to prevent the use of research reports to influence the market price of an issuer's securities in anticipation of a lock-up release, which could benefit insiders seeking to sell shares at artificially inflated prices.

Under Rule 5131(d)(2), if an underwriter has agreed to a lock-up period of at least 180 days and subsequently agrees to release or waive the lock-up restrictions before their scheduled expiration, the underwriter's research analysts are subject to a blackout period on the publication of research reports. Specifically, the underwriter may not publish or distribute a research report regarding the issuer for at least 15 days before the early release date through at least 2 trading days after the early release date. This blackout period applies regardless of whether the research report is initiated by the research analyst or is a routine update.

The practical implications for AHT are as follows:

(a) If Whitfield Barrow grants a waiver or early release with respect to any lock-up party, the research departments of Whitfield Barrow, Calloway Pierce Securities, Velthorn Capital Partners, and Pemberton Wallis may be subject to a research blackout period of at least 17 days in total (15 days before plus 2 days after the release date).

(b) This blackout period could affect the timing of research initiation reports, which are typically published 25 days after the IPO. If an early release request is contemplated within the first several weeks following the IPO, it could create conflicts with the research initiation timeline.

(c) The research blackout does not apply to the scheduled lock-up expiration date (August 6, 2024), as the restriction under Rule 5131(d)(2) applies only to early releases and waivers, not to the natural expiration of the lock-up period.

AHT and Calderwood & Harkness should coordinate closely with Whitfield Barrow on any potential early release request to ensure full compliance with Rule 5131 and to avoid inadvertent research blackout triggers. The Lock-Up Release Procedures Letter from Calderwood & Harkness (Theodore Langston) to Rachel Moynihan, dated January 31, 2024, outlines the full procedural framework for processing early release requests, including the required notice periods, board-level approval requirements, and coordination procedures with Whitfield Barrow's compliance department.

VI. Practical Considerations and Recommendations

A. Lock-Up Execution Status

As of the date of this memorandum, all 45 lock-up agreements have been fully executed and delivered to Whitfield Barrow & Co., LLC. Whitfield Barrow has confirmed receipt of all executed agreements. The Lock-Up Agreement Execution Tracker, maintained by Calderwood & Harkness and updated as of February 5, 2024, reflects complete execution by all required signatories. No outstanding execution items remain.

All 80,000,000 pre-IPO shares of common stock outstanding are subject to executed lock-up agreements. There are no pre-IPO shares held by persons or entities that are not subject to the lock-up restrictions.

B. Post-IPO Lock-Up Management

We recommend that AHT implement the following procedures for ongoing lock-up management during the 180-day restricted period:

(i) Internal inquiry tracking. AHT's General Counsel, Rachel Moynihan, should establish and maintain an internal tracking system for any lock-up-related inquiries from insiders, directors, or pre-IPO institutional investors during the lock-up period. Such inquiries may include questions regarding the scope of permitted exceptions, requests for waivers, and general compliance questions. All inquiries should be logged and, where appropriate, referred to Calderwood & Harkness for legal review before a response is provided.

(ii) Pre-clearance of permitted transfers. Any proposed transfer of locked-up shares that purports to fall within one of the four permitted exceptions (estate planning transfers, pre-existing 10b5-1 plan sales, open market post-IPO acquisitions, or RSU tax withholding) should be reviewed by Calderwood & Harkness for compliance with the specific conditions and limitations of the applicable exception prior to execution of the transfer. This pre-clearance process is particularly important for estate planning transfers, where the donee or transferee must execute a lock-up agreement on substantially identical terms, and for RSU tax withholding sales, where the 10% per-holder cap must be monitored.

(iii) RSU vesting event monitoring. RSU vesting events during the lock-up period should be flagged in advance by the Company's stock plan administrator to ensure that any tax withholding sales or share withholdings remain within the 10% per-holder cap. Calderwood & Harkness recommends that the Company's stock plan administrator provide a schedule of anticipated RSU vesting events during the lock-up period, together with the estimated number of shares that may be sold or withheld for tax purposes, at least 15 business days prior to each vesting date.

(iv) Section 16 reporting coordination. Estate planning transfers and RSU tax withholding transactions may trigger Section 16(a) reporting obligations for directors and officers subject to Section 16 of the Securities Exchange Act. Rachel Moynihan, in her capacity as Corporate Secretary, should coordinate with Calderwood & Harkness to ensure that any required Form 4 or Form 5 filings are made on a timely basis and that the filings include appropriate footnote disclosure regarding the lock-up restrictions and applicable exceptions.

C. Lock-Up Expiration Planning

The lock-up is scheduled to expire on August 6, 2024, at which point approximately 80,000,000 shares of common stock will become eligible for sale in the public markets, subject to applicable restrictions under Rule 144 of the Securities Act. For affiliates of the Company (including directors, officers, and holders of 10% or more of outstanding shares), Rule 144 imposes volume limitations (the greater of 1% of outstanding shares or the average weekly trading volume during the four preceding calendar weeks), manner-of-sale requirements, and public information conditions.

The volume of shares becoming available upon lock-up expiration — approximately 77.67% of total post-IPO outstanding shares — represents significant potential selling pressure. Even if only a fraction of lock-up parties choose to sell upon expiration, the mere availability of such a large volume of shares could affect market sentiment and create downward pressure on the stock price, a phenomenon commonly referred to as "lock-up overhang."

We recommend that AHT begin planning for the lock-up expiration well in advance and consider the following actions:

(i) Investor relations strategy. AHT's investor relations team should develop a communications strategy for the lock-up expiration, including proactive outreach to institutional investors to address questions regarding potential selling activity by insiders and pre-IPO institutional investors. The Company may wish to consider issuing a press release or filing a Current Report on Form 8-K disclosing the lock-up expiration date and the number of shares becoming eligible for sale, though there is no legal requirement to do so.

(ii) Analyst day scheduling. Consideration should be given to scheduling an investor day or analyst event in the weeks following the lock-up expiration to provide a positive catalyst for the stock and to refocus investor attention on the Company's fundamentals and growth trajectory.

(iii) Follow-on offering considerations. If Brindoval Trelvon Partners, Ridgeline Growth Equity, or other significant holders intend to seek liquidity following the lock-up expiration, AHT and Whitfield Barrow should consider whether an orderly secondary offering would be preferable to open-market sales under Rule 144. A registered secondary offering would provide price discovery, orderly execution, and reduced market impact relative to uncoordinated open-market selling. The timing and structure of any follow-on offering would need to be coordinated with the registration rights framework set forth in the Registration Rights Agreement.

(iv) Trading plan establishment. Directors and officers who anticipate selling shares following the lock-up expiration should consider establishing Rule 10b5-1 trading plans in advance of the expiration date (but after the lock-up restrictions have expired, as the lock-up prohibits the establishment of new 10b5-1 plans during the restricted period). The adoption of pre-planned trading programs can mitigate concerns regarding insider trading and can facilitate orderly selling activity over time.

VII. Conclusion

The AHT lock-up structure — consisting of a 180-day duration, four standard exceptions (estate planning transfers, pre-existing 10b5-1 plans, open market post-IPO acquisitions, and RSU tax withholding at up to 10% of locked-up shares per holder), no automatic early release trigger, and sole discretion waiver authority vested in Whitfield Barrow & Co., LLC, as Representative of the several underwriters — is fully consistent with prevailing market practice for healthcare services and SaaS IPOs in the 2023–2024 period.

The terms reflect a well-balanced approach that is protective of aftermarket price stability given the concentrated insider ownership structure (Brindoval Trelvon Partners at 27.18% post-IPO, Ridgeline Growth Equity at 15.53%, Dr. Rourke at 12.43%, and Ms. Tsujimoto at 9.32%) while providing reasonable flexibility for tax withholding obligations and pre-existing trading plans. The exception structure is neither unusually broad nor unusually narrow relative to comparable precedents, and the absence of an automatic early release trigger is consistent with the approach taken by the vast majority of recent healthcare services and SaaS IPOs.

No material departures from market standard have been identified. The lock-up terms should not present issues for investor or analyst reception and should support a constructive aftermarket trading environment during the 180-day restricted period. We are available to discuss any aspect of this analysis with the deal team at your convenience.

Appendix A: Key Terms of AHT Lock-Up Agreement (Summary)

Appendix B: Comparable IPO Lock-Up Terms — Detailed Comparison Table

DISCLAIMER: This memorandum is an internal working document of Calderwood & Harkness LLP prepared in connection with the representation of Arbor Health Technologies Inc. It is protected by attorney-client privilege and the attorney work product doctrine. This memorandum reflects the professional judgment of the authors based on information available as of the date hereof and is subject to revision as additional information becomes available. This memorandum does not constitute legal advice to any person or entity other than the client identified herein. Distribution outside the firm is not authorized without the prior written approval of the Responsible Partner.

Prepared by: Claire Dempsey, Working Associate, Capital Markets

Reviewed by: Eric Johannsen, Lead Associate, Capital Markets

Calderwood & Harkness LLP 125 Broad Street New York, NY 10004

Lock-Up Party	Title / Relationship	Shares Subject to Lock-Up	% of Pre-IPO Outstanding
Dr. Nathaniel Rourke	Co-Founder, Chairman & CEO	12,800,000	16.0%
Margaret "Meg" Tsujimoto	Co-Founder & CTO	9,600,000	12.0%
David Halderman	CFO	2,400,000	3.0%
Rachel Moynihan	General Counsel & Corporate Secretary	1,200,000	1.5%
Dr. Priya Subramanian	Chief Medical Officer	1,600,000	2.0%
Brindoval Trelvon Partners Fund IV, L.P.	Pre-IPO Institutional Investor	28,000,000	35.0%
Ridgeline Growth Equity Fund III, LLC	Pre-IPO Institutional Investor	16,000,000	20.0%
Other Pre-IPO Holders (employees, advisors, former employees)	Various	8,400,000	10.5%
Total	80,000,000	100.0%
Comparable Company	IPO Date	Gross Proceeds	Lock-Up Duration	# of Signatories	Estate Planning Exception	10b5-1 Exception	Open Market Exception	RSU Tax Withholding Exception	Early Release Trigger	Beneficiary
Helix Clinical Systems Inc.	March 2023	~$350M	180 days	~40	Yes (donee signs lock-up)	Yes	Yes	Yes (10%)	None	Lead bookrunner
Cascadia Health Analytics Corp.	May 2023	~$275M	180 days	~35	Yes (donee signs lock-up)	Yes	Yes	Yes (15%)	None	Lead bookrunner
Pinnacle SaaS Holdings Inc.	June 2023	~$500M	180 days	~50	Yes (donee signs lock-up)	Yes	Yes	No	None	Representative
Marlowe Asset Management MedTech Solutions LLC	August 2023	~$420M	180 days	~38	Yes (donee signs lock-up)	Yes	Yes	Yes (10%)	Stock price trigger (150% of IPO price for 20 of 30 trading days) — 25% early release at 90 days	Lead bookrunner
Birchwood Digital Health Inc.	September 2023	~$310M	180 days	~42	Yes (donee signs lock-up)	No	Yes	Yes (10%)	None	Representative
Orion Platform Technologies Corp.	October 2023	~$600M	90 days	~55	Yes (donee signs lock-up)	Yes	Yes	Yes (10%)	N/A (shorter lock-up)	Lead bookrunner
Summit Care Informatics Inc.	November 2023	~$225M	180 days	~30	Yes (donee signs lock-up)	Yes	No	Yes (5%)	None	Representative
Clearview Population Health Corp.	January 2024	~$380M	180 days	~48	Yes (donee signs lock-up)	Yes	Yes	Yes (10%)	None	Representative
Term	Description
Lock-Up Period	180 days from February 8, 2024 (expiration August 6, 2024)
Signatories	Approximately 45 individuals and entities
Shares Covered	Approximately 80,000,000 shares (100% of pre-IPO shares outstanding)
Post-IPO Coverage	Approximately 77.67% of 103,000,000 post-IPO shares outstanding (including greenshoe)
Beneficiary	Whitfield Barrow & Co., LLC, as Representative of the several underwriters

Exception 1	Estate planning transfers — transfers to family members, trusts, or estate-planning vehicles; donee/transferee must execute lock-up agreement on same terms for remaining lock-up period
Exception 2	Pre-existing Rule 10b5-1 trading plans — sales under plans disclosed in S-1; side letter from Whitfield Barrow confirms specific parameters for plans of Dr. Rourke and Ms. Tsujimoto
Exception 3	Open market post-IPO acquisitions — shares acquired in open market transactions after IPO closing are not subject to lock-up
Exception 4	RSU tax withholding — up to 10% of locked-up shares (calculated per holder) may be sold or withheld to satisfy tax withholding obligations on vesting RSUs
Early Release Trigger	None — no automatic stock-price-based or other early release provision
Waiver Authority	Whitfield Barrow, as Representative, has sole discretion to waive or release lock-up restrictions in whole or in part at any time
Registration Rights Standstill	180 days, coterminous with lock-up; no demand, short-form, or piggyback registration rights during lock-up period; S-3 shelf rights not available until 12 months post-IPO
Helix Clinical Systems Inc.	Cascadia Health Analytics Corp.	Pinnacle SaaS Holdings Inc.	Marlowe Asset Management MedTech Solutions LLC	Birchwood Digital Health Inc.	Orion Platform Technologies Corp.	Summit Care Informatics Inc.	Clearview Population Health Corp.	AHT (for reference)
Industry Sub-Sector	Healthcare Services / Clinical Analytics	Health IT / Population Health	Enterprise SaaS	Medical Technology / SaaS	Digital Health Platform	Platform Technology / SaaS	Health IT / Care Management	Population Health / Data Analytics	Healthcare Services / SaaS
IPO Date	March 2023	May 2023	June 2023	August 2023	September 2023	October 2023	November 2023	January 2024	February 2024
Gross Proceeds	~$350M	~$275M	~$500M	~$420M	~$310M	~$600M	~$225M	~$380M	~$460M
Exchange	NYSE	Nasdaq	NYSE	Nasdaq	NYSE	Nasdaq	NYSE	NYSE	NYSE
Lock-Up Duration	180 days	180 days	180 days	180 days	180 days	90 days	180 days	180 days	180 days
# of Signatories	~40	~35	~50	~38	~42	~55	~30	~48	~45
% Post-IPO Shares Covered	~75%	~72%	~80%	~78%	~74%	~68%	~70%	~76%	~77.67%
Estate Planning Exception	Yes (donee signs lock-up)	Yes (donee signs lock-up)	Yes (donee signs lock-up)	Yes (donee signs lock-up)	Yes (donee signs lock-up)	Yes (donee signs lock-up)	Yes (donee signs lock-up)	Yes (donee signs lock-up)	Yes (donee signs lock-up)
10b5-1 Plan Exception	Yes	Yes	Yes	Yes	No	Yes	Yes	Yes	Yes (with side letter)
Open Market Exception	Yes	Yes	Yes	Yes	Yes	Yes	No	Yes	Yes
RSU Tax Withholding Exception	Yes (10%)	Yes (15%)	No	Yes (10%)	Yes (10%)	Yes (10%)	Yes (5%)	Yes (10%)	Yes (10%)
Charitable Donation Exception	No	No	No	No	No	No	No	No	No
Early Release Trigger	None	None	None	Stock price trigger (150% for 20/30 days) — 25% release at 90 days	None	N/A (shorter lock-up)	None	None	None
Waiver Authority	Lead bookrunner	Lead bookrunner	Representative	Lead bookrunner	Representative	Lead bookrunner	Representative	Representative	Representative (Whitfield Barrow)
Registration Rights Standstill Coterminous	Yes	Yes	Yes	Yes	Yes	N/A	Yes	Yes	Yes

MEMORANDUM
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
FROM: Claire Dempsey, Working Associate, Capital Markets, Calderwood & Harkness LLP
TO: Theodore Langston, Responsible Partner Vivienne St. Claire, Billing Partner Eric Johannsen, Lead Associate
DATE: February 6, 2024
RE: Arbor Health Technologies Inc. — Lock-Up Agreement Analysis and Market Comparison
MATTER NO.: 1010-00002
CLIENT: Arbor Health Technologies Inc.
PURPOSE: This memorandum analyzes the lock-up terms negotiated for the Arbor Health Technologies Inc. (NYSE: ARHT) initial public offering in connection with the Underwriting Agreement with Whitfield Barrow & Co., LLC, as Representative of the several underwriters, and compares those terms against recent healthcare services and SaaS IPO precedents from 2023–2024. The memorandum is intended to inform the deal team of the market positioning of the AHT lock-up structure and to support discussions with the client and the underwriters. This memorandum does not address the broader Underwriting Agreement, the Amended and Restated Registration Rights Agreement, or the 2024 Equity Incentive Plan except to the extent relevant to the lock-up analysis.
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I. Executive Summary
AHT's lock-up arrangement consists of a 180-day lock-up period commencing on the date of the final prospectus, which is expected to be February 8, 2024, and expiring on August 6, 2024. The lock-up agreements have been executed in favor of Whitfield Barrow & Co., LLC, in its capacity as Representative of the several underwriters participating in the offering.
Approximately 45 individuals and entities have executed lock-up agreements, covering approximately 80,000,000 pre-IPO shares, which represents 100% of the pre-IPO shares of common stock outstanding. The lock-up parties include the following categories of holders:
• All directors: Dr. Nathaniel Rourke (Co-Founder, Chairman & CEO), Margaret Tsujimoto (Co-Founder & CTO), Leonard Corbett, Diana Coltrane, Howard Feng, Carolyn Whittemore, and Dr. Samuel Obadina.
• All executive officers: Dr. Nathaniel Rourke, Margaret Tsujimoto, David Halderman (CFO), Rachel Moynihan (General Counsel & Corporate Secretary), and Dr. Priya Subramanian (Chief Medical Officer).
• Pre-IPO institutional investors: Brindoval Trelvon Partners Fund IV, L.P. (holding approximately 28,000,000 shares) and Ridgeline Growth Equity Fund III, LLC (holding approximately 16,000,000 shares).
• All other holders of 1% or more of the pre-IPO shares outstanding, including certain employees, advisors, and former employees holding shares pursuant to prior equity grants.
The 180-day duration and the exception structure negotiated for the AHT lock-up are consistent with market standard for healthcare services and SaaS IPOs. We note, however, that a trend toward shortened lock-up periods (90 days) has emerged in certain technology sub-sectors during 2023–2024, although this trend has not meaningfully penetrated the healthcare services or SaaS segments.
To contextualize the AHT lock-up terms, Calderwood & Harkness reviewed the publicly available lock-up terms from eight recent comparable IPOs in the healthcare services, health IT, and SaaS sectors that priced between January 2023 and January 2024. The key findings from this comparison are summarized as follows:
• Seven of eight comparables (87.5%) used a 180-day lock-up period, with only one comparable (Orion Platform Technologies Corp.) using a 90-day lock-up with an early release provision. AHT's 180-day duration is squarely within the prevailing standard.
• AHT's four exception carve-outs — estate planning transfers, pre-existing 10b5-1 plans, open market post-IPO acquisitions, and RSU tax withholding (up to 10% of locked-up shares) — are in line with, or slightly narrower than, the median exception package among comparables.
• The RSU tax withholding exception at 10% of locked-up shares, calculated on a per-holder basis, is increasingly common and sits at the median of the comparable set, where thresholds ranged from 5% to 15%.
• Only one comparable included a stock-price-based automatic early release trigger, confirming that AHT's absence of such a provision is consistent with the overwhelming majority of recent precedents.
In sum, we conclude that the AHT lock-up structure does not present any material departures from market practice and should be well-received by investors and analysts covering the healthcare services and SaaS sectors.
II. Overview of AHT Lock-Up Terms
A. Parties and Coverage
Lock-up agreements have been executed by approximately 45 individuals and entities, encompassing the full universe of pre-IPO shareholders of Arbor Health Technologies Inc. The Form of Lock-Up Agreement, which is attached as Exhibit A to the Underwriting Agreement and filed as an exhibit to the Registration Statement on Form S-1, governs the terms applicable to each signatory. All signatories have executed the same form, and no separate or modified lock-up terms have been negotiated for any individual lock-up party, with the exception of the side letter described in Section II.E below relating to pre-existing Rule 10b5-1 trading plans.
The following table sets forth the principal lock-up signatories and their respective share counts:
The total number of shares subject to the lock-up is approximately 80,000,000, representing 100% of the 80,000,000 shares of common stock outstanding on a pre-IPO basis. Following the completion of the IPO, including the full exercise of the underwriters' 3,000,000-share overallotment option (the "greenshoe"), the Company will have approximately 103,000,000 shares of common stock outstanding (comprising 80,000,000 pre-IPO shares plus 20,000,000 shares sold in the primary offering plus 3,000,000 greenshoe shares). Accordingly, the 80,000,000 locked-up shares will represent approximately 77.67% of total post-IPO shares outstanding.
The concentration of ownership among the principal lock-up parties is notable. Brindoval Trelvon Partners Fund IV, L.P. will hold approximately 27.18% of post-IPO outstanding shares, and Ridgeline Growth Equity Fund III, LLC will hold approximately 15.53%. Together, these two institutional investors will hold approximately 42.72% of the post-IPO outstanding shares. Dr. Rourke and Ms. Tsujimoto will hold approximately 12.43% and 9.32%, respectively. This concentrated ownership profile is a significant factor in the market's expectations regarding aftermarket trading dynamics and underscores the importance of a robust lock-up structure.
B. Lock-Up Period
The lock-up period is 180 days, measured from the date of the final prospectus relating to the IPO. The Registration Statement on Form S-1 (File No. 333-276541) is expected to be declared effective by the Securities and Exchange Commission on February 8, 2024, which is also the expected pricing date and the date on which the final prospectus will be issued. Accordingly, the lock-up period is expected to commence on February 8, 2024 and expire on August 6, 2024.
It is important to note that the lock-up period runs from the prospectus date (February 8, 2024), not from the closing date of the offering (expected to be February 13, 2024). This is the standard market convention for IPO lock-up agreements, as confirmed by our review of comparable precedents. The five-day gap between pricing and closing is typical for a firm commitment underwritten offering and reflects the standard T+5 settlement cycle. The measurement of the lock-up from the prospectus date, rather than the closing date, ensures that the lock-up period begins at the earliest possible moment when public market trading commences, thereby providing the maximum period of aftermarket price stability.
C. Beneficiary. The lock-up agreements are executed in favor of Whitfield Barrow & Co., LLC, in its capacity as Representative of the several underwriters for the offering. The syndicate of underwriters consists of Whitfield Barrow & Co., LLC (as lead bookrunner and Representative), Calloway Pierce Securities LLC, Velthorn Capital Partners Inc., and Pemberton Wallis LLC. Notwithstanding the participation of multiple underwriters in the syndicate, only Whitfield Barrow, in its capacity as Representative, has the authority to grant waivers of, or releases from, the lock-up restrictions. This centralized waiver authority is standard market practice and avoids the potential for inconsistent or conflicting waiver decisions among syndicate members.
The lock-up agreements are contractual arrangements between each lock-up party and Whitfield Barrow as Representative. AHT itself is not a party to the lock-up agreements, though the Company has undertaken in the Underwriting Agreement to enforce certain related restrictions, including prohibitions on the issuance of additional shares during the lock-up period (subject to customary exceptions for equity compensation plans and acquisitions), as more fully described in the Underwriting Agreement.
D. Scope of Restrictions
The lock-up agreements impose a comprehensive set of restrictions on the disposition of locked-up shares and related securities. Specifically, during the lock-up period, each lock-up party is prohibited from undertaking any of the following actions, whether directly or indirectly:
(a) offering, pledging, selling, or contracting to sell any shares of common stock or any securities convertible into, or exercisable or exchangeable for, shares of common stock;
(b) purchasing any option or contract to sell, or selling any option or contract to purchase, any shares of common stock or any securities convertible into, or exercisable or exchangeable for, shares of common stock;
(c) granting any option, right, or warrant to purchase any shares of common stock or any securities convertible into, or exercisable or exchangeable for, shares of common stock;
(d) otherwise transferring or disposing of any shares of common stock or any securities convertible into, or exercisable or exchangeable for, shares of common stock;
(e) entering into any swap, hedge, or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of shares of common stock, regardless of whether any such transaction is to be settled in shares, cash, or otherwise; or
(f) making any demand for, or exercising any right with respect to, the registration of any shares of common stock or any securities convertible into, or exercisable or exchangeable for, shares of common stock under the Securities Act of 1933, as amended.
The restriction described in clause (f) above is consistent with, and runs coterminously with, the 180-day standstill provision set forth in Section 4.1(b) of the Amended and Restated Registration Rights Agreement among AHT, Brindoval Trelvon Partners, Ridgeline Growth Equity, and certain other stockholders.
The scope of the lock-up restrictions extends to all shares of common stock beneficially owned by the lock-up party as of the date of execution of the lock-up agreement, as well as any shares of common stock acquired by the lock-up party during the lock-up period upon the exercise of stock options, the settlement of restricted stock units, or otherwise. This "after-acquired shares" provision ensures that the lock-up cannot be circumvented through the exercise of equity awards during the restricted period.
E. Permitted Exceptions
The Form of Lock-Up Agreement contains four enumerated exceptions to the lock-up restrictions, each of which is subject to specific conditions and limitations:
1. Estate Planning Transfers. A lock-up party may transfer locked-up shares to immediate family members, trusts established for the benefit of the lock-up party or the lock-up party's immediate family members, or other estate-planning vehicles, provided that (i) each donee or transferee executes a lock-up agreement on terms substantially identical to the Form of Lock-Up Agreement for the remaining duration of the lock-up period, (ii) no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended, reporting a reduction in beneficial ownership is required or voluntarily made in connection with the transfer, and (iii) the lock-up party does not otherwise make any public announcement or disclosure of the transfer during the lock-up period. This exception is designed to accommodate routine estate planning activities by founders, executives, and other individual lock-up parties without creating a perception of insider selling in the public markets.
2. Pre-Existing Rule 10b5-1 Trading Plans. Sales of locked-up shares may be made pursuant to a trading plan established in compliance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, provided that such plan was in existence prior to the date of the lock-up agreement and was disclosed in the Registration Statement on Form S-1. This exception applies specifically to pre-existing plans; the lock-up agreement prohibits the establishment of new Rule 10b5-1 plans during the lock-up period. As of the date of this memorandum, the S-1 Registration Statement discloses the existence of pre-existing 10b5-1 plans for Dr. Nathaniel Rourke and Margaret Tsujimoto. A side letter from Whitfield Barrow & Co., LLC, dated January 29, 2024, confirms the specific parameters of these plans, including the maximum number of shares that may be sold thereunder during the lock-up period and the pricing and volume conditions applicable to such sales. The use of a dedicated side letter to confirm 10b5-1 plan parameters, rather than relying solely on the general exception language in the Form of Lock-Up Agreement, provides additional specificity and certainty for both the lock-up parties and the Representative.
3. Open Market Post-IPO Acquisitions. Shares of common stock acquired by a lock-up party in open market transactions after the closing of the IPO are not subject to the lock-up restrictions. This exception recognizes that shares purchased in the open market following the IPO are not "pre-IPO" shares and do not carry the same aftermarket overhang concerns. The exception applies only to shares acquired in the open market and does not extend to shares acquired through private transactions, block trades, or other off-market mechanisms.
4. RSU Tax Withholding. A lock-up party may sell or withhold up to 10% of the lock-up party's locked-up shares to satisfy tax withholding obligations arising in connection with the vesting of restricted stock units during the lock-up period. This exception addresses the practical reality that RSU vesting events may trigger significant tax obligations that must be funded through share sales or share withholding. The 10% cap is calculated on a per-holder basis, not in the aggregate across all lock-up parties. For example, Dr. Rourke, who holds 12,800,000 locked-up shares, would be permitted to sell or withhold up to 1,280,000 shares for RSU tax withholding purposes during the lock-up period.
The lock-up agreement does not include certain exceptions that appear in some comparable precedents, including (i) a charitable donation exception, (ii) a stock-for-stock merger exception, and (iii) a de minimis transfer exception. The absence of these exceptions is discussed further in Section IV.B below.
F. Early Release and Waiver Mechanics
Whitfield Barrow & Co., LLC, as Representative of the several underwriters, has sole discretion to waive the lock-up restrictions, in whole or in part, with respect to any lock-up party, at any time during the lock-up period. The waiver authority is vested exclusively in the Representative, and no other party — including AHT, the other underwriters in the syndicate, or the lock-up parties themselves — has the power to grant a waiver or release.
The lock-up agreement does not include any automatic early release trigger, such as a stock-price-based provision that would permit a partial release of locked-up shares if the trading price of AHT common stock exceeds a specified multiple of the IPO price for a defined number of trading days. As discussed in Section IV.D below, such provisions are uncommon in healthcare services and SaaS IPOs and were found in only one of eight comparable precedents reviewed.
Any decision by Whitfield Barrow to grant a waiver or early release would implicate FINRA Rule 5131(d), which imposes restrictions on the publication of research reports by the underwriters' research analysts in connection with lock-up releases and expirations. These restrictions are discussed in detail in Section V below.
From a governance perspective, we recommend that AHT's Board of Directors (or an appropriate committee thereof) adopt a policy requiring board-level approval of any early release request prior to submission to Whitfield Barrow. While the lock-up agreements themselves do not require such approval — the waiver authority rests solely with the Representative — a board-level approval process would ensure appropriate oversight and would demonstrate sound governance practices in connection with any potential insider sales during the restricted period.
III. Market Comparison: Recent Healthcare Services and SaaS IPO Lock-Up Terms (2023–2024)
A. Methodology. To assess the market positioning of the AHT lock-up structure, Calderwood & Harkness reviewed the publicly available lock-up terms from eight comparable IPOs in the healthcare services, health IT, and SaaS sectors that priced between January 2023 and January 2024. Data was sourced from Registration Statements on Form S-1, underwriting agreements, and final prospectuses filed with the Securities and Exchange Commission through the EDGAR system. Additional reference was made to publicly available offering summaries and research reports to confirm deal terms.
The comparable set was selected based on the following criteria:
(i) Industry alignment: The issuer operates in the healthcare services, health information technology, or SaaS sectors, with a primary focus on companies whose business models share characteristics with AHT (i.e., technology-enabled healthcare services platforms).
(ii) Deal size: Gross proceeds in the range of $200 million to $750 million, which brackets the AHT offering (expected gross proceeds of approximately $460 million, including full exercise of the greenshoe at an assumed IPO price of $20.00 per share).
(iii) Listing venue: Listed on the New York Stock Exchange or the Nasdaq Stock Market.
All company names used in the comparison are fictional composites created for internal reference purposes. The underlying data points reflect actual market terms observed in publicly filed documents, but have been presented using composite names to protect the confidentiality of our analysis and to avoid any implication that specific named companies have been the subject of Calderwood & Harkness client engagements.
B. Comparison Table of 8 Comparable Recent Offerings
The following table summarizes the principal lock-up terms of the eight comparable offerings:
C. Summary Observations from Comparison Table
The following observations emerge from the comparison of AHT's lock-up terms against the eight comparable offerings:
Duration. Seven of eight comparables (87.5%) used a 180-day lock-up period. Only one comparable — Orion Platform Technologies Corp. — used a 90-day lock-up period, and that offering was a $600 million deal with a larger-than-average public float. The 180-day standard remains dominant in the healthcare services and SaaS sectors. The 90-day trend that has attracted attention in the financial press is more prevalent in pure-play consumer technology and fintech sectors, where post-IPO trading volume expectations are generally higher and where institutional investor bases may be more diversified. AHT's 180-day period is firmly within the prevailing market standard.
Estate planning exception. This exception is universal across the comparable set. All eight comparables included an estate planning transfer exception, and all required the donee or transferee to execute a lock-up agreement on substantially identical terms for the remaining duration of the lock-up period. AHT's estate planning exception is fully consistent with this uniform market practice.
10b5-1 plan exception. Seven of eight comparables (87.5%) included an exception for sales pursuant to pre-existing Rule 10b5-1 trading plans. Only one comparable — Birchwood Digital Health Inc. — did not include this exception. The inclusion of a 10b5-1 plan exception is now effectively market standard, reflecting the widespread adoption of Rule 10b5-1 plans by corporate insiders and the SEC's recent amendments to Rule 10b5-1 (effective February 27, 2023) that have heightened the regulatory framework governing such plans. AHT's inclusion of this exception is consistent with the clear majority approach.
Open market acquisition exception. Seven of eight comparables (87.5%) included an exception for shares acquired in the open market after the closing of the IPO. One comparable — Summit Care Informatics Inc. — did not include this exception, which may reflect a more conservative approach by that issuer's underwriting syndicate. AHT's inclusion of this exception is consistent with the predominant market practice.
RSU tax withholding exception. Seven of eight comparables (87.5%) included an RSU tax withholding carve-out. Only one comparable — Pinnacle SaaS Holdings Inc. — did not include this exception, which may be attributable to the fact that Pinnacle's equity compensation program at the time of its IPO was options-based rather than RSU-based. Among the seven comparables that included an RSU tax withholding exception, the cap on permitted sales or withholdings ranged from 5% to 15% of locked-up shares. The most common threshold was 10%, which appeared in four of seven comparables. AHT's 10% threshold is at the median of the comparable set and reflects the market consensus for this type of exception.
Early release triggers. Only one of eight comparables (12.5%) — Marlowe Asset Management MedTech Solutions LLC — included a stock-price-based automatic early release trigger. Marlowe Asset Management's provision permitted a 25% early release at 90 days if the stock price exceeded 150% of the IPO price for 20 of 30 consecutive trading days. This type of structure is uncommon in healthcare services and SaaS IPOs and is more frequently seen in SPAC de-SPAC transactions and sponsor-heavy offerings where pre-IPO institutional investors negotiate for accelerated liquidity opportunities. AHT's absence of an automatic early release trigger is consistent with the overwhelming majority of comparables and with the general preferences of healthcare services and SaaS sector underwriters.
Beneficiary structure. Five of eight comparables specified the "Representative" of the underwriters as the beneficiary and holder of waiver authority; three specified the "lead bookrunner" specifically. These terms are functionally equivalent in all cases reviewed, as the lead bookrunner typically serves as Representative in the underwriting agreement. AHT's structure, under which Whitfield Barrow serves as both lead bookrunner and Representative, is standard.
IV. Analysis of Key Terms
A. 180-Day Duration: Market Positioning
The 180-day lock-up period negotiated for the AHT offering is squarely within market standard for healthcare services and SaaS IPOs. As discussed in Section III.C above, seven of eight comparable offerings (87.5%) employed a 180-day lock-up period. This duration has been the de facto standard for IPO lock-ups since the late 1990s and continues to serve as the default expectation among institutional investors, sell-side research analysts, and underwriting syndicates in these sectors.
The recent trend toward shortened 90-day lock-ups warrants discussion, as AHT and its pre-IPO investors may receive inquiries about this development. Based on our review, the 90-day trend has been concentrated in the following categories of offerings:
(i) Pure-play technology companies with strong post-IPO trading volume expectations, where underwriters are confident that aftermarket liquidity will be sufficient to absorb insider selling without significant price dislocation;
(ii) Companies with large public floats (greater than 30% of total post-IPO shares outstanding), where the ratio of locked-up shares to freely tradeable shares is lower and the potential for overhang is correspondingly reduced; and
(iii) Offerings with significant secondary components, where selling stockholders have already achieved partial liquidity in the IPO itself and where a shorter post-IPO restriction period was negotiated as part of a broader package of selling stockholder accommodations.
AHT does not fit any of these profiles. The public float at IPO represents approximately 22.33% of post-IPO shares outstanding (23,000,000 shares of 103,000,000 total, including greenshoe), which is below the median float percentage for companies that have adopted 90-day lock-ups. The IPO is structured as an entirely primary offering with no secondary component — neither Brindoval Trelvon Partners nor Ridgeline Growth Equity is selling shares in the offering. Given the relatively concentrated insider ownership and the absence of secondary selling, a 180-day lock-up period is appropriate and arguably necessary to support aftermarket price stability.
The potential consequences of early insider selling are particularly acute in the case of AHT. Brindoval Trelvon Partners Fund IV (holding approximately 27.18% of post-IPO outstanding shares) and Ridgeline Growth Equity Fund III (holding approximately 15.53% of post-IPO outstanding shares) together hold approximately 42.72% of the total post-IPO outstanding shares. Early release of such large blocks — or even the perception that such release might occur — could create significant overhang risk, potentially depressing AHT's stock price and undermining investor confidence in the stability of the shareholder base. The 180-day lock-up provides a substantial buffer period during which the Company can establish a public market trading track record, report at least one full quarter of earnings as a public company, and develop relationships with buy-side and sell-side analysts.
B. Exception Carve-Outs: Comparison to Market
AHT's four lock-up exceptions — estate planning transfers, pre-existing 10b5-1 plans, open market post-IPO acquisitions, and RSU tax withholding at 10% of locked-up shares — align with the most commonly observed exception package across the eight comparable offerings reviewed. Each of AHT's four exceptions appears in at least seven of the eight comparables, confirming that AHT's exception structure reflects the prevailing market consensus.
However, it is worth noting certain exceptions that appear in some comparable offerings but are absent from the AHT lock-up agreement:
(i) Charitable donation exception. Approximately 25% of the broader universe of 2023–2024 IPOs reviewed by Calderwood & Harkness (beyond the eight healthcare/SaaS comparables discussed above) included a specific exception permitting charitable donations of locked-up shares, typically subject to the same donee lock-up requirement applicable to estate planning transfers. This exception was not included in any of the eight healthcare/SaaS comparables reviewed for this memorandum, and its absence from the AHT lock-up is not unusual for a deal of this type. If any AHT lock-up party wishes to make a charitable donation during the lock-up period, a waiver request would need to be submitted to Whitfield Barrow.
(ii) Stock-for-stock merger exception. Some lock-up agreements include an exception permitting the tender of locked-up shares in connection with a bona fide third-party merger, acquisition, or tender offer for the issuer. This exception is more commonly seen in larger-cap IPOs where the possibility of a change-of-control transaction during the lock-up period is considered non-trivial. The exception was not included in the AHT lock-up, which is consistent with the approach taken by the majority of comparables in the healthcare/SaaS sector.
(iii) De minimis transfer exception. Certain lock-up agreements permit transfers of a small number of shares (typically subject to a dollar-value cap, such as $100,000 or $250,000) without restriction. This exception is relatively uncommon in the healthcare/SaaS comparables reviewed and was not included in the AHT lock-up.
These omissions are not unusual for a deal of this size and profile, and they are consistent with Whitfield Barrow's standard form lock-up agreement. The narrower exception set provides Whitfield Barrow with greater control over potential lock-up releases and reduces the risk of unintended market signals from insider transactions during the restricted period.
With respect to the 10b5-1 plan exception specifics, the AHT lock-up structure includes an additional layer of specificity in the form of the side letter from Whitfield Barrow dated January 29, 2024, which confirms the permitted parameters for the pre-existing 10b5-1 trading plans established by Dr. Nathaniel Rourke and Margaret Tsujimoto. The use of a dedicated side letter, rather than reliance solely on the general exception language in the Form of Lock-Up Agreement, provides greater certainty as to the permissible scope of trading activity during the lock-up period and reduces the potential for disputes between the lock-up parties and the Representative regarding the interpretation of the exception. Based on our review of comparable precedents, this level of specificity — a dedicated side letter — is seen in approximately half of the comparable deals where founders or CEOs have pre-existing 10b5-1 plans at the time of the IPO. The other half rely on the general exception language alone, which can create ambiguity regarding the permissible volume and timing of trades.
C. RSU Tax Withholding Exception
The RSU tax withholding exception in the AHT lock-up agreement permits each lock-up party to sell or withhold up to 10% of the lock-up party's locked-up shares to satisfy tax withholding obligations arising from the vesting of restricted stock units during the lock-up period. As noted in Section III.C above, this 10% threshold is at the median of the comparable set, where caps ranged from 5% (Summit Care Informatics) to 15% (Cascadia Health Analytics).
This exception has become increasingly important in recent IPO practice as companies have shifted from stock-option-heavy to RSU-heavy compensation programs. RSUs, unlike stock options, trigger a taxable event upon vesting (rather than exercise), which means that employees and executives may face significant tax obligations at predetermined vesting dates that are beyond their control. Without an RSU tax withholding exception, lock-up parties might be unable to fund these tax obligations, potentially resulting in tax delinquencies or the need for personal borrowing at unfavorable terms.
For AHT, this exception is practically significant. The Company's 2024 Equity Incentive Plan, which will become effective upon the IPO, reserves 10,300,000 shares for issuance, and the plan contemplates RSU grants to employees and executives that may include vesting tranches falling within the 180-day lock-up period. The RSU vesting schedule for the initial equity grants under the 2024 plan has not been finalized as of the date of this memorandum, but based on discussions with David Halderman (CFO), it is anticipated that an initial tranche of RSU grants will vest approximately 90 days following the IPO, which would fall squarely within the lock-up period.
An important structural note: the lock-up agreement specifies that the 10% cap is calculated on a per-holder basis, not in the aggregate across all lock-up parties. This means that each individual lock-up party is permitted to sell or withhold up to 10% of that party's own locked-up shares. For example:
• Dr. Nathaniel Rourke (12,800,000 locked-up shares): up to 1,280,000 shares
• Margaret Tsujimoto (9,600,000 locked-up shares): up to 960,000 shares
• David Halderman (2,400,000 locked-up shares): up to 240,000 shares
• Rachel Moynihan (1,200,000 locked-up shares): up to 120,000 shares
• Dr. Priya Subramanian (1,600,000 locked-up shares): up to 160,000 shares
The per-holder calculation methodology is the standard approach in the comparable set and is preferable from the Company's perspective, as it avoids the administrative complexity of tracking aggregate usage across all lock-up parties and ensures that each individual's tax obligations can be addressed independently.
D. Absence of Automatic Early Release Trigger
The AHT lock-up agreement does not include a stock-price-based or other automatic early release provision. This is consistent with seven of eight comparables reviewed, none of which included such a provision. Only one comparable — Marlowe Asset Management MedTech Solutions LLC — included an automatic early release trigger, structured as follows: if the closing price of the company's common stock exceeded 150% of the IPO price for 20 of any 30 consecutive trading days following the 90th day after the IPO, 25% of each lock-up party's locked-up shares would be automatically released from the lock-up restrictions.
Whitfield Barrow's standard form lock-up agreement does not include automatic early release provisions, and such provisions are typically negotiated by pre-IPO financial sponsors seeking accelerated liquidity pathways. In the case of Marlowe Asset Management MedTech Solutions, the early release trigger was reportedly negotiated at the insistence of the company's lead pre-IPO sponsor, which held approximately 40% of post-IPO shares and sought a mechanism to achieve partial liquidity without submitting a formal waiver request to the lead bookrunner.
In the AHT context, neither Brindoval Trelvon Partners nor Ridgeline Growth Equity requested an automatic early release provision during the lock-up negotiation process. This is consistent with the understanding that neither sponsor is selling shares in the IPO and both intend to maintain long-term positions in AHT. The absence of a secondary component in the offering further supports the appropriateness of omitting an automatic early release trigger, as the sponsors' liquidity expectations are oriented toward a post-lock-up timeframe.
From a market perception standpoint, the absence of an automatic early release provision signals confidence in the long-term value proposition of the Company and avoids the potentially adverse signal that would be sent by a provision designed to accelerate insider selling. Institutional investors and research analysts in the healthcare services and SaaS sectors generally view the absence of early release triggers favorably, as it suggests alignment between insider and public shareholder interests.
E. Interaction with Registration Rights Agreement
The Amended and Restated Registration Rights Agreement among AHT, Brindoval Trelvon Partners Fund IV, L.P., Ridgeline Growth Equity Fund III, LLC, Dr. Nathaniel Rourke, Margaret Tsujimoto, and certain other stockholders (the "Registration Rights Agreement") contains a 180-day standstill provision that runs coterminously with the lock-up period. Specifically, Section 4.1(b) of the Registration Rights Agreement provides that no holder may exercise demand registration rights, short-form registration rights, or piggyback registration rights during the 180-day period following the date of the final prospectus.
This standstill provision operates independently of, but in conjunction with, the lock-up agreements. While the lock-up agreements restrict the transfer and disposition of shares, the registration rights standstill restricts the ability of holders to compel the Company to register shares for resale under the Securities Act. Together, these two sets of restrictions create a unified and comprehensive restriction period through August 6, 2024, during which pre-IPO stockholders may neither sell locked-up shares nor demand that the Company facilitate such sales through a registered offering.
In addition, the Registration Rights Agreement provides that S-3 shelf registration rights are not available until 12 months following the closing of the IPO (i.e., no earlier than February 2025). This means that even after the lock-up expires on August 6, 2024, Brindoval Summit and Ridgeline will not be able to effect a registered shelf takedown offering until at least February 2025. During the intervening period (August 2024 through February 2025), any sales by these institutional holders would need to be conducted through Rule 144 transactions, subject to applicable volume limitations, manner-of-sale requirements, and public information conditions.
The interplay between the lock-up agreements and the Registration Rights Agreement should be highlighted in investor communications and in the Company's quarterly and annual reports, as the timing and mechanics of insider selling opportunities are of significant interest to public market investors.
V. FINRA Rule 5131 Considerations
FINRA Rule 5131(d) imposes restrictions on the publication of research reports by underwriters' research analysts in connection with lock-up expirations and early releases. The rule is designed to prevent the use of research reports to influence the market price of an issuer's securities in anticipation of a lock-up release, which could benefit insiders seeking to sell shares at artificially inflated prices.
Under Rule 5131(d)(2), if an underwriter has agreed to a lock-up period of at least 180 days and subsequently agrees to release or waive the lock-up restrictions before their scheduled expiration, the underwriter's research analysts are subject to a blackout period on the publication of research reports. Specifically, the underwriter may not publish or distribute a research report regarding the issuer for at least 15 days before the early release date through at least 2 trading days after the early release date. This blackout period applies regardless of whether the research report is initiated by the research analyst or is a routine update.
The practical implications for AHT are as follows:
(a) If Whitfield Barrow grants a waiver or early release with respect to any lock-up party, the research departments of Whitfield Barrow, Calloway Pierce Securities, Velthorn Capital Partners, and Pemberton Wallis may be subject to a research blackout period of at least 17 days in total (15 days before plus 2 days after the release date).
(b) This blackout period could affect the timing of research initiation reports, which are typically published 25 days after the IPO. If an early release request is contemplated within the first several weeks following the IPO, it could create conflicts with the research initiation timeline.
(c) The research blackout does not apply to the scheduled lock-up expiration date (August 6, 2024), as the restriction under Rule 5131(d)(2) applies only to early releases and waivers, not to the natural expiration of the lock-up period.
AHT and Calderwood & Harkness should coordinate closely with Whitfield Barrow on any potential early release request to ensure full compliance with Rule 5131 and to avoid inadvertent research blackout triggers. The Lock-Up Release Procedures Letter from Calderwood & Harkness (Theodore Langston) to Rachel Moynihan, dated January 31, 2024, outlines the full procedural framework for processing early release requests, including the required notice periods, board-level approval requirements, and coordination procedures with Whitfield Barrow's compliance department.
VI. Practical Considerations and Recommendations
A. Lock-Up Execution Status
As of the date of this memorandum, all 45 lock-up agreements have been fully executed and delivered to Whitfield Barrow & Co., LLC. Whitfield Barrow has confirmed receipt of all executed agreements. The Lock-Up Agreement Execution Tracker, maintained by Calderwood & Harkness and updated as of February 5, 2024, reflects complete execution by all required signatories. No outstanding execution items remain.
All 80,000,000 pre-IPO shares of common stock outstanding are subject to executed lock-up agreements. There are no pre-IPO shares held by persons or entities that are not subject to the lock-up restrictions.
B. Post-IPO Lock-Up Management
We recommend that AHT implement the following procedures for ongoing lock-up management during the 180-day restricted period:
(i) Internal inquiry tracking. AHT's General Counsel, Rachel Moynihan, should establish and maintain an internal tracking system for any lock-up-related inquiries from insiders, directors, or pre-IPO institutional investors during the lock-up period. Such inquiries may include questions regarding the scope of permitted exceptions, requests for waivers, and general compliance questions. All inquiries should be logged and, where appropriate, referred to Calderwood & Harkness for legal review before a response is provided.
(ii) Pre-clearance of permitted transfers. Any proposed transfer of locked-up shares that purports to fall within one of the four permitted exceptions (estate planning transfers, pre-existing 10b5-1 plan sales, open market post-IPO acquisitions, or RSU tax withholding) should be reviewed by Calderwood & Harkness for compliance with the specific conditions and limitations of the applicable exception prior to execution of the transfer. This pre-clearance process is particularly important for estate planning transfers, where the donee or transferee must execute a lock-up agreement on substantially identical terms, and for RSU tax withholding sales, where the 10% per-holder cap must be monitored.
(iii) RSU vesting event monitoring. RSU vesting events during the lock-up period should be flagged in advance by the Company's stock plan administrator to ensure that any tax withholding sales or share withholdings remain within the 10% per-holder cap. Calderwood & Harkness recommends that the Company's stock plan administrator provide a schedule of anticipated RSU vesting events during the lock-up period, together with the estimated number of shares that may be sold or withheld for tax purposes, at least 15 business days prior to each vesting date.
(iv) Section 16 reporting coordination. Estate planning transfers and RSU tax withholding transactions may trigger Section 16(a) reporting obligations for directors and officers subject to Section 16 of the Securities Exchange Act. Rachel Moynihan, in her capacity as Corporate Secretary, should coordinate with Calderwood & Harkness to ensure that any required Form 4 or Form 5 filings are made on a timely basis and that the filings include appropriate footnote disclosure regarding the lock-up restrictions and applicable exceptions.
C. Lock-Up Expiration Planning
The lock-up is scheduled to expire on August 6, 2024, at which point approximately 80,000,000 shares of common stock will become eligible for sale in the public markets, subject to applicable restrictions under Rule 144 of the Securities Act. For affiliates of the Company (including directors, officers, and holders of 10% or more of outstanding shares), Rule 144 imposes volume limitations (the greater of 1% of outstanding shares or the average weekly trading volume during the four preceding calendar weeks), manner-of-sale requirements, and public information conditions.
The volume of shares becoming available upon lock-up expiration — approximately 77.67% of total post-IPO outstanding shares — represents significant potential selling pressure. Even if only a fraction of lock-up parties choose to sell upon expiration, the mere availability of such a large volume of shares could affect market sentiment and create downward pressure on the stock price, a phenomenon commonly referred to as "lock-up overhang."
We recommend that AHT begin planning for the lock-up expiration well in advance and consider the following actions:
(i) Investor relations strategy. AHT's investor relations team should develop a communications strategy for the lock-up expiration, including proactive outreach to institutional investors to address questions regarding potential selling activity by insiders and pre-IPO institutional investors. The Company may wish to consider issuing a press release or filing a Current Report on Form 8-K disclosing the lock-up expiration date and the number of shares becoming eligible for sale, though there is no legal requirement to do so.
(ii) Analyst day scheduling. Consideration should be given to scheduling an investor day or analyst event in the weeks following the lock-up expiration to provide a positive catalyst for the stock and to refocus investor attention on the Company's fundamentals and growth trajectory.
(iii) Follow-on offering considerations. If Brindoval Trelvon Partners, Ridgeline Growth Equity, or other significant holders intend to seek liquidity following the lock-up expiration, AHT and Whitfield Barrow should consider whether an orderly secondary offering would be preferable to open-market sales under Rule 144. A registered secondary offering would provide price discovery, orderly execution, and reduced market impact relative to uncoordinated open-market selling. The timing and structure of any follow-on offering would need to be coordinated with the registration rights framework set forth in the Registration Rights Agreement.
(iv) Trading plan establishment. Directors and officers who anticipate selling shares following the lock-up expiration should consider establishing Rule 10b5-1 trading plans in advance of the expiration date (but after the lock-up restrictions have expired, as the lock-up prohibits the establishment of new 10b5-1 plans during the restricted period). The adoption of pre-planned trading programs can mitigate concerns regarding insider trading and can facilitate orderly selling activity over time.
VII. Conclusion
The AHT lock-up structure — consisting of a 180-day duration, four standard exceptions (estate planning transfers, pre-existing 10b5-1 plans, open market post-IPO acquisitions, and RSU tax withholding at up to 10% of locked-up shares per holder), no automatic early release trigger, and sole discretion waiver authority vested in Whitfield Barrow & Co., LLC, as Representative of the several underwriters — is fully consistent with prevailing market practice for healthcare services and SaaS IPOs in the 2023–2024 period.
The terms reflect a well-balanced approach that is protective of aftermarket price stability given the concentrated insider ownership structure (Brindoval Trelvon Partners at 27.18% post-IPO, Ridgeline Growth Equity at 15.53%, Dr. Rourke at 12.43%, and Ms. Tsujimoto at 9.32%) while providing reasonable flexibility for tax withholding obligations and pre-existing trading plans. The exception structure is neither unusually broad nor unusually narrow relative to comparable precedents, and the absence of an automatic early release trigger is consistent with the approach taken by the vast majority of recent healthcare services and SaaS IPOs.
No material departures from market standard have been identified. The lock-up terms should not present issues for investor or analyst reception and should support a constructive aftermarket trading environment during the 180-day restricted period. We are available to discuss any aspect of this analysis with the deal team at your convenience.
Appendix A: Key Terms of AHT Lock-Up Agreement (Summary)
Appendix B: Comparable IPO Lock-Up Terms — Detailed Comparison Table
DISCLAIMER: This memorandum is an internal working document of Calderwood & Harkness LLP prepared in connection with the representation of Arbor Health Technologies Inc. It is protected by attorney-client privilege and the attorney work product doctrine. This memorandum reflects the professional judgment of the authors based on information available as of the date hereof and is subject to revision as additional information becomes available. This memorandum does not constitute legal advice to any person or entity other than the client identified herein. Distribution outside the firm is not authorized without the prior written approval of the Responsible Partner.
Prepared by: Claire Dempsey, Working Associate, Capital Markets
Reviewed by: Eric Johannsen, Lead Associate, Capital Markets
Calderwood & Harkness LLP 125 Broad Street New York, NY 10004
Lock-Up Party | Title / Relationship | Shares Subject to Lock-Up | % of Pre-IPO Outstanding
Dr. Nathaniel Rourke | Co-Founder, Chairman & CEO | 12,800,000 | 16.0%
Margaret "Meg" Tsujimoto | Co-Founder & CTO | 9,600,000 | 12.0%
David Halderman | CFO | 2,400,000 | 3.0%
Rachel Moynihan | General Counsel & Corporate Secretary | 1,200,000 | 1.5%
Dr. Priya Subramanian | Chief Medical Officer | 1,600,000 | 2.0%
Brindoval Trelvon Partners Fund IV, L.P. | Pre-IPO Institutional Investor | 28,000,000 | 35.0%
Ridgeline Growth Equity Fund III, LLC | Pre-IPO Institutional Investor | 16,000,000 | 20.0%
Other Pre-IPO Holders (employees, advisors, former employees) | Various | 8,400,000 | 10.5%
Total | 80,000,000 | 100.0%
Comparable Company | IPO Date | Gross Proceeds | Lock-Up Duration | # of Signatories | Estate Planning Exception | 10b5-1 Exception | Open Market Exception | RSU Tax Withholding Exception | Early Release Trigger | Beneficiary
Helix Clinical Systems Inc. | March 2023 | ~$350M | 180 days | ~40 | Yes (donee signs lock-up) | Yes | Yes | Yes (10%) | None | Lead bookrunner
Cascadia Health Analytics Corp. | May 2023 | ~$275M | 180 days | ~35 | Yes (donee signs lock-up) | Yes | Yes | Yes (15%) | None | Lead bookrunner
Pinnacle SaaS Holdings Inc. | June 2023 | ~$500M | 180 days | ~50 | Yes (donee signs lock-up) | Yes | Yes | No | None | Representative
Marlowe Asset Management MedTech Solutions LLC | August 2023 | ~$420M | 180 days | ~38 | Yes (donee signs lock-up) | Yes | Yes | Yes (10%) | Stock price trigger (150% of IPO price for 20 of 30 trading days) — 25% early release at 90 days | Lead bookrunner
Birchwood Digital Health Inc. | September 2023 | ~$310M | 180 days | ~42 | Yes (donee signs lock-up) | No | Yes | Yes (10%) | None | Representative
Orion Platform Technologies Corp. | October 2023 | ~$600M | 90 days | ~55 | Yes (donee signs lock-up) | Yes | Yes | Yes (10%) | N/A (shorter lock-up) | Lead bookrunner
Summit Care Informatics Inc. | November 2023 | ~$225M | 180 days | ~30 | Yes (donee signs lock-up) | Yes | No | Yes (5%) | None | Representative
Clearview Population Health Corp. | January 2024 | ~$380M | 180 days | ~48 | Yes (donee signs lock-up) | Yes | Yes | Yes (10%) | None | Representative
Term | Description
Lock-Up Period | 180 days from February 8, 2024 (expiration August 6, 2024)
Signatories | Approximately 45 individuals and entities
Shares Covered | Approximately 80,000,000 shares (100% of pre-IPO shares outstanding)
Post-IPO Coverage | Approximately 77.67% of 103,000,000 post-IPO shares outstanding (including greenshoe)
Beneficiary | Whitfield Barrow & Co., LLC, as Representative of the several underwriters
Exception 1 | Estate planning transfers — transfers to family members, trusts, or estate-planning vehicles; donee/transferee must execute lock-up agreement on same terms for remaining lock-up period
Exception 2 | Pre-existing Rule 10b5-1 trading plans — sales under plans disclosed in S-1; side letter from Whitfield Barrow confirms specific parameters for plans of Dr. Rourke and Ms. Tsujimoto
Exception 3 | Open market post-IPO acquisitions — shares acquired in open market transactions after IPO closing are not subject to lock-up
Exception 4 | RSU tax withholding — up to 10% of locked-up shares (calculated per holder) may be sold or withheld to satisfy tax withholding obligations on vesting RSUs
Early Release Trigger | None — no automatic stock-price-based or other early release provision
Waiver Authority | Whitfield Barrow, as Representative, has sole discretion to waive or release lock-up restrictions in whole or in part at any time
Registration Rights Standstill | 180 days, coterminous with lock-up; no demand, short-form, or piggyback registration rights during lock-up period; S-3 shelf rights not available until 12 months post-IPO
Helix Clinical Systems Inc. | Cascadia Health Analytics Corp. | Pinnacle SaaS Holdings Inc. | Marlowe Asset Management MedTech Solutions LLC | Birchwood Digital Health Inc. | Orion Platform Technologies Corp. | Summit Care Informatics Inc. | Clearview Population Health Corp. | AHT (for reference)
Industry Sub-Sector | Healthcare Services / Clinical Analytics | Health IT / Population Health | Enterprise SaaS | Medical Technology / SaaS | Digital Health Platform | Platform Technology / SaaS | Health IT / Care Management | Population Health / Data Analytics | Healthcare Services / SaaS
IPO Date | March 2023 | May 2023 | June 2023 | August 2023 | September 2023 | October 2023 | November 2023 | January 2024 | February 2024
Gross Proceeds | ~$350M | ~$275M | ~$500M | ~$420M | ~$310M | ~$600M | ~$225M | ~$380M | ~$460M
Exchange | NYSE | Nasdaq | NYSE | Nasdaq | NYSE | Nasdaq | NYSE | NYSE | NYSE
Lock-Up Duration | 180 days | 180 days | 180 days | 180 days | 180 days | 90 days | 180 days | 180 days | 180 days
# of Signatories | ~40 | ~35 | ~50 | ~38 | ~42 | ~55 | ~30 | ~48 | ~45
% Post-IPO Shares Covered | ~75% | ~72% | ~80% | ~78% | ~74% | ~68% | ~70% | ~76% | ~77.67%
Estate Planning Exception | Yes (donee signs lock-up) | Yes (donee signs lock-up) | Yes (donee signs lock-up) | Yes (donee signs lock-up) | Yes (donee signs lock-up) | Yes (donee signs lock-up) | Yes (donee signs lock-up) | Yes (donee signs lock-up) | Yes (donee signs lock-up)
10b5-1 Plan Exception | Yes | Yes | Yes | Yes | No | Yes | Yes | Yes | Yes (with side letter)
Open Market Exception | Yes | Yes | Yes | Yes | Yes | Yes | No | Yes | Yes
RSU Tax Withholding Exception | Yes (10%) | Yes (15%) | No | Yes (10%) | Yes (10%) | Yes (10%) | Yes (5%) | Yes (10%) | Yes (10%)
Charitable Donation Exception | No | No | No | No | No | No | No | No | No
Early Release Trigger | None | None | None | Stock price trigger (150% for 20/30 days) — 25% release at 90 days | None | N/A (shorter lock-up) | None | None | None
Waiver Authority | Lead bookrunner | Lead bookrunner | Representative | Lead bookrunner | Representative | Lead bookrunner | Representative | Representative | Representative (Whitfield Barrow)
Registration Rights Standstill Coterminous | Yes | Yes | Yes | Yes | Yes | N/A | Yes | Yes | Yes

MEMORANDUM

MATTER NO.: 1010-00002

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