Mr. Chris Dobbin reports

NOVA LEAP HEALTH CORP. POSTS Q1 2023 RESULTS

Nova Leap Health Corp. has released financial results for the quarter ended March 31, 2023.

All amounts are in U.S. dollars unless otherwise specified.

Nova Leap first quarter 2023 financial results

Financial results for the first quarter ended March 31, 2023, include the following:

• Q1 2023 revenues of $6,396,076 decreased by 5.7 per cent relative to fourth quarter 2022 revenues of $6,780,083 and by 12.3 per cent relative to first quarter 2022 revenues of $7,296,609.
• Q1 2023 adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) increased to $86,025 from $71,313 in Q4 2022 and was lower than Q1 2022 adjusted EBITDA of $227,562.
• Gross profit margin as a percentage of revenues remained strong at 35.2 per cent in Q1 2023. Gross profit margin percentage was 35.6 per cent in Q4 2022 and 34.8 per cent in Q1 2022.
• Head office and operations management expense decreased by $101,942 in Q1 2023 as compared with Q1 2022 and $115,892 as compared with Q4 2022 due to the elimination of targeted support functions in head office late in second quarter 2022 and management's efforts since third quarter 2022 to streamline its U.S. operations.
• The loss from operating activities in Q1 2023 decreased to $182,864 from $321,424 in Q4 2022 and $198,829 in Q1 2022.
• Q1 2023 net loss decreased to $296,876 from $970,395 in Q4 2022 and $389,674 in Q1 2022.
• The company had available cash of $894,365 as of March 31, 2023, as well as full access to the unutilized revolving credit facility of $1,108,402 ($1.5-million (Canadian)).

President and chief executive officer's comments

"The message to shareholders is that we continue to deliver prudent fiscal management, which should provide us with flexibility to restart our acquisition strategy and improve results in future quarters," said Chris Dobbin, president and chief executive officer of Nova Leap. "This past quarter was focused on two initiatives: continuing our capital allocation strategy of paying down the company's debt while further restructuring the U.S. operations and working with U.S. leadership on the changes implemented during the latter part of 2022 and Q1 2023 -- both of which I will speak to further.

"From a capital allocation perspective, we have been paying down a substantial portion of our debt and remain on track to have approximately $290,000 of bank debt at the end of the year. We believe this will provide the company with much greater flexibility with future expansion opportunities. I have referenced this previously, and our approach to debt repayment has been consistent.

"Let me collectively address the revenue decline and restructuring of operations. With respect to the quarter-over-quarter revenue decline from Q4 2022 to Q1 2023, just under 40 per cent of the decline relates to two less days in the quarter, for which we had to perform services. Given that we charge on a per-hour basis, that has a big impact. The remainder was a decrease in hours, most of which we anticipate to be temporary. Some of the decrease in hours was expected given the closure of one of our physical locations, which was not producing the results intended and for which we had previously recognized a goodwill impairment. We have been prudently restructuring operations for the past three quarters throughout the organization, and that restructuring continued well into Q1 2023. We have been very diligent with this approach so as to have minimum disruption to our staff and clients.

"We began to see the positive results of the restructuring from the latter part of 2022 in Q1 2023 such that even with a drop in revenue, adjusted EBITDA increased. The restructuring that occurred well into Q1 2023 will be more fully reflected in Q2 results. Notwithstanding all the changes that have been made, there are still many areas in the United States, for which we can produce improved results. In fact, many of the changes that were made were done in order to increase organic revenue going forward. I believe we have the leadership team in place to achieve this, and I believe that we will see further positive impacts of these changes in the quarters ahead."

This news release should be read in conjunction with the unaudited condensed interim consolidated financial statements for the three months ended March 31, 2023, and 2022, including the notes to the financial statements and management's discussion and analysis dated May 11, 2023, which have been filed on SEDAR.

About Nova Leap Health Corp.

Nova Leap is an acquisitive home health care service company operating in one of the fastest-growing industries in the United States and Canada. The company performs a vital role within the continuum of care with an individual- and family-centred focus, particularly those requiring dementia care. Nova Leap achieved the No. 42 ranking on the 2021 Report on Business ranking of Canada's top-growing companies, the No. 2 ranking on the 2020 ROB ranking of Canada's top-growing companies and the No. 10 ranking in the 2019 TSX Venture 50 in the clean technology and life science sector. The company is geographically diversified with operations in 10 different U.S. states within the New England, southeastern, south-central and Midwest regions, as well as in Nova Scotia, Canada.

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