Mr. Jason Tong reports

ARCPOINT TO HOST CONFERENCE CALL TO PROVIDE BUSINESS UPDATE AND DISCUSS 2023 Q3 FINANCIAL RESULTS

Arcpoint Inc. will host a conference call on Wednesday, Nov. 22, 2023, at 9:30 a.m. Eastern Time, to review the company's financial results for the third quarter ended Sept. 30, 2023, and provide an operational update.

The dial-in number for the conference call is as follows.

Canada/United States toll-free:1-800-319-4610

International toll:1-604-638-5340

Callers should dial in five to 10 minutes prior to the scheduled start time and ask to join the Arcpoint call.

Arcpoint's president and chief executive officer, John Constantine, commented: "We continue to cut costs as we roll out our MyArcpointLabs platform and reduced our net, operating cash, EBITDA and adjusted EBITDA losses for this quarter by 37 per cent, 47 per cent, 41 per cent and 74 per cent, respectively, versus the previous quarter. These improvements do not include the new cuts we implemented and announced last month."

On Oct. 17, 2023, the company reported that it had undertaken new measures to reduce costs by $1-million (U.S.) on an annualized basis. These cuts included annualized reductions in staffing and compensation of approximately $800,000 (U.S.) and $200,000 (U.S.) in sales, general and administration costs. As a function of these cuts, the company incurred severance costs of $67,000 (U.S.) in October, 2023, with the full impact of financial benefits beginning in November, 2023.

Mr. Constantine added, "Since launching MyArcpointLabs in July, 2023, in addition to reducing costs, we have focused on building out our distribution network of affiliates and other relationships to drive more business through our franchisee locations and overall system."

On July 10, 2023, Arcpoint announced that it had launched its new consumer e-commerce platform, MyArcpointLabs (MAPL), which was developed to make it easier for the company's franchisees to attract and better serve individual health care consumers and for consumers to purchase the company's products and services more easily, as well as expand the company's distribution network through affiliate locations. As the company discussed in its Aug. 10, 2023, Aug. 17, 2023, and Oct. 17, 2023, news releases, affiliate businesses are health-related businesses that are separate from Arcpoint, such as health or vitamin stores, fitness facilities, chiropractor offices, physician offices, clinical and genetic reference labs, and pharmacies. Given regulatory, licensing, technology and other issues, many of these types of businesses have not been previously able to offer DTC (direct-to-consumer) health care testing services. Using the MyArcpointLabs platform, affiliates can offer some or all Arcpoint's products and services to their customers to both enhance their own product and service offerings, and, in some cases, generate additional revenue, while at the same time meeting applicable regulatory and other compliance obligations. As also discussed in the Oct. 17, 2023, news release on the launch of Arcpoint Employer Access, any business can now become a new type of affiliate by offering Arcpoint wellness and preventative diagnostic testing services to their employees.

As at Sept. 30, 2023, the company had total cash on hand of approximately $1.8-million (U.S.), comprising $1.5-million (U.S.) in unrestricted cash and cash equivalents, and $246,000 (U.S.) in brand fund restricted cash. Use of brand fund restricted cash is at the company's discretion and is used to increase sales and the brand presence of the company's entities and franchisees.

Summary of 2023 Q3 financial results

All results below are reported under international financial reporting standards and in U.S. dollars.

Total revenue for the three months ended Sept. 30, 2023, was $1.6-million, compared with $1.7-million for the three months ended Sept. 30, 2022, $1.5-million for the three months ended June 30, 2023, and $1.7-million for the three months ended March 31, 2023. During Q3 2022, high complexity PCR testing and low complexity rapid tests volumes were higher due to the COVID-19 pandemic.

Net loss for the three months ended Sept. 30, 2023, was $1.5-million, compared with a net loss of $1.9-million for the three months ended Sept. 30, 2022, a loss of $2.4-million for the three months ended June 30, 2023, and a loss of $2.1-million for the three months ended March 31, 2023. The decrease in loss for Q3 2023 versus Q3 2022 was due to lower operating costs, including salaries and wages and legal costs for the period.

Operating cash flow for the three months ended Sept. 30, 2023, was negative $1.0-million, compared with negative $1.3-million for the three months ended Sept. 30, 2022, negative $1.9-million for the three months ended June 30, 2023, and negative $1.2-million for the three months ended March 31, 2023.

EBITDA (earnings before interest, taxes, depreciation and amortization) for the three months ended Sept. 30, 2023, was negative $1.2-million, compared with negative $1.6-million for the three months ended Sept. 30, 2022, negative $2.0-million for the three months ended June 30, 2023, and negative $1.8-million for the three months ended March 31, 2023.

Adjusted EBITDA for the three months ended Sept. 30, 2023, was negative $458,000, compared with negative $928,000 for the three months ended Sept. 30, 2022, negative $1.8-million for the three months ended June 30, 2023, and negative $1.1-million for the three months ended March 31, 2023. For the current period ended, the difference between EBITDA and adjusted EBITDA is primarily due to an adjustment related to the timing difference between brand fund revenues and expenditures, and the gain on the retirement of the Corporate Labs of Indy office lease.

Definition and reconciliation of non-IFRS (international financial reporting standards) financial measures

The company reports certain non-IFRS measures that are used to evaluate the performance of its businesses and the performance of their respective segments. Securities regulators require such measures to be clearly defined and reconciled with their most comparable IFRS measures.

As non-IFRS measures generally do not have a standardized meaning, they may not be comparable with similar measures presented by other issuers. Rather, these are provided as additional information to complement those IFRS measures by providing further understanding of the results of the operations of the company from management's perspective. Accordingly, these measures should not be considered in isolation, nor as a substitute for analysis of the company's financial information reported under IFRS. Non-IFRS measures used to analyze the performance of the company's businesses include EBITDA and adjusted EBITDA.

The company believes that these non-IFRS financial measures provide meaningful supplemental information regarding the company's performances and may be useful to investors because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making. These financial measures are intended to provide investors with supplemental measures of the company's operating performances and thus highlight trends in the company's core businesses that may not otherwise be apparent when solely relying on the IFRS measures. These non-IFRS measures are calculated as follows.

EBITDA comprises income (loss) less interest, income tax, and depreciation and amortization. Management believes that EBITDA is a useful indicator for investors and is used by management in evaluating the operating performance of the company.

Adjusted EBITDA comprises income (loss) less interest, income tax, depreciation, amortization, share-based compensation, brand fund revenue and expense timing difference, change in fair value of warrant liability, foreign exchange gain (loss), and other income/expenses not attributable to the operations of the company. Management believes that EBITDA is a useful indicator for investors and is used by management in evaluating the operating performance of the company.

A reconciliation of how the company calculates EBITDA and adjusted EBITDA is provide in the attached table.

For more information, please see the interim financial statements and the interim management's discussion and analysis of the company (MD&A) for the three-month period ended Sept. 30, 2023, under the company's profile on SEDAR+.

About Arcpoint Inc.

Arcpoint is a leading United States-based franchise system that leverages technology along with bricks and mortar locations to give businesses and individual consumers access to convenient, cost-effective health care information and solutions with transparent, upfront pricing, so that they can be pro-active and preventative with their health and well-being. Arcpoint is based in Greenville, S.C., U.S. Arcpoint Franchise Group LLC, formed under the laws of the state of South Carolina in February, 2005, is the franchisor of Arcpoint Labs and supports over 130 independently owned locations. Arcpoint sells franchises to individuals throughout the United States and provides support in the form of marketing, technology and training to new franchisees. Arcpoint Corporate Labs LLC develops corporate-owned labs committed to providing accurate, cost-effective solutions for customers, businesses and physicians. AFG Services LLC serves as the innovation centre of the Arcpoint group of companies as it builds a proprietary technology platform and a physician network to equip all Arcpoint labs with best-in-class tools and solutions to better serve their customers. The platform also digitalizes and streamlines administrative functions such as materials purchasing, compliance, billing and physician services for Arcpoint franchise labs and other clients.

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