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 fiscal
quarter ended November 30, 2022.
Robert Mattacchione, Novo’s CEO and Board Chairman, stated, “The
Company remains committed to the commercialization of its
proprietary product offerings and the expansion and delivery of its
essential services and solutions of how non-catastrophic healthcare
is delivered both now and in the future. The Company’s fiscal year
2023 first quarter period emphasized maximizing efficiencies
pointed towards future cost savings and margin stability.”
Financial Highlights:
- As of November 30, 2022, the Company’s cash and cash
equivalents were $878 thousand, total assets were $38.2 million,
total liabilities were $17.2 million, and stockholders’ equity was
$20.9 million.
- Revenues for the three months ended November 30, 2022 were
$3,419,280, representing an increase of $257,353, or 8.1%, from
$3,161,927 for the same period in 2021. The increase in revenue is
principally due to an increase in outsourced product sales which
resulted in an increase in revenue of $607,589. Acenzia’s and
Terragenx’s revenue for the three months ended November 30, 2022
was $777,229 and $9,157, respectively. Revenues from our healthcare
services decreased by 7.3% when comparing the revenues for the
three months ended November 30, 2022 to the same period in 2021
primarily due to a COVID-19 surge in Ontario province Canada and
COVID-19 staffing related shortages limiting clinic and eldercare
patient-practitioner direct personal interaction.
- Operating costs for the three months ended November 30, 2022
were $3,981,493, representing an increase of $1,351,368, or 51.4%,
from $2,630,125 for the same period in 2021. The increase in
operating costs is principally due to the increase in overhead
expenses associated with the operations of Acenzia, PRO-DIP, and
Terragenx which was approximately $902,756 for the three months
ended November 30, 2022. In subsequent quarters, this increase in
overhead expenses associated with Acenzia, PRO-DIP, and Terragenx
is projected to decrease as the Company integrates and consolidates
operations. Also, an increase in legal and professional fees
contributed to the increase in operating expenses.
- Net loss attributed to Novo Integrated Sciences, Inc. for the
three months ended November 30, 2022 was $3,935,413, representing
an increase of $2,128,826, or 117.8%, from $1,806,587 for the same
period in 2021. The increase in net loss is principally due to (i)
an increase in overhead expenses associated with the operations of
Acenzia, PRO-DIP, and Terragenx which was approximately $902,756
for the three months ended November 30, 2022, (ii) an increase in
interest expense, and (iii) an increase in amortization of debt
discounts.
Operational Milestones:
- The Company completed a registered offering which raised an
aggregate of $2,000,000 with the sale of 4,000,000 units consisting
of (i) 4,000,000 shares of the Company’s common stock, (ii)
warrants with a three-year term to purchase 4,000,000 shares of
common stock at an exercise price of $0.50 per share, and (iii)
warrants with a five-year term to purchase 4,000,000 shares of
common stock at an exercise price of $0.50 per share (the
“Offering”).
- The Company obtained certain waivers and amendments with
respect to certain payment and warrant exercise pricing provisions
for both the Hudson Bay Master Fund Ltd. and CVI Investments, Inc.
aggregate $16.666m senior secured promissory notes.
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 November 30, 2022
(unaudited) and August 31, 2022
November 30,
August 31,
2022
2022
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents
$
878,700
$
2,178,687
Accounts receivable, net
960,091
1,017,405
Inventory, net
1,010,115
879,033
Other receivables, current portion
1,053,437
1,085,335
Prepaid expenses and other current
assets
554,978
571,335
Total current assets
4,457,321
5,731,795
Property and equipment, net
5,563,829
5,800,648
Intangible assets, net
17,708,310
18,840,619
Right-of-use assets, net
2,423,519
2,673,934
Goodwill
7,595,844
7,825,844
TOTAL ASSETS
37,748,823
$
40,872,840
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable
$
2,075,124
$
1,800,268
Accrued expenses
1,232,519
1,116,125
Accrued interest (including amounts to
related parties)
434,521
454,189
Convertible notes payable, net of discount
of $2,750,917
6,422,009
9,099,654
Derivative liability
1,390,380
-
Contingent liability
62,855
534,595
Due to related parties
417,718
478,897
Finance lease liability, current
portion
8,737
8,890
Operating lease liability, current
portion
521,358
582,088
Total current liabilities
12,565,221
14,074,706
Debentures, related parties
918,439
946,250
Government loans and notes payable, net of
current portion
157,900
161,460
Finance lease liability, net of current
portion
9,466
12,076
Operating lease liability, net of current
portion
2,010,041
2,185,329
Deferred tax liability
1,402,966
1,445,448
TOTAL LIABILITIES
17,064,033
18,825,269
Commitments and contingencies
-
-
STOCKHOLDERS’ EQUITY
Novo Integrated Sciences, Inc.
Convertible preferred stock; $0.001 par
value; 1,000,000 shares authorized; 0 and 0 shares issued and
outstanding at November 30, 2022 and August 31, 2022,
respectively
-
-
Common stock; $0.001 par value;
499,000,000 shares authorized; 39,890,811 and 31,180,603 shares
issued and outstanding at November 30, 2022 and August 31, 2022,
respectively
39,891
31,181
Additional paid-in capital
69,135,417
66,056,824
Common stock to be issued (4,113,411 and
4,149,633 shares at November 30, 2022 and August 31, 2022)
9,382,441
9,474,807
Other comprehensive income
143,828
560,836
Accumulated deficit
(57,753,902
)
(53,818,489
)
Total Novo Integrated Sciences, Inc.
stockholders’ equity
20,947,675
22,305,159
Noncontrolling interest
(262,885
)
(257,588
)
Total stockholders’ equity
20,684,790
22,047,571
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
37,748,823
$
40,872,840
NOVO INTEGRATED SCIENCES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the Three Months Ended
November 30, 2022 and 2021 (unaudited)
Three Months Ended
November 30,
November 30,
2022
2021
(unaudited)
(unaudited)
Revenues
$
3,419,280
$
3,161,927
Cost of revenues
1,679,747
1,895,461
Gross profit
1,739,533
1,266,466
Operating expenses:
Selling expenses
7,332
168
General and administrative expenses
3,974,161
2,629,957
Total operating expenses
3,981,493
2,630,125
Loss from operations
(2,241,960
)
(1,363,659
)
Non-operating income (expense)
Interest income
2,281
8,388
Interest expense
(167,243
)
(68,730
)
Amortization of debt discount
(1,490,513
)
(57,840
)
Foreign currency transaction losses
(39,301
)
(334,554
)
Total other income (expense)
(1,694,776
)
(452,736
)
Loss before income taxes
(3,936,736
)
(1,816,395
)
Income tax expense
-
-
Net loss
$
(3,936,736
)
$
(1,816,395
)
Net loss attributed to noncontrolling
interest
(1,323
)
(9,808
)
Net loss attributed to Novo Integrated
Sciences, Inc.
$
(3,935,413
)
$
(1,806,587
)
Comprehensive loss:
Net loss
(3,936,736
)
(1,816,395
)
Foreign currency translation loss
(420,982
)
(104,388
)
Comprehensive loss:
$
(4,357,718
)
$
(1,920,783
)
Weighted average common shares outstanding
- basic and diluted
33,855,082
26,924,705
Net loss per common share - basic and
diluted
$
(0.12
)
$
(0.07
)
NOVO INTEGRATED SCIENCES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Three Months Ended
November 30, 2022 and 2021 (unaudited)
Additional
Common
Other
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
31,180,603
$
31,181
$
66,056,824
$
9,474,807
$
560,836
$
(53,818,489
)
$
22,305,159
$
(257,588
)
$
22,047,571
Units issued for cash, net of offering
costs
4,000,000
4,000
1,791,000
-
-
-
1,795,000
-
1,795,000
Issuance of common stock to be issued
36,222
36
92,330
(92,366
)
-
-
-
-
-
Cashless exercise of warrants
4,673,986
4,674
1,134,376
-
-
-
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
39,890,811
$
39,891
$
69,135,417
$
9,382,441
$
143,828
$
(57,753,902
)
$
20,947,675
$
(262,885
)
$
20,684,790
Balance, August 31, 2021
26,610,144
$
26,610
$
54,579,396
$
9,236,607
$
991,077
$
(20,969,274
)
$
43,864,416
$
(60,261
)
$
43,804,155
Common stock for services
35,000
35
64,715
-
-
-
64,750
-
64,750
Common stock issued as collateral and held
in escrow
2,000,000
2,000
(2,000
)
-
-
-
-
-
-
Common stock to be issued for purchase of
Terragenx
-
-
-
983,925
-
-
983,925
97,311
1,081,236
Common stock to be issued for purchase of
Mullin assets
-
-
-
188,925
-
-
188,925
-
188,925
Value of warrants issued with convertible
notes
-
-
295,824
-
-
-
295,824
-
295,824
Fair value of stock options
-
-
154,135
-
-
-
154,135
-
154,135
Foreign currency translation loss
-
-
-
-
(103,533
)
-
(103,533
)
(855
)
(104,388
)
Net loss
-
-
-
-
-
(1,806,587
)
(1,806,587
)
(9,808
)
(1,816,395
)
Balance, November 30, 2021
28,645,144
$
28,645
$
55,092,070
$
10,409,457
$
887,544
$
(22,775,861
)
$
43,641,855
$
26,387
$
43,668,242
NOVO INTEGRATED SCIENCES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
For the Three Months Ended
November 30, 2022 and 2021 (unaudited)
Three Months Ended
November 30,
November 30,
2022
2021
(unaudited)
(unaudited)
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss
$
(3,936,736
)
$
(1,816,395
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
586,166
694,282
Fair value of vested stock options
60,887
154,135
Financing costs for debt extension
1,139,050
-
Common stock issued for services
-
64,750
Operating lease expense
209,846
163,879
Amortization of debt discount
1,490,513
57,840
Foreign currency transaction losses
39,301
334,554
Changes in operating assets and
liabilities:
Accounts receivable
28,174
(253,079
)
Inventory
(157,118
)
12,245
Prepaid expenses and other current
assets
1,471
(47,335
)
Accounts payable
321,961
(55,056
)
Accrued expenses
149,945
82,933
Accrued interest
(9,232
)
9,481
Operating lease liability
(202,465
)
(161,337
)
Net cash used in operating activities
(278,237
)
(759,103
)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property and equipment
-
(120,397
)
Cash acquired with acquisition
-
29,291
Net cash used in investing activities
-
(91,106
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Repayments to related parties
(48,480
)
(3,127
)
Repayments of finance leases
(2,763
)
(7,088
)
Repayment of convertible notes
(2,777,778
)
-
Proceeds from the sale of units, net of
offering costs
1,795,000
-
Proceeds from issuance of convertible
notes, net
-
1,410,000
Net cash (used in) provided by financing
activities
(1,034,021
)
1,399,785
Effect of exchange rate changes on cash
and cash equivalents
12,271
(41,984
)
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS
(1,299,987
)
507,592
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
2,178,687
8,293,162
CASH AND CASH EQUIVALENTS, END OF
PERIOD
$
878,700
$
8,800,754
CASH PAID FOR:
Interest
$
186,911
$
64,522
Income taxes
$
-
$
-
SUPPLEMENTAL NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Debt discount recognized on derivative
liability
$
1,390,380
$
-
Common stock to be issued for intangible
assets
$
-
$
188,925
Common stock to be issued for
acquisition
$
-
$
983,925
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230524005818/en/
Chris David, COO-President Novo Integrated Sciences, Inc.
chris.david@novointegrated.com (888) 512-1195
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