Jack Nathan Health Closes Sale of Canadian Business and Positions for Global Growth

TORONTO--(BUSINESS WIRE)-- Jack Nathan Medical Corp. (TSXV: “JNH”; OTCQB: “JNHMF”) (the “Company”) is pleased to announce, further to the Company’s November 4, 2024 press release, the successful completion of the sale (the “Asset Sale” or the “Transaction”) of its Canadian business, assets and operations (the “JNH Canadian Business”) to WELL Health Technologies Corp. (“WELL”) as part of its strategic repositioning, other than certain Canadian operations which are being transitioned in connection with the Transaction. The purchase price (the “Purchase Price”) for the JNH Canadian Business was Cdn$5,000,000. Also, in connection with the Transaction, all debt owing by the Company to Wal-Mart Canada Corp. (totaling more than Cdn$15,000,000) has been extinguished. Shareholders of the Company approved the Asset Sale at the special meeting of shareholders held on November 29, 2024. The Company continues to own and operate its Mexican business and operations, including the 155 corporate owned and operated clinics in Walmart locations in Mexico, five Mexican clinics inside Walmart distribution centers servicing Walmart Associates, and one multidisciplinary Mexican clinic.

This transformative transaction marks a significant milestone for Jack Nathan Health, achieving several key outcomes:

• Debt Elimination: The Company has eliminated over Cdn$15 million in debt, including all amounts owed to Wal-Mart Canada Corp., creating a much stronger balance sheet and enhancing financial flexibility.
• Convertible Debenture Cancellation: The cancellation of the Company’s convertible debenture in connection with the Transaction results in the elimination of 152,380,952 potentially issuable shares that had been so issuable pursuant to a conversion of the debenture and exercise of the underlying warrants, which significantly streamlines the Company’s capital structure. As well, 8,500,000 restricted share units previously outstanding under the Company’s Omnibus Equity Incentive Plan have also been cancelled, further enhancing the Company’s capital structure.
• Cash Infusion: The Company has received a cash infusion from the Asset Sale providing support for future growth initiatives.
• Retention of Profitable Mexican Operations: The Company retains ownership and operational control of its profitable network of 155 corporate owned clinics in Walmart locations across Mexico, as well as five clinics located in Walmart distribution centers servicing Walmart Associates and a multidisciplinary Mexican clinic.

Also in connection with the Transaction, the Company’s Mexican subsidiary (“JN Mexico”) and Wal-Mart Canada Corp.(“Walmart”) have entered into a profit sharing agreement, pursuant to which JN Mexico has granted to Walmart in the first year after closing the Asset Sale a 10% interest, and thereafter a 25% interest, in any profit from JN Mexico’s business, which is payable by JN Mexico until such time as a total of Cdn$4 million has been paid to Walmart. This profit share obligation is secured against JN Mexico’s assets.

The Company expects to utilize approximately 57% of the proceeds from the Purchase Price for the Asset Sale to (i) settle Purchase Price advances made by WELL prior to closing the Asset Sale (the “Closing”) to support the Company’s cash flow requirements and business continuity needs pursuant to the previously reported interim financing agreement entered into between WELL and the Company, (ii) pay transaction costs (mainly legal costs) incurred in connection with the Asset Sale, and (iii) pay severance costs for staff and senior management who are not transferring to WELL and not remaining with the Company post-Closing.

The Company also reports that (A) Dr. Glenn Copeland has stepped down from his positions with the Company as Chief Executive Officer, President, Chief Medical Officer and Chairman of the Board and as a director, and (B) Marcy Herriman has stepped down from her position with the Company as Chief Operating Officer. Mike Marchelletta, Executive Vice Chairman of the Company, will assume the role of Chief Executive Officer of the Company. Dr. Copeland has agreed to provide clinical consultant services to the Company for a period of three months following Closing, and Ms. Herriman has agreed to provide operations’ consulting services to the Company for a period of three months following Closing.

Mike Marchelletta, Executive Vice Chairman of the Company, commented: “On behalf of the Board of Directors and the entire company team, we would like to thank Dr. Glenn Copeland. As both a practitioner and a visionary CEO, Dr. Copeland has guided the Company through transformative times with a steady hand and a clear vision for delivering high quality healthcare services. Under his tenure, the Company achieved several significant milestones, including the successful divestiture of our local Canadian operations, which has allowed us to focus on our core strengths and global growth opportunities.”

“Also on behalf of the Board of Directors and the entire company team, we would like to express our deep gratitude to Marcy Herriman for her outstanding contributions as Chief Operating Officer. Marcy has been a cornerstone of Jack Nathan Health, driving the execution of our medical services and operations with unmatched precision and dedication in both Canada and Mexico. Her remarkable attention to detail, operational expertise, and commitment to excellence have been instrumental in the Company’s success.”

Dr. Copeland commented: “I want to thank the Board of Jack Nathan, Blake Lyon, Mike Marchelletta and Anthony DeCristofaro, for the privilege of working with the three of them. Their support, guidance and team approach allowed this company to mature and grow into a leading Canadian medical institution overseeing over 240 clinics in Mexico and Canada. As a team we oversaw over 2 million patient visits a year and provided medical access and care to these in the greatest need. None of this would have been possible without the guidance and work ethic of our outstanding COO Marcy Herriman. I’ve had the opportunity and pleasure of working with Marcy for over 14 years - she has helped grow this business over the past 4 years beyond our wildest expectations. We both look forward to helping Mike and the Board, in our new consulting roles, continue to grow the large opportunity in Mexico and the other countries who continue to show keen interest in partnering with us.”

WELL is the largest owner-operator of outpatient medical clinics in Canada providing primary care, allied health, specialized care and diagnostic healthcare services. WELL, which also operates in the U.S., operates over 180 clinics across Canada, before taking into account the clinics acquired in the Transaction. WELL is publicly traded on the Toronto Stock Exchange under the symbol “WELL”.

About Jack Nathan Medical Corp.

Jack Nathan Medical Corp., operating as Jack Nathan Health®, is an innovative healthcare company co-locating physician and ancillary medical services conveniently inside Walmart® stores. Jack Nathan Health® provides an exceptional level of patient care, made possible through patient-centric physicians, a variety of medical services, technology, and programs, designed to put patients first. Our mission is to provide everyone access to the finest quality retail medical centers, with both in-clinic physicians and digital telemedicine, so you and your loved ones can “Live Your Best Life”.

Jack Nathan Health® was established in 2006 and continues to expand its international footprint, delivering exceptional, state-of-the-art, turn-key medical centers in 168 corporately owned and operated locations globally. In Mexico, the Company has 161 corporate owned clinics, including 155 retail clinics in Walmart locations, 5 clinics inside Walmart Distribution Centers servicing Walmart Associates, and 1 large format Multi-disciplinary clinic in Mexico City. In Canada, there are currently 4 Rehab clinics and 3 MedSpa clinics, all of which are corporate owned and operated.

For more information, visit www.jacknathanhealth.com or www.sedarplus.ca.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Note Concerning Forward-Looking Information

Certain statements contained in this press release constitute "forward-looking information" as such term is defined in applicable Canadian securities legislation. The words "may", "would", "could", "should", "potential", "will", "seek", "intend", "plan", "anticipate", "believe”, “estimate", "expect" and similar expressions as they relate to the Company are intended to identify forward-looking information. All statements other than statements of historical fact may be forward-looking information. Forward-looking information contained in this press release includes, without limitation, statements with respect to the Company’s plan to continue to own and operate its Mexican business and operations, and future growth of the Company’s business, including possible global growth expansion. Such statements reflect the Company's current views and intentions with respect to future events, and current information available to it, and are subject to certain risks, uncertainties, and assumptions. Many factors could cause the actual results, performance or achievements that may be expressed or implied by such forward-looking information to vary from those described herein should one or more of these risks or uncertainties materialize. Such factors include but are not limited to: risks associated with changes in economic conditions or financial markets; increases in costs; litigation; legislative and other judicial, regulatory, political, and competitive developments; the economic and business impact of operational difficulties. This list is not exhaustive of the factors that may affect forward-looking information. These and other factors should be considered carefully, and readers should not place undue reliance on such forward-looking information. Should any factor affect the Company in an unexpected manner or should assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover, the Company does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this press release is made as of the date of this press release and the Company undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law.

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Jack Nathan Medical Corp., Mike Marchelletta, Executive Vice Chairman; phone: (416) 518-1000.

Source: Jack Nathan Medical Corp.