NLH Nova Leap Health Corp

NOVA LEAP HEALTH CORP. (TSXV: NLH) (“Nova Leap” or “the Company”), a growing home health care organization, is pleased to announce that it has executed a definitive agreement (the “Agreement”), dated October 11, 2024, to acquire the assets of a home care services business (“the Target”) with operations in Florida. The Target has reported unaudited annualized revenues of approximately $3,100,000 and unaudited annualized Adjusted EBITDA of approximately $345,000 for the first eleven months of its 2024 fiscal year. All amounts are in United States Dollars (“USD”) unless otherwise specified.

Under the terms of the Agreement, the acquisition is to be made for total consideration of $1,636,000, subject to closing adjustments, of which $1,316,000 is payable with cash on closing and $320,000 is by way of a promissory note repayable over a three-year period. The $1,316,000 of cash on closing will be funded by way of a debt facility with the Company’s lender which is repayable over a five year term.

“As mentioned in previous shareholder communications, we have been actively working on acquisition opportunities since re-engaging our M&A program”, said Chris Dobbin, President & CEO of Nova Leap. “We have been looking for opportunities in Florida for quite some time given the long-term prospects for the market. We are looking forward to supporting the existing management team, a talented group who have been successful in growing this agency.”

The acquisition is a Non-Arm’s Length transaction pursuant to TSX Venture Exchange (“TSXV”) policies, as the vendor is controlled by Anne Whelan, a Director of Nova Leap. The acquisition is also a related party transaction pursuant to Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions (“MI 61-101”). However, Nova Leap is exempt from the valuation and minority approval requirements in MI 61-101 as the fair market value of the assets to be acquired by Nova Leap and the purchase price payable does not exceed 25% of its market capitalization.

Completion of the acquisition is subject to the satisfaction of certain conditions, including the approval of the TSXV, lender approval and state licensing.

The acquisition is expected to be immediately accretive and there are no finder fees to be paid. Closing of the acquisition is expected to occur in November.

About Nova Leap

Nova Leap is an acquisitive home health care services company operating in one of the fastest-growing industries in the U.S. & Canada. The Company performs a vital role within the continuum of care with an individual and family centered focus, particularly those requiring dementia care. Nova Leap achieved the #42 ranking on the 2021 Report on Business ranking of Canada’s Top Growing Companies, the #2 ranking on the 2020 Report on Business ranking of Canada’s Top Growing Companies and the #10 Ranking in the 2019 TSX Venture 50™ in the Clean Technology & Life Sciences sector. The Company is geographically diversified with operations in 10 different U.S. states within the New England, Southeastern, South Central and Midwest regions as well as in Nova Scotia, Canada.

NON-IFRS MEASURES:

This release contains references to certain measures that do not have a standardized meaning under IFRS as prescribed by the International Accounting Standards Board (“IASB”) and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing a further understanding of operations from management’s perspective. Accordingly, non-IFRS financial measures should not be considered in isolation or as a substitute for analysis of financial information reported under IFRS. The Company presents non-IFRS financial measures, specifically Adjusted EBITDA (as such term is hereinafter defined), as well as supplementary financial measures such as annualized revenue and annualized adjusted EBITDA. The Company believes these non-IFRS financial measures are frequently used by lenders, securities analysts, investors and other interested parties as a measure of financial performance, and it is therefore helpful to provide supplemental measures of operating performance and thus highlight trends that may not otherwise be apparent when relying solely on IFRS financial measures.

Adjusted Earnings before interest, taxes, amortization and depreciation (“Adjusted EBITDA”), is calculated as income from operating activities plus amortization and depreciation and stock-based compensation expense. The most directly comparable IFRS measure is income from operating activities.

Annualized Adjusted EBITDA is calculated as actual Adjusted EBITDA for a specific period of time extrapolated over 365 days.

FORWARD LOOKING INFORMATION:

Certain information in this press release may contain forward-looking statements, such as statements regarding the closing of the acquisition (including timing) and its expected impact on the Company, financing of the acquisition, and plans regarding future acquisitions and business growth. This information is based on current expectations and assumptions, including assumptions described elsewhere in this release and those concerning general economic and market conditions, the satisfaction of conditions to closing the acquisition, availability of working capital necessary for conducting Nova Leap’s operations, availability of desirable acquisition targets and financing to fund such acquisitions, and Nova Leap’s ability to integrate its acquired businesses and maintain previously achieved service hour and revenue levels, that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. Risks that could cause results to differ from those stated in the forward-looking statements in this release include staff and supply shortages, regulatory changes affecting the home care industry or government programs utilized by the Company, other unexpected increases in operating costs and competition from other service providers. All forward-looking statements, including any financial outlook or future-oriented financial information, contained in this press release are made as of the date of this release and included for the purpose of providing information about management's current expectations and plans relating to the future, and these statements may not be appropriate for other purposes. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements unless and until required by securities laws applicable to the Company. Additional information identifying risks and uncertainties is contained in the Company's filings with the Canadian securities regulators, which filings are available at www.sedarplus.com.

CAUTIONARY STATEMENT:

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information:

Chris Dobbin, CPA, ICD.D
Director, President and CEO
Nova Leap Health Corp.
E:cdobbin@novaleaphealth.com