HEALWELL expects to achieve at least $3.0 million in annual cost savings through a strategic cost optimization initiative. HEALWELL is focussed on aligning its operations ahead of the anticipated closing of its previously announced acquisition of New Zealand based Orion Health ("Orion") to optimize synergies and streamline operations between the two companies.
HEALWELL also disclosed that it expects to be favourably positioned in the event the U.S. tariffs against Canada were to expand beyond goods to services, as it has minimal exposure to the provisioning of services from Canada into the U.S. The Company also intends to significantly ramp up the distribution of its AI products and services through its future relationship with Orion, which generates most of its revenues internationally in countries outside of the U.S., as well as through the Canadian public sector healthcare community.
HEALWELL has also received a formal commitment letter from a Schedule I bank for a $50 million credit facility specifically for the acquisition of and subsequent use by Orion.
Toronto, Ontario--(Newsfile Corp. - February 3, 2025) - HEALWELL AI Inc. (TSX: AIDX) (OTCQX: HWAIF) ("HEALWELL" or the "Company"), a healthcare artificial intelligence company focused on preventative care, today announced it is engaging in a strategic cost optimization initiative designed to streamline operations and improve efficiencies. The restructuring initiatives are aimed at positioning the Company for long-term growth and are expected to yield at least $3.0 million in annual cost savings. This strategic optimization initiative comes as HEALWELL prepares to finalize the closing of its previously announced acquisition of New Zealand based Orion Health ("Orion"). This right-sizing initiative, designed to streamline operations ahead of the Orion acquisition integration process, will include headcount reductions, cutting public company costs and decreasing marketing expenses; thereby allowing the Company to maximize synergies and drive immediate value from the Orion acquisition for customers and stakeholders.
Anthony Lam, Chief Financial Officer of HEALWELL, commented, "2024 was a year of rapid growth and capital allocation for HEALWELL. We ended the year by announcing the acquisition of Orion Health, which will be our most important and transformational acquisition to date. Orion will add approximately 400 new employees and 11 global offices to our corporate family and bring forth significant cost and revenue synergy opportunities across our enterprise. In anticipation of completing the Orion acquisition, we have already started to realize some of these synergies as well as streamlining our operations. These restructuring initiatives will not impact any of our AI-based business units or AI focused projects, which are expected to increase in headcount in the coming year. These savings will enhance the efficiency and effectiveness of our healthcare software, patient services and contract research organization (CRO) business units, while ensuring streamlined operations and sustained excellence."
Dr. Alexander Dobranowski, CEO of HEALWELL, further adds, "By proactively implementing cost optimization initiatives we will be better prepared for the future integration of Orion, which will help us better serve our customers, strengthen our market position, and ensure sustainable growth. This is a strategic move aimed at benefiting from the synergies provided by the acquisition and setting the stage for sustained future growth, innovation, and enhanced service delivery. We look forward to executing on these and other key initiatives designed to enhance and create shareholder value."
HEALWELL also disclosed today that new U.S. tariffs by the Trump administration are expected to have minimal impact on its business, as the Company does not ship any physical goods across the U.S. border. The Company also believes that it is in a favourable position in the event the U.S. tariffs against Canada were to expand beyond goods to services, as the vast majority of its revenues are generated outside of the United States. HEALWELL also intends to significantly ramp up the distribution of its AI products and services through its relationship with Orion, which generates most of its revenues internationally in countries outside of the U.S., including Canada, New Zealand, Australia, UK and the Middle East. The Company also believes that it could be a significant benefactor in the event of a surge of "buy Canadian" sentiment in Canada, as AI initiatives are embarked on by the Canadian public sector healthcare community.
HEALWELL also announced it has received a formal commitment letter from a Schedule I Canadian bank to support a $50 million credit facility specifically for the acquisition of and subsequent use by Orion. Between this commitment letter and the capital raises closed in the last two weeks through the Company's upsized bought deal placements, the Company now has sufficient financing to start to prepare for closing the acquisition of Orion, which is presently expected to occur on or before April 1, 2025.
Dr. Alexander Dobranowski Chief Executive Officer HEALWELL AI Inc.
About HEALWELL AI
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/.
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, including statements about the Company's strategic cost optimization initiatives and their anticipated benefits and cost savings; the anticipated impact of the recently announced and potential future U.S.-Canadian tariffs on the Company; the Company's anticipated acquisition and subsequent integration of Orion; the anticipated timing of completing the acquisition of Orion; the Company's anticipated sources of capital for the acquisition of Orion, including a $50 million bank loan; and the Company's plans to increase headcount and ramp up distribution of its AI products and services; and are based on assumptions, expectations, estimates and projections as of the date of this press release. Forward-looking statements are often, but not always, identified by words or phrases such as "expect", "believe", "intend", "anticipate", "initiative", "position", "future", "look forward to", "in the event of", "make preparations for", "improve", "growth","support", 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 timing and anticipated impact of the Company's cost optimization initiatives; the Company's ability to satisfy any remaining conditions precedent to completion of the Orion acquisition, including receipt of all outstanding regulatory approvals; HEALWELL's ability to complete the acquisition on the timelines and terms contemplated; the Company's ability to successfully negotiate and enter into definitive agreements for the $50 credit facility with the Schedule I bank, and the timelines and terms on which that credit facility will be provided; the Company's ability to integrate acquired businesses, products and services with its own; the stability of general economic and market conditions; sufficiency of working capital and access to financing; HEALWELL's ability to comply with applicable laws and regulations; HEALWELL's continued compliance with third party intellectual property rights; the effects of competition in the industry; the requirement for increasingly innovative product solutions and service offerings; trends in customer growth and the adoption of new technologies in the industry; 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
