Mr. Joe Walewicz reports

NEUPATH HEALTH DELIVERS STRONG QUARTERLY REVENUES AND IMPROVES CASH POSITION

Neupath Health Inc. has released its financial and operating results for the three months ended March 31, 2023, and the grant of stock options.

Financial and Operational Highlights

Strong quarterly total revenue of $16.1 million for the three months ended March 31, 2023 compared to $15.4 million for the comparative three-month period;

Adjusted EBITDA was $0.7 million for the three months ended March 31, 2023 compared to $0.3 million for the three months March 31, 2022;

On May 2, 2023, the Company announced the closing of its brokered private placement offering of 10% subordinated and postponed unsecured non-convertible debenture units of the Company for gross proceeds of $1.453 million;

On May 15, 2023, the Company announced that it had received Notices of Reassessment confirming a positive resolution of the outstanding Canada Revenue Agency ("CRA") matter, with cash refunds of approximately $1.9 million received last week;

On March 15, 2023, the Company announced that it received a binding offer to purchase its corporate-owned medical facility in London, Ontario. The Company anticipates the transaction will close on August 1, 2023. The Company expects the net proceeds from the sale to be more than $0.5 million after paying off the mortgage secured by this facility;

Joseph Walewicz was appointed Chief Executive Officer of the Company on March 9, 2023; and

The Company continues to focus on improved operations to support its accelerated growth strategy.

(1) Non-International Financial Reporting Standard ("IFRS") and Other Financial Measures defined by the Company below.

"We are pleased to see that increased physician hours, new facilities and new contracts are contributing to top-line growth," stated Joe Walewicz, Neupath's CEO. "The private placement and resolution of the CRA matter has significantly improved our balance sheet post-quarter end, and with continued operational improvements expected in the second half of 2023, we are excited about our ability to execute on enhanced patient care and new growth opportunities."

Q1 2023 Financial Results

Total revenue is comprised of clinic revenue and non-clinic revenue. Total revenue was $16.1 million for the three months ended March 31, 2023 compared to, $15.4 million for the three months ended March 31, 2022, up 4.2% year over year. This growth reflects the opening of clinics in Red Deer, our Ottawa fluoroscopy clinic, additional physician hours and growth in our non-clinics business.

Clinic revenue is generated through the provision of medical services to patients. Clinic revenue was $14.9 million for the three months ended March 31, 2023 compared to $14.5 million for the three months ended March 31, 2022. The increase was primarily driven by continued growth from new clinic openings in late 2022. Capacity utilization for the three months ended March 31, 2023 was 62%, consistent with the comparative quarter and reflecting increased capacity added to our network in the second half of 2022.

Non-clinic revenue was $1.2 million for the three months ended March 31, 2023 compared to $0.9 million for the three months ended March 31, 2022. Non-clinic revenue is earned from physician staffing where Neupath provides physicians for provincial and federal correctional institutions and hospital health departments across Canada, and from contract research services provided to pharmaceutical companies and clinical research organizations. This revenue fluctuates depending on the need for physicians in certain institutions and the timing and enrolment of clinical studies that the Company is working on. First quarter growth was driven in part by a new contract win for our physician staffing business, effective the start of 2023.

Gross margin % was 18.0% for the three months ended March 31, 2023 compared to 17.2% for the three months ended March 31, 2022. The increase in gross margin was primarily driven by a decrease in physician costs as a percentage of revenue. Gross margin for the prior quarter was impacted by remuneration payment accruals due to the HealthPointe Medical Centres Ltd. ("HealthPointe") acquisition of $0.2 million. Excluding these transaction-related accruals, gross margin % would have been 18.4% for the three months ended March 31, 2022. (See Non-IFRS Financial Measures - Gross Margin below). Adjusted gross margin % was down slightly as clinic startup costs were high in the first quarter, but are expected to normalize in the second half of 2023.

Adjusted EBITDA was $0.7 million for the three months ended March 31, 2023 compared to $0.3 million for the three months March 31, 2022.

Issuance of Stock Options

The Company has approved the grant of 140,000 Options to certain employees and 1,417,837 Options to officers of the Company to be issued on May 30, 2023, at an exercise price equal to the closing price on the last trading day immediately preceding the grant date, and with an expiry date of May 30, 2030. The terms of the Options granted are in accordance with the Company's Amended and Restated Stock Option Plan. The Options that are granted to officers are subject to time-based vesting and will vest annually in equal installments on each anniversary date from the date of grant for 4 years.

The following table provides a reconciliation of net loss and comprehensive loss to EBITDA and adjusted EBITDA:

The following table provides a reconciliation of total revenue to gross margin and adjusted gross margin:

For further details on the results, please refer to Neupath's Management, Discussion and Analysis and Condensed Consolidated Interim Financial Statements for the three months ended March 31, 2023, which are available on the Company's website (www.neupath.com) and under the Company's profile on SEDAR (www.sedar.com).

About Neupath

Neupath operates a network of healthcare clinics and related businesses focused on improved access to care and outcomes for patients by leveraging best-in-class treatments and delivering patient-centered multidisciplinary care. We operate a network of medical clinics in Ontario and Alberta that provide comprehensive assessments and rehabilitation services to clients with chronic pain, musculoskeletal/back injuries, sports related injuries and concussions. In addition, Neupath provides workplace health services and independent medical assessments to employers and disability insurers through a national network of healthcare providers, as well as contract research services to pharmaceutical and biotechnology companies. Neupath is focused on enabling each individual we treat to live their best life.

We seek Safe Harbor.