[sheet: Cover & Instructions]

Field	Value
Prepared By	Calderwood & Harkness LLP — Sylvia Hartwell, Specialist Partner, Tax
C&H Matter No.	2024-M&A-0142
Document Status	DRAFT — Subject to finalization following NWC true-up (deadline: September 28, 2024)
Form	IRS Form 8594 — Asset Acquisition Statement Under Section 1060
Name of Purchaser	Ardent Healthcare Acquisition Corp.
Purchaser EIN	93-2184720
Purchaser Address	c/o National Registered Services, Inc., 1209 Orange Street, Wilmington, DE 19801
Name of Seller	Cardinal Peak Industries, Inc.
Seller EIN	82-3947561
Seller Address	8400 Crescent Ridge Parkway, Suite 200, Nashville, TN 37215
Date of Sale / Acquisition	June 30, 2024
Total Sales Price (Aggregate Consideration)	$620,000,000 (Base Purchase Price)
Contingent Consideration (Earnout)	Up to $45,000,000 aggregate — see Earnout Allocation tab
Estimated NWC Adjustment	$1,200,000 (Estimated Closing NWC of $29,200,000 vs. NWC Target of $28,000,000; subject to final determination)
Total Consideration for Allocation Purposes (Preliminary)	$620,000,000 (excluding contingent earnout; to be adjusted for final NWC true-up)
Transaction Structure	Asset Purchase — Purchaser acquired substantially all assets of Seller pursuant to Asset Purchase Agreement dated April 2, 2024
Governing Law of APA	State of Delaware
Was the Purchaser and Seller in a relationship described in IRC § 197(f)(9)?	No
Did the Purchaser also purchase a license or covenant not to compete?	Yes — Non-Competition and Non-Solicitation Agreements with Dr. Randall J. Whitfield and Elaine Whitfield-Torres (3-year restrictive covenants)
Seller's Auditor (for reference)	Linden Hayes & Co., P.C. — Roberta Chen, CPA
Buyer's Accounting Advisor (for reference)	Ashford & Creighton LLP — Gregory Nolan, CPA
Distribution	Beatrice Holloway (C&H), Derek Okonkwo (C&H), Priya Mehta-Sullivan (Ardent Capital Management LLC), Connor Briggs (Ardent Capital Management LLC)
Note	Both Buyer and Seller must file Form 8594 with their respective federal income tax returns for the tax year that includes June 30, 2024. Allocation must be consistent between parties per IRC § 1060 and Treasury Reg. § 1.1060-1(c). Earnout payments, when determinable, will be treated as additional purchase price and allocated in supplemental Form 8594 filings.

[sheet: Part II — Asset Allocation]

Asset Class	Description	Fair Market Value — Buyer's Allocation	Fair Market Value — Seller's Allocation	Agree? (Y/N)	Notes
Class I	Cash and cash equivalents, demand deposits, and similar items	$0	$0	Y	Seller's cash and cash equivalents are excluded assets under the APA and not acquired by Purchaser
Class II	Actively traded personal property, certificates of deposit, and foreign currency	$0	$0	Y	No actively traded personal property acquired
Class III	Accounts receivable, mortgages, and credit card receivables (mark-to-market assets)	$38,500,000	$38,500,000	Y	Accounts receivable from managed-care payors, Medicare/Medicaid, and patient self-pay; valued at estimated net realizable value as of closing. Includes receivables from SummitCare Health Plans, Inc. (~22% of net revenue) and government payors (~31% of net revenue combined).
Class IV	Inventory (if applicable, marked to fair market value)	$2,800,000	$2,800,000	Y	Medical supplies, therapy equipment consumables, and pharmaceutical inventory at 37 clinic locations across TN (14), GA (8), NC (5), SC (4), AL (3), VA (2), KY (1)
Class V	All assets not in Classes I–IV, VI, or VII (tangible and intangible personal property other than goodwill and going concern value)	$195,700,000	$195,700,000	Y	Includes: (a) furniture, fixtures & equipment (~$24,200,000); (b) leasehold improvements (~$18,500,000); (c) PeakConnect patient-engagement software platform and registered trademark U.S. Reg. No. 5,412,887 (~$82,000,000); (d) patient lists and referral relationships (~$31,000,000); (e) assembled workforce value (~$14,000,000); (f) favorable lease interests on 37 triple-net leases, avg. remaining term 4.2 years (~$11,500,000); (g) non-compete agreements with Dr. Randall J. Whitfield and Elaine Whitfield-Torres (~$8,500,000); (h) managed-care contracts and payor relationships (~$6,000,000). See Class V Detail tab for breakdown.
Class VI	IRC § 197 intangibles other than goodwill and going concern value	$0	$0	Y	All § 197 intangibles included in Class V above per applicable allocation methodology; no separate Class VI items identified
Class VII	Goodwill and going concern value	$383,000,000	$383,000,000	Y	Residual allocation to goodwill and going concern value after allocation to Classes I–VI. Reflects the premium paid for CPI's market position, brand reputation, and growth trajectory. Purchase price multiple of ~8.36x LTM Adjusted EBITDA ($74,160,000) supports significant goodwill allocation.
TOTAL	Aggregate — All Classes	$620,000,000	$620,000,000	Y	Equals Base Purchase Price. Subject to adjustment for final NWC true-up (estimated closing NWC $29,200,000 vs. NWC Target $28,000,000; preliminary excess of $1,200,000 within $500,000 de minimis collar — if final adjustment exceeds collar, reallocation required). Contingent earnout (up to $45,000,000) allocated separately when paid.

[sheet: Class V Detail]

Sub-Category	Asset Description	Valuation Methodology	Fair Market Value	Amortization Period	Notes
Furniture, Fixtures & Equipment	Medical and therapy equipment, office furniture, IT hardware across 37 clinics	Depreciated replacement cost / appraisal	$24,200,000	5–7 years (MACRS)	Physical assets at all clinic locations; per Ashford & Creighton LLP fixed asset analysis
Leasehold Improvements	Tenant improvements at 37 leased clinic locations	Depreciated replacement cost	$18,500,000	Shorter of useful life or remaining lease term (avg. 4.2 years)	Triple-net lease locations; landlord consents required for 29 of 37 leases
Proprietary Software — PeakConnect Platform	Patient-engagement software platform; U.S. Trademark Reg. No. 5,412,887	Relief-from-royalty / income approach	$82,000,000	15 years (IRC § 197 intangible)	Material intangible asset acquired; assigned via IP Assignment Agreement at closing
Patient Lists & Referral Relationships	Existing patient relationships and physician referral network across 7 states	Multi-period excess earnings method	$31,000,000	15 years (IRC § 197 intangible)	~2,100 clinicians and support staff serve patient base
Assembled Workforce	Value attributable to trained and licensed clinical workforce (~1,450 clinicians, ~650 admin/support)	Cost approach (recruitment and training costs)	$14,000,000	15 years (IRC § 197 intangible)	Transferred employees; accrued PTO assumed at closing
Favorable Lease Interests	Below-market lease value on 37 triple-net leases	Income approach — present value of lease savings vs. market rents	$11,500,000	Remaining lease terms (avg. 4.2 years)	Per Cornerstone Land Title Company and internal analysis
Non-Compete Agreements	Non-competition and non-solicitation agreements with Dr. Randall J. Whitfield (52% shareholder) and Elaine Whitfield-Torres (18% shareholder)	Income approach — with-and-without method	$8,500,000	3 years (term of restrictive covenants)	Covenants cover all 7 states of CPI operations; governed by Tennessee law
Managed-Care Contracts & Payor Relationships	Contracts with 12 major managed-care payors including SummitCare Health Plans, Inc.	Income approach — excess earnings	$6,000,000	15 years (IRC § 197 intangible)	SummitCare represents ~22% of net revenue; Medicare/Medicaid combined ~31%
TOTAL CLASS V	$195,700,000	Sum of all Class V sub-categories

[sheet: Earnout Allocation]

Earnout Tranche	Measurement Period	EBITDA Threshold	EBITDA Target for Maximum	Maximum Payout	Linear Ramp Rate	Preliminary Allocation — Class V	Preliminary Allocation — Class VII / Goodwill	Notes
Tranche 1	12-month period ending June 30, 2025	$80,000,000	$85,000,000	$22,500,000	$4.50 per $1 of Adjusted EBITDA above $80M threshold	TBD at time of payment	TBD at time of payment (residual method)	Payout is linear between $80M (threshold, $0) and $85M ($22.5M maximum). Change of control acceleration: 100% of remaining maximum earnout immediately payable upon a change of control of the Acquired Business or Ardent Healthcare Acquisition Corp.
Tranche 2	12-month period ending June 30, 2026	$90,000,000	$95,000,000	$22,500,000	$4.50 per $1 of Adjusted EBITDA above $90M threshold	TBD at time of payment	TBD at time of payment (residual method)	Same linear ramp structure as Tranche 1 applied to $90M–$95M range
Aggregate Maximum	$45,000,000	Aggregate earnout cap per Earnout Agreement dated June 30, 2024. Each tranche payment constitutes additional purchase price under IRC § 1060 and must be allocated using the residual method in a supplemental Form 8594 filing for the year in which payment occurs.
Methodology Note 1	Tranche 1 payout formula: MIN($22,500,000, MAX(0, (Actual EBITDA − $80,000,000) × $4.50)). Tranche 2 payout formula: MIN($22,500,000, MAX(0, (Actual EBITDA − $90,000,000) × $4.50)).
Methodology Note 2	Upon payment, earnout consideration is added to total consideration and re-allocated across Classes I–VII using the residual method per IRC § 1060 and Treasury Reg. § 1.1060-1(c)(4). A supplemental Form 8594 must be filed by both Buyer and Seller for the taxable year in which payment occurs.

[sheet: Sources & Uses Summary]

Category	Line Item	Amount	Notes
SOURCES	Term Loan A — Pinnacle National Bank, N.A. (Administrative Agent)	$310,000,000	5-year; SOFR + 325 bps; syndicate includes Horizon Commercial Lending Corp., Tidewater Savings Bank, N.A., Great Plains Capital Partners LLC
SOURCES	Equity Contribution — Ardent Capital Partners III LP	$220,000,000	Fund III, vintage 2022; $3.2B fund size
SOURCES	Revolving Credit Facility (undrawn at closing)	$0 drawn / $90,000,000 committed	5-year; SOFR + 300 bps; available for post-closing liquidity
SOURCES	Total Funded Sources at Closing	$530,000,000	$310M TLA + $220M equity
USES	Cash to Seller (net of escrow)	$558,000,000	$620M Base Purchase Price − $62M Escrow Holdback. Distributed pro rata: Dr. Whitfield (52%), Whitfield-Torres (18%), Ridgeline Growth Equity Fund II LP (22%), other management (8%)
USES	Escrow Deposit — Commonwealth Trust & Escrow Company	$62,000,000	10% of $620M; Tranche 1 release June 30, 2025 ($31M); Tranche 2 release December 30, 2025 ($31M); net of pending indemnification claims
USES	Payoff — Velthorn Merchant Bank, N.A.	$87,400,000	Outstanding principal under Credit Agreement dated March 15, 2018, as amended; payoff letter dated June 26, 2024; UCC terminations filed DE & TN on June 28, 2024
USES	Estimated NWC Adjustment (preliminary)	$1,200,000	Estimated closing NWC of $29,200,000 vs. NWC Target of $28,000,000; $500K de minimis collar applies; final determination deadline September 28, 2024
USES	Transaction Fees & Expenses (estimated)	Included in reconciliation	Buyer's counsel (Calderwood & Harkness LLP), financial advisor (Graystone Partners LLC), accounting advisor (Ashford & Creighton LLP), R&W insurance premium (Sentinel Specialty Insurance Company, Policy No. SSI-RWI-2024-05178), regulatory counsel (Hargrove, Sinclair & Demarest LLP), environmental consultant (Whitmore Environmental Sciences Inc.), title (Cornerstone Land Title Company)
USES	Total Uses	$620,000,000+	Base Purchase Price plus transaction costs; reconciled with sources

[sheet: Key Assumptions & Open Items]

Item No.	Description	Status	Responsible Party	Deadline / Target Date	Notes
1	Final NWC Determination	Pending	Ashford & Creighton LLP (Gregory Nolan) / Linden Hayes & Co., P.C. (Roberta Chen)	September 28, 2024	Estimated closing NWC of $29,200,000 vs. NWC Target of $28,000,000. Final NWC to be determined within 90 days post-closing. Dollar-for-dollar adjustment above/below target with $500,000 de minimis collar. Any adjustment changes total consideration and requires reallocation.
2	Independent Valuation of Intangible Assets	In Progress	Ashford & Creighton LLP	Q3 2024	Formal purchase price allocation (ASC 805) valuation may refine Class V sub-allocations; Form 8594 should be consistent with financial reporting allocation.
3	Earnout Treatment — Contingent Consideration	Deferred	Calderwood & Harkness LLP (Sylvia Hartwell, Tax)	Upon earnout payment (EP1 ends June 30, 2025; EP2 ends June 30, 2026)	Earnout payments treated as additional purchase price per IRC § 1060; supplemental Form 8594 to be filed in year of payment. If change of control occurs, 100% of remaining maximum ($45M less any prior payments) accelerates.
4	Seller Agreement on Allocation	Pending	Barrow, Kensington & Pratt LLP (Catherine Barrow / Samuel Otieno)	Prior to filing	Buyer and Seller must agree on allocation per APA Section [●]. Draft to be transmitted to Seller's counsel for review. Both parties obligated to file consistent Form 8594.
5	Excluded Assets — Confirmation	Confirmed	Calderwood & Harkness LLP	Completed	Excluded assets confirmed: Seller's cash/cash equivalents, tax refunds for pre-closing periods, personal property of Dr. Whitfield, CPI corporate name (licensed back for 12 months), equity interests in Cardinal Peak Labs, Inc. (dormant DE corp.). No allocation to excluded assets.
6	Excluded Liabilities — No Allocation Impact	Confirmed	Calderwood & Harkness LLP	Completed	Excluded liabilities include: Dawson v. CPI (Case No. 3:23-cv-01847, M.D. Tenn., est. exposure $2.8M–$5.1M), pre-closing tax liabilities, CPI 401(k) plan liabilities, Velthorn Merchant Bank indebtedness (paid off at closing: $87.4M). No allocation impact.
7	R&W Insurance — Indemnification Interaction	Reference Only	Calderwood & Harkness LLP / Alder Risk Partners LLC (Philip Yuen)	N/A	R&W insurance coverage of $62M (Sentinel Specialty Insurance Company, Policy No. SSI-RWI-2024-05178) with $6.2M retention does not affect purchase price allocation. Indemnification cap of $124M (20% × $620M), basket of $3.1M (0.5%), de minimis of $100K per claim. General reps survive 18 months (through December 30, 2025); fundamental reps survive 36 months (through June 30, 2027).
8	Filing Deadline	Open	Calderwood & Harkness LLP (Sylvia Hartwell)	With 2024 tax returns	Form 8594 must be attached to both Buyer's and Seller's federal income tax returns for the taxable year including the acquisition date (June 30, 2024). Ardent Healthcare Acquisition Corp. EIN: 93-2184720; CPI EIN: 82-3947561.
9	Non-Compete Allocation — Reasonableness	Under Review	Calderwood & Harkness LLP (Sylvia Hartwell) / Ashford & Creighton LLP	Q3 2024	Allocation of $8.5M to non-compete agreements with Dr. Whitfield and Whitfield-Torres to be supported by with-and-without analysis; 3-year amortization period. Governed by Tennessee law.
10	State Tax Implications	Under Review	Calderwood & Harkness LLP (Sylvia Hartwell)	Q3 2024	Asset purchase structure provides step-up in tax basis across all acquired assets. State income and sales/use tax implications across TN, GA, NC, SC, AL, VA, and KY to be confirmed; allocation may affect state-level tax treatment.

[sheet: Cover & Instructions]
Field | Value
Prepared By | Calderwood & Harkness LLP — Sylvia Hartwell, Specialist Partner, Tax
C&H Matter No. | 2024-M&A-0142
Document Status | DRAFT — Subject to finalization following NWC true-up (deadline: September 28, 2024)
Form | IRS Form 8594 — Asset Acquisition Statement Under Section 1060
Name of Purchaser | Ardent Healthcare Acquisition Corp.
Purchaser EIN | 93-2184720
Purchaser Address | c/o National Registered Services, Inc., 1209 Orange Street, Wilmington, DE 19801
Name of Seller | Cardinal Peak Industries, Inc.
Seller EIN | 82-3947561
Seller Address | 8400 Crescent Ridge Parkway, Suite 200, Nashville, TN 37215
Date of Sale / Acquisition | June 30, 2024
Total Sales Price (Aggregate Consideration) | $620,000,000 (Base Purchase Price)
Contingent Consideration (Earnout) | Up to $45,000,000 aggregate — see Earnout Allocation tab
Estimated NWC Adjustment | $1,200,000 (Estimated Closing NWC of $29,200,000 vs. NWC Target of $28,000,000; subject to final determination)
Total Consideration for Allocation Purposes (Preliminary) | $620,000,000 (excluding contingent earnout; to be adjusted for final NWC true-up)
Transaction Structure | Asset Purchase — Purchaser acquired substantially all assets of Seller pursuant to Asset Purchase Agreement dated April 2, 2024
Governing Law of APA | State of Delaware
Was the Purchaser and Seller in a relationship described in IRC § 197(f)(9)? | No
Did the Purchaser also purchase a license or covenant not to compete? | Yes — Non-Competition and Non-Solicitation Agreements with Dr. Randall J. Whitfield and Elaine Whitfield-Torres (3-year restrictive covenants)
Seller's Auditor (for reference) | Linden Hayes & Co., P.C. — Roberta Chen, CPA
Buyer's Accounting Advisor (for reference) | Ashford & Creighton LLP — Gregory Nolan, CPA
Distribution | Beatrice Holloway (C&H), Derek Okonkwo (C&H), Priya Mehta-Sullivan (Ardent Capital Management LLC), Connor Briggs (Ardent Capital Management LLC)
Note | Both Buyer and Seller must file Form 8594 with their respective federal income tax returns for the tax year that includes June 30, 2024. Allocation must be consistent between parties per IRC § 1060 and Treasury Reg. § 1.1060-1(c). Earnout payments, when determinable, will be treated as additional purchase price and allocated in supplemental Form 8594 filings.
[sheet: Part II — Asset Allocation]
Asset Class | Description | Fair Market Value — Buyer's Allocation | Fair Market Value — Seller's Allocation | Agree? (Y/N) | Notes
Class I | Cash and cash equivalents, demand deposits, and similar items | $0 | $0 | Y | Seller's cash and cash equivalents are excluded assets under the APA and not acquired by Purchaser
Class II | Actively traded personal property, certificates of deposit, and foreign currency | $0 | $0 | Y | No actively traded personal property acquired
Class III | Accounts receivable, mortgages, and credit card receivables (mark-to-market assets) | $38,500,000 | $38,500,000 | Y | Accounts receivable from managed-care payors, Medicare/Medicaid, and patient self-pay; valued at estimated net realizable value as of closing. Includes receivables from SummitCare Health Plans, Inc. (~22% of net revenue) and government payors (~31% of net revenue combined).
Class IV | Inventory (if applicable, marked to fair market value) | $2,800,000 | $2,800,000 | Y | Medical supplies, therapy equipment consumables, and pharmaceutical inventory at 37 clinic locations across TN (14), GA (8), NC (5), SC (4), AL (3), VA (2), KY (1)
Class V | All assets not in Classes I–IV, VI, or VII (tangible and intangible personal property other than goodwill and going concern value) | $195,700,000 | $195,700,000 | Y | Includes: (a) furniture, fixtures & equipment (~$24,200,000); (b) leasehold improvements (~$18,500,000); (c) PeakConnect patient-engagement software platform and registered trademark U.S. Reg. No. 5,412,887 (~$82,000,000); (d) patient lists and referral relationships (~$31,000,000); (e) assembled workforce value (~$14,000,000); (f) favorable lease interests on 37 triple-net leases, avg. remaining term 4.2 years (~$11,500,000); (g) non-compete agreements with Dr. Randall J. Whitfield and Elaine Whitfield-Torres (~$8,500,000); (h) managed-care contracts and payor relationships (~$6,000,000). See Class V Detail tab for breakdown.
Class VI | IRC § 197 intangibles other than goodwill and going concern value | $0 | $0 | Y | All § 197 intangibles included in Class V above per applicable allocation methodology; no separate Class VI items identified
Class VII | Goodwill and going concern value | $383,000,000 | $383,000,000 | Y | Residual allocation to goodwill and going concern value after allocation to Classes I–VI. Reflects the premium paid for CPI's market position, brand reputation, and growth trajectory. Purchase price multiple of ~8.36x LTM Adjusted EBITDA ($74,160,000) supports significant goodwill allocation.
TOTAL | Aggregate — All Classes | $620,000,000 | $620,000,000 | Y | Equals Base Purchase Price. Subject to adjustment for final NWC true-up (estimated closing NWC $29,200,000 vs. NWC Target $28,000,000; preliminary excess of $1,200,000 within $500,000 de minimis collar — if final adjustment exceeds collar, reallocation required). Contingent earnout (up to $45,000,000) allocated separately when paid.
[sheet: Class V Detail]
Sub-Category | Asset Description | Valuation Methodology | Fair Market Value | Amortization Period | Notes
Furniture, Fixtures & Equipment | Medical and therapy equipment, office furniture, IT hardware across 37 clinics | Depreciated replacement cost / appraisal | $24,200,000 | 5–7 years (MACRS) | Physical assets at all clinic locations; per Ashford & Creighton LLP fixed asset analysis
Leasehold Improvements | Tenant improvements at 37 leased clinic locations | Depreciated replacement cost | $18,500,000 | Shorter of useful life or remaining lease term (avg. 4.2 years) | Triple-net lease locations; landlord consents required for 29 of 37 leases
Proprietary Software — PeakConnect Platform | Patient-engagement software platform; U.S. Trademark Reg. No. 5,412,887 | Relief-from-royalty / income approach | $82,000,000 | 15 years (IRC § 197 intangible) | Material intangible asset acquired; assigned via IP Assignment Agreement at closing
Patient Lists & Referral Relationships | Existing patient relationships and physician referral network across 7 states | Multi-period excess earnings method | $31,000,000 | 15 years (IRC § 197 intangible) | ~2,100 clinicians and support staff serve patient base
Assembled Workforce | Value attributable to trained and licensed clinical workforce (~1,450 clinicians, ~650 admin/support) | Cost approach (recruitment and training costs) | $14,000,000 | 15 years (IRC § 197 intangible) | Transferred employees; accrued PTO assumed at closing
Favorable Lease Interests | Below-market lease value on 37 triple-net leases | Income approach — present value of lease savings vs. market rents | $11,500,000 | Remaining lease terms (avg. 4.2 years) | Per Cornerstone Land Title Company and internal analysis
Non-Compete Agreements | Non-competition and non-solicitation agreements with Dr. Randall J. Whitfield (52% shareholder) and Elaine Whitfield-Torres (18% shareholder) | Income approach — with-and-without method | $8,500,000 | 3 years (term of restrictive covenants) | Covenants cover all 7 states of CPI operations; governed by Tennessee law
Managed-Care Contracts & Payor Relationships | Contracts with 12 major managed-care payors including SummitCare Health Plans, Inc. | Income approach — excess earnings | $6,000,000 | 15 years (IRC § 197 intangible) | SummitCare represents ~22% of net revenue; Medicare/Medicaid combined ~31%
TOTAL CLASS V | $195,700,000 | Sum of all Class V sub-categories
[sheet: Earnout Allocation]
Earnout Tranche | Measurement Period | EBITDA Threshold | EBITDA Target for Maximum | Maximum Payout | Linear Ramp Rate | Preliminary Allocation — Class V | Preliminary Allocation — Class VII / Goodwill | Notes
Tranche 1 | 12-month period ending June 30, 2025 | $80,000,000 | $85,000,000 | $22,500,000 | $4.50 per $1 of Adjusted EBITDA above $80M threshold | TBD at time of payment | TBD at time of payment (residual method) | Payout is linear between $80M (threshold, $0) and $85M ($22.5M maximum). Change of control acceleration: 100% of remaining maximum earnout immediately payable upon a change of control of the Acquired Business or Ardent Healthcare Acquisition Corp.
Tranche 2 | 12-month period ending June 30, 2026 | $90,000,000 | $95,000,000 | $22,500,000 | $4.50 per $1 of Adjusted EBITDA above $90M threshold | TBD at time of payment | TBD at time of payment (residual method) | Same linear ramp structure as Tranche 1 applied to $90M–$95M range
Aggregate Maximum | $45,000,000 | Aggregate earnout cap per Earnout Agreement dated June 30, 2024. Each tranche payment constitutes additional purchase price under IRC § 1060 and must be allocated using the residual method in a supplemental Form 8594 filing for the year in which payment occurs.
Methodology Note 1 | Tranche 1 payout formula: MIN($22,500,000, MAX(0, (Actual EBITDA − $80,000,000) × $4.50)). Tranche 2 payout formula: MIN($22,500,000, MAX(0, (Actual EBITDA − $90,000,000) × $4.50)).
Methodology Note 2 | Upon payment, earnout consideration is added to total consideration and re-allocated across Classes I–VII using the residual method per IRC § 1060 and Treasury Reg. § 1.1060-1(c)(4). A supplemental Form 8594 must be filed by both Buyer and Seller for the taxable year in which payment occurs.
[sheet: Sources & Uses Summary]
Category | Line Item | Amount | Notes
SOURCES | Term Loan A — Pinnacle National Bank, N.A. (Administrative Agent) | $310,000,000 | 5-year; SOFR + 325 bps; syndicate includes Horizon Commercial Lending Corp., Tidewater Savings Bank, N.A., Great Plains Capital Partners LLC
SOURCES | Equity Contribution — Ardent Capital Partners III LP | $220,000,000 | Fund III, vintage 2022; $3.2B fund size
SOURCES | Revolving Credit Facility (undrawn at closing) | $0 drawn / $90,000,000 committed | 5-year; SOFR + 300 bps; available for post-closing liquidity
SOURCES | Total Funded Sources at Closing | $530,000,000 | $310M TLA + $220M equity
USES | Cash to Seller (net of escrow) | $558,000,000 | $620M Base Purchase Price − $62M Escrow Holdback. Distributed pro rata: Dr. Whitfield (52%), Whitfield-Torres (18%), Ridgeline Growth Equity Fund II LP (22%), other management (8%)
USES | Escrow Deposit — Commonwealth Trust & Escrow Company | $62,000,000 | 10% of $620M; Tranche 1 release June 30, 2025 ($31M); Tranche 2 release December 30, 2025 ($31M); net of pending indemnification claims
USES | Payoff — Velthorn Merchant Bank, N.A. | $87,400,000 | Outstanding principal under Credit Agreement dated March 15, 2018, as amended; payoff letter dated June 26, 2024; UCC terminations filed DE & TN on June 28, 2024
USES | Estimated NWC Adjustment (preliminary) | $1,200,000 | Estimated closing NWC of $29,200,000 vs. NWC Target of $28,000,000; $500K de minimis collar applies; final determination deadline September 28, 2024
USES | Transaction Fees & Expenses (estimated) | Included in reconciliation | Buyer's counsel (Calderwood & Harkness LLP), financial advisor (Graystone Partners LLC), accounting advisor (Ashford & Creighton LLP), R&W insurance premium (Sentinel Specialty Insurance Company, Policy No. SSI-RWI-2024-05178), regulatory counsel (Hargrove, Sinclair & Demarest LLP), environmental consultant (Whitmore Environmental Sciences Inc.), title (Cornerstone Land Title Company)
USES | Total Uses | $620,000,000+ | Base Purchase Price plus transaction costs; reconciled with sources
[sheet: Key Assumptions & Open Items]
Item No. | Description | Status | Responsible Party | Deadline / Target Date | Notes
1 | Final NWC Determination | Pending | Ashford & Creighton LLP (Gregory Nolan) / Linden Hayes & Co., P.C. (Roberta Chen) | September 28, 2024 | Estimated closing NWC of $29,200,000 vs. NWC Target of $28,000,000. Final NWC to be determined within 90 days post-closing. Dollar-for-dollar adjustment above/below target with $500,000 de minimis collar. Any adjustment changes total consideration and requires reallocation.
2 | Independent Valuation of Intangible Assets | In Progress | Ashford & Creighton LLP | Q3 2024 | Formal purchase price allocation (ASC 805) valuation may refine Class V sub-allocations; Form 8594 should be consistent with financial reporting allocation.
3 | Earnout Treatment — Contingent Consideration | Deferred | Calderwood & Harkness LLP (Sylvia Hartwell, Tax) | Upon earnout payment (EP1 ends June 30, 2025; EP2 ends June 30, 2026) | Earnout payments treated as additional purchase price per IRC § 1060; supplemental Form 8594 to be filed in year of payment. If change of control occurs, 100% of remaining maximum ($45M less any prior payments) accelerates.
4 | Seller Agreement on Allocation | Pending | Barrow, Kensington & Pratt LLP (Catherine Barrow / Samuel Otieno) | Prior to filing | Buyer and Seller must agree on allocation per APA Section [●]. Draft to be transmitted to Seller's counsel for review. Both parties obligated to file consistent Form 8594.
5 | Excluded Assets — Confirmation | Confirmed | Calderwood & Harkness LLP | Completed | Excluded assets confirmed: Seller's cash/cash equivalents, tax refunds for pre-closing periods, personal property of Dr. Whitfield, CPI corporate name (licensed back for 12 months), equity interests in Cardinal Peak Labs, Inc. (dormant DE corp.). No allocation to excluded assets.
6 | Excluded Liabilities — No Allocation Impact | Confirmed | Calderwood & Harkness LLP | Completed | Excluded liabilities include: Dawson v. CPI (Case No. 3:23-cv-01847, M.D. Tenn., est. exposure $2.8M–$5.1M), pre-closing tax liabilities, CPI 401(k) plan liabilities, Velthorn Merchant Bank indebtedness (paid off at closing: $87.4M). No allocation impact.
7 | R&W Insurance — Indemnification Interaction | Reference Only | Calderwood & Harkness LLP / Alder Risk Partners LLC (Philip Yuen) | N/A | R&W insurance coverage of $62M (Sentinel Specialty Insurance Company, Policy No. SSI-RWI-2024-05178) with $6.2M retention does not affect purchase price allocation. Indemnification cap of $124M (20% × $620M), basket of $3.1M (0.5%), de minimis of $100K per claim. General reps survive 18 months (through December 30, 2025); fundamental reps survive 36 months (through June 30, 2027).
8 | Filing Deadline | Open | Calderwood & Harkness LLP (Sylvia Hartwell) | With 2024 tax returns | Form 8594 must be attached to both Buyer's and Seller's federal income tax returns for the taxable year including the acquisition date (June 30, 2024). Ardent Healthcare Acquisition Corp. EIN: 93-2184720; CPI EIN: 82-3947561.
9 | Non-Compete Allocation — Reasonableness | Under Review | Calderwood & Harkness LLP (Sylvia Hartwell) / Ashford & Creighton LLP | Q3 2024 | Allocation of $8.5M to non-compete agreements with Dr. Whitfield and Whitfield-Torres to be supported by with-and-without analysis; 3-year amortization period. Governed by Tennessee law.
10 | State Tax Implications | Under Review | Calderwood & Harkness LLP (Sylvia Hartwell) | Q3 2024 | Asset purchase structure provides step-up in tax basis across all acquired assets. State income and sales/use tax implications across TN, GA, NC, SC, AL, VA, and KY to be confirmed; allocation may affect state-level tax treatment.

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