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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest reported): January 22, 2024

 

Novo Integrated Sciences, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada   001-40089   59-3691650

(State or other jurisdiction

of Incorporation)

 

 

(Commission

File Number)

 

 

(IRS Employer

Identification Number)

 

11120 NE 2nd Street, Suite 200, Bellevue, WA 98004

(Address of principal executive offices)

 

(206) 617-9797

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.)

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CF$ 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class   Trading Symbol(s)   Name of Each Exchange on which Registered
Common Stock   NVOS   Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 
 

 

Item 2.02. Results of Operations and Financial Condition.

 

On January 22, 2024, Novo Integrated Sciences, Inc. (“Novo”) issued a press release announcing its financial results for the quarter ended November 30, 2023. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. The information contained in the website is not a part of this Current Report on Form 8-K.

 

The information furnished pursuant to this Item 2.02, including the information contained in Exhibit 99.1, is “furnished” and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section. Such information shall not be incorporated by reference in another filing under the Exchange Act or the Securities Act of 1933, as amended, except to the extent such other filing specifically incorporates such information by reference.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.   Description
99.1   Press release issued by the registrant on January 22, 2024.
104   Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 
 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  Novo Integrated Sciences, Inc.
     
Dated: January 22, 2024 By: /s/ Robert Mattacchione
    Robert Mattacchione
    Chief Executive Officer

 

 

 

 

Exhibit 99.1

 

 

Novo Integrated Sciences Reports Fiscal Year 2024 First Quarter Financial Results

 

BELLEVUE, Wash., January 22, 2024 - 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 first fiscal quarter ended November 30, 2023.

 

Robert Mattacchione, Novo’s CEO and Board Chairman, stated, “The Company remains committed to the commercialization of its proprietary product offerings and the expansion and delivery of its essential services and solutions for how non-catastrophic healthcare is delivered both now and in the future. During the fiscal year 2024 first quarter period, the Company continued to work with certain prospective financial partners to close previously announced non-traditional financing opportunities for the Company’s business capital needs, including (i) an unsecured, non-dilutive 15-year debt instrument, with a principal sum of $70,000,000, which provides for net proceeds to the Company of approximately $52,000,000, after fees; (ii) the acquisition and monetization of the Ophir collection, a certain collection of 43 gemstones, 42 of which are certified by the Gemological Institute of America (the “Ophir Collection”); and (iii) a collateral transfer agreement of a One Billion Dollar gold-backed bond for the purpose and general use of monetization by Novo for a period of up to 15 years. In today’s environment of tight capital markets and expensive capital raises, these pending transactions would allow the Company access to the foundational capital and repayment terms necessary to support and accelerate the further implementation and growth of Novo’s three-pillar business model. “

 

Financial Highlights for the three month period ended November 30, 2023:

 

Cash and cash equivalents were $1,640,007, total assets were $37,244,384, total liabilities were $13,960,336, and stockholders’ equity was $23,284,048.
   
Revenues were $3,891,218, representing an increase of $471,938, or 14%, from $3,419,280 for the same period in 2022. The increase in revenue was principally due to an increase in product sales. Acenzia’s and Terragenx’s revenue for the three months ended November 30, 2023 were $1,683,850 and $16,971, respectively. Revenue from our healthcare services increased by 1.2% when comparing the revenue for the same period in 2022.
   
Operating costs were $5,261,655, representing an increase of $1,280,162, or 32%, from $3,981,493 for the same period in 2022. The increase in operating costs was principally due to common stock issuance for services and cashless warrant exercise.
   
Net loss attributed to the Company was $4,680,343, representing an increase of $744,930, or 19%, from $3,935,413 for the same period in 2022. The increase in net loss was principally due to the increase in operating expenses.
   
On September 12, 2023, the Company issued a $3,500,000 promissory note (12% per annum interest rate) with a purchase price of $3,150,000 and completed the related Securities Purchase Agreement with Mast Hill Fund, L.P. (“Mast Hill”). No warrants or shares were issued under the terms and conditions of this transaction with Mast Hill.

 

 

 

 

On September 18, 2023, the Company issued a $277,778 promissory note (12% per annum interest rate) with a purchase price of $250,000 and completed the related Securities Purchase Agreement with FirstFire Global Opportunities Fund, LLC (“FirstFire”). No warrants or shares were issued under the terms and conditions of this transaction with FirstFire.
   
On September 21, 2023, the total principal and interest of $577,521 owed on the $573,000 FirstFire promissory note, dated March 21, 2023, was converted to 519,845 restricted shares of the Company’s common stock and paid in full.

 

Corporate and Operational Highlights for the three month period ended November 30, 2023:

 

On November 6, 2023, the Company effectuated a 1-for-10 reverse stock split (the “Reverse Stock Split”). The Company’s common stock began trading on the Nasdaq Capital Market on a Reverse Stock Split-adjusted basis on November 7, 2023.
   
On November 21, 2023, the Company entered into a Purchase and Sale Agreement (“Ophir Agreement”) between the Company and Blake Alsbrook, solely in his capacity as Court-appointed successor receiver (the “Successor Receiver”) in Ocean Thermal Energy Corporation v. C. Robert Coe II, et al., United States District Court for the Central District of California (the “Court”) Case No. 2:19-cv-04299 VAP (JPRx). Pursuant to the terms of the Ophir Agreement, the Company agreed to purchase, and the Successor Receiver agreed to sell to the Company, the Ophir Collection, subject to the contingencies outlined in the Ophir Agreement, including Court approval, which was received on December 1, 2023. All parties involved in this Ophir Agreement continue to work toward closing the transactions contemplated by the Ophir Agreement. Upon closing of the acquisition of the Ophir Collection, the Company intends to monetize the Ophir Collection.
   
On November 22, 2023, the Company received notice from The Nasdaq Stock Market, LLC (“Nasdaq”) informing the Company that it had regained compliance with the minimum bid price requirement as set forth under Nasdaq Listing Rule 5550(a)(2) for continued listing on the Nasdaq Capital Market.

 

About Novo Integrated Sciences, Inc.

 

Novo Integrated Sciences, Inc. is pioneering a holistic approach to patient-first health and wellness through a multidisciplinary healthcare ecosystem of services and product innovation. Novo offers an essential and differentiated solution to deliver, or intend to deliver, these services and products through the integration of medical technology, advanced therapeutics, and rehabilitative science.

 

We believe that “decentralizing” healthcare, through the integration of medical technology and interconnectivity, is an essential solution to the rapidly evolving fundamental transformation of how non-catastrophic healthcare is delivered both now and in the future. Specific to non-critical care, ongoing advancements in both medical technology and inter-connectivity are allowing for a shift of the patient/practitioner relationship to the patient’s home and away from on-site visits to primary medical centers with mass-services. This acceleration of “ease-of-access” in the patient/practitioner interaction for non-critical care diagnosis and subsequent treatment minimizes the degradation of non-critical health conditions to critical conditions as well as allowing for more cost-effective healthcare distribution.

 

 

 

 

The Company’s decentralized healthcare business model is centered on three primary pillars to best support the transformation of non-catastrophic healthcare delivery to patients and consumers:

 

First Pillar: Service Networks. Deliver multidisciplinary primary care services through (i) an affiliate network of clinic facilities, (ii) small and micro footprint sized clinic facilities primarily located within the footprint of box-store commercial enterprises, (iii) clinic facilities operated through a franchise relationship with the Company, and (iv) corporate operated clinic facilities.
   
Second Pillar: Technology. Develop, deploy, and integrate sophisticated interconnected technology, interfacing the patient to the healthcare practitioner thus expanding the reach and availability of the Company’s services, beyond the traditional clinic location, to geographic areas not readily providing advanced, peripheral based healthcare services, including the patient’s home.
   
Third Pillar: Products. Develop and distribute effective, personalized health and wellness product solutions allowing for the customization of patient preventative care remedies and ultimately a healthier population. The Company’s science-first approach to product innovation further emphasizes our mandate to create and provide over-the-counter preventative and maintenance care solutions.

 

Innovation through science combined with the integration of sophisticated, secure technology assures Novo Integrated Sciences of continued cutting-edge advancement in patient-first platforms.

 

For more information concerning Novo Integrated Sciences, please visit www.novointegrated.com.

 

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.

 

Contact

 

Chris David, COO-President

Novo Integrated Sciences, Inc.

chris.david@novointegrated.com

(888) 512-1195

 

 

 

 

NOVO INTEGRATED SCIENCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

As of November 30, 2023 (unaudited) and August 31, 2023

 

   November 30,   August 31, 
   2023   2023 
ASSETS          
Current Assets:          
Cash and cash equivalents  $1,640,007   $416,323 
Accounts receivable, net   2,636,174    1,467,028 
Inventory, net   1,270,835    1,106,983 
Other receivables   1,047,742    1,051,584 
Prepaid expenses and other current assets   213,812    346,171 
Total current assets   6,808,570    4,388,089 
           
Property and equipment, net   5,306,613    5,390,038 
Intangible assets, net   15,704,218    16,218,539 
Right-of-use assets, net   1,870,204    1,983,898 
Goodwill   7,554,779    7,582,483 
TOTAL ASSETS  $37,244,384   $35,563,047 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
Current Liabilities:          
Accounts payable  $3,403,634   $3,513,842 
Accrued expenses   1,300,549    1,233,549 
Accrued interest (including amounts to related parties)   480,719    382,666 
Government loans and notes payable, current portion   93,488    277,405 
Convertible notes payable, net of discount of $3,118,819   1,103,959    558,668 
Derivative liability   2,686,260    - 
Contingent liability   52,749    61,767 
Debentures, related parties   913,474    916,824 
Due to related parties   458,266    533,001 
Finance lease liability   8,907    11,744 
Operating lease liability, current portion   413,506    415,392 
Total current liabilities   10,915,511    7,904,858 
           
Government loans and notes payable, net of current portion   63,777    65,038 
Operating lease liability, net of current portion   1,585,667    1,693,577 
Deferred tax liability   1,395,381    1,400,499 
TOTAL LIABILITIES   13,960,336    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 November 30, 2023 and August 31, 2023, respectively   -    - 
Common stock; $0.001 par value; 499,000,000 shares authorized; 17,291,192 and 15,759,325 shares issued and outstanding at November 30, 2023 and August 31, 2023, respectively   17,292    15,760 
Additional paid-in capital   95,481,354    90,973,316 
Common stock to be issued (17,375 and 91,138 shares at November 30, 2023 and August 31, 2023)   44,443    1,217,293 
Other comprehensive loss   (246,488)   (357,383)
Accumulated deficit   (71,713,384)   (67,033,041)
Total Novo Integrated Sciences, Inc. stockholders’ equity   23,583,217    24,815,945 
Noncontrolling interest   (299,169)   (316,870)
Total stockholders’ equity   23,284,048    24,499,075 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $37,244,384   $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.

 

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 

 

NOVO INTEGRATED SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Three Months Ended November 30, 2023 and 2022 (unaudited)

 

   Three Months Ended 
   November 30,   November 30, 
   2023   2022 
         
Revenues  $3,891,218   $3,419,280 
           
Cost of revenues   1,947,200    1,679,747 
           
Gross profit   1,944,018    1,739,533 
           
Operating expenses:          
Selling expenses   9,586    7,332 
General and administrative expenses   5,252,069    3,974,161 
Total operating expenses   5,261,655    3,981,493 
           
Loss from operations   (3,317,637)   (2,241,960)
           
Non-operating income (expense)          
Interest income   2,219    2,281 
Interest expense   (143,374)   (167,243)
Other expense   (652,174)   - 
Change in fair value of derivative liability   585,529    - 
Amortization of debt discount   (1,075,928)   (1,490,513)
Foreign currency transaction losses   (59,358)   (39,301)
Total non-operating expense   (1,343,086)   (1,694,776)
           
Loss before income taxes   (4,660,723)   (3,936,736)
           
Income tax expense   -    - 
           
Net loss  $(4,660,723)  $(3,936,736)
           
Net income (loss) attributed to noncontrolling interest   19,620    (1,323)
           
Net loss attributed to Novo Integrated Sciences, Inc.  $(4,680,343)  $(3,935,413)
           
Comprehensive loss:          
Net loss   (4,660,723)   (3,936,736)
Foreign currency translation gain (loss)   108,976    (420,982)
Comprehensive loss:  $(4,551,747)  $(4,357,718)
           
Weighted average common shares outstanding - basic and diluted   16,726,308    3,385,508 
           
Net loss per common share - basic and diluted  $(0.28)  $(1.16)

 

* 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.

 

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 

 

NOVO INTEGRATED SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three Months Ended November 30, 2023 and 2022 (unaudited)

 

   Common Stock  

Additional

Paid-in

  

Common

Stock To

  

Other

Comprehensive

   Accumulated  

Total Novo

Stockholders’

   Noncontrolling   Total 
   Shares   Amount   Capital   Be Issued   (Loss) 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 
Rounding due to stock split   27,973    28    (28)   -    -    -    -    -    - 
Foreign currency translation gain   -    -    -    -    110,895    -    110,895    (1,919)   108,976 
Net (loss) income   -    -    -    -    -    (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 
                                              
Balance, August 31, 2022   3,118,063   $3,118   $66,084,887   $9,474,807   $560,836   $(53,818,489)  $22,305,159   $(257,588)  $22,047,571 
                                              
Units issued for cash, net of offering costs   400,000    400    1,794,600    -    -    -    1,795,000    -    1,795,000 
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 

 

* 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.

 

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 

 

NOVO INTEGRATED SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended November 30, 2023 and 2022 (unaudited)

 

   Three Months Ended 
   November 30,   November 30, 
   2023   2022 
         
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(4,660,723)  $(3,936,736)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   572,404    586,166 
Fair value of vested stock options   -    60,887 
Financing costs for debt extension   1,323,398    1,139,050 
Common stock issued for services   1,195,400    - 
Operating lease expense   149,877    209,846 
Amortization of debt discount   1,075,928    1,490,513 
Foreign currency transaction losses   59,358    39,301 
Change in fair value of derivative liability   (585,529)   - 
Changes in operating assets and liabilities:          
Accounts receivable   (1,168,350)   28,174 
Inventory   (166,476)   (157,118)
Prepaid expenses and other current assets   130,584    1,471 
Accounts payable   (98,996)   321,961 
Accrued expenses   71,214    149,945 
Accrued interest   99,430    (9,232)
Operating lease liability   (149,877)   (202,465)
Net cash used in operating activities   (2,152,358)   (278,237)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Repayments to related parties   (72,402)   (48,480)
Repayments of notes payable   (183,100)   - 
Repayments of finance leases   (2,779)   (2,763)
Proceeds from issuance of convertible notes   3,314,153    - 
Repayment of convertible notes   -    (2,777,778)
Proceeds from the sale of units, net of offering costs   -    1,795,000 
Proceeds from exercise of warrants   240,400    - 
Net cash provided by (used in) financing activities   3,296,272    (1,034,021)
           
Effect of exchange rate changes on cash and cash equivalents   79,770    12,271 
           
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   1,223,684    (1,299,987)
           
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD   416,323    2,178,687 
           
CASH AND CASH EQUIVALENTS, END OF PERIOD  $1,640,007   $878,700 
           
CASH PAID FOR:          
Interest  $45,321   $186,911 
Income taxes  $-   $- 
           
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:          
Debt discount recognized on derivative liability  $3,071,653   $1,390,380 
Common stock issued for convertible debt settlement  $577,522   $- 
Debt discount recognized on convertible note  $3,735,414   $- 

 

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 

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Cover
Jan. 22, 2024
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Document Type 8-K
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Document Period End Date Jan. 22, 2024
Entity File Number 001-40089
Entity Registrant Name Novo Integrated Sciences, Inc
Entity Central Index Key 0001138978
Entity Tax Identification Number 59-3691650
Entity Incorporation, State or Country Code NV
Entity Address, Address Line One 11120 NE 2nd Street
Entity Address, Address Line Two Suite 200
Entity Address, City or Town Bellevue
Entity Address, State or Province WA
Entity Address, Postal Zip Code 98004
City Area Code (206)
Local Phone Number 617-9797
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Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock
Trading Symbol NVOS
Security Exchange Name NASDAQ
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