Management expects Triple-digit Percentage
Revenue Growth sequentially for the Fiscal 2022 Third Quarter
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 February 28, 2022.
Robert Mattacchione, Novo’s CEO and Board Chairman, stated, “The
38.2% year-over-year revenue growth we experienced for the fiscal
second quarter is directly related to the expansion of our
essential and differentiated ecosystem for the delivery of
healthcare related services and products. The Company projects
'triple-digit' percentage revenue growth sequentially for the
fiscal third quarter ending May 31, 2022 primarily due to product
and diagnostic technology sales. This projected acceleration in
revenue growth in future quarters is directly related to the
effects of commercializing our three-pillar model and crystalizes
the Company’s mission for a fully integrated healthcare ecosystem,
with global reach, resulting in rapid growth and
profitability.”
Financial Highlights for the Period Ended February 28,
2022:
- Cash and cash equivalents were $15.9 million, total assets were
$70.3 million, total liabilities were $25.8 million, and
stockholders’ equity was $44.5 million.
- Revenues were $2,869,223, representing an increase of $793,329,
or 38.2%, from $2,075,894 for the same period in 2021 principally
due to the acquisition of Acenzia, Inc. in June 2021 and Terragenx
in November 2021. Acenzia’s and Terragenx’ revenue for the three
months ended February 28, 2022 was $749,345 and $245,658,
respectively. Revenue from healthcare services decreased by 9.7%,
when comparing the revenue for the three months ended February 28,
2022 to the same period in 2021, primarily due to a surge of
COVID-19 in the province of Ontario, Canada, limiting clinic and
eldercare patient-practitioner direct personal interaction.
- Operating costs were $3,337,030, representing an increase of
$1,259,640, or 60.6%, from $2,077,390 for the same period in 2021
principally due to (i) an increase in legal and professional fees
related to fund raising, and (ii) an increase in overhead expenses
associated with the acquisitions of Acenzia, PRO-DIP, and Terragenx
which was approximately $1,133,000. 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.
- Net loss attributed to Novo Integrated Sciences, Inc. was
$4,805,167, representing an increase of $3,465,297, or 258.6%, from
$1,339,870 for the same period in 2021 principally due to (i) an
increase in interest expense, (ii) an increase in amortization of
debt discounts, (iii) an increase in legal and professional fees
related to fund raising, (iv) an increase in overhead expenses
associated with the acquisitions of Acenzia, PRO-DIP, and Terragenx
which was approximately $1,133,000, and (v) an increase in foreign
currency transaction losses.
- On December 14, 2022, the Company completed a registered direct
offering with accredited institutional investors, resulting in
gross proceeds of $15 million to Novo.
Operational Milestones:
- Completed an amended and restated Master Facility License
Agreement with LA Fitness in Canada.
- IoNovo Iodide and IoNovo for Kids Pure Iodine oral sprays
granted Natural Product Number (NPN) by Health Canada.
- Signed an Asset Purchase Agreement with the shareholder of
Poling Taddeo Hovius Physiotherapy Professional Corp. (“PTHPC”), a
clinic-based physiotherapy, rehabilitative, and related ancillary
services and products business known as Fairway Physiotherapy and
Sports Injury Clinic in Ontario province, Canada, to acquire all
assets of PTHPC for a purchase price of $627,000 in exchange for an
allotment of 156,750 restricted shares of the Company’s common
stock at $4.00 per share. The transaction closed on March 1,
2022.
- Signed a Share Exchange Agreement with the shareholder of
12858461 Canada Corp. (“1285”), a clinic-based physiotherapy and
related ancillary services and products business in Ontario
province, Canada, to acquire 50.1% of 1285 for a purchase price of
$68,000 in exchange for an allotment of 17,000 restricted shares of
the Company’s common stock at $4.00 per share. The transaction
closed on March 1, 2022.
Operational Milestones Subsequent to End of Fiscal 2022
Second Quarter:
- Completed Acquisition of Clinical Consultants International LLC
(CCI).
- As a result of CCI acquisition, Novo signed a memorandum of
understanding with Boditech Med, a global point-of-care testing
leader, to market and distribute in North America.
- PRO-DIP® issued U.S. Patent for oral pouch delivery system
technology.
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 multiple patient and consumer touchpoints
for 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, diagnostic and therapeutic solutions, 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. For more information on Novo
Healthnet Limited, Novo’s wholly owned subsidiary, please visit
www.novohealthnet.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 February 28, 2022
(unaudited) and August 31, 2021
February 28,
August 31,
2022
2021
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents
$
15,943,997
$
8,293,162
Accounts receivable, net
1,251,973
1,468,429
Inventory
334,414
339,385
Other receivables, current portion
981,597
814,157
Prepaid expenses and other current
assets
503,437
218,376
Total current assets
19,015,418
11,133,509
Property and equipment, net
6,157,621
6,070,291
Intangible assets, net
33,217,602
32,436,468
Right-of-use assets, net
2,348,391
2,543,396
Other receivables, net of current
portion
522,062
692,738
Goodwill
9,058,936
9,081,879
TOTAL ASSETS
$
70,320,030
$
61,958,281
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable
$
1,105,707
$
1,449,784
Accrued expenses
1,199,274
1,129,309
Accrued interest (including amounts to
related parties)
642,246
366,280
Government loans and notes payable,
current portion
5,260,047
4,485,649
Convertible notes payable, net of discount
of $302,550
1,572,450
-
Contingent liability
749,626
-
Due to related parties
473,367
478,920
Finance lease liability, current
portion
17,533
23,184
Operating lease liability, current
portion
533,535
530,797
Total current liabilities
11,553,785
8,463,923
Debentures, related parties
979,724
982,205
Notes payable, net of current portion
174,242
5,133,604
Convertible notes payable, net of discount
of $6,943,704
9,722,962
-
Finance lease liability, net of current
portion
10,854
16,217
Operating lease liability, net of current
portion
1,866,858
2,057,805
Deferred tax liability
1,496,581
1,500,372
TOTAL LIABILITIES
25,805,006
18,154,126
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 February 28, 2022 and August 31, 2021,
respectively
Common stock; $0.001 par value;
499,000,000 shares authorized; 28,885,144 and 26,610,144 shares
issued and outstanding at February 28, 2022 and August 31, 2021,
respectively
28,885
26,610
Additional paid-in capital
60,691,723
54,579,396
Common stock to be issued (4,359,841 and
3,622,199 shares at February 28, 2022 and August 31, 2021)
10,409,457
9,236,607
Other comprehensive income
1,002,282
991,077
Accumulated deficit
(27,581,028
)
(20,969,274
)
Total Novo Integrated Sciences, Inc.
stockholders’ equity
44,551,319
43,864,416
Noncontrolling interest
(36,295
)
(60,261
)
Total stockholders’ equity
44,515,024
43,804,155
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
70,320,030
$
61,958,281
NOVO INTEGRATED SCIENCES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the Three and Six Months
Ended February 28, 2022 and 2021 (unaudited)
Three Months Ended
Six Months Ended
February 28,
February 28,
February 28,
February 28,
2022
2021
2022
2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Revenues
$
2,869,223
$
2,075,894
$
6,031,150
$
4,231,400
Cost of revenues
1,652,869
1,324,448
3,548,330
2,668,504
Gross profit
1,216,354
751,446
2,482,820
1,562,896
Operating expenses:
Selling expenses
26,370
602
26,538
1,845
General and administrative expenses
3,310,660
2,076,788
5,940,617
3,644,719
Total operating expenses
3,337,030
2,077,390
5,967,155
3,646,564
Loss from operations
(2,120,676
)
(1,325,944
)
(3,484,335
)
(2,083,668
)
Non operating income (expense)
Interest income
8,490
8,301
16,878
16,863
Interest expense
(1,226,182
)
(22,948
)
(1,294,912
)
(46,889
)
Amortization of debt discount
(1,463,022
)
-
(1,520,862
)
-
Foreign currency transaction losses
(66,814
)
-
(401,368
)
-
Total other income (expense)
(2,747,528
)
(14,647
)
(3,200,264
)
(30,026
)
Loss before income taxes
(4,868,204
)
(1,340,591
)
(6,684,599
)
(2,113,694
)
Income tax expense
-
-
-
-
Net loss
$
(4,868,204
)
$
(1,340,591
)
$
(6,684,599
)
$
(2,113,694
)
Net loss attributed to noncontrolling
interest
(63,037
)
(721
)
(72,845
)
(2,354
)
Net loss attributed to Novo Integrated
Sciences, Inc.
$
(4,805,167
)
$
(1,339,870
)
$
(6,611,754
)
$
(2,111,340
)
Comprehensive loss:
Net loss
(4,868,204
)
(1,340,591
)
(6,684,599
)
(2,113,694
)
Foreign currency translation gain
114,738
42,232
11,205
52,828
Comprehensive loss:
$
(4,753,466
)
$
(1,298,359
)
$
(6,673,394
)
$
(2,060,866
)
Weighted average common shares outstanding
- basic and diluted
28,740,700
23,754,808
27,827,686
23,630,900
Net loss per common share - basic and
diluted
$
(0.17
)
$
(0.06
)
$
(0.24
)
$
(0.09
)
NOVO INTEGRATED SCIENCES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Three and Six Months
Ended February 28, 2022 and 2021 (unaudited)
Total
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, 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
Common stock for services
240,000
240
297,760
-
-
-
298,000
-
298,000
Value of warrants issued with convertible
notes
-
-
5,257,466
-
-
-
5,257,466
-
5,257,466
Fair value of stock options
-
-
44,427
-
-
-
44,427
-
44,427
Foreign currency translation gain
-
-
-
-
114,738
-
114,738
355
115,093
Net loss
-
-
-
-
-
(4,805,167
)
(4,805,167
)
(63,037
)
(4,868,204
)
Balance, February 28, 2022
28,885,144
$
28,885
$
60,691,723
$
10,409,457
$
1,002,282
$
(27,581,028
)
$
44,551,319
$
(36,295
)
$
44,515,024
Balance, August 31, 2020
23,466,236
$
23,466
$
44,905,454
$
-
$
1,199,696
$
(16,507,127
)
$
29,621,489
$
(49,859
)
$
29,571,630
Common stock issued for cash
21,905
22
91,978
-
-
-
92,000
-
92,000
Common stock issued for services
65,000
65
247,935
-
-
-
248,000
-
248,000
Foreign currency translation gain
-
-
-
-
10,596
-
10,596
(225
)
10,371
Net loss
-
-
-
-
-
(771,470
)
(771,470
)
(1,633
)
(773,103
)
Balance, November 30, 2020
23,553,141
23,553
45,245,367
-
1,210,292
(17,278,597
)
29,200,615
(51,717
)
29,148,898
Exercise of stock options
7,500
8
11,992
-
-
-
12,000
-
12,000
Common stock issued for intellectual
property
240,000
240
875,760
-
-
-
876,000
-
876,000
Common stock to be issued for services
rendered
-
-
-
375,000
-
-
375,000
-
375,000
Rounding due to stock split
957
1
(1
)
-
-
-
-
-
-
Fair value of vested stock options
-
-
22,215
-
-
-
22,215
-
22,215
Foreign currency translation loss
-
-
-
-
42,232
-
42,232
(965
)
41,267
Net loss
-
-
-
-
-
(1,339,870
)
(1,339,870
)
(721
)
(1,340,591
)
Balance, February 28, 2021
23,801,598
$
23,802
$
46,155,333
$
375,000
$
1,252,524
$
(18,618,467
)
$
29,188,192
$
(53,403
)
$
29,134,789
NOVO INTEGRATED SCIENCES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
For the Six Months Ended
February 28, 2022 and 2021 (unaudited)
Six Months Ended
February 28,
February 28,
2022
2021
(unaudited)
(unaudited)
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss
$
(6,684,599
)
$
(2,113,694
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
1,467,837
737,423
Fair value of vested stock options
198,562
22,215
Common stock issued for services
362,750
623,000
Operating lease expense
289,626
306,717
Amortization of debt discount
1,520,862
-
Foreign currency transaction losses
401,368
-
Changes in operating assets and
liabilities:
Accounts receivable
213,125
353,649
Inventory
46,135
-
Prepaid expenses and other current
assets
(285,444
)
(216,568
)
Accounts payable
(422,847
)
(938
)
Accrued expenses
(111,479
)
153,807
Accrued interest
277,075
5,867
Operating lease liability
(282,703
)
(301,250
)
Net cash used in operating activities
(3,009,732
)
(429,772
)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property and equipment
(192,536
)
(618
)
Cash acquired with acquisition
29,291
-
Net cash used in investing activities
(163,245
)
(618
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Repayments to related parties
(4,350
)
(82,723
)
Repayments of finance leases
(10,934
)
-
Repayments of notes payable
(4,415,000
)
-
Proceeds from the sale of common stock,
net of offering costs
-
92,000
Proceeds from exercise of stock
options
-
12,000
Proceeds from issuance of convertible
notes, net
15,270,000
-
Net cash provided by financing
activities
10,839,716
21,277
Effect of exchange rate changes on cash
and cash equivalents
(15,904
)
39,832
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
7,650,835
(369,281
)
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
8,293,162
2,067,718
CASH AND CASH EQUIVALENTS, END OF
PERIOD
$
15,943,997
$
1,698,437
CASH PAID FOR:
Interest
$
1,294,912
$
32,936
Income taxes
$
-
$
-
SUPPLEMENTAL NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Common stock to be issued for intangible
assets
$
188,925
$
960,000
Common stock to be issued for
acquisition
$
983,925
$
-
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220413005833/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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