EX-99.1 2 ex99-1.htm

 

Exhibit 99.1

 

 

Novo Integrated Sciences Reports Fiscal 2022 Second Quarter Financial Results

 

Management expects Triple-digit Percentage Revenue Growth sequentially

for the Fiscal 2022 Third Quarter

 

BELLEVUE, Wash., April 13, 2022 - 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 fiscal quarter ended February 28, 2022.

 

Robert Mattacchione, Novo’s CEO and Board Chairman, stated, “The 38.2% year-over-year revenue growth we experienced for the fiscal second quarter is directly related to the expansion of our essential and differentiated ecosystem for the delivery of healthcare related services and products. The Company projects “triple-digit” percentage revenue growth sequentially for the fiscal third quarter ending May 31, 2022 due to product and diagnostic technology sales. This projected acceleration in revenue growth in future quarters is directly related to the effects of commercializing our three-pillar model and crystalizes the Company’s mission for a fully integrated healthcare ecosystem, with global reach, resulting in rapid growth and profitability.”

 

Financial Highlights for the Period Ended February 28, 2022:

 

  Cash and cash equivalents were $15.9 million, total assets were $70.3 million, total liabilities were $25.8 million, and stockholders’ equity was $44.5 million.
     
  Revenues were $2,869,223, representing an increase of $793,329, or 38.2%, from $2,075,894 for the same period in 2021 principally due to the acquisition of Acenzia, Inc. in June 2021 and Terragenx in November 2021. Acenzia’s and Terragenx’ revenue for the three months ended February 28, 2022 was $749,345 and $245,658, respectively. Revenue from healthcare services decreased by 9.7%, when comparing the revenue for the three months ended February 28, 2022 to the same period in 2021, primarily due to a surge of COVID-19 in the province of Ontario Canada, limiting clinic and eldercare patient-practitioner direct personal interaction.
     
  Operating costs were $3,337,030, representing an increase of $1,259,640, or 60.6%, from $2,077,390 for the same period in 2021 principally due to (i) an increase in legal and professional fees related to fund raising, and (ii) an increase in overhead expenses associated with the acquisitions of Acenzia, PRO-DIP, and Terragenx which was approximately $1,133,000. In subsequent quarters, this increase in overhead expenses associated with Acenzia, PRO-DIP, and Terragenx is projected to decrease as the Company integrates and consolidates operations.
     
  Net loss attributed to Novo Integrated Sciences, Inc. was $4,805,167, representing an increase of $3,465,297, or 258.6%, from $1,339,870 for the same period in 2021 principally due to (i) an increase in interest expense, (ii) an increase in amortization of debt discounts, (iii) an increase in legal and professional fees related to fund raising, (iv) an increase in overhead expenses associated with the acquisitions of Acenzia, PRO-DIP, and Terragenx which was approximately $1,133,000, and (v) an increase in foreign currency transaction losses.
     
  On December 14, 2022, the Company completed a registered direct offering with accredited institutional investors, resulting in gross proceeds of $15 million to Novo.

 

 

 

 

Operational Milestones:

 

  Completed an amended and restated Master Facility License Agreement with LA Fitness in Canada.
     
  IoNovo Iodide and IoNovo for Kids Pure Iodine oral sprays granted Natural Product Number (NPN) by Health Canada.
     
  Signed an Asset Purchase Agreement with the shareholder of Poling Taddeo Hovius Physiotherapy Professional Corp. (“PTHPC”), a clinic-based physiotherapy, rehabilitative, and related ancillary services and products business known as Fairway Physiotherapy and Sports Injury Clinic in Ontario province Canada, to acquire all assets of PTHPC for a purchase price of $627,000 in exchange for an allotment of 156,750 restricted shares of the Company’s common stock at $4.00 per share. The transaction closed on March 1, 2022.
     
  Signed a Share Exchange Agreement with the shareholder of 12858461 Canada Corp. (“1285”), a clinic-based physiotherapy and related ancillary services and products business in Ontario province Canada, to acquire 50.1% of 1285 for a purchase price of $68,000 in exchange for an allotment of 17,000 restricted shares of the Company’s common stock at $4.00 per share. The transaction closed on March 1, 2022.

 

Operational Milestones Subsequent to End of Fiscal 2022 Second Quarter:

 

  Completed Acquisition of Clinical Consultants International LLC (CCI).
     
  As a result of CCI acquisition, Novo signed a memorandum of understanding with Boditech Med, a global point-of-care testing leader, to market and distribute in North America.
     
  PRO-DIP® issued U.S. Patent for oral pouch delivery system technology.

 

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 multiple patient and consumer touchpoints for 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, diagnostic and therapeutic solutions, 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. For more information on Novo Healthnet Limited, Novo’s wholly owned subsidiary, please visit www.novohealthnet.com

 

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Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this press release are forward-looking statements. In some cases, forward-looking statements can be identified by words such as “believe,” “intend,” “expect,” “anticipate,” “plan,” “potential,” “continue” or similar expressions. Such forward-looking statements include risks and uncertainties, and there are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors, risks and uncertainties are discussed in Novo’s filings with the Securities and Exchange Commission. Investors should not place any undue reliance on forward-looking statements since they involve known and unknown, uncertainties and other factors which are, in some cases, beyond Novo’s control which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects Novo’s current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to operations, results of operations, growth strategy and liquidity. Novo assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The contents of any website referenced in this press release are not incorporated by reference herein.

 

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 February 28, 2022 (unaudited) and August 31, 2021

 

   February 28,   August 31, 
   2022   2021 
   (unaudited)     
ASSETS          
Current Assets:          
Cash and cash equivalents  $15,943,997   $8,293,162 
Accounts receivable, net   1,251,973    1,468,429 
Inventory   334,414    339,385 
Other receivables, current portion   981,597    814,157 
Prepaid expenses and other current assets   503,437    218,376 
Total current assets   19,015,418    11,133,509 
           
Property and equipment, net   6,157,621    6,070,291 
Intangible assets, net   33,217,602    32,436,468 
Right-of-use assets, net   2,348,391    2,543,396 
Other receivables, net of current portion   522,062    692,738 
Goodwill   9,058,936    9,081,879 
TOTAL ASSETS  $70,320,030   $61,958,281 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
Current Liabilities:          
Accounts payable  $1,105,707   $1,449,784 
Accrued expenses   1,199,274    1,129,309 
Accrued interest (including amounts to related parties)   642,246    366,280 
Government loans and notes payable, current portion   5,260,047    4,485,649 
Convertible notes payable, net of discount of $302,550   1,572,450    - 
Contingent liability   749,626    - 
Due to related parties   473,367    478,920 
Finance lease liability, current portion   17,533    23,184 
Operating lease liability, current portion   533,535    530,797 
Total current liabilities   11,553,785    8,463,923 
           
Debentures, related parties   979,724    982,205 
Notes payable, net of current portion   174,242    5,133,604 
Convertible notes payable, net of discount of $6,943,704   9,722,962    - 
Finance lease liability, net of current portion   10,854    16,217 
Operating lease liability, net of current portion   1,866,858    2,057,805 
Deferred tax liability   1,496,581    1,500,372 
TOTAL LIABILITIES   25,805,006    18,154,126 
           
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 28, 2022 and August 31, 2021, respectively          
Common stock; $0.001par value; 499,000,000 shares authorized; 28,885,144 and 26,610,144 shares issued and outstanding at February 28, 2022 and August 31, 2021, respectively   28,885    26,610 
Additional paid-in capital   60,691,723    54,579,396 
Common stock to be issued (4,359,841 and 3,622,199 shares at February 28, 2022 and August 31, 2021)   10,409,457    9,236,607 
Other comprehensive income   1,002,282    991,077 
Accumulated deficit   (27,581,028)   (20,969,274)
Total Novo Integrated Sciences, Inc. stockholders’ equity   44,551,319    43,864,416 
Noncontrolling interest   (36,295)   (60,261)
Total stockholders’ equity   44,515,024    43,804,155 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $70,320,030   $61,958,281 

 

 

 

 

NOVO INTEGRATED SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Three and Six Months Ended February 28, 2022 and 2021 (unaudited)

 

   Three Months Ended   Six Months Ended 
   February 28,   February 28,   February 28,   February 28, 
   2022   2021   2022   2021 
   (unaudited)   (unaudited)   (unaudited)   (unaudited) 
                 
Revenues  $2,869,223   $2,075,894   $6,031,150   $4,231,400 
                     
Cost of revenues   1,652,869    1,324,448    3,548,330    2,668,504 
                     
Gross profit   1,216,354    751,446    2,482,820    1,562,896 
                     
Operating expenses:                    
Selling expenses   26,370    602    26,538    1,845 
General and administrative expenses   3,310,660    2,076,788    5,940,617    3,644,719 
Total operating expenses   3,337,030    2,077,390    5,967,155    3,646,564 
                     
Loss from operations   (2,120,676)   (1,325,944)   (3,484,335)   (2,083,668)
                     
Non operating income (expense)                    
Interest income   8,490    8,301    16,878    16,863 
Interest expense   (1,226,182)   (22,948)   (1,294,912)   (46,889)
Amortization of debt discount   (1,463,022)   -    (1,520,862)   - 
Foreign currency transaction losses   (66,814)   -    (401,368)   - 
Total other income (expense)   (2,747,528)   (14,647)   (3,200,264)   (30,026)
                     
Loss before income taxes   (4,868,204)   (1,340,591)   (6,684,599)   (2,113,694)
                     
Income tax expense   -    -    -    - 
                     
Net loss  $(4,868,204)  $(1,340,591)  $(6,684,599)  $(2,113,694)
                     
Net loss attributed to noncontrolling interest   (63,037)   (721)   (72,845)   (2,354)
                     
Net loss attributed to Novo Integrated Sciences, Inc.  $(4,805,167)  $(1,339,870)  $(6,611,754)  $(2,111,340)
                     
Comprehensive loss:                    
Net loss   (4,868,204)   (1,340,591)   (6,684,599)   (2,113,694)
Foreign currency translation gain   114,738    42,232    11,205    52,828 
Comprehensive loss:  $(4,753,466)  $(1,298,359)  $(6,673,394)  $(2,060,866)
                     
Weighted average common shares outstanding - basic and diluted   28,740,700    23,754,808    27,827,686    23,630,900 
                     
Net loss per common share - basic and diluted  $(0.17)  $(0.06)  $(0.24)  $(0.09)

 

 

 

 

NOVO INTEGRATED SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three and Six Months Ended February 28, 2022 and 2021 (unaudited)

 

                           Total         
           Additional   Common   Other       Novo         
   Common Stock   Paid-in   Stock To   Comprehensive   Accumulated   Stockholders’   Noncontrolling   Total 
   Shares   Amount   Capital   Be Issued   Income   Deficit   Equity   Interest   Equity 
Balance, August 31, 2021   26,610,144   $26,610   $54,579,396   $9,236,607   $991,077   $(20,969,274)  $43,864,416   $(60,261)  $43,804,155 
                                              
Common stock for services   35,000    35    64,715    -    -    -    64,750    -    64,750 
Common stock issued as collateral and held in escrow   2,000,000    2,000    (2,000)   -    -    -    -    -    - 
Common stock to be issued for purchase of Terragenx   -    -    -    983,925    -    -    983,925    97,311    1,081,236 
Common stock to be issued for purchase of Mullin assets   -    -    -    188,925    -    -    188,925    -    188,925 
Value of warrants issued with convertible notes   -    -    295,824    -    -    -    295,824    -    295,824 
Fair value of stock options   -    -    154,135    -    -    -    154,135    -    154,135 
Foreign currency translation loss   -    -    -    -    (103,533)   -    (103,533)   (855)   (104,388)
Net loss   -    -    -    -    -    (1,806,587)   (1,806,587)   (9,808)   (1,816,395)
                                              
Balance, November 30, 2021   28,645,144    28,645    55,092,070    10,409,457    887,544    (22,775,861)   43,641,855    26,387    43,668,242 
                                              
Common stock for services   240,000    240    297,760    -    -    -    298,000    -    298,000 
Value of warrants issued with convertible notes   -    -    5,257,466    -    -    -    5,257,466    -    5,257,466 
Fair value of stock options   -    -    44,427    -    -    -    44,427    -    44,427 
Foreign currency translation gain   -    -    -    -    114,738    -    114,738    355    115,093 
Net loss   -    -    -    -    -    (4,805,167)   (4,805,167)   (63,037)   (4,868,204)
                                              
Balance, February 28, 2022   28,885,144   $28,885   $60,691,723   $10,409,457   $1,002,282   $(27,581,028)  $44,551,319   $(36,295)  $44,515,024 
                                              
                                              
                                              
Balance, August 31, 2020   23,466,236   $23,466   $44,905,454   $-   $1,199,696   $(16,507,127)  $29,621,489   $(49,859)  $29,571,630 
                                              
Common stock issued for cash   21,905    22    91,978    -    -    -    92,000    -    92,000 
Common stock issued for services   65,000    65    247,935    -    -    -    248,000    -    248,000 
Foreign currency translation gain   -    -    -    -    10,596    -    10,596    (225)   10,371 
Net loss   -    -    -    -    -    (771,470)   (771,470)   (1,633)   (773,103)
                                              
Balance, November 30, 2020   23,553,141    23,553    45,245,367    -    1,210,292    (17,278,597)   29,200,615    (51,717)   29,148,898 
                                              
Exercise of stock options   7,500    8    11,992    -    -    -    12,000    -    12,000 
Common stock issued for intellectual property   240,000    240    875,760    -    -    -    876,000    -    876,000 
Common stock to be issued for services rendered   -    -    -    375,000    -    -    375,000    -    375,000 
Rounding due to stock split   957    1    (1)   -    -    -    -    -    - 
Fair value of vested stock options   -    -    22,215    -    -    -    22,215    -    22,215 
Foreign currency translation loss   -    -    -    -    42,232    -    42,232    (965)   41,267 
Net loss   -    -    -    -    -    (1,339,870)   (1,339,870)   (721)   (1,340,591)
                                              
Balance, February 28, 2021   23,801,598   $23,802   $46,155,333   $375,000   $1,252,524   $(18,618,467)  $29,188,192   $(53,403)  $29,134,789 

 

 

 

 

NOVO INTEGRATED SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended February 28, 2022 and 2021 (unaudited)

 

   Six Months Ended 
   February 28,   February 28, 
   2022   2021 
   (unaudited)   (unaudited) 
         
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(6,684,599)  $(2,113,694)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   1,467,837    737,423 
Fair value of vested stock options   198,562    22,215 
Common stock issued for services   362,750    623,000 
Operating lease expense   289,626    306,717 
Amortization of debt discount   1,520,862    - 
Foreign currency transaction losses   401,368    - 
Changes in operating assets and liabilities:          
Accounts receivable   213,125    353,649 
Inventory   46,135    - 
Prepaid expenses and other current assets   (285,444)   (216,568)
Accounts payable   (422,847)   (938)
Accrued expenses   (111,479)   153,807 
Accrued interest   277,075    5,867 
Operating lease liability   (282,703)   (301,250)
Net cash used in operating activities   (3,009,732)   (429,772)
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchase of property and equipment   (192,536)   (618)
Cash acquired with acquisition   29,291    - 
Net cash used in investing activities   (163,245)   (618)
           
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Repayments to related parties   (4,350)   (82,723)
Repayments of finance leases   (10,934)   - 
Repayments of notes payable   (4,415,000)   - 
Proceeds from the sale of common stock, net of offering costs   -    92,000 
Proceeds from exercise of stock options   -    12,000 
Proceeds from issuance of convertible notes, net   15,270,000    - 
Net cash provided by financing activities   10,839,716    21,277 
           
Effect of exchange rate changes on cash and cash equivalents   (15,904)   39,832 
           
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   7,650,835    (369,281)
           
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD   8,293,162    2,067,718 
           
CASH AND CASH EQUIVALENTS, END OF PERIOD  $15,943,997   $1,698,437 
           
CASH PAID FOR:          
Interest  $1,294,912   $32,936 
Income taxes  $-   $- 
           
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:          
Common stock to be issued for intangible assets  $188,925   $960,000 
Common stock to be issued for acquisition  $983,925   $-