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
Novo Integrated Sciences (NASDAQ:NVOS)
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