WELL Health Technologies Corp T.WELL

TD

[retiredcf]

RECORD INVESTMENT BY DIGITAL TO HELP WELL DRIVE AI USE IN CANADIAN HEALTHCARE

THE TD COWEN INSIGHT

We believe this additional investment by DIGITAL, its largest to-date, is the Canadian government's strong endorsement of WELL and its growing affiliate ecosystem of (AI- driven) technology partners. With its large customer base and comprehensive suite of tech- enabled solutions, we believe WELL will be a key beneficiary of increased adoption of (AI- driven) technology solutions in the coming years.

Event: Yesterday afternoon, DIGITAL, Canada's Global Innovation Cluster for digital technologies, announced its largest investment to-date focused on helping develop and deploy AI-powered technologies in healthcare.

Impact: SLIGHTLY POSITIVE

Details. DIGITAL's C$15.3mm contribution (over four years) to the C$44mm Health Compass II project follows its C$3.1mm contribution to the C$7.3mm Health Compass project announced in January 2023.

WELL will receive $6.8mm from DIGITAL for Health Compass II (it received $1.69mm for Health Compass), with its other partners ORX Surgical, Tali AI, Phelix AI, and HEALWELL AI (WELL has directly invested in each) receiving ~$1.7mm-$2.5mm each.

The Health Compass II project seeks to transform healthcare delivery by enhancing interoperability and leveraging AI to help improve patient care and reduce healthcare provider burdens. Four AI modules will be integrated into WELL's Provider Compass:

• AI Voice Assistant by Tali (AI Voice) - Ambient scribe that automatically captures relevant information from physicians' conversation with patients.

• SMART Inbox by Phelix (AI Inbox) - Workflow orchestration and automation module that reduces manual administrative efforts for healthcare providers by 50% or more.

• Patient Compass by ORX - An AI-powered virtual agent that improves patient engagement by 30%.

• Decision Compass by HEALWELL AI (AI Decision Support) - Identifies opportunities for earlier diagnosis and/or improved care for rare and complex diseases.

  The initiative is expected to achieve a 25% reduction in healthcare delivery costs for clinics and a 20% improvement in patient satisfaction within the 1-2 years post-implementation.

  WELL will serve as the lead commercialization partner and first customer, as well as develop standards-based API interoperability for each module.

  No change in F2024 guidance. We believe there should be a modest benefit to R&D expenses from the DIGITAL funding, with a potentially more significant impact from commercializing the AI-driven platform in the years ahead and the benefits from using it at WELL's clinics. We understand WELL is planning to provide more colour on the funding partnership on its Q2 call (mid-August).