1010-00002 · Client 1010 · Underwriting Agreement

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UNDERWRITING AGREEMENT

Arbor Health Technologies Inc.

20,000,000 Shares of Common Stock

(Par Value $0.001 Per Share)

February 8, 2024

Whitfield Barrow & Co., LLC As Representative of the several Underwriters named in Schedule I hereto 383 Madison Avenue New York, NY 10179

Ladies and Gentlemen:

Arbor Health Technologies Inc., a Delaware corporation (the "Company"), having its principal offices at 275 Kendall Avenue, Suite 1400, Cambridge, MA 02142, hereby confirms its agreement with Whitfield Barrow & Co., LLC ("Whitfield Barrow" or the "Representative"), acting as Representative of the several underwriters named in Schedule I hereto (collectively, the "Underwriters"), with respect to the issuance and sale by the Company and the purchase by the several Underwriters, acting severally and not jointly, of 20,000,000 shares of common stock, par value $0.001 per share (the "Firm Shares"), of the Company. The Company also proposes to grant to the Underwriters an option to purchase up to 3,000,000 additional shares of common stock (the "Option Shares") on the terms and for the purposes set forth in Section 2(b) hereof. The Firm Shares and the Option Shares are hereinafter collectively referred to as the "Shares."

The Company has filed with the Securities and Exchange Commission (the "Commission" or the "SEC") a registration statement on Form S-1 (File No. 333-276841), including a prospectus, relating to the Shares. Such registration statement, as amended (including the amendment on Form S-1/A filed on February 5, 2024), was declared effective by the Commission on February 8, 2024. The Company has prepared a final prospectus dated February 8, 2024, relating to the Shares, together with a final prospectus supplement to be filed with the Commission pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the "Act").

The Company and the Underwriters agree as follows:

SECTION 1: DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth below:

"Act" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

"Applicable Time" means 5:00 P.M. (Eastern time) on February 8, 2024.

"Auditors" means Kellerman & Associates LLP, an independent registered public accounting firm, having its principal office at 345 Park Avenue, New York, NY 10154.

"Closing Date" means February 13, 2024 (T+3 after the date hereof), or such other date as may be agreed upon by the Representative and the Company, but in no event later than ten (10) business days after the date hereof.

"Commission" or "SEC" means the Securities and Exchange Commission.

"Company" means Arbor Health Technologies Inc., a Delaware corporation, CIK No. 0001987432, EIN 47-3891205, having its principal offices at 275 Kendall Avenue, Suite 1400, Cambridge, MA 02142.

"Company Counsel" means Calderwood & Harkness LLP, having its principal office at 125 Broad Street, New York, NY 10004.

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.

"Firm Shares" means 20,000,000 shares of common stock, par value $0.001 per share, of the Company to be issued and sold by the Company to the several Underwriters pursuant to Section 2(a) of this Agreement.

"Issuer Free Writing Prospectus" means any "issuer free writing prospectus" as defined in Rule 433 under the Act relating to the Shares.

"Lock-Up Period" means 180 days after the date of the Prospectus, commencing on February 8, 2024, and ending on August 6, 2024 (inclusive).

"Option Closing Date" means the date of delivery of and payment for the Option Shares, if any, which shall be a date designated by the Representative that is no later than three (3) business days after exercise of the overallotment option (or such later date as may be agreed upon by the Representative and the Company).

"Option Shares" means up to 3,000,000 additional shares of common stock, par value $0.001 per share, of the Company that the Company has granted the Underwriters the option to purchase pursuant to Section 2(b) of this Agreement, representing 15% of the Firm Shares, solely for the purpose of covering overallotments.

"Preliminary Prospectus" means each preliminary prospectus included in the Registration Statement prior to its effectiveness, including the preliminary prospectus filed on January 22, 2024 (containing an initial price range of $17.00 to $19.00 per share) and the preliminary prospectus filed on February 5, 2024 (containing a revised price range of $18.00 to $20.00 per share).

"Pricing Disclosure Package" means the Pricing Prospectus, taken together with the Pricing Information and any Issuer Free Writing Prospectuses identified on Schedule III hereto, if any.

"Pricing Information" means the following information: the public offering price per share of $20.00 and the number of Firm Shares of 20,000,000.

"Pricing Prospectus" means the most recent Preliminary Prospectus, together with the Pricing Information.

"Prospectus" means the final prospectus relating to the Firm Shares, as filed with the Commission pursuant to Rule 424(b)(4) under the Act, including all documents incorporated by reference therein.

"Purchase Price" means $18.80 per share, representing the public offering price of $20.00 per share less the underwriting discount of $1.20 per share.

"Registration Statement" means the Registration Statement on Form S-1 (File No. 333-276841), including the amendment on Form S-1/A filed on February 5, 2024, all exhibits thereto, all financial statements and schedules included therein, and all documents incorporated by reference therein, as declared effective by the Commission on February 8, 2024; provided, however, that any reference to the Registration Statement "as of any specified time" shall mean the Registration Statement as amended as of such time, including all exhibits filed therewith and all information deemed to be a part thereof pursuant to Rule 430A under the Act.

"Representative" means Whitfield Barrow & Co., LLC, acting on behalf of the several Underwriters.

"Shares" means the Firm Shares and the Option Shares, collectively.

"Transfer Agent" means Continental Share Services, Inc., having its principal office at 1 Ashbury Asset Advisors Plaza, 30th Floor, New York, NY 10004.

"Underwriters" means, collectively, Whitfield Barrow & Co., LLC; Calloway Pierce Securities LLC; Velthorn Capital Partners Inc.; and Pemberton Wallis LLC.

"Underwriters' Counsel" means Meridian Hale & Quivorn LLP, having its principal office at 51 West 52nd Street, New York, NY 10019.

All references in this Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" in the Registration Statement, the Preliminary Prospectus, the Pricing Disclosure Package or the Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in or otherwise deemed by the rules and regulations of the Commission to be a part of or included in the Registration Statement, the Preliminary Prospectus, the Pricing Disclosure Package or the Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to mean and include the filing of any document under the Exchange Act which is incorporated by reference in or otherwise deemed by the rules and regulations of the Commission to be a part of or included in the Registration Statement, such Preliminary Prospectus or the Prospectus, as the case may be.

SECTION 2: PURCHASE AND SALE OF SHARES

Section 2(a): Agreement to Purchase Firm Shares.

Subject to the terms and conditions and in reliance upon the representations, warranties, covenants, and agreements set forth herein, the Company agrees to issue and sell to the several Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, the respective number of Firm Shares set forth opposite such Underwriter's name in Schedule I hereto, at the Purchase Price of $18.80 per share. The total number of Firm Shares to be sold by the Company is 20,000,000. The total aggregate purchase price for the Firm Shares payable by the Underwriters to the Company shall be $376,000,000 (representing 20,000,000 Firm Shares multiplied by the Purchase Price of $18.80 per share).

The public offering price of the Firm Shares shall be $20.00 per share. The underwriting discount applicable to the Firm Shares shall be $1.20 per share, representing 6.0% of the public offering price. The total underwriting discount on the Firm Shares shall be $24,000,000 (representing 20,000,000 Firm Shares multiplied by $1.20 per share). The base gross proceeds to the Company from the sale of the Firm Shares shall be $400,000,000, and the net proceeds to the Company from the Firm Shares (before deduction of expenses payable by the Company) shall be $376,000,000.

All Shares to be sold in this offering are primary shares to be newly issued by the Company. There are no secondary sales or selling stockholders in connection with this offering.

The obligations of each Underwriter to purchase the Firm Shares shall be several and not joint. No Underwriter shall be obligated to purchase any Firm Shares that any other Underwriter has agreed but failed to purchase, except as provided in Section 10 hereof.

Section 2(b): Overallotment Option (Option Shares).

In addition to the Firm Shares, the Company hereby grants to the several Underwriters an option (the "Overallotment Option") to purchase, severally and not jointly, up to 3,000,000 Option Shares at the Purchase Price of $18.80 per share, solely for the purpose of covering overallotments, if any, made in connection with the offering of the Firm Shares. The Overallotment Option shall be exercisable at any time, and from time to time, in whole or in part, within thirty (30) days from the date of the Prospectus (i.e., on or before March 9, 2024), by written notice from the Representative to the Company setting forth the number of Option Shares as to which the Overallotment Option is being exercised and the date on which the Option Shares are to be delivered (the "Option Closing Date").

If the Overallotment Option is exercised in full, the additional gross proceeds to the Company from the sale of the Option Shares shall be $60,000,000 (representing 3,000,000 Option Shares multiplied by the public offering price of $20.00 per share), the additional underwriting discount shall be $3,600,000 (representing 3,000,000 Option Shares multiplied by $1.20 per share), and the additional net proceeds to the Company from the Option Shares (before deduction of expenses) shall be $56,400,000 (representing 3,000,000 Option Shares multiplied by the Purchase Price of $18.80 per share).

Accordingly, the maximum total gross proceeds to the Company from the offering (assuming exercise of the Overallotment Option in full) shall be $460,000,000. The maximum total underwriting discount shall be $27,600,000. The maximum total net proceeds to the Company (before deduction of expenses) shall be $432,400,000.

The Option Shares shall be allocated among the several Underwriters pro rata in proportion to their respective Firm Share commitments as set forth in Schedule I hereto. The number of Option Shares to be purchased by each Underwriter shall be determined by multiplying the total number of Option Shares to be purchased by a fraction, the numerator of which is the number of Firm Shares set forth opposite such Underwriter's name in Schedule I and the denominator of which is the total number of Firm Shares.

Section 2(c): Payment and Delivery — Firm Shares.

Delivery of the Firm Shares shall be made on the Closing Date (February 13, 2024) through the facilities of The Depository Trust Company ("DTC"), or at such other place as may be agreed upon by the Representative and the Company, against payment of the aggregate Purchase Price therefor by wire transfer of immediately available funds to the account designated in writing by the Company. The Company shall designate in writing to the Representative, no later than two (2) full business days prior to the Closing Date, the account to which such wire transfer shall be made.

The Firm Shares shall be registered in such names and in such denominations as the Representative shall request in writing at least two (2) full business days prior to the Closing Date. It is understood that the Representative may direct that certificates for the Firm Shares, if any, be issued in the names of such dealers as may have been selected by the Underwriters for selling group purposes, and that any Shares deposited with DTC shall be registered in the name of Cede & Co., as nominee of DTC.

Continental Share Services, Inc. shall act as the transfer agent and registrar for the common stock. The common stock of the Company has been made eligible for deposit and book-entry transfer through the facilities of DTC (CUSIP: 039217105). The Company shall cooperate in all respects necessary to cause the Firm Shares to be eligible for such deposit and transfer on or before the Closing Date.

Section 2(d): Payment and Delivery — Option Shares.

Delivery of the Option Shares shall be made on the applicable Option Closing Date through the facilities of DTC, or at such other place as may be agreed upon by the Representative and the Company, against payment of the aggregate purchase price for such Option Shares by wire transfer of immediately available funds to the account designated in writing by the Company. If the Overallotment Option is exercised, settlement of the Option Shares shall occur no later than three (3) business days after the date on which the Representative delivers notice of exercise to the Company, or on such later date as may be agreed upon by the Representative and the Company; provided, however, that the Option Closing Date shall not be earlier than the Closing Date.

The Option Shares shall be registered in such names and in such denominations as the Representative shall request in writing at least one (1) full business day prior to the applicable Option Closing Date.

SECTION 3: REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to, and agrees with, each of the Underwriters as of the date hereof, as of the Applicable Time, and as of the Closing Date (and, if applicable, as of any Option Closing Date), as follows:

Section 3(a): Organization and Good Standing.

The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with full corporate power and authority to own, lease, and operate its properties and to conduct its business as described in the Registration Statement, the Pricing Disclosure Package, and the Prospectus. The Company is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the character of the business conducted by it or the nature or location of the properties owned or leased by it makes such qualification necessary, including the Commonwealth of Massachusetts, except where the failure to be so qualified or to be in good standing would not, individually or in the aggregate, have a material adverse effect on the condition (financial or otherwise), results of operations, business, properties, management, or prospects of the Company (a "Material Adverse Effect"). The Company's registered agent in the State of Delaware is National Registered Agents of Delaware, Inc., 160 Greentree Drive, Suite 101, Dover, DE 19904. The Company has no subsidiaries except as disclosed in the Registration Statement, the Pricing Disclosure Package, and the Prospectus.

Section 3(b): Capitalization.

The authorized capital stock of the Company, immediately prior to the consummation of this offering, consists of 120,000,000 shares of common stock, par value $0.001 per share, of which 80,000,000 shares are issued and outstanding. Upon the effectiveness of the Amended and Restated Certificate of Incorporation to be filed with the Secretary of State of the State of Delaware on or before the Closing Date, the authorized capital stock of the Company will consist of (i) 400,000,000 shares of common stock, par value $0.001 per share, and (ii) 50,000,000 shares of preferred stock, par value $0.001 per share (blank check preferred). The Company does not have a dual-class stock structure and has a single class of common stock outstanding.

Following the consummation of this offering (including the issuance of the Firm Shares and, if the Overallotment Option is exercised in full, the Option Shares), there will be 103,000,000 shares of common stock issued and outstanding (assuming full exercise of the Overallotment Option), or 100,000,000 shares of common stock issued and outstanding (assuming no exercise of the Overallotment Option). All outstanding shares of common stock have been validly issued, are fully paid and non-assessable, and have been issued in compliance with all applicable federal and state securities laws. No preemptive rights, anti-dilution adjustments, rights of first refusal, or similar rights exist with respect to the Company's capital stock or the issuance and sale of the Shares, except as disclosed in the Registration Statement, the Pricing Disclosure Package, and the Prospectus.

As of the date hereof, the holders of the Company's outstanding common stock, together with their respective holdings, are as follows:

The Company has the following equity compensation plans and arrangements:

(i) 2014 Stock Incentive Plan. Under the Company's 2014 Stock Incentive Plan, 12,000,000 shares of common stock are authorized for issuance. As of the date hereof, options to purchase 11,200,000 shares of common stock have been granted thereunder, of which options to purchase 8,400,000 shares have vested, at a weighted average exercise price of $3.25 per share.

(ii) 2024 Equity Incentive Plan. The Company has adopted the 2024 Equity Incentive Plan, under which 10,300,000 shares of common stock have been reserved for issuance, representing approximately 10% of the post-IPO outstanding shares (assuming full exercise of the Overallotment Option). The 2024 Equity Incentive Plan contains an annual "evergreen" provision pursuant to which the number of shares reserved for issuance thereunder will automatically increase on the first day of each fiscal year by an amount equal to 3% of the total number of shares of common stock outstanding on the last day of the immediately preceding fiscal year, or such lesser number as determined by the Board of Directors.

(iii) 2024 Employee Stock Purchase Plan. The Company has adopted the 2024 Employee Stock Purchase Plan (the "2024 ESPP"), under which 2,060,000 shares of common stock have been reserved for issuance, representing approximately 2% of the post-IPO outstanding shares. The 2024 ESPP provides for a 15% discount from the applicable market price and semi-annual offering periods.

Each of the foregoing equity compensation plans is described accurately in all material respects in the Registration Statement, the Pricing Disclosure Package, and the Prospectus.

Section 3(c): Authorization of the Shares.

The Shares have been duly authorized for issuance and sale pursuant to this Agreement. When issued and delivered by the Company against payment therefor as provided herein, the Shares will be validly issued, fully paid, and non-assessable, free and clear of all liens, encumbrances, equities, security interests, or claims of any kind. The issuance of the Shares is not subject to any preemptive rights or similar rights arising under the Company's Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, any agreement to which the Company is a party, or under the laws of the State of Delaware.

Section 3(d): Authorization of this Agreement.

This Agreement has been duly authorized, executed, and delivered by the Company. This Agreement constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as the enforceability thereof may be limited by (i) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors' rights generally, and (ii) general principles of equity (whether considered in a proceeding in equity or at law), including concepts of materiality, reasonableness, good faith, and fair dealing.

Section 3(e): Registration Statement and Prospectus.

The Registration Statement on Form S-1 (File No. 333-276841) has been prepared by the Company in conformity with the requirements of the Act and the rules and regulations of the Commission and has been filed with the Commission. The Registration Statement was declared effective by the Commission on February 8, 2024. No stop order suspending the effectiveness of the Registration Statement has been issued by the Commission, and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are pending or threatened by the Commission.

The Registration Statement, at the time it became effective, did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading. The Prospectus, as of its date and as of the Closing Date (and, if applicable, as of any Option Closing Date), does not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Pricing Disclosure Package, as of the Applicable Time, did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

The foregoing representations and warranties in this Section 3(e) do not apply to statements in or omissions from the Registration Statement, the Prospectus, or the Pricing Disclosure Package made in reliance upon and in conformity with information furnished to the Company in writing by or on behalf of any Underwriter through the Representative expressly for use therein (the "Underwriter Information"), as identified in Section 8(b) hereof.

The financial statements and related schedules included in the Registration Statement, the Pricing Disclosure Package, and the Prospectus, together with related notes and schedules, fairly present the financial condition, results of operations, stockholders' equity, and cash flows of the Company at the dates and for the periods indicated, and have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved, except as otherwise noted therein. The selected financial data and the summary financial information included in the Registration Statement, the Pricing Disclosure Package, and the Prospectus present fairly, in all material respects, the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included therein. The pro forma financial statements and the related notes thereto included in the Registration Statement, the Pricing Disclosure Package, and the Prospectus have been prepared in accordance with the Commission's rules and guidelines with respect to pro forma financial statements and are based on reasonable assumptions.

Kellerman & Associates LLP, which has audited the Company's financial statements included in the Registration Statement and the Prospectus, is an independent registered public accounting firm with respect to the Company as required by the Act and the rules and regulations of the Commission, and the rules of the Public Company Accounting Oversight Board (United States) (the "PCAOB").

Section 3(f): No Material Adverse Change.

Since the respective dates as of which information is given in the Registration Statement, the Pricing Disclosure Package, and the Prospectus, there has not been (i) any material adverse change, or any development involving a prospective material adverse change, in the condition (financial or otherwise), results of operations, business, properties, management, or prospects of the Company (whether or not arising in the ordinary course of business), (ii) any transaction entered into by the Company that is material to the Company other than in the ordinary course of business, (iii) any obligation, direct or contingent, incurred by the Company that is material to the Company other than in the ordinary course of business, or (iv) any dividend or distribution of any kind declared, paid, or made by the Company on its capital stock, except in each case as set forth in or contemplated by the Pricing Disclosure Package and the Prospectus.

Section 3(g): No Undisclosed Liabilities.

The Company does not have, and as of the Closing Date will not have, any material liabilities or obligations, whether absolute, accrued, contingent, or otherwise, whether or not required by GAAP to be reflected in financial statements or disclosed in the notes thereto, except (i) as disclosed in the Registration Statement, the Pricing Disclosure Package, and the Prospectus, (ii) liabilities incurred in the ordinary course of business since the date of the most recent financial statements included in the Pricing Disclosure Package, which liabilities are not, individually or in the aggregate, material to the Company, and (iii) liabilities arising under this Agreement.

Section 3(h): Compliance with Laws.

The Company is not in violation of its Amended and Restated Certificate of Incorporation or its Amended and Restated Bylaws. The Company is not in default in the performance or observance of any material obligation, agreement, covenant, or condition contained in any material bond, debenture, note, indenture, mortgage, deed of trust, loan agreement, lease, or other instrument or agreement to which it is a party or by which it or any of its properties may be bound.

The Company is in compliance in all material respects with all applicable federal, state, local, and foreign statutes, rules, regulations, ordinances, orders, and decrees, including, without limitation, all healthcare regulatory requirements applicable to the Company's clinical decision support and population health management platform operations across the 42 states in which the Company operates, serving over 1,200 hospital systems and physician groups. Without limiting the generality of the foregoing, the Company is in material compliance with all applicable requirements of the Health Insurance Portability and Accountability Act of 1996, as amended ("HIPAA"), the Health Information Technology for Economic and Clinical Health Act ("HITECH"), and all rules and regulations promulgated thereunder.

No consent, approval, authorization, license, permit, order, or qualification of or with any court, governmental authority, or regulatory body is required in connection with the execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby, including the issuance and sale of the Shares, except for (i) such as have been obtained under the Act, (ii) such as may be required under the Exchange Act, (iii) such as may be required under applicable state securities or "blue sky" laws, (iv) such as may be required by FINRA, and (v) such as may be required under the listing rules of the New York Stock Exchange (the "NYSE").

Section 3(i): No Conflicts.

The execution, delivery, and performance of this Agreement by the Company, the issuance and sale of the Shares, and the consummation of the transactions contemplated herein will not (i) conflict with, result in a breach or violation of, or constitute a default under, the Company's Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws, (ii) conflict with, result in a breach or violation of, or constitute a default under, or result in the creation or imposition of any lien, charge, or encumbrance upon any property or assets of the Company, under any statute, law, rule, regulation, judgment, order, or decree applicable to the Company or any of its properties, or (iii) conflict with, result in a breach or violation of, constitute a default under, give rise to any right of termination, cancellation, or acceleration of any obligation or loss of any benefit under, or result in the creation or imposition of any lien, charge, or encumbrance upon any property or assets of the Company under, any of the terms or provisions of any material agreement, indenture, mortgage, deed of trust, note, loan agreement, bond, license, permit, lease, or other instrument or obligation to which the Company is a party or by which any of its properties may be bound, including, without limitation, the Credit Agreement dated as of March 15, 2022, as amended by the First Amendment dated January 18, 2024, by and among the Company, Keypoint National Bank, N.A. (as Administrative Agent), and Stonemill Capital Bank (such credit agreement, as amended, the "Keypoint Credit Facility"), providing for a $150,000,000 senior secured revolving credit facility.

Section 3(j): Intellectual Property.

The Company owns, or possesses adequate rights to use, all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets, technology, know-how, and other intellectual property and proprietary rights (collectively, "Intellectual Property") necessary for the conduct of the Company's business as described in the Registration Statement, the Pricing Disclosure Package, and the Prospectus, including, without limitation, the Arbor Platform and all related software-as-a-service ("SaaS") technology. To the Company's knowledge, no claims have been asserted, and no claims are pending or threatened, by any person challenging the Company's use of any intellectual Property or challenging the validity, enforceability, or scope of any intellectual Property owned by the Company, except for such claims as would not, individually or in the aggregate, have a Material Adverse Effect. To the Company's knowledge, the conduct of the Company's business does not infringe, misappropriate, or otherwise violate any intellectual Property rights of any third party, except for such infringement, misappropriation, or violation as would not, individually or in the aggregate, have a Material Adverse Effect.

Section 3(k): Tax Matters.

The Company has filed all necessary federal, state, local, and foreign income and franchise tax returns and has paid all taxes shown as due thereon, and no tax deficiency has been determined adversely to the Company which has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The Company's Federal Employer Identification Number is 47-3891205. The Company has nexus in, and files income or franchise tax returns in, the following states: Massachusetts, New York, California, Texas, Illinois, Florida, Pennsylvania, Ohio, New Jersey, and Georgia. No tax deficiency has been asserted or threatened against the Company that would, individually or in the aggregate, have a Material Adverse Effect, nor does the Company have knowledge of any basis for any such assertion.

Section 3(l): Insurance.

The Company maintains insurance policies with insurers of recognized financial responsibility in such amounts and covering such risks as the Company believes are adequate for the conduct of its business and the value of its properties, including, without limitation, directors and officers ("D&O") liability insurance. The Company's D&O insurance program is structured as follows:

(i) Primary Policy: Northbridge Specialty Insurance Company, providing $50,000,000 per occurrence and in the aggregate (Policy No. NSI-IPO-2024-00473);

(ii) First Excess Policy: Pinnacle Re Assurance Ltd., providing $25,000,000 excess of $50,000,000;

(iii) Second Excess Policy: Atlas Guard Insurance Company, providing $25,000,000 excess of $75,000,000;

(iv) Total D&O Tower: $100,000,000.

All such insurance policies are in full force and effect and all premiums due thereon have been paid. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

Section 3(m): No Undisclosed Relationships.

No material relationship, direct or indirect, exists between or among the Company, on the one hand, and any of the Underwriters or their respective affiliates, on the other hand, which is required to be described in the Registration Statement, the Pricing Disclosure Package, or the Prospectus that is not so described. There are no material transactions or arrangements between the Company and any Underwriter or any affiliate of any Underwriter except as disclosed in the Registration Statement, the Pricing Disclosure Package, and the Prospectus.

Section 3(n): Internal Controls and Disclosure Controls.

The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management's general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commission's rules and forms.

Section 3(o): Listing.

The shares of common stock of the Company have been approved for listing on the New York Stock Exchange under the ticker symbol "ARHT," subject only to official notice of issuance. The Company has taken all actions necessary to cause the Shares to be so listed on or before the Closing Date.

Section 3(p): Transfer Agent.

Continental Share Services, Inc. has been duly appointed as the transfer agent and registrar for the common stock of the Company. The shares of common stock are eligible for deposit and book-entry transfer through the facilities of DTC. The Company is not in default under any agreement with Continental Share Services, Inc.

Section 3(q): ERISA and Employee Benefit Plans.

Each employee benefit plan (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")), and each other plan, program, arrangement, or agreement maintained, sponsored, or contributed to by the Company for the benefit of its current or former employees, directors, or consultants, has been maintained in compliance with its terms and with the requirements of all applicable statutes, rules, and regulations, including ERISA and the Internal Revenue Code of 1986, as amended (the "Code"), except where the failure to be in compliance would not, individually or in the aggregate, have a Material Adverse Effect. No "reportable event" (as defined in Section 4043 of ERISA) has occurred with respect to any employee benefit plan for which the reporting requirement has not been waived. The 2014 Stock Incentive Plan, the 2024 Equity Incentive Plan, and the 2024 Employee Stock Purchase Plan are described accurately in all material respects in the Registration Statement, the Pricing Disclosure Package, and the Prospectus.

Section 3(r): Environmental Matters.

The Company is in compliance in all material respects with all applicable environmental laws and regulations, including, without limitation, all federal, state, local, and foreign laws, rules, regulations, orders, decrees, and judgments relating to the protection of the environment, the generation, storage, handling, transportation, treatment, disposal, emission, release, or threatened release of pollutants, contaminants, chemicals, industrial, toxic, or hazardous substances or wastes. No environmental claim has been asserted against the Company, and to the Company's knowledge, no circumstances exist that could form the basis for any such claim that would, individually or in the aggregate, have a Material Adverse Effect.

Section 3(s): Cybersecurity and Data Privacy.

The Company and its subsidiaries' information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases (collectively, "IT Systems") are adequate for, and operate and perform in all material respects as required in connection with, the operation of the business of the Company as currently conducted. The Company and its subsidiaries have implemented and maintain commercially reasonable technical, administrative, and physical controls, policies, procedures, and safeguards to maintain and protect their material confidential information and the integrity, continuous operation, redundancy, and security of all IT Systems and data (including all personal, personally identifiable, sensitive, confidential, or regulated data ("Personal Data")) used in connection with their businesses. To the Company's knowledge, there have been no material breaches, violations, outages, or unauthorized uses of or accesses to the IT Systems or Personal Data, nor any incidents under internal review or investigations relating to the same, except for those that have been resolved without material cost or liability. The Company has complied in all material respects with all applicable laws and regulations, and all judgments, orders, rules, and regulations of any court or arbitrator or governmental or regulatory authority, internal policies, and contractual obligations relating to the privacy and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation, or modification.

Section 3(t): FCPA / Anti-Corruption.

Neither the Company nor, to the knowledge of the Company, any director, officer, employee, agent, affiliate, or other person acting on behalf of the Company has, in the course of its actions for, or on behalf of, the Company: (i) used any corporate funds for any unlawful contribution, gift, entertainment, or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery Act 2010 of the United Kingdom, or any other applicable anti-bribery or anti-corruption law; or (iv) made, offered, agreed, requested, or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback, or other unlawful or improper payment or benefit.

Section 3(u): OFAC / Sanctions.

Neither the Company nor, to the knowledge of the Company, any director, officer, employee, agent, affiliate, or other person acting on behalf of the Company is currently the subject or target of any sanctions administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury ("OFAC"), the U.S. Department of State, or the Bureau of Industry and Security of the U.S. Department of Commerce), the United Nations Security Council, the European Union, Her Majesty's Treasury, or other relevant sanctions authority (collectively, "Sanctions"). Neither the Company nor, to the knowledge of the Company, any director, officer, employee, agent, affiliate, or other person acting on behalf of the Company is located, organized, or resident in a country or territory that is the subject or target of comprehensive territorial Sanctions (currently, Cuba, Iran, North Korea, Syria, and the Crimea, Donetsk People's Republic, and Luhansk People's Republic regions of Ukraine). The Company will not directly or indirectly use the proceeds of the offering, or lend, contribute, or otherwise make available such proceeds to any subsidiary, joint venture partner, or other person or entity, for the purpose of financing the activities of any person currently the subject of any Sanctions or in any country or territory that is the subject of comprehensive territorial Sanctions, or in any other manner that will result in a violation by any person of Sanctions.

Section 3(v): No Stabilization.

The Company has not taken, and will not take, directly or indirectly, any action designed to or that might constitute or reasonably be expected to cause or result in stabilization or manipulation of the price of the shares of common stock of the Company, or any other security of the Company, to facilitate the sale or resale of any of the Shares, in violation of applicable law.

Section 3(w): Lock-Up Agreements.

The Company has obtained duly executed lock-up agreements, substantially in the form attached hereto as Exhibit A, from each officer, director, and stockholder of the Company listed in Schedule II hereto (approximately 45 individuals and entities, collectively holding approximately 80,000,000 shares of common stock prior to this offering), each such lock-up agreement being in the form previously approved by the Representative, and each for the Lock-Up Period of 180 days from the date of the Prospectus (i.e., from February 8, 2024, through August 6, 2024). Each such lock-up agreement is in full force and effect as of the date hereof.

Section 3(x): Use of Proceeds.

The Company intends to use the net proceeds from this offering as set forth in the Registration Statement, the Pricing Disclosure Package, and the Prospectus, specifically:

(i) approximately $65,000,000 for the repayment of the outstanding balance drawn under the Keypoint Credit Facility;

(ii) approximately $120,000,000 for product development and research and development investment;

(iii) approximately $100,000,000 for potential acquisitions and strategic investments; and

(iv) the balance for general corporate purposes, including working capital.

Section 3(y): Forward-Looking Statements.

No forward-looking statement (within the meaning of Section 27A of the Act and Section 21E of the Exchange Act) contained in the Registration Statement, the Pricing Disclosure Package, or the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

Section 3(z): Statistical and Market Data.

All statistical and market-related data included in the Registration Statement, the Pricing Disclosure Package, and the Prospectus are based on or derived from sources that the Company believes to be reliable and accurate, and the Company has obtained the written consent of the owners thereof for the use of such data to the extent required.

Section 3(aa): Related Party Transactions.

All related party transactions required to be disclosed pursuant to Item 404 of Regulation S-K promulgated under the Act are disclosed in the Registration Statement, the Pricing Disclosure Package, and the Prospectus as so required.

Section 3(bb): Material Contracts.

All contracts or agreements required to be described in the Registration Statement or the Prospectus, or to be filed as exhibits to the Registration Statement, have been so described or filed, as applicable. The following material contracts, among others, are accurately described in all material respects in the Registration Statement, the Pricing Disclosure Package, and the Prospectus:

(i) Keypoint Credit Facility. Credit Agreement dated as of March 15, 2022, by and among the Company, Keypoint National Bank, N.A. (as Administrative Agent), and Stonemill Capital Bank (as lender), providing for a $150,000,000 senior secured revolving credit facility, as amended by the First Amendment dated January 18, 2024. Maturity date: March 15, 2027. Interest rate: Adjusted Term SOFR plus 200 basis points per annum. Financial covenants include: Total Net Leverage Ratio not to exceed 3.50 to 1.00, and Fixed Charge Coverage Ratio of not less than 1.25 to 1.00.

(ii) Amended and Restated Investors' Rights Agreement dated October 22, 2020, by and among the Company and the investors named therein, which agreement terminates by its terms upon the consummation of a "Qualified IPO" (as defined therein), including the offering contemplated hereby.

(iii) Amended and Restated Registration Rights Agreement by and among the Company and the holders named therein, providing for demand registration rights, piggyback registration rights, and shelf registration rights on Form S-3 (available after the passage of 12 months following the date of the Prospectus), together with a 180-day standstill provision.

(iv) Amended and Restated Voting Agreement by and among the Company and the stockholders named therein, which agreement terminates by its terms upon the consummation of the Company's initial public offering, including the offering contemplated hereby.

Each of the foregoing contracts is in full force and effect as of the date hereof, and the Company is not in material default under any such contract, nor, to the Company's knowledge, is any other party thereto in material default.

SECTION 4: REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS

Each of the Underwriters, severally and not jointly, represents, warrants, and agrees as follows:

Section 4(a): Authorization.

Such Underwriter has been duly authorized to enter into this Agreement and to perform its obligations hereunder. The Representative has been duly authorized by each of the Underwriters to enter into this Agreement on behalf of such Underwriter and to act on behalf of the several Underwriters in connection with the transactions contemplated by this Agreement.

Section 4(b): FINRA Compliance.

Such Underwriter is a member in good standing of the Financial Industry Regulatory Authority, Inc. ("FINRA") and is registered as a broker-dealer under the Exchange Act and the securities laws of each state in which such Underwriter proposes to offer or sell the Shares. Whitfield Barrow & Co., LLC maintains FINRA CRD No. 7924. FINRA has confirmed that it has raised no objection with respect to the fairness and reasonableness of the underwriting terms and arrangements pertaining to this offering (such confirmation having been received on or about January 30, 2024).

Section 4(c): Selling Restrictions.

Such Underwriter agrees that it will sell the Shares only in compliance with the Act, the Exchange Act, the rules and regulations of FINRA, and all applicable state securities or "blue sky" laws. No Underwriter has made, or will make, any offer or sale of the Shares other than through the Prospectus (or through a notice permitted by Rule 173 under the Act), except that the Underwriters may make offers utilizing the Preliminary Prospectus and the Pricing Disclosure Package prior to the availability of the Prospectus.

Section 4(d): No Stabilization (Limited Exception).

No Underwriter has taken, or will take, directly or indirectly, any action designed to, or that might constitute or reasonably be expected to cause or result in, stabilization or manipulation of the price of any security of the Company in connection with the offering of the Shares, other than activities that are permitted under Regulation M under the Exchange Act in connection with the distribution of the Shares. Each Underwriter acknowledges that it has been advised of the requirements of Regulation M and agrees to comply therewith.

Section 4(e): Information Furnished by Underwriters.

Each Underwriter confirms that the only information furnished to the Company in writing by or on behalf of such Underwriter through the Representative expressly for use in the Registration Statement, the Pricing Disclosure Package, and the Prospectus (and any amendment or supplement thereto) is the information set forth in the paragraphs identified in Section 8(b) hereof relating to stabilization transactions, syndicate short sales, overallotment, and penalty bids (the "Underwriter Information"). Each Underwriter represents that no Underwriter has furnished any other written information to the Company for inclusion in the Registration Statement, the Pricing Disclosure Package, or the Prospectus.

SECTION 5: COVENANTS OF THE COMPANY

The Company covenants and agrees with each of the Underwriters as follows:

Section 5(a): Rules 424 and 430A Compliance.

The Company shall file the Prospectus with the Commission pursuant to Rule 424(b)(4) under the Act within the time period required by such Rule and in any event no later than the second business day following the date hereof (i.e., by February 12, 2024). The Company currently anticipates filing the Prospectus on February 9, 2024. The Company shall not file any amendment to the Registration Statement or any supplement to the Prospectus (including any prospectus supplement) to which the Representative shall reasonably object in writing after being furnished with a copy thereof, and the Company shall provide the Representative and Underwriters' Counsel (Meridian Hale & Quivorn LLP) with prior notice of and a reasonable opportunity to review and comment on any proposed amendment or supplement prior to the filing thereof with the Commission.

Section 5(b): Delivery of Prospectus Copies.

The Company shall deliver, without charge, to the Representative and to Underwriters' Counsel such number of copies of the Prospectus, each Preliminary Prospectus, and any amendments or supplements thereto, including any documents incorporated by reference therein, as the Representative may reasonably request for the purposes contemplated by the Act and the rules and regulations of the Commission thereunder. The Company consents to the use of the Prospectus and each Preliminary Prospectus by the Underwriters and by dealers to whom Shares may be sold, in connection with the offering and sale of the Shares and for such period of time thereafter as the Prospectus is required by law to be delivered in connection with sales by any Underwriter or dealer.

Section 5(c): Amendments and Supplements.

During any period in which a prospectus relating to the Shares is required by law to be delivered by an Underwriter or dealer (including through compliance with Rule 172 or Rule 173 under the Act), if any event shall occur or condition shall exist as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact, or would omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it shall be necessary at any time to amend or supplement the Prospectus or the Registration Statement to comply with the Act, the Company shall promptly (i) notify the Representative of any such event or condition and (ii) prepare and file with the Commission, subject to Section 5(a) hereof, an amendment or supplement to the Registration Statement or the Prospectus that will correct such statement or omission or effect such compliance, and the Company shall furnish to the Underwriters, without charge, such number of copies of such amendment or supplement as the Underwriters may reasonably request. The Company shall also promptly advise the Representative of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, or the initiation or threatening of any proceedings for that purpose, and the Company will use its reasonable best efforts to prevent the issuance of any stop order and to obtain its prompt removal if issued.

Section 5(d): Blue Sky Compliance.

The Company shall cooperate with the Representative and Underwriters' Counsel in qualifying the Shares for offer and sale under the securities or "blue sky" laws of such U.S. jurisdictions as the Representative may designate and shall continue such qualifications in effect for so long as may be necessary for the distribution of the Shares; provided, however, that the Company shall not be obligated to qualify as a foreign corporation in any jurisdiction in which it is not already so qualified, to file a general consent to service of process in any jurisdiction, or to subject itself to taxation in any jurisdiction in which it is not already so subject. The Company's estimated blue sky and miscellaneous filing expenses are approximately $657,000, which amount is included in the total estimated offering expenses of approximately $4,200,000.

Section 5(e): Earnings Statement.

The Company shall make generally available to its security holders, as soon as practicable, an earnings statement (which need not be audited) covering a period of at least twelve months beginning with the first fiscal quarter of the Company commencing after the "effective date" (as defined in Rule 158 under the Act) of the Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act. The Company may satisfy the requirements of this Section 5(e) by making such earnings statement available on the Commission's EDGAR system or the Company's website.

Section 5(f): Use of Proceeds.

The Company shall apply the net proceeds from the sale of the Shares in the manner described under "Use of Proceeds" in the Registration Statement, the Pricing Disclosure Package, and the Prospectus.

Section 5(g): Listing.

The Company shall use its reasonable best efforts to cause the shares of common stock, including the Shares, to be listed on the NYSE under the ticker symbol "ARHT" on or prior to the Closing Date and shall maintain such listing for so long as any Shares are outstanding.

Section 5(h): Reporting Requirements.

Following the Closing Date, the Company shall file all reports required to be filed under the Exchange Act in a timely manner for so long as the Company is subject to the reporting requirements of the Exchange Act.

Section 5(i): No Issuance During Lock-Up Period.

The Company agrees that, without the prior written consent of the Representative, during the Lock-Up Period (180 days from the date of the Prospectus, i.e., from February 8, 2024, through August 6, 2024), the Company will not:

(i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right, or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable for shares of common stock;

(ii) file or cause to be filed any registration statement under the Act with respect to any shares of common stock or any securities convertible into or exercisable or exchangeable for shares of common stock; or

(iii) enter into any swap, hedge, or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of shares of common stock;

whether any such transaction described in clauses (i), (ii), or (iii) above is to be settled by delivery of shares of common stock or such other securities, in cash, or otherwise; provided, however, that the foregoing restrictions shall not apply to:

(A) the Shares to be sold pursuant to this Agreement;

(B) shares of common stock issuable upon the exercise of stock options outstanding on the date hereof under the Company's 2014 Stock Incentive Plan, as described in the Registration Statement, the Pricing Disclosure Package, and the Prospectus;

(C) grants of stock options, restricted stock units, or other equity-based awards under the Company's 2024 Equity Incentive Plan, and shares of common stock issuable upon the exercise or vesting thereof, as described in the Registration Statement, the Pricing Disclosure Package, and the Prospectus; provided that any shares issued to or received by any person who is subject to a lock-up agreement described in Section 3(w) shall remain subject to such lock-up agreement;

(D) shares of common stock issuable under the Company's 2024 Employee Stock Purchase Plan, as described in the Registration Statement, the Pricing Disclosure Package, and the Prospectus; and

(E) shares of common stock issued upon the conversion or exchange of convertible or exchangeable securities outstanding as of the date hereof and described in the Registration Statement, the Pricing Disclosure Package, and the Prospectus.

Section 5(j): Lock-Up Agreements from Insiders.

The Company shall use its reasonable best efforts to enforce the lock-up agreements delivered pursuant to Section 3(w) hereof, which agreements cover approximately 80,000,000 shares of common stock (representing 100% of the pre-IPO outstanding shares) for the Lock-Up Period of 180 days from the date of the Prospectus (expiring August 6, 2024). The Company shall not release or waive any person from any lock-up agreement without the prior written consent of the Representative. The Company shall provide the Representative with reasonable advance notice (and in any event not less than three (3) business days' prior notice) of any request by any person for release or waiver from the restrictions contained in any lock-up agreement, together with a description of the circumstances giving rise to such request.

Section 5(k): FINRA Filings.

The Company shall cooperate with the Representative in connection with any filings required to be made with FINRA, and shall use its reasonable best efforts to cause any such filings to be made and cleared as promptly as practicable.

Section 5(l): DTC Book-Entry.

The Company shall cooperate with the Transfer Agent to ensure that the Shares are eligible for deposit and book-entry transfer through the facilities of DTC on and after the Closing Date.

Section 5(m): Free Writing Prospectuses.

The Company shall not prepare, use, authorize, approve, refer to, or distribute any Issuer Free Writing Prospectus (as defined in Rule 433 under the Act), whether or not listed on Schedule III hereto, without the prior written consent of the Representative. The Company shall comply in all material respects with the requirements of Rule 433 under the Act applicable to any Issuer Free Writing Prospectus, including the filing requirements thereof.

SECTION 6: COVENANTS OF THE UNDERWRITERS

Each of the Underwriters covenants and agrees as follows:

Section 6(a): Prospectus Delivery.

Each Underwriter agrees that it will deliver or cause to be delivered a copy of the Prospectus (or make available a notice to each purchaser as required by Rule 173 under the Act) t

UNDERWRITING AGREEMENT
Arbor Health Technologies Inc.
20,000,000 Shares of Common Stock
(Par Value $0.001 Per Share)
February 8, 2024
Whitfield Barrow & Co., LLC As Representative of the several Underwriters named in Schedule I hereto 383 Madison Avenue New York, NY 10179
Ladies and Gentlemen:
Arbor Health Technologies Inc., a Delaware corporation (the "Company"), having its principal offices at 275 Kendall Avenue, Suite 1400, Cambridge, MA 02142, hereby confirms its agreement with Whitfield Barrow & Co., LLC ("Whitfield Barrow" or the "Representative"), acting as Representative of the several underwriters named in Schedule I hereto (collectively, the "Underwriters"), with respect to the issuance and sale by the Company and the purchase by the several Underwriters, acting severally and not jointly, of 20,000,000 shares of common stock, par value $0.001 per share (the "Firm Shares"), of the Company. The Company also proposes to grant to the Underwriters an option to purchase up to 3,000,000 additional shares of common stock (the "Option Shares") on the terms and for the purposes set forth in Section 2(b) hereof. The Firm Shares and the Option Shares are hereinafter collectively referred to as the "Shares."
The Company has filed with the Securities and Exchange Commission (the "Commission" or the "SEC") a registration statement on Form S-1 (File No. 333-276841), including a prospectus, relating to the Shares. Such registration statement, as amended (including the amendment on Form S-1/A filed on February 5, 2024), was declared effective by the Commission on February 8, 2024. The Company has prepared a final prospectus dated February 8, 2024, relating to the Shares, together with a final prospectus supplement to be filed with the Commission pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the "Act").
The Company and the Underwriters agree as follows:
SECTION 1: DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth below:
"Act" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
"Applicable Time" means 5:00 P.M. (Eastern time) on February 8, 2024.
"Auditors" means Kellerman & Associates LLP, an independent registered public accounting firm, having its principal office at 345 Park Avenue, New York, NY 10154.
"Closing Date" means February 13, 2024 (T+3 after the date hereof), or such other date as may be agreed upon by the Representative and the Company, but in no event later than ten (10) business days after the date hereof.
"Commission" or "SEC" means the Securities and Exchange Commission.
"Company" means Arbor Health Technologies Inc., a Delaware corporation, CIK No. 0001987432, EIN 47-3891205, having its principal offices at 275 Kendall Avenue, Suite 1400, Cambridge, MA 02142.
"Company Counsel" means Calderwood & Harkness LLP, having its principal office at 125 Broad Street, New York, NY 10004.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
"Firm Shares" means 20,000,000 shares of common stock, par value $0.001 per share, of the Company to be issued and sold by the Company to the several Underwriters pursuant to Section 2(a) of this Agreement.
"Issuer Free Writing Prospectus" means any "issuer free writing prospectus" as defined in Rule 433 under the Act relating to the Shares.
"Lock-Up Period" means 180 days after the date of the Prospectus, commencing on February 8, 2024, and ending on August 6, 2024 (inclusive).
"Option Closing Date" means the date of delivery of and payment for the Option Shares, if any, which shall be a date designated by the Representative that is no later than three (3) business days after exercise of the overallotment option (or such later date as may be agreed upon by the Representative and the Company).
"Option Shares" means up to 3,000,000 additional shares of common stock, par value $0.001 per share, of the Company that the Company has granted the Underwriters the option to purchase pursuant to Section 2(b) of this Agreement, representing 15% of the Firm Shares, solely for the purpose of covering overallotments.
"Preliminary Prospectus" means each preliminary prospectus included in the Registration Statement prior to its effectiveness, including the preliminary prospectus filed on January 22, 2024 (containing an initial price range of $17.00 to $19.00 per share) and the preliminary prospectus filed on February 5, 2024 (containing a revised price range of $18.00 to $20.00 per share).
"Pricing Disclosure Package" means the Pricing Prospectus, taken together with the Pricing Information and any Issuer Free Writing Prospectuses identified on Schedule III hereto, if any.
"Pricing Information" means the following information: the public offering price per share of $20.00 and the number of Firm Shares of 20,000,000.
"Pricing Prospectus" means the most recent Preliminary Prospectus, together with the Pricing Information.
"Prospectus" means the final prospectus relating to the Firm Shares, as filed with the Commission pursuant to Rule 424(b)(4) under the Act, including all documents incorporated by reference therein.
"Purchase Price" means $18.80 per share, representing the public offering price of $20.00 per share less the underwriting discount of $1.20 per share.
"Registration Statement" means the Registration Statement on Form S-1 (File No. 333-276841), including the amendment on Form S-1/A filed on February 5, 2024, all exhibits thereto, all financial statements and schedules included therein, and all documents incorporated by reference therein, as declared effective by the Commission on February 8, 2024; provided, however, that any reference to the Registration Statement "as of any specified time" shall mean the Registration Statement as amended as of such time, including all exhibits filed therewith and all information deemed to be a part thereof pursuant to Rule 430A under the Act.
"Representative" means Whitfield Barrow & Co., LLC, acting on behalf of the several Underwriters.
"Shares" means the Firm Shares and the Option Shares, collectively.
"Transfer Agent" means Continental Share Services, Inc., having its principal office at 1 Ashbury Asset Advisors Plaza, 30th Floor, New York, NY 10004.
"Underwriters" means, collectively, Whitfield Barrow & Co., LLC; Calloway Pierce Securities LLC; Velthorn Capital Partners Inc.; and Pemberton Wallis LLC.
"Underwriters' Counsel" means Meridian Hale & Quivorn LLP, having its principal office at 51 West 52nd Street, New York, NY 10019.
All references in this Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" in the Registration Statement, the Preliminary Prospectus, the Pricing Disclosure Package or the Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in or otherwise deemed by the rules and regulations of the Commission to be a part of or included in the Registration Statement, the Preliminary Prospectus, the Pricing Disclosure Package or the Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to mean and include the filing of any document under the Exchange Act which is incorporated by reference in or otherwise deemed by the rules and regulations of the Commission to be a part of or included in the Registration Statement, such Preliminary Prospectus or the Prospectus, as the case may be.
SECTION 2: PURCHASE AND SALE OF SHARES
Section 2(a): Agreement to Purchase Firm Shares.
Subject to the terms and conditions and in reliance upon the representations, warranties, covenants, and agreements set forth herein, the Company agrees to issue and sell to the several Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, the respective number of Firm Shares set forth opposite such Underwriter's name in Schedule I hereto, at the Purchase Price of $18.80 per share. The total number of Firm Shares to be sold by the Company is 20,000,000. The total aggregate purchase price for the Firm Shares payable by the Underwriters to the Company shall be $376,000,000 (representing 20,000,000 Firm Shares multiplied by the Purchase Price of $18.80 per share).
The public offering price of the Firm Shares shall be $20.00 per share. The underwriting discount applicable to the Firm Shares shall be $1.20 per share, representing 6.0% of the public offering price. The total underwriting discount on the Firm Shares shall be $24,000,000 (representing 20,000,000 Firm Shares multiplied by $1.20 per share). The base gross proceeds to the Company from the sale of the Firm Shares shall be $400,000,000, and the net proceeds to the Company from the Firm Shares (before deduction of expenses payable by the Company) shall be $376,000,000.
All Shares to be sold in this offering are primary shares to be newly issued by the Company. There are no secondary sales or selling stockholders in connection with this offering.
The obligations of each Underwriter to purchase the Firm Shares shall be several and not joint. No Underwriter shall be obligated to purchase any Firm Shares that any other Underwriter has agreed but failed to purchase, except as provided in Section 10 hereof.
Section 2(b): Overallotment Option (Option Shares).
In addition to the Firm Shares, the Company hereby grants to the several Underwriters an option (the "Overallotment Option") to purchase, severally and not jointly, up to 3,000,000 Option Shares at the Purchase Price of $18.80 per share, solely for the purpose of covering overallotments, if any, made in connection with the offering of the Firm Shares. The Overallotment Option shall be exercisable at any time, and from time to time, in whole or in part, within thirty (30) days from the date of the Prospectus (i.e., on or before March 9, 2024), by written notice from the Representative to the Company setting forth the number of Option Shares as to which the Overallotment Option is being exercised and the date on which the Option Shares are to be delivered (the "Option Closing Date").
If the Overallotment Option is exercised in full, the additional gross proceeds to the Company from the sale of the Option Shares shall be $60,000,000 (representing 3,000,000 Option Shares multiplied by the public offering price of $20.00 per share), the additional underwriting discount shall be $3,600,000 (representing 3,000,000 Option Shares multiplied by $1.20 per share), and the additional net proceeds to the Company from the Option Shares (before deduction of expenses) shall be $56,400,000 (representing 3,000,000 Option Shares multiplied by the Purchase Price of $18.80 per share).
Accordingly, the maximum total gross proceeds to the Company from the offering (assuming exercise of the Overallotment Option in full) shall be $460,000,000. The maximum total underwriting discount shall be $27,600,000. The maximum total net proceeds to the Company (before deduction of expenses) shall be $432,400,000.
The Option Shares shall be allocated among the several Underwriters pro rata in proportion to their respective Firm Share commitments as set forth in Schedule I hereto. The number of Option Shares to be purchased by each Underwriter shall be determined by multiplying the total number of Option Shares to be purchased by a fraction, the numerator of which is the number of Firm Shares set forth opposite such Underwriter's name in Schedule I and the denominator of which is the total number of Firm Shares.
Section 2(c): Payment and Delivery — Firm Shares.
Delivery of the Firm Shares shall be made on the Closing Date (February 13, 2024) through the facilities of The Depository Trust Company ("DTC"), or at such other place as may be agreed upon by the Representative and the Company, against payment of the aggregate Purchase Price therefor by wire transfer of immediately available funds to the account designated in writing by the Company. The Company shall designate in writing to the Representative, no later than two (2) full business days prior to the Closing Date, the account to which such wire transfer shall be made.
The Firm Shares shall be registered in such names and in such denominations as the Representative shall request in writing at least two (2) full business days prior to the Closing Date. It is understood that the Representative may direct that certificates for the Firm Shares, if any, be issued in the names of such dealers as may have been selected by the Underwriters for selling group purposes, and that any Shares deposited with DTC shall be registered in the name of Cede & Co., as nominee of DTC.
Continental Share Services, Inc. shall act as the transfer agent and registrar for the common stock. The common stock of the Company has been made eligible for deposit and book-entry transfer through the facilities of DTC (CUSIP: 039217105). The Company shall cooperate in all respects necessary to cause the Firm Shares to be eligible for such deposit and transfer on or before the Closing Date.
Section 2(d): Payment and Delivery — Option Shares.
Delivery of the Option Shares shall be made on the applicable Option Closing Date through the facilities of DTC, or at such other place as may be agreed upon by the Representative and the Company, against payment of the aggregate purchase price for such Option Shares by wire transfer of immediately available funds to the account designated in writing by the Company. If the Overallotment Option is exercised, settlement of the Option Shares shall occur no later than three (3) business days after the date on which the Representative delivers notice of exercise to the Company, or on such later date as may be agreed upon by the Representative and the Company; provided, however, that the Option Closing Date shall not be earlier than the Closing Date.
The Option Shares shall be registered in such names and in such denominations as the Representative shall request in writing at least one (1) full business day prior to the applicable Option Closing Date.
SECTION 3: REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to, and agrees with, each of the Underwriters as of the date hereof, as of the Applicable Time, and as of the Closing Date (and, if applicable, as of any Option Closing Date), as follows:
Section 3(a): Organization and Good Standing.
The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with full corporate power and authority to own, lease, and operate its properties and to conduct its business as described in the Registration Statement, the Pricing Disclosure Package, and the Prospectus. The Company is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the character of the business conducted by it or the nature or location of the properties owned or leased by it makes such qualification necessary, including the Commonwealth of Massachusetts, except where the failure to be so qualified or to be in good standing would not, individually or in the aggregate, have a material adverse effect on the condition (financial or otherwise), results of operations, business, properties, management, or prospects of the Company (a "Material Adverse Effect"). The Company's registered agent in the State of Delaware is National Registered Agents of Delaware, Inc., 160 Greentree Drive, Suite 101, Dover, DE 19904. The Company has no subsidiaries except as disclosed in the Registration Statement, the Pricing Disclosure Package, and the Prospectus.
Section 3(b): Capitalization.
The authorized capital stock of the Company, immediately prior to the consummation of this offering, consists of 120,000,000 shares of common stock, par value $0.001 per share, of which 80,000,000 shares are issued and outstanding. Upon the effectiveness of the Amended and Restated Certificate of Incorporation to be filed with the Secretary of State of the State of Delaware on or before the Closing Date, the authorized capital stock of the Company will consist of (i) 400,000,000 shares of common stock, par value $0.001 per share, and (ii) 50,000,000 shares of preferred stock, par value $0.001 per share (blank check preferred). The Company does not have a dual-class stock structure and has a single class of common stock outstanding.
Following the consummation of this offering (including the issuance of the Firm Shares and, if the Overallotment Option is exercised in full, the Option Shares), there will be 103,000,000 shares of common stock issued and outstanding (assuming full exercise of the Overallotment Option), or 100,000,000 shares of common stock issued and outstanding (assuming no exercise of the Overallotment Option). All outstanding shares of common stock have been validly issued, are fully paid and non-assessable, and have been issued in compliance with all applicable federal and state securities laws. No preemptive rights, anti-dilution adjustments, rights of first refusal, or similar rights exist with respect to the Company's capital stock or the issuance and sale of the Shares, except as disclosed in the Registration Statement, the Pricing Disclosure Package, and the Prospectus.
As of the date hereof, the holders of the Company's outstanding common stock, together with their respective holdings, are as follows:
The Company has the following equity compensation plans and arrangements:
(i) 2014 Stock Incentive Plan. Under the Company's 2014 Stock Incentive Plan, 12,000,000 shares of common stock are authorized for issuance. As of the date hereof, options to purchase 11,200,000 shares of common stock have been granted thereunder, of which options to purchase 8,400,000 shares have vested, at a weighted average exercise price of $3.25 per share.
(ii) 2024 Equity Incentive Plan. The Company has adopted the 2024 Equity Incentive Plan, under which 10,300,000 shares of common stock have been reserved for issuance, representing approximately 10% of the post-IPO outstanding shares (assuming full exercise of the Overallotment Option). The 2024 Equity Incentive Plan contains an annual "evergreen" provision pursuant to which the number of shares reserved for issuance thereunder will automatically increase on the first day of each fiscal year by an amount equal to 3% of the total number of shares of common stock outstanding on the last day of the immediately preceding fiscal year, or such lesser number as determined by the Board of Directors.
(iii) 2024 Employee Stock Purchase Plan. The Company has adopted the 2024 Employee Stock Purchase Plan (the "2024 ESPP"), under which 2,060,000 shares of common stock have been reserved for issuance, representing approximately 2% of the post-IPO outstanding shares. The 2024 ESPP provides for a 15% discount from the applicable market price and semi-annual offering periods.
Each of the foregoing equity compensation plans is described accurately in all material respects in the Registration Statement, the Pricing Disclosure Package, and the Prospectus.
Section 3(c): Authorization of the Shares.
The Shares have been duly authorized for issuance and sale pursuant to this Agreement. When issued and delivered by the Company against payment therefor as provided herein, the Shares will be validly issued, fully paid, and non-assessable, free and clear of all liens, encumbrances, equities, security interests, or claims of any kind. The issuance of the Shares is not subject to any preemptive rights or similar rights arising under the Company's Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, any agreement to which the Company is a party, or under the laws of the State of Delaware.
Section 3(d): Authorization of this Agreement.
This Agreement has been duly authorized, executed, and delivered by the Company. This Agreement constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as the enforceability thereof may be limited by (i) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors' rights generally, and (ii) general principles of equity (whether considered in a proceeding in equity or at law), including concepts of materiality, reasonableness, good faith, and fair dealing.
Section 3(e): Registration Statement and Prospectus.
The Registration Statement on Form S-1 (File No. 333-276841) has been prepared by the Company in conformity with the requirements of the Act and the rules and regulations of the Commission and has been filed with the Commission. The Registration Statement was declared effective by the Commission on February 8, 2024. No stop order suspending the effectiveness of the Registration Statement has been issued by the Commission, and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are pending or threatened by the Commission.
The Registration Statement, at the time it became effective, did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading. The Prospectus, as of its date and as of the Closing Date (and, if applicable, as of any Option Closing Date), does not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Pricing Disclosure Package, as of the Applicable Time, did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
The foregoing representations and warranties in this Section 3(e) do not apply to statements in or omissions from the Registration Statement, the Prospectus, or the Pricing Disclosure Package made in reliance upon and in conformity with information furnished to the Company in writing by or on behalf of any Underwriter through the Representative expressly for use therein (the "Underwriter Information"), as identified in Section 8(b) hereof.
The financial statements and related schedules included in the Registration Statement, the Pricing Disclosure Package, and the Prospectus, together with related notes and schedules, fairly present the financial condition, results of operations, stockholders' equity, and cash flows of the Company at the dates and for the periods indicated, and have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved, except as otherwise noted therein. The selected financial data and the summary financial information included in the Registration Statement, the Pricing Disclosure Package, and the Prospectus present fairly, in all material respects, the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included therein. The pro forma financial statements and the related notes thereto included in the Registration Statement, the Pricing Disclosure Package, and the Prospectus have been prepared in accordance with the Commission's rules and guidelines with respect to pro forma financial statements and are based on reasonable assumptions.
Kellerman & Associates LLP, which has audited the Company's financial statements included in the Registration Statement and the Prospectus, is an independent registered public accounting firm with respect to the Company as required by the Act and the rules and regulations of the Commission, and the rules of the Public Company Accounting Oversight Board (United States) (the "PCAOB").
Section 3(f): No Material Adverse Change.
Since the respective dates as of which information is given in the Registration Statement, the Pricing Disclosure Package, and the Prospectus, there has not been (i) any material adverse change, or any development involving a prospective material adverse change, in the condition (financial or otherwise), results of operations, business, properties, management, or prospects of the Company (whether or not arising in the ordinary course of business), (ii) any transaction entered into by the Company that is material to the Company other than in the ordinary course of business, (iii) any obligation, direct or contingent, incurred by the Company that is material to the Company other than in the ordinary course of business, or (iv) any dividend or distribution of any kind declared, paid, or made by the Company on its capital stock, except in each case as set forth in or contemplated by the Pricing Disclosure Package and the Prospectus.
Section 3(g): No Undisclosed Liabilities.
The Company does not have, and as of the Closing Date will not have, any material liabilities or obligations, whether absolute, accrued, contingent, or otherwise, whether or not required by GAAP to be reflected in financial statements or disclosed in the notes thereto, except (i) as disclosed in the Registration Statement, the Pricing Disclosure Package, and the Prospectus, (ii) liabilities incurred in the ordinary course of business since the date of the most recent financial statements included in the Pricing Disclosure Package, which liabilities are not, individually or in the aggregate, material to the Company, and (iii) liabilities arising under this Agreement.
Section 3(h): Compliance with Laws.
The Company is not in violation of its Amended and Restated Certificate of Incorporation or its Amended and Restated Bylaws. The Company is not in default in the performance or observance of any material obligation, agreement, covenant, or condition contained in any material bond, debenture, note, indenture, mortgage, deed of trust, loan agreement, lease, or other instrument or agreement to which it is a party or by which it or any of its properties may be bound.
The Company is in compliance in all material respects with all applicable federal, state, local, and foreign statutes, rules, regulations, ordinances, orders, and decrees, including, without limitation, all healthcare regulatory requirements applicable to the Company's clinical decision support and population health management platform operations across the 42 states in which the Company operates, serving over 1,200 hospital systems and physician groups. Without limiting the generality of the foregoing, the Company is in material compliance with all applicable requirements of the Health Insurance Portability and Accountability Act of 1996, as amended ("HIPAA"), the Health Information Technology for Economic and Clinical Health Act ("HITECH"), and all rules and regulations promulgated thereunder.
No consent, approval, authorization, license, permit, order, or qualification of or with any court, governmental authority, or regulatory body is required in connection with the execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby, including the issuance and sale of the Shares, except for (i) such as have been obtained under the Act, (ii) such as may be required under the Exchange Act, (iii) such as may be required under applicable state securities or "blue sky" laws, (iv) such as may be required by FINRA, and (v) such as may be required under the listing rules of the New York Stock Exchange (the "NYSE").
Section 3(i): No Conflicts.
The execution, delivery, and performance of this Agreement by the Company, the issuance and sale of the Shares, and the consummation of the transactions contemplated herein will not (i) conflict with, result in a breach or violation of, or constitute a default under, the Company's Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws, (ii) conflict with, result in a breach or violation of, or constitute a default under, or result in the creation or imposition of any lien, charge, or encumbrance upon any property or assets of the Company, under any statute, law, rule, regulation, judgment, order, or decree applicable to the Company or any of its properties, or (iii) conflict with, result in a breach or violation of, constitute a default under, give rise to any right of termination, cancellation, or acceleration of any obligation or loss of any benefit under, or result in the creation or imposition of any lien, charge, or encumbrance upon any property or assets of the Company under, any of the terms or provisions of any material agreement, indenture, mortgage, deed of trust, note, loan agreement, bond, license, permit, lease, or other instrument or obligation to which the Company is a party or by which any of its properties may be bound, including, without limitation, the Credit Agreement dated as of March 15, 2022, as amended by the First Amendment dated January 18, 2024, by and among the Company, Keypoint National Bank, N.A. (as Administrative Agent), and Stonemill Capital Bank (such credit agreement, as amended, the "Keypoint Credit Facility"), providing for a $150,000,000 senior secured revolving credit facility.
Section 3(j): Intellectual Property.
The Company owns, or possesses adequate rights to use, all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets, technology, know-how, and other intellectual property and proprietary rights (collectively, "Intellectual Property") necessary for the conduct of the Company's business as described in the Registration Statement, the Pricing Disclosure Package, and the Prospectus, including, without limitation, the Arbor Platform and all related software-as-a-service ("SaaS") technology. To the Company's knowledge, no claims have been asserted, and no claims are pending or threatened, by any person challenging the Company's use of any intellectual Property or challenging the validity, enforceability, or scope of any intellectual Property owned by the Company, except for such claims as would not, individually or in the aggregate, have a Material Adverse Effect. To the Company's knowledge, the conduct of the Company's business does not infringe, misappropriate, or otherwise violate any intellectual Property rights of any third party, except for such infringement, misappropriation, or violation as would not, individually or in the aggregate, have a Material Adverse Effect.
Section 3(k): Tax Matters.
The Company has filed all necessary federal, state, local, and foreign income and franchise tax returns and has paid all taxes shown as due thereon, and no tax deficiency has been determined adversely to the Company which has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The Company's Federal Employer Identification Number is 47-3891205. The Company has nexus in, and files income or franchise tax returns in, the following states: Massachusetts, New York, California, Texas, Illinois, Florida, Pennsylvania, Ohio, New Jersey, and Georgia. No tax deficiency has been asserted or threatened against the Company that would, individually or in the aggregate, have a Material Adverse Effect, nor does the Company have knowledge of any basis for any such assertion.
Section 3(l): Insurance.
The Company maintains insurance policies with insurers of recognized financial responsibility in such amounts and covering such risks as the Company believes are adequate for the conduct of its business and the value of its properties, including, without limitation, directors and officers ("D&O") liability insurance. The Company's D&O insurance program is structured as follows:
(i) Primary Policy: Northbridge Specialty Insurance Company, providing $50,000,000 per occurrence and in the aggregate (Policy No. NSI-IPO-2024-00473);
(ii) First Excess Policy: Pinnacle Re Assurance Ltd., providing $25,000,000 excess of $50,000,000;
(iii) Second Excess Policy: Atlas Guard Insurance Company, providing $25,000,000 excess of $75,000,000;
(iv) Total D&O Tower: $100,000,000.
All such insurance policies are in full force and effect and all premiums due thereon have been paid. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.
Section 3(m): No Undisclosed Relationships.
No material relationship, direct or indirect, exists between or among the Company, on the one hand, and any of the Underwriters or their respective affiliates, on the other hand, which is required to be described in the Registration Statement, the Pricing Disclosure Package, or the Prospectus that is not so described. There are no material transactions or arrangements between the Company and any Underwriter or any affiliate of any Underwriter except as disclosed in the Registration Statement, the Pricing Disclosure Package, and the Prospectus.
Section 3(n): Internal Controls and Disclosure Controls.
The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management's general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commission's rules and forms.
Section 3(o): Listing.
The shares of common stock of the Company have been approved for listing on the New York Stock Exchange under the ticker symbol "ARHT," subject only to official notice of issuance. The Company has taken all actions necessary to cause the Shares to be so listed on or before the Closing Date.
Section 3(p): Transfer Agent.
Continental Share Services, Inc. has been duly appointed as the transfer agent and registrar for the common stock of the Company. The shares of common stock are eligible for deposit and book-entry transfer through the facilities of DTC. The Company is not in default under any agreement with Continental Share Services, Inc.
Section 3(q): ERISA and Employee Benefit Plans.
Each employee benefit plan (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")), and each other plan, program, arrangement, or agreement maintained, sponsored, or contributed to by the Company for the benefit of its current or former employees, directors, or consultants, has been maintained in compliance with its terms and with the requirements of all applicable statutes, rules, and regulations, including ERISA and the Internal Revenue Code of 1986, as amended (the "Code"), except where the failure to be in compliance would not, individually or in the aggregate, have a Material Adverse Effect. No "reportable event" (as defined in Section 4043 of ERISA) has occurred with respect to any employee benefit plan for which the reporting requirement has not been waived. The 2014 Stock Incentive Plan, the 2024 Equity Incentive Plan, and the 2024 Employee Stock Purchase Plan are described accurately in all material respects in the Registration Statement, the Pricing Disclosure Package, and the Prospectus.
Section 3(r): Environmental Matters.
The Company is in compliance in all material respects with all applicable environmental laws and regulations, including, without limitation, all federal, state, local, and foreign laws, rules, regulations, orders, decrees, and judgments relating to the protection of the environment, the generation, storage, handling, transportation, treatment, disposal, emission, release, or threatened release of pollutants, contaminants, chemicals, industrial, toxic, or hazardous substances or wastes. No environmental claim has been asserted against the Company, and to the Company's knowledge, no circumstances exist that could form the basis for any such claim that would, individually or in the aggregate, have a Material Adverse Effect.
Section 3(s): Cybersecurity and Data Privacy.
The Company and its subsidiaries' information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases (collectively, "IT Systems") are adequate for, and operate and perform in all material respects as required in connection with, the operation of the business of the Company as currently conducted. The Company and its subsidiaries have implemented and maintain commercially reasonable technical, administrative, and physical controls, policies, procedures, and safeguards to maintain and protect their material confidential information and the integrity, continuous operation, redundancy, and security of all IT Systems and data (including all personal, personally identifiable, sensitive, confidential, or regulated data ("Personal Data")) used in connection with their businesses. To the Company's knowledge, there have been no material breaches, violations, outages, or unauthorized uses of or accesses to the IT Systems or Personal Data, nor any incidents under internal review or investigations relating to the same, except for those that have been resolved without material cost or liability. The Company has complied in all material respects with all applicable laws and regulations, and all judgments, orders, rules, and regulations of any court or arbitrator or governmental or regulatory authority, internal policies, and contractual obligations relating to the privacy and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation, or modification.
Section 3(t): FCPA / Anti-Corruption.
Neither the Company nor, to the knowledge of the Company, any director, officer, employee, agent, affiliate, or other person acting on behalf of the Company has, in the course of its actions for, or on behalf of, the Company: (i) used any corporate funds for any unlawful contribution, gift, entertainment, or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery Act 2010 of the United Kingdom, or any other applicable anti-bribery or anti-corruption law; or (iv) made, offered, agreed, requested, or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback, or other unlawful or improper payment or benefit.
Section 3(u): OFAC / Sanctions.
Neither the Company nor, to the knowledge of the Company, any director, officer, employee, agent, affiliate, or other person acting on behalf of the Company is currently the subject or target of any sanctions administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury ("OFAC"), the U.S. Department of State, or the Bureau of Industry and Security of the U.S. Department of Commerce), the United Nations Security Council, the European Union, Her Majesty's Treasury, or other relevant sanctions authority (collectively, "Sanctions"). Neither the Company nor, to the knowledge of the Company, any director, officer, employee, agent, affiliate, or other person acting on behalf of the Company is located, organized, or resident in a country or territory that is the subject or target of comprehensive territorial Sanctions (currently, Cuba, Iran, North Korea, Syria, and the Crimea, Donetsk People's Republic, and Luhansk People's Republic regions of Ukraine). The Company will not directly or indirectly use the proceeds of the offering, or lend, contribute, or otherwise make available such proceeds to any subsidiary, joint venture partner, or other person or entity, for the purpose of financing the activities of any person currently the subject of any Sanctions or in any country or territory that is the subject of comprehensive territorial Sanctions, or in any other manner that will result in a violation by any person of Sanctions.
Section 3(v): No Stabilization.
The Company has not taken, and will not take, directly or indirectly, any action designed to or that might constitute or reasonably be expected to cause or result in stabilization or manipulation of the price of the shares of common stock of the Company, or any other security of the Company, to facilitate the sale or resale of any of the Shares, in violation of applicable law.
Section 3(w): Lock-Up Agreements.
The Company has obtained duly executed lock-up agreements, substantially in the form attached hereto as Exhibit A, from each officer, director, and stockholder of the Company listed in Schedule II hereto (approximately 45 individuals and entities, collectively holding approximately 80,000,000 shares of common stock prior to this offering), each such lock-up agreement being in the form previously approved by the Representative, and each for the Lock-Up Period of 180 days from the date of the Prospectus (i.e., from February 8, 2024, through August 6, 2024). Each such lock-up agreement is in full force and effect as of the date hereof.
Section 3(x): Use of Proceeds.
The Company intends to use the net proceeds from this offering as set forth in the Registration Statement, the Pricing Disclosure Package, and the Prospectus, specifically:
(i) approximately $65,000,000 for the repayment of the outstanding balance drawn under the Keypoint Credit Facility;
(ii) approximately $120,000,000 for product development and research and development investment;
(iii) approximately $100,000,000 for potential acquisitions and strategic investments; and
(iv) the balance for general corporate purposes, including working capital.
Section 3(y): Forward-Looking Statements.
No forward-looking statement (within the meaning of Section 27A of the Act and Section 21E of the Exchange Act) contained in the Registration Statement, the Pricing Disclosure Package, or the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.
Section 3(z): Statistical and Market Data.
All statistical and market-related data included in the Registration Statement, the Pricing Disclosure Package, and the Prospectus are based on or derived from sources that the Company believes to be reliable and accurate, and the Company has obtained the written consent of the owners thereof for the use of such data to the extent required.
Section 3(aa): Related Party Transactions.
All related party transactions required to be disclosed pursuant to Item 404 of Regulation S-K promulgated under the Act are disclosed in the Registration Statement, the Pricing Disclosure Package, and the Prospectus as so required.
Section 3(bb): Material Contracts.
All contracts or agreements required to be described in the Registration Statement or the Prospectus, or to be filed as exhibits to the Registration Statement, have been so described or filed, as applicable. The following material contracts, among others, are accurately described in all material respects in the Registration Statement, the Pricing Disclosure Package, and the Prospectus:
(i) Keypoint Credit Facility. Credit Agreement dated as of March 15, 2022, by and among the Company, Keypoint National Bank, N.A. (as Administrative Agent), and Stonemill Capital Bank (as lender), providing for a $150,000,000 senior secured revolving credit facility, as amended by the First Amendment dated January 18, 2024. Maturity date: March 15, 2027. Interest rate: Adjusted Term SOFR plus 200 basis points per annum. Financial covenants include: Total Net Leverage Ratio not to exceed 3.50 to 1.00, and Fixed Charge Coverage Ratio of not less than 1.25 to 1.00.
(ii) Amended and Restated Investors' Rights Agreement dated October 22, 2020, by and among the Company and the investors named therein, which agreement terminates by its terms upon the consummation of a "Qualified IPO" (as defined therein), including the offering contemplated hereby.
(iii) Amended and Restated Registration Rights Agreement by and among the Company and the holders named therein, providing for demand registration rights, piggyback registration rights, and shelf registration rights on Form S-3 (available after the passage of 12 months following the date of the Prospectus), together with a 180-day standstill provision.
(iv) Amended and Restated Voting Agreement by and among the Company and the stockholders named therein, which agreement terminates by its terms upon the consummation of the Company's initial public offering, including the offering contemplated hereby.
Each of the foregoing contracts is in full force and effect as of the date hereof, and the Company is not in material default under any such contract, nor, to the Company's knowledge, is any other party thereto in material default.
SECTION 4: REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS
Each of the Underwriters, severally and not jointly, represents, warrants, and agrees as follows:
Section 4(a): Authorization.
Such Underwriter has been duly authorized to enter into this Agreement and to perform its obligations hereunder. The Representative has been duly authorized by each of the Underwriters to enter into this Agreement on behalf of such Underwriter and to act on behalf of the several Underwriters in connection with the transactions contemplated by this Agreement.
Section 4(b): FINRA Compliance.
Such Underwriter is a member in good standing of the Financial Industry Regulatory Authority, Inc. ("FINRA") and is registered as a broker-dealer under the Exchange Act and the securities laws of each state in which such Underwriter proposes to offer or sell the Shares. Whitfield Barrow & Co., LLC maintains FINRA CRD No. 7924. FINRA has confirmed that it has raised no objection with respect to the fairness and reasonableness of the underwriting terms and arrangements pertaining to this offering (such confirmation having been received on or about January 30, 2024).
Section 4(c): Selling Restrictions.
Such Underwriter agrees that it will sell the Shares only in compliance with the Act, the Exchange Act, the rules and regulations of FINRA, and all applicable state securities or "blue sky" laws. No Underwriter has made, or will make, any offer or sale of the Shares other than through the Prospectus (or through a notice permitted by Rule 173 under the Act), except that the Underwriters may make offers utilizing the Preliminary Prospectus and the Pricing Disclosure Package prior to the availability of the Prospectus.
Section 4(d): No Stabilization (Limited Exception).
No Underwriter has taken, or will take, directly or indirectly, any action designed to, or that might constitute or reasonably be expected to cause or result in, stabilization or manipulation of the price of any security of the Company in connection with the offering of the Shares, other than activities that are permitted under Regulation M under the Exchange Act in connection with the distribution of the Shares. Each Underwriter acknowledges that it has been advised of the requirements of Regulation M and agrees to comply therewith.
Section 4(e): Information Furnished by Underwriters.
Each Underwriter confirms that the only information furnished to the Company in writing by or on behalf of such Underwriter through the Representative expressly for use in the Registration Statement, the Pricing Disclosure Package, and the Prospectus (and any amendment or supplement thereto) is the information set forth in the paragraphs identified in Section 8(b) hereof relating to stabilization transactions, syndicate short sales, overallotment, and penalty bids (the "Underwriter Information"). Each Underwriter represents that no Underwriter has furnished any other written information to the Company for inclusion in the Registration Statement, the Pricing Disclosure Package, or the Prospectus.
SECTION 5: COVENANTS OF THE COMPANY
The Company covenants and agrees with each of the Underwriters as follows:
Section 5(a): Rules 424 and 430A Compliance.
The Company shall file the Prospectus with the Commission pursuant to Rule 424(b)(4) under the Act within the time period required by such Rule and in any event no later than the second business day following the date hereof (i.e., by February 12, 2024). The Company currently anticipates filing the Prospectus on February 9, 2024. The Company shall not file any amendment to the Registration Statement or any supplement to the Prospectus (including any prospectus supplement) to which the Representative shall reasonably object in writing after being furnished with a copy thereof, and the Company shall provide the Representative and Underwriters' Counsel (Meridian Hale & Quivorn LLP) with prior notice of and a reasonable opportunity to review and comment on any proposed amendment or supplement prior to the filing thereof with the Commission.
Section 5(b): Delivery of Prospectus Copies.
The Company shall deliver, without charge, to the Representative and to Underwriters' Counsel such number of copies of the Prospectus, each Preliminary Prospectus, and any amendments or supplements thereto, including any documents incorporated by reference therein, as the Representative may reasonably request for the purposes contemplated by the Act and the rules and regulations of the Commission thereunder. The Company consents to the use of the Prospectus and each Preliminary Prospectus by the Underwriters and by dealers to whom Shares may be sold, in connection with the offering and sale of the Shares and for such period of time thereafter as the Prospectus is required by law to be delivered in connection with sales by any Underwriter or dealer.
Section 5(c): Amendments and Supplements.
During any period in which a prospectus relating to the Shares is required by law to be delivered by an Underwriter or dealer (including through compliance with Rule 172 or Rule 173 under the Act), if any event shall occur or condition shall exist as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact, or would omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it shall be necessary at any time to amend or supplement the Prospectus or the Registration Statement to comply with the Act, the Company shall promptly (i) notify the Representative of any such event or condition and (ii) prepare and file with the Commission, subject to Section 5(a) hereof, an amendment or supplement to the Registration Statement or the Prospectus that will correct such statement or omission or effect such compliance, and the Company shall furnish to the Underwriters, without charge, such number of copies of such amendment or supplement as the Underwriters may reasonably request. The Company shall also promptly advise the Representative of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, or the initiation or threatening of any proceedings for that purpose, and the Company will use its reasonable best efforts to prevent the issuance of any stop order and to obtain its prompt removal if issued.
Section 5(d): Blue Sky Compliance.
The Company shall cooperate with the Representative and Underwriters' Counsel in qualifying the Shares for offer and sale under the securities or "blue sky" laws of such U.S. jurisdictions as the Representative may designate and shall continue such qualifications in effect for so long as may be necessary for the distribution of the Shares; provided, however, that the Company shall not be obligated to qualify as a foreign corporation in any jurisdiction in which it is not already so qualified, to file a general consent to service of process in any jurisdiction, or to subject itself to taxation in any jurisdiction in which it is not already so subject. The Company's estimated blue sky and miscellaneous filing expenses are approximately $657,000, which amount is included in the total estimated offering expenses of approximately $4,200,000.
Section 5(e): Earnings Statement.
The Company shall make generally available to its security holders, as soon as practicable, an earnings statement (which need not be audited) covering a period of at least twelve months beginning with the first fiscal quarter of the Company commencing after the "effective date" (as defined in Rule 158 under the Act) of the Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act. The Company may satisfy the requirements of this Section 5(e) by making such earnings statement available on the Commission's EDGAR system or the Company's website.
Section 5(f): Use of Proceeds.
The Company shall apply the net proceeds from the sale of the Shares in the manner described under "Use of Proceeds" in the Registration Statement, the Pricing Disclosure Package, and the Prospectus.
Section 5(g): Listing.
The Company shall use its reasonable best efforts to cause the shares of common stock, including the Shares, to be listed on the NYSE under the ticker symbol "ARHT" on or prior to the Closing Date and shall maintain such listing for so long as any Shares are outstanding.
Section 5(h): Reporting Requirements.
Following the Closing Date, the Company shall file all reports required to be filed under the Exchange Act in a timely manner for so long as the Company is subject to the reporting requirements of the Exchange Act.
Section 5(i): No Issuance During Lock-Up Period.
The Company agrees that, without the prior written consent of the Representative, during the Lock-Up Period (180 days from the date of the Prospectus, i.e., from February 8, 2024, through August 6, 2024), the Company will not:
(i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right, or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable for shares of common stock;
(ii) file or cause to be filed any registration statement under the Act with respect to any shares of common stock or any securities convertible into or exercisable or exchangeable for shares of common stock; or
(iii) enter into any swap, hedge, or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of shares of common stock;
whether any such transaction described in clauses (i), (ii), or (iii) above is to be settled by delivery of shares of common stock or such other securities, in cash, or otherwise; provided, however, that the foregoing restrictions shall not apply to:
(A) the Shares to be sold pursuant to this Agreement;
(B) shares of common stock issuable upon the exercise of stock options outstanding on the date hereof under the Company's 2014 Stock Incentive Plan, as described in the Registration Statement, the Pricing Disclosure Package, and the Prospectus;
(C) grants of stock options, restricted stock units, or other equity-based awards under the Company's 2024 Equity Incentive Plan, and shares of common stock issuable upon the exercise or vesting thereof, as described in the Registration Statement, the Pricing Disclosure Package, and the Prospectus; provided that any shares issued to or received by any person who is subject to a lock-up agreement described in Section 3(w) shall remain subject to such lock-up agreement;
(D) shares of common stock issuable under the Company's 2024 Employee Stock Purchase Plan, as described in the Registration Statement, the Pricing Disclosure Package, and the Prospectus; and
(E) shares of common stock issued upon the conversion or exchange of convertible or exchangeable securities outstanding as of the date hereof and described in the Registration Statement, the Pricing Disclosure Package, and the Prospectus.
Section 5(j): Lock-Up Agreements from Insiders.
The Company shall use its reasonable best efforts to enforce the lock-up agreements delivered pursuant to Section 3(w) hereof, which agreements cover approximately 80,000,000 shares of common stock (representing 100% of the pre-IPO outstanding shares) for the Lock-Up Period of 180 days from the date of the Prospectus (expiring August 6, 2024). The Company shall not release or waive any person from any lock-up agreement without the prior written consent of the Representative. The Company shall provide the Representative with reasonable advance notice (and in any event not less than three (3) business days' prior notice) of any request by any person for release or waiver from the restrictions contained in any lock-up agreement, together with a description of the circumstances giving rise to such request.
Section 5(k): FINRA Filings.
The Company shall cooperate with the Representative in connection with any filings required to be made with FINRA, and shall use its reasonable best efforts to cause any such filings to be made and cleared as promptly as practicable.
Section 5(l): DTC Book-Entry.
The Company shall cooperate with the Transfer Agent to ensure that the Shares are eligible for deposit and book-entry transfer through the facilities of DTC on and after the Closing Date.
Section 5(m): Free Writing Prospectuses.
The Company shall not prepare, use, authorize, approve, refer to, or distribute any Issuer Free Writing Prospectus (as defined in Rule 433 under the Act), whether or not listed on Schedule III hereto, without the prior written consent of the Representative. The Company shall comply in all material respects with the requirements of Rule 433 under the Act applicable to any Issuer Free Writing Prospectus, including the filing requirements thereof.
SECTION 6: COVENANTS OF THE UNDERWRITERS
Each of the Underwriters covenants and agrees as follows:
Section 6(a): Prospectus Delivery.
Each Underwriter agrees that it will deliver or cause to be delivered a copy of the Prospectus (or make available a notice to each purchaser as required by Rule 173 under the Act) t

UNDERWRITING AGREEMENT

SECTION 1: DEFINITIONS

SECTION 2: PURCHASE AND SALE OF SHARES

SECTION 3: REPRESENTATIONS AND WARRANTIES OF THE COMPANY

SECTION 4: REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS

SECTION 5: COVENANTS OF THE COMPANY

SECTION 6: COVENANTS OF THE UNDERWRITERS

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