1. WELLSTAR secures C$62 million to expand pre-spinout growth. 2. Series B financing expected to close early December 2025. 3. WELLSTAR aims for public listing in 2026, enhancing investor opportunities.
Investors backing WELLSTAR signal strong confidence, similar to past investments boosting valuations.
The financing directly impacts WELL's growth trajectory, affecting investor sentiment and stock price positively.
Funding will support growth and expansion over the coming years, influencing future valuations.
Not for distribution to U.S. news wire services or dissemination in the United States
WELL Health Technologies Corp. (TSX:WELL, OTCQX:WHTCF) ("WELL"), a digital healthcare company focused on improving health outcomes by leveraging technology to empower healthcare practitioners and their patients globally, is pleased to announce its majority-owned subsidiary WELLSTAR Technologies Corp. ("WELLSTAR") has entered into agreements to complete a Series B preferred share investment (each, a "Series B Share") in the aggregate amount of approximately C$62 million at an offering price of C$1.50 per Series B Share (the "Series B Financing"). The Series B Financing is supported by three of Canada's most prominent fund investors, Mawer Investment Management Ltd. ("Mawer"), Edgepoint Wealth Management Inc. ("Edgepoint") and PICTON Investments (collectively, the "Institutional Investors") and is expected to close early December 2025, subject to certain closing conditions.
The Series B Financing builds on an initial equity investment led by Mawer and Edgepoint in December 2024, whereby an aggregate of C$50.4 million was raised through a Series A preferred share investment (each, a "Series A Share") at an offering price of C$1.00 per Series A Share (the "Series A Financing").
Amir Javidan, CEO of WELLSTAR commented, "This financing reinforces investor confidence in WELLSTAR's strong performance and growth outlook, and provides significant balance sheet strength as we scale our AI-enabled solutions, expand our product portfolio, and pursue strategic acquisitions. We're extremely proud to have the continued support of leading institutional investors as we execute on our mission to reshape healthcare through digital enablement."
WELLSTAR is targeting a public listing in 2026. By separating WELLSTAR from WELL's clinical operations, investors have the opportunity to directly invest in a high-growth healthcare technology company with a robust margin profile and strong expansion prospects.
On the closing of the Series B Financing, WELLSTAR will issue C$59 million of Series B Shares to the Institutional Investors, plus an additional amount of approximately C$3 million of Series B Shares to management of both WELLSTAR and WELL. WELL intends to maintain a majority in the economic and voting interest of WELLSTAR upon closing and for the long term.
The Series B Shares to be issued on closing will be issued on substantially similar terms to the Series A Shares issued pursuant to the Series A Financing. The Series B Shares will automatically convert into subordinate voting shares of WELLSTAR upon a qualifying IPO, RTO public listing, or alternative liquidity transaction. The Series B Shares will not be entitled to dividends until 2026, after which they will accrue quarterly dividends at an increasing rate over time. These dividends will accrue as notional preferred shares until the occurrence of a liquidity event, redemption or other liquidation event in accordance with the terms of the Series B Shares. The Series B Shares will also be redeemable at the option of the holders at any time after December 31, 2026. In connection with the Series B Financing, such holders will enter into an amended and restated shareholders' agreement and an amended and restated governance agreement to grant standard investor rights to certain classes of shareholders until WELLSTAR ceases to be a private company.
The use of proceeds from the Series B Financing are anticipated to be dedicated towards future acquisitions, AI-related innovation, organic growth initiatives and general corporate purposes.
Cormark Securities, Beacon Securities and Stifel Nicolaus Canada are acting as co-lead agents on behalf of a syndicate of agents with respect to the Series B Financing, with Cormark Securities serving as the sole bookrunner.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
WELL HEALTH TECHNOLOGIES CORP.
Per: "Hamed Shahbazi"
Hamed Shahbazi
Chief Executive Officer, Chair and Director
About WELL Health Technologies Corp.
WELL's mission is to tech-enable healthcare providers. We do this by developing the best technologies, services, and support available, which ensures healthcare providers are empowered to positively impact patient outcomes. WELL's comprehensive healthcare and digital platform includes extensive front and back-office management software applications that help physicians run and secure their practices. WELL's solutions enable more than 40,000 healthcare providers between the US and Canada and power the largest owned and operated healthcare ecosystem in Canada with over 200 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. WELL is publicly traded on the Toronto Stock Exchange under the symbol "WELL" and on the OTC Exchange under the symbol "WHTCF". To learn more about WELL, please visit: www.well.company.
About WELLSTAR
WELLSTAR Technologies supports Canada's healthcare providers with our extensive expertise in healthcare technology, clinic operations, and digital transformation. As part of WELL, which operates over 220 healthcare clinics and supports over 40,000 providers across Canada, we bring deep industry knowledge and a proven track record of optimizing clinical workflows, enhancing patient engagement, and streamlining administrative processes. With a comprehensive suite of technology solutions, we have successfully helped thousands of providers adopt and benefit from modern, interoperable technologies that improve patient outcomes and system efficiency. To learn more about WELLSTAR, please visit https://wellstar.health.
Forward-Looking Statements
This news release contains "Forward-Looking Information" within the meaning of applicable Canadian securities laws, including, without limitation: the closing of the Series B Financing and the anticipated date thereof; WELLSTAR's ability to satisfy all closing conditions; WELLSTAR's ability to consummate a spinout transaction and the anticipated date thereof; information regarding WELL's and WELLSTAR's goals; the expectation to raise aggregate gross proceeds of C$62 million; the anticipated use of proceeds; that WELLSTAR will continue to be a high-growth healthcare technology company with strong expansion prospects; the intention to be active in M&A and WELLSTAR's ability to consummate on these opportunities; and the expectation that WELL will maintain a majority in the economic and voting interest of WELLSTAR. Forward-Looking Information is necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, and contingencies. Forward-Looking Information generally can be identified by the use of forward-looking words such as "may", "should", "will", "could", "intend", "estimate", "plan", "anticipate", "expect", "believe", "goal" or "continue", or the negative thereof or similar variations. Forward-Looking Information involves known and unknown risks, uncertainties and other factors that may cause future results, performance, or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by the Forward-Looking Information and the Forward-Looking Information is not a guarantee of future results or performance. WELL's comments expressed or implied by such Forward-Looking Information are subject to a number of risks, uncertainties, and conditions, many of which are outside of WELL's control, and undue reliance should not be placed on such information. Forward-Looking Information are qualified in their entirety by inherent risks and uncertainties, including: inability to close the Series B Financing for any reason; that capital markets decline to a point whereby an exit strategy is not feasible on economically favorable terms; WELLSTAR is unable to fund future growth; WELLSTAR is unable to negotiate and consummate future M&A acquisitions on favorable terms; direct and indirect material adverse effects from adverse market conditions; risks inherent in the primary healthcare sector in general; regulatory and legislative changes; litigation risk; that future results may vary from historical results; an inability to realize the expected benefits and synergies of acquisitions; that market competition may affect the business, results and financial condition of WELL and other risk factors identified in documents filed by WELL under its profile at www.sedarplus.ca, including its most recent Annual Information Form and its most recent Management's Discussion and Analysis. Except as required by securities law, WELL does not assume any obligation to update or revise any forward-looking information, whether as a result of new information, events or otherwise.
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For more information:
Tyler Baba
Investor Relations, Manager
investor@well.company
604-628-7266