Dr. Alexander Dobranowski reports

HEALWELL COMPLETES ACQUISITION OF ORION HEALTH, BECOMING A GLOBAL LEADER IN HEALTHCARE DATA INTEROPERABILITY AND ARTIFICIAL INTELLIGENCE

Healwell AI Inc. has acquired all of the ordinary shares of Orion Health Holdings Ltd., a global health care intelligence platform serving marquee public-sector clients, for total consideration of approximately $175-million (New Zealand) plus a performance-based earnout of up to a further $25-million (New Zealand), in accordance with the share purchase agreement dated Dec. 16, 2024, as amended, among the company, Healwell New Zealand Ltd., Orion Health, McCrae International Ltd. and McCrae Ltd.

Highlights:

• Healwell has acquired Orion Health (based in Auckland, New Zealand) a global health care intelligence platform providing subscription licences and services to marquee public-sector clients with data interoperability and health care navigation products.
• Orion Health has approximately 400 employees with offices in 11 countries globally. Its software solutions currently support over 70 public-sector and private-sector customers, representing 150 million patient lives around the world.
• Healwell will utilize Orion's global health systems and deploy its best-in-class AI (artificial intelligence) technology products to deliver actionable insights and drive better health care outcomes, deepening its public-sector penetration and supporting Orion Health's long-standing government relationships.
• The acquisition was funded through approximately $55-million from subscription receipts financings and up to $50-million in senior bank debt provided by two Canadian chartered banks.
• Ian Richard McRae, founder of Orion Health, was appointed to the board of Healwell on closing.

Dr. Alexander Dobranowski, chief executive officer of Healwell, commented: "We are thrilled to welcome Orion Health to the Healwell family and are excited at the potential of creating a powerhouse of innovation that will deliver actionable insights and drive better health care outcomes globally. The acquisition of Orion Health represents a transformative milestone for the company, bringing large enterprise customers, recurring revenues, strong operating margins and free cash flow conversion to Healwell while providing a significant new channel for the distribution of our best-in-class AI products. In addition, the acquisition strengthens our position in the public sector, enabling us to deepen our reach with government partners, thanks to Orion Health's strong, long-standing relationships. With the added synergies from Well Health, we are poised to transform health care through AI and data-driven innovation."

Brad Porter, chief executive officer of Orion Health, commented: "We are delighted to be joining forces with Healwell and delivering on our combined mission of revolutionizing health care through AI and data-driven innovation. AI-driven insights have the potential to revolutionize how health care providers interact with data, leading to improved decision making, better patient outcomes and more efficient care delivery. By leveraging Healwell's expertise in AI and Orion Health's R&D [research and development] in New Zealand, we will enhance our Virtuoso and Amadeus platforms, ensuring health care organizations worldwide have access to the most advanced tools for care coordination and population health management. We are truly excited with the potential of our combined platforms and capabilities and look forward to the bright future ahead."

The acquisition of Orion Health provides new opportunities for global health systems to access Healwell's best-in-class AI technology delivering actionable insights and driving better health care outcomes. It unlocks substantial revenue synergy potential as well as improved operational efficiencies and cost savings through shared services with Well Health Technologies Corp. Collectively, these advantages strengthen Healwell's financial profile, creating a larger, scalable business with substantial growth and value creation potential.

Transaction details

The purchase price for the transaction was approximately $175-million (New Zealand) plus a performance-based earnout of up to a further $25-million (New Zealand). Approximately $105-million (New Zealand) was paid in cash and an additional $70-million (New Zealand) (converted into Canadian dollars) was paid through the issuance of 35,643,478 Class A subordinate voting shares at an agreed-upon price of $1.61 per share, of which 78.6 per cent of such shares are subject to certain voluntary resale and trading restrictions.

The earnout is a three-year performance-based earnout of up to $25-million (New Zealand), with up to 50 per cent of the amount payable, at the vendor's option, in shares based on the 10-day VWAP (volume-weighted average price) of the shares prior to the applicable payment date. The earnout is contingent upon Orion Health's ability to achieve normalized EBITDA (earnings before interest, taxes, depreciation and amortization) (as calculated in the agreement) greater than $20-million (New Zealand) for each 12-month period.

The purchase price was partially financed through a subscription receipt equity offering of approximately $25.5-million at a price of $2 per subscription receipt and a subscription receipt convertible debt offering of approximately $27.3-million at a price of $910 per debt subscription receipt, both of which were co-led by Eight Capital and Scotia Capital Inc., as lead underwriters and joint bookrunners, together with a syndicate of underwriters. On closing of the transaction: (i) the subscription receipts from the equity offering converted into 12,737,500 units of the company, with each unit entitling the holder thereof to one share and one-half of one share purchase warrant, with each whole warrant exercisable at a price of $2.50 for a period of 36 months following the closing of the equity offering; and (ii) the subscription receipts from the debt offering converted into 30,000 convertible debentures in the principal amount of $1,000, each bearing interest at a rate of 10 per cent per year, payable semi-annually in arrears and maturing on Dec. 31, 2029, all without any further action required on the part of the subscription receipt holders. The principal amount under the convertible debentures is convertible into shares at a conversion price of $2.40 per share.

In addition, the purchase price was financed in part by a senior credit facility for an amount of up to $50-million. The facility was provided by a syndicate of banks led by Bank of Nova Scotia and inclusive of Royal Bank of Canada and documented by way of a credit agreement dated March 4, 2025. The credit agreement matures on March 4, 2028. Security for the credit facility comprises security over all present and after-acquired property of each obligor under the credit agreement. The terms of the credit agreement are customary for a transaction of this nature.

Following the closing of the transaction and equity offering, there were 261,547,371 shares issued and outstanding on a non-diluted basis (339,778,565 shares issued and outstanding on a fully diluted basis).

In connection with the transaction, the company granted the vendor a right to nominate a single member of the board of directors of the company for so long as the vendor (including any affiliates) holds over 66.7 per cent of the shares issued to the vendor on closing of the agreement (the threshold share percentage). Well Health has also entered into a voting support agreement to vote its shares in favour of the appointment of the vendor's nominee so long as the vendor holds the threshold share percentage.

New directors

The company is excited to announce that it has expanded its board of directors through the appointment of Mr. McCrae and has appointed Tina Raja and Sam Englebardt as directors of the company following the resignations of Bashar Al-Rehany and Kingsley Ward. The company thanks Mr. Al-Rehany and Mr. Ward for their services and wishes them success in their future endeavours. Following these changes, the company's board now comprises six directors.

Mr. McCrae

Mr. McCrae is the founder of Orion Health and sole vendor in the transaction. He previously worked as a scientist for the New Zealand Department of Scientific and Industrial Resource before later completing a master in engineering sciences. Mr. McCrae went on to work for Imagineering and Ernst & Young before founding Orion Health in 1993. In 2010, Mr. McCrae received a World Class New Zealander award and in 2014 Orion Health became the first company to win the New Zealand Supreme Hi-Tech Company of the Year for the second time. In 2023, Mr. McCrae was inducted as a Flying Kiwi into the New Zealand Hi-Tech Hall of Fame.

Ms. Raja

Ms. Raja most recently served as a partner and the head of business development and capital formation at 26North Partners -- a next-generation, multiasset-class investment platform. Prior to this, she served as a managing director at Blackstone in the tactical opportunities group, where she led European business development and investor relations across tactical opportunities, growth equity and insurance solutions. Previously, she also served as head of co-investments and investor relations at Gemcorp Capital LLP, starting in 2015. Ms. Raja began her career in 2008 as an analyst at Goldman Sachs.

Raised in London, Ms. Raja earned a BA (honours) in economics from the University of Nottingham. In 2017, Ms. Raja was recognized in the inaugural Europe Forbes 30 under 30 list for her contributions to the finance industry. She also serves as a young advisory director on the board for the Metropolitan Opera and the Global Council of the American Ballet Theatre.

Mr. Englebardt

Mr. Englebardt is a media and technology investor and content producer who is a co-founder and partner at Galaxy Digital Holdings Ltd., a publicly traded merchant bank focused on the institutionalization of digital assets. Mr. Englebardt is also the founding general partner of Galaxy's interactive division. Now investing from its third venture fund, with over $800-million of AUM (assets under management), Galaxy Interactive invests in opportunities resulting from the convergence of people's digital and physical lives, including health care. Prior to Galaxy Digital, Mr. Englebardt was a partner and managing director at Lambert Media Group (LMG) from 2007 to 2016, where he sourced and managed a portfolio of media-sector private equity investments, including Rave Cinemas (sold to Cinemark in 2013). In addition to several private boards, Mr. Englebardt is on the board of directors of iHeart Media.

Mr. Englebardt earned his JD from Harvard Law School and studied philosophy, political science and economics at Oxford University and the University of Colorado at Boulder, from which he graduated summa cum laude and Phi Beta Kappa.

Early warning report disclosure

This press release is also being issued pursuant to National Instrument 62-103, The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, in connection with the issuance of the shares to the vendor and McCrae International. In connection with the issuance, McCrae International will file, together with the vendor and Mr. McCrae (the sole shareholder of the vendor and McCrae International) as joint actors, an early warning report pursuant to NI 62-103 with the securities regulators in each of the provinces of Canada with respect to the foregoing matters, a copy of which will be available under the company's profile on SEDAR+. A copy of early warning report may also be obtained by contacting Luke Hills at luke.hills@gowlingwlg.com

Immediately prior to the closing, the vendor parties did not beneficially own, directly or indirectly, or exercise control or direction over, any shares or any securities convertible into or exercisable for shares. Immediately following the closing, the vendor parties acquired beneficial ownership, directly or indirectly, or exercised control or direction, over an aggregate of 35,643,478 shares (representing approximately 13.6 per cent of the issued and outstanding shares on a non-diluted basis and 6.6 per cent of the voting rights attached to the shares and Healwell's Class B multiple voting shares, based on 261,547,371 shares and 30.8 million multiple voting shares outstanding immediately following the closing), such aggregate shareholdings comprising:

• 32,079,130 shares (representing approximately 12.3 per cent of the issued and outstanding shares on a non-diluted basis and 5.9 per cent of the voting rights attached to the shares and multiple voting shares, based on 261,547,371 shares and 30.8 million multiple voting shares outstanding immediately following the closing) being beneficially owned by McCrae International;
• 3,564,348 shares (representing approximately 1.4 per cent of the issued and outstanding shares on a non-diluted basis and 0.7 per cent of the voting rights attached to the shares and multiple voting shares, based on 261,547,371 shares and 30.8 million multiple voting shares outstanding immediately following the closing) being beneficially owned by the vendor.

The vendor parties acquired the shares in partial satisfaction of the purchase price in connection with the transaction and will hold the shares for investment purposes. The vendor parties intend to review its investment in Healwell on a continuing basis and may, from time to time and at any time, and depending on market and other conditions, acquire or dispose of equity, debt or other securities of Healwell through open-market transactions, private placements and other privately negotiated transactions, or otherwise, in each case, depending on a number of factors, including general market and economic conditions and other factors and conditions the vendor parties deem appropriate, including the contractual resale restrictions applicable to the vendor parties' shares.

The vendor is a party incorporated under the laws of New Zealand with a registered address of care of Baker Accounting Ltd., 208 Ponsonby Rd., Ponsonby, Auckland, 1011, New Zealand. McCrae International is a party incorporated under the laws of New Zealand with a registered address of care of Baker Accounting, 208 Ponsonby Rd., Ponsonby, Auckland, 1011, New Zealand.

Other information

J.P. Morgan acted as financial adviser to Healwell in addition to Eight Capital and Scotia Capital, which co-led the company's bought deal subscription receipt financing. Cozen O'Connor LLP (mergers and acquisitions), Gardiner Roberts LLP (equity financing), MinterEllisonRuddWatts (New Zealand), Norton Rose Fullbright LLP (international due diligence), and Blakes Cassels & Graydon LLP (financial services) acted as legal advisers to Healwell and KPMG LLP (New Zealand) acted as tax adviser to Healwell.

Gowling WLG (Canada) LLP and Bell Gully Services Ltd. acted as legal advisers to Orion Health. Deloitte New Zealand acted as tax adviser to Orion Health.

For more information on the transaction, please see the company's news releases dated Dec. 16, 2024, Dec. 17, 2024, Jan. 14, 2025, Jan. 21, 2025, Jan. 28, 2025, and Feb. 10, 2025, available on SEDAR+.

For more information on the equity offering and the debt offering, please see the company's news releases dated Jan. 21, 2025, and Jan. 28, 2025, respectively.

About Healwell

Healwell is a health care artificial intelligence company focused preventive care. Its mission is to improve health care and save lives through early identification and detection of disease. Using its own proprietary technology, Healwell is developing and commercializing advanced clinical decision support systems that can help health care providers detect rare and chronic diseases, improve efficiency of their practice, and ultimately help improve patient health outcomes. Healwell is executing a strategy centred around developing and acquiring technology and clinical sciences capabilities that complement the company's road map. Healwell is publicly traded on the Toronto Stock Exchange under the symbol AIDX and on the OTC (over-the-counter) exchange under the symbol HWAIF.

About Orion Health Holdings Ltd.

Orion Health is a global health care technology company focused on reimagining health care for all. Orion Health is leading the change in digital health with health and care organizations to improve the well-being of every individual with its world-leading unified health care platform, made up of the Virtuoso digital front door, Amadeus digital care record and Orchestral health intelligence platform -- each underpinned by extensive health and social data sets, machine learning, and 30 years of innovation focused purely on improving global well-being.

We seek Safe Harbor.