Mr. Hamed Shahbazi reports

Well HEALTH COMPLETES CLINIC ACQUISITION AND INVESTMENT TRANSACTIONS WITH HEALWELL AI INC. (FORMERLY MCI ONEHEALTH), AND FORMS STRATEGIC ALLIANCE FOCUSED ON DEVELOPING AI ENABLED DISEASE DETECTION AND PREVENTATIVE CARE TOOLS FOR CARE PROVIDERS

Well Health Technologies Corp. has completed the strategic transaction with Healwell AI Inc. (formerly MCI Onehealth Technologies Inc.). The transaction is composed of Well's purchase of Healwell's clinical assets in Ontario, Well's investment of $4-million as the lead investor in Healwell's private placement offering of convertible debenture units for gross proceeds of $10-million, the formation of a strategic alliance between Well and Healwell, and a conditional call option which would allow Well to purchase a controlling interest of Healwell from the prior MCI founders' multivoting shares.

Hamed Shahbazi, founder and chief executive officer of Well, commented: "Investing in and developing AI [artificial intelligence]-enabled tools and technologies for care providers is of core interest to Well. This is why we not only sought to invest in and support Healwell, but also acquire the conditional option to purchase a controlling stake in the company.

"With this transaction, Well amplifies its commitment to revolutionizing and positively impacting Canadian health care with secure and responsibly configured AI technologies. Together, Well and Healwell have the tools, the vision and the drive to navigate challenges and harness the power of innovation. We're setting the stage for a brighter, more efficient health care future."

Upon the successful completion of this transaction, Well fortifies its stature as a predominant entity in the Canadian health care landscape. This move amplifies Well's dual strengths -- its robust clinical prowess and its cutting-edge technological solutions. Not only does this transaction consolidate Well's position as Canada's premier health care clinic owner-operator, but it also accentuates its dedication to empowering health care providers through innovative AI and data-driven technologies, particularly those targeting preventative care.

The completion of this transaction will also welcome the following two Well representatives to Healwell's board: Mr. Shahbazi, chairman and CEO, and Erik Danudjaja, senior associate, corporate development and strategy. The inclusion of Well's leadership on the Healwell board combines a wealth of knowledge and vision, aimed at addressing the highly fragmented and underdigitized Canadian health care market. Both companies see a significant opportunity to bridge existing gaps and elevate patient outcomes through technology and innovation. This alliance underscores a mutual dedication to advancing the Canadian health care landscape, paving the way for a more integrated, dynamic and responsive system. For stakeholders and investors, this partnership is the beginning of a transformative shift in the way health care is delivered, championing a future that is more technologically adept and economically sustainable.

Strategic alliance agreement

Well has entered into a strategic alliance agreement with Healwell to accelerate the growth and development of Healwell's AI-enabled health care technologies. The agreement establishes a powerful framework for the two companies to harness their collective resources and expertise: Well gains access to Healwell's data analytics expertise, and the opportunity to deploy and licence Healwell's AI technologies, and Healwell gains access to Well's extensive clinic and physician network to drive growth, and enhance the experience of doctors and patients at Well's clinics.

Transaction details

Under an asset purchase agreement, Well acquired Healwell's performing clinics in Ontario, which are expected to generate annual revenue of more than $21-million and contribute to positive EBITDA (earnings before interest, taxes, depreciation and amortization) in fiscal year 2024.

On the closing of the transaction, Well paid: (i) $1.5-million cash for Healwell's clinical assets; (ii) $3.5-million in Well shares to the holders of The First Canadian Wellness Co. secured credit facilities; and (iii) $4-million in cash invested in Healwell as part of a convertible debenture financing with five-year maturity, 10-per-cent coupon, and convertible into Class A subordinate voting shares at a conversion price of 20 cents per share and five-to-one warrant coverage. Well becomes the largest shareholder of Healwell on an as-converted basis.

As part of the transaction, Well received an option to acquire up to 30.8 million Class A shares and 30.8 million Class B shares in Healwell over time and upon the achievement of certain performance metrics. If Well fully exercises this call option, Well is expected to control over 70 per cent of the vote of Healwell.

The short-term, secured promissory note for $3.1-million that Well provided Healwell, as previously announced on July 20, 2023, has been fully repaid.

About Well Health Technologies Corp.

Well's mission is to tech-enable health care providers. The company does this by developing the best technologies, services and support available, which ensures health care providers are empowered to positively impact patient outcomes. Well's comprehensive health care and digital platform includes extensive front-office and back-office management software applications that help physicians run and secure their practices. Well's solutions enable more than 31,000 health care providers between the United States and Canada and power the largest owned and operated health care ecosystem in Canada with more than 148 clinics supporting primary care, specialized care and diagnostic services. In the United States, Well's solutions are focused on specialized markets such as the gastrointestinal market, women's health, primary care and mental health.

About Healwell AI Inc.

Healwell AI is a health care technology and data science company focused on preventative medicine by leveraging AI and big datasets to empower patients and doctors with increased access, reduced costs and improved patient outcomes. Its vision is to improve health care and save lives through early identification and detection of disease. As a physician-led organization with a proven management team of experienced executives, Healwell AI is executing a strategy centred around acquiring technology and clinical sciences capabilities that complement the company's road map.

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