An anonymous director reports

WELL HEALTH TECHNOLOGIES CORP. EARLY WARNING NEWS RELEASE

Well Health Technologies Corp. has issued 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.

On Jan. 25, 2024, the company and Well entered into a share purchase agreement, pursuant to which Well agreed to sell all of the issued and outstanding shares of its subsidiary, Intrahealth Systems Ltd., to the company for total consideration of approximately $24.2-million.

On Feb. 1, 2024, the company and Well closed the transaction. Upon closing, Intrahealth became a wholly owned subsidiary of the company, and Well received consideration composed of: (i) approximately $3.6-million paid in cash; (ii) 21,682,465 Class A subordinate voting shares of the company; (iii) a deferred purchase amount of $641,667, 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 on the Toronto Stock Exchange. 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-million each for an aggregate principal amount of $5-million. The notes incur default interest of 18 per cent per annum. The maturity date of the notes 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 10th 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 become 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, composed of: (i) 958,333 Class A shares held directly; (ii) 20 million Class A share purchase warrants held directly, each of which is exercisable into one Class A share a price of 20 cents per Class A share until Oct. 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 Dec. 22, 2026; and (iv) $4-million principal amount of convertible debentures held directly, convertible into Class A shares at a price of 20 cents per Class A share at any time or from time to time prior to Oct. 1, 2028, or 20 million 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 per cent of the company's issued and outstanding Class A shares on a non-diluted basis and approximately 32.17 per cent 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, composed of: (i) 22,640,798 Class A shares held directly; (ii) 20 million warrants held directly, each of which is exercisable into one Class A share at a price of 20 cents per Class A share until Oct. 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 Dec. 22, 2026; (iv) $4-million in convertible debentures held directly, convertible into Class A shares at a price of 20 cents per Class A share at any time or from time to time prior to Oct. 1, 2028, or 20 million 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-million, of which $1-million of the principal amount is convertible into 1,398,992 Class A shares within 60 days of this report based on a VWAP of 71.48 cents. Immediately subsequent to the closing, 109,669,255 Class A shares were issued and outstanding and Well's Class A shares represented approximately 20.64 per cent of the company's issued and outstanding Class A shares on a non-diluted basis and approximately 42.51 per cent on a partially diluted basis.

In addition to the above, on Oct. 1 2023, Well and the company's founding shareholders, Dr. Sven Grail and Dr. George Christodoulou, entered into a call option agreement, under which Well was granted a call option to acquire up to 30.8 million Class A shares and 30.8 million Class B multiple voting 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. The call option is exercisable until Oct. 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 market 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 Aug. 21, 2023, which is available on SEDAR+.

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 30.8 million Class B shares, representing 62.86 per cent of the company's currently issued and outstanding Class A shares and 100 per cent of the currently issued and outstanding Class B shares. This is on a partially diluted basis assuming the conversion of all convertible debentures and $1-million 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 71.48 cents) and the 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 considered or deemed appropriate. Alternatively, some or all of the securities described herein may be disposed of in compliance with applicable securities regulatory requirements.