VANCOUVER, BC, Feb. 1, 2024
/PRNewswire/ - WELL Health Technologies Corp. ("WELL"), of
550-375 Water Street, Vancouver,
B.C., V6B 5C6, issues this press release as required by
National Instrument 62-103 – The Early Warning System and
Related Take-Over Bid and Insider Reporting Issues and National
Instrument 62-104 – Take Over Bids and Issuer Bids with
respect to the acquisition of securities in HEALWELL AI Inc. (the
"Company"), of 4881 Yonge Street, Suite 300, Toronto, Ontario, M2N 5X3.
On January 25, 2024, the Company
and WELL entered into a share purchase agreement (the
"SPA"), pursuant to which WELL agreed to sell all of the
issued and outstanding shares of its subsidiary, Intrahealth
Systems Limited ("Intrahealth"), to the Company for total
consideration of approximately $24.2
million (the "Transaction").
On February 1, 2024 (the
"Closing Date"), the Company and WELL closed the
Transaction (the "Closing"). Upon Closing, Intrahealth
became a wholly-owned subsidiary of the Company and WELL received
consideration comprised of: (i) approximately $3,600,000 paid in cash; (ii) 21,682,465 Class A
subordinate voting shares of the Company (each, a "Class A
Share"); (iii) a deferred purchase amount of $641,667 ("Deferred Purchase Amount"),
which, at the discretion of the Company, may be satisfied by
issuing Class A Shares to WELL at a price which is equal to the
volume weighted average trading price of the Class A Shares (the
"VWAP") on the Toronto Stock Exchange (the "TSX").
The VWAP will be calculated by dividing the total value by the
total volume of the Class A Shares traded on the TSX for the five
trading days immediately preceding the applicable date; and (iv)
five unsecured, non-interest bearing, convertible promissory notes
in the principal amount of $1,000,000
each for an aggregate principal amount of $5
million (the "Notes"). The Notes incur default
interest of 18% per annum. The maturity date of the Notes (the
"Maturity Date") are staged to become due in two month
intervals (due on the first day of the month that is the second,
fourth, sixth, eighth, and tenth month from the Closing Date
respectively). Notwithstanding the foregoing, WELL may elect, in
its sole discretion, to extend the maturity date of any or all
Notes by an additional 60 days upon notice to the Company. The
payment date of the Deferred Purchase Amount is contingent upon the
occurrence of certain payment obligations of WELL under a share
purchase agreement between WELL and the former shareholders
of Intrahealth dated as of March 7,
2021 which becomes due in May
2024.
At any time before five business days from the Maturity Date of
a particular Note, WELL may elect, in its sole discretion, to
convert on the Maturity Date all or any portion of the Note into
such number of Class A Shares by the conversion price which is
equal to the VWAP on the TSX. The VWAP will be calculated by
dividing the total value by the total volume of the Class A Shares
traded on the TSX for the five trading days immediately preceding
the applicable date.
Immediately prior to the Closing and exclusive of the Call
Option (as defined below), WELL directly owned and controlled
41,270,833 Class A Shares, comprised of: (i) 958,333 Class A Shares
held directly, (ii) 20,000,000 Class A Share purchase warrants
(each, a "Warrant") held directly, each of which is
exercisable into one Class A Share a price of $0.20 per Class A Share until October 1, 2028, (iii) 312,500 Warrants held
directly, each of which is exercisable into one Class A Share at a
price of $1.20 per Class A Share
until December 22, 2026, and (iv)
$4,000,000 principal amount
convertible debentures (the "Convertible Debentures")
held directly, convertible into Class A Shares at a price of
$0.20 per Class A Share at any time
or from time to time, prior to October 1,
2028, or 20,000,000 Class A Shares (this amount is exclusive
of any Class A Shares issuable upon conversion of interest of the
Convertible Debentures). Immediately prior to the Closing,
87,986,790 Class A Shares were issued and outstanding and WELL's
Class A Shares represented approximately 1.09% of the Company's
issued and outstanding Class A Shares on a non-diluted basis and
approximately 32.17% on a partially-diluted basis.
Immediately subsequent to the Closing and exclusive of the Call
Option, WELL directly owned and controlled 64,352,290 Class A
Shares, comprised of: (i) 22,640,798 Class A Shares held directly,
(ii) 20,000,000 Warrants held directly, each of which is
exercisable into one Class A Share a price of $0.20 per Class A Share until October 1, 2028, (iii) 312,500 Warrants held
directly, each of which is exercisable into one Class A Share at a
price of $1.20 per Class A Share
until December 22, 2026, (iv)
$4,000,000 in Convertible Debentures
held directly, convertible into Class A Shares at a price of
$0.20 per Class A Share at any time
or from time to time, prior to October 1,
2028, or 20,000,000 Class A Shares (this amount is exclusive
of any Class A Shares issuable upon conversion of interest of the
Convertible Debentures), and (v) the Notes in the principal amount
of $5,000,000, of which, $1,000,000 of the principal amount is convertible
into 1,398,992 Class A Shares within 60 days of this Report based
on a VWAP of $0.7148. Immediately
subsequent to the Closing, 109,669,255 Class A Shares were issued
and outstanding and the WELL's Class A Shares represented
approximately 20.64% of the Company's issued and outstanding Class
A Shares on a non-diluted basis and approximately 42.51% on a
partially-diluted basis.
In addition to the above, on October 1¸ 2023, WELL and the
Company's founding shareholders, Dr. Sven
Grail ("Dr. Grail") and Dr. George Christodoulou ("Dr.
Christodoulou"), entered into a call option agreement (the
"Call Option Agreement"), under which WELL was granted a
call option (the "Call Option") to acquire up to 30.8
million Class A Shares and 30.8 million Class B Multiple Voting
Shares ("Class B Shares") of the Company from Dr. Grail and
Dr. Christodoulou collectively. Dr. Grail owns 15.4 million Class A
Shares and 15.4 million Class B Shares of the shares subject to the
Call Option and Dr. Christodoulou owns the remaining 15.4 million
Class A Shares and 15.4 million Class B Shares subject to the Call
Option (together, the "Optioned Shares"). The Call Option is
exercisable until October 1, 2026 and
its exercise is conditional on the achievement by the Company of a
number of performance milestones designed to demonstrate
improvements in the Company's financial and capital markets
performance, as well as obtaining any required Exchange or
regulatory approvals. The Call Option can only be exercised in
pairs, such that WELL must concurrently acquire a Class A Share and
a Class B Share.
Additional information with respect to the Call Option Agreement
and its material terms can be found in WELL's early warning report,
and in the Company's Notice of Meeting and Management Information
Circular dated August 21, 2023 which
is available on sedarplus.ca.
Immediately subsequent to the Closing, if the Call Option were
to be fully exercised and all of the Optioned Shares were acquired
by WELL, WELL would own, or exercise control or direction over,
95,152,290 Class A Shares and 30,800,000 Class B Shares,
representing 62.86% of the Company's currently issued and
outstanding Class A Shares and 100% of the currently issued and
outstanding Class B Shares. This is on a partially diluted basis
assuming the conversion of all Convertible Debentures, $1,000,000 of the principal amount of Notes
(convertible into 1,398,992 Class A Shares within 60 days of this
Report based on a VWAP of $0.7148)
and exercise of all Warrants held by WELL.
The Class A Shares and the Note were acquired for investment
purposes. WELL intends to monitor the business and affairs of the
Company, including its financial performance, and depending upon
these factors, market conditions and other factors, additional
securities of the Company may be acquired as is considered or
deemed appropriate. Alternatively, some or all of the securities
described herein may be disposed of in compliance with applicable
securities regulatory requirements.
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SOURCE WELL Health Technologies Corp.