WELL Health Postpones Annual Financial Statement Filing Amid Issues with US Subsidiary Circle Medical

Published On: March 29, 2025 9:15 pm

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WELL Health Technologies Delays Annual Financial Filings Amid Subsidiary Issues

VANCOUVER, BC, March 28, 2025 /PRNewswire/ – WELL Health Technologies Corp. WELL WHTCF (“WELL” or the “Company“), a digital healthcare firm dedicated to improving health outcomes through technology, has announced a delay in filing its audited annual consolidated financial statements for the year ending December 31, 2024. This delay, which affects the mandatory management discussion and analysis as well as the CEO and CFO certificates (collectively, the “Required Filings“), pushes beyond the March 31, 2025 deadline (the “Deadline“).

The delay arises from accounting issues related to the Company’s non-wholly owned Delaware subsidiary, Circle Medical Technologies, Inc. (“Circle Medical“). In fiscal 2023, Circle Medical reported a net loss of $1.1 million, impacting WELL’s consolidated net income of $16.6 million. Additionally, it contributed less than 2.7% to the Company’s consolidated Adjusted EBITDA⁽¹⁾.

In September 2024, Circle Medical received a request for the voluntary production of documents and information (the “RFI“) from the Civil Division of the U.S. Attorney’s Office for the Northern District of California (“USAO“). This inquiry is focused on certain billing practices of Circle Medical in the U.S. The company is currently working to respond to the RFI and resolve this investigation. Completion of this process is essential for finalizing Circle Medical’s financial statements, and in turn, the Company’s annual consolidated financial statements due December 31, 2024. Unfortunately, this will not be finalized before the March 31, 2025 filing deadline.

WELL Health does not anticipate that resolving this matter will significantly affect its cash position or available resources. Both the Company and Circle Medical are diligently working to finalize the annual consolidated financial statements as soon as possible. They currently project that the Required Filings will be submitted on or before April 15, 2025 (the “Filing Interval“).

Furthermore, the Company is actively exploring strategic alternatives for Circle Medical and remains committed to this process.

WELL Health has requested a management cease trade order from the British Columbia Securities Commission, its principal regulator, as per National Policy 12-203 – Management Cease Trade Orders (“NP 12-203“). While approval of this order is not guaranteed, if it is granted, it will not restrict trading in securities by individuals who are not part of the Company’s management.

The Company plans to comply with the alternative information guidelines outlined in NP 12-203 by issuing bi-weekly status reports, if necessary, until it resolves the filing default. Failure to file the Required Filings in time could result in the British Columbia Securities Commission imposing a general cease trade order against WELL.

Aside from the matters disclosed, WELL remains up to date with its filing obligations.

WELL Health Technologies Updates on Financial Reporting Delay

WELL Health Technologies Corp. has reported its financial performance, utilizing Adjusted EBITDA as a key metric alongside traditional IFRS results. The Company defines Adjusted EBITDA as net income (loss) before interest, taxes, depreciation, and amortization, further adjusted for specific costs. These include net rent expense for finance leases under IFRS, transaction and restructuring costs, time-based earn-out expenses, change in fair value of investments, share of income or loss of associates, foreign exchange gains or losses, stock-based compensation, and any gains or losses not indicative of ongoing operations. Adjusted EBITDA serves as a crucial measure of cash flow available for operational support, debt servicing, and future growth initiatives.

This financial metric, however, should not be seen as a replacement for net income (loss) or cash flow from operating activities as per IFRS standards. A detailed reconciliation of Adjusted EBITDA to the closest IFRS measure will be available in the Company’s Fiscal 2023 Annual Management Discussion and Analysis (MD&A).

WELL Health Technologies Corp.

Per: “Hamed Shahbazi”

Hamed Shahbazi

Chief Executive Officer, Chairman, and Director

About WELL Health Technologies Corp.

WELL Health Technologies aims to enhance healthcare through innovative technology solutions. The Company’s offerings include a comprehensive healthcare and digital platform designed to support healthcare providers effectively. With more than 41,000 healthcare providers encompassing both the US and Canada, WELL operates the largest owned healthcare ecosystem in Canada, featuring over 200 clinics dedicated to primary care, specialized care, and diagnostic services. In the United States, WELL focuses on specialized sectors, including the gastrointestinal market, women’s health, primary care, and mental health. WELL trades on both the Toronto Stock Exchange as “WELL” and the OTC Exchange as “WHTCF.” For further insights about the Company, visit www.well.company.

Forward-Looking Information

This release contains “Forward-Looking Information,” as defined under Canadian securities laws. This includes projections regarding management cease trade order grants, anticipated timelines for Required Filings, the impact of resolving the USAO RFI on WELL, and potential strategic moves related to Circle Medical. This Forward-Looking Information relies on various assumptions and is subject to significant economic, business, and competitive risks, many of which are beyond WELL’s control. Consequently, actual results may differ substantially from those presented here. Typically, Forward-Looking Information can be recognized through terms like “may,” “should,” “will,” “could,” “intend,” “estimate,” “plan,” “anticipate,” “expect,” “believe,” or similar expressions. Risks associated with Forward-Looking Information are outlined in documents posted on WELL’s profile at www.sedar.com, including the latest Annual Information Form and Management’s Discussion and Analysis. WELL is not obligated to update Forward-Looking Information unless legally required to do so.

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