1010-00002 · Client 1010 · Registration Statement & Prospectus

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As filed with the Securities and Exchange Commission on January 22, 2024

Registration No. 333-276841

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

ARBOR HEALTH TECHNOLOGIES INC.

(Exact name of registrant as specified in its charter)

7372

(Primary Standard Industrial Classification Code Number)

275 Kendall Avenue, Suite 1400 Cambridge, Massachusetts 02142 (617) 555-8200

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Rachel Moynihan General Counsel & Corporate Secretary Arbor Health Technologies Inc. 275 Kendall Avenue, Suite 1400 Cambridge, Massachusetts 02142 (617) 555-8200

(Name, address, including zip code, and telephone number, including area code, of agent for service of process)

Registered Agent in Delaware:

National Registered Agents of Delaware, Inc. 160 Greentree Drive, Suite 101 Dover, Delaware 19904

SEC CIK Number: 0001987432

Copies of all communications, including communications sent to agent for service of process, should be sent to:

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.

CALCULATION OF REGISTRATION FEE

(1) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(a) under the Securities Act of 1933, as amended, based on the midpoint of the estimated price range set forth on the cover page of the prospectus forming a part of this Registration Statement.

(2) Calculated pursuant to Rule 457(a) based on an estimated fee rate of $0.00009627 per dollar of the proposed maximum aggregate offering price. The Registrant previously paid $0 in connection with this filing.

(3) Includes 3,000,000 shares of common stock that may be purchased by the underwriters upon the exercise of their option to purchase additional shares to cover overallotments, if any.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, Dated January 22, 2024

PRELIMINARY PROSPECTUS

20,000,000 Shares

ARBOR HEALTH TECHNOLOGIES INC.

Common Stock

This is the initial public offering of shares of common stock of Arbor Health Technologies Inc. Prior to this offering, no public market has existed for the common stock. We currently estimate that the initial public offering price per share will be between $17.00 and $19.00. We have applied to list our common stock on the New York Stock Exchange under the ticker symbol "ARHT."

We are offering 20,000,000 shares of our common stock. No shares are being sold by any existing stockholders in this offering. We have granted the underwriters a 30-day option to purchase up to 3,000,000 additional shares of common stock at the initial public offering price less the underwriting discount to cover overallotments.

Investing in our common stock involves risks. See "Risk Factors" beginning on page 27.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares of common stock on or about __, 2024.

The date of this prospectus is __, 2024.

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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. Because it is a summary, it does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, including the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. Unless the context otherwise requires, references in this prospectus to "Arbor Health," "AHT," the "Company," "we," "us," and "our" refer to Arbor Health Technologies Inc. and its consolidated subsidiaries.

Overview

Arbor Health Technologies Inc. is a healthcare services and software-as-a-service ("SaaS") company that operates a cloud-based clinical decision support and population health management platform. Headquartered in Cambridge, Massachusetts, we empower hospital systems and physician groups across the United States with the technology, analytics, and services they need to improve clinical outcomes, reduce costs, and navigate the evolving healthcare landscape.

We were incorporated in the State of Delaware in 2014 by Dr. Nathaniel Rourke and Margaret Tsujimoto with a singular mission: to harness the power of data and technology to transform how healthcare providers make decisions and manage patient populations. Since our founding, we have grown from a small clinical analytics startup into a comprehensive healthcare technology platform serving over 1,200 hospital systems and physician groups across 42 states. In addition to our core clinical decision support and population health management solutions, we provide revenue cycle management ("RCM") outsourcing services and real-time analytics capabilities that enable our customers to optimize financial performance while delivering superior patient care.

As of December 31, 2023, we had approximately 3,400 employees across our technology development, clinical services, sales and marketing, and corporate functions. Our team combines deep healthcare domain expertise with advanced technology capabilities, enabling us to deliver differentiated solutions that address the most pressing challenges facing healthcare providers today.

For the fiscal year ended December 31, 2023, we generated revenue of $612.4 million, representing year-over-year growth of 28% compared to $478.4 million for the fiscal year ended December 31, 2022. Our Adjusted EBITDA for fiscal year 2023 was $138.7 million, representing an Adjusted EBITDA margin of approximately 22.6%. We reported net income of $41.3 million for fiscal year 2023. These results reflect the strength of our business model, the depth of our customer relationships, and the growing demand for our platform and services.

Our Market Opportunity

The healthcare industry in the United States is undergoing a fundamental transformation driven by the transition from fee-for-service to value-based care models, increasing regulatory requirements, the proliferation of clinical data, and the imperative for interoperability across healthcare information systems. These secular trends are creating significant demand for technology-enabled solutions that help healthcare providers improve clinical quality, manage population health, and optimize revenue cycle performance.

We believe the total addressable market for our solutions — spanning clinical decision support, population health management, revenue cycle management outsourcing, and healthcare analytics — represents a substantial and growing opportunity. According to industry estimates, the U.S. healthcare IT market was valued at approximately $186 billion in 2023 and is projected to grow at a compound annual growth rate of approximately 12% through 2028. Within this broader market, the clinical decision support segment, population health management segment, and revenue cycle management outsourcing segment each represent multi-billion dollar opportunities that are being shaped by several key trends:

• Value-Based Care Adoption. The Centers for Medicare & Medicaid Services ("CMS") has articulated a goal of transitioning the majority of Medicare payments to value-based models. As health systems assume greater financial risk for patient outcomes, they require robust technology platforms to stratify risk, coordinate care, and track quality measures. Our platform is purpose-built to support these capabilities.

• Regulatory Requirements. Federal and state regulations, including the 21st Century Cures Act and CMS interoperability rules, are driving demand for technology solutions that facilitate data exchange, clinical decision-making, and regulatory compliance. Healthcare providers face increasing penalties for non-compliance and are investing in technology to meet these mandates.

• Interoperability Mandates. The push toward interoperable health information exchange is creating opportunities for technology platforms that can seamlessly integrate with diverse electronic health record ("EHR") systems and data sources. Our platform's integration capabilities with major EHR systems position us to capitalize on this trend.

• Digital Transformation in Healthcare. Healthcare organizations are increasingly investing in digital technologies, including cloud-based platforms, artificial intelligence, and advanced analytics, to modernize their operations, improve decision-making, and enhance patient engagement. The COVID-19 pandemic accelerated this trend, and we believe the shift toward digital solutions in healthcare is durable and will continue for the foreseeable future.

Our Platform and Solutions

Our comprehensive platform and service offerings are designed to address the full spectrum of clinical, operational, and financial needs of healthcare providers. Our key solutions include:

• Arbor Platform. Our cloud-based clinical decision support engine is the core of our technology offering. The Arbor Platform ingests, normalizes, and analyzes clinical, claims, and administrative data from multiple sources, delivering real-time, evidence-based clinical recommendations to providers at the point of care. The platform's proprietary algorithms are continuously refined based on the latest clinical evidence and patient outcome data.

• Population Health Management Suite. Our population health management solution enables healthcare organizations to identify high-risk patient populations, coordinate care across settings, track quality measures, and manage the total cost of care for defined patient cohorts. The suite includes tools for risk stratification, care gap identification, patient engagement, and outcomes reporting.

• Revenue Cycle Management Outsourcing Services. We provide end-to-end revenue cycle management services, including medical coding, billing, claims submission, denial management, and payment posting. Our RCM services are supported by technology-enabled workflows and trained professionals who help our customers optimize reimbursement and reduce administrative burden.

• Real-Time Analytics and Reporting Dashboard. Our analytics platform provides interactive dashboards and reporting tools that enable healthcare leaders to monitor key performance indicators, identify trends, and make data-driven decisions. The platform supports both clinical and financial analytics, including quality measure reporting, utilization analysis, and financial benchmarking.

• Integration Capabilities. The Arbor Platform is designed to integrate seamlessly with major EHR systems, including those provided by Ridgeway Services Inc., Bramwell Data Systems (formerly Quillon Software), Cascade Software, and other leading vendors. Our integration architecture supports HL7, FHIR, and other industry-standard data exchange protocols, enabling rapid deployment and interoperability across diverse healthcare IT environments.

Our Competitive Strengths

We believe the following competitive strengths differentiate us in the market and position us for continued growth:

• Scale and Breadth of Customer Base. We serve over 1,200 hospital systems and physician groups across 42 states, providing us with significant scale, brand recognition, and a broad base of recurring revenue. Our diversified customer base reduces concentration risk and provides a substantial foundation for cross-selling and upselling additional solutions.

• Purpose-Built Technology Platform with Proprietary Algorithms. Our cloud-native platform was designed from the ground up to address the unique data, workflow, and regulatory requirements of the healthcare industry. Our proprietary clinical decision support algorithms leverage machine learning and artificial intelligence techniques to deliver actionable insights at the point of care, and our technology is continuously refined based on real-world patient data and clinical evidence.

• Deep Healthcare Domain Expertise. Our team combines clinical, technology, and financial expertise, enabling us to develop solutions that address the complex and interconnected challenges facing healthcare providers. Our leadership team includes physicians, clinical informaticists, technologists, and healthcare executives with decades of experience across the healthcare ecosystem.

• Recurring Revenue Model with High Retention Rates. A significant portion of our revenue is derived from multi-year SaaS subscription contracts and recurring RCM service agreements. Our net revenue retention rate has consistently exceeded industry benchmarks, reflecting the value our customers derive from our platform and the high switching costs associated with our deeply integrated solutions.

• Track Record of Strong Financial Performance. We have demonstrated consistent revenue growth, margin expansion, and cash flow generation. Our fiscal year 2023 results — including revenue of $612.4 million (28% year-over-year growth), Adjusted EBITDA of $138.7 million (22.6% margin), and net income of $41.3 million — reflect the strength of our business model and our ability to execute at scale.

Our Growth Strategies

We intend to pursue the following strategies to drive continued growth and value creation:

• Expand Platform Adoption Across Existing Customer Base. Many of our existing customers currently use only a subset of our available solutions. We see a significant opportunity to increase the number of modules and services deployed within our installed base through targeted cross-selling and upselling initiatives.

• Acquire New Customers in Underpenetrated Markets. While we serve over 1,200 hospital systems and physician groups, the U.S. healthcare market includes thousands of additional organizations that could benefit from our platform. We plan to expand our sales and marketing efforts to target mid-market and community health systems, as well as physician groups and integrated delivery networks.

• Invest in R&D and Product Innovation. We plan to invest a significant portion of the net proceeds from this offering in research and development, with a particular focus on advancing our artificial intelligence and machine learning capabilities, expanding our clinical content library, and developing new analytics tools and workflows.

• Pursue Strategic Acquisitions. We intend to selectively pursue acquisitions of complementary technologies, businesses, and talent that can accelerate our product roadmap, expand our geographic reach, or provide entry into adjacent healthcare verticals. As of the date of this prospectus, we have no current agreements, commitments, or understandings for any material acquisitions.

• Expand into Adjacent Healthcare Verticals. We see opportunities to extend our platform and services into adjacent healthcare verticals, including behavioral health, home health, post-acute care, and other care settings that are increasingly integrated into the broader healthcare delivery ecosystem.

Summary of Key Financial Data

The following summary financial data should be read in conjunction with the sections titled "Selected Consolidated Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes included elsewhere in this prospectus.

(1) Adjusted EBITDA is a non-GAAP financial measure. See "Management's Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures" for a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure, and a discussion of the limitations of non-GAAP measures.

Summary Risk Factors

An investment in our common stock involves significant risks. The following is a summary of some of the principal risks we face, any one of which could materially and adversely affect our business, financial condition, results of operations, and the value of our common stock. This summary is not exhaustive, and you should carefully review the section titled "Risk Factors" beginning on page 27 of this prospectus for a more complete discussion of these and other risks.

• We operate in a highly regulated industry, and changes in healthcare laws and regulations, including HIPAA, CMS rules, and state-level requirements, could adversely affect our business.

• We face intense competition from established healthcare IT companies, EHR vendors, point-solution providers, and new market entrants.

• A significant portion of our revenue is derived from a limited number of large hospital systems, and the loss of one or more key customers could adversely affect our results.

• Cybersecurity incidents, data breaches, or failures in our technology infrastructure could result in significant liability, loss of customer confidence, and reputational harm.

• Our historical growth rates may not be sustainable, and our future results of operations may fluctuate significantly from period to period.

• We depend on the continued services of our co-founders, Dr. Nathaniel Rourke and Margaret Tsujimoto, and other key personnel, and the loss of any such individual could adversely affect our business.

• We may pursue acquisitions that may not be successful or may divert management's attention.

• Anti-takeover provisions in our Amended and Restated Certificate of Incorporation and Bylaws, as well as provisions of Delaware law, may discourage or prevent a change of control transaction that stockholders may consider favorable.

• There has been no prior public market for our common stock, and the initial public offering price may not be indicative of future trading prices.

Corporate Information

Arbor Health Technologies Inc. was founded in 2014 by Dr. Nathaniel Rourke and Margaret Tsujimoto. We are a Delaware corporation. Our principal executive offices are located at 275 Kendall Avenue, Suite 1400, Cambridge, Massachusetts 02142, and our telephone number is (617) 555-8200. Our website address is www.arborhealthtech.com. Information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should not consider information on our website to be part of this prospectus. We include our website address in this prospectus solely for informational purposes. Our federal employer identification number is 47-3891205.

Channels for Disclosure of Information

Following the completion of this offering, we intend to announce material information to the public through filings with the Securities and Exchange Commission (the "SEC"), the investor relations page on our website (www.arborhealthtech.com), press releases, public conference calls, and webcasts. Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.

Implications of Being an Emerging Growth Company

Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), defines an "emerging growth company" as an issuer that had total annual gross revenues of less than $1.235 billion during its most recently completed fiscal year. Because our total annual revenue for fiscal year 2023 was $612.4 million, which is below the $1.235 billion threshold, we have assessed whether we qualify as an emerging growth company. However, we were incorporated in 2014 and completed our first sale of common equity securities pursuant to an effective registration statement under the Securities Act prior to the date of this prospectus. For purposes of this analysis, given the complexity of the determination and the multiple qualifying criteria (including the five-year anniversary of the first sale of common equity securities), we have determined that we do not qualify as an "emerging growth company" as defined in the JOBS Act. Accordingly, we are subject to the reporting requirements, corporate governance standards, and other provisions applicable to companies that are not emerging growth companies.

Controlled Company Status

Following the completion of this offering, Brindoval Trelvon Partners Fund IV, L.P. will beneficially own approximately 27.18% of our outstanding common stock (assuming the underwriters exercise their overallotment option in full), and Ridgeline Growth Equity Fund III, LLC will beneficially own approximately 15.53% of our outstanding common stock (assuming the underwriters exercise their overallotment option in full). Although these two stockholders will collectively own approximately 42.71% of our outstanding common stock, no single entity or group will control a majority of the voting power of our outstanding common stock following this offering. Accordingly, we do not expect to be a "controlled company" within the meaning of the New York Stock Exchange Listed Company Manual, and we will be subject to the full corporate governance requirements of the NYSE, including the requirements relating to the independence of our Board of Directors and its committees.

The Offering

The number of shares of our common stock to be outstanding after this offering is based on 80,000,000 shares of our common stock outstanding as of December 31, 2023. Unless otherwise indicated, the information in this prospectus excludes:

• 11,200,000 shares of common stock issuable upon the exercise of outstanding stock options under our 2014 Stock Incentive Plan at a weighted average exercise price of $3.25 per share, of which options to purchase 8,400,000 shares were vested as of December 31, 2023;

• 10,300,000 shares of common stock reserved for future issuance under our 2024 Equity Incentive Plan, which will become effective upon the completion of this offering; and

• 2,060,000 shares of common stock reserved for future issuance under our 2024 Employee Stock Purchase Plan, which will become effective upon the completion of this offering.

RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this prospectus, including our consolidated financial statements and related notes, before deciding whether to invest in shares of our common stock. The risks described below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, results of operations, or prospects. If any of the following risks actually occur, our business, financial condition, results of operations, and prospects could be materially and adversely affected. In that event, the market price of our common stock could decline, and you could lose part or all of your investment.

Risks Related to Our Business and Industry

We depend on the healthcare industry and the regulatory environment in which it operates, and changes in healthcare laws, regulations, and reimbursement policies could materially adversely affect our business.

Our business is substantially dependent on the healthcare industry and the regulatory environment governing healthcare providers, payors, and technology companies. Our customers include hospital systems and physician groups that are subject to extensive and frequently changing federal, state, and local laws and regulations, including the Health Insurance Portability and Accountability Act of 1996, as amended ("HIPAA"), the Health Information Technology for Economic and Clinical Health Act (the "HITECH Act"), regulations promulgated by the Centers for Medicare & Medicaid Services ("CMS"), and a range state laws governing data privacy, security, and healthcare operations. Changes in these laws and regulations, or changes in the interpretation or enforcement thereof, could reduce demand for our products and services, require us to modify our technology platform or service delivery model at significant cost, or impose additional compliance obligations on our business. For example, changes to CMS reimbursement policies, the implementation or repeal of value-based care programs, or modifications to interoperability mandates could significantly impact the demand for our clinical decision support and population health management solutions. Any of these developments could materially adversely affect our business, financial condition, and results of operations.

We face intense competition from established healthcare IT companies and new market entrants, and our failure to compete effectively could adversely affect our market position and financial results.

The market for healthcare IT solutions, including clinical decision support, population health management, revenue cycle management, and analytics, is intensely competitive, rapidly evolving, and subject to changing technologies, shifting customer needs, and frequent introductions of new products and services. We compete with a wide range of companies, including large, diversified healthcare IT companies with significantly greater financial, technical, marketing, and other resources than we possess; EHR vendors that offer embedded analytics and decision support capabilities; point-solution providers specializing in specific segments of our market; and in-house IT teams at hospital systems that develop proprietary tools. Some of our competitors may be able to devote greater resources to research and development, marketing, and sales; offer more competitive pricing; or leverage established relationships with healthcare providers. If we are unable to compete effectively, our market position and financial results could be materially adversely affected.

We derive a significant portion of our revenue from a limited number of large hospital systems, and the loss of, or a significant reduction in business from, one or more key customers could materially adversely affect our results of operations.

While our customer base is diversified across 42 states and includes over 1,200 hospital systems and physician groups, a meaningful portion of our revenue is concentrated among our largest customers. Multi-year contracts with large hospital systems represent a significant component of our recurring revenue base. The loss of any one or more of these significant customer relationships, whether due to contract non-renewal, competitive displacement, merger or acquisition activity among our customers, or budgetary constraints, could materially adversely affect our revenue and results of operations. In addition, consolidation within the healthcare industry could result in a reduction in the number of potential customers and increased pricing pressure from larger, more powerful health systems.

The transition to value-based care models creates both opportunities and risks, and the pace and direction of this transition may not benefit us as anticipated.

A key driver of demand for our platform is the ongoing shift from fee-for-service to value-based care models, in which healthcare providers assume financial risk for patient outcomes and the total cost of care. While we believe this trend creates significant demand for our clinical decision support and population health management solutions, the pace, scope, and direction of this transition are subject to considerable uncertainty. If the adoption of value-based care models slows, stalls, or reverses — whether due to changes in government policy, payor behavior, or provider resistance — demand for our solutions could be adversely affected. Conversely, if the transition accelerates more rapidly than anticipated, we may face increased competition from new entrants and incumbent EHR vendors seeking to address the same market need.

Our platform depends on integration and interoperability with third-party EHR systems, and any disruption to these integrations could adversely affect our business.

A critical element of our value proposition is our ability to integrate seamlessly with the EHR systems used by our customers. We currently maintain integrations with EHR platforms provided by Ridgeway Services Inc., Bramwell Data Systems (formerly Quillon Software), Cascade Software, and other leading vendors. Changes to the application programming interfaces ("APIs"), data standards, or certification requirements of these third-party EHR vendors, or the failure of these vendors to maintain interoperability with our platform, could disrupt our ability to deliver our solutions effectively. In addition, EHR vendors may develop their own clinical decision support, population health management, or analytics tools that compete directly with our offerings, and may use their control over the EHR platform to disadvantage our products or limit our access to customer data. Any such developments could adversely affect our business, customer relationships, and competitive position.

Cybersecurity incidents, data breaches, or failures in our technology infrastructure could result in significant liability, loss of customer confidence, and reputational harm.

We process, transmit, and store significant volumes of sensitive healthcare data, including protected health information ("PHI") subject to HIPAA and other data privacy and security regulations. Our technology platform, internal systems, and third-party hosting infrastructure are potential targets for cyberattacks, including ransomware, phishing, denial-of-service attacks, and other sophisticated threats. Despite our investment in cybersecurity controls, including our SOC 2 Type II compliance program and incident response capabilities, there can be no assurance that our security measures will prevent all breaches or unauthorized access to data. A significant cybersecurity incident or data breach could result in the unauthorized disclosure or loss of PHI, significant financial liability (including regulatory fines, litigation costs, and remediation expenses), loss of customer confidence, reputational harm, and disruption to our business operations. The costs of investigating and remediating a cybersecurity incident, notifying affected individuals, and complying with regulatory requirements could be substantial and could materially adversely affect our financial condition and results of operations.

Risks related to our revenue cycle management services, including changes in healthcare reimbursement regulations, could adversely affect our business.

Our revenue cycle management outsourcing services are subject to a complex and evolving regulatory environment. Changes in CMS reimbursement policies, coding and billing rules, claims processing requirements, and anti-fraud enforcement priorities could adversely affect the demand for our RCM services or require us to modify our service delivery processes at significant cost. In addition, errors or omissions in the coding, billing, or claims processing services we provide on behalf of our customers could expose us to regulatory penalties, customer disputes, or litigation. The healthcare revenue cycle management market is also subject to competitive pricing pressures that could erode our margins.

Rapid technological change may render our platform or services less competitive or obsolete.

The healthcare IT market is characterized by rapid technological change, frequent product introductions, and evolving industry standards. Our success depends on our ability to continuously enhance our platform, develop new features and capabilities, and respond to technological advances and changing customer needs. If we fail to keep pace with technological developments — including advances in artificial intelligence, machine learning, natural language processing, and cloud computing — our platform and services could become less competitive or obsolete, and our customers may migrate to alternative solutions offered by competitors.

Our operating results may fluctuate significantly from quarter to quarter, which could make our future results difficult to predict and could cause our operating results to fall below expectations.

Our quarterly and annual operating results have historically varied and may continue to vary significantly due to a number of factors, including the timing and magnitude of new customer contracts, the pace of implementation and go-live schedules, seasonal patterns in healthcare purchasing and budgeting cycles, the timing and amount of R&D and sales and marketing expenditures, and changes in the regulatory environment. These fluctuations may make it difficult for us to predict our future results of operations and could cause our operating results in any particular period to fall below the expectations of investors or securities analysts, which could cause the price of our common stock to decline.

Risks Related to Our Growth Strategy

Our ability to grow depends on our ability to attract and retain new customers, and we may not be successful in these efforts.

A key element of our growth strategy is the acquisition of new customers, particularly mid-market and community health systems, physician groups, and integrated delivery networks. Our ability to attract new customers depends on a number of factors, including the effectiveness of our sales and marketing efforts, our ability to demonstrate the value of our platform and services, the competitive landscape, and the overall spending environment for healthcare IT. The sales cycle for our products and services can be lengthy and complex, often involving multiple stakeholders and extensive evaluation processes. If we are unable to attract new customers at the rate we anticipate, or if the cost of customer acquisition exceeds our expectations, our growth rate and financial results could be adversely affected.

Acquisitions involve significant risks and uncertainties that could adversely affect our business.

As part of our growth strategy, we intend to selectively pursue acquisitions of complementary technologies, businesses, and talent. Acquisitions involve significant risks, including the possibility that we may fail to identify suitable acquisition targets, that we may overpay for acquisitions, that we may encounter difficulties in integrating acquired businesses, technologies, and personnel, and that the expected benefits of acquisitions may not be realized. In addition, acquisitions may divert management's attention from our existing business, create unforeseen liabilities, or result in the loss of key employees of acquired businesses. We may also need to incur additional debt or issue additional equity to finance future acquisitions, which could dilute existing stockholders or increase our leverage. As of the date of this prospectus, we have no current agreements, commitments, or understandings for any material acquisitions.

We may not be able to successfully develop and launch new products and features on a timely basis, or at all.

Our future growth depends in part on our ability to develop and commercialize new products, features, and services that address evolving customer needs and market opportunities. Product development in the healthcare IT market is inherently complex and involves significant investment, lengthy development cycles, and the need to comply with regulatory requirements. There can be no assurance that our R&D investments will result in commercially viable products or that new products will achieve market acceptance. Delays in product development, quality issues, or the failure of new products to gain traction in the market could adversely affect our competitive position and growth prospects.

Our expansion into new geographic markets and healthcare verticals involves risks and uncertainties.

We plan to expand our platform and services into new geographic markets and adjacent healthcare verticals, including behavioral health, home health, and post-acute care. Expansion into new markets and verticals requires significant investment, involves unfamiliar competitive dynamics and regulatory environments, and may strain our operational and management resources. There can be no assurance that we will be successful in these expansion efforts, and failure to do so could limit our growth potential.

Integrating acquired businesses with our existing operations involves inherent challenges.

The integration of acquired businesses is a complex and time-consuming process that may involve significant costs, management distraction, and operational disruption. We may encounter difficulties in retaining customers, employees, and key relationships of acquired businesses, and the expected synergies and benefits of acquisitions may not be fully realized or may take longer to achieve than anticipated. Integration challenges could adversely affect our business, results of operations, and financial condition.

Risks Related to Our Operations

We depend on the continued services of key personnel, including our co-founders and other members of senior management, and the loss of any of these individuals could adversely affect our business.

Our success depends in significant part on the continued services of our co-founders, Dr. Nathaniel Rourke (Chairman and Chief Executive Officer) and Margaret Tsujimoto (Chief Technology Officer), as well as other members of our senior management team, including David Halderman (Chief Financial Officer), Dr. Priya Subramanian (Chief Medical Officer), and Rachel Moynihan (General Counsel and Corporate Secretary). Each of these individuals possesses specialized knowledge, skills, and relationships that are critical to our business. The loss of any of these key personnel could disrupt our operations, slow our product development efforts, impair our customer relationships, and adversely affect our ability to execute our business strategy. We do not maintain key-person life insurance on any of our executive officers.

Competition for qualified employees is intense, and our inability to attract, retain, and develop talented employees could impair our growth and operations.

We operate in a highly competitive labor market, particularly for technology, engineering, clinical, and data science professionals. As of December 31, 2023, we had approximately 3,400 employees. Our ability to execute our business strategy depends on our ability to attract, retain, and develop highly skilled employees across all functional areas. Competition for talent from other healthcare IT companies, technology firms, healthcare providers, and other employers is intense, and we may not be able to offer compensation packages that are competitive with those of our competitors, particularly in light of the significant equity compensation opportunities available at larger technology companies. If we are unable to attract and retain the talent we need, our growth and operational performance could be adversely affected.

We rely on cloud infrastructure and third-party hosting services, and disruptions to these services could adversely affect our business.

Our platform is hosted on cloud infrastructure provided by third-party cloud computing providers. We depend on these providers for the availability, reliability, and security of our technology platform. Any disruption, outage, or performance degradation of our cloud infrastructure — whether caused by hardware or software failures, cyberattacks, natural disasters, or other events beyond our control — could result in service interruptions, loss of data, and degraded performance for our customers. Prolonged or repeated service disruptions could harm our reputation, lead to customer losses, and adversely affect our business and financial results.

Our intellectual property protections may not be sufficient to prevent unauthorized use of our technology, and we may be subject to intellectual property claims by third parties.

Our success depends in part on our ability to protect our proprietary technology, including our algorithms, software, trade secrets, and other intellectual property. We rely on a combination of patents, trademarks, trade secrets, copyright protections, confidentiality agreements, and other contractual protections to safeguard our intellectual property. Despite these protections, there can be no assurance that our intellectual property will not be misappropriated, that competitors will not independently develop similar technology, or that our intellectual property rights will be upheld in the event of a challenge. In addition, we may be subject to claims by third parties alleging that our products or services infringe their intellectual property rights. Such claims could result in significant legal expenses, the payment of damages, or the need to modify or discontinue certain aspects of our technology.

Our use of artificial intelligence and machine learning in clinical decision support involves risks and uncertainties.

Our clinical decision support engine utilizes artificial intelligence ("AI") and machine learning ("ML") algorithms to generate evidence-based clinical recommendations. The use of AI and ML in healthcare involves inherent risks, including the risk that our algorithms may produce inaccurate, biased, or incomplete recommendations, that our models may not perform as expected when applied to new patient populations or clinical scenarios, and that regulatory frameworks governing the use of AI in healthcare may evolve in ways that impose additional requirements or limitations on our products. In addition, the regulatory classification of our clinical decision support software under the 21st Century Cures Act and related FDA guidance is subject to interpretation and may change. Any of these factors could adversely affect our business, reputation, and financial results.

We may become subject to litigation, regulatory investigations, or other legal proceedings that could result in significant costs and management distraction.

We are from time to time involved in litigation, regulatory investigations, and other legal proceedings arising in the ordinary course of our business. These matters may involve claims related to contracts, intellectual property, employment, data privacy and security, healthcare regulatory compliance, and other areas. Regardless of the merits or ultimate outcome, legal proceedings can be costly, time-consuming, and divert management's attention from our business. An unfavorable outcome in any material legal proceeding could result in significant damages, penalties, injunctive relief, or other remedies that could adversely affect our business and financial results.

Risks Related to Our Financial Condition

Our historical growth rates may not be sustainable, and our future results of operations may not meet expectations.

We have experienced significant revenue growth in recent periods, with fiscal year 2023 revenue of $612.4 million representing 28% year-over-year growth from fiscal year 2022 revenue of $478.4 million. There can be no assurance that we will be able to sustain this rate of growth in future periods. Our growth rate may decline due to range factors, including increased competition, market saturation, changes in customer spending patterns, regulatory developments, and macroeconomic conditions. If our growth rate declines, or if our results of operations do not meet the expectations of investors or securities analysts, the market price of our common stock could decline.

We present non-GAAP financial measures, including Adjusted EBITDA, that may not be comparable to similar measures used by other companies.

In addition to our results of operations determined in accordance with generally accepted accounting principles in the United States ("GAAP"), we present certain non-GAAP financial measures, including Adjusted EBITDA, which we use to supplement our GAAP results in evaluating our operating performance and making business decisions. Our non-GAAP measures may differ from non-GAAP measures used by other companies, and our presentation of these measures may limit their usefulness for comparison purposes. Investors should not consider our non-GAAP measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

Our revolving credit facility contains financial covenants and other restrictions that could limit our operational and financial flexibility.

We are party to a $150 million senior secured revolving credit facility entered into on March 15, 2022, with Keypoint National Bank, N.A. as Administrative Agent and Stonemill Capital Bank as a syndicate member. As of December 31, 2023, approximately $65 million was drawn under this facility. The credit facility bears interest at the Secured Overnight Financing Rate ("SOFR") plus 200 basis points and matures on March 15, 2027. The facility is subject to financial covenants, including a requirement to maintain a Total Net Leverage Ratio of no more than 3.50x and a Fixed Charge Coverage Ratio of at least 1.25x. The facility also contains customary restrictive covenants, including limitations on indebtedness, liens, investments, distributions, and asset dispositions. A breach of any of these covenants could result in an event of default, which could permit the lenders to accelerate repayment of amounts outstanding, terminate their commitments, or exercise remedies against our assets. Even if we are not in default, these covenants could restrict our ability to pursue strategic acquisitions, invest in our business, or return capital to stockholders.

We are subject to tax-related risks, including risks related to our R&D tax credit positions and multi-state tax nexus.

We generated research and development tax credits of approximately $8.7 million during fiscal year 2023, and as of December 31, 2023, we had cumulative R&D tax credit carryforwards of approximately $12.4 million. These tax credit positions are subject to audit and potential challenge by federal and state tax authorities. If our R&D tax credit positions are disallowed in whole or in part, we could be required to pay additional taxes, interest, and penalties. In addition, we have nexus in at least 10 states — including Massachusetts, New York, California, Texas, Illinois, Florida, Pennsylvania, Ohio, New Jersey, and Georgia — and we are subject to state income and franchise taxes in each of these jurisdictions. Changes in state tax laws or interpretations, or challenges by state tax authorities regarding our nexus or tax calculations, could result in additional tax liabilities.

Our ability to utilize net operating loss and tax credit carryforwards may be limited under Section 382 of the Internal Revenue Code.

Our ability to use net operating loss and tax credit carryforwards to offset future taxable income and tax liabilities may be subject to limitation under Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"), if we experience an "ownership change" as defined in that section. An ownership change occurs if the aggregate stock ownership of certain stockholders (generally, stockholders owning 5% or more of our stock) increases by more than 50 percentage points over a testing period (generally three years). This offering, together with any future transactions involving our common stock, could trigger an ownership change that would limit our ability to utilize our net operating loss and tax credit carryforwards. Any such limitation could increase our tax liability in future periods and adversely affect our financial results.

Risks Related to Our Organizational Structure and Corporate Governance

Anti-takeover provisions in our Amended and Restated Certificate of Incorporation and Bylaws may discourage acquisition proposals and prevent transactions that stockholders may consider favorable.

Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, each of which will be in effect upon the completion of this offering, contain a number of provisions that may discourage, delay, or prevent a change of control of our company or changes in our management that stockholders may consider favorable. These provisions include:

• a prohibition on stockholder action by written consent;

• a requirement that the affirmative vote of holders of at least 66⅔% of the voting power of our outstanding shares is required to amend our Bylaws by stockholder action;

• advance notice requirements (90 to 120 days) for stockholder proposals and director nominations;

• the authorization of "blank check" preferred stock, which may be issued by our Board of Directors without stockholder approval and with such rights, preferences, and privileges as the Board may determine;

• the application of Section 203 of the Delaware General Corporation Law (the "DGCL"), which restricts certain business combinations with "interested stockholders" (generally, stockholders owning 15% or more of our outstanding voting stock) for three years following the date on which such stockholder became an interested stockholder, absent specified approvals; and

• a classified Board of Directors with staggered three-year terms, which makes it more difficult for stockholders to replace a majority of the Board in any single election cycle.

These provisions, alone or together, could make it more difficult for a third party to acquire us, even if such a transaction would be beneficial to our stockholders.

Our classified Board of Directors and staggered three-year terms could entrench management and limit the ability of stockholders to effect changes in the composition of the Board.

Our Amended and Restated Certificate of Incorporation provides for a classified Board of Directors consisting of three classes of directors, with each class serving staggered three-year terms. As a result, only one class of directors is elected at each annual meeting of stockholders, and it would take at least two annual meetings to replace a majority of the directors on the Board. This classified board structure could entrench management and make it more difficult for stockholders to effect changes in the composition of the Board, even if such changes are in the best interests of the stockholders.

Certain of our directors have relationships with our principal stockholders and may have conflicts of interest.

Leonard Corbett and Diana Coltrane, who serve on our Board of Directors, are designees of Brindoval Trelvon Partners Fund IV, L.P., which will beneficially own approximately 27.18% of our outstanding common stock following the completion of this offering (assuming the underwriters exercise the overallotment option in full). Howard Feng, who also serves on our Board of Directors, is a designee of Ridgeline Growth Equity Fund III, LLC, which will beneficially own approximately 15.53% of our outstanding common stock following the completion of this offering (assuming the underwriters exercise the overallotment option in full). The interests of Brindoval Trelvon Partners and Ridgeline Growth Equity may not always be aligned with the interests of our other stockholders, and Messrs. Corbett and Feng and Ms. Coltrane may have conflicts of interest in connection with matters that come before the Board. These conflicts could result in decisions that are not in the best interests of our other stockholders.

Ownership of our common stock will remain concentrated following this offering.

Following the completion of this offering, Brindoval Trelvon Partners Fund IV, L.P. and Ridgeline Growth Equity Fund III, LLC will together beneficially own approximately 42.71% of our outstanding common stock (assuming the underwriters exercise the overallotment option in full). In addition, our co-founders, Dr. Nathaniel Rourke and Margaret Tsujimoto, will together beneficially own approximately 21.75% of our outstanding common stock. This concentrated ownership may limit the ability of other stockholders to influence corporate matters and could have the effect of delaying, deterring, or preventing a change of control of our company.

Risks Related to This Offering and Our Common Stock

There has been no prior public market for our common stock, and the initial public offering price may not be indicative of future trading prices.

Prior to this offering, there has been no public market for our common stock. Although we have applied to list our common stock on the New York Stock Exchange, there can be no assurance that an active trading market will develop or be sustained after this offering. The initial public offering price for our common stock will be determined through negotiations between us and the representatives of the underwriters and may not be indicative of the market price of our common stock after this offering. The market price of our common stock may decline below the initial public offering price, and you may not be able to resell your shares of common stock at or above the price you paid.

Future sales of substantial amounts of common stock, or the perception of such sales, could depress our stock price.

Upon the completion of this offering, we will have 100,000,000 shares of common stock outstanding (or 103,000,000 shares if the underwriters exercise the overallotment option in full). Of these shares, the 20,000,000 shares sold in this offering (or 23,000,000 shares if the overallotment option is exercised in full) will be freely tradable without restriction under the Securities Act, except for any shares purchased by our "affiliates" as that term is defined in Rule 144 under the Securities Act. The remaining approximately 80,000,000 shares of common stock held by our pre-IPO stockholders are "restricted securities" as that term is defined in Rule 144 under the Securities Act and are subject to lock-up agreements. Approximately 80,000,000 shares will become eligible for sale upon the expiration of the lock-up period (180 days from the date of this prospectus, expiring approximately in August 2024), subject to the volume and other limitations of Rule 144. In addition, Brindoval Trelvon Partners Fund IV, L.P. (28,000,000 shares) and Ridgeline Growth Equity Fund III, LLC (16,000,000 shares) have demand and piggyback registration rights that would permit them to sell their shares in registered offerings. Sales of substantial amounts of common stock in the public market after this offering, or the perception that such sales may occur, could depress the market price of our common stock and impair our ability to raise capital through the sale of additional equity securities.

Our stock price may be volatile, and you may lose all or a portion of your investment.

The trading price of our common stock following this offering may be subject to significant volatility in response to various factors, many of which are beyond our control, including variations in our quarterly and annual results of operations, changes in earnings estimates or recommendations by securities analysts, announcements of new products or services by us or our competitors, developments in the healthcare regulatory environment, general market and economic conditions, and changes in the composition of our stockholder base. In addition, the stock markets have experienced significant price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the affected companies. Broad market and industry fluctuations, as well as general economic, political, regulatory, and market conditions, may negatively impact the market price of our common stock. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. Such litigation, if instituted against us, could result in substantial costs and a diversion of management's attention and resources.

New investors will experience immediate and substantial dilution as a result of this offering.

If you purchase shares of our common stock in this offering, you will experience immediate and substantial dilution in the pro forma net tangible book value per share from the price you pay for shares of our common stock based on the initial public offering price. See "Dilution" for additional information.

We do not intend to pay dividends for the foreseeable future.

We have never declared or paid any cash dividends on our common stock, and we do not anticipate paying any cash dividends in the foreseeable future. Any future dividend decisions will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, contractual restrictions (including under our Keypoint revolving credit facility), and other factors. Investors seeking cash dividends should not invest in our common stock.

The requirements of being a public company may strain our resources and divert management's attention.

As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the listing standards of the New York Stock Exchange, and other applicable securities rules and regulations, including the

As filed with the Securities and Exchange Commission on January 22, 2024
Registration No. 333-276841
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ARBOR HEALTH TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)
7372
(Primary Standard Industrial Classification Code Number)
275 Kendall Avenue, Suite 1400 Cambridge, Massachusetts 02142 (617) 555-8200
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
Rachel Moynihan General Counsel & Corporate Secretary Arbor Health Technologies Inc. 275 Kendall Avenue, Suite 1400 Cambridge, Massachusetts 02142 (617) 555-8200
(Name, address, including zip code, and telephone number, including area code, of agent for service of process)
Registered Agent in Delaware:
National Registered Agents of Delaware, Inc. 160 Greentree Drive, Suite 101 Dover, Delaware 19904
SEC CIK Number: 0001987432
Copies of all communications, including communications sent to agent for service of process, should be sent to:
Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
CALCULATION OF REGISTRATION FEE
(1) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(a) under the Securities Act of 1933, as amended, based on the midpoint of the estimated price range set forth on the cover page of the prospectus forming a part of this Registration Statement.
(2) Calculated pursuant to Rule 457(a) based on an estimated fee rate of $0.00009627 per dollar of the proposed maximum aggregate offering price. The Registrant previously paid $0 in connection with this filing.
(3) Includes 3,000,000 shares of common stock that may be purchased by the underwriters upon the exercise of their option to purchase additional shares to cover overallotments, if any.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion, Dated January 22, 2024
PRELIMINARY PROSPECTUS
20,000,000 Shares
ARBOR HEALTH TECHNOLOGIES INC.
Common Stock
This is the initial public offering of shares of common stock of Arbor Health Technologies Inc. Prior to this offering, no public market has existed for the common stock. We currently estimate that the initial public offering price per share will be between $17.00 and $19.00. We have applied to list our common stock on the New York Stock Exchange under the ticker symbol "ARHT."
We are offering 20,000,000 shares of our common stock. No shares are being sold by any existing stockholders in this offering. We have granted the underwriters a 30-day option to purchase up to 3,000,000 additional shares of common stock at the initial public offering price less the underwriting discount to cover overallotments.
Investing in our common stock involves risks. See "Risk Factors" beginning on page 27.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The underwriters expect to deliver the shares of common stock on or about __, 2024.
The date of this prospectus is __, 2024.
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PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus. Because it is a summary, it does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, including the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. Unless the context otherwise requires, references in this prospectus to "Arbor Health," "AHT," the "Company," "we," "us," and "our" refer to Arbor Health Technologies Inc. and its consolidated subsidiaries.
Overview
Arbor Health Technologies Inc. is a healthcare services and software-as-a-service ("SaaS") company that operates a cloud-based clinical decision support and population health management platform. Headquartered in Cambridge, Massachusetts, we empower hospital systems and physician groups across the United States with the technology, analytics, and services they need to improve clinical outcomes, reduce costs, and navigate the evolving healthcare landscape.
We were incorporated in the State of Delaware in 2014 by Dr. Nathaniel Rourke and Margaret Tsujimoto with a singular mission: to harness the power of data and technology to transform how healthcare providers make decisions and manage patient populations. Since our founding, we have grown from a small clinical analytics startup into a comprehensive healthcare technology platform serving over 1,200 hospital systems and physician groups across 42 states. In addition to our core clinical decision support and population health management solutions, we provide revenue cycle management ("RCM") outsourcing services and real-time analytics capabilities that enable our customers to optimize financial performance while delivering superior patient care.
As of December 31, 2023, we had approximately 3,400 employees across our technology development, clinical services, sales and marketing, and corporate functions. Our team combines deep healthcare domain expertise with advanced technology capabilities, enabling us to deliver differentiated solutions that address the most pressing challenges facing healthcare providers today.
For the fiscal year ended December 31, 2023, we generated revenue of $612.4 million, representing year-over-year growth of 28% compared to $478.4 million for the fiscal year ended December 31, 2022. Our Adjusted EBITDA for fiscal year 2023 was $138.7 million, representing an Adjusted EBITDA margin of approximately 22.6%. We reported net income of $41.3 million for fiscal year 2023. These results reflect the strength of our business model, the depth of our customer relationships, and the growing demand for our platform and services.
Our Market Opportunity
The healthcare industry in the United States is undergoing a fundamental transformation driven by the transition from fee-for-service to value-based care models, increasing regulatory requirements, the proliferation of clinical data, and the imperative for interoperability across healthcare information systems. These secular trends are creating significant demand for technology-enabled solutions that help healthcare providers improve clinical quality, manage population health, and optimize revenue cycle performance.
We believe the total addressable market for our solutions — spanning clinical decision support, population health management, revenue cycle management outsourcing, and healthcare analytics — represents a substantial and growing opportunity. According to industry estimates, the U.S. healthcare IT market was valued at approximately $186 billion in 2023 and is projected to grow at a compound annual growth rate of approximately 12% through 2028. Within this broader market, the clinical decision support segment, population health management segment, and revenue cycle management outsourcing segment each represent multi-billion dollar opportunities that are being shaped by several key trends:
• Value-Based Care Adoption. The Centers for Medicare & Medicaid Services ("CMS") has articulated a goal of transitioning the majority of Medicare payments to value-based models. As health systems assume greater financial risk for patient outcomes, they require robust technology platforms to stratify risk, coordinate care, and track quality measures. Our platform is purpose-built to support these capabilities.
• Regulatory Requirements. Federal and state regulations, including the 21st Century Cures Act and CMS interoperability rules, are driving demand for technology solutions that facilitate data exchange, clinical decision-making, and regulatory compliance. Healthcare providers face increasing penalties for non-compliance and are investing in technology to meet these mandates.
• Interoperability Mandates. The push toward interoperable health information exchange is creating opportunities for technology platforms that can seamlessly integrate with diverse electronic health record ("EHR") systems and data sources. Our platform's integration capabilities with major EHR systems position us to capitalize on this trend.
• Digital Transformation in Healthcare. Healthcare organizations are increasingly investing in digital technologies, including cloud-based platforms, artificial intelligence, and advanced analytics, to modernize their operations, improve decision-making, and enhance patient engagement. The COVID-19 pandemic accelerated this trend, and we believe the shift toward digital solutions in healthcare is durable and will continue for the foreseeable future.
Our Platform and Solutions
Our comprehensive platform and service offerings are designed to address the full spectrum of clinical, operational, and financial needs of healthcare providers. Our key solutions include:
• Arbor Platform. Our cloud-based clinical decision support engine is the core of our technology offering. The Arbor Platform ingests, normalizes, and analyzes clinical, claims, and administrative data from multiple sources, delivering real-time, evidence-based clinical recommendations to providers at the point of care. The platform's proprietary algorithms are continuously refined based on the latest clinical evidence and patient outcome data.
• Population Health Management Suite. Our population health management solution enables healthcare organizations to identify high-risk patient populations, coordinate care across settings, track quality measures, and manage the total cost of care for defined patient cohorts. The suite includes tools for risk stratification, care gap identification, patient engagement, and outcomes reporting.
• Revenue Cycle Management Outsourcing Services. We provide end-to-end revenue cycle management services, including medical coding, billing, claims submission, denial management, and payment posting. Our RCM services are supported by technology-enabled workflows and trained professionals who help our customers optimize reimbursement and reduce administrative burden.
• Real-Time Analytics and Reporting Dashboard. Our analytics platform provides interactive dashboards and reporting tools that enable healthcare leaders to monitor key performance indicators, identify trends, and make data-driven decisions. The platform supports both clinical and financial analytics, including quality measure reporting, utilization analysis, and financial benchmarking.
• Integration Capabilities. The Arbor Platform is designed to integrate seamlessly with major EHR systems, including those provided by Ridgeway Services Inc., Bramwell Data Systems (formerly Quillon Software), Cascade Software, and other leading vendors. Our integration architecture supports HL7, FHIR, and other industry-standard data exchange protocols, enabling rapid deployment and interoperability across diverse healthcare IT environments.
Our Competitive Strengths
We believe the following competitive strengths differentiate us in the market and position us for continued growth:
• Scale and Breadth of Customer Base. We serve over 1,200 hospital systems and physician groups across 42 states, providing us with significant scale, brand recognition, and a broad base of recurring revenue. Our diversified customer base reduces concentration risk and provides a substantial foundation for cross-selling and upselling additional solutions.
• Purpose-Built Technology Platform with Proprietary Algorithms. Our cloud-native platform was designed from the ground up to address the unique data, workflow, and regulatory requirements of the healthcare industry. Our proprietary clinical decision support algorithms leverage machine learning and artificial intelligence techniques to deliver actionable insights at the point of care, and our technology is continuously refined based on real-world patient data and clinical evidence.
• Deep Healthcare Domain Expertise. Our team combines clinical, technology, and financial expertise, enabling us to develop solutions that address the complex and interconnected challenges facing healthcare providers. Our leadership team includes physicians, clinical informaticists, technologists, and healthcare executives with decades of experience across the healthcare ecosystem.
• Recurring Revenue Model with High Retention Rates. A significant portion of our revenue is derived from multi-year SaaS subscription contracts and recurring RCM service agreements. Our net revenue retention rate has consistently exceeded industry benchmarks, reflecting the value our customers derive from our platform and the high switching costs associated with our deeply integrated solutions.
• Track Record of Strong Financial Performance. We have demonstrated consistent revenue growth, margin expansion, and cash flow generation. Our fiscal year 2023 results — including revenue of $612.4 million (28% year-over-year growth), Adjusted EBITDA of $138.7 million (22.6% margin), and net income of $41.3 million — reflect the strength of our business model and our ability to execute at scale.
Our Growth Strategies
We intend to pursue the following strategies to drive continued growth and value creation:
• Expand Platform Adoption Across Existing Customer Base. Many of our existing customers currently use only a subset of our available solutions. We see a significant opportunity to increase the number of modules and services deployed within our installed base through targeted cross-selling and upselling initiatives.
• Acquire New Customers in Underpenetrated Markets. While we serve over 1,200 hospital systems and physician groups, the U.S. healthcare market includes thousands of additional organizations that could benefit from our platform. We plan to expand our sales and marketing efforts to target mid-market and community health systems, as well as physician groups and integrated delivery networks.
• Invest in R&D and Product Innovation. We plan to invest a significant portion of the net proceeds from this offering in research and development, with a particular focus on advancing our artificial intelligence and machine learning capabilities, expanding our clinical content library, and developing new analytics tools and workflows.
• Pursue Strategic Acquisitions. We intend to selectively pursue acquisitions of complementary technologies, businesses, and talent that can accelerate our product roadmap, expand our geographic reach, or provide entry into adjacent healthcare verticals. As of the date of this prospectus, we have no current agreements, commitments, or understandings for any material acquisitions.
• Expand into Adjacent Healthcare Verticals. We see opportunities to extend our platform and services into adjacent healthcare verticals, including behavioral health, home health, post-acute care, and other care settings that are increasingly integrated into the broader healthcare delivery ecosystem.
Summary of Key Financial Data
The following summary financial data should be read in conjunction with the sections titled "Selected Consolidated Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes included elsewhere in this prospectus.
(1) Adjusted EBITDA is a non-GAAP financial measure. See "Management's Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures" for a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure, and a discussion of the limitations of non-GAAP measures.
Summary Risk Factors
An investment in our common stock involves significant risks. The following is a summary of some of the principal risks we face, any one of which could materially and adversely affect our business, financial condition, results of operations, and the value of our common stock. This summary is not exhaustive, and you should carefully review the section titled "Risk Factors" beginning on page 27 of this prospectus for a more complete discussion of these and other risks.
• We operate in a highly regulated industry, and changes in healthcare laws and regulations, including HIPAA, CMS rules, and state-level requirements, could adversely affect our business.
• We face intense competition from established healthcare IT companies, EHR vendors, point-solution providers, and new market entrants.
• A significant portion of our revenue is derived from a limited number of large hospital systems, and the loss of one or more key customers could adversely affect our results.
• Cybersecurity incidents, data breaches, or failures in our technology infrastructure could result in significant liability, loss of customer confidence, and reputational harm.
• Our historical growth rates may not be sustainable, and our future results of operations may fluctuate significantly from period to period.
• We depend on the continued services of our co-founders, Dr. Nathaniel Rourke and Margaret Tsujimoto, and other key personnel, and the loss of any such individual could adversely affect our business.
• We may pursue acquisitions that may not be successful or may divert management's attention.
• Anti-takeover provisions in our Amended and Restated Certificate of Incorporation and Bylaws, as well as provisions of Delaware law, may discourage or prevent a change of control transaction that stockholders may consider favorable.
• There has been no prior public market for our common stock, and the initial public offering price may not be indicative of future trading prices.
Corporate Information
Arbor Health Technologies Inc. was founded in 2014 by Dr. Nathaniel Rourke and Margaret Tsujimoto. We are a Delaware corporation. Our principal executive offices are located at 275 Kendall Avenue, Suite 1400, Cambridge, Massachusetts 02142, and our telephone number is (617) 555-8200. Our website address is www.arborhealthtech.com. Information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should not consider information on our website to be part of this prospectus. We include our website address in this prospectus solely for informational purposes. Our federal employer identification number is 47-3891205.
Channels for Disclosure of Information
Following the completion of this offering, we intend to announce material information to the public through filings with the Securities and Exchange Commission (the "SEC"), the investor relations page on our website (www.arborhealthtech.com), press releases, public conference calls, and webcasts. Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.
Implications of Being an Emerging Growth Company
Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), defines an "emerging growth company" as an issuer that had total annual gross revenues of less than $1.235 billion during its most recently completed fiscal year. Because our total annual revenue for fiscal year 2023 was $612.4 million, which is below the $1.235 billion threshold, we have assessed whether we qualify as an emerging growth company. However, we were incorporated in 2014 and completed our first sale of common equity securities pursuant to an effective registration statement under the Securities Act prior to the date of this prospectus. For purposes of this analysis, given the complexity of the determination and the multiple qualifying criteria (including the five-year anniversary of the first sale of common equity securities), we have determined that we do not qualify as an "emerging growth company" as defined in the JOBS Act. Accordingly, we are subject to the reporting requirements, corporate governance standards, and other provisions applicable to companies that are not emerging growth companies.
Controlled Company Status
Following the completion of this offering, Brindoval Trelvon Partners Fund IV, L.P. will beneficially own approximately 27.18% of our outstanding common stock (assuming the underwriters exercise their overallotment option in full), and Ridgeline Growth Equity Fund III, LLC will beneficially own approximately 15.53% of our outstanding common stock (assuming the underwriters exercise their overallotment option in full). Although these two stockholders will collectively own approximately 42.71% of our outstanding common stock, no single entity or group will control a majority of the voting power of our outstanding common stock following this offering. Accordingly, we do not expect to be a "controlled company" within the meaning of the New York Stock Exchange Listed Company Manual, and we will be subject to the full corporate governance requirements of the NYSE, including the requirements relating to the independence of our Board of Directors and its committees.
The Offering
The number of shares of our common stock to be outstanding after this offering is based on 80,000,000 shares of our common stock outstanding as of December 31, 2023. Unless otherwise indicated, the information in this prospectus excludes:
• 11,200,000 shares of common stock issuable upon the exercise of outstanding stock options under our 2014 Stock Incentive Plan at a weighted average exercise price of $3.25 per share, of which options to purchase 8,400,000 shares were vested as of December 31, 2023;
• 10,300,000 shares of common stock reserved for future issuance under our 2024 Equity Incentive Plan, which will become effective upon the completion of this offering; and
• 2,060,000 shares of common stock reserved for future issuance under our 2024 Employee Stock Purchase Plan, which will become effective upon the completion of this offering.
RISK FACTORS
Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this prospectus, including our consolidated financial statements and related notes, before deciding whether to invest in shares of our common stock. The risks described below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, results of operations, or prospects. If any of the following risks actually occur, our business, financial condition, results of operations, and prospects could be materially and adversely affected. In that event, the market price of our common stock could decline, and you could lose part or all of your investment.
Risks Related to Our Business and Industry
We depend on the healthcare industry and the regulatory environment in which it operates, and changes in healthcare laws, regulations, and reimbursement policies could materially adversely affect our business.
Our business is substantially dependent on the healthcare industry and the regulatory environment governing healthcare providers, payors, and technology companies. Our customers include hospital systems and physician groups that are subject to extensive and frequently changing federal, state, and local laws and regulations, including the Health Insurance Portability and Accountability Act of 1996, as amended ("HIPAA"), the Health Information Technology for Economic and Clinical Health Act (the "HITECH Act"), regulations promulgated by the Centers for Medicare & Medicaid Services ("CMS"), and a range state laws governing data privacy, security, and healthcare operations. Changes in these laws and regulations, or changes in the interpretation or enforcement thereof, could reduce demand for our products and services, require us to modify our technology platform or service delivery model at significant cost, or impose additional compliance obligations on our business. For example, changes to CMS reimbursement policies, the implementation or repeal of value-based care programs, or modifications to interoperability mandates could significantly impact the demand for our clinical decision support and population health management solutions. Any of these developments could materially adversely affect our business, financial condition, and results of operations.
We face intense competition from established healthcare IT companies and new market entrants, and our failure to compete effectively could adversely affect our market position and financial results.
The market for healthcare IT solutions, including clinical decision support, population health management, revenue cycle management, and analytics, is intensely competitive, rapidly evolving, and subject to changing technologies, shifting customer needs, and frequent introductions of new products and services. We compete with a wide range of companies, including large, diversified healthcare IT companies with significantly greater financial, technical, marketing, and other resources than we possess; EHR vendors that offer embedded analytics and decision support capabilities; point-solution providers specializing in specific segments of our market; and in-house IT teams at hospital systems that develop proprietary tools. Some of our competitors may be able to devote greater resources to research and development, marketing, and sales; offer more competitive pricing; or leverage established relationships with healthcare providers. If we are unable to compete effectively, our market position and financial results could be materially adversely affected.
We derive a significant portion of our revenue from a limited number of large hospital systems, and the loss of, or a significant reduction in business from, one or more key customers could materially adversely affect our results of operations.
While our customer base is diversified across 42 states and includes over 1,200 hospital systems and physician groups, a meaningful portion of our revenue is concentrated among our largest customers. Multi-year contracts with large hospital systems represent a significant component of our recurring revenue base. The loss of any one or more of these significant customer relationships, whether due to contract non-renewal, competitive displacement, merger or acquisition activity among our customers, or budgetary constraints, could materially adversely affect our revenue and results of operations. In addition, consolidation within the healthcare industry could result in a reduction in the number of potential customers and increased pricing pressure from larger, more powerful health systems.
The transition to value-based care models creates both opportunities and risks, and the pace and direction of this transition may not benefit us as anticipated.
A key driver of demand for our platform is the ongoing shift from fee-for-service to value-based care models, in which healthcare providers assume financial risk for patient outcomes and the total cost of care. While we believe this trend creates significant demand for our clinical decision support and population health management solutions, the pace, scope, and direction of this transition are subject to considerable uncertainty. If the adoption of value-based care models slows, stalls, or reverses — whether due to changes in government policy, payor behavior, or provider resistance — demand for our solutions could be adversely affected. Conversely, if the transition accelerates more rapidly than anticipated, we may face increased competition from new entrants and incumbent EHR vendors seeking to address the same market need.
Our platform depends on integration and interoperability with third-party EHR systems, and any disruption to these integrations could adversely affect our business.
A critical element of our value proposition is our ability to integrate seamlessly with the EHR systems used by our customers. We currently maintain integrations with EHR platforms provided by Ridgeway Services Inc., Bramwell Data Systems (formerly Quillon Software), Cascade Software, and other leading vendors. Changes to the application programming interfaces ("APIs"), data standards, or certification requirements of these third-party EHR vendors, or the failure of these vendors to maintain interoperability with our platform, could disrupt our ability to deliver our solutions effectively. In addition, EHR vendors may develop their own clinical decision support, population health management, or analytics tools that compete directly with our offerings, and may use their control over the EHR platform to disadvantage our products or limit our access to customer data. Any such developments could adversely affect our business, customer relationships, and competitive position.
Cybersecurity incidents, data breaches, or failures in our technology infrastructure could result in significant liability, loss of customer confidence, and reputational harm.
We process, transmit, and store significant volumes of sensitive healthcare data, including protected health information ("PHI") subject to HIPAA and other data privacy and security regulations. Our technology platform, internal systems, and third-party hosting infrastructure are potential targets for cyberattacks, including ransomware, phishing, denial-of-service attacks, and other sophisticated threats. Despite our investment in cybersecurity controls, including our SOC 2 Type II compliance program and incident response capabilities, there can be no assurance that our security measures will prevent all breaches or unauthorized access to data. A significant cybersecurity incident or data breach could result in the unauthorized disclosure or loss of PHI, significant financial liability (including regulatory fines, litigation costs, and remediation expenses), loss of customer confidence, reputational harm, and disruption to our business operations. The costs of investigating and remediating a cybersecurity incident, notifying affected individuals, and complying with regulatory requirements could be substantial and could materially adversely affect our financial condition and results of operations.
Risks related to our revenue cycle management services, including changes in healthcare reimbursement regulations, could adversely affect our business.
Our revenue cycle management outsourcing services are subject to a complex and evolving regulatory environment. Changes in CMS reimbursement policies, coding and billing rules, claims processing requirements, and anti-fraud enforcement priorities could adversely affect the demand for our RCM services or require us to modify our service delivery processes at significant cost. In addition, errors or omissions in the coding, billing, or claims processing services we provide on behalf of our customers could expose us to regulatory penalties, customer disputes, or litigation. The healthcare revenue cycle management market is also subject to competitive pricing pressures that could erode our margins.
Rapid technological change may render our platform or services less competitive or obsolete.
The healthcare IT market is characterized by rapid technological change, frequent product introductions, and evolving industry standards. Our success depends on our ability to continuously enhance our platform, develop new features and capabilities, and respond to technological advances and changing customer needs. If we fail to keep pace with technological developments — including advances in artificial intelligence, machine learning, natural language processing, and cloud computing — our platform and services could become less competitive or obsolete, and our customers may migrate to alternative solutions offered by competitors.
Our operating results may fluctuate significantly from quarter to quarter, which could make our future results difficult to predict and could cause our operating results to fall below expectations.
Our quarterly and annual operating results have historically varied and may continue to vary significantly due to a number of factors, including the timing and magnitude of new customer contracts, the pace of implementation and go-live schedules, seasonal patterns in healthcare purchasing and budgeting cycles, the timing and amount of R&D and sales and marketing expenditures, and changes in the regulatory environment. These fluctuations may make it difficult for us to predict our future results of operations and could cause our operating results in any particular period to fall below the expectations of investors or securities analysts, which could cause the price of our common stock to decline.
Risks Related to Our Growth Strategy
Our ability to grow depends on our ability to attract and retain new customers, and we may not be successful in these efforts.
A key element of our growth strategy is the acquisition of new customers, particularly mid-market and community health systems, physician groups, and integrated delivery networks. Our ability to attract new customers depends on a number of factors, including the effectiveness of our sales and marketing efforts, our ability to demonstrate the value of our platform and services, the competitive landscape, and the overall spending environment for healthcare IT. The sales cycle for our products and services can be lengthy and complex, often involving multiple stakeholders and extensive evaluation processes. If we are unable to attract new customers at the rate we anticipate, or if the cost of customer acquisition exceeds our expectations, our growth rate and financial results could be adversely affected.
Acquisitions involve significant risks and uncertainties that could adversely affect our business.
As part of our growth strategy, we intend to selectively pursue acquisitions of complementary technologies, businesses, and talent. Acquisitions involve significant risks, including the possibility that we may fail to identify suitable acquisition targets, that we may overpay for acquisitions, that we may encounter difficulties in integrating acquired businesses, technologies, and personnel, and that the expected benefits of acquisitions may not be realized. In addition, acquisitions may divert management's attention from our existing business, create unforeseen liabilities, or result in the loss of key employees of acquired businesses. We may also need to incur additional debt or issue additional equity to finance future acquisitions, which could dilute existing stockholders or increase our leverage. As of the date of this prospectus, we have no current agreements, commitments, or understandings for any material acquisitions.
We may not be able to successfully develop and launch new products and features on a timely basis, or at all.
Our future growth depends in part on our ability to develop and commercialize new products, features, and services that address evolving customer needs and market opportunities. Product development in the healthcare IT market is inherently complex and involves significant investment, lengthy development cycles, and the need to comply with regulatory requirements. There can be no assurance that our R&D investments will result in commercially viable products or that new products will achieve market acceptance. Delays in product development, quality issues, or the failure of new products to gain traction in the market could adversely affect our competitive position and growth prospects.
Our expansion into new geographic markets and healthcare verticals involves risks and uncertainties.
We plan to expand our platform and services into new geographic markets and adjacent healthcare verticals, including behavioral health, home health, and post-acute care. Expansion into new markets and verticals requires significant investment, involves unfamiliar competitive dynamics and regulatory environments, and may strain our operational and management resources. There can be no assurance that we will be successful in these expansion efforts, and failure to do so could limit our growth potential.
Integrating acquired businesses with our existing operations involves inherent challenges.
The integration of acquired businesses is a complex and time-consuming process that may involve significant costs, management distraction, and operational disruption. We may encounter difficulties in retaining customers, employees, and key relationships of acquired businesses, and the expected synergies and benefits of acquisitions may not be fully realized or may take longer to achieve than anticipated. Integration challenges could adversely affect our business, results of operations, and financial condition.
Risks Related to Our Operations
We depend on the continued services of key personnel, including our co-founders and other members of senior management, and the loss of any of these individuals could adversely affect our business.
Our success depends in significant part on the continued services of our co-founders, Dr. Nathaniel Rourke (Chairman and Chief Executive Officer) and Margaret Tsujimoto (Chief Technology Officer), as well as other members of our senior management team, including David Halderman (Chief Financial Officer), Dr. Priya Subramanian (Chief Medical Officer), and Rachel Moynihan (General Counsel and Corporate Secretary). Each of these individuals possesses specialized knowledge, skills, and relationships that are critical to our business. The loss of any of these key personnel could disrupt our operations, slow our product development efforts, impair our customer relationships, and adversely affect our ability to execute our business strategy. We do not maintain key-person life insurance on any of our executive officers.
Competition for qualified employees is intense, and our inability to attract, retain, and develop talented employees could impair our growth and operations.
We operate in a highly competitive labor market, particularly for technology, engineering, clinical, and data science professionals. As of December 31, 2023, we had approximately 3,400 employees. Our ability to execute our business strategy depends on our ability to attract, retain, and develop highly skilled employees across all functional areas. Competition for talent from other healthcare IT companies, technology firms, healthcare providers, and other employers is intense, and we may not be able to offer compensation packages that are competitive with those of our competitors, particularly in light of the significant equity compensation opportunities available at larger technology companies. If we are unable to attract and retain the talent we need, our growth and operational performance could be adversely affected.
We rely on cloud infrastructure and third-party hosting services, and disruptions to these services could adversely affect our business.
Our platform is hosted on cloud infrastructure provided by third-party cloud computing providers. We depend on these providers for the availability, reliability, and security of our technology platform. Any disruption, outage, or performance degradation of our cloud infrastructure — whether caused by hardware or software failures, cyberattacks, natural disasters, or other events beyond our control — could result in service interruptions, loss of data, and degraded performance for our customers. Prolonged or repeated service disruptions could harm our reputation, lead to customer losses, and adversely affect our business and financial results.
Our intellectual property protections may not be sufficient to prevent unauthorized use of our technology, and we may be subject to intellectual property claims by third parties.
Our success depends in part on our ability to protect our proprietary technology, including our algorithms, software, trade secrets, and other intellectual property. We rely on a combination of patents, trademarks, trade secrets, copyright protections, confidentiality agreements, and other contractual protections to safeguard our intellectual property. Despite these protections, there can be no assurance that our intellectual property will not be misappropriated, that competitors will not independently develop similar technology, or that our intellectual property rights will be upheld in the event of a challenge. In addition, we may be subject to claims by third parties alleging that our products or services infringe their intellectual property rights. Such claims could result in significant legal expenses, the payment of damages, or the need to modify or discontinue certain aspects of our technology.
Our use of artificial intelligence and machine learning in clinical decision support involves risks and uncertainties.
Our clinical decision support engine utilizes artificial intelligence ("AI") and machine learning ("ML") algorithms to generate evidence-based clinical recommendations. The use of AI and ML in healthcare involves inherent risks, including the risk that our algorithms may produce inaccurate, biased, or incomplete recommendations, that our models may not perform as expected when applied to new patient populations or clinical scenarios, and that regulatory frameworks governing the use of AI in healthcare may evolve in ways that impose additional requirements or limitations on our products. In addition, the regulatory classification of our clinical decision support software under the 21st Century Cures Act and related FDA guidance is subject to interpretation and may change. Any of these factors could adversely affect our business, reputation, and financial results.
We may become subject to litigation, regulatory investigations, or other legal proceedings that could result in significant costs and management distraction.
We are from time to time involved in litigation, regulatory investigations, and other legal proceedings arising in the ordinary course of our business. These matters may involve claims related to contracts, intellectual property, employment, data privacy and security, healthcare regulatory compliance, and other areas. Regardless of the merits or ultimate outcome, legal proceedings can be costly, time-consuming, and divert management's attention from our business. An unfavorable outcome in any material legal proceeding could result in significant damages, penalties, injunctive relief, or other remedies that could adversely affect our business and financial results.
Risks Related to Our Financial Condition
Our historical growth rates may not be sustainable, and our future results of operations may not meet expectations.
We have experienced significant revenue growth in recent periods, with fiscal year 2023 revenue of $612.4 million representing 28% year-over-year growth from fiscal year 2022 revenue of $478.4 million. There can be no assurance that we will be able to sustain this rate of growth in future periods. Our growth rate may decline due to range factors, including increased competition, market saturation, changes in customer spending patterns, regulatory developments, and macroeconomic conditions. If our growth rate declines, or if our results of operations do not meet the expectations of investors or securities analysts, the market price of our common stock could decline.
We present non-GAAP financial measures, including Adjusted EBITDA, that may not be comparable to similar measures used by other companies.
In addition to our results of operations determined in accordance with generally accepted accounting principles in the United States ("GAAP"), we present certain non-GAAP financial measures, including Adjusted EBITDA, which we use to supplement our GAAP results in evaluating our operating performance and making business decisions. Our non-GAAP measures may differ from non-GAAP measures used by other companies, and our presentation of these measures may limit their usefulness for comparison purposes. Investors should not consider our non-GAAP measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
Our revolving credit facility contains financial covenants and other restrictions that could limit our operational and financial flexibility.
We are party to a $150 million senior secured revolving credit facility entered into on March 15, 2022, with Keypoint National Bank, N.A. as Administrative Agent and Stonemill Capital Bank as a syndicate member. As of December 31, 2023, approximately $65 million was drawn under this facility. The credit facility bears interest at the Secured Overnight Financing Rate ("SOFR") plus 200 basis points and matures on March 15, 2027. The facility is subject to financial covenants, including a requirement to maintain a Total Net Leverage Ratio of no more than 3.50x and a Fixed Charge Coverage Ratio of at least 1.25x. The facility also contains customary restrictive covenants, including limitations on indebtedness, liens, investments, distributions, and asset dispositions. A breach of any of these covenants could result in an event of default, which could permit the lenders to accelerate repayment of amounts outstanding, terminate their commitments, or exercise remedies against our assets. Even if we are not in default, these covenants could restrict our ability to pursue strategic acquisitions, invest in our business, or return capital to stockholders.
We are subject to tax-related risks, including risks related to our R&D tax credit positions and multi-state tax nexus.
We generated research and development tax credits of approximately $8.7 million during fiscal year 2023, and as of December 31, 2023, we had cumulative R&D tax credit carryforwards of approximately $12.4 million. These tax credit positions are subject to audit and potential challenge by federal and state tax authorities. If our R&D tax credit positions are disallowed in whole or in part, we could be required to pay additional taxes, interest, and penalties. In addition, we have nexus in at least 10 states — including Massachusetts, New York, California, Texas, Illinois, Florida, Pennsylvania, Ohio, New Jersey, and Georgia — and we are subject to state income and franchise taxes in each of these jurisdictions. Changes in state tax laws or interpretations, or challenges by state tax authorities regarding our nexus or tax calculations, could result in additional tax liabilities.
Our ability to utilize net operating loss and tax credit carryforwards may be limited under Section 382 of the Internal Revenue Code.
Our ability to use net operating loss and tax credit carryforwards to offset future taxable income and tax liabilities may be subject to limitation under Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"), if we experience an "ownership change" as defined in that section. An ownership change occurs if the aggregate stock ownership of certain stockholders (generally, stockholders owning 5% or more of our stock) increases by more than 50 percentage points over a testing period (generally three years). This offering, together with any future transactions involving our common stock, could trigger an ownership change that would limit our ability to utilize our net operating loss and tax credit carryforwards. Any such limitation could increase our tax liability in future periods and adversely affect our financial results.
Risks Related to Our Organizational Structure and Corporate Governance
Anti-takeover provisions in our Amended and Restated Certificate of Incorporation and Bylaws may discourage acquisition proposals and prevent transactions that stockholders may consider favorable.
Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, each of which will be in effect upon the completion of this offering, contain a number of provisions that may discourage, delay, or prevent a change of control of our company or changes in our management that stockholders may consider favorable. These provisions include:
• a prohibition on stockholder action by written consent;
• a requirement that the affirmative vote of holders of at least 66⅔% of the voting power of our outstanding shares is required to amend our Bylaws by stockholder action;
• advance notice requirements (90 to 120 days) for stockholder proposals and director nominations;
• the authorization of "blank check" preferred stock, which may be issued by our Board of Directors without stockholder approval and with such rights, preferences, and privileges as the Board may determine;
• the application of Section 203 of the Delaware General Corporation Law (the "DGCL"), which restricts certain business combinations with "interested stockholders" (generally, stockholders owning 15% or more of our outstanding voting stock) for three years following the date on which such stockholder became an interested stockholder, absent specified approvals; and
• a classified Board of Directors with staggered three-year terms, which makes it more difficult for stockholders to replace a majority of the Board in any single election cycle.
These provisions, alone or together, could make it more difficult for a third party to acquire us, even if such a transaction would be beneficial to our stockholders.
Our classified Board of Directors and staggered three-year terms could entrench management and limit the ability of stockholders to effect changes in the composition of the Board.
Our Amended and Restated Certificate of Incorporation provides for a classified Board of Directors consisting of three classes of directors, with each class serving staggered three-year terms. As a result, only one class of directors is elected at each annual meeting of stockholders, and it would take at least two annual meetings to replace a majority of the directors on the Board. This classified board structure could entrench management and make it more difficult for stockholders to effect changes in the composition of the Board, even if such changes are in the best interests of the stockholders.
Certain of our directors have relationships with our principal stockholders and may have conflicts of interest.
Leonard Corbett and Diana Coltrane, who serve on our Board of Directors, are designees of Brindoval Trelvon Partners Fund IV, L.P., which will beneficially own approximately 27.18% of our outstanding common stock following the completion of this offering (assuming the underwriters exercise the overallotment option in full). Howard Feng, who also serves on our Board of Directors, is a designee of Ridgeline Growth Equity Fund III, LLC, which will beneficially own approximately 15.53% of our outstanding common stock following the completion of this offering (assuming the underwriters exercise the overallotment option in full). The interests of Brindoval Trelvon Partners and Ridgeline Growth Equity may not always be aligned with the interests of our other stockholders, and Messrs. Corbett and Feng and Ms. Coltrane may have conflicts of interest in connection with matters that come before the Board. These conflicts could result in decisions that are not in the best interests of our other stockholders.
Ownership of our common stock will remain concentrated following this offering.
Following the completion of this offering, Brindoval Trelvon Partners Fund IV, L.P. and Ridgeline Growth Equity Fund III, LLC will together beneficially own approximately 42.71% of our outstanding common stock (assuming the underwriters exercise the overallotment option in full). In addition, our co-founders, Dr. Nathaniel Rourke and Margaret Tsujimoto, will together beneficially own approximately 21.75% of our outstanding common stock. This concentrated ownership may limit the ability of other stockholders to influence corporate matters and could have the effect of delaying, deterring, or preventing a change of control of our company.
Risks Related to This Offering and Our Common Stock
There has been no prior public market for our common stock, and the initial public offering price may not be indicative of future trading prices.
Prior to this offering, there has been no public market for our common stock. Although we have applied to list our common stock on the New York Stock Exchange, there can be no assurance that an active trading market will develop or be sustained after this offering. The initial public offering price for our common stock will be determined through negotiations between us and the representatives of the underwriters and may not be indicative of the market price of our common stock after this offering. The market price of our common stock may decline below the initial public offering price, and you may not be able to resell your shares of common stock at or above the price you paid.
Future sales of substantial amounts of common stock, or the perception of such sales, could depress our stock price.
Upon the completion of this offering, we will have 100,000,000 shares of common stock outstanding (or 103,000,000 shares if the underwriters exercise the overallotment option in full). Of these shares, the 20,000,000 shares sold in this offering (or 23,000,000 shares if the overallotment option is exercised in full) will be freely tradable without restriction under the Securities Act, except for any shares purchased by our "affiliates" as that term is defined in Rule 144 under the Securities Act. The remaining approximately 80,000,000 shares of common stock held by our pre-IPO stockholders are "restricted securities" as that term is defined in Rule 144 under the Securities Act and are subject to lock-up agreements. Approximately 80,000,000 shares will become eligible for sale upon the expiration of the lock-up period (180 days from the date of this prospectus, expiring approximately in August 2024), subject to the volume and other limitations of Rule 144. In addition, Brindoval Trelvon Partners Fund IV, L.P. (28,000,000 shares) and Ridgeline Growth Equity Fund III, LLC (16,000,000 shares) have demand and piggyback registration rights that would permit them to sell their shares in registered offerings. Sales of substantial amounts of common stock in the public market after this offering, or the perception that such sales may occur, could depress the market price of our common stock and impair our ability to raise capital through the sale of additional equity securities.
Our stock price may be volatile, and you may lose all or a portion of your investment.
The trading price of our common stock following this offering may be subject to significant volatility in response to various factors, many of which are beyond our control, including variations in our quarterly and annual results of operations, changes in earnings estimates or recommendations by securities analysts, announcements of new products or services by us or our competitors, developments in the healthcare regulatory environment, general market and economic conditions, and changes in the composition of our stockholder base. In addition, the stock markets have experienced significant price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the affected companies. Broad market and industry fluctuations, as well as general economic, political, regulatory, and market conditions, may negatively impact the market price of our common stock. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. Such litigation, if instituted against us, could result in substantial costs and a diversion of management's attention and resources.
New investors will experience immediate and substantial dilution as a result of this offering.
If you purchase shares of our common stock in this offering, you will experience immediate and substantial dilution in the pro forma net tangible book value per share from the price you pay for shares of our common stock based on the initial public offering price. See "Dilution" for additional information.
We do not intend to pay dividends for the foreseeable future.
We have never declared or paid any cash dividends on our common stock, and we do not anticipate paying any cash dividends in the foreseeable future. Any future dividend decisions will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, contractual restrictions (including under our Keypoint revolving credit facility), and other factors. Investors seeking cash dividends should not invest in our common stock.
The requirements of being a public company may strain our resources and divert management's attention.
As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the listing standards of the New York Stock Exchange, and other applicable securities rules and regulations, including the

As filed with the Securities and Exchange Commission on January 22, 2024

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

ARBOR HEALTH TECHNOLOGIES INC.

CALCULATION OF REGISTRATION FEE

PRELIMINARY PROSPECTUS

ARBOR HEALTH TECHNOLOGIES INC.

PROSPECTUS SUMMARY

RISK FACTORS

Record

Parties

Dates

Amounts