Novo Integrated Sciences, Inc. (NASDAQ:NVOS) (the “Company” or
“Novo”), pioneering a holistic approach to patient-first health and
wellness through a multidisciplinary healthcare ecosystem of
multiple patient and consumer touchpoints for services and product
innovation, today reported its financial results for the third
fiscal quarter ended May 31, 2024.
Robert Mattacchione, Novo’s CEO and Board Chairman, stated, “The
Company’s fiscal year 2024 third quarter emphasized maximizing
operational efficiencies for all business units. The Company
continues to work with certain prospective financial partners to
close previously announced non-traditional financing opportunities
to raise foundational capital with repayment terms necessary to
support and accelerate the further growth of Novo’s three-pillar
business model. The Company remains committed to the
commercialization of its proprietary product offerings and the
expansion and delivery of its essential services and solutions for
how non-catastrophic healthcare is delivered both now and in the
future.”
Financial Highlights for the three-month period ended May 31,
2024:
- Cash and cash equivalents were $1,539,771, total assets were
$35,327,000, total liabilities were $25,663,779, and total
stockholders’ equity was $9,956,134.
- Revenues were $3,151,851, representing a decrease of $141,082,
or 4%, from $3,292,933 for the three months ended May 31, 2023. The
decrease in revenue is principally due to a decrease in product
sales. Acenzia’s and Terragenx’s revenue for the three months ended
May 31, 2024 were $884,396 and $103,399, respectively. Despite a
decrease in total revenue, revenue from our healthcare services
increased by 8.1% when comparing the revenue for the three months
ended May 31, 2024 to the three months ended May 31, 2023.
- Operating costs were $3,417,096, representing an increase of
$672,584, or 25%, from $2,744,512 for the three months ended May
31, 2023. The increase in operating costs was primarily due to the
inflationary impact on operating costs.
- Net loss attributed to Novo Integrated Sciences, Inc. for the
three months ended May 31, 2024, was $13,741,903, representing an
increase of $12,244,573, or 818%, from $1,497,330 for the three
months ended May 31, 2023. The increase in net loss of $12,244,573
is mainly attributed to the recognition of a $6,724,690 loss in the
fair value of the derivative liability, loss from operations of
$1,089,785, amortization of the debt discount of $2,748,793 and
foreign currency exchange loss of $1,455,248 arising as a result of
intercompany balance reconciliation.
- On April 5, 2024, the Company executed a $6.21 million
Securities Purchase Agreement and Promissory Note with
Streeterville Capital LLC (the “Streeterville Note”). The interest
rate on the Streeterville Note is 10.9% and it has a 12-month
maturity date. A portion of the proceeds from the Streeterville
Note paid the balance owed on two notes, as follows:
- $3,228,774 (principal) and $30,571.28 (interest) on the 2023
$3.5 million Mast Hill note; and
- $82,761 (principal) and $1,552 (interest) on the 2023 $277,777
First Fire note.
About Novo Integrated Sciences,
Inc.
Novo Integrated Sciences, Inc. is pioneering a holistic approach
to patient-first health and wellness through a multidisciplinary
healthcare ecosystem of services and product innovation. Novo
offers an essential and differentiated solution to deliver, or
intend to deliver, these services and products through the
integration of medical technology, advanced therapeutics, and
rehabilitative science.
We believe that “decentralizing” healthcare, through the
integration of medical technology and interconnectivity, is an
essential solution to the rapidly evolving fundamental
transformation of how non-catastrophic healthcare is delivered both
now and in the future. Specific to non-critical care, ongoing
advancements in both medical technology and inter-connectivity are
allowing for a shift of the patient/practitioner relationship to
the patient’s home and away from on-site visits to primary medical
centers with mass-services. This acceleration of “ease-of-access”
in the patient/practitioner interaction for non-critical care
diagnosis and subsequent treatment minimizes the degradation of
non-critical health conditions to critical conditions as well as
allowing for more cost-effective healthcare distribution.
The Company’s decentralized healthcare business model is
centered on three primary pillars to best support the
transformation of non-catastrophic healthcare delivery to patients
and consumers:
- First Pillar: Service Networks. Deliver multidisciplinary
primary care services through (i) an affiliate network of clinic
facilities, (ii) small and micro footprint sized clinic facilities
primarily located within the footprint of box-store commercial
enterprises, (iii) clinic facilities operated through a franchise
relationship with the Company, and (iv) corporate operated clinic
facilities.
- Second Pillar: Technology. Develop, deploy, and integrate
sophisticated interconnected technology, interfacing the patient to
the healthcare practitioner thus expanding the reach and
availability of the Company’s services, beyond the traditional
clinic location, to geographic areas not readily providing
advanced, peripheral based healthcare services, including the
patient’s home.
- Third Pillar: Products. Develop and distribute effective,
personalized health and wellness product solutions allowing for the
customization of patient preventative care remedies and ultimately
a healthier population. The Company’s science-first approach to
product innovation further emphasizes our mandate to create and
provide over-the-counter preventative and maintenance care
solutions.
Innovation through science combined with the integration of
sophisticated, secure technology assures Novo Integrated Sciences
of continued cutting-edge advancement in patient-first
platforms.
For more information concerning Novo Integrated Sciences, please
visit www.novointegrated.com.
Twitter, LinkedIn, Facebook, Instagram, YouTube
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements other than statements of historical facts
included in this press release are forward-looking statements. In
some cases, forward-looking statements can be identified by words
such as "believe," “intend,” "expect," "anticipate," "plan,"
"potential," "continue" or similar expressions. Such
forward-looking statements include risks and uncertainties, and
there are important factors that could cause actual results to
differ materially from those expressed or implied by such
forward-looking statements. These factors, risks and uncertainties
are discussed in Novo’s filings with the Securities and Exchange
Commission. Investors should not place any undue reliance on
forward-looking statements since they involve known and unknown,
uncertainties and other factors which are, in some cases, beyond
Novo’s control which could, and likely will, materially affect
actual results, levels of activity, performance or achievements.
Any forward-looking statement reflects Novo’s current views with
respect to future events and is subject to these and other risks,
uncertainties and assumptions relating to operations, results of
operations, growth strategy and liquidity. Novo assumes no
obligation to publicly update or revise these forward-looking
statements for any reason, or to update the reasons actual results
could differ materially from those anticipated in these
forward-looking statements, even if new information becomes
available in the future. The contents of any website referenced in
this press release are not incorporated by reference herein.
NOVO INTEGRATED SCIENCES,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
As of May 31, 2024 (unaudited)
and August 31, 2023
May 31,
August 31,
2024
2023
ASSETS
Current Assets:
Cash and cash equivalents
$
1,539,771
$
416,323
Accounts receivable, net
2,251,528
1,467,028
Inventory, net
1,112,068
1,106,983
Other receivables, current portion
1,043,473
1,051,584
Prepaid expenses and other current
assets
214,436
346,171
Total current assets
6,161,276
4,388,089
Property and equipment, net
5,157,781
5,390,038
Intangible assets, net
14,690,038
16,218,539
Right-of-use assets, net
1,793,907
1,983,898
Goodwill
7,523,998
7,582,483
TOTAL ASSETS
$
35,327,000
$
35,563,047
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable
$
3,894,602
$
3,513,842
Accrued expenses
1,332,485
1,233,549
Accrued interest (including amounts to
related parties)
450,795
382,666
Government loans and notes payable,
current portion
93,488
277,405
Convertible notes payable, net of discount
of $4,985,381
1,224,619
558,668
Derivative liability
14,048,576
–
Contingent liability
45,968
61,767
Debentures, related parties
909,753
916,824
Due to related parties
262,295
533,001
Finance lease liability, net of current
portion
4,336
11,744
Operating lease liability, current
portion
409,516
415,392
Total current liabilities
22,676,433
7,904,858
Government loans and notes payable, net of
current portion
63,572
65,038
Operating lease liability, net of current
portion
1,534,078
1,693,577
Deferred tax liability
1,389,696
1,400,499
TOTAL LIABILITIES
25,663,779
11,063,972
Commitments and contingencies
–
–
STOCKHOLDERS’ EQUITY
Novo Integrated Sciences, Inc.
Convertible preferred stock; $0.001 par
value; 1,000,000 shares authorized; Nil shares issued and
outstanding at May 31, 2024 and August 31, 2023
–
–
Common stock; $0.001 par value;
499,000,000 shares authorized; 19,054,523 and 15,759,325 shares
issued and outstanding at May 31, 2024 and August 31, 2023,
respectively
19,055
15,760
Additional paid-in capital
96,660,608
90,973,316
Common stock to be issued (1,700 and
91,138 shares at May 31, 2024 and August 31, 2023)
25,500
1,217,293
Other comprehensive (loss) income
1,452,386
(357,383
)
Accumulated deficit
(88,201,415
)
(67,033,041
)
Total Novo Integrated Sciences, Inc.
stockholders’ equity
9,956,134
24,815,945
Noncontrolling interest
(292,913
)
(316,870
)
Total stockholders’ equity
9,663,221
24,499,075
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
35,327,000
$
35,563,047
* The condensed consolidated balance sheets’
common stock amounts have been retroactively adjusted to account
for the Company’s 1:10 reverse stock split, effective November 7,
2023.
NOVO INTEGRATED SCIENCES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the Three and Nine Months
Ended May 31, 2024 and 2023 (unaudited)
Three Months Ended
Nine Months Ended
May 31,
May 31,
May 31,
May 31,
2024
2023
2024
2023
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Revenues
$
3,151,851
$
3,292,933
$
10,213,661
$
9,268,722
Cost of revenues
2,254,958
1,978,839
6,048,664
5,244,192
Gross profit
896,893
1,314,094
4,164,997
4,024,530
Operating expenses:
Selling expenses
2,635
1,877
14,811
9,916
General and administrative expenses
3,414,461
2,742,635
11,527,794
9,473,802
Total operating expenses
3,417,096
2,744,512
11,542,605
9,483,718
Loss from operations
(2,520,203
)
(1,430,418
)
(7,377,608
)
(5,459,188
)
Non operating income (expense)
Interest income
2,214
62,397
6,910
6,762
Interest expense
(178,445
)
(9,570
)
(460,503
)
(240,520
)
Other expense
(3,431
)
–
(964,368
)
–
Change in fair value of derivative
liability
(6,724,690
)
–
(5,765,822
)
–
Amortization of debt discount
(2,904,830
)
(156,037
)
(5,095,331
)
(4,386,899
)
Exchange currency (loss) gain
(1,406,915
)
48,333
(1,485,861
)
12,652
Total other expense
(11,216,097
)
(54,877
)
(13,764,975
)
(4,608,005
)
Loss before income taxes
(13,736,300
)
(1,485,295
)
(21,142,583
)
(10,067,193
)
Income tax expense
–
–
–
–
Net loss
$
(13,736,300
)
$
(1,485,295
)
$
(21,142,583
)
$
(10,067,193
)
Net income (loss) attributed to
noncontrolling interest
5,603
12,035
25,791
(13,095
)
Net loss attributed to Novo Integrated
Sciences, Inc.
$
(13,741,903
)
$
(1,497,330
)
$
(21,168,374
)
$
(10,054,098
)
Comprehensive loss:
Net loss
(13,736,300
)
(1,485,295
)
(21,142,583
)
(10,067,193
)
Foreign currency translation gain
(loss)
750,067
(120,357
)
1,809,769
(738,022
)
Comprehensive loss:
$
(12,986,233
)
$
(1,605,652
)
$
(19,332,814
)
$
(10,805,215
)
Weighted average common shares outstanding
- basic and diluted
18,685,979
14,360,058
17,688,692
8,583,229
Net loss per common share - basic and
diluted
$
(0.74
)
$
(0.10
)
$
(1.20
)
$
(1.17
)
* The condensed consolidated statements of
operations and comprehensive loss’s share and per share amounts
have been retroactively adjusted to account for the Company’s 1:10
reverse stock split, effective November 7, 2023.
NOVO INTEGRATED SCIENCES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Three and Nine Months
Ended May 31, 2024 and 2023 (unaudited)
Additional
Common
Other
Total Novo
Common Stock
Paid-in
Stock To
Comprehensive
Accumulated
Stockholders’
Noncontrolling
Total
Shares
Amount
Capital
Be Issued
Income
Deficit
Equity
Interest
Equity
Balance, August 31, 2023
15,759,325
$
15,760
$
90,973,316
$
1,217,293
$
(357,383
)
$
(67,033,041
)
$
24,815,945
$
(316,870
)
$
24,499,075
Cashless exercise of warrants
245,802
246
1,323,152
–
–
–
1,323,398
–
1,323,398
Exercise of warrants for cash
240,400
240
240,160
–
–
–
240,400
–
240,400
Share issuance for convertible debt
settlement
519,845
520
577,002
–
–
–
577,522
–
577,522
Issuance of common stock to be issued
73,767
74
1,172,776
(1,172,850
)
–
–
–
–
–
Common stock issued for services
424,080
424
1,194,976
–
–
–
1,195,400
–
1,195,400
Reverse stock split share rounding
27,973
28
(28
)
–
–
–
–
–
–
Foreign currency translation gain
–
–
–
–
110,895
–
110,895
(1,919
)
108,976
Net loss
–
–
–
–
–
(4,680,343
)
(4,680,343
)
19,620
(4,660,723
)
Balance, November 30, 2023
17,291,192
$
17,292
$
95,481,354
$
44,443
$
(246,488
)
$
(71,713,384
)
$
23,583,217
$
(299,169
)
$
23,284,048
Share issuance for convertible debt
settlement
457,128
457
453,616
–
–
–
454,073
–
454,073
Foreign currency translation gain
–
–
–
–
749,869
–
749,869
198
750,067
Fair value of stock options
–
–
147,656
–
–
–
147,656
–
147,656
Net loss
–
–
–
–
–
(2,746,128
)
(2,746,128
)
568
(2,745,560
)
Balance, February 29, 2024
17,748,320
$
17,749
$
96,082,626
$
44,443
$
503,381
$
(74,459,512
)
$
22,188,687
$
(298,403
)
$
21,890,284
Share issuance for convertible debt
settlement
1,306,203
1,306
577,982
–
–
–
579,288
–
579,288
Cancellation of agreement
–
–
–
(18,943
)
–
–
(18,943
)
–
(18,943
)
Foreign currency translation gain
–
–
–
–
949,005
–
949,005
(113
)
948,892
Net loss
–
–
–
–
–
(13,741,903
)
(13,741,903
)
5,603
(13,736,300
)
Balance, May 31, 2024
19,054,523
$
19,055
$
96,660,608
$
25,500
$
1,452,386
$
(88,201,415
)
$
9,956,134
$
(292,913
)
$
9,663,221
Additional
Common
Other
Total Novo
Common Stock
Paid-in
Stock To
Comprehensive
Accumulated
Stockholders’
Noncontrolling
Total
Shares
Amount
Capital
Be Issued
Income
Deficit
Equity
Interest
Equity
Balance, August 31, 2022
3,118,063
$
3,118
$
66,084,887
$
9,474,807
$
560,836
$
(53,818,489
)
$
22,305,159
$
(257,588
)
$
22,047,571
Common stock issued for cash, net of
offering costs
400,000
400
1,794,600
–
–
–
1,795,000
–
1,795,000
Issuance of common stock to be issued
3,623
4
92,362
(92,366
)
–
–
–
–
–
Cashless exercise of warrants
467,399
467
1,138,583
–
–
–
1,139,050
–
1,139,050
Fair value of stock options
–
–
60,887
–
–
–
60,887
–
60,887
Foreign currency translation loss
–
–
–
–
(417,008
)
–
(417,008
)
(3,974
)
(420,982
)
Net loss
–
–
–
–
–
(3,935,413
)
(3,935,413
)
(1,323
)
(3,936,736
)
Balance, November 30, 2022
3,989,085
$
3,989
$
69,171,319
$
9,382,441
$
143,828
$
(57,753,902
)
$
20,947,675
$
(262,885
)
$
20,684,790
Share issuance for convertible debt
settlement
9,310,940
9,311
9,076,740
–
–
–
9,086,051
–
9,086,051
Exercise of warrants (Cashless
Exercise)
115,935
116
282,417
–
–
–
282,533
–
282,533
Exercise of warrants for cash
131,000
131
130,869
–
–
–
131,000
–
131,000
Issuance of common stock to be issued
320,202
320
8,164,828
(8,165,148
)
–
–
–
–
–
Shares issued with convertible notes
95,500
96
82,868
–
–
–
82,963
–
82,963
Value of warrants issued with convertible
notes
–
–
86,327
–
–
–
86,327
–
86,327
Fair value of stock options
–
–
60,887
–
–
–
60,887
–
60,887
Extinguishment of derivative liability due
to conversion
–
–
1,390,380
–
–
–
1,390,380
–
1,390,380
Foreign currency translation loss
–
–
–
–
(195,821
)
–
(195,821
)
(862
)
(196,683
)
Net loss
–
–
–
–
–
(4,621,355
)
(4,621,355
)
(23,807
)
(4,645,162
)
Balance, February 28, 2023
13,962,662
13,963
88,446,635
1,217,293
(51,993
)
(62,375,257
)
27,250,640
(287,554
)
26,963,086
Share issuance for convertible debt
settlement
107,594
108
100,170
–
–
–
100,278
–
100,278
Exercise of warrants for cash
320,000
320
319,680
–
–
–
320,000
–
320,000
Shares issued with convertible notes
95,500
96
90,037
–
–
–
90,132
–
90,132
Value of warrants issued with convertible
notes
–
–
93,811
–
–
–
93,811
–
93,811
Beneficial conversion feature upon
issuance of convertible debt
–
–
66,068
–
–
–
66,068
–
66,068
Stock option expense
–
–
263,561
–
–
–
263,561
–
263,561
Foreign currency translation loss
–
–
–
–
(120,533
)
–
(120,533
)
176
(120,357
)
Net loss
–
–
–
–
–
(1,497,330
)
(1,497,330
)
12,035
(1,485,295
)
Balance, May 31, 2023
14,485,756
$
14,486
$
89,379,961
$
1,217,293
$
(172,526
)
$
(63,872,587
)
$
26,566,627
$
(275,343
)
$
26,291,284
* The condensed consolidated statements of
stockholders’ equity share amounts have been retroactively adjusted
to account for the Company’s 1:10 reverse stock split, effective
November 7, 2023.
NOVO INTEGRATED SCIENCES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
For the Nine Months Ended May
31, 2024 and 2023 (unaudited)
Nine Months Ended
May 31,
May 31,
2024
2023
(unaudited)
(unaudited)
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss
$
(21,142,583
)
$
(10,067,193
)
Adjustments for non-cash items:
Depreciation and amortization
1,697,317
1,718,388
Fair value of vested stock options
147,656
385,335
Change in fair value of derivative
liability
5,765,822
–
Cashless exercise of warrants
1,323,398
1,421,583
Common stock issued for services
1,195,400
–
Operating lease expense
466,276
624,246
Amortization of debt discount
5,095,331
4,386,899
Foreign currency transaction losses
1,485,861
(12,652
)
Changes in operating assets and
liabilities:
Accounts receivable
(797,692
)
(308,907
)
Inventory
(12,548
)
(92,260
)
Prepaid expenses and other current
assets
130,015
333,724
Accounts payable
408,067
154,542
Accrued expenses
76,428
104,004
Accrued interest
103,605
(67,634
)
Operating lease liability
(466,276
)
(594,618
)
Net cash used in operating activities
(4,523,923
)
(2,014,543
)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property and equipment
(2,005
)
(18,870
)
Net cash used in investing activities
(2,005
)
(18,870
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
(Repayments to) proceeds from related
parties
(267,756
)
(56,649
)
Proceeds from notes payable
274
222,000
Repayments of notes payable
(184,125
)
–
Repayments of finance leases
(7,350
)
(6,435
)
Proceeds from issuance of convertible
notes, net
8,649,153
925,306
Repayment of convertible notes
(3,311,536
)
(3,033,888
)
Proceeds from the sale of common stock,
net of offering costs
–
1,795,000
Proceeds from exercise of warrants
240,400
451,000
Net cash provided by financing
activities
5,119,060
296,334
Effect of exchange rate changes on cash
and cash equivalents
530,316
22,403
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
1,123,448
(1,714,676
)
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
416,323
2,178,687
CASH AND CASH EQUIVALENTS, END OF
PERIOD
$
1,539,771
$
464,011
CASH PAID FOR:
Interest
$
190,491
$
343,878
Income taxes
$
–
$
–
SUPPLEMENTAL NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Common stock issued for convertible debt
settlement
$
1,610,883
$
9,186,329
Beneficial conversion feature upon
issuance of convertible notes
–
66,068
Debt discount recognized on derivative
liability
–
1,390,380
Debt discount recognized on convertible
note
–
639,993
Extinguishment of derivative liability due
to conversion
–
1,390,380
Common stock issued with convertible
notes
–
173,095
Warrants issued with convertible notes
$
–
$
180,138
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240719320957/en/
Chris David, COO-President Novo Integrated Sciences, Inc.
chris.david@novointegrated.com (888) 512-1195
Novo Integrated Sciences (NASDAQ:NVOS)
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