Revenue Increased 382% Sequentially and 481%
Year-to-Year 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
third quarter ended May 31, 2022.
Robert Mattacchione, Novo’s CEO and Board Chairman, stated,
“Novo achieved record revenue in the fiscal 2022 third quarter
primarily driven by an increase in both proprietary and outsourced
product sales. We believe that subsequent quarters will illustrate
a further acceleration of market penetration for our product
solutions, particularly when combined with the synergistic positive
effect of both our existing and projected expansion of the
Company’s service-oriented business units. The three pillars of the
Company’s operating model are gaining traction particularly as we
expand our line of product solutions and complete our acquisitional
objectives.”
Financial Highlights for the Period Ended May 31,
2022:
- Cash and cash equivalents were $12.6 million, total assets were
$71.7 million, total liabilities were $27.3 million, and
stockholders’ equity was $44.4 million.
- Revenues were $13,851,883, representing an increase of
$11,470,909, or 481.8%, from $2,380,974 for the same period in 2021
principally due to an increase in outsourced product sales and
IoNovo Iodine which resulted in an increase in revenue of
$9,730,236. Acenzia’s and Terragenx’s revenue for the three months
ended May 31, 2022 was $645,588 and $1,275,690, respectively.
Revenue from our healthcare services decreased by 7.6% when
comparing the revenue for the three months ended May 31, 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 May 31, 2022 were
$3,611,628, representing an increase of $1,929,198, or 114.7%, from
$1,682,430 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 $952,000 for the three months ended May 31,
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. In
addition, common stock issued for services increased by $276,828
for the three months ended May 31, 2022 compared to the same period
in 2021. 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 May 31, 2022 was $3,810,054, representing an
increase of $3,398,867, or 827%, from $411,187 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 $952,000
for the three months ended May 31, 2022, (ii) common stock issued
for services of $314,000; (iii) an increase in interest expense and
(iv) an increase in amortization of debt discounts.
Operational Milestones for the Fiscal 2022 Second
Quarter:
- Chief Medical Officer, Dr. Joseph M. Chalil, Selected as Top
Physician of the Year by IAOTP for outstanding leadership,
dedication, and innovation medical contributions.
- Completed Acquisition of Clinical Consultants International LLC
(CCI).
- PRO-DIP® issued U.S. Patent for oral pouch delivery system
technology.
- Completed acquisition of 2 multi-disciplinary clinics in
Ontario Canada.
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 May 31, 2022 (unaudited)
and August 31, 2021
May 31,
August 31,
2022
2021
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents
$
12,677,446
$
8,293,162
Accounts receivable, net
5,166,239
1,468,429
Inventory, net
645,063
339,385
Other receivables, current portion
1,209,137
814,157
Prepaid expenses and other current
assets
380,800
218,376
Total current assets
20,078,685
11,133,509
Property and equipment, net
5,931,683
6,070,291
Intangible assets, net
32,192,858
32,029,499
Right-of-use assets, net
2,222,970
2,543,396
Other receivables, net of current
portion
-
692,738
Goodwill
11,366,618
9,488,848
TOTAL ASSETS
$
71,792,814
$
61,958,281
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable
$
1,621,719
$
1,449,784
Accrued expenses
1,243,792
1,129,309
Accrued interest (including amounts to
related parties)
961,823
366,280
Government loans and notes payable,
current portion
5,260,056
4,485,649
Convertible notes payable, net of discount
of $0
1,875,000
-
Contingent liability
750,860
-
Due to related parties
456,528
478,920
Finance lease liability, current
portion
15,982
23,184
Operating lease liability, current
portion
544,690
530,797
Total current liabilities
12,730,450
8,463,923
Debentures, related parties
981,337
982,205
Notes payable, net of current portion
158,645
5,133,604
Convertible notes payable, net of discount
of $5,170,205
10,252,017
-
Finance lease liability, net of current
portion
8,563
16,217
Operating lease liability, net of current
portion
1,734,790
2,057,805
Deferred tax liability
1,499,045
1,500,372
TOTAL LIABILITIES
27,364,847
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 May 31, 2022 and August 31, 2021, respectively
Common stock; $0.001 par value;
499,000,000 shares authorized; 30,659,073 and 26,610,144 shares
issued and outstanding at May 31, 2022 and August 31, 2021,
respectively
30,659
26,610
Additional paid-in capital
64,620,878
54,579,396
Common stock to be issued (4,308,591 and
3,622,199 shares at May 31, 2022 and August 31, 2021)
10,096,332
9,236,607
Other comprehensive income
1,015,993
991,077
Accumulated deficit
(31,391,082
)
(20,969,274
)
Total Novo Integrated Sciences, Inc.
stockholders’ equity
44,372,780
43,864,416
Noncontrolling interest
55,187
(60,261
)
Total stockholders’ equity
44,427,967
43,804,155
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
71,792,814
$
61,958,281
NOVO INTEGRATED SCIENCES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the Three and Nine Months
Ended May 31, 2022 and 2021 (unaudited)
Three Months Ended
Nine Months Ended
May 31,
May 31,
May 31,
May 31,
2022
2021
2022
2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Revenues
$
13,851,883
$
2,380,974
$
19,883,033
$
6,612,374
Cost of revenues
11,443,001
1,100,516
14,991,331
3,769,020
Gross profit
2,408,882
1,280,458
4,891,702
2,843,354
Operating expenses:
Selling expenses
9,802
2,381
36,340
4,226
General and administrative expenses
3,601,826
1,680,049
9,542,443
5,324,768
Total operating expenses
3,611,628
1,682,430
9,578,783
5,328,994
Loss from operations
(1,202,746
)
(401,972
)
(4,687,081
)
(2,485,640
)
Non operating income (expense)
Interest income
8,355
8,402
25,233
25,265
Interest expense
(513,398
)
(21,701
)
(1,808,310
)
(68,590
)
Amortization of debt discount
(2,133,890
)
-
(3,654,752
)
-
Foreign currency transaction gains
(losses)
97,654
-
(303,714
)
-
Total other income (expense)
(2,541,279
)
(13,299
)
(5,741,543
)
(43,325
)
Loss before income taxes
(3,744,025
)
(415,271
)
(10,428,624
)
(2,528,965
)
Income tax expense
-
-
-
-
Net loss
$
(3,744,025
)
$
(415,271
)
$
(10,428,624
)
$
(2,528,965
)
Net income (loss) attributed to
noncontrolling interest
66,029
(4,084
)
(6,816
)
(6,438
)
Net loss attributed to Novo Integrated
Sciences, Inc.
$
(3,810,054
)
$
(411,187
)
$
(10,421,808
)
$
(2,522,527
)
Comprehensive loss:
Net loss
(3,744,025
)
(415,271
)
(10,428,624
)
(2,528,965
)
Foreign currency translation gain
13,711
123,521
24,916
176,349
Comprehensive loss:
$
(3,730,314
)
$
(291,750
)
$
(10,403,708
)
$
(2,352,616
)
Weighted average common shares outstanding
- basic and diluted
29,817,999
25,298,866
28,498,414
24,192,998
Net loss per common share - basic and
diluted
$
(0.13
)
$
(0.02
)
$
(0.37
)
$
(0.10
)
NOVO INTEGRATED SCIENCES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Three and Nine Months
Ended May 31, 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
Common stock for services
125,000
125
313,875
-
-
-
314,000
-
314,000
Common stock for conversion of convertible
notes
623,929
624
1,247,225
-
-
-
1,247,849
-
1,247,849
Common stock for acquisition
800,000
800
1,703,200
-
-
-
1,704,000
-
1,704,000
Common stock to be issued for
acquisitions
-
-
-
260,625
-
-
260,625
25,402
286,027
Issuance of common stock to be issued
225,000
225
573,525
(573,750
)
-
-
-
-
-
Fair value of stock options
-
-
91,330
-
-
-
91,330
-
91,330
Foreign currency translation gain
-
-
-
-
13,711
-
13,711
51
13,762
Net loss
-
-
-
-
-
(3,810,054
)
(3,810,054
)
66,029
(3,744,025
)
Balance, May 31, 2022
30,659,073
$
30,659
$
64,620,878
$
10,096,332
$
1,015,993
$
(31,391,082
)
$
44,372,780
$
55,187
$
44,427,967
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
gain
-
-
-
-
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
Common stock for services
100,000
100
374,900
(375,000
)
-
-
-
-
-
Common stock issued for acquisition
189,796
190
430,647
-
-
-
430,837
-
430,837
Common stock issued for services
rendered
9,913
9
37,163
-
-
-
37,172
-
37,172
Common stock issued for cash, net of
offering costs
2,388,050
2,388
7,233,192
-
-
-
7,235,580
-
7,235,580
Fair value of vested stock options
-
-
66,640
-
-
-
66,640
-
66,640
Foreign currency translation
gain
-
-
-
-
123,521
-
123,521
(3,143
)
120,378
Net loss
-
-
-
-
-
(411,187
)
(411,187
)
(4,084
)
(415,271
)
Balance, May 31, 2021
26,489,357
$
26,489
$
54,297,875
$
-
$
1,376,045
$
(19,029,654
)
$
36,670,755
$
(60,630
)
$
36,610,125
NOVO INTEGRATED SCIENCES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
For the Nine Months Ended May
31, 2022 and 2021 (unaudited)
Nine Months Ended
May 31,
May 31,
2022
2021
(unaudited)
(unaudited)
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss
$
(10,428,624
)
$
(2,528,965
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
2,349,434
1,118,925
Fair value of vested stock options
289,892
88,855
Common stock issued for services
676,750
660,172
Operating lease expense
418,188
467,864
Amortization of debt discount
3,654,752
-
Foreign currency transaction losses
303,714
-
Changes in operating assets and
liabilities:
Accounts receivable
(3,650,069
)
543,213
Inventory
(263,539
)
-
Prepaid expenses and other current
assets
(150,632
)
(143,590
)
Accounts payable
117,056
(97,659
)
Accrued expenses
(68,871
)
64,513
Accrued interest
598,904
7,455
Operating lease liability
(406,862
)
(460,063
)
Net cash used in operating activities
(6,559,907
)
(279,280
)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property and equipment
(190,973
)
(201,369
)
Cash acquired from (paid for)
acquisition
57,489
(10,000
)
Payment on other receivable
296,138
-
Amounts loaned for other receivables
-
(470,040
)
Net cash provided by (used in) investing
activities
162,654
(681,409
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Repayments to related parties
(21,932
)
(177,534
)
Repayments of finance leases
(14,797
)
-
Repayments of notes payable
(4,430,794
)
-
Proceeds from the sale of common stock,
net of offering costs
-
7,327,580
Proceeds from exercise of stock
options
-
12,000
Proceeds from issuance of convertible
notes, net
15,270,000
-
Net cash provided by financing
activities
10,802,477
7,162,046
Effect of exchange rate changes on cash
and cash equivalents
(20,940
)
97,970
NET INCREASE IN CASH AND CASH
EQUIVALENTS
4,384,284
6,299,327
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
8,293,162
2,067,718
CASH AND CASH EQUIVALENTS, END OF
PERIOD
$
12,677,446
$
8,367,045
CASH PAID FOR:
Interest
$
1,294,912
$
33,183
Income taxes
$
-
$
-
SUPPLEMENTAL NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Common stock to be issued for intangible
assets
$
188,925
$
876,000
Common stock to be issued for
acquisitions
$
1,244,550
$
-
Common stock issued for acquisition
$
1,704,000
$
430,837
Conversion of convertible notes payable
and accrued interest to common stock
$
1,247,849
$
-
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Chris David, COO & President Novo Integrated Sciences, Inc.
chris.david@novointegrated.com (888) 512-1195
Novo Integrated Sciences (NASDAQ:NVOS)
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