Carbon_Health_Technologies_Inc - Chapter 11 Bidding Procedures Summary

Bidding Procedures Summary

Parties Involved

• Sellers: Carbon Health Technologies, Inc. and its debtor affiliates
• Stalking Horse Bidder: None designated
• Consultation Parties:
  • Future Solution Investments LLC, as agent for (i) the lenders under the Prepetition Loan and Security Agreement dated November 14, 2025, and (ii) the lenders under the Senior Secured Superpriority Debtor-In-Possession Financing Agreement dated February 2026
  • Any official committee appointed in the Chapter 11 Cases

Assets Being Sold

• The Debtors seek to sell all, substantially all, or any part of their assets through one or more sale transactions, free and clear of all liens, pledges, security interests, encumbrances, claims, charges, options, restrictions, and other interests
• The Assets comprise two principal segments:
  • Any and all assets associated with the Debtors' network of 93 urgent care and primary care medical facilities
  • Any and all assets associated with the Debtors' proprietary, end-to-end software platform, CarbyOS
• An "Enterprise Sale Transaction" is defined as one or more sale transactions for all or substantially all of the Assets
• A "Partial Sale Transaction" is any sale transaction for less than all or substantially all of the Assets

Credit Bid

• Any secured creditor with a valid, perfected, and unavoidable lien on any of the Debtors' Assets shall have the right to credit bid all or a portion of their secured claims for their respective collateral pursuant to section 363(k) of the Bankruptcy Code, provided that:
  • A secured creditor shall have the right to credit bid such claims only with respect to the collateral by which such secured creditor is secured
  • The credit bid shall include cash consideration sufficient to pay in full all claims for which there are valid, perfected, and unavoidable liens on any Assets included in such bid that are senior in priority to those of the party seeking to credit bid (unless such senior lien holder consents to alternative treatment)
  • The credit bid shall otherwise comply with the DIP Order
• The Agent has the right to submit a credit bid on account of the Prepetition Secured Claims, the DIP Claims, or both pursuant to section 363(k) of the Bankruptcy Code
• If the Agent exercises its credit bid right in connection with any sale transaction, any such credit bid will be deemed a Qualified Bid and the Agent a Qualified Bidder, with no requirement to satisfy either the Participation Requirements or the Bid Requirements
• The Agent's support for, acceptance of, or vote in favor of any plan, including any plan incorporating a debt-for-equity exchange or any other restructuring transaction, shall not constitute, and shall not be deemed to constitute, the submission of a credit bid or any other bid for any Assets

Bid Requirements

• Good Faith Deposit: 10% of the Purchase Price (with the value of any non-cash consideration determined by the Debtors, in consultation with the Consultation Parties), to be held in an escrow account; provided that the Debtors, in their reasonable business judgment and in consultation with the Consultation Parties, may elect to waive or modify the requirement of a Deposit on a case-by-case basis
• To participate in the Sale Process, each interested party must:
  • Enter into or already be party to a confidentiality agreement with the Debtors in form and substance satisfactory to the Debtors
  • Upon request by the Debtors, submit sufficient information to allow the Debtors to determine that such party has the financial wherewithal to consummate a sale transaction and has a bona fide interest in purchasing some or all of the Assets
  • Provide contact information for a primary point of contact
• Each Bid must:
  • Be irrevocable and binding until the closing of the sale transaction if the Potential Bidder is a Successful Bidder, and the Potential Bidder must agree to serve as a Back-Up Bidder if selected
  • Clearly identify the Assets to be acquired and the liabilities and obligations to be assumed
  • Be for cash and set forth the cash purchase price to be paid
  • Provide that all Cure Amounts related to Designated Contracts will be paid by the Qualified Bidder as part of the consideration for the Bid
  • For any Enterprise Sale Transaction, be sufficient to pay in full, in cash: the DIP Claims, plus the Prepetition Secured Claims, plus allowed administrative expense claims incurred through the closing of the sale transaction, plus the administrative expense claims projected to be incurred from the closing through the wind-down of the Debtors' estates, plus allowed priority claims
  • Identify each executory contract and unexpired lease to be assumed and assigned, confirm that the Potential Bidder agrees to pay any Cure Amounts, and include an Adequate Assurance Package
  • Demonstrate that the Qualified Bidder can provide adequate assurance of future performance under all Designated Contracts as required by section 365 of the Bankruptcy Code
  • Indicate whether the Potential Bidder intends to hire all or some of the employees primarily employed in connection with the Assets
  • Include a duly authorized and executed purchase agreement in both PDF and MS-WORD format, marked against the Form Purchase Agreement
  • Include a commitment to close the sale transaction by no later than March 31, 2026
  • Fully disclose the legal identity of each person or entity bidding and any connections with the Debtors, other known bidders, or officers/directors
  • Include written evidence of the Potential Bidder's financial ability to close the proposed sale transaction
  • May not be conditioned on financing or due diligence
  • Set forth each regulatory and third-party approval required and the date by which the Potential Bidder expects to receive such approvals
  • Include representations that the Potential Bidder has completed due diligence, has not engaged in collusion, and is acting in good faith
  • Be accompanied with a board resolution demonstrating the authority of the Potential Bidder to make a binding bid
  • Include a covenant to cooperate with the Debtors regarding antitrust and regulatory requirements
  • Unequivocally disclaim and waive any right to receive a break-up fee, expense reimbursement, or termination fee, or to request any substantial contribution administrative expense claim
  • Contain a statement that the Potential Bidder submits to the jurisdiction of the Court and consents to the entry of a final judgment or order
• Landlords may submit bids with respect to their own leased premises in the form of a lease termination agreement or an assumption and assignment agreement

Auction Details

• An Auction will be held on March 11, 2026, at 12:00 p.m. (prevailing Central Time) at the offices of Pachulski Stang Ziehl & Jones LLP, One Sansome Street, Suite 3430, San Francisco, CA 94104, if the Debtors receive more than two Qualified Bids for any Assets
• Only Qualified Bidders who have made a Qualified Bid and the Agent (by exercising the Credit Bid Right) will be entitled to make subsequent Qualified Bids at the Auction
• Professionals or other representatives of the Consultation Parties will be permitted to attend and observe the Auction
• All Qualified Bids in the Auction will be made and received on an open basis, with the true identity of each Auction Participant disclosed to all other Auction Participants
• For each Baseline Bid, bidding will start at the purchase price and terms proposed in the applicable Baseline Bid and will proceed thereafter in increments to be announced at the Auction (each, a "Minimum Overbid Amount")
• The Debtors reserve the right to, in consultation with the Consultation Parties, increase or decrease the Minimum Overbid Amount at any time during the Auction for any Asset
• The Auction will be conducted openly and will be transcribed or recorded
• Each Auction Participant will be required to confirm in writing and on the record at the Auction that it has not engaged in any collusion and that its bid represents a binding, good faith, and bona fide offer
• The Debtors will, after consulting the Consultation Parties and with the consent of the Agent (subject to certain limitations), identify the highest or otherwise best Qualified Bid for particular Assets as the Successful Bid; provided that the Agent's consent shall not be required for the selection of a Successful Bid that provides sufficient sale proceeds to allow for the repayment in full in cash of all outstanding DIP Claims and Prepetition Secured Claims
• The Debtors may also identify a Qualified Bidder that submitted the next highest or otherwise best Qualified Bid for particular Assets as a Back-Up Bid
• Back-Up Bids will remain open and irrevocable until the earliest to occur of: (i) consummation of the sale transaction with the applicable Successful Bidder, or (ii) the release of such Back-Up Bid by the Debtors in writing

Assumption and Assignment

• On or before March 9, 2026, the Debtors will file with the Court the Assumption and Assignment Notice with the list of Contracts that may be Designated Contracts to be assumed and assigned, along with any proposed Cure Amounts
• If no Cure Amount is listed on the Contracts List for a particular Contract, the Debtors' asserted Cure Amount for such Contract will be deemed to be $0.00
• The Debtors will serve the Assumption and Assignment Notice, via email if available or first-class mail, on all Counterparties to Designated Contracts and all parties requesting notice pursuant to Bankruptcy Rule 2002
• Objections to the proposed assumption and assignment of a Designated Contract or the applicable Cure Amount must:
  • Be in writing and state the name and address of the objecting party
  • Comply with the Bankruptcy Code, the Bankruptcy Rules, and the Bankruptcy Local Rules
  • State, with specificity, the fully liquidated Cure Amount and the legal and factual bases for any unliquidated Cure Amount, along with the specific nature and dates of any alleged defaults
  • Be filed with the Court and served on the Objection Notice Parties on or before March 17, 2026, at 4:00 p.m. (the "Contract Objection Deadline")
• Each Counterparty to a Designated Contract may combine its Sale Objection and Contract Objection into a single Combined Objection and file such Combined Objection by the Contract Objection Deadline
• Any time after the Assumption and Assignment Notice Deadline and not later than March 12, 2026, the Debtors reserve the right to: (i) add previously omitted Designated Contracts, (ii) remove a Designated Contract from the Contracts List, or (iii) modify the previously stated Cure Amount associated with any Designated Contract
• The Debtors may take actions to add or modify Designated Contracts after March 12, 2026, by filing and serving a supplemental Assumption and Assignment Notice upon affected Counterparties, who will have 10 days from the service thereof to file a Supplemental Contract Objection
• The Debtors shall provide each Successful Bidder's and Back-Up Bidder's Adequate Assurance Package on a strictly confidential basis to all Counterparties to Designated Contracts once a Qualified Bidder is deemed a Successful Bidder and by no later than March 12, 2026
• If no Contract Objection (or Supplemental Contract Objection) is timely received with respect to a Designated Contract:
  • The Counterparty to such Designated Contract will be deemed to have consented to the assumption by the Debtors and assignment to the applicable Successful Bidder and be forever barred from asserting any objection with regard to such assumption and assignment
  • Any and all defaults under the Designated Contract and any and all pecuniary losses related thereto will be deemed cured and compensated pursuant to sections 365(b)(1)(A) and (B) of the Bankruptcy Code upon payment of the Cure Amount
  • The Counterparty will be forever barred from asserting any other claims related to such Designated Contract against the Debtors and their estates or the applicable Successful Bidder that existed prior to the entry of the applicable Sale Order
• To the extent that the parties are unable to consensually resolve any Contract Objection prior to the Sale Hearing, such Contract Objection will be adjudicated at the Sale Hearing or at such other hearing date as the Court may determine, including a hearing scheduled after the Sale Hearing without delaying or otherwise affecting the closing of the applicable sale transaction

Sale Free and Clear

• The Debtors seek to sell the Assets free and clear of all liens, pledges, security interests, encumbrances, claims, charges, options, restrictions, and other interests to the fullest extent permissible under the Bankruptcy Code
• Except as otherwise provided in the applicable Purchase Agreements with the Successful Bidders or the applicable Sale Orders, any Assets sold pursuant to the Bid Procedures shall be conveyed at the closing of a sale transaction in their then-present condition, "AS IS, WITH ALL FAULTS, AND WITHOUT ANY WARRANTY WHATSOEVER, EXPRESS OR IMPLIED"
• The Assets are sold free and clear of any and all Encumbrances of any kind or nature to the fullest extent permissible under the Bankruptcy Code, with such liens, claims, interests, restrictions, charges, and encumbrances to attach to the proceeds of sale paid directly to the Debtors (to be held by the Debtors for the benefit of, and pending the distribution of such proceeds to, the Agent and other holders of liens in accordance with the priority of their respective liens and otherwise subject to the debtor-in-possession financing orders) with the same validity and in the same order of priority

Plan Toggle

• If no Acceptable Bids are received for an Enterprise Sale Transaction, then the Debtors, after consultation with the Consultation Parties, may elect to toggle to seek confirmation of a chapter 11 plan premised upon a debt-for-equity exchange (the "Plan Without Sale Toggle")
• If Acceptable Bids are received with respect to Partial Sale Transactions (which combined do not constitute an Enterprise Sale Transaction), then the Debtors, after consultation with the Consultation Parties, may elect to both: (a) consummate the applicable Partial Sale Transactions, and (b) seek confirmation of a plan premised upon a debt-for-equity exchange
• If no Qualified Bid for the Assets is received by the Bid Deadline, the Debtors, in consultation with the Consultation Parties and with the written consent of the Agent, may: (i) terminate the Sale Process, (ii) file and serve a notice indicating that no Qualified Bids were received, and (iii) exercise the Plan Without Sale Toggle

Key Dates

• Bid Deadline: March 6, 2026, at 5:00 p.m. (prevailing Central Time)
• Qualified Bid Determination Deadline: March 9, 2026
• Assumption and Assignment Notice Deadline: March 9, 2026
• Auction (if necessary): March 11, 2026, at 12:00 p.m. (prevailing Central Time)
• Post-Auction Notice Filing Deadline: March 12, 2026
• Sale Order(s) Filing Deadline: March 12, 2026
• Adequate Assurance Information Packages Deadline: March 12, 2026
• Sale Objection Deadline: March 16, 2026, at 4:00 p.m. (prevailing Central Time)
• Contract Objection Deadline: March 17, 2026, at 4:00 p.m. (prevailing Central Time)
• Deadline for Debtors to Reply to Objections: March 18, 2026
• Sale Hearing: March 24, 2026, at 1:00 p.m. (prevailing Central Time)
• Targeted Closing/Outside Date: March 31, 2026