Mr. John Constantine reports

ARCPOINT TO HOST CONFERENCE CALL TO DISCUSS 2024 Q1 FINANCIAL RESULTS

Arcpoint Inc. will host a conference call at 11 a.m. Eastern Time, Friday, May 24, 2024, to review the company's first quarter financial results for the period ending March 31, 2024. All results are expressed in U.S. dollars.

The dial-in numbers for the conference call is as follows:

• Canada/United States toll-free: 1-844-763-8274;
• International toll: 1-647-484-8814.

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

Arcpoint president and chief executive officer John Constantine commented, "In addition to the progress we've made in reducing costs, we are encouraged by the improvement in revenues for our AFG Services Group, which is largely dominated by our technology platforms MyArcpointLabs and Total Reporting."

As reported April 29, 2024, throughout April 2024, the company enacted reductions in head count as well as to operational and administrative costs that are expected to result in annualized savings of approximately $530,000 in staffing costs and $440,000 in operational and administrative costs. These reductions are in addition to the staffing and operational cuts totalling $2-million as previously reported by the company in its news releases dated March 8 and Oct. 17, 2023.

AFG Services, which primarily provides clinical testing and software services that support the company's franchise systems as well as other direct business to business customers with its Total Reporting platform, increased revenues by 19 per cent to $582,000 in Q1 2024, versus $490,000 in Q4 2024.

Mr. Constantine concluded: "With most of the development expense and heavy lifting of the launch of our technology platforms behind us, we are now positioned to expand the use of these platforms to new users. In particular, we are working hard to leverage MyArcpointLabs to create a health care ecosystem that will drive more business to our franchisees and expand our distribution network through new partnerships."

On July 10, 2023, the company reported that it had launched its new consumer e-commerce platform, MyArcpointLabs (MAPL). MAPL was developed to make it easier for the company's franchisees to attract and better serve individual health care consumers and for a greater number of consumers to purchase the company's products and services more easily. By year-end of 2023, every Arcpoint franchised location had MAPL integrated into its location and interfaced with its local website. The combination of all Arcpoint locations having MAPL deployed and an increase in monthly reoccurring fees for users to access MAPL, helped MAPL revenue increase by 23 per cent to $223,000 in Q1 2024, versus $181,000 in Q4 2023.

MAPL provides interface support with various other health care organizations and acts as the operations tool within the franchise system. The technology virtualizes the company's consumer business model allowing for the expansion of the company's footprint to other entities beyond traditional Arcpoint facilities and enabling franchisees to generate revenue prior to having a brick-and-mortar facility. MAPL also allows for the linking of diagnostic testing services with virtual physicians, telehealth organizations and other health care system constituents, such as independent pharmacies.

On Nov. 21, 2023, the company further announced that it had implemented a new application programming interface (API) with MD Care Group LLC, a telehealth company, which provides consumers with cost-effective, virtual access to health care through a national network of thousands of board-certified physicians and health care providers. This allows Arcpoint customers to connect with MD Care Group's doctors, through MAPL, to discuss results from Arcpoint diagnostic tests or other medical concerns they may have. This opens the door for future opportunities for the creation of virtual primary care and urgent care centres anywhere Arcpoint services can be accessed.

The company's other technology platform, Total Reporting, is the company's business-to-business portal. Total Reporting helps Arcpoint's franchisees to market more services, such as background checks and employer physicals, through an efficient, single-sign-on integrated platform. In Q1 2024, as a result of increased volumes and usage uptake, Total Reporting revenue increased by 12 per cent to $324,000, versus $289,000 in Q4 2023.

For Q1 2024, Arcpoint Franchise Group revenues declined to $1.2-million versus $1.5-million in Q4 2023 as the result of lower recognition and amortization of upfront franchising. Arcpoint Franchise Group revenue consists primarily of royalties and brand fund contributions based on a percentage of sales reported by franchise labs. Revenue generated from this segment also includes franchise fees paid by franchisees and initial clinical, training and technology set-up fees paid by new franchisees.

As at March 31, 2024, the company had total cash on hand of approximately $350,000, comprising $340,000 in unrestricted cash and cash equivalents and $13,548 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.

All results below are reported under international financial reporting standards.

Summary of Q1 2024 financial results:

• Total revenues for the three months ended March 31, 2024, were $1.6-million compared with $1.7-million for the three months ended March 31, 2023. The decrease in revenue for Q1 2024 versus Q1 2023 was primarily due to lower royalty and franchising revenues due to the pullback of COVID testing across the country offset by an increase in support service revenues provided to franchisees and lab services.
• Net loss for the three months ended March 31, 2024, was $1.5-million compared with a net loss of $2.1-million for the three months ended March 31, 2023. The decrease in loss for Q1 2024 versus Q1 2023 was primarily due to a decrease in salary and wages of $700,000 and decrease in general and administrative costs of $100,000.
• Operating cash flow for the three months ended March 31, 2024, was negative $1.3-million compared with 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 March 31, 2024, was negative $1.2-million compared with negative $1.8-million for the three months ended March 31, 2023.
• Adjusted EBITDA for the three months ended March 31, 2024, was negative $1-million compared with negative $1.1-million for the three months ended March 31, 2023.

About Arcpoint Inc.

Arcpoint is a leading United States-based franchise system that leverages technology along with brick-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 preventive 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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