Novo Integrated Sciences Reports Fiscal Year 2024 Third Quarter Financial Results

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, 2024.

Robert Mattacchione, Novo’s CEO and Board Chairman, stated, “The Company’s fiscal year 2024 third quarter emphasized maximizing operational efficiencies for all business units. The Company continues to work with certain prospective financial partners to close previously announced non-traditional financing opportunities to raise foundational capital with repayment terms necessary to support and accelerate the further growth of Novo’s three-pillar business model. The Company remains committed to the commercialization of its proprietary product offerings and the expansion and delivery of its essential services and solutions for how non-catastrophic healthcare is delivered both now and in the future.”

Financial Highlights for the three-month period ended May 31, 2024:

• Cash and cash equivalents were $1,539,771, total assets were $35,327,000, total liabilities were $25,663,779, and total stockholders’ equity was $9,956,134.
• Revenues were $3,151,851, representing a decrease of $141,082, or 4%, from $3,292,933 for the three months ended May 31, 2023. The decrease in revenue is principally due to a decrease in product sales. Acenzia’s and Terragenx’s revenue for the three months ended May 31, 2024 were $884,396 and $103,399, respectively. Despite a decrease in total revenue, revenue from our healthcare services increased by 8.1% when comparing the revenue for the three months ended May 31, 2024 to the three months ended May 31, 2023.
• Operating costs were $3,417,096, representing an increase of $672,584, or 25%, from $2,744,512 for the three months ended May 31, 2023. The increase in operating costs was primarily due to the inflationary impact on operating costs.
• Net loss attributed to Novo Integrated Sciences, Inc. for the three months ended May 31, 2024, was $13,741,903, representing an increase of $12,244,573, or 818%, from $1,497,330 for the three months ended May 31, 2023. The increase in net loss of $12,244,573 is mainly attributed to the recognition of a $6,724,690 loss in the fair value of the derivative liability, loss from operations of $1,089,785, amortization of the debt discount of $2,748,793 and foreign currency exchange loss of $1,455,248 arising as a result of intercompany balance reconciliation.
• On April 5, 2024, the Company executed a $6.21 million Securities Purchase Agreement and Promissory Note with Streeterville Capital LLC (the “Streeterville Note”). The interest rate on the Streeterville Note is 10.9% and it has a 12-month maturity date. A portion of the proceeds from the Streeterville Note paid the balance owed on two notes, as follows:
  • $3,228,774 (principal) and $30,571.28 (interest) on the 2023 $3.5 million Mast Hill note; and
  • $82,761 (principal) and $1,552 (interest) on the 2023 $277,777 First Fire note.

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.

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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, 2024 (unaudited) and August 31, 2023

 

 

May 31,

 

 

August 31,

 

 

 

2024

 

 

2023

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,539,771

 

 

$

416,323

 

Accounts receivable, net

 

 

2,251,528

 

 

 

1,467,028

 

Inventory, net

 

 

1,112,068

 

 

 

1,106,983

 

Other receivables, current portion

 

 

1,043,473

 

 

 

1,051,584

 

Prepaid expenses and other current assets

 

 

214,436

 

 

 

346,171

 

Total current assets

 

 

6,161,276

 

 

 

4,388,089

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

5,157,781

 

 

 

5,390,038

 

Intangible assets, net

 

 

14,690,038

 

 

 

16,218,539

 

Right-of-use assets, net

 

 

1,793,907

 

 

 

1,983,898

 

Goodwill

 

 

7,523,998

 

 

 

7,582,483

 

TOTAL ASSETS

 

$

35,327,000

 

 

$

35,563,047

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

3,894,602

 

 

$

3,513,842

 

Accrued expenses

 

 

1,332,485

 

 

 

1,233,549

 

Accrued interest (including amounts to related parties)

 

 

450,795

 

 

 

382,666

 

Government loans and notes payable, current portion

 

 

93,488

 

 

 

277,405

 

Convertible notes payable, net of discount of $4,985,381

 

 

1,224,619

 

 

 

558,668

 

Derivative liability

 

 

14,048,576

 

 

 

–

 

Contingent liability

 

 

45,968

 

 

 

61,767

 

Debentures, related parties

 

 

909,753

 

 

 

916,824

 

Due to related parties

 

 

262,295

 

 

 

533,001

 

Finance lease liability, net of current portion

 

 

4,336

 

 

 

11,744

 

Operating lease liability, current portion

 

 

409,516

 

 

 

415,392

 

Total current liabilities

 

 

22,676,433

 

 

 

7,904,858

 

 

 

 

 

 

 

 

 

 

Government loans and notes payable, net of current portion

 

 

63,572

 

 

 

65,038

 

Operating lease liability, net of current portion

 

 

1,534,078

 

 

 

1,693,577

 

Deferred tax liability

 

 

1,389,696

 

 

 

1,400,499

 

TOTAL LIABILITIES

 

 

25,663,779

 

 

 

11,063,972

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

–

 

 

 

–

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Novo Integrated Sciences, Inc.

 

 

 

 

 

 

 

 

Convertible preferred stock; $0.001 par value; 1,000,000 shares authorized; Nil shares issued and outstanding at May 31, 2024 and August 31, 2023

 

 

–

 

 

 

–

 

Common stock; $0.001 par value; 499,000,000 shares authorized; 19,054,523 and 15,759,325 shares issued and outstanding at May 31, 2024 and August 31, 2023, respectively

 

 

19,055

 

 

 

15,760

 

Additional paid-in capital

 

 

96,660,608

 

 

 

90,973,316

 

Common stock to be issued (1,700 and 91,138 shares at May 31, 2024 and August 31, 2023)

 

 

25,500

 

 

 

1,217,293

 

Other comprehensive (loss) income

 

 

1,452,386

 

 

 

(357,383

)

Accumulated deficit

 

 

(88,201,415

)

 

 

(67,033,041

)

Total Novo Integrated Sciences, Inc. stockholders’ equity

 

 

9,956,134

 

 

 

24,815,945

 

Noncontrolling interest

 

 

(292,913

)

 

 

(316,870

)

Total stockholders’ equity

 

 

9,663,221

 

 

 

24,499,075

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

35,327,000

 

 

$

35,563,047

 

* The condensed consolidated balance sheets’ common stock amounts have been retroactively adjusted to account for the Company’s 1:10 reverse stock split, effective November 7, 2023.

NOVO INTEGRATED SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Three and Nine Months Ended May 31, 2024 and 2023 (unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

 

May 31,

 

May 31,

 

May 31,

 

May 31,

 

 

2024

 

2023

 

2024

 

2023

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

Revenues

 

$

3,151,851

 

 

$

3,292,933

 

 

$

10,213,661

 

 

$

9,268,722

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

2,254,958

 

 

 

1,978,839

 

 

 

6,048,664

 

 

 

5,244,192

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

896,893

 

 

 

1,314,094

 

 

 

4,164,997

 

 

 

4,024,530

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling expenses

 

 

2,635

 

 

 

1,877

 

 

 

14,811

 

 

 

9,916

 

General and administrative expenses

 

 

3,414,461

 

 

 

2,742,635

 

 

 

11,527,794

 

 

 

9,473,802

 

Total operating expenses

 

 

3,417,096

 

 

 

2,744,512

 

 

 

11,542,605

 

 

 

9,483,718

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(2,520,203

)

 

 

(1,430,418

)

 

 

(7,377,608

)

 

 

(5,459,188

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Non operating income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

2,214

 

 

 

62,397

 

 

 

6,910

 

 

 

6,762

 

Interest expense

 

 

(178,445

)

 

 

(9,570

)

 

 

(460,503

)

 

 

(240,520

)

Other expense

 

 

(3,431

)

 

 

–

 

 

 

(964,368

)

 

 

–

 

Change in fair value of derivative liability

 

 

(6,724,690

)

 

 

–

 

 

 

(5,765,822

)

 

 

–

 

Amortization of debt discount

 

 

(2,904,830

)

 

 

(156,037

)

 

 

(5,095,331

)

 

 

(4,386,899

)

Exchange currency (loss) gain

 

 

(1,406,915

)

 

 

48,333

 

 

 

(1,485,861

)

 

 

12,652

 

Total other expense

 

 

(11,216,097

)

 

 

(54,877

)

 

 

(13,764,975

)

 

 

(4,608,005

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(13,736,300

)

 

 

(1,485,295

)

 

 

(21,142,583

)

 

 

(10,067,193

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

–

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(13,736,300

)

 

$

(1,485,295

)

 

$

(21,142,583

)

 

$

(10,067,193

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributed to noncontrolling interest

 

 

5,603

 

 

 

12,035

 

 

 

25,791

 

 

 

(13,095

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributed to Novo Integrated Sciences, Inc.

 

$

(13,741,903

)

 

$

(1,497,330

)

 

$

(21,168,374

)

 

$

(10,054,098

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(13,736,300

)

 

 

(1,485,295

)

 

 

(21,142,583

)

 

 

(10,067,193

)

Foreign currency translation gain (loss)

 

 

750,067

 

 

 

(120,357

)

 

 

1,809,769

 

 

 

(738,022

)

Comprehensive loss:

 

$

(12,986,233

)

 

$

(1,605,652

)

 

$

(19,332,814

)

 

$

(10,805,215

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - basic and diluted

 

 

18,685,979

 

 

 

14,360,058

 

 

 

17,688,692

 

 

 

8,583,229

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per common share - basic and diluted

 

$

(0.74

)

 

$

(0.10

)

 

$

(1.20

)

 

$

(1.17

)

* The condensed 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.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three and Nine Months Ended May 31, 2024 and 2023 (unaudited)

 

 

 

 

 

 

 

 

Additional

 

Common

 

Other

 

 

 

Total 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, 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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cashless exercise of warrants

 

 

245,802

 

 

 

246

 

 

 

1,323,152

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

1,323,398

 

 

 

–

 

 

 

1,323,398

 

Exercise of warrants for cash

 

 

240,400

 

 

 

240

 

 

 

240,160

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

240,400

 

 

 

–

 

 

 

240,400

 

Share issuance for convertible debt settlement

 

 

519,845

 

 

 

520

 

 

 

577,002

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

577,522

 

 

 

–

 

 

 

577,522

 

Issuance of common stock to be issued

 

 

73,767

 

 

 

74

 

 

 

1,172,776

 

 

 

(1,172,850

)

 

 

–

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

–

 

Common stock issued for services

 

 

424,080

 

 

 

424

 

 

 

1,194,976

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

1,195,400

 

 

 

–

 

 

 

1,195,400

 

Reverse stock split share rounding

 

 

27,973

 

 

 

28

 

 

 

(28

)

 

 

–

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

–

 

Foreign currency translation gain

 

 

–

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

110,895

 

 

 

–

 

 

 

110,895

 

 

 

(1,919

)

 

 

108,976

 

Net loss

 

 

–

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

(4,680,343

)

 

 

(4,680,343

)

 

 

19,620

 

 

 

(4,660,723

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, November 30, 2023

 

 

17,291,192

 

 

$

17,292

 

 

$

95,481,354

 

 

$

44,443

 

 

$

(246,488

)

 

$

(71,713,384

)

 

$

23,583,217

 

 

$

(299,169

)

 

$

23,284,048

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share issuance for convertible debt settlement

 

 

457,128

 

 

 

457

 

 

 

453,616

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

454,073

 

 

 

–

 

 

 

454,073

 

Foreign currency translation gain

 

 

–

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

749,869

 

 

 

–

 

 

 

749,869

 

 

 

198

 

 

 

750,067

 

Fair value of stock options

 

 

–

 

 

 

–

 

 

 

147,656

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

147,656

 

 

 

–

 

 

 

147,656

 

Net loss

 

 

–

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

(2,746,128

)

 

 

(2,746,128

)

 

 

568

 

 

 

(2,745,560

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, February 29, 2024

 

 

17,748,320

 

 

$

17,749

 

 

$

96,082,626

 

 

$

44,443

 

 

$

503,381

 

 

$

(74,459,512

)

 

$

22,188,687

 

 

$

(298,403

)

 

$

21,890,284

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share issuance for convertible debt settlement

 

 

1,306,203

 

 

 

1,306

 

 

 

577,982

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

579,288

 

 

 

–

 

 

 

579,288

 

Cancellation of agreement

 

 

–

 

 

 

–

 

 

 

–

 

 

 

(18,943

)

 

 

–

 

 

 

–

 

 

 

(18,943

)

 

 

–

 

 

 

(18,943

)

Foreign currency translation gain

 

 

–

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

949,005

 

 

 

–

 

 

 

949,005

 

 

 

(113

)

 

 

948,892

 

Net loss

 

 

–

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

(13,741,903

)

 

 

(13,741,903

)

 

 

5,603

 

 

 

(13,736,300

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, May 31, 2024

 

 

19,054,523

 

 

$

19,055

 

 

$

96,660,608

 

 

$

25,500

 

 

$

1,452,386

 

 

$

(88,201,415

)

 

$

9,956,134

 

 

$

(292,913

)

 

$

9,663,221

 

 

 

 

 

 

 

 

 

Additional

 

 

Common

 

Other

 

 

 

Total 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, 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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for cash, net of offering costs

 

 

400,000

 

 

 

400

 

 

 

1,794,600

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

1,795,000

 

 

 

–

 

 

 

1,795,000

 

Issuance of common stock to be issued

 

 

3,623

 

 

 

4

 

 

 

92,362

 

 

 

(92,366

)

 

 

–

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

–

 

Cashless exercise of warrants

 

 

467,399

 

 

 

467

 

 

 

1,138,583

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

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

 

 

3,989,085

 

 

$

3,989

 

 

$

69,171,319

 

 

$

9,382,441

 

 

$

143,828

 

 

$

(57,753,902

)

 

$

20,947,675

 

 

$

(262,885

)

 

$

20,684,790

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share issuance for convertible debt settlement

 

 

9,310,940

 

 

 

9,311

 

 

 

9,076,740

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

9,086,051

 

 

 

–

 

 

 

9,086,051

 

Exercise of warrants (Cashless Exercise)

 

 

115,935

 

 

 

116

 

 

 

282,417

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

282,533

 

 

 

–

 

 

 

282,533

 

Exercise of warrants for cash

 

 

131,000

 

 

 

131

 

 

 

130,869

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

131,000

 

 

 

–

 

 

 

131,000

 

Issuance of common stock to be issued

 

 

320,202

 

 

 

320

 

 

 

8,164,828

 

 

 

(8,165,148

)

 

 

–

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

–

 

Shares issued with convertible notes

 

 

95,500

 

 

 

96

 

 

 

82,868

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

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

 

 

13,962,662

 

 

 

13,963

 

 

 

88,446,635

 

 

 

1,217,293

 

 

 

(51,993

)

 

 

(62,375,257

)

 

 

27,250,640

 

 

 

(287,554

)

 

 

26,963,086

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share issuance for convertible debt settlement

 

 

107,594

 

 

 

108

 

 

 

100,170

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

100,278

 

 

 

–

 

 

 

100,278

 

Exercise of warrants for cash

 

 

320,000

 

 

 

320

 

 

 

319,680

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

320,000

 

 

 

–

 

 

 

320,000

 

Shares issued with convertible notes

 

 

95,500

 

 

 

96

 

 

 

90,037

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

90,132

 

 

 

–

 

 

 

90,132

 

Value of warrants issued with convertible notes

 

 

–

 

 

 

–

 

 

 

93,811

 

 

 

–

 

 

 

–

 

 

 

–

 

 

 

93,811

 

 

 

–

 

 

 

93,811

 

Beneficial conversion feature upon issuance of 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

 

 

14,485,756

 

 

$

14,486

 

 

$

89,379,961

 

 

$

1,217,293

 

 

$

(172,526

)

 

$

(63,872,587

)

 

$

26,566,627

 

 

$

(275,343

)

 

$

26,291,284

 

* The condensed consolidated statements of stockholders’ 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.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended May 31, 2024 and 2023 (unaudited)

 

 

Nine Months Ended

 

 

May 31,

 

May 31,

 

 

2024

 

2023

 

 

(unaudited)

 

(unaudited)

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net loss

 

$

(21,142,583

)

 

$

(10,067,193

)

Adjustments for non-cash items:

 

 

 

 

 

 

Depreciation and amortization

 

 

1,697,317

 

 

 

1,718,388

 

Fair value of vested stock options

 

 

147,656

 

 

 

385,335

 

Change in fair value of derivative liability

 

 

5,765,822

 

 

 

–

 

Cashless exercise of warrants

 

 

1,323,398

 

 

 

1,421,583

 

Common stock issued for services

 

 

1,195,400

 

 

 

–

 

Operating lease expense

 

 

466,276

 

 

 

624,246

 

Amortization of debt discount

 

 

5,095,331

 

 

 

4,386,899

 

Foreign currency transaction losses

 

 

1,485,861

 

 

 

(12,652

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(797,692

)

 

 

(308,907

)

Inventory

 

 

(12,548

)

 

 

(92,260

)

Prepaid expenses and other current assets

 

 

130,015

 

 

 

333,724

 

Accounts payable

 

 

408,067

 

 

 

154,542

 

Accrued expenses

 

 

76,428

 

 

 

104,004

 

Accrued interest

 

 

103,605

 

 

 

(67,634

)

Operating lease liability

 

 

(466,276

)

 

 

(594,618

)

Net cash used in operating activities

 

 

(4,523,923

)

 

 

(2,014,543

)

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchase of property and equipment

 

 

(2,005

)

 

 

(18,870

)

Net cash used in investing activities

 

 

(2,005

)

 

 

(18,870

)

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

(Repayments to) proceeds from related parties

 

 

(267,756

)

 

 

(56,649

)

Proceeds from notes payable

 

 

274

 

 

 

222,000

 

Repayments of notes payable

 

 

(184,125

)

 

 

–

 

Repayments of finance leases

 

 

(7,350

)

 

 

(6,435

)

Proceeds from issuance of convertible notes, net

 

 

8,649,153

 

 

 

925,306

 

Repayment of convertible notes

 

 

(3,311,536

)

 

 

(3,033,888

)

Proceeds from the sale of common stock, net of offering costs

 

 

–

 

 

 

1,795,000

 

Proceeds from exercise of warrants

 

 

240,400

 

 

 

451,000

 

Net cash provided by financing activities

 

 

5,119,060

 

 

 

296,334

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

530,316

 

 

 

22,403

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

 

1,123,448

 

 

 

(1,714,676

)

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

 

 

416,323

 

 

 

2,178,687

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

 

$

1,539,771

 

 

$

464,011

 

 

 

 

 

 

 

 

CASH PAID FOR:

 

 

 

 

 

 

Interest

 

$

190,491

 

 

$

343,878

 

Income taxes

 

$

–

 

 

$

–

 

 

 

 

 

 

 

 

SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

Common stock issued for convertible debt settlement

 

$

1,610,883

 

 

$

9,186,329

 

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/20240719320957/en/

Chris David, COO-President Novo Integrated Sciences, Inc. [e-mail] [phone]