HEALWELL has completed the convertible debt tranche of its previously announced upsized $55 million bought deal financing, issuing subscription receipts for $30 million in convertible debentures.
The proceeds of the financing, together with the $25.5 million equity tranche of the offering completed last week, will be used to fund the previously announced acquisition of New Zealand based Orion Health.
Toronto, Ontario--(Newsfile Corp. - January 28, 2025) - HEALWELL AI Inc. (TSX: AIDX) (OTCQX: HWAIF) ("HEALWELL" or the "Company"), a healthcare artificial intelligence company focused on preventative care, is pleased to announce that it has completed the second tranche (the "Second Closing") of its previously announced $55 million bought deal private placement financing (the "Offering"), issuing subscription receipts (the "Debenture Subscription Receipts") for $30 million in convertible debentures of the Company (the "Convertible Debentures"). The Offering was co-led by Eight Capital and Scotia Capital Inc., as lead underwriters and joint bookrunners, together with Canaccord Genuity Corp., TD Securities Inc., Beacon Securities Limited, Clarus Securities Inc., Haywood Securities Inc., Roth Canada, Inc., Raymond James Limited and Ventum Financial Corp. (the "Underwriters").
The gross proceeds from the Second Closing, including the Underwriters' cash commission, have been deposited in escrow pending the satisfaction of certain release conditions, including that all conditions precedent to the acquisition by the Company of Orion Health Holdings Limited (the "Acquisition", and together with the Offering, the "Transaction") have been met (the "Release Conditions").
Details of the Convertible Debt Financing
The Company has issued a total of 30,000 Debenture Subscription Receipts at a price of $910 per Debenture Subscription Receipt, for total gross proceeds of $27,300,000, after accounting for the original issue discount on the Convertible Debentures. Each Debenture Subscription Receipt will entitle the holder thereof to receive, upon satisfaction of the Release Conditions and for no additional consideration, one Convertible Debenture of the Company in the principal amount of $1,000, bearing interest at a rate of 10% per year, payable semi-annually in arrears, and maturing on December 31, 2029. The principal amount outstanding under the Convertible Debentures is convertible into Class A Subordinate Voting Shares of the Company ("Subordinate Voting Shares") at a conversion price of $2.40 per share.
The gross proceeds of the Second Closing, including the Underwriters' cash commission, have been deposited in escrow until the satisfaction of the Release Conditions. Upon satisfaction of the Release Conditions, the Underwriters' cash commission and any expenses of the Underwriters will be paid to the Underwriters from the escrowed proceeds and the net amount will be released to the Company. In the event that the Release Conditions have not been satisfied prior to 5:00 p.m. (Vancouver Time) on June 30, 2025, or the Company advises the Underwriters or announces to the public that it does not intend to satisfy the Release Conditions or that the Acquisition has been terminated, the aggregate issue price of the Debenture Subscription Receipts (plus any interest earned thereon) shall be returned to the applicable holders of the Debenture Subscription Receipts, and such Debenture Subscription Receipts shall be automatically cancelled and be of no further force and effect.
On completion of the Second Closing, the Company also issued to the Underwriters a total of 455,000 warrants for Subordinate Voting Shares with a three-year term and an exercise price of $2.40/share as partial compensation for their services.
The Transaction is subject to the shareholder approval requirements of Sections 607(g) and 611(c) of the TSX Company Manual as: (i) the Transaction involves the issuance of Subordinate Voting Shares at less than $2.08/share, their 5-day volume weighted average price on December 16, 2024 when the Transaction was first announced; and (ii) results in the issuance of Subordinate Voting Shares constituting more than 25% of the currently issued and outstanding Subordinate Voting Shares. The TSX has advised the Company that it will be permitted to rely on a written approval from shareholders holding a majority of the voting shares of the Company to approve the Transaction in accordance with section 604(d) of the TSX Company Manual, and accordingly that it will not be required to hold a formal special shareholder meeting to seek approval of the Transaction.
Shareholders representing a majority of the voting shares of the Company executed an initial written consent approving the Transaction on January 13, 2025 and have subsequently confirmed by a further written consent on January 27, 2025 that they continue to approve of the Transaction in its present form. The details of the Transaction and its maximum potential dilutive effect on shareholders are set out in the Company's news release dated January 14, 2025 and have not materially changed, other than the substitution of the Debenture Subscription Receipts for the Convertible Debentures.
Gardiner Roberts LLP acted as counsel for the Company and Wildeboer Dellelce LLP acted as counsel for the Underwriters in connection with the Offering.
Dr. Alexander Dobranowski Chief Executive Officer HEALWELL AI Inc.
About HEALWELL
HEALWELL is a healthcare artificial intelligence company focused on preventative care. Its mission is to improve healthcare and save lives through early identification and detection of disease. Using its own proprietary technology, the Company is developing and commercializing advanced clinical decision support systems that can help healthcare providers detect rare and chronic diseases, improve efficiency of their practice and ultimately help improve patient health outcomes. HEALWELL is executing a strategy centered around developing and acquiring technology and clinical sciences capabilities that complement the Company's road map. HEALWELL is publicly traded on the Toronto Stock Exchange under the symbol "AIDX" and on the OTC Exchange under the symbol "HWAIF". To learn more about HEALWELL, please visit https://healwell.ai/.
About ORION HEALTH
Orion Health is a global healthcare technology company focused on reimagining healthcare for all. Orion Health is leading the change in digital health with health and care organizations to improve the wellbeing of every individual with our world leading Unified Healthcare Platform. Made up of a Virtuoso digital front door, Amadeus digital care record, and Orchestral health intelligence platform - each underpinned by extensive health and social data sets, machine learning, and 30 years of innovation focused purely on improving global well-being. www.orionhealth.com.
Forward-Looking Statements
Certain statements in this press release, constitute "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of applicable Canadian securities laws and are based on assumptions, expectations, estimates and projections as of the date of this press release. Forward-looking statements in this press release include statements with respect to, among other things, the intended uses of the proceeds of the Offering, the pending acquisition by the Company of Orion Health, the potential for a shareholder meeting in connection with the Transaction and the potential future satisfaction or non-satisfaction of the Release Conditions. Forward-looking statements are often, but not always, identified by words or phrases such as "expect", "anticipate", "pending", "shall be", "subject to" or variations of such words and phrases or statements that certain future conditions, actions, events or results "will", "may", "could", "would", "should", "might" or "can" be taken, occur or be achieved, or the negative of any of these terms . Forward-looking statements are necessarily based upon management's perceptions of historical trends, current conditions and expected future developments, as well as a number of specific factors and assumptions that, while considered reasonable by HEALWELL as of the date of such statements, are outside of HEALWELL's control and are inherently subject to significant business, economic and competitive uncertainties and contingencies which could result in the forward-looking statements ultimately being entirely or partially incorrect or untrue. Forward-looking statements contained in this press release are based on various assumptions, including, but not limited to, the following: the parties' ability to satisfy any conditions precedent to completion of the Acquisition, including receipt of all shareholder, regulatory and TSX approvals; HEALWELL's ability to complete the Acquisition or to complete it on the terms described above; HEALWELL's ability to continue to access sources of debt and equity financing and the terms on which such financing may be provided; HEALWELL's ability to integrate the acquired businesses, products and services with its own; the stability of general economic and market conditions; HEALWELL's ability to comply with applicable laws and regulations; HEALWELL's continued compliance with third party intellectual property rights; and that the risk factors noted below, collectively, do not have a material impact on HEALWELL's business, operations, revenues and/or results. By their nature, forward-looking statements are subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections, or conclusions will not prove to be accurate, that assumptions may not be correct, and that objectives, strategic goals and priorities will not be achieved.
Known and unknown risk factors, many of which are beyond the control of HEALWELL, could cause the actual results of HEALWELL to differ materially from the results, performance, achievements, or developments expressed or implied by such forward-looking statements. Such risk factors include but are not limited to those factors which are discussed under the section entitled "Risk Factors" in HEALWELL's most recent annual information form dated April 1, 2024, which is available under HEALWELL's SEDAR+ profile at www.sedarplus.ca. The risk factors are not intended to represent a complete list of the factors that could affect HEALWELL and the reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management's expectations and plans relating to the future. HEALWELL disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law. All of the forward-looking statements contained in this press release are qualified by these cautionary statements.
For more information:
Pardeep S. Sangha Investor Relations, HEALWELL AI Inc. Phone: 604-572-6392 ir@healwell.ai
