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 providing services and
product innovation, today reported its financial results for the
fiscal year ended August 31, 2023.
Robert Mattacchione, the Company’s CEO and Board Chairman,
stated, “The 2023 fiscal year emphasized maximizing efficiencies
pointed toward future cost savings and margin stability. The
Company remains committed to the commercialization of its
proprietary product offerings and the expansion and delivery of its
essential services and solutions to the rapidly evolving
fundamental transformation of how non-catastrophic healthcare is
delivered both now and in the future. Specific to increasing the
Company’s cash position, management is primarily focused on raising
capital through non-dilutive structures and solutions.”
Financial Info for the Fiscal Year Ended August 31,
2023:
- As of August 31, 2023, the Company’s cash and cash equivalents
were $416.3 thousand, total assets were $35.56 million, total
liabilities were $11.06 million, and stockholders’ equity was
$24.81 million.
- Revenues for the year ended August 31, 2023 were $12,572,019,
representing an increase of $834,082, or 7%, from $11,737,937 for
the same period in 2022. The increase in revenue is principally due
to an increase in product sales. Acenzia’s and Terragenx’s revenue
for the year ended August 31, 2023 was $3,817,346 and $53,751,
respectively. Revenue from our healthcare services decreased by 2%,
when comparing the revenue for the year ended August 31, 2023 to
the same period in 2022.
- Operating costs for the year ended August 31, 2023 were
$13,505,877, representing a decrease of $16,320,038, or 55%, from
$29,825,915 for the same period in 2022. The decrease in operating
costs is principally due to (i) the decrease in overhead expenses
associated with the operations of Acenzia, PRO-DIP, and Terragenx,
and (ii) no further impairment of intangible assets and goodwill
being recognized in the year ended August 31, 2023.
- Net loss attributed to Novo Integrated Sciences for the year
ended August 31, 2023 was $13,214,552, representing a decrease of
$19,634,663, or 60%, from $32,849,215 for the same period in 2022.
The decrease in net loss was principally due to (i) a decrease in
overhead expenses associated with the operations of Acenzia,
PRO-DIP, and Terragenx which was approximately $4,902,925 for the
year ended August 31, 2023, (ii) a decrease in interest expenses,
and (iii) no further impairment of intangible assets and goodwill
being recognized in the year ended August 31, 2023.
- On December 14, 2021, the Company issued two senior secured
convertible notes payable for a total of $16,666,666 (the “$16.66m
Notes”), with each note having a face amount of $8,333,333. During
the year ended August 31, 2023, the Company made (i) cash payments
in the aggregate amount of $3,001,442, principal and interest, and
(ii) an aggregate of $8,429,225 in principal and interest was
converted into 8,527,835 shares of common stock issued to the
$16.66m Note holders.
Operational Milestones for the Fiscal Year Ended August 31,
2023:
- The Company and Farm 7 Group Inc., a Canada corporation (“F7”),
entered into a joint venture agreement (the “JV Agreement”)
relating to the development, administration, and arrangement of
structured financing for the implementation and commencement of the
Kenya Agricultural Cooperative Project, a Kenya centric
agricultural project with finalized and executed uptake contracts
for food-based agricultural goods on up to 9 million hectares with
potential revenue up to $350,000,000. The JV Agreement, which has
an initial term of 30 years, provides for the annual distribution
of the net profits 75% to F7 and 25% to Novo.
- IoNovo Iodine and IoNovo for Kids Pure Iodine oral sprays
granted a registration number and received regulatory approval by
Turkey’s Ministry of Health as a dietary supplement determined to
be safe, effective, of high quality, and eligible for sale in
Turkey.
- The Company received court approval from the United States
District Court for the Central District of California for the
Purchase and Sale Agreement which provides for the Company to
acquire a certain collection of 43 gemstones, 42 of which are
certified by the Gemological Institute of America, known as the
“Ophir Collection”, for $60,000,000.
- The Company entered into a Master Collaboration Agreement with
Psychocare Health Pvt. Ltd. India (“PCHPL”), commencing a strategic
initiative to introduce new products and state-of-the-art
healthcare technologies to the Indian market, with plans to extend
healthcare related products to the North American market, providing
Novo with access to PCHPL’s over 500 India based franchisee
distributors, and providing Novo with an opportunity to integrate
into PCHPL's supply chain. This strategic move is expected to
optimize manufacturing processes and enhance market access for Novo
brands and products.
Corporate Highlights:
- Subsequent to the fiscal year end, Nasdaq informed the Company
that it has regained compliance with the minimum bid price
requirement as set forth under Nasdaq Listing Rule 5550(a)(2) for
continued listing on The Nasdaq Capital Market.
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 . For more information on NHL,
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.
CONSOLIDATED BALANCE
SHEETS
As of August 31, 2023 and
2022
August 31,
August 31,
2023
2022
ASSETS
Current Assets:
Cash and cash equivalents
$
416,323
$
2,178,687
Accounts receivable, net
1,467,028
1,017,405
Inventory, net
1,106,983
879,033
Other receivables
1,051,584
1,085,335
Prepaid expenses and other current
assets
346,171
571,335
Total current assets
4,388,089
5,731,795
Property and equipment, net
5,390,038
5,800,648
Intangible assets, net
16,218,539
18,840,619
Right-of-use assets, net
1,983,898
2,673,934
Goodwill
7,582,483
7,825,844
TOTAL ASSETS
$
35,563,047
$
40,872,840
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable
$
3,513,842
$
1,800,268
Accrued expenses
1,233,549
1,116,125
Accrued interest (including amounts to
related parties)
382,666
454,189
Government loans and notes payable,
current portion
277,405
-
Convertible notes payable, net of discount
of $459,332
558,668
9,099,654
Contingent liability
61,767
534,595
Debentures, related parties, current
portion
916,824
-
Due to related parties
533,001
478,897
Finance lease liability, current
portion
11,744
8,890
Operating lease liability, current
portion
415,392
582,088
Total current liabilities
7,904,858
14,074,706
Debentures, related parties, net of
current portion
-
946,250
Government loans and notes payable, net of
current portion
65,038
161,460
Finance lease liability, net of current
portion
-
12,076
Operating lease liability, net of current
portion
1,693,577
2,185,329
Deferred tax liability
1,400,499
1,445,448
TOTAL LIABILITIES
11,063,972
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 August 31, 2023 and August 31, 2022,
respectively
-
-
Common stock; $0.001 par value;
499,000,000 shares authorized; 15,759,325 and 3,118,063 shares
issued and outstanding at August 31, 2023 and August 31, 2022,
respectively
15,760
3,118
Additional paid-in capital
90,973,316
66,084,887
Common stock to be issued (91,138 and
414,965 shares at August 31, 2023 and August 31, 2022)
1,217,293
9,474,807
Other comprehensive (loss) income
(357,383
)
560,836
Accumulated deficit
(67,033,041
)
(53,818,489
)
Total Novo Integrated Sciences, Inc.
stockholders’ equity
24,815,945
22,305,159
Noncontrolling interest
(316,870
)
(257,588
)
Total stockholders’ equity
24,499,075
22,047,571
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
35,563,047
$
40,872,840
* The consolidated balance sheets’ common stock
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.
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS
For the Years Ended August 31,
2023 and 2022
Years Ended
August 31,
August 31,
2023
2022
Revenues
$
12,572,019
$
11,737,937
Cost of revenues
7,619,304
6,938,699
Gross profit
4,952,715
4,799,238
Operating expenses:
Selling expenses
15,149
20,702
General and administrative expenses
13,490,728
14,364,639
Impairment of assets
-
14,083,531
Goodwill impairment
-
1,357,043
Total operating expenses
13,505,877
29,825,915
Loss from operations
(8,553,162
)
(25,026,677
)
Non-operating income (expense)
Interest income
9,027
169,088
Interest expense
(360,571
)
(1,594,275
)
Other income
607,589
-
Amortization of debt discount
(4,757,121
)
(5,973,973
)
Foreign currency transaction losses
(215,206
)
(641,643
)
Total other income (expense)
(4,716,282
)
(8,040,803
)
Loss before income taxes
(13,269,444
)
(33,067,480
)
Income tax expense (recovery)
-
(22,302
)
Net loss
$
(13,269,444
)
$
(33,045,178
)
Net loss attributed to noncontrolling
interest
(54,892
)
(195,963
)
Net loss attributed to Novo Integrated
Sciences, Inc.
$
(13,214,552
)
$
(32,849,215
)
Comprehensive loss:
Net loss
(13,269,444
)
(33,045,178
)
Foreign currency translation loss
(922,609
)
(431,605
)
Comprehensive loss:
$
(14,192,053
)
$
(33,476,783
)
Weighted average common shares outstanding
- basic and diluted
10,165,548
2,913,263
Net loss per common share - basic and
diluted
$
(1.30
)
$
(11.28
)
* The 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.
CONSOLIDATED STATEMENTS OF
STOCKHOLDERS’ EQUITY
For the Years Ended August 31,
2023 and 2022
Common Stock
Additional
Paid-in
Common Stock To
Other Comprehensive
Accumulated
Total Novo
Stockholders’
Noncontrolling
Shares
Amount
Capital
Be Issued
Income
Deficit
Equity
Interest
Total Equity
Balance, August 31, 2021
2,661,014
$
2,661
$
54,603,345
$
9,236,607
$
991,077
$
(20,969,274
)
$
43,864,416
$
(60,261
)
$
43,804,155
Common stock for services
75,000
75
1,329,675
-
-
-
1,329,750
-
1,329,750
Common stock issued as collateral and held
in escrow
200,000
200
(200
)
-
-
-
-
-
-
Common stock for conversion of convertible
notes
63,653
64
1,272,930
-
-
-
1,272,994
-
1,272,994
Common stock issued for acquisitions
80,000
80
1,703,920
-
-
-
1,704,000
-
1,704,000
Common stock to be issued for
acquisitions
-
-
-
1,433,475
-
-
1,433,475
-
1,433,475
Value of warrants issued with convertible
notes
-
-
5,553,290
-
-
-
5,553,290
-
5,553,290
Issuance of common stock to be issued
38,396
38
1,195,237
(1,195,275
)
-
-
-
-
-
Fair value of stock options
-
-
426,690
-
-
-
426,690
-
426,690
Foreign currency translation loss
-
-
-
-
(430,241
)
-
(430,241
)
(1,364
)
(431,605
)
Net loss
-
-
-
-
-
(32,849,215
)
(32,849,215
)
(195,963
)
(33,045,178
)
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
Units issued for cash, net of offering
costs
400,000
400
1,794,600
-
-
-
1,795,000
-
1,795,000
Cashless exercise of warrants
583,334
583
1,421,000
-
-
-
1,421,583
-
1,421,583
Share issuance for convertible debt
settlement
10,177,834
10,178
9,957,962
-
-
-
9,968,140
-
9,968,140
Exercise of warrants for cash
532,600
533
532,067
-
-
-
532,600
-
532,600
Shares issued with convertible notes
265,167
265
247,622
-
-
-
247,887
-
247,887
Value of warrants issued with convertible
notes
-
-
257,994
-
-
-
257,994
-
257,994
Beneficial conversion feature upon
issuance on convertible debt
-
-
164,046
-
-
-
164,046
-
164,046
Extinguishment of derivative liability due
to conversion
-
-
1,390,380
-
-
-
1,390,380
-
1,390,380
Common stock for services
358,500
359
480,233
-
-
-
480,592
-
480,592
Issuance of common stock to be issued
323,827
324
8,257,190
(8,257,514
)
-
-
-
-
-
Fair value of stock options
-
-
385,335
-
-
-
385,335
-
385,335
Foreign currency translation loss
-
-
-
-
(918,219
)
-
(918,219
)
(4,390
)
(922,609
)
Net loss
-
-
-
-
-
(13,214,552
)
(13,214,552
)
(54,892
)
(13,269,444
)
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
* The consolidated statements of stockholder’s
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.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
For the Years Ended August 31,
2023 and 2022
Years Ended
August 31,
August 31,
2023
2022
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss
$
(13,269,444
)
$
(33,045,178
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
2,302,754
3,019,253
Fair value of vested stock options
385,335
426,690
Financing costs for debt extension
1,421,583
-
Default payment and interest paid through
common share issuance
205,349
-
Common stock issued for services
480,592
1,329,750
Operating lease expense
797,515
852,580
Amortization of debt discount
4,757,121
5,973,973
Foreign currency transaction losses
215,206
641,643
Impairment of assets
-
14,083,531
Other receivables write-off
-
299,672
Goodwill impairment
-
1,357,043
Changes in operating assets and
liabilities:
Accounts receivable
(597,191
)
457,006
Inventory
(255,781
)
(527,397
)
Prepaid expenses and other current
assets
210,382
(369,647
)
Accounts payable
1,770,589
283,234
Accrued expenses
153,598
38,743
Accrued interest
(58,066
)
101,353
Operating lease liability
(762,852
)
(806,394
)
Net cash used in operating activities
(2,243,315
)
(5,884,145
)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property and equipment
(49,224
)
(190,168
)
Cash acquired with acquisition
-
57,489
Collection of other receivable
-
296,138
Net cash (used in) provided by investing
activities
(49,224
)
163,459
CASH FLOWS FROM FINANCING
ACTIVITIES:
Receipts from related parties
7,206
16,600
Proceeds from notes payable
222,780
-
Repayments of notes payable
(37,130
)
(10,591,115
)
Repayments of finance leases
(8,611
)
(18,435
)
Proceeds from issuance of convertible
notes
1,285,903
15,270,000
Repayment of convertible notes
(3,033,888
)
(5,104,167
)
Proceeds from the sale of common stock,
net of offering costs
1,795,000
-
Proceeds from exercise of warrants
532,600
-
Net cash provided by (used in) financing
activities
763,860
(427,117
)
Effect of exchange rate changes on cash
and cash equivalents
(233,685
)
33,328
NET DECREASE IN CASH AND CASH
EQUIVALENTS
(1,762,364
)
(6,114,475
)
CASH AND CASH EQUIVALENTS, BEGINNING OF
YEAR
2,178,687
8,293,162
CASH AND CASH EQUIVALENTS, END OF
YEAR
$
416,323
$
2,178,687
CASH PAID FOR:
Interest
$
432,094
$
1,502,819
Income taxes
$
-
$
-
SUPPLEMENTAL NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Common stock issued for convertible
debt
$
9,968,140
$
1,272,994
Common stock issued for acquisition
$
-
$
1,704,000
Warrants issued with convertible notes
$
257,994
$
5,553,290
Beneficial conversion feature upon
issuance of convertible notes
$
164,046
$
-
Debt discount recognized on derivative
liability
$
1,390,380
$
-
Extinguishment of derivative liability due
to conversion
$
1,390,380
$
-
Debt discount recognized on convertible
note
$
975,024
$
-
Common stock issued with convertible
notes
$
247,887
$
-
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231214983120/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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