Yahoo Finance

In connection with the Offering, if the underwriters' option is fully exercised, the Company expects to issue up to a maximum of (i) 14,662,500 subscription receipts of the Company (the "Subscription Receipts") for units of the Company consisting of one Subordinate Voting Share and one-half of one Subordinate Voting Share Purchase warrant (each whole warrant, a "Warrant") exercisable at a price of $2.50 for a period of 36 months following the closing of the Offering ; and (ii) 31,250 convertible debentures of the Company in the principal amount of $1,000 each (the "Convertible Debentures"), with a 9% original issuer discount and an interest rate of 10% per annum payable semi-annually in arrears. The principal amount of the Convertible Debentures will be convertible into Subordinate Voting Shares of the Company at a price of $2.40 per share, provided that on the occurrence of certain change of control transactions involving the Company, the holders of the Convertible Debentures will have the right to convert the principal amount into Subordinate Voting Shares at a reduced price, which may be as low as $1.77/share.

The gross proceeds of the Offering, less 50% of the Underwriters' cash commission on the Subscription Receipts portion of the Offering and certain expenses of the Underwriters, will be deposited in escrow until the satisfaction of certain release conditions, including that all conditions precedent to the Acquisition of Orion Health Holdings Limited have been met (the "Release Conditions"). 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 transaction has been terminated, the aggregate issue price of the Subscription Receipts and the Convertible Debentures (plus any interest earned thereon) shall be returned to the applicable holders of the Subscription Receipts and Convertible Debentures, and such Subscription Receipts and Convertible Debentures shall be automatically cancelled or redeemed, as applicable, and be of no further force and effect.

On closing of the Offering, the Company also expects to issue to the underwriters up to a maximum of (i) 607,333 warrants for Subordinate Voting Shares with a three-year term and an exercise price of $2.08/share; and (ii) 500,000 warrants for Subordinate Voting Shares with a three-year term and an exercise price of $2.40/share (collectively, the "Broker Warrants") 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 (the "Market Price"); and (ii) results in the issuance of Subordinate Voting Shares constituting more than 25% of the currently issued and outstanding Subordinate Voting Shares.

In total across both the Offering and the Acquisition, it is expected that the Transaction may result in the issuance of up to an additional 76,408,625 Subordinate Voting Shares at prices ranging from $1.61/share (a 22.6% discount to Market Price) to $2.50/share (a 20.2% premium to Market Price). The Subordinate Voting Shares that are expected to be issued will consist of: (a) 35,652,174 Subordinate Voting Shares in partial satisfaction of the purchase price for the Acquisition, at an issue price of $1.61/share; (b) up to 12,750,000 Subordinate Voting Shares on conversion of the Subscription Receipts, at an issue price of $2.00/share; (c) up to 6,375,000 Subordinate Voting Shares on exercise of the Warrants underlying the Subscription Receipts, at an issue price of $2.50/share; (d) up to a maximum of 17,655,368 Subordinate Voting Shares on conversion of the Convertible Debentures, assuming they convert at their lowest conversion price of $1.77/share; (e) up to a maximum of 607,333 Subordinate Voting Shares on exercise of the Broker Warrants, at an exercise price of $2.08/share; and (f) up to a maximum of 500,000 Subordinate Voting Shares on exercise of the Broker Warrants, at an exercise price of $2.40/share.

In addition to the foregoing securities, a variable number of Subordinate Voting Shares may be issued in satisfaction of the Company's obligations with respect to the Variable Share Consideration at an issue price calculated with reference to the 10-day VWAP for Subordinate Voting Shares shortly before the date of payment. Because the Variable Share Consideration is based on a price to be fixed on a future date, the number of Subordinate Voting Shares issuable in satisfaction of the Variable Consideration may fluctuate. The table below shows an illustrative example of how the anticipated maximum number of Subordinate Voting Shares issuable in connection with the Transaction may vary if the share price used to satisfy the Variable Share Consideration is higher or lower than the Market Price:

The definitive agreements for the Transaction have been and are being negotiated between the Issuer and their respective counterparties at arm's length. The Transaction is not expected to result in the creation of any new control person of the Company, however, one new individual, the vendor in the Acquisition, will become the holder of more than 10% of the issued and outstanding Subordinate Voting Shares on completion of the Transaction. On closing of the Acquisition, it is expected that the Company will grant the vendor the right to nominate one individual to the board of directors of the Company for so long as the vendor continues to hold a threshold number of Subordinate Voting Shares.

Shareholders representing a majority of the voting shares of the Company have executed a written consent approving the Transaction, and the TSX has advised the Company that it will be permitted to rely on that written consent as evidence of the required majority shareholder approval 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.

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 closing of the Acquisition and the terms on which it is expected to be completed (including the number of Subordinate Voting Shares that may be issued in respect of the Variable Share Consideration), the anticipated timing to close the upsized Offering, and the ability of the Company to forego a shareholder meeting in respect of the Acquisition. Forward-looking statements are often, but not always, identified by words or phrases such as "expect", "creation", "anticipated", "illustrative", "pending", "subject to", "continuing 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 remaining conditions precedent to completion of the Acquisition and/or the Offering, including receipt of all outstanding regulatory approvals; HEALWELL's ability to complete the Acquisition and/or the Offering, or to complete them on the terms contemplated; the quantum of the working capital adjustment, deferred purchase price and earn-out amounts that may become due under the Acquisition and whether those amounts will be paid in whole or in part in Subordinate Voting Shares; the Company's ability to successfully negotiate and enter into definitive agreements for a credit facility with a Schedule A bank, and the terms on which that facility may be implemented; the Company's ability to access other sources of debt and equity financing and the terms on which such financing may be provided; the Company's ability to integrate acquired businesses, products and services with its own; the potential for third parties to object to the written shareholder consent obtained by the Company; 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.com. 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

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/237125