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, 2023.
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. During the fiscal year
2023 third quarter period, the Company announced the signing of
agreements for an unsecured, non-dilutive 15-year debt instrument,
with a principal sum of $70,000,000, which provides for the Company
to receive net proceeds of approximately $55,000,000 after fees. In
today’s environment of tight capital markets and expensive capital
raises, this cash infusion is consequential and will provide the
Company with the foundational capital and repayment terms required
to support and accelerate the further implementation and growth of
Novo’s three-pillar business model. ”
Financial Highlights for the three month period ended May 31,
2023:
- Cash and cash equivalents were $464,011, total assets were
$35.7 million, total liabilities were $9.5 million, and
stockholders’ equity was $26.5 million.
- Revenues were $3,292,933, representing a decrease of
$10,558,950, or 76%, from $13,851,883 for the same period in 2022.
The decrease in revenue is principally due to the decrease in
outsourced product sales and IoNovo Iodine. Acenzia’s and
Terragenx’s revenue for the three months ended May 31, 2023 was
$896,405 and $5,866, respectively. Revenue from our healthcare
services decreased by 8% when comparing the revenue for the three
months ended for the same period in 2022.
- Operating costs were $2,744,512, representing a decrease of
$867,116, or 24%, from $3,611,628 for the same period in 2022. The
decrease in operating costs was principally due to the decrease in
overhead expenses and depreciation and amortization.
- Net loss attributed to the Company was $1,497,330, representing
a decrease of $2,312,724, or 61%, from $3,810,054 for the same
period in 2022. The decrease in net loss was principally due to the
decrease in operating expenses.
- On March 21, 2023, the Company issued a $573,000 promissory
note (12% per annum interest rate) and completed the related
Securities Purchase Agreement with FirstFire Global Opportunities
Fund, LLC (“FirstFire”) for gross proceeds of $515,700. The Company
granted 5-year warrants with an exercise price of $0.25 per share
and issued 955,000 restricted shares to FirstFire.
- On April 26, 2023, the Company entered into a securities
purchase agreement with RC Consulting Group LLC in favor of SCP
Tourbillion Monaco or registered assigns pursuant to which the
Company issued an unsecured 15-year promissory note to the RC
Noteholder (the “RC Note”) with a maturity date of April 26, 2038,
in the principal sum of $70,000,000, which amount represents the
$57,000,000 purchase price plus a yield (non-compounding) of 1.52%
(zero coupon) per annum from April 26, 2023 until the same becomes
due and payable as provided in the RC Note.
- Subsequent to the period ended May 31, 2023, on June 20, 2023,
the Company issued a $445,000 promissory note (12% per annum
interest rate) and completed the related Securities Purchase
Agreement with Mast Hill Fund, L.P. for gross proceeds of $400,500.
The Company granted 5-year warrants with an exercise price of $0.25
per share and issued 776,614 restricted shares to Mast Hill Fund,
L.P.
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, 2023 (unaudited)
and August 31, 2022
May 31,
August 31,
2023
2022
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents
$
464,011
$
2,178,687
Accounts receivable, net
1,327,613
1,017,405
Inventory, net
938,940
879,033
Other receivables
1,046,080
1,085,335
Prepaid expenses and other current
assets
221,414
571,335
Total current assets
3,998,058
5,731,795
Property and equipment, net
5,411,438
5,800,648
Intangible assets, net
16,696,363
18,840,619
Right-of-use assets, net
2,096,376
2,673,934
Goodwill
7,542,795
7,825,844
TOTAL ASSETS
$
35,745,030
$
40,872,840
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable
$
1,896,040
$
1,800,268
Accrued expenses
1,178,245
1,116,125
Accrued interest (including amounts to
related parties)
350,831
454,189
Government loans and notes payable,
current portion
312,672
-
Convertible notes payable, net of discount
of $494,523
651,477
9,099,654
Contingent liability
57,933
534,595
Due to related parties
406,683
478,897
Debentures, related parties, current
portion
912,025
-
Finance lease liability, current
portion
13,814
8,890
Operating lease liability, current
portion
428,951
582,088
Total current liabilities
6,208,671
14,074,706
Debentures, related parties, net of
current portion
-
946,250
Government loans and notes payable, net of
current portion
64,946
161,460
Finance lease liability, net of current
portion
-
12,076
Operating lease liability, net of current
portion
1,786,961
2,185,329
Deferred tax liability
1,393,168
1,445,448
TOTAL LIABILITIES
9,453,746
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 May 31, 2023 and August 31, 2022, respectively
-
-
Common stock; $0.001 par value;
499,000,000 shares authorized; 144,857,518 and 31,180,603 shares
issued and outstanding at May 31, 2023 and August 31, 2022,
respectively
144,857
31,181
Additional paid-in capital
89,249,590
66,056,824
Common stock to be issued (911,392 and
4,149,633 shares at May 31, 2023 and August 31, 2022,
respectively)
1,217,293
9,474,807
Other comprehensive (loss) income
(172,526
)
560,836
Accumulated deficit
(63,872,587
)
(53,818,489
)
Total Novo Integrated Sciences, Inc.
stockholders’ equity
26,566,627
22,305,159
Noncontrolling interest
(275,343
)
(257,588
)
Total stockholders’ equity
26,291,284
22,047,571
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
35,745,030
$
40,872,840
NOVO INTEGRATED SCIENCES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the Three and Nine Months
Ended May 31, 2023 and 2022 (unaudited)
Three Months Ended
Nine Months Ended
May 31,
May 31,
May 31,
May 31,
2023
2022
2023
2022
Revenues
$
3,292,933
$
13,851,883
$
9,268,722
$
19,883,033
Cost of revenues
1,978,839
11,443,001
5,244,192
14,991,331
Gross profit
1,314,094
2,408,882
4,024,530
4,891,702
Operating expenses:
Selling expenses
1,877
9,802
9,916
36,340
General and administrative expenses
2,742,635
3,601,826
9,473,802
9,542,443
Total operating expenses
2,744,512
3,611,628
9,483,718
9,578,783
Loss from operations
(1,430,418
)
(1,202,746
)
(5,459,188
)
(4,687,081
)
Non-operating income (expense)
Interest income
62,397
8,355
6,762
25,233
Interest expense
(9,570)
(513,398
)
(240,520
)
(1,808,310
)
Amortization of debt discount
(156,037
)
(2,133,890
)
(4,386,899
)
(3,654,752
)
Foreign currency transaction gain
(loss)
48,333
97,654
12,652
(303,714
)
Total other expense
(54,877
)
(2,541,279
)
(4,608,005
)
(5,741,543
)
Loss before income taxes
(1,485,295
)
(3,744,025
)
(10,067,193
)
(10,428,624
)
Income tax expense
-
-
-
-
Net loss
$
(1,485,295
)
$
(3,744,025
)
$
(10,067,193
)
$
(10,428,624
)
Net loss attributed to noncontrolling
interest
12,035
66,029
(13,095
)
(6,816
)
Net loss attributed to Novo Integrated
Sciences, Inc.
(1,497,330
)
(3,810,054
)
(10,054,098
)
(10,421,808
)
Comprehensive loss:
Net loss
(1,485,295
)
(3,744,025
)
(10,067,193
)
(10,428,624
)
Foreign currency translation (loss)
gain
(120,357
)
13,711
(738,022
)
24,916
Comprehensive loss:
$
(1,605,652
)
$
(3,730,314
)
$
(10,805,215
)
$
(10,403,708
)
Weighted average common shares outstanding
– basic and diluted
143,600,541
29,817,999
85,832,252
28,498,414
Net loss per common share – basic and
diluted
$
(0.01
)
$
(0.13
)
$
(0.12
)
$
(0.37
)
NOVO INTEGRATED SCIENCES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Three and Nine Months
Ended May 31, 2023 and 2022 (unaudited)
Common Stock
Additional Paid-in
Common Stock To
Other Comprehensive
Accumulated
Novo 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
Share issuance for convertible debt
settlement
93,109,398
93,110
8,992,941
-
-
-
9,086,051
-
9,086,051
Cashless exercise of warrants
1,159,348
1,159
281,374
-
-
-
282,533
-
282,533
Exercise of warrants for cash
1,310,000
1,310
129,690
-
-
-
131,000
-
131,000
Issuance of common stock to be issued
3,202,019
3,201
8,161,947
(8,165,148
)
-
-
-
-
-
Shares issued with convertible notes
955,000
955
82,008
-
-
-
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
139,626,576
$
139,626
$
88,320,971
$
1,217,293
$
(51,993
)
$
(62,375,257
)
$
27,250,640
$
(287,554
)
$
26,963,086
Share issuance for convertible debt
settlement
1,075,942
1,076
99,202
-
-
-
100,278
-
100,278
Exercise of warrants for cash
3,200,000
3,200
316,800
-
-
-
320,000
-
320,000
Shares issued with convertible notes
955,000
955
89,177
-
-
-
90,132
-
90,132
Value of warrants issued with convertible
notes
-
-
93,811
-
-
-
93,811
-
93,811
Beneficial conversion feature upon
issuance on 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
144,857,518
$
144,857
$
89,249,590
$
1,217,293
$
(172,526
)
$
(63,872,587
)
$
26,566,627
$
(275,343
)
$
26,291,284
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 issued for services
125,000
125
313,875
-
-
-
314,000
-
314,000
Share issuance for convertible debt
settlement
623,929
624
1,247,225
-
-
-
1,247,849
-
1,247,849
Common stock issued 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
NOVO INTEGRATED SCIENCES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
For the Nine Months Ended May
31, 2023 and 2022 (unaudited)
Nine Months Ended
May 31,
May 31,
2023
2022
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss
$
(10,067,193
)
$
(10,428,624
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
1,718,388
2,349,434
Fair value of vested stock options
385,335
289,892
Common stock issued for services
-
676,750
Financing costs for debt extension
1,421,583
-
Operating lease expense
624,246
418,188
Amortization of debt discount
4,386,899
3,654,752
Foreign currency transaction (gain)
loss
(12,652
)
303,714
Changes in operating assets and
liabilities:
Accounts receivable
(308,907
)
(3,650,069
)
Inventory
(92,260
)
(263,539
)
Prepaid expenses and other current
assets
333,724
(150,632
)
Accounts payable
154,542
117,056
Accrued expenses
104,004
(68,871
)
Accrued interest
(67,634)
598,904
Operating lease liability
(594,618
)
(406,862
)
Net cash used in operating activities
(2,014,543
)
(6,559,907
)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property and equipment
(18,870
)
(190,973
)
Cash acquired with acquisition
-
57,489
Payments received from other
receivables
-
296,138
Net cash (used in) provided by investing
activities
(18,870
)
162,654
CASH FLOWS FROM FINANCING
ACTIVITIES:
Repayments to related parties
(56,649)
(21,932
)
Repayments of finance leases
(6,435
)
(14,797
)
Proceeds from (repayments of) notes
payable
222,000
(4,430,794
)
Proceeds from the sale of common stock,
net of offering costs
1,795,000
-
Proceeds from exercise of warrants
451,000
-
Repayment of convertible notes
(3,033,888
)
-
Proceeds from issuance of convertible
notes, net
925,306
15,270,000
Net cash provided by financing
activities
296,334
10,802,477
Effect of exchange rate changes on cash
and cash equivalents
22,403
(20,940
)
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS
(1,714,676
)
4,384,284
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
2,178,687
8,293,162
CASH AND CASH EQUIVALENTS, END OF
PERIOD
$
464,011
$
12,677,446
CASH PAID FOR:
Interest
$
343,878
$
1,294,912
Income taxes
$
-
$
-
SUPPLEMENTAL NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Common stock issued for convertible debt
settlement
$
9,186,329
$
1,247,849
Common stock to be issued for intangible
assets
$
-
$
188,925
Common stock to be issued for
acquisition
$
-
$
1,244,550
Common stock issued for acquisition
$
-
$
1,704,000
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/20230717025947/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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