ARCpoint Inc.

Thank you for standing by. This is the conference operator. Welcome to the ArcPoint Inc. 3rd Quarter 2024 Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then 0. unless otherwise specifically stated, all dollar amounts discussed during this call are in US dollars. We wish to remind you that this call and responses to any questions may contain forward-looking information or statements that are based on expectations, estimates, and long-term projections as of the date of this call. Information on this call is believed to be accurate at the time of this call and may be superseded by more current information. except as required by law, the company does not undertake any obligation to update the information, whether as a result of new information, future events, or otherwise. Overlooking information involves known and unknown risks, uncertainties, assumptions, and other factors which may cause the actual results, performance, or achievements of WorkPoint to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking information. Accordingly, undue reliance should not be placed on these statements. Important additional information identifying risks, uncertainties, and other factors is contained in the management's discussion and analysis portion of the company's most recently filed financial reports under the headings entitled Caution Regarding Forward-Looking Information and Risks and Uncertainties. These documents may be accessed on the CEDAR website. I would now like to turn the conference over to John Constantine, CEO of ArcPoint, Inc. Please go ahead.

Thank you so much. Appreciate everybody joining today. And again, I'm John Constantine, CEO of ArcPoint, Inc. I'm going to kick this call off in a little bit of a different manner than I have done this in the past. I'm going to get a little bit personal on how the ArcPoint ecosystem has improved my personal health. First off, I want to talk about the fact that we are a B2B company. So whether it's Cresso Brands, which is a network of laboratories across the country, telehealth companies, brick-and-mortar physicians, pharmacies, we market our service to enable all those healthcare stakeholders to have access to a healthcare ecosystem, making it easier for them to do things like laboratory testing for their customers. Because we've stitched together systems that are typically separate from each other, we have a unique value proposition not only to those telehealth providers, laboratories, and healthcare-adjacent organizations, also to their customers. And I'm a perfect example of that. Earlier, I had a healthcare test ran, sort of an annual checkup. It's a pretty standard test for a man my age, in my mid-40s. Let's just see what was going on with me. And I did it because I wanted to test our first interface with a telehealth provider that we built a bidirectional interface with. Now, the value that we present to these telehealth companies is that we provide them access to laboratory testing data on their patients, on their customers, that they typically wouldn't have in the past. And that's the pull for them to join into the ecosystem. So in my case, I ran the test. And I sent it over through the interface over to a telehealth provider. That telehealth provider jumped on with me. You know, it was an easy process. I got an appointment scheduled time, talked to the doctor, and the doctor was able to see my lab results. And the interesting thing about this is the doctor was surprised, one, at the amount of data that he had at his disposal and of his customers. You know, remember, the telehealth doctors typically don't have access to this type of information. But he was also surprised by what my results were. In fact, I had an elevated calcium result. Now, to me, not a practitioner, an elevated calcium result could be because I drink too many protein shakes in the morning or maybe too much milk and cookies at night. To him as a practitioner, though, it meant something else. He started questioning whether or not I've had this previously. Now, here's the thing. I went back and looked at my previous lab results, and it turns out I've had elevated calcium since 2018. I've been passing that information over to my family practice doctor who works for the healthcare system. And it's a big, you know, typical hospital system that people in the United States use. And it hasn't been seen since 2018. So year on year, elevated calcium, it's not seen. Now, this isn't to talk down about my family practice doctor. In fact, I love my family practice doctor. He's been amazing to work with on my health journey. I'm pretty proactive with my health. But he has a massive, patient base, which means that he just can't focus on everything. And so this happens to be one of those things. It typically doesn't affect men my age. And so he never focused on it. However, when this telehealth doctor who has more time on his hands than the traditional physician and is looking at unique data for him, saw my calcium result, he said, listen, this might be a problem. I'm going to short circuit this to say that the laboratory tests that I was able to gather was able to be passed over to a telehealth doctor. That telehealth doctor was able to interpret those results, identify a problem that I've been having for years that has been missed in the traditional healthcare system, and then plug me back into the traditional healthcare system to get me taken care of. It turns out that I had a parathyroid issue. One of my parathyroid glands was overgrown, had a surgery. I had it removed. And the moral of the story is that I feel like a million bucks. I have more energy, my body isn't as sore, my joints don't hurt, and I'm just generally feeling like a younger person. I had no idea how awful I felt until I actually got this taken care of. And it's because of this healthcare ecosystem that we're building that that was possible. We don't compete with the traditional healthcare system. We complement it by taking a system that is traditionally expensive, complicated, and hard to access, simplifying it, making it easy to find locations and making it easy for people to access, pay a fair price up front, and get convenient access to practitioners. We say that 40% of consumers or patients in the United States are putting off healthcare conversations because of the unknown expense or because of the fact that 94% of U.S. citizens don't fully understand how the healthcare system works. That creates confusion, uneasiness, and it makes people not want to access it. We make it easier for these telehealth doctors to provide more value, for the laboratories that are a part of Cresso Brands to provide better services, more convenient services, and for healthcare-adjacent organizations to plug consumers in, to drive those consumers both into the Cresso Brand locations as well as into the telehealth markets as well. All right, so I wanted to start with that because I want to paint this picture of what it is that we're building. Now, the third quarter was a pivotal moment for us. I'm going to turn the call over to Jason Tong, our CFO. He's going to go through the financial results, and I have a couple of bullet points on what we've accomplished throughout the third quarter. So, Jason, take it away.

Thanks, John. I just want to remind – I'm going to go through the financial results of Q3. I just want to remind everybody that all amounts here are reported under IFRS and are in U.S. dollars. I would also like to note that the Crestle transaction was concluded in the third quarter of 2024 on August 20th, 2024. For accounting purposes, the company has deconsolidated its subsidiary, Artpoint Franchise Group, and now is recording its 29.5% interest in Crestle as an equity investment starting August 20th. And I would like to also ask the audience to read the unaudited Q3 interim financial statements here for more details. So going through the Q3 2024 financial results, revenues in Q3 2024 was $1.2 million compared to $1.6 million in Q3 of 2023. The decrease in revenues was primarily due to decrease in royalties and franchising revenues, as no royalties and brand fund revenues were included after the deconsolidation of Artporn Franchise Group and after the Crestle transaction on August 20, 2024. Debt income for Q3 2024 was $5.2 million versus a net loss of $1.5 million. The increase was primarily due to an accounting gain on deconsolidation, again, due to the Crestle transaction of $6.3 million, decrease of cost and revenues of $800,000, decrease in salary and wages of $160,000, and decrease in sales and marketing costs. Operating cash flows for Q3 2024 was negative $600,000, compared to negative 1 million for Q3, 2023. EBITDA for Q3, 2024 was 5.5 million compared to negative 1.2 million in Q3, 2023. Adjusted EBITDA in Q3, 2024 was negative 600,000 compared to negative 400,000 in Q3 of 2023. I would now go through the nine months and the results, the year-to-date results for Q3. Total revenues for the nine months ended was $4.5 million compared to $4.8 million in the prior period. Again, the decrease in revenues was primarily due to the Crestle transaction, where starting August 20th, we have deconsolidated our point franchise group, and we are no longer including its revenues in our financial statements. Net income for the nine months ended was was $2.3 million compared to a net loss of $6 million in 2023. The change was primarily due to an accounting gain on deconsolidation of $6.3 million, a decrease in cost of revenues of $1.1 million, decrease in salary and wages of $1 million, and decrease in software expenses of about $200,000 and decrease in sales and marketing of about $240,000. Operating cash flows for the nine-month period was negative 2.5 million compared to negative 4 million for the prior period. EBITDA for the nine-month period was 3.3 million compared to negative 5 million for the prior period. And adjusted EBITDA for the nine-month period was negative 2.5 million compared to negative 3.2 million in the prior period. And I'll pass it on back to John.