Healwell AI Inc. (TSX:AIDX) agreed to acquire VeroSource Solutions Inc. for CAD 24.5 million on June 11, 2024. Under the terms of the Agreement, HEALWELL is acquiring all of the shares of VeroSource in a two-step transaction whereby purchase price for first step of acquisition is 51% initial acquisition is approximately CAD 12.5 million, payable as follows: (i) CAD 3.9 million in cash on the initial closing date, subject to customary closing adjustments; (ii) CAD 6.1 million through the issuance of HEALWELL subordinate voting shares on the initial closing date using the prior 20-day VWAP from the announcement date; and (iii) a four-year performance-based earn-out of up to CAD 2.5 million, payable in cash, HEALWELL AI subordinate voting shares or a combination of both, at HEALWELL's discretion, with any shares priced using the prior 20-day VWAP from the applicable payment date. The performance-based earn-out is driven by maintaining and enhancing VeroSource's EBITDA growth.

The parties have agreed to enter into a standard shareholders' agreement with mutual board nomination rights to govern the business and affairs of VeroSource from the initial closing date to the second closing date. The purchase price of the second step of acquisition that is 49% stake is approximately CAD 12 million, payable as follows: (i) CAD 3.8 million in cash on the second closing date; (ii) CAD 5.8 million through the issuance of HEALWELL AI subordinate voting shares on the second closing date using the prior 20-day VWAP from the initial announcement date; and (iii) an increase of CAD 2.4 million to the maximum amount of the four-year performance-based earn-out that commenced on the initial closing date, for a combined maximum amount of CAD 4.9 million, payable in cash, HEALWELL subordinate voting shares or a combination of both, at HEALWELL's discretion, with any shares priced using the prior 20-day VWAP from the applicable payment date. The transaction is subject to a number of standard conditions, including conditional approval from the Toronto Stock Exchange.

The expected completion for 51% stake is July 1, 2024, and remaining 49% stake is January 1, 2025.