AI/ML Innovations Inc. Completes Acquisition of Technology from Naiad Lab Inc.

Rhea-AI Summary

AI/ML Innovations Inc. (AIML) has finalized the acquisition of cutting-edge technology from Naiad Lab, a deal completed on June 3, 2024. The acquisition includes Naiad's proprietary Long ECG Neural Net (L-ECG NN) for detailed cardiovascular insights and the Neural Network Store (NNStore), a subscription-based AI analysis platform.

Key aspects of the acquisition include AIML issuing 6.7 million common shares valued at $335,000 to Naiad and creating a new subsidiary to manage the assets. Additionally, AIML will pay a royalty to Naiad based on revenue generated from the L-ECG NN technology and has granted 700,000 stock options to Naiad's management. The deal involves contingent shares that convert to common shares if certain milestones are met, including FDA approval and revenue targets.

This strategic acquisition aims to enhance AIML's portfolio and position it at the forefront of AI-driven healthcare innovations.

Positive

• Acquisition of advanced AI healthcare technologies, enhancing AIML's portfolio.
• AIML issued 6.7 million common shares, valued at $335,000, to Naiad as payment.
• Creation of a new subsidiary to manage acquired assets.
• Royalty agreement incentivizes high revenue generation from L-ECG NN technology.
• 700,000 stock options granted to Naiad's management, aligning interests with AIML.
• Contingent shares convertible upon achieving FDA approval and revenue milestones.
• No Finder's Fee required for the transaction, reducing immediate costs.

Negative

• Non-arm's length transaction as AIML's CPO is also the CEO of Naiad, posing potential conflicts of interest.
• Contingent shares could potentially dilute AIML's stock if milestones are met.
• Royalty payments could impact AIML's long-term revenue from L-ECG NN technology.
• CSE approval required, introducing regulatory risk and potential delays in finalizing the acquisition.

Highlights:

• AI-driven Strategic Assets: Acquired Assets Include Advanced Neural Net Healthcare Technologies.

VICTORIA, BC / ACCESSWIRE / June 17, 2024 / AI/ML Innovations Inc. ("AIML" or the "Company") (CSE:AIML)(OTCQB:AIMLF)(FWB:42FB), a leading company committed to acquiring and advancing Artificial Intelligence/Machine Learning technologies that address urgent societal needs, is pleased to announce the completion and signing of a definitive agreement, dated June 3, 2024, for the asset purchase of cutting-edge technology from Naiad Lab Inc. The acquisition marks a significant milestone in AIML's strategic growth and innovation roadmap.

As previously announced by the Company on May 2, 2024, the acquired technologies include:

A proprietary Long ECG Neural Net (L-ECG NN) for Cardiovascular Insights

This advanced solution provides detailed beat-to-beat labeling for ECGs of any duration, up to and including 48 hours, covering approximately 170,000 labeled heartbeats. This enhanced level of detail enables further neural network processing to uncover critical insights and events related to cardiovascular disease and other ailments.

The Neural Network Store (NNStore)

A subscription-based online neural net store that allows device company developers and researchers to upload files for analysis by various AI systems.

Paul Duffy, CEO of AIML Innovations Inc., stated, "The acquisition of Naiad Lab's technology is a significant step for AIML. It not only strengthens our portfolio, but also positions us at the forefront of biometric measurement innovations."

Esmat Naikyar, CEO of Naiad Lab, added, "Our mission is to leverage state-of-the-art neural networks to deliver actionable health insights. The Long ECG Neural Net fits that model perfectly as it provides near instantaneous actionable feedback to the healthcare provider."

The salient points of the acquisition include:

1. AIML has purchased 100% of Naiad's Long ECG Neural Net, 100% of Naiad's Neural Net Store & NNaaS, and access to certain contracted services to be provided by Naiad's management and technical team on an ongoing basis under separate employment/consulting agreements (collectively, the "Assets").
2. AIML issues 6,700,000 Common Shares from its Treasury to Naiad, (currently valued at $335,000), as full and final payment for the Assets. The shares will be subject to a 12-month hold period.
3. AIML has created a new operating subsidiary which shall hold the Assets.
4. AIML agrees to pay a streaming royalty (the "Royalty") to Naiad for up to a 20-year period, as per the following terms:
   i. a 2% Royalty which is payable on gross revenue of not less than $1,500,000 and not greater than $5,000,000 inclusive per fiscal year, if and only if such revenue is directly attributable to third-party licensing of the Long ECG Neural Net, AND
   ii. a 3% Royalty which is payable on all gross revenue above $5,000,000 per fiscal year, if and only if such revenue is directly attributable to third-party licensing of the Long ECG Neural Net.
   iii. AIML at its sole discretion may purchase the Royalty from Naiad at any time for $1,000,000.
5. AIML grants a total of 700,000 stock options for 5 years at a $0.20 exercise price to management members of Naiad, in accordance with the Corporation's Stock Option Plan.
6. AIML has entered into consulting/management agreements with certain key members of Naiad Labs.
7. AIML has issued 3,000,000 Contingent Payment Shares to Naiad Labs for a 12-month period, which are convertible into 3,000,000 Common Shares from Treasury at a cost of $0.00 per share, subject to the following terms:
   i. the Long ECG Neural Net has formally entered the US FDA approval process; AND,
   ii. The Long ECG Neural Net generates gross revenue of not less than $1,000,000.

The Assets purchase has a non-arm's length component to it in that AIML's CPO, Esmat Naikyar, is the CEO and co-Founder of Naiad Lab Inc. Mr. Naikyar is neither on the board of directors of AIML, nor was he involved in AIML's approval process for this transaction.

The Asset purchase is subject to CSE approval. No Finder's Fee will be paid in conjunction with this transaction. The Asset purchase will not result in either a change of control or the creation of new control persons.

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About AI/ML Innovations Inc. https://aiml-innovations.com/

AI/ML Innovations Inc. has realigned its business operations to capitalize on the burgeoning fields of artificial intelligence (AI) and machine learning (ML), with an initial investment focus on emerging digital health and wellbeing companies that leverage AI, ML, cloud computing and digital platforms to drive transformative healthcare management solutions and precision support delivery across the health continuum. Through strategic partnerships with Health Gauge (95.2% owned by AIML), Tech2Heal (up to 22% ownership rights, with 12.44% currently owned by AIML), AI Rx Inc. (70% owned by AIML) and other planned accretive investments, the Company continues to capitalize on expanding growth areas, to the benefit of all the Company's stakeholders. AI/ML's shares are traded on the Canadian Securities Exchange under the symbol "AIML", the OTCQB Venture Market under "AIMLF", and the Frankfurt Stock Exchange under "42FB".

On behalf of the Board of Directors

Tim Daniels, Executive Chairman

For more information about AI/ML Innovations:

For detailed information please see AI/ML's website or the Company's filed documents at www.sedarplus.ca
For further information, contact: Blake Fallis at (778) 405-0882 or info@aiml-innovations.com

Neither the CSE nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.

For AI/ML Innovations Investors

Certain statements made in this press release that are not based on historical information are forward-looking statements that involve substantial known and unknown risks and uncertainties. This press release contains express or implied forward-looking statements relating to, among other things, AI/ML Innovations' expectations concerning management's plans, objectives, and strategies, including strategies for defending the Company's intellectual property. These statements are neither promises nor guarantees but are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. AI/ML Innovations Inc. undertakes no obligation to update or revise the information contained in this press release, whether as a result of new information, future events, or circumstances or otherwise except as expressly required by applicable securities law. Further information regarding the uncertainties and risks can be found in the disclosure documents filed by AI/ML with the securities regulatory authorities, available at www.sedar.com.

SOURCE: AI/ML Innovations Inc.

View the original press release on accesswire.com

FAQ

What technology did AIML acquire from Naiad Lab?

AIML acquired Naiad's Long ECG Neural Net for cardiovascular insights and the Neural Network Store, an AI analysis platform.

When was the acquisition of Naiad Lab technology by AIML completed?

The acquisition was completed on June 3, 2024.

How much was the AIML share issuance for the Naiad Lab asset acquisition valued at?

AIML issued 6.7 million common shares, currently valued at $335,000, to Naiad Lab.

What are the royalty terms in the AIML and Naiad Lab acquisition deal?

AIML will pay a 2% royalty on gross revenue between $1.5M and $5M and a 3% royalty on revenue above $5M from the L-ECG NN technology.

What milestones must be met for Naiad Lab to convert contingent shares into common shares?

The milestones include FDA approval and generating gross revenue of at least $1M from the L-ECG NN technology.

What potential conflicts of interest exist in the AIML and Naiad Lab acquisition?

AIML's CPO, Esmat Naikyar, is also the CEO of Naiad Lab, which poses a potential conflict of interest.

Is there any regulatory risk associated with AIMLF's acquisition of Naiad Lab's technology?

Yes, the acquisition is subject to CSE approval, introducing possible regulatory risk and delays.