Mr. Hector Bremner reports

AVRICORE HEALTH CORPORATE UPDATE - MID-YEAR REVIEW DEMONSTRATES COMPANY ON RIGHT TRACK

Avricore Health Inc. continues to achieve significant growth, form new partnerships and develop new markets while surpassing margin targets. Now, as the company looks back at the first half of the year, it continues with confidence on its strategy to bring HealthTab, its turnkey solution for point-of-care testing and data management, to more pharmacies across Canada and the world.

"We've had an incredible year so far and we're very excited about what's still to come," said Hector Bremner, chief executive officer of Avricore Health. "Make no mistake, with new partners in Canada and expansion into the U.K., we have nothing but blue sky in front of us."

Record earnings run continues

Revenues for the first half of 2023 reached $1,177,290, an increase of 437 per cent compared with the same period last year with more HealthTab systems deployed and tests sold. Gross profit increased 511 per cent for a total of $440,152 and gross margin for the period was 37.39 per cent compared with 32.88 per cent last year. This result outperforms the company's target margin of 30 per cent and demonstrates solid fundamentals, as HealthTab is investing in scale while increasing gross margin and profitability.

Year-over-year revenue comparisons are the best measure of the company's performance due to the fact revenues and test usages have some seasonal trends. The company realizes monthly revenues in the form of subscription fees; however, consumable sales are not monthly, but in larger lots on an as-needed basis. Because the deployments are still relatively new, the patterns of consumption are still establishing. There are many external impacts as to how, where and how often tests will be used -- such as regulatory changes impacting pharmacy scope, scale-up training and financing.

However, as HealthTab's time in pharmacy has been scaling up and maturing since the fall of 2022, the company is confident in the long-term success of its approach and its ability to significantly grow.

Investing in growth

The company has been nearing net profitability despite the current challenging environment for businesses, and it is even more impressive considering that HealthTab only recently began to scale up. The company has been investing in growth and significantly increasing the number of pharmacies offering HealthTab, ensuring long-term growth of revenues and achieving profitability.

The team expects continuing growth and utilization of HealthTab in Canada thanks to the significant alignment with Shoppers Drug Mart and Loblaws grocery locations. More pharmacy walk-in clinics are being added across provinces like Alberta and Ontario. And more provinces are quickly making plans to add this recent innovation in primary care access to their approach to delivering better care related to minor ailments, chronic disease and infectious disease.

Direct reimbursement for pharmacists to conduct this important work is still not available; however, new health care funding agreements were largely signed this year between the federal and provincial governments, therefore the industry is very hopeful the lack of funding will be rectified.

One jurisdiction making investments and leading the way for a global best-approach to pharmacy-based care is the United Kingdom and its National Healthcare Service (NHS). The NHS England recently announced 645 million pounds sterling to support increasing access to primary care, including expanding clinical pharmacy as an essential part of recovering the system's ability to deliver timely service.

The company was honoured to recently announce that it was selected by a collaborative involving the internationally renowned Barts Heart Centre and national cardiovascular charity HEART U.K. to assess the feasibility of community pharmacists in the U.K.'s ability to complement opportunistic blood pressure checks with cholesterol testing to assess overall cardiovascular risk and build on the clinical services offered.

The feasibility study seeks deeper insights and ways to build off the successful delivery of over 930,000 blood pressure checks in just over a year through approximately 6,000 pharmacies as part of the NHS initiative to support risk identification and prevention of cardiovascular disease. That initiative allowed those with high blood pressure to be identified and referred onward for management. This is critical at this time for such services, as it is estimated that there are over five million people with undiagnosed hypertension in the U.K. today.

The entire team, and its partners, are confident in the need and ultimate success of the program and expect to achieve a significant scale in the U.K., the world's sixth-largest economy with nearly 14,000 pharmacies.

Adding near-to-patient data

Also achieved recently, the company announced its agreement with Ascensia Diabetes Care, a global diabetes care company, to integrate its blood glucose monitoring (BGM) systems, marketed as Contour Next Gen and Contour Next One, with HealthTab.

Arguably the most popular BGM for people living with diabetes, this partnership opens exciting new opportunities to reach individuals who will benefit from active support in the management of their chronic disease by their community pharmacist. Also, the data generated by the Contour family of BGMs will add the critical time-in-range insights, generated by the patient daily, in HealthTab. This innovative collaboration will drive higher utilization of both technologies, the services of the pharmacy and, most importantly, better health outcomes for patients.

Infectious disease

Beginning this year, the company announced that in collaboration with Abbott Rapid Diagnostics and Shoppers Drug Mart, HealthTab would begin adding a significant number Abbott ID Now instruments.

The company is pleased to update that during the current reporting period 164 locations have now received the ID Now, either in combination with the Afinion 2 or stand-lone, to offer confirmed molecular testing for virus detection in community pharmacies.

This is significant, as last year's "tripledemic" (flu, respiratory syncytial virus and COVID) strained the Canadian health care system beyond its breaking point. This year, scientists are concerned about a heavily mutated COVID variant. Pharmacy will play a key role in these battles and confirmed test results mean faster responses, better treatment and less spread of these infectious diseases.

While flu seasons can severely strain pharmacies' capacity for chronic disease screening and management, having the ID Now means HealthTab can support pharmacies with confirmed molecular testing for virus detection during these critical months of the year and diversify the company's revenues.

The year ahead

Avricore Health anticipates an exciting year ahead, with many indications of policy and financing support for pharmacy. Much of this is still in progress now; however, the items herein are the focus for the year.

HealthTab market fast facts:

• Point-of-care testing market to reach $93.21-billion (U.S.) in 2030;
• Nearly 13.6 million Canadians expected to be diabetic or prediabetic by 2030, with many undiagnosed;
• Over one in three Americans, approximately 88 million people, have prediabetes;
• Close to 160,000 Canadians 20 years and older are diagnosed with heart disease each year, often it is only after a heart attack they are diagnosed;
• There are more that 10,000 pharmacies in Canada, 88,000 pharmacies in the United States and nearly 12,000 in the U.K.

About HealthTab

HealthTab is a turnkey point-of-care testing solution that combines best-in-class point-of-care technologies with a secure, cloud-based platform for tackling pressing global health issues. With just a few drops of blood from a finger prick, the system generates lab-accurate results on the spot and data are reported in real time. The test menu includes up to 23 key biomarkers for screening and managing chronic diseases, such as diabetes and heart disease (such as HbA1c, lipid profile, eGFR (estimated glomerular filtration rate)). HealthTab has also recently added capabilities for bacterial and viral tests, such as strep and COVID-19.

The HealthTab network model is unlike anything in pharmacy today. It gives knowledgeable and trusted pharmacists a greater role in primary care delivery, while empowering patients to take more control of their health. It also reduces costs and waiting times and provides many potential revenue streams including equipment leasing and consumables, direct access testing, disease prevention and management programs, sponsored health programs, decentralized clinical trials, real-world data (RWD) sets, and third party app integration through application programming interface.

About Avricore Health Inc.

Avricore Health is a pharmacy service innovator focused on acquiring and developing early-stage technologies aimed at moving pharmacy forward. Through its flagship offering HealthTab, a wholly owned subsidiary, the company's mission is to make actionable health information more accessible to everyone by creating the world's largest network of rapid testing devices in community pharmacies.

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