Mr. Jeff Ruby reports

NEWTOPIA REPORTS THIRD QUARTER 2023 FINANCIAL RESULTS

Newtopia Inc. has released its third quarter 2023 financial results and operational highlights and has filed the company's quarterly financial statements. These results pertain to the three and nine months ended Sept. 30, 2023. All amounts are expressed in Canadian dollars, unless otherwise noted.

Third quarter 2023 financial highlights (versus Q3 2022):

• Revenue of $2.43-million, as compared with $2.65-million;
• Gross profit margin of 66 per cent, as compared with 55 per cent.

"Newtopia's Q3 2023 was all about profitability, as we delivered our company's first EBITDA-positive quarter", said Jeff Ruby, founder and chief executive officer of Newtopia. "These results are even more impressive in light of the difficult macroeconomic backdrop, and I could not be prouder of our entire team for their efforts in reaching this company milestone a full quarter ahead of our internal plan. While revenues remained soft in line with market conditions, by keeping our operating expenses in check, we were able to achieve bottom-line profitability, making Newtopia one of the very few profitable health technology companies."

Mr. Ruby continued: "During the quarter, we maintained our key innovator clients while pursuing new initiatives in both the U.S. and Canada. Regarding the former, as previously announced, Newtopia has launched an innovative health coaching project in partnership with a prominent philanthropic foundation, designed to positively impact chronic disease burden on a regional basis in the southeastern United States. The project has commenced with patients of a large primary care provider with nearly 20 locations in two counties who have been identified through biometric and diagnostic data indicating they suffer from Type 2 diabetes or hypertension and have a corresponding BMI greater than 30. The project is positioned to expand to other providers and employers in the region, home to a population of more than 500,000 people, and offers a blueprint for the deployment of scalable, value-based primary prevention efforts with large, national employers, payors and providers across the United States."

Third quarter 2023 financial results

Revenue for the three months ended Sept. 30, 2023, was $2.43-million, compared with $2.65-million in the prior-year period. Enrolment fee revenue, or revenue from Welcome Kit sales, totalled 7 per cent of revenue for the quarter, compared with 8 per cent in Q3 2022.

Non-IFRS (international financial reporting standards) gross profit for the third quarter 2023 totalled $1.6-million, as compared with $1.45-million in the prior-year period. This calculation consists of Newtopia's revenue less direct expenses, which include the cost of Welcome Kits sold to new participants and labour costs associated with hiring and training the company's coaching team of inspirators (health coaches). As a percentage of revenue, gross profit year to date has totalled 61 per cent, compared with 50 per cent in the prior-year period.

Operating expenses for the three months ended Sept. 30, 2023, totalled $1.6-million, compared with $3.3-million in the prior-year period and $1.8-million in Q2 2023. For the third quarter, EBITDA (earnings before interest, taxes, depreciation and amortization) totalled a gain of $21,000, compared with a loss of $1.8-million in the prior-year period and a loss of $400,000 in Q2 2023.

The company ended the third quarter 2023 with approximately $600,000 in cash, with additional access to its revolving line of credit with a Canadian Schedule 1 bank and a previously announced $2.5-million debenture issuance that was extended to September, 2024.

2023 outlook

Newtopia anticipates that the company will remain EBITDA positive in the fourth quarter.

Conference call

The company will host a conference call today at 5 p.m. Eastern Time to discuss the third quarter 2023 results in further detail. To access the conference call, please dial 877-407-3982 (United States) or 201-493-6780 (international) 10 minutes prior to the start time and reference conference ID No. 13741435. The call will also be available via live webcast on the investor relations portion of the company's website.

A replay of the conference call will be available through Dec. 7, 2023, which can be accessed by dialling 844-512-2921 (U.S.) or 412-317-6671 (international) and entering the passcode 13741435. The webcast will also be archived on the company's website.

About Newtopia Inc.

Newtopia is a tech-enabled habit change provider focused on disease prevention and reducing the cost of care for health insurers. As a provider of whole person care, it prevents, reverses and slows the progression of chronic disease while enriching mental health, resilience and overall human performance. Newtopia's programs leverage genetic, social and behavioural insights to create individualized prevention programs with a focus on Type 2 diabetes, heart disease, stroke and weight. With a person-centred approach that combines virtual care, digital tools, connected devices and actionable data science, Newtopia delivers sustainable clinical and financial outcomes.

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