Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Novo Integrated Sciences Reports Fiscal Year 2024 Second Quarter Financial Results By: Novo Integrated Sciences, Inc. via Business Wire April 15, 2024 at 16:30 PM EDT 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 second fiscal quarter ended February 29, 2024. Robert Mattacchione, Novo’s CEO and Board Chairman, stated, “The Company’s fiscal year 2024 second quarter period emphasized maximizing operational efficiencies pointed towards future cost savings and margin improvement. 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 February 29, 2024: Cash and cash equivalents were $651,747, total assets were $34,949,271, total liabilities were $13,058,987, and stockholders’ equity was $21,890,284. Revenues were $3,170,592, representing an increase of $614,083, or 24%, from $2,556,509 for the three months ended February 28, 2023. The increase in revenue is principally due to an increase in product sales. Acenzia’s and Terragenx’s revenue for the three months ended February 29, 2024 were $884,396 and $103,399, respectively. Revenue from our healthcare services increased by 3.4% when comparing the revenue for the three months ended February 29, 2024 to the three months ended February 28, 2023. Operating costs were $2,863,854, representing an increase of $106,141, or 4%, from $2,757,713 for the three months ended February 28, 2023. The increase in operating costs was principally due to higher fair value of stock options issued during the three months. Net loss attributed to the Company for the three months ended February 29, 2024 was $2,746,128, representing a decrease of $1,875,227, or 41%, from $4,621,355 for the three months ended February 28, 2023. The decrease in net loss was principally due to the increase in gross profit and lower amount of other expenses. On December 21, 2023, the total principal and interest of $449,535 owed on the $445,000 Mast Hill Fund, LP promissory note, dated June 20, 2023, was converted to 457,128 shares of the Company’s common stock and paid in full. 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 February 29, 2024 (unaudited) and August 31, 2023 February 29, August 31, 2024 2023 ASSETS Current Assets: Cash and cash equivalents $ 651,747 $ 416,323 Accounts receivable, net 2,153,914 1,467,028 Inventory, net 947,351 1,106,983 Other receivables 1,048,596 1,051,584 Prepaid expenses and other current assets 217,619 346,171 Total current assets 5,019,227 4,388,089 Property and equipment, net 5,246,241 5,390,038 Intangible assets, net 15,205,967 16,218,539 Right-of-use assets, net 1,916,900 1,983,898 Goodwill 7,560,936 7,582,483 TOTAL ASSETS $ 34,949,271 $ 35,563,047 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ 2,173,667 $ 3,513,842 Accrued expenses 1,328,828 1,233,549 Accrued interest (including amounts to related parties) 477,480 382,666 Government loans and notes payable, current portion 93,488 277,405 Convertible notes payable, net of discount of $2,004,245 1,773,533 558,668 Derivative liability 2,312,921 – Contingent liability 27,756 61,767 Debentures, related parties 914,219 916,824 Due to related parties 434,039 533,001 Finance lease liability 5,788 11,744 Operating lease liability, current portion 417,342 415,392 Total current liabilities 9,959,061 7,904,858 Government loans and notes payable, net of current portion 64,016 65,038 Operating lease liability, net of current portion 1,639,391 1,693,577 Deferred tax liability 1,396,519 1,400,499 TOTAL LIABILITIES 13,058,987 11,063,972 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 February 29, 2024 and August 31, 2023, respectively – – Common stock; $0.001 par value; 499,000,000 shares authorized; 17,748,320 and 15,759,325 shares issued and outstanding at February 29, 2024 and August 31, 2023, respectively 17,749 15,760 Additional paid-in capital 96,082,626 90,973,316 Common stock to be issued (17,375 and 91,138 shares at February 29, 2024 and August 31, 2023) 44,443 1,217,293 Other comprehensive gain (loss) 503,381 (357,383 ) Accumulated deficit (74,459,512 ) (67,033,041 ) Total Novo Integrated Sciences, Inc. stockholders’ equity 22,188,687 24,815,945 Noncontrolling interest (298,403 ) (316,870 ) Total stockholders’ equity 21,890,284 24,499,075 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 34,949,271 $ 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 Six Months Ended February 29, 2024 and February 28, 2023 (unaudited) Three Months Ended Six Months Ended February 29, February 28, February 29, February 28, 2024 2023 2024 2023 Revenues $ 3,170,592 $ 2,556,509 $ 7,061,810 $ 5,975,789 Cost of revenues 1,846,506 1,585,606 3,793,706 3,265,353 Gross profit 1,324,086 970,903 3,268,104 2,710,436 Operating expenses: Selling expenses 2,590 707 12,176 8,039 General and administrative expenses 2,861,264 2,757,006 8,113,333 6,731,167 Total operating expenses 2,863,854 2,757,713 8,125,509 6,739,206 Loss from operations (1,539,768 ) (1,786,810 ) (4,857,405 ) (4,028,770 ) Non-operating income (expense) Interest income 2,477 2,243 4,696 4,524 Interest expense (138,684 ) (123,866 ) (282,058 ) (291,109 ) Other expense (308,763 ) — (960,937 ) — Change in fair value of derivative liability 373,339 — 958,868 — Amortization of debt discount (1,114,573 ) (2,740,349 ) (2,190,501 ) (4,230,862 ) Foreign currency transaction (loss) gain (19,588 ) 3,620 (78,946 ) (35,681 ) Total other expense (1,205,792 ) (2,858,352 ) (2,548,878 ) (4,553,128 ) Loss before income taxes (2,745,560 ) (4,645,162 ) (7,406,283 ) (8,581,898 ) Income tax expense — — — — Net loss $ (2,745,560 ) $ (4,645,162 ) $ (7,406,283 ) $ (8,581,898 ) Net income (loss) attributed to noncontrolling interest 568 (23,807 ) 20,188 (25,130 ) Net loss attributed to Novo Integrated Sciences, Inc. $ (2,746,128 ) $ (4,621,355 ) $ (7,426,471 ) $ (8,556,768 ) Comprehensive loss: Net loss (2,745,560 ) (4,645,162 ) (7,406,283 ) (8,581,898 ) Foreign currency translation gain (loss) 750,067 (196,683 ) 860,764 (617,665 ) Comprehensive loss: $ (1,995,493 ) $ (4,841,845 ) $ (6,545,519 ) $ (9,199,563 ) Weighted average common shares outstanding - basic and diluted 17,642,829 7,933,492 17,184,569 5,646,937 Net loss per common share - basic and diluted $ (0.16 ) $ (0.59 ) $ (0.43 ) $ (1.52 ) * 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 Six Months Ended February 29, 2024 and February 28, 2023 (unaudited) Additional Common Other Novo Common Stock Paid-in Stock To Comprehensive Accumulated Stockholders’ Noncontrolling Total Shares Amount Capital Be Issued Income (Loss) 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 loss – – – – 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 Additional Common Other Novo Common Stock Paid-in Stock To Comprehensive Accumulated Stockholders’ Noncontrolling Total Shares Amount Capital Be Issued Income (Loss) 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 Cashless exercise of warrants 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 * 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 Six Months Ended February 29, 2024 and February 28, 2023 (unaudited) Six Months Ended February 29, February 28, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (7,406,283 ) $ (8,581,898 ) Adjustments for non-cash items: Depreciation and amortization 1,140,613 1,138,797 Fair value of vested stock options 147,656 121,774 Change in fair value of derivative liability (958,868 ) — Cashless exercise of warrants 1,323,398 1,421,583 Common stock issued for services 1,195,400 — Operating lease expense 308,867 419,256 Amortization of debt discount 2,190,501 4,230,862 Foreign currency transaction losses 78,946 35,681 Changes in operating assets and liabilities: Accounts receivable (691,424 ) 57,936 Inventory 157,116 (78,898 ) Prepaid expenses and other current assets 127,885 6,143 Accounts payable (1,333,031 ) 299,881 Accrued expenses 98,987 148,918 Accrued interest 63,151 28,226 Operating lease liability (308,867 ) (405,082 ) Net cash used in operating activities (3,865,953 ) (1,156,821 ) CASH FLOWS FROM FINANCING ACTIVITIES: (Repayments to) proceeds from related parties (64,837 ) 6,138 Proceeds from notes payable 145 — Repayments of notes payable (184,475 ) — Repayments of finance leases (5,931 ) (4,299 ) Proceeds from issuance of convertible notes, net 3,314,153 445,235 Repayment of convertible notes — (2,977,778 ) Proceeds from the sale of common stock, net of offering costs — 1,795,000 Proceeds from exercise of warrants 240,400 131,000 Net cash provided by (used in) financing activities 3,299,455 (604,704 ) Effect of exchange rate changes on cash and cash equivalents 801,922 192,576 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 235,424 (1,568,949 ) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 416,323 2,178,687 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 651,747 $ 609,738 CASH PAID FOR: Interest $ 158,367 $ 275,990 Income taxes $ — $ — SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES: Common stock issued for convertible debt settlement $ 1,031,595 $ 9,086,051 Debt discount recognized on derivative liability $ — $ 1,390,380 Debt discount recognized on convertible note $ — $ 297,055 Extinguishment of derivative liability due to conversion $ — $ 1,390,380 Common stock issued with convertible notes $ — $ 82,963 Warrants issued with convertible notes $ — $ 86,327 View source version on businesswire.com: https://www.businesswire.com/news/home/20240415120487/en/Contacts Chris David, COO-President Novo Integrated Sciences, Inc. chris.david@novointegrated.com (888) 512-1195 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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Novo Integrated Sciences Reports Fiscal Year 2024 Second Quarter Financial Results By: Novo Integrated Sciences, Inc. via Business Wire April 15, 2024 at 16:30 PM EDT 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 second fiscal quarter ended February 29, 2024. Robert Mattacchione, Novo’s CEO and Board Chairman, stated, “The Company’s fiscal year 2024 second quarter period emphasized maximizing operational efficiencies pointed towards future cost savings and margin improvement. 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 February 29, 2024: Cash and cash equivalents were $651,747, total assets were $34,949,271, total liabilities were $13,058,987, and stockholders’ equity was $21,890,284. Revenues were $3,170,592, representing an increase of $614,083, or 24%, from $2,556,509 for the three months ended February 28, 2023. The increase in revenue is principally due to an increase in product sales. Acenzia’s and Terragenx’s revenue for the three months ended February 29, 2024 were $884,396 and $103,399, respectively. Revenue from our healthcare services increased by 3.4% when comparing the revenue for the three months ended February 29, 2024 to the three months ended February 28, 2023. Operating costs were $2,863,854, representing an increase of $106,141, or 4%, from $2,757,713 for the three months ended February 28, 2023. The increase in operating costs was principally due to higher fair value of stock options issued during the three months. Net loss attributed to the Company for the three months ended February 29, 2024 was $2,746,128, representing a decrease of $1,875,227, or 41%, from $4,621,355 for the three months ended February 28, 2023. The decrease in net loss was principally due to the increase in gross profit and lower amount of other expenses. On December 21, 2023, the total principal and interest of $449,535 owed on the $445,000 Mast Hill Fund, LP promissory note, dated June 20, 2023, was converted to 457,128 shares of the Company’s common stock and paid in full. 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 February 29, 2024 (unaudited) and August 31, 2023 February 29, August 31, 2024 2023 ASSETS Current Assets: Cash and cash equivalents $ 651,747 $ 416,323 Accounts receivable, net 2,153,914 1,467,028 Inventory, net 947,351 1,106,983 Other receivables 1,048,596 1,051,584 Prepaid expenses and other current assets 217,619 346,171 Total current assets 5,019,227 4,388,089 Property and equipment, net 5,246,241 5,390,038 Intangible assets, net 15,205,967 16,218,539 Right-of-use assets, net 1,916,900 1,983,898 Goodwill 7,560,936 7,582,483 TOTAL ASSETS $ 34,949,271 $ 35,563,047 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ 2,173,667 $ 3,513,842 Accrued expenses 1,328,828 1,233,549 Accrued interest (including amounts to related parties) 477,480 382,666 Government loans and notes payable, current portion 93,488 277,405 Convertible notes payable, net of discount of $2,004,245 1,773,533 558,668 Derivative liability 2,312,921 – Contingent liability 27,756 61,767 Debentures, related parties 914,219 916,824 Due to related parties 434,039 533,001 Finance lease liability 5,788 11,744 Operating lease liability, current portion 417,342 415,392 Total current liabilities 9,959,061 7,904,858 Government loans and notes payable, net of current portion 64,016 65,038 Operating lease liability, net of current portion 1,639,391 1,693,577 Deferred tax liability 1,396,519 1,400,499 TOTAL LIABILITIES 13,058,987 11,063,972 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 February 29, 2024 and August 31, 2023, respectively – – Common stock; $0.001 par value; 499,000,000 shares authorized; 17,748,320 and 15,759,325 shares issued and outstanding at February 29, 2024 and August 31, 2023, respectively 17,749 15,760 Additional paid-in capital 96,082,626 90,973,316 Common stock to be issued (17,375 and 91,138 shares at February 29, 2024 and August 31, 2023) 44,443 1,217,293 Other comprehensive gain (loss) 503,381 (357,383 ) Accumulated deficit (74,459,512 ) (67,033,041 ) Total Novo Integrated Sciences, Inc. stockholders’ equity 22,188,687 24,815,945 Noncontrolling interest (298,403 ) (316,870 ) Total stockholders’ equity 21,890,284 24,499,075 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 34,949,271 $ 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 Six Months Ended February 29, 2024 and February 28, 2023 (unaudited) Three Months Ended Six Months Ended February 29, February 28, February 29, February 28, 2024 2023 2024 2023 Revenues $ 3,170,592 $ 2,556,509 $ 7,061,810 $ 5,975,789 Cost of revenues 1,846,506 1,585,606 3,793,706 3,265,353 Gross profit 1,324,086 970,903 3,268,104 2,710,436 Operating expenses: Selling expenses 2,590 707 12,176 8,039 General and administrative expenses 2,861,264 2,757,006 8,113,333 6,731,167 Total operating expenses 2,863,854 2,757,713 8,125,509 6,739,206 Loss from operations (1,539,768 ) (1,786,810 ) (4,857,405 ) (4,028,770 ) Non-operating income (expense) Interest income 2,477 2,243 4,696 4,524 Interest expense (138,684 ) (123,866 ) (282,058 ) (291,109 ) Other expense (308,763 ) — (960,937 ) — Change in fair value of derivative liability 373,339 — 958,868 — Amortization of debt discount (1,114,573 ) (2,740,349 ) (2,190,501 ) (4,230,862 ) Foreign currency transaction (loss) gain (19,588 ) 3,620 (78,946 ) (35,681 ) Total other expense (1,205,792 ) (2,858,352 ) (2,548,878 ) (4,553,128 ) Loss before income taxes (2,745,560 ) (4,645,162 ) (7,406,283 ) (8,581,898 ) Income tax expense — — — — Net loss $ (2,745,560 ) $ (4,645,162 ) $ (7,406,283 ) $ (8,581,898 ) Net income (loss) attributed to noncontrolling interest 568 (23,807 ) 20,188 (25,130 ) Net loss attributed to Novo Integrated Sciences, Inc. $ (2,746,128 ) $ (4,621,355 ) $ (7,426,471 ) $ (8,556,768 ) Comprehensive loss: Net loss (2,745,560 ) (4,645,162 ) (7,406,283 ) (8,581,898 ) Foreign currency translation gain (loss) 750,067 (196,683 ) 860,764 (617,665 ) Comprehensive loss: $ (1,995,493 ) $ (4,841,845 ) $ (6,545,519 ) $ (9,199,563 ) Weighted average common shares outstanding - basic and diluted 17,642,829 7,933,492 17,184,569 5,646,937 Net loss per common share - basic and diluted $ (0.16 ) $ (0.59 ) $ (0.43 ) $ (1.52 ) * 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 Six Months Ended February 29, 2024 and February 28, 2023 (unaudited) Additional Common Other Novo Common Stock Paid-in Stock To Comprehensive Accumulated Stockholders’ Noncontrolling Total Shares Amount Capital Be Issued Income (Loss) 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 loss – – – – 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 Additional Common Other Novo Common Stock Paid-in Stock To Comprehensive Accumulated Stockholders’ Noncontrolling Total Shares Amount Capital Be Issued Income (Loss) 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 Cashless exercise of warrants 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 * 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 Six Months Ended February 29, 2024 and February 28, 2023 (unaudited) Six Months Ended February 29, February 28, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (7,406,283 ) $ (8,581,898 ) Adjustments for non-cash items: Depreciation and amortization 1,140,613 1,138,797 Fair value of vested stock options 147,656 121,774 Change in fair value of derivative liability (958,868 ) — Cashless exercise of warrants 1,323,398 1,421,583 Common stock issued for services 1,195,400 — Operating lease expense 308,867 419,256 Amortization of debt discount 2,190,501 4,230,862 Foreign currency transaction losses 78,946 35,681 Changes in operating assets and liabilities: Accounts receivable (691,424 ) 57,936 Inventory 157,116 (78,898 ) Prepaid expenses and other current assets 127,885 6,143 Accounts payable (1,333,031 ) 299,881 Accrued expenses 98,987 148,918 Accrued interest 63,151 28,226 Operating lease liability (308,867 ) (405,082 ) Net cash used in operating activities (3,865,953 ) (1,156,821 ) CASH FLOWS FROM FINANCING ACTIVITIES: (Repayments to) proceeds from related parties (64,837 ) 6,138 Proceeds from notes payable 145 — Repayments of notes payable (184,475 ) — Repayments of finance leases (5,931 ) (4,299 ) Proceeds from issuance of convertible notes, net 3,314,153 445,235 Repayment of convertible notes — (2,977,778 ) Proceeds from the sale of common stock, net of offering costs — 1,795,000 Proceeds from exercise of warrants 240,400 131,000 Net cash provided by (used in) financing activities 3,299,455 (604,704 ) Effect of exchange rate changes on cash and cash equivalents 801,922 192,576 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 235,424 (1,568,949 ) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 416,323 2,178,687 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 651,747 $ 609,738 CASH PAID FOR: Interest $ 158,367 $ 275,990 Income taxes $ — $ — SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES: Common stock issued for convertible debt settlement $ 1,031,595 $ 9,086,051 Debt discount recognized on derivative liability $ — $ 1,390,380 Debt discount recognized on convertible note $ — $ 297,055 Extinguishment of derivative liability due to conversion $ — $ 1,390,380 Common stock issued with convertible notes $ — $ 82,963 Warrants issued with convertible notes $ — $ 86,327 View source version on businesswire.com: https://www.businesswire.com/news/home/20240415120487/en/Contacts Chris David, COO-President Novo Integrated Sciences, Inc. chris.david@novointegrated.com (888) 512-1195
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 second fiscal quarter ended February 29, 2024. Robert Mattacchione, Novo’s CEO and Board Chairman, stated, “The Company’s fiscal year 2024 second quarter period emphasized maximizing operational efficiencies pointed towards future cost savings and margin improvement. 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 February 29, 2024: Cash and cash equivalents were $651,747, total assets were $34,949,271, total liabilities were $13,058,987, and stockholders’ equity was $21,890,284. Revenues were $3,170,592, representing an increase of $614,083, or 24%, from $2,556,509 for the three months ended February 28, 2023. The increase in revenue is principally due to an increase in product sales. Acenzia’s and Terragenx’s revenue for the three months ended February 29, 2024 were $884,396 and $103,399, respectively. Revenue from our healthcare services increased by 3.4% when comparing the revenue for the three months ended February 29, 2024 to the three months ended February 28, 2023. Operating costs were $2,863,854, representing an increase of $106,141, or 4%, from $2,757,713 for the three months ended February 28, 2023. The increase in operating costs was principally due to higher fair value of stock options issued during the three months. Net loss attributed to the Company for the three months ended February 29, 2024 was $2,746,128, representing a decrease of $1,875,227, or 41%, from $4,621,355 for the three months ended February 28, 2023. The decrease in net loss was principally due to the increase in gross profit and lower amount of other expenses. On December 21, 2023, the total principal and interest of $449,535 owed on the $445,000 Mast Hill Fund, LP promissory note, dated June 20, 2023, was converted to 457,128 shares of the Company’s common stock and paid in full. 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 February 29, 2024 (unaudited) and August 31, 2023 February 29, August 31, 2024 2023 ASSETS Current Assets: Cash and cash equivalents $ 651,747 $ 416,323 Accounts receivable, net 2,153,914 1,467,028 Inventory, net 947,351 1,106,983 Other receivables 1,048,596 1,051,584 Prepaid expenses and other current assets 217,619 346,171 Total current assets 5,019,227 4,388,089 Property and equipment, net 5,246,241 5,390,038 Intangible assets, net 15,205,967 16,218,539 Right-of-use assets, net 1,916,900 1,983,898 Goodwill 7,560,936 7,582,483 TOTAL ASSETS $ 34,949,271 $ 35,563,047 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ 2,173,667 $ 3,513,842 Accrued expenses 1,328,828 1,233,549 Accrued interest (including amounts to related parties) 477,480 382,666 Government loans and notes payable, current portion 93,488 277,405 Convertible notes payable, net of discount of $2,004,245 1,773,533 558,668 Derivative liability 2,312,921 – Contingent liability 27,756 61,767 Debentures, related parties 914,219 916,824 Due to related parties 434,039 533,001 Finance lease liability 5,788 11,744 Operating lease liability, current portion 417,342 415,392 Total current liabilities 9,959,061 7,904,858 Government loans and notes payable, net of current portion 64,016 65,038 Operating lease liability, net of current portion 1,639,391 1,693,577 Deferred tax liability 1,396,519 1,400,499 TOTAL LIABILITIES 13,058,987 11,063,972 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 February 29, 2024 and August 31, 2023, respectively – – Common stock; $0.001 par value; 499,000,000 shares authorized; 17,748,320 and 15,759,325 shares issued and outstanding at February 29, 2024 and August 31, 2023, respectively 17,749 15,760 Additional paid-in capital 96,082,626 90,973,316 Common stock to be issued (17,375 and 91,138 shares at February 29, 2024 and August 31, 2023) 44,443 1,217,293 Other comprehensive gain (loss) 503,381 (357,383 ) Accumulated deficit (74,459,512 ) (67,033,041 ) Total Novo Integrated Sciences, Inc. stockholders’ equity 22,188,687 24,815,945 Noncontrolling interest (298,403 ) (316,870 ) Total stockholders’ equity 21,890,284 24,499,075 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 34,949,271 $ 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 Six Months Ended February 29, 2024 and February 28, 2023 (unaudited) Three Months Ended Six Months Ended February 29, February 28, February 29, February 28, 2024 2023 2024 2023 Revenues $ 3,170,592 $ 2,556,509 $ 7,061,810 $ 5,975,789 Cost of revenues 1,846,506 1,585,606 3,793,706 3,265,353 Gross profit 1,324,086 970,903 3,268,104 2,710,436 Operating expenses: Selling expenses 2,590 707 12,176 8,039 General and administrative expenses 2,861,264 2,757,006 8,113,333 6,731,167 Total operating expenses 2,863,854 2,757,713 8,125,509 6,739,206 Loss from operations (1,539,768 ) (1,786,810 ) (4,857,405 ) (4,028,770 ) Non-operating income (expense) Interest income 2,477 2,243 4,696 4,524 Interest expense (138,684 ) (123,866 ) (282,058 ) (291,109 ) Other expense (308,763 ) — (960,937 ) — Change in fair value of derivative liability 373,339 — 958,868 — Amortization of debt discount (1,114,573 ) (2,740,349 ) (2,190,501 ) (4,230,862 ) Foreign currency transaction (loss) gain (19,588 ) 3,620 (78,946 ) (35,681 ) Total other expense (1,205,792 ) (2,858,352 ) (2,548,878 ) (4,553,128 ) Loss before income taxes (2,745,560 ) (4,645,162 ) (7,406,283 ) (8,581,898 ) Income tax expense — — — — Net loss $ (2,745,560 ) $ (4,645,162 ) $ (7,406,283 ) $ (8,581,898 ) Net income (loss) attributed to noncontrolling interest 568 (23,807 ) 20,188 (25,130 ) Net loss attributed to Novo Integrated Sciences, Inc. $ (2,746,128 ) $ (4,621,355 ) $ (7,426,471 ) $ (8,556,768 ) Comprehensive loss: Net loss (2,745,560 ) (4,645,162 ) (7,406,283 ) (8,581,898 ) Foreign currency translation gain (loss) 750,067 (196,683 ) 860,764 (617,665 ) Comprehensive loss: $ (1,995,493 ) $ (4,841,845 ) $ (6,545,519 ) $ (9,199,563 ) Weighted average common shares outstanding - basic and diluted 17,642,829 7,933,492 17,184,569 5,646,937 Net loss per common share - basic and diluted $ (0.16 ) $ (0.59 ) $ (0.43 ) $ (1.52 ) * 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 Six Months Ended February 29, 2024 and February 28, 2023 (unaudited) Additional Common Other Novo Common Stock Paid-in Stock To Comprehensive Accumulated Stockholders’ Noncontrolling Total Shares Amount Capital Be Issued Income (Loss) 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 loss – – – – 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 Additional Common Other Novo Common Stock Paid-in Stock To Comprehensive Accumulated Stockholders’ Noncontrolling Total Shares Amount Capital Be Issued Income (Loss) 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 Cashless exercise of warrants 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 * 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 Six Months Ended February 29, 2024 and February 28, 2023 (unaudited) Six Months Ended February 29, February 28, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (7,406,283 ) $ (8,581,898 ) Adjustments for non-cash items: Depreciation and amortization 1,140,613 1,138,797 Fair value of vested stock options 147,656 121,774 Change in fair value of derivative liability (958,868 ) — Cashless exercise of warrants 1,323,398 1,421,583 Common stock issued for services 1,195,400 — Operating lease expense 308,867 419,256 Amortization of debt discount 2,190,501 4,230,862 Foreign currency transaction losses 78,946 35,681 Changes in operating assets and liabilities: Accounts receivable (691,424 ) 57,936 Inventory 157,116 (78,898 ) Prepaid expenses and other current assets 127,885 6,143 Accounts payable (1,333,031 ) 299,881 Accrued expenses 98,987 148,918 Accrued interest 63,151 28,226 Operating lease liability (308,867 ) (405,082 ) Net cash used in operating activities (3,865,953 ) (1,156,821 ) CASH FLOWS FROM FINANCING ACTIVITIES: (Repayments to) proceeds from related parties (64,837 ) 6,138 Proceeds from notes payable 145 — Repayments of notes payable (184,475 ) — Repayments of finance leases (5,931 ) (4,299 ) Proceeds from issuance of convertible notes, net 3,314,153 445,235 Repayment of convertible notes — (2,977,778 ) Proceeds from the sale of common stock, net of offering costs — 1,795,000 Proceeds from exercise of warrants 240,400 131,000 Net cash provided by (used in) financing activities 3,299,455 (604,704 ) Effect of exchange rate changes on cash and cash equivalents 801,922 192,576 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 235,424 (1,568,949 ) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 416,323 2,178,687 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 651,747 $ 609,738 CASH PAID FOR: Interest $ 158,367 $ 275,990 Income taxes $ — $ — SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES: Common stock issued for convertible debt settlement $ 1,031,595 $ 9,086,051 Debt discount recognized on derivative liability $ — $ 1,390,380 Debt discount recognized on convertible note $ — $ 297,055 Extinguishment of derivative liability due to conversion $ — $ 1,390,380 Common stock issued with convertible notes $ — $ 82,963 Warrants issued with convertible notes $ — $ 86,327 View source version on businesswire.com: https://www.businesswire.com/news/home/20240415120487/en/
Chris David, COO-President Novo Integrated Sciences, Inc. chris.david@novointegrated.com (888) 512-1195