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Sunday, September 25, 2022

Wellteq Digital Health Inc (OTCMKTS: WTEQF) (CNSX: WTEQ) Big Move as Advanced Human Imaging Ltd. Signs Agreement to Acquire the Company

Wellteq Digital Health Inc (OTCMKTS: WTEQF) (CNSX: WTEQ) is up big after the Company announced it has entered into a definitive arrangement agreement with Advanced Human Imaging Ltd. (ASX: AHI) (NASDAQ: AHI) whereby AHI will acquire all of the outstanding shares of wellteq pursuant to a plan of arrangement. Pursuant to the terms of the Arrangement Agreement, wellteq shareholders will receive 1 share of AHI for every 6 wellteq shares held (or 0.1667 AHI Shares for every 1 wellteq Share). In connection with the Arrangement Agreement, AHI and wellteq have entered into a loan agreement whereby AHI has agreed to advance to wellteq up to A$1,200,000. 

Currently trading at $1.26 per share Advanced Human Imaging Ltd. has developed and patented a proprietary dimensioning technology that enables users to check, track, and assess their dimensions and body composition using only a smartphone privately and accurately. The company has expanded its capabilities with the inclusion of Transdermal Optical Imaging (TOI), allowing the capture of vital signs. The combination of the proprietary suite delivers a unique risk assessment tool empowering users to check, track and action better health outcomes. According to the press release wellteq (currently at $0.04) shareholders will receive 1 share of AHI (currently at $1.26) there is a significant and obvious discrepancy here which the market will be correcting in the coming week. 

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Wellteq Digital Health Inc (OTCMKTS: WTEQF) (CNSX: WTEQ) is a global digital health provider, empowering people to be healthier and happier by coaching lasting behavior change by delivering a digital health platform to employers and insurance corporate customers, who in turn offer it to their employees and policy holders, respectively. wellteq provides the supportive behavioral change that coaches people through lifestyle improvements. wellteq brings together a team of real people, connected by a shared purpose: to coach the world to better health.  

The Arrangement Agreement was entered into by the parties following the execution of a non-binding letter of intent on June 29, 2022. Pursuant to the terms of the Arrangement Agreement, AHI will acquire 100% of the outstanding wellteq Shares by way of a plan of arrangement (the “Arrangement”) under the Business Corporations Act (British Columbia). In consideration for the wellteq Shares, AHI will issue one (1) AHI Share for every six (6) wellteq Shares outstanding at the effective time of the Arrangement, equal to 0.1667 AHI Shares for every one (1) wellteq Share. The conversion ratio represents an offer price of C$0.03398 per wellteq Share based on a price of C$0.2039 per AHI Share, being the 5-day VWAP of AHI on August 31, 2022 at an exchange rate of C$1.00: A$1.11. The consideration represents a premium of 106.7% on the 5-day VWAP for wellteq of C$0.01644 on August 31, 2022. 

AHI will issue a total of approximately 17,811,508 AHI Shares in total consideration for 100% of wellteq’s issued share capital. Following completion of the Arrangement, wellteq shareholders in aggregate will hold approximately 9.573% of AHI’s issued capital. wellteq anticipates calling a shareholder meeting to be held in November 2022 (the “Meeting”), to among other things, seek shareholder approval of the Transaction. wellteq anticipates closing of the Transaction will occur in late-November 2022, subject to satisfaction of all conditions to closing set out in the Arrangement Agreement. 

The completion of the Transaction is subject to the satisfaction of a number of conditions set forth in the Arrangement Agreement, including but not limited to the following: The Transaction being approved by special resolution passed by 66 2/3% of the votes cast by holders of wellteq Shares represented at the Meeting; If required under applicable laws, approval by a majority of the minority shareholders of wellteq; The Arrangement being approved by the British Columbia Supreme Court; Applicable regulatory approvals, including those of the ASX, NASDAQ and the CSE, as required; and other conditions of closing customary in transactions of this nature. 

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The Arrangement Agreement contains certain customary deal protection provisions, including a non-solicitation provision in favour of AHI, subject to customary “fiduciary out” provisions that allow wellteq to consider and accept a superior proposal, subject to a right to match in favour of AHI, as well as a break fee of between A$350,000 and A$500,000 payable by wellteq to AHI under certain circumstances, and a break fee of A$350,000 payable by AHI to wellteq in certain limited circumstances. Upon closing of the Transaction, wellteq will seek to delist the wellteq Shares from the CSE and cease to be a reporting issuer in all jurisdictions in Canada. 

Upon conclusion of the Transaction, wellteq will nominate two directors to the Board of Directors of AHI. The proposed nominee Directors are currently Scott Montgomery, CEO and a director of wellteq, and Peter Vaughan, Chair of the wellteq Board of Directors, and Mr. Montgomery is currently the proposed CEO of AHI. The Board of Directors of wellteq, after consultation with its legal and financial advisor, have unanimously approved and resolved to recommend that the wellteq shareholders vote in favour of the Transaction. The directors and senior officers of wellteq have entered into voting support agreements, committing to vote their wellteq Shares in favour of, and to otherwise support, the Transaction. 

In connection with the entry by the parties into the Arrangement Agreement, AHI and wellteq entered into the Loan Agreement, whereby AHI has agreed to advance to wellteq up to A$1,200,000, to be advanced in tranches not exceeding A$200,000. Amounts advanced under the Loan will be due and payable six (6) months after the date of the first advance under the Loan Agreement, and in any event no later than January 31, 2023, and will bear interest at a rate of 10% per annum. Interest will accrue and be payable to AHI on amounts outstanding under the Loan Agreement accruing from and after the date that the loan is advanced to wellteq. Interest will be payable on the occurrence of an event of default or the date that Ahi declares outstanding amounts under the Loan Agreement become due and payable. 

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Wellteq Digital Health is rocketing northbound since announcing it has entered into a definitive arrangement agreement with Advanced Human Imaging Ltd. AHI on Nasdaq whereby AHI will acquire all of the outstanding shares of wellteq pursuant to a plan of arrangement. Pursuant to the terms of the Arrangement Agreement, wellteq shareholders will receive 1 share of AHI for every 6 wellteq shares held (or 0.1667 AHI Shares for every 1 wellteq Share). In connection with the Arrangement Agreement, AHI and wellteq have entered into a loan agreement whereby AHI has agreed to advance to wellteq up to A$1,200,000. Currently trading at $1.26 per share Advanced Human Imaging Ltd. has developed and patented a proprietary dimensioning technology that enables users to check, track, and assess their dimensions and body composition using only a smartphone privately and accurately. The company has expanded its capabilities with the inclusion of Transdermal Optical Imaging (TOI), allowing the capture of vital signs. The combination of the proprietary suite delivers a unique risk assessment tool empowering users to check, track and action better health outcomes. According to the press release wellteq (currently at $0.04) shareholders will receive 1 share of AHI (currently at $1.26) there is a significant and obvious discrepancy here which the market will be correcting in the coming week.  We will be updating on Wellteq Digital Health when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with Wellteq Digital Health.

Disclosure: we hold no position in Wellteq Digital Health either long or short and we have not been compensated for this article.

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