HEALWELL AI Inc. (“
HEALWELL” or the
“
Company”) (TSX: AIDX, OTCQX: HWAIF), a healthcare
technology company focused on AI and data science for preventative
care, is pleased to announce that it has entered into an agreement
to acquire Intrahealth Systems Limited
(“
Intrahealth”), a subsidiary of WELL Health
Technologies Corp. (“
WELL”) (TSX: WELL), which is
an insider of the Company, pursuant to an arm’s length negotiated
transaction for total consideration of approximately $24.2 million
(the “
Transaction”), a majority of which is
expected to be paid in HEALWELL Class A subordinate voting shares.
Intrahealth is an advanced SaaS-based Electronic Health Records
(“
EHR”) management platform for small and medium
enterprise healthcare organizations across Canada, Australia, and
New Zealand. Intrahealth’s robust platform meets the demands of a
wide range of clients from a single doctor’s office to a
multi-thousand user health institution. Founded in New Zealand and
headquartered in Vancouver, B.C., Intrahealth was originally
acquired by WELL in April 2021.
The independent directors of the Company have
unanimously approved the Transaction, with the directors appointed
by WELL recusing themselves from voting. Grant Thornton LLP, as
independent financial advisor, also provided an opinion to the
directors that, as of today’s date, and based on and subject to
certain assumptions and limitations that they made, that the
consideration to be paid by the Company to WELL for the shares of
Intrahealth is fair, from a financial point of view, to the
Company.
Dr. Alexander Dobranowski, CEO of HEALWELL,
commented on the acquisition, “Intrahealth is a highly respected
global EHR with a rich history of supporting major health systems
in three countries across two continents. Intrahealth will not only
add mature SaaS and digital revenue, strong positive EBITDA and
cashflows, but it will also serve as a platform to showcase the
effectiveness of our industry leading AI solutions. Our firm belief
is that the future of healthcare will be centered around AI enabled
EHRs due to the enormous potential scope to positively impact
healthcare providers and their patients. EHR systems that are not
outfitted with AI capabilities either natively or through an AI
powered clinical decision support system will not be able to retain
their customers in the future. This presents an enormous market
opportunity for companies such as HEALWELL who have the technology
to drive this industry forward.”
Hamed Shahbazi, Founder and CEO of WELL stated,
“When Intrahealth was acquired by WELL nearly three years ago, the
intent was to enable Intrahealth to grow and expand. We achieved
that goal and now Intrahealth enters the next stage of its
development which we feel will be best achieved through pairing it
more deeply with the HEALWELL platform. We believe the combination
of HEALWELL’s best-in-class AI capabilities combined with
Intrahealth’s EHR platform will result in the creation of one of
the industry’s first AI powered EHR platform with next-generation
clinical decision support capabilities that will provide patients
and providers with powerful tools to drive better health outcomes
at lower costs in a manner aligned with global Value Based Care
trends. Given that we are a significant stakeholder in HEALWELL, we
are excited about the value creation possibilities that will accrue
as a result of HEALWELL and Intrahealth combining and effectively
building the ultimate AI co-pilot for physicians.”
Intrahealth supports approximately 15,000
healthcare professionals across its global network. In 2024, it is
expected that Intrahealth will generate more than $12 million in
revenues, achieve over 80% gross margins, produce positive EBITDA
and increased cashflows. Approximately 70% of Intrahealth’s revenue
is generated in Canada and over 80% of its revenue is high margin
recurring revenue.
Dorian Prior, President of Intrahealth
commented, “Our talented multi-national team at Intrahealth is
thrilled to join HEALWELL at such an exciting time in their
development as a company; we’re looking forward to integrating
Intrahealth’s products with HEALWELL’s cutting-edge AI
technologies. The future of healthcare will unquestionably involve
AI and we feel fortunate to have an opportunity to be at the
forefront of the future of our industry. This comes at a great time
where we have never had a better pipeline of growth
opportunities.”
Intrahealth is engaged in the business of
providing a suite of flexible software solutions to a wide variety
of customers including health authorities, hospitals, public health
outpatient centres, community health, home care, ambulatory care,
and diverse healthcare professionals. Intrahealth provides highly
configurable software solutions that also support mobile platforms
and seamless access to virtual care/telehealth solutions.
Intrahealth’s solutions for hospitals include patient
administration systems, bed management, waiting list management,
enterprise-wide scheduling, case management, medication management,
emergency room operations and ward management, among many other
features.
Transaction
Description
HEALWELL is acquiring 100% of the shares
outstanding of Intrahealth from WELL for total consideration of
approximately $24.2 million, to be paid by HEALWELL as follows: (i)
$3.6 million paid in cash on closing; (ii) $15 million in
Class A subordinated voting shares of HEALWELL (the
“Shares”) issued at closing at a deemed price of
$0.69 per Share based on the volume weighted average price of the
Shares for the five trading days immediately preceding the date of
this press release, which will result in the issuance of
approximately 21.7 million Shares; and (iii) $5 million to be paid
out over the following 10 months in either cash or Shares, at
WELL’s discretion, which if such amount was paid in Shares at
$0.50, $0.70 or $0.90 per Share would result in the issuance of
10.0 million, 7.1 million or 5.6 million Shares, respectively, to
WELL representing approximately 8.4%, 6.1% or 4.9%, respectively,
of the issued and outstanding voting securities of HEALWELL after
such issuance. WELL will also pay an earnout to the prior owners of
Intrahealth of approximately $0.6 million due in May 2024.
The Transaction will also result in WELL
becoming a new control person of HEALWELL, which currently holds
approximately 1.0 million Shares, representing 1.1% of the issued
and outstanding voting securities of HEALWELL, holding between 22.7
million and 32.7 million Shares based on the foregoing,
representing 20.7% and 27.3% of the issued and outstanding voting
securities of HEALWELL, respectively, after the Transaction is
completed. Dr. George Christodoulou and Dr. Sven Grail are also
control persons of HEALWELL holding 16.5 million and 15.6 million
of the Class A Shares, respectively, and 15.4 million and 15.6
million of the Class B voting shares of HEALWELL, respectively,
representing 15.1% and 14.2% of the issued and outstanding voting
securities of HEALWELL, respectively.
There is also no voting trust or similar
agreement governing the issued and outstanding voting securities of
HEALWELL. The Transaction is expected to close on or about February
1, 2024.
Shareholder Approval and Regulatory
Considerations
Under the rules of the Toronto Stock Exchange
(“TSX”), the issuance of the Shares to WELL pursuant tothe
Transaction requires the approval of a majority of holdings of
voting securities of the Company, excluding shares held by WELL,
which is an interested party in respect of the Transaction,
specifically, as the Transaction is subject to the disinterested
shareholder approval requirements of (a) sections 604(a)(ii) and
611(b) of the TSX Company Manual as: (i) WELL is a related party of
the Company; and (ii) the value of the consideration paid to WELL
for the purchase of the shares of Intrahealth will be greater than
10% of the current market capitalization of the Company and the
number of securities issued or issuable to insiders of the Company
as a group, together with any securities issued or made issuable to
insiders as a group for acquisitions during the preceding six
months, in payment of the purchase price for the Transaction
exceeds 10% of the number of securities of the Company which are
outstanding on a non-diluted basis, prior to the date of closing of
the Transaction; and (b) section 611(c) of the TSX Company Manual
as the number of securities issued or issuable in payment of the
purchase price for the Transaction may exceed 25% of the number of
securities of the Company which are outstanding, on a non-diluted
basis. Shareholders representing a majority of the voting shares of
the Company have executed a written consent approving the
Transaction. The TSX has advised the Company that it will be
permitted to rely on that written consent of such shareholders 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.
Under Multilateral Instrument 61-101 Protection
of Minority Security Holders in Special Transactions (“MI
61-101”), the Transaction constitutes a “related party
transaction” because WELL holds more than 10% of the outstanding
Class A Shares of the Company. However, the Transaction is exempt
from the formal valuation and minority shareholder approval
requirements of MI 61-101 in reliance on the exemptions set forth
in sections 5.5(e) and 5.7(1)(c) of MI 61-101, as the Transaction
is supported by a control person of the Company in the
circumstances described in section 5.5(e) of MI 61-101.
Dr. Alexander DobranowskiChief Executive
OfficerHEALWELL AI Inc.
About HEALWELL
HEALWELL is a healthcare technology company
focused on AI and data science for preventative care. Its mission
is to improve healthcare and save lives through early
identification and detection of disease. As a physician-led
organization with a proven management team of experienced
executives, 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 TSX 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 and are based on assumptions, expectations,
estimates and projections as of the date of this press release.
Forward-looking statements in this press release includes without
limitation statements relating to the Transaction, including the
terms and conditions, closing date and impacts thereof; HEALWELL’s
anticipated benefits and synergies from the Transaction, including
Intrahealth’s expected 2024 revenues; HEALWELL’s future plans
including it’s ability to execute on its strategic goals, including
HEALWELL’s ability to identify and close acquisition targets and to
launch new AI commercial initiatives, the achievement of
profitability and revenue targets; HEALWELL’s future growth
prospects and business outlook; the planned growth of HEALWELL’s
customer base and the expected growth of operations, and the future
conditions of the healthcare and healthcare AI market. Readers are
cautioned to not place undue reliance on forward-looking
statements. Actual results and developments may differ materially
from those contemplated by these statements.
Forward-looking statements are often, but not
always, identified by words or phrases such as “to become”,
“improve”, “growth”, “ensuring”, “continue”, “anticipated”,
“expects”, “proceed”, “potential”, “future”, “consider”, “result
in”, “increase”, “deliver”, “emerging”, “is poised”, “plan”,
“position”, “opportunities”, “expansion”, “exercise”, “ensure”,
“achieve”, “acquire”, “complete”, “satisfy”, “entitle”, “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 satisfaction of any
additional conditions to the Transaction including, without
limitation, any future acceptance of the Transaction by the TSX or
securities commission and the receipt of any additional approvals
for the Transaction, including but not limited to any further
acceptance, any board approvals, shareholder approvals or third
party consents. Although HEALWELL’s management believes that the
assumptions made and the expectations represented by such
information are reasonable, there can be no assurance that the
forward-looking statements will prove to be accurate. 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 March 31, 2023, and in the preliminary short
form base shelf prospectus dated January 19, 2024, both of which
are 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. Further, these forward-looking statements
are made as of the date of this news release and, except as
expressly required by applicable law, 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. SanghaInvestor Relations, HEALWELL AI
Inc.Phone: 604-572-6392ir@healwell.ai
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