Mr. Harrison Ross reports

HEALTH LOGIC INTERACTIVE ANNOUNCES SIGNING OF LETTER OF INTENT TO ACQUIRE CHIPBRAIN, INC.

Health Logic Interactive Inc. has signed a non-binding letter of intent to acquire ChipBrain Inc., an established, commercial-stage artificial intelligence (AI) technology company that, through the use of real-time AI coaching and analytics, assists sales teams to increase company revenues and conversions and empowers managers to more effectively oversee and enhance their teams.

Mission and history

ChipBrain's mission is to provide any company with a sales function, a highly effective, easy-to-implement AI software solution to increase revenue, efficiency and morale.

ChipBrain's fully developed, market-ready AI software platform allows sales professionals to gauge, analyze and react to real-time customer interactions over video calls, voice calls, and text messaging/e-mailing and gives tailored sales strategies to the employee to increase sales conversions, and maximize upselling and cross-selling opportunities.

Outside of real-time, actionable sales advice, ChipBrain's technology is used to identify more leads and optimally strategize for follow-up. The time saved in these now automated interactions can be invested in higher-quality customer interactions, resulting in better customer retention.

For sales managers and companies as a whole, ChipBrain is used as a monitoring tool to intervene in the sales function if and when a problem with a customer develops, preventing costly customer losses. It is also utilized in situations where customer interactions or employee-to-employee interactions trigger warnings in the system that deems a certain employee may require retraining in a certain area, which could lower attrition rates.

ChipBrain's core technology and mission were developed by some of the earliest pioneers and brightest minds in the AI space. Several years ago, when AI was in its infancy, ChipBrain was born from a first-place win in the Harvard Business School MBA fund start-up competition. Later that year and partially as a result of the Harvard contest win, ChipBrain won an official partnership with Salesforce through the winning of Salesforce's Accelerator Executive Pitch Competition.

Team and founders

ChipBrain management and its founders include PhDs and academics from Harvard, Stanford and MIT (Massachusetts Institute of Technology). Early access to research and applied research at these institutions has allowed the seamless tech transfer from academia to commercial launch and now IPO (initial public offering).

Instrumental to the commercialization of this platform technology is one of ChipBrain's early advisers, John Fanning. Mr. Fanning was the founder of Napster, the first peer-to-peer music sharing platform. At its peak, Napster had 100 million users and a valuation of $20-billion (The Wall Street Journal).

Mr. Fanning has agreed to join the newly formed public company as an adviser and will lead a committee on talent acquisition to attract other business and technology leaders to the team. Mr. Fanning has also identified several potential AI targets to introduce as potential acquisitions after this translation is completed.

The composition of the management team, board of directors and advisory board of the newly formed public company will be announced in the press release that coincides with the definitive agreement on this acquisition.

Industry and opportunity

Generative AI is poised to unleash the next wave of global productivity -- and it is happening now. Global consulting firm McKinsey & Co. found from its research that 90 per cent of commercial leaders expect to utilize generative AI solutions often over the next two years. With a relatively small investment in AI, businesses can increase revenue 3 per cent to 15 per cent, according to the same firm.

McKinsey estimates the total addressable market (TAM) of generative AI to be in the range of $2.6-trillion to $4.4-trillion, annually. McKinsey estimates ChipBrain's serviceable addressable market (SAM) niche, generative AI for sales, to be $486-billion annually. ChipBrain's serviceable obtainable market (SOM) at 1 per cent could be worth $4.9-billion annually.

Several other AI-based sales and marketing tools appear to be on the market today, but Health Logic has specifically targeted ChipBrain for acquisition over other targets because:

• The competitors generally lack a proprietary data set to add any value to potential clients.
• They offer a micro feature that does not provide a solution but rather a plug-in-type application that really does not benefit the sales funnel.
• The majority of companies in the AI sales/marketing space are really just ChatGPT with a skin layered on top.

ChipBrain's robust database and proprietary, stand-alone technology was built over several years by some of the brightest in the industry. This head start provides a durable competitive advantage providing the best possible target for Health Logic's current and prospective shareholders in the AI space.

Post-IPO planning and strategy

Health Logic's Board has determined, based on current market conditions for AI-related companies, that it is an optimal time to move forward with this transaction and additional investments into the space.

According to the LOI, the company will undertake a capital raise at a to-be-determined size and valuation concurrently with that definitive agreement. The capital will be used to finance ChipBrain's growth initiatives, including sales and marketing, to start commercial sales of its market-ready product, key hires and general corporate purposes.

Health Logic and Mr. Fanning, one of the founders of ChipBrain, are exploring additional licensing and acquisitions opportunities to support the goal of being an AI leader.

Next steps

The signing of the LOI initiates a period of detailed due diligence by both companies to evaluate the merits and risks of the transaction. Upon satisfactory review, a definitive agreement is drafted detailing the specifics of the anticipated transaction, including terms, share exchange ratios, closing conditions, plans for financing and other important details regarding the transaction. Subsequently, necessary disclosure documents are prepared and submitted to the TSX Venture Exchange. If required, existing shareholders may be asked to vote on the transaction. The TSX-V then conducts a regulatory review, and, once approved, the transaction is finalized, leading to the new entity being listed for trading.

Throughout this process, transparency is paramount. The company will issue press releases at significant milestones, ensuring investors are continually informed. After the transaction, the resulting entity is obligated to maintain continuing disclosures as mandated by the TSX-V and securities regulators, ensuring consistent updates on financial and operational developments. The proposed acquisition of an AI-focused company highlights the company's continual dedication to incubating innovative technologies after its most recent technology exit with the sale of the company's lab-on-chip subsidiary.

About ChipBrain Inc.

Founded by MIT and Harvard graduates, ChipBrain designs the world's best communication assistance AI to empower people with augmented empathy and persuasion in conversations. ChipBrain is inventing a world where people from different backgrounds can more easily relate to one another.

About Health Logic Interactive Inc.

Health Logic Interactive is a public entity on the NEX board of the TSX-V and intends to pursue its search for new assets to develop and make an application to the TSX-V for a reactivation to Tier 2 of the TSX-V from the NEX. The reactivation will be subject to meeting all continued listing requirements of Tier 2 of the TSX-V.

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