There is a lot going on at the Vancouver-based medical-clinic operator and technology developer Well Health Technologies Corp. (TSX:WELL).
For one thing, its share price plunged 16.7 per cent today, to $4.14, following news it that it would delay filing audited annual financial statements for the fiscal year ended Dec. 31, as well as all management discussion of that year. It released that news after markets closed on Friday.
It said financial statements would be delayed because the U.S. attorney’s office for the Northern District of California is investigating Well Health's subsidiary Circle Medical Technologies Inc. for its billing practices.
Well Health said it needs more time to analyze information and determine how that investigation will impact Circle's financial statements, and by extension Well Health's overall financial situation.
It said it expects to be able to file its annual financial statement by April 15.
Well Health's share price is up 12.81 per cent compared with one year ago, and is down 43.75 per cent from its all-time high earlier this year.
Well Health to acquire controlling stake in Healwell AI tomorrow
Separately, the company today said it is pushing ahead with its plan to buy a controlling interest in Toronto-based Healwell AI. That acquisition would be done simultaneous with Healwell AI buying New Zealand-based Orion Health effective tomorrow (April 1).
The transaction would see Well Health acquiring sufficient Class A and Class B shares in Healwell AI, through various ways, to own, on a fully diluted basis, approximately 29 per cent of Healwell by market cap. Well Health would control Healwell AI because it would own 60 per cent of the company's voting shares on a fully diluted basis.
That stake in Healwell AI is set to add about $160 million in revenue for Well Health in the next 12 months, Well Health said this morning.
Well Health and Healwell AI have long been partners.
BIV reported in July that Well Health was leading a consortium that nabbed $15.3 million in funding for a $44-million project to develop artificial-intelligence (AI) technology that helps doctors save time. Healwell AI was part of that consortium.
That funding last summer came from the Vancouver-based organization that distributes federal government capital, now known as Digital: Canada's Global Innovation Cluster, after rebranding from being Digital Technology Supercluster.
Patient visits hit all-time high in 2024
Some good news for Well Health is that it generated a record of more than 5.7 million patient visits in its most recent fiscal year. Patient visits were up 32 per cent, year-over-year, with organic patient visits up 30 per cent, Well Health said today.
"Our Canadian clinics, underpinned by our technology-enabled care model, continues to lead the way in driving strong organic growth," Well Health CEO and founder Hamed Shahbazi said today in a news release.
Shahbazi is likely best known for founding Tio Networks Corp., before selling it to PayPal Holdings Inc. for $304 million in 2017.
Well Heath plans to spin off technology subsidiary
The company's business model is two-headed, which is why it is planning to split into two, with each entity separately trading on the Toronto Stock Exchange and better able to attract new investors.
Well Health's dominant revenue stream is from operating approximately 175 medical clinics in Canada, while the secondary stream comes from selling health and office-management technologies to medical clinics, Shahbazi explained to BIV last year.
“About 90 per cent of our overall revenue comes from providing care to patients, and about 10 per cent, or probably less than 10 per cent now, comes from actual technology revenue,” he said in September.
The plan is for the Well Health division that runs medical clinics to own a majority stake in the technology company — newly rebranded as Wellstar. That separation and public listing could go ahead in the first half of this year, Shahbazi told BIV in September.
Shahbazi did not respond to BIV's request for an interview this afternoon.
Well Health topped BIV's 2024 Top 100 Fastest-Growing Companies list, registering a whopping 2,265.2-per-cent revenue growth between 2019 and 2023. In its 2023 fiscal year, the company generated $776,054,000 in revenue, up from $32,810,782 in 2019.
That growth has showed no sign of stopping, as sales have continued to rise throughout 2024. The three-month period up to the end of September was Well Health’s 23nd consecutive quarter of record-breaking revenue.
One of Well Health's earlier and biggest investors is Chinese billionaire Li Ka-shing, a man likely best known to many Vancouverites as the guy whose company bought the city's former Expo 86 site in 1988, for $320 million, to be spread over 15 years. BIV reported in 2019 that Ka-shing had an almost 11-per-cent stake in the company, while his venture capital firm Horizon Ventures owned a seven-per-cent stake. He then added to that stake in 2020.
