AIDX HealWell AI Inc

HEALWELL AI Inc. (“HEALWELL” or the “Company”) (TSX: AIDX, OTCQX: HWAIF), a healthcare artificial intelligence company focused on preventative care, is pleased to announce that it has entered into an agreement to acquire 100% of the shares of Auckland, New Zealand based Orion Health Holdings Limited, a subscription license and services revenue business serving marquee public sector clients globally with data interoperability and healthcare navigation products and services after the concurrent divestiture of Orion Health’s divisions that are non-strategic to HEALWELL, for total consideration of $200m NZD or $165m CAD (the “Transaction”). The acquisition of Orion Health and concurrent divestment of non-strategic divisions will represent a transformative milestone in HEALWELL’s journey to become a global leader in healthcare technology and artificial intelligence. Orion Health is expected to generate revenue of more than $100m CAD with EBITDA2 of over $20m CAD in calendar 2025.

Orion Health is a leader in global healthcare technology, with over 70 worldwide customers in 11 countries. This acquisition will provide HEALWELL with a significant muti-jurisdictional platform to deliver its best-in-class AI-driven solutions by integrating them with Orion Health’s advanced healthcare data infrastructure capabilities. Orion Health’s software solutions currently serve a population approaching 150 million lives globally; which will materially expand HEALWELL’s footprint to execute against its mission of early disease detection.  

“The Acquisition of Orion Health is a major game-changer in the development of HEALWELL’s trajectory as a company,” said Hamed Shahbazi, Chairman of HEALWELL. “Orion Health brings significant large enterprise customers, recurring revenues, strong operating margins and free cashflow conversion to HEALWELL while providing a significant new channel for the distribution of its best-in-class AI products and services. Our organisations share a vision and mission to revolutionize healthcare through AI and data-driven innovation. This transaction will singlehandedly propel HEALWELL into being a profitable and cash generative company while providing significant new opportunities for its future capital allocation and M&A strategy.”

Orion Health is a global leader in the development and deployment of data management platforms at scale, delivering healthcare information intelligence through their advanced Virtuoso Digital Front Door (DFD) and Amadeus Digital Care Record (DCR) platforms. Their ability to aggregate data from multiple sources and knit it together for healthcare practitioners to have seamless data flow across multiple complex health systems benefits patients but also delivers population scale data.

These platforms have won Orion Health long-term contracts in some of the largest countries and regions globally. Australia and New Zealand, the NHS in the UK and North America are their strongest markets with Canada being their largest regional market. The Province of Ontario is implementing both the DCR and DFD solutions while the Province of Alberta has been a DCR customer for more than 20 years. Orion Health’s Amadeus and Virtuoso platforms are expected to become key drivers of HEALWELL’s future growth.

Founder and majority shareholder of Orion Health, Ian McCrae commented, “Innovation is in Orion Health’s DNA and HEALWELL inherits two world-class market-leading solutions in Amadeus and Virtuoso. HEALWELL, with the resources they have, will take these solutions to a new level of excellence. HEALWELL’s commitment to maintaining and investing in R&D in New Zealand was of huge importance for me. We’re writing a new chapter in Orion Health’s history and HEALWELL is the right organisation to take it to the next level and deliver better healthcare experiences for all.”

Amadeus is a Digital Care Record (DCR) platform that consolidates patient data across care settings, enabling enhanced care coordination and population health management. Virtuoso is a Digital Front Door (DFD) platform that offers an integrated patient and population engagement platform, enabling end-to-end healthcare navigation and management.

Both Amadeus and Virtuoso platforms are trusted by governments, health systems, and commercial payers worldwide and bring proven capabilities to streamline healthcare workflows, reduce clinician burnout, and improve health equity.

In Canada, its 20+ year partnership with Alberta Netcare stands out as one of Orion Health’s largest DCR implementations, integrating data from over 120 clinical sources to create unified patient records. This system, with more than 1.2 billion clinician screen views and 70,000 clinical users, enhances e-referrals and clinician collaboration across care settings. In Ontario, the Virtuoso platform underpins the province’s “digital-first” health policy by supporting Ontario Health 811, a scalable portal that provides 24/7 health advice to 15 million users, reducing emergency care pressures while connecting patients to digital care.

Dr. Alexander Dobranowski, CEO of HEALWELL, commented, “We are very pleased to welcome the skilled and talented Orion Health team to HEALWELL. Together we will deliver on our combined mission to revolutionize healthcare through AI and data-driven innovation. The integration of Amadeus and Virtuoso will position HEALWELL as a global leader in healthcare technology and artificial intelligence. These platforms will enable us to deliver unparalleled solutions that drive efficiency, improve patient outcomes, and empower healthcare providers worldwide. We look forward to completing the transaction and delivering long-term value to our customers, partners, and stakeholders together, as we redefine what’s possible in healthcare.”

The acquisition of Orion Health will provide opportunities for global health systems to access HEALWELL’s best-in-class AI technology to deliver actionable insights and drive better healthcare outcomes. It also significantly scales HEALWELL’s platform by deepening its penetration into the public sector, supported by Orion Health’s long-standing government relationships and broader customer base. Moreover, the acquisition will unlock substantial revenue synergy potential, as well as improved operational efficiencies and cost savings through shared services with WELL Health Technologies Corp., HEALWELL’s largest investor and strategic partner. Collectively, these advantages will strengthen HEALWELL’s financial profile, creating a larger, scalable business with substantial growth and value-creation potential.

Brad Porter, CEO of Orion Health commented, “This is a transformational moment in Orion Health’s history, strengthening its position as a world leader in population health management and combining it with the powerful AI capabilities of HEALWELL. Joining the HEALWELL family will make Orion Health stronger than ever, creating significant momentum. We anticipate that 2025 will be one of our best and most profitable years to date. There is so much potential with our combined capabilities to meet unmet health needs in ways that could be game-changing for the health of entire communities. When we link up data and insights with AI-assisted action, we will see data saving lives on a scale not seen before. It’s truly exciting.”

Transaction Overview

HEALWELL will acquire 100% of the shares of Orion Health, following the concurrent divestiture of Orion Health’s non-strategic assets, for an aggregate purchase price of $175 million NZD plus a performance based earnout of up to a further $25 million NZD. On closing, HEALWELL will satisfy the purchase price of $144 million CAD with a combination of $86 million CAD in cash and $57.4 million CAD in HEALWELL Class A Subordinate Voting shares (“Shares”) priced with reference to the related financing. The Transaction is expected to close on or before April 1st, 2025 subject to regulatory approval, approval from the Toronto Stock Exchange (the “Exchange”), divestment of the non-strategic assets, and exercise of a call option to consolidate minority share positions in Orion Health with the major shareholder. The purchase price is expected to be financed through a combination of up to $50 million CAD in senior bank debt provided by a Canadian Schedule I bank and the net proceeds of the Offering. The $57.4 million CAD of equity issued as part of the purchase price will be issued at a deemed price of $1.61 per share.

The Offering will be completed on a “bought deal” private placement basis and will be co-lead by Eight Capital and Scotiabank, on behalf of a syndicate of underwriters (the “Underwriters”). The Offering will consist of: (i) 10,000,000 subscription receipts of the Company (the “Subscription Receipts”) at a price of $2.00 per Subscription Receipt; and (ii) 31,250 convertible debentures of the Company (the “Convertible Debentures”) by way of private placement on a “bought deal” basis at a price per Convertible Debenture of $960, for total gross proceeds of $50,000,000.

The Convertible Debentures will be issued with a 4% original issue discount and will be convertible into Shares at a price of $2.40 per Share. The Company may force the conversion of all of the principal amount of the then outstanding Convertible Debentures at a price of $2.40 per Share on not less than 30 days’ notice should, at any time following the date that is 4 months and 1 day following the issue date, the daily volume weighted average trading price of the Shares be greater than $3.85 for any 10 consecutive trading days.

The Convertible Debentures will bear interest at the rate of 10% per annum, payable semi-annually in arrears on June 30 and December 31 of each year, beginning on June 30, 2025. The Convertible Debentures will mature on December 31, 2029, unless earlier repurchased, redeemed, or converted in accordance with their terms.

The Convertible Debentures will not be redeemable at the Company’s option prior to December 31, 2027. On or after January 1, 2028, the Convertible Debentures will be redeemable at the Company’s option, in whole or in part, at a price equal to 110% of the principal amount of the Convertible Debentures to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

Each Subscription Receipt will entitle the holder thereof to receive, upon satisfaction of the Release Conditions (as defined below), for no additional consideration, one unit of the Company consisting of 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 Offering.

The gross proceeds of the Subscription Receipt portion of the Offering, less 50% of the Underwriters’ cash commission (as described below) and certain expenses of the Underwriters, will be deposited in escrow on closing of the Offering until the satisfaction of certain release conditions, including that all conditions precedent to the Transaction have been met (the “Release Conditions”). In the event that the Release Conditions have not been satisfied prior to 5:00 p.m. (Vancouver Time) on June 30, 2025, or the Company advises the Underwriters or announces to the public that it does not intend to satisfy the Release Conditions or that the Transaction has been terminated, the aggregate issue price of the Subscription Receipts (plus any interest earned thereon) shall be returned to the applicable holders of the Subscription Receipts, and such Subscription Receipts shall be automatically cancelled and be of no further force and effect.

The Company has granted the Underwriters an option to offer for sale up to an additional 15% of the Subscription Receipts, exercisable in whole or in part at any time for a period of up to 48 hours prior to the closing date.

Completion of the Offering will be subject to various conditions, including the approval of the Exchange. As the Transaction and Offering will exceed 25% of the number of HEALWELL’s current issued and outstanding shares, HEALWELL is required to obtain shareholder approval from shareholders holding at least a majority of the voting power of the Company.

J.P. Morgan acted as financial advisor to HEALWELL on the acquisition.

Dr. Alexander Dobranowski Chief Executive OfficerHEALWELL AI Inc.

About HEALWELL

HEALWELL is a healthcare artificial intelligence company focused preventative care. Its mission is to improve healthcare and save lives through early identification and detection of disease. Using its own proprietary technology, the Company is developing and commercializing advanced clinical decision support systems that can help healthcare providers detect rare and chronic diseases, improve efficiency of their practice and ultimately help improve patient health outcomes. HEALWELL is executing a strategy centered 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 Exchange under the symbol “HWAIF”. To learn more about HEALWELL, please visit https://healwell.ai/.

About ORION HEALTH

Orion Health is a global healthcare technology company focused on reimagining healthcare for all. Orion Health is leading the change in digital health with health and care organizations to improve the wellbeing of every individual with our world leading Unified Healthcare Platform. Made up of a 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. www.orionhealth.com.

Forward Looking Statements

Certain statements in this press release, constitute "forward-looking information" and "forward looking statements" (collectively, "forward looking statements") within the meaning of applicable Canadian securities laws and are based on assumptions, expectations, estimates and projections as of the date of this press release. Forward-looking statements in this press release include statements with respect to, among other things, the closing of the Transaction and the Offering and the terms on which each of them are expected to be completed, the anticipated future financial performance of Orion Health and HEALWELL; the potential opportunities for synergies between the product and service offerings of HEALWELL and Orion Health and the markets they serve; the potential operational efficiencies and cost savings resulting from shared services with WELL Health Technologies Corp.; and potential future investment by HEALWELL into R&D initiatives in New Zealand. Forward-looking statements are often, but not always, identified by words or phrases such as “to acquire”, “position”, “opportunity”, “expected”, “creating”, “transform”, “anticipate” or variations of such words and phrases or statements that certain future conditions, actions, events or results "will", "may", "could", "would", "should", "might" or "can" be taken, occur or be achieved, or the negative of any of these terms . Forward-looking statements are necessarily based upon management’s perceptions of historical trends, current conditions and expected future developments, as well as a number of specific factors and assumptions that, while considered reasonable by HEALWELL as of the date of such statements, are outside of HEALWELL's control and are inherently subject to significant business, economic and competitive uncertainties and contingencies which could result in the forward-looking statements ultimately being entirely or partially incorrect or untrue. Forward looking statements contained in this press release are based on various assumptions, including, but not limited to, the following: the parties’ ability to satisfy any conditions precedent to completion of the Transaction and the Offering, including receipt of all shareholder, regulatory and TSX approvals; HEALWELL’s ability to complete the Transaction and the Offering or to complete them on the terms described above; HEALWELL’s ability to access sources of debt and equity financing to complete the acquisition and the terms on which such financing may be provided; HEALWELL’s ability to integrate the acquired businesses, products and services with its own; the anticipated terms of any shared services arrangement with WELL Health Technologies Corp.; trends in customer growth; HEALWELL’s ability to develop new technologies and the timelines on which they can be developed; new technologies functioning as expected; customers adopting and using new technologies and services as expected; the need to develop increasingly innovative products and services; competition in the industry; the stability of general economic and market conditions; HEALWELL's ability to comply with applicable laws and regulations; HEALWELL's continued compliance with third party intellectual property rights; and that the risk factors noted below, collectively, do not have a material impact on HEALWELL's business, operations, revenues and/or results. By their nature, forward-looking statements are subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections, or conclusions will not prove to be accurate, that assumptions may not be correct, and that objectives, strategic goals and priorities will not be achieved.

Known and unknown risk factors, many of which are beyond the control of HEALWELL, could cause the actual results of HEALWELL to differ materially from the results, performance, achievements, or developments expressed or implied by such forward-looking statements. Such risk factors include but are not limited to those factors which are discussed under the section entitled "Risk Factors" in HEALWELL's most recent annual information form dated April 1, 2024, which is available under HEALWELL's SEDAR+ profile at www.sedarplus.com. The risk factors are not intended to represent a complete list of the factors that could affect HEALWELL and the reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements. There can be no assurance that forward looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management’s expectations and plans relating to the future. HEALWELL disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law. All of the forward-looking statements contained in this press release are qualified by these cautionary statements.

This news release contains future-oriented financial information and financial outlook information (collectively, “FOFI”) about HEALWELL’s expected increase in annualized revenue run rate and EBITDA2 of Orion Health post-divestiture on a post-closing basis, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set out in the above paragraphs. The actual financial results of Orion Health on a post-closing basis may vary from the amounts set out herein and such variation may be material. HEALWELL and its management believe that the FOFI has been prepared on a reasonable basis, reflecting management’s best estimates and judgments. However, because this information is subjective and subject to numerous risks, it should not be relied on as necessarily indicative of future results. Except as required by applicable securities laws, HEALWELL undertakes no obligation to update such FOFI. FOFI contained in this news release was made as of the date hereof and was provided for the purpose of providing further information about HEALWELL’s anticipated future business operations on a post-closing basis. Readers are cautioned that the FOFI contained in this news release should not be used for purposes other than for which it is disclosed herein.

Footnotes:

1. After accounting for the divestiture by Orion Health of two non-strategic divisions prior to its acquisition by HEALWELL.
2. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is a Non-GAAP measure. EBITDA should not be construed as an alternative to net income/loss determined in accordance with International Financial Reporting Standards (“IFRS”). EBITDA does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. The Company believes that EBITDA is a meaningful financial metric as it measures cash generated from operations which the Company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives.

For more information:

Pardeep S. Sangha Investor Relations, HEALWELL AI Inc.Phone: 604-572-6392 ir@healwell.ai