Subject: ARCpoint news release for immediate distribution
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File: Attachment ARC_nr_Q1_2025_Fianancial_Results_May26_2025-FINAL.pdf
ARCPOINT REPORTS Q1 2025 FINANCIAL RESULTS
Greenville, South Carolina, May 26, 2025 ARCpoint Inc. (TSXV: ARC) (the "Company" or "ARCpoint") is
pleased to report that it has filed its unaudited Q1, 2025 Financial Statements and related Management
Discussion and Analysis as summarized below.
Interim CFO and Director, Adam Ho commented, "In addition to a year over year reduction in overall costs
as a result of the CRESSO transaction, we have also recently enacted additional temporary reductions in
overall compensation and professional services costs of approximately USD$57k per month. These
temporary reductions are a testament to the commitment of our team members in our pursuit of
increasing value for our shareholders and other stakeholders."
Beginning in mid-April of this year, the Company enacted temporary reductions in overall compensation
and professional services costs totalling approximately USD$57k on a monthly basis. These temporary
reductions represent approximately 40% of total monthly compensation and key, monthly recurring
professional services costs. The reductions are temporary and are intended to help the Company manage
its finances while it works to increase revenues through the addition of new users of the Company's
MyARCpointLabs ("MAPL") technology platform.
Mr. Ho added, "Although a reduction in costs is important and we are grateful for the sacrifices our team
members are making, we remain focused on adding new users of our MAPL platform and look forward to
reporting on our progress in this regard soon".
On Aug. 20, 2024, the company announced that it had entered into a transaction with Any Lab Test Now
(ALTN) to bring together the franchise operations of both Any Lab Test Now and ARCpoint into a new joint
venture company, CRESSO Brands LLC. ALTN, based in Atlanta, Ga., was founded in 1992 and at the time
of the Aug. 20, 2024, transaction, had more than 235 United States franchise locations, providing direct
access to clinical, DNA, and drug and alcohol lab testing services, as well as phlebotomy and other
specimen collection services, through its retail storefront business model. When combined with the more
than 135 ARCpoint franchise group locations, also at the time of the transaction, CRESSO is now the largest
franchise network of its kind in the United States. At the time of the CRESSO transaction, ALTN and
ARCpoint also agreed to make ARCpoint's MyARCpointLabs technology platform (MAPL) the systems
choice for CRESSO brand franchisees. Given that the Company now holds a 29.5% interest in the CRESSO,
ARCpoint's interest is accounted for using the equity method. As a result, revenues and costs previously
attributable to the Company's franchise operations, are no longer consolidated into the ARCpoint's
financial statements.
All results below are reported under International Financial Reporting Standards and in US dollars. The
Company reminds readers to take into consideration that the CRESSO transaction was concluded in the
third quarter of 2024 on August 20, 2024. For accounting purposes, the Company has deconsolidated
ARCpoint Franchise Group and recorded its 29.5% interest in CRESSO as an equity investment going
forward. The Company advises readers to see its unaudited interim Financial Statements (the "Financial
Statements") and the interim Management Discussion & Analysis of the Company (MD&A") under the
Company's profile at www.sedarplus.ca.
On January 3, 2025, the Company completed the sale of its 68% share ownership interest in ABH
Greenville, as originally announced on December 30, 2024. In exchange for its ownership interest in ABH
Greenville, the Company received a cash consideration of $360,000.
As at March 31, 2025, the Company had total cash on hand of approximately US$0.23 million.
All results below are reported under International Financial Reporting Standards and in US dollars.
Summary of 2025 Q1 Financial Results
dot Total revenues for the three months ended March 31, 2025 were $0.18 million compared to $1.61
million for the three months ended March 31, 2024. The decrease in revenue was primarily due
to decreased royalty and franchising revenues as no royalties and brand fund revenues were
included after the CRESSO joint venture transaction ("CRESSO Transaction") on August 20, 2024.
dot Net loss for the three months ended March 31, 2025 was $0.62 million compared to a net loss of
$1.5 million for the three months ended March 31, 2024. The decrease in net loss was primarily
due to a decrease in cost of revenue of $0.6 million, a decrease in salary and wages of $0.7 million,
a decrease in general and administrative expenses of $0.1 million and a decrease in sales and
marketing costs of $0.1 million, partially offset by a gain in the disposal of ABH Greenville of $0.3
million and a gain in the share of income of CRESSO of $0.2 million.
dot Operating cash flow for the three months ended March 31, 2025 was negative $0.9 million
compared to negative $1.3 million for the three months ended March 31, 2024.
dot EBITDA for the three months ended March 31, 2025, was negative $0.4 million compared to
negative $1.2 million for the three months ended March 31, 2024.
dot Adjusted EBITDA for the three months ended March 31, 2025, was negative $0.6 million
compared to negative $1.0 million for the three months ended March 31, 2024.
DEFINITION AND RECONCILIATION OF NON-IFRS FINANCIAL MEASURES
The Company reports certain non-IFRS measures that are used to evaluate the performance of its
businesses and the performance of their respective segments. Securities regulators require such measures
to be clearly defined and reconciled with their most comparable IFRS measures.
As non-IFRS measures generally do not have a standardized meaning, they may not be comparable to
similar measures presented by other issuers. Rather, these are provided as additional information to
complement those IFRS measures by providing further understanding of the results of the operations of
the Company from management's perspective. Accordingly, these measures should not be considered in
isolation, nor as a substitute for analysis of the Company's financial information reported under IFRS. Non-
IFRS measures used to analyze the performance of the Company's businesses include "EBITDA" and
"Adjusted EBITDA".
The Company believes that these non-IFRS financial measures provide meaningful supplemental
information regarding the Company's performances and may be useful to investors because they allow
for greater transparency with respect to key metrics used by management in its financial and operational
decision-making. These financial measures are intended to provide investors with supplemental measures
of the Company's operating performances and thus highlight trends in the Company's core businesses
that may not otherwise be apparent when solely relying on the IFRS measures. These non-IFRS measures
are calculated as follows:
"EBITDA" is comprised as income (loss) less interest, income tax and depreciation and amortization.
Management believes that EBITDA is a useful indicator for investors, and is used by management, in
evaluating the operating performance of the Company. See "Consolidated EBITDA and Adjusted EBITDA
Reconciliation" appended to this press release for a quantitative reconciliation of EBITDA to the most
directly comparable financial measure.
"Adjusted EBITDA" is comprised as income (loss) less interest, income tax, depreciation, amortization,
share-based compensation, Brand Fund revenue and expense timing difference, change in fair value of
warrant liability, foreign exchange gain (loss) and other income / expenses not attributable to the
operations of the Company. Management believes that EBITDA is a useful indicator for investors, and is
used by management, in evaluating the operating performance of the Company. See "Consolidated
EBITDA and Adjusted EBITDA Reconciliation" appended to this press release for a quantitative
reconciliation of Adjusted EBITDA to the most directly comparable financial measure.
A reconciliation of how the Company calculates EBITDA and Adjusted EBITDA is provide in the table
appended to this press release.
For more information, please see the unaudited interim Financial Statements (the "Financial
Statements") and the interim Management Discussion & Analysis of the Company (MD&A") under the
Company's profile at www.sedarplus.ca.
About ARCpoint Inc.
ARCpoint is a leading US-based health care company that leverages technology along with brick-and-
mortar locations to give businesses and individual consumers access to convenient, cost-effective
healthcare information and solutions with transparent, up-front pricing, so that they can be proactive and
preventative with their health and well-being. ARCpoint is based in Greenville, South Carolina, USA.
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
center 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.
For more information, please contact:
ARCpoint Inc.
Adam Ho, Interim Chief Financial Officer
Phone : (604) 329-1009
E-mail : invest@arcpointlabs.com
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION :
Forward-Looking Information this news release contains "forward-looking information" within the
meaning of applicable Canadian securities laws which are based on ARCpoint's current internal
expectations, estimates, projections, assumptions and beliefs and views of future events. Forward-
looking information can be identified by the use of forward-looking terminology such as "expect",
"likely", "may", "will", "should", "intend", "anticipate", "potential", "proposed", "estimate" and other
similar words, including negative and grammatical variations thereof, or statements that certain events
or conditions "may", "would" or "will" happen, or by discussions of strategy.
The forward-looking information in this news release is based upon the expectations, estimates,
projections, assumptions and views of future events which management believes to be reasonable in
the circumstances. Forward-looking information includes estimates, plans, expectations, opinions,
forecasts, projections, targets, guidance or other statements that are not statements of fact. Froward-
looking information necessarily involve known and unknown risks, including, without limitation, risks
associated with general economic conditions; adverse industry events; loss of markets; future legislative
and regulatory developments; inability to access sufficient capital from internal and external sources,
and/or inability to access sufficient capital on favourable terms; the ability of the Company to
implement its business strategies, the COVID-19 pandemic; competition and other risks.
Any forward-looking information speaks only as of the date on which it is made, and except as required
by law, the Company does not undertake any obligation to update or revise any forward-looking
information, whether as a result of new information, future events or otherwise. New factors emerge
from time to time, and it is not possible for the Company to predict all such factors. When considering
the forward-looking information contained herein, readers should keep in mind the risk factors and
other cautionary statements in the Company's disclosure documents filed with the applicable Canadian
securities regulatory authorities on SEDAR at www.sedar.com. The risk factors and other factors noted
in the disclosure documents could cause actual events or results to differ materially from those described
in any forward-looking information.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the Exchange) accepts responsibility for the adequacy or accuracy of this Press release.
ARCpoint Inc.
Consolidated EBITDA and Adjusted EBITDA Reconciliation
(Expressed in United States Dollars)
(a) Finance expense comprised of interest on bank loans, notes payable and lease liabilities (see Financial
Statements).
(b) Share-based compensation expense comprised of non-cash compensation (see Financial Statements).
(c) See `Cresso Transaction' section of this MD&A for further details.
(d) Previous to the `Cresso Transaction' on August 20, 2024, the Group operated a Brand Fund to collect and
administer funds contributed for use in advertising and promotional programs designed to increase sales and
enhance the reputation of the Group and its franchisees. The Group reported contributions and expenditures
on a gross basis on the Group's statement of profit and loss. Brand Fund contributions are recognized as
revenue when invoiced, as the Group has full discretion on how and when the Brand Fund revenues are spent.
Brand Fund revenue received may not equal advertising expenditures for the period due to timing of
promotions and this difference is recognized to earnings. This adjustment is made to normalize for the timing
difference of the Brand Fund revenues and Brand Fund expenditures.
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