10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______, 20___, to _____, 20___.

Commission File Number: 001-40089

Novo Integrated Sciences, Inc.

(Exact Name of Registrant as Specified in its Charter)

Nevada	59-3691650
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

11120 NE 2nd Street, Suite 100 Bellevue, Washington	98004
(Address of Principal Executive Offices)	(Zip Code)

(206) 617-9797

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 17,748,320 shares of the Registrant’s $0.001 par value common stock outstanding as of January 22, 2024.

Novo Integrated Sciences, Inc.

Contents

PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	51
Item 4.	Controls and Procedures	51
PART II – OTHER INFORMATION		52
Item 1.	Legal Proceedings	52
Item 1A.	Risk Factors	52
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 3.	Defaults Upon Senior Securities	52
Item 4.	Mine Safety Disclosures	52
Item 5.	Other Information	52
Item 6.	Exhibits	53
Signatures		54

2

Item 1. Financial Statements.

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.

3

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.

4

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.

5

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.

6

NOVO INTEGRATED SCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Note 1 - Organization and Basis of Presentation

Organization and Line of Business

Novo Integrated Sciences, Inc. (“Novo Integrated”) was incorporated in Delaware on November 27, 2000, under the name Turbine Truck Engines, Inc. On February 20, 2008, the Company was re-domiciled to the State of Nevada. Effective July 12, 2017, the Company’s name was changed to Novo Integrated Sciences, Inc. When used herein, the terms the “Company,” “we,” “us” and “our” refer to Novo Integrated and its consolidated subsidiaries.

The Company owns Canadian and U.S. subsidiaries which provide, or intend to provide, essential and differentiated solutions to the delivery of multidisciplinary primary care and related wellness products through the integration of medical technology, interconnectivity, advanced therapeutics, diagnostic solutions, unique personalized product offerings, 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 now and how it will be delivered 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 and efficient 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.

On April 25, 2017 (the “Effective Date”), we entered into a Share Exchange Agreement (the “Share Exchange Agreement”) by and between (i) Novo Integrated; (ii) Novo Healthnet Limited (“NHL”), (iii) ALMC-ASAP Holdings Inc. (“ALMC”); (iv) Michael Gaynor Family Trust (the “MGFT”); (v) 1218814 Ontario Inc. (“1218814”); and (vi) Michael Gaynor Physiotherapy Professional Corp. (“MGPP,” and together with ALMC, MGFT and 1218814, the “NHL Shareholders”). Pursuant to the terms of the Share Exchange Agreement, Novo Integrated agreed to acquire, from the NHL Shareholders, all of the shares of both common and preferred stock of NHL held by the NHL Shareholders in exchange for the issuance, by Novo Integrated to the NHL Shareholders, of shares of Novo Integrated common stock such that following the closing of the Share Exchange Agreement, the NHL Shareholders would own 1,677,974 restricted shares of Novo Integrated common stock, representing 85% of the issued and outstanding Novo Integrated common stock, calculated including all granted and issued options or warrants to acquire Novo Integrated common stock as of the Effective Date, but to exclude shares of Novo Integrated common stock that were subject to a then-current Regulation S offering that was undertaken by Novo Integrated (the “Exchange”).

7

On May 9, 2017, the Exchange closed and, as a result, NHL became a wholly owned subsidiary of Novo Integrated. The Exchange was accounted for as a reverse acquisition under the purchase method of accounting since NHL obtained control of Novo Integrated Sciences, Inc. Accordingly, the Exchange was recorded as a recapitalization of NHL, and not as a business combination, with NHL being treated as the continuing entity. The historical financial statements presented are the financial statements of NHL. At the closing date of the Exchange, the net assets of the legal acquirer, Novo Integrated Sciences, Inc., were $6,904.

Reverse Stock Split

On November 7, 2023, the Company effected a 1-for-10 reverse stock split of its common stock. As a result of the reverse stock split, every 10 shares of issued and outstanding common stock were exchanged for one share of common stock, with any fractional shares being rounded up to the next higher whole share. Unless otherwise noted, the share and per share information in this report have been retroactively adjusted to give effect to the 1-for-10 reverse stock split.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements were prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The information furnished herein reflects all adjustments, consisting only of normal recurring adjustments, which in the opinion of management, are necessary to fairly state the Company’s financial position, the results of its operations, and cash flows for the periods presented. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with U.S. GAAP were omitted pursuant to such rules and regulations.

The financial information contained in this report should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended August 31, 2023, that the Company filed on December 14, 2023. The results of operations for the three months ended November 30, 2023 are not necessarily indicative of the results for the fiscal year ending August 31, 2024.

The Company’s Canadian subsidiaries’ functional currency is the Canadian Dollar (“CAD”) and the parent company’s functional currency is the United States Dollar (“$” or “USD”); however, the accompanying unaudited condensed consolidated financial statements were translated and presented in USD.

Going Concern

The Company evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date the condensed consolidated financial statements are issued. The Company has incurred recurring losses from operations, has negative cash flows from operating activities, and has an accumulated deficit as of November 30, 2023. The Company believes that its cash and other available resources may not be sufficient to meet its operating needs and the payment of obligations related to various business acquisitions as they come due within one year after the date the unaudited condensed consolidated financial statements are issued.

In an effort to alleviate these conditions, the Company has considered equity and/or debt financing and/or asset monetization. There can be no assurance that funding would be available, or that the terms of such funding would be on favorable terms if available. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing. These conditions, along with the matters noted above, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the unaudited condensed consolidated financial statements are issued.

8

While management has developed and is in process to implement plans that management believes could alleviate in the future the substantial doubt that was raised, management concluded at the date of the issuance of the unaudited condensed consolidated financial statements that substantial doubt exists as those plans are not completely within the control of management. These unaudited condensed consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and consolidated balance sheets classifications that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.

Foreign Currency Translation

The accounts of the Company’s Canadian subsidiaries are maintained in CAD. The accounts of these subsidiaries are translated into USD in accordance with the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) Topic 830, Foreign Currency Transaction, with the CAD as the functional currency. According to Topic 830, all assets and liabilities are translated at the exchange rate on the balance sheet date, stockholders’ equity is translated at historical rates and statement of operations items are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income (“OCI”) in accordance with ASC Topic 220, Comprehensive Income. Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the condensed consolidated statement of operations and comprehensive loss. The following table details the exchange rates used for the respective periods:

	November 30, 2023		November 30, 2022		August 31, 2023
Period end: CAD to USD exchange rate	$	0.7363	$	0.7403	$	0.7390
Average period: CAD to USD exchange rate	$	0.7324	$	0.7414	$	0.7426

Note 2 – Summary of Significant Accounting Policies

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. This applies in particular to the going concern assessment, useful lives of non-current assets, impairment of non-current assets, allowance for doubtful receivables, allowance for slow moving and obsolete inventory, valuation of share-based compensation and warrants, valuation of derivative liability, and valuation allowance for deferred tax assets. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and entities it controls, including its wholly owned subsidiaries, NHL, Acenzia Inc. (“Acenzia”), Novomerica Health Group, Inc. (“NHG”), Novo Healthnet Rehab Limited, Novo Assessments Inc., PRO-DIP, LLC (“PRO-DIP”), a 91% controlling interest in Terragenx Inc. (“Terragenx”), a 50.1% controlling interest in 12858461 Canada Corp (“1285 Canada”), an 80% controlling interest in Novo Healthnet Kemptville Centre, Inc., a Back on Track Physiotherapy and Health Centre clinic operated by NHL, Clinical Consultants International, LLC and a 70% controlling interest in Novo Earth Therapeutics Inc. (currently inactive).

All intercompany transactions have been eliminated.

9

An entity is controlled when the Company has the ability to direct the relevant activities of the entity, has exposure or rights to variable returns from its involvement with the entity, and is able to use its power over the entity to affect its returns from the entity.

Income or loss and each component of OCI are attributed to the shareholders of the Company and to the noncontrolling interests. Total comprehensive income is attributed to the shareholders of the Company and to the noncontrolling interests even if this results in the non-controlling interests having a deficit balance on consolidation.

Noncontrolling Interest

The Company follows FASB ASC Topic 810, Consolidation, which governs the accounting for and reporting of non-controlling interests (“NCIs”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCIs be treated as a separate component of equity, not as a liability, that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially owned consolidated subsidiary be allocated to the NCI even when such allocation might result in a deficit balance.

The net income (loss) attributed to the NCI is separately designated in the accompanying condensed consolidated statements of operations and comprehensive loss.

Cash Equivalents

For the purpose of the condensed consolidated statements of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly liquid debt instruments with original maturities of three months or less.

Accounts Receivable

Accounts receivable are recorded, net of allowance for doubtful accounts and sales returns. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentration, customer credit worthiness, current economic trends and changes in customer payment patterns to determine if the allowance for doubtful accounts is adequate. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Delinquent account balances are written-off after management has determined that the likelihood of collection is not probable and known bad debts are written off against the allowance for doubtful accounts when identified. As of November 30, 2023 and August 31, 2023, the allowance for uncollectible accounts receivable was $855,116 and $864,215, respectively.

Inventory

Inventories are valued at the lower of cost (determined by the first in, first out method) and net realizable value. Management compares the cost of inventories with the net realizable value and allowance is made for writing down their inventories to net realizable value, if lower. Inventory is segregated into three areas: raw materials, work-in-process and finished goods. The Company periodically assessed its inventory for slow moving and/or obsolete items and any change in the allowance is recorded in cost of revenue in the accompanying condensed consolidated statements of operations and comprehensive loss. If any are identified an appropriate allowance for those items is made and/or the items are deemed to be impaired. As of November 30, 2023 and August 31, 2023, the Company’s allowance for slow moving or obsolete inventory was $nil and $nil, respectively.

Other Receivables

Other receivables are recorded at cost and presented as current or long-term based on the terms of the agreements. Management reviews the collectability of other receivables and writes off the portion that is deemed to be uncollectible. During the three months ended November 30, 2023 and year ended August 31, 2023, the Company wrote off $nil and $nil, respectively, of other receivables that were not expected to be collected.

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Property and Equipment

Property and equipment are stated at cost less depreciation and impairment. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the declining balance method for substantially all assets with estimated lives as follows:

Building	30 years
Leasehold improvements	5 years
Clinical equipment	5 years
Computer equipment	3 years
Office equipment	5 years
Furniture and fixtures	5 years

Leases

The Company applies the provisions of ASC Topic 842, Leases which requires lessees to recognize lease assets and lease liabilities on the balance sheet. The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate.

Long-Lived Assets

The Company applies the provisions of ASC Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets, including right-of-use assets, used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal. Based on its review at November 30, 2023, the Company believes there was no impairment of its long-lived assets.

Intangible Assets

The Company’s intangible assets are being amortized over their estimated useful lives as follows:

Land use rights	50 years (the lease period)
Intellectual property	7 years
Customer relationships	5 years
Brand names	7 years

The intangible assets with finite useful lives are reviewed for impairment when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Based on its review at November 30, 2023, the Company believes there was no impairment of its intangible assets.

Right-of-use Assets

The Company’s right-of-use assets consist of leased assets recognized in accordance with ASC 842, Leases, which requires lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liability represents the Company’s obligation to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the condensed consolidated balance sheet and are expensed on a straight-line basis over the lease term in the condensed consolidated statements of operations and comprehensive loss. The Company determines the lease term by agreement with lessor. In cases where the lease does not provide an implicit interest rate, the Company uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.

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Goodwill

Goodwill represents the excess of purchase price over the underlying net assets of businesses acquired. Under U.S. GAAP, goodwill is not amortized but is subject to annual impairment tests. The Company recorded goodwill related to its acquisition of APKA Health, Inc. (“APKA”) during the fiscal year ended August 31, 2017, Executive Fitness Leaders (“EFL”) during the fiscal year ended August 31, 2018, Action Plus Physiotherapy Rockland (“Rockland”) during the fiscal year ended August 31, 2019, Acenzia during the fiscal year ended August 31, 2021, and 1285 Canada during the fiscal year ended August 31, 2022. Based on its review at November 30, 2023, the Company believes there was no impairment of its goodwill.

Summary of changes in goodwill by acquired businesses is as follows:

	APKA			EFL			Rockland			Acenzia			1285 Canada			Total
Balance, August 31, 2022	$	190,678		$	125,088		$	221,188		$	7,288,307		$	583		$	7,825,844
Foreign currency translation adjustment		(5,928	)		(3,892	)		(6,878	)		(226,645	)		(18	)		(243,361	)
Balance, August 31, 2023	$	184,750		$	121,196		$	214,310		$	7,061,662		$	565		$	7,582,483
Foreign currency translation adjustment		(675	)		(443	)		(783	)		(25,801	)		(2	)		(27,704	)
Balance, November 30, 2023	$	184,075		$	120,753		$	213,527		$	7,035,861		$	563		$	7,554,779

Fair Value of Financial Instruments

For certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, other receivables, accounts payable, accrued expenses, current portion of finance and operating lease liability, current portion of government loans and notes payable, debentures, convertible notes payable, and due to related parties, the carrying amounts approximate their fair values due to their short-term maturities.

FASB ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosure of the fair value of financial instruments held by the Company. FASB ASC Topic 825, Financial Instruments, defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the condensed consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization, low risk of counterparty default and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

● Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

● Level 3 inputs to the valuation methodology use one or more unobservable inputs which are significant to the fair value measurement.

The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic 480, Distinguishing Liabilities from Equity, and FASB ASC Topic 815, Derivatives and Hedging.

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For certain financial instruments, the carrying amounts reported in the condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, other receivables, and current liabilities, including accounts payable, accrued expenses, current portion of finance and operating lease liability, current portion of government loans and notes payable, debentures, convertible notes payable, and due to related parties, each qualify as a financial instrument, and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The carrying value of notes payable approximates their fair values due to current market rate on such debt.

As of November 30, 2023 and August 31, 2023, respectively, the Company did not identify any financial assets and liabilities required to be presented on the condensed consolidated balance sheet at fair value, except for contingent liability which is carried at fair value using Level 1 inputs and derivative liability which is carried at fair value using Level 3 inputs.

Derivative Financial Instruments

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815. The Company applies the guidance in ASC 815-40-35-12 to determine the order in which each convertible instrument would be evaluated for derivative classification.

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to the fair value of derivatives.

Revenue Recognition

The Company’s revenue recognition reflects the updated accounting policies as per the requirements of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“Topic 606”). As sales are and have been primarily from providing healthcare services, the Company has no significant post-delivery obligations.

Revenue from providing healthcare and healthcare related services and product sales are recognized under Topic 606 in a manner that reasonably reflects the delivery of its products and services to customers in return for expected consideration and includes the following elements:

● executed contracts with the Company’s customers that it believes are legally enforceable;

● identification of performance obligations in the respective contract;

● determination of the transaction price for each performance obligation in the respective contract;

● allocation the transaction price to each performance obligation; and

● recognition of revenue only when the Company satisfies each performance obligation.

These five elements, as applied to the Company’s revenue category, are summarized below:

● Healthcare and healthcare related services – gross service revenue is recorded in the accounting records at the time the services are provided (point-in-time) on an accrual basis at the provider’s established rates. The Company reserves a provision for contractual adjustment and discounts that are deducted from gross service revenue. The Company reports revenues net of any sales, use and value added taxes.

● Product sales – revenue is recorded at the point of time of delivery.

In arrangements where another party is involved in providing specified services to a customer, the Company evaluates whether it is the principal or agent. In this evaluation, the Company considers if the Company obtains control of the specified goods or services before they are transferred to the customer, as well as other indicators such as the party primarily responsible for fulfillment, inventory risk, and discretion in establishing price. For product sales where the Company is not the principal, the Company recognizes revenue on a net basis. For the periods presented, revenue for arrangements where the Company is the agent was not material.

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Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue. Unearned revenue is included with accrued expenses in the accompanying condensed consolidated balance sheets.

Sales returns and allowances were insignificant for the three months ended November 30, 2023 and 2022. The Company does not provide unconditional right of return, price protection or any other concessions to its customers.

Income Taxes

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented.

Stock-Based Compensation

The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the requisite service period. The Company recognizes in the condensed consolidated statements of operations and comprehensive loss the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.

Basic and Diluted Earnings Per Share

Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share. The calculations within these condensed consolidated financial statements have been retroactively adjusted to reflect the effects of the 1-for-10 reverse stock split that was effective on November 7, 2023. Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS assumes that all dilutive securities are converted. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were 659,616 and 1,860,950 options/warrants outstanding at November 30, 2023 and 2022, respectively. In addition, at November 30, 2023, there were outstanding convertible notes that could convert into 3,786,454 shares of common stock and there were 17,375 shares of common stock to be issued.

Due to the net loss incurred, potentially dilutive instruments would be anti-dilutive. Accordingly, diluted loss per share is the same as basic loss per share for all periods presented.

Foreign Currency Transactions and Comprehensive Income

U.S. GAAP generally requires recognized revenue, expenses, gains and losses be included in net income. Certain statements, however, require entities to report specific changes in assets and liabilities, such as gain or loss on foreign currency translation, as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. The functional currency of the Company’s Canadian subsidiaries is the CAD. Translation gain of $108,976 for the three months ended November 30, 2023 and translation loss of $922,609 for the year ended August 31, 2023, respectively, are classified as an item of other comprehensive loss in the stockholders’ equity section of the condensed consolidated balance sheet.

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Condensed Consolidated Statements of Cash Flows

Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rates. As a result, amounts related to assets and liabilities reported on the condensed consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the condensed consolidated balance sheets.

Segment Reporting

ASC Topic 280, Segment Reporting, requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has two reportable segments. See Note 16.

Reclassifications

Certain prior period amounts were reclassified to conform to the manner of presentation in the current period. These reclassifications had no effect on the net loss or shareholders’ equity.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying condensed consolidated financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

Note 3 – Related Party Transactions

Due to related parties

Amounts loaned to the Company by stockholders and officers of the Company are payable upon demand and unsecured. At November 30, 2023 and August 31, 2023, the amount due to related parties was $458,266 and $533,001, respectively. At November 30, 2023, $376,701 was non-interest bearing, $nil bears interest at 6% per annum, and $81,565 bears interest at 13.75% per annum. At August 31, 2023, $451,137 was non-interest bearing, $21,267 bears interest at 6% per annum, and $60,597 bears interest at 13.75% per annum.

Note 4 – Accounts Receivables, Net

Accounts receivables, net at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30,			August 31,
	2023			2023
Trade receivables	$	3,412,783		$	2,223,243
Amounts earned but not billed		78,507			108,000
		3,491,290			2,331,243
Allowance for doubtful accounts		(855,116	)		(864,215	)
Accounts receivable, net	$	2,636,174		$	1,467,028

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Note 5 – Inventory

Inventory at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30,		August 31,
	2023		2023
Raw materials	$	516,811	$	388,391
Work in process		108,244		81,696
Finished Goods		645,780		636,896
		1,270,835		1,106,983
Allowance for slow moving and obsolete inventory		-		-
Inventory, net	$	1,270,835	$	1,106,983

Note 6 – Other Receivables

Other receivables at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30, 2023			August 31, 2023
Advance to corporation; accrues interest at 12% per annum; unsecured; due January 31, 2024, as amended.	$	73,630		$	73,900
Advance to corporation; accrues interest at 12% per annum; secured by property and other assets of debtor; due February 1, 2024, as amended.		532,433			534,386
Advance to corporation; accrues interest at 10% per annum; secured by assets of debtor; due February 1, 2024, as amended.		441,679			443,298
Total other receivables		1,047,742			1,051,584
Current portion		(1,047,742	)		(1,051,584	)
Long-term portion	$	-		$	-

Note 7 – Property and Equipment

Property and equipment at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30,			August 31,
	2023			2023
Land	$	441,780		$	443,400
Building		3,313,350			3,325,500
Leasehold improvements		838,297			841,371
Clinical equipment		1,909,678			1,916,681
Computer equipment		33,381			33,504
Office equipment		44,400			44,502
Furniture and fixtures		38,149			38,289
		6,619,035			6,643,247
Accumulated depreciation		(1,312,422	)		(1,253,209	)
Total	$	5,306,613		$	5,390,038

Depreciation expense for the three months ended November 30, 2023 and 2022 was $72,604 and $60,043, respectively.

Certain property and equipment have been used to secure notes payable (See Note 10).

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Note 8 – Intangible Assets

Intangible assets at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30,			August 31,
	2023			2023
Land use rights	$	11,573,321		$	11,573,321
Intellectual property		7,487,410			7,497,746
Customer relationships		2,287,746			2,291,058
Brand names		1,921,375			1,928,421
		23,269,852			23,290,546
Accumulated amortization		(7,565,634	)		(7,072,007	)
Total	$	15,704,218		$	16,218,539

Amortization expense for the three months ended November 30, 2023 and 2022 was $499,800 and $526,123, respectively.

Expected amortization expense of intangible assets over the next 5 years and thereafter is as follows:

Twelve Months Ending November 30,
2024	$	2,003,586
2025		1,820,324
2026		1,454,624
2027		1,208,004
2028		639,025
Thereafter		8,578,655
Total	$	15,704,218

Note 9 – Accrued Expenses

Accrued expenses at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30,		August 31,
	2023		2023
Accrued liabilities	$	1,049,543	$	961,897
Accrued payroll		215,936		236,218
Unearned revenue		35,070		35,434
	$	1,300,549	$	1,233,549

Note 10 – Government Loans and Notes Payable

Notes payable at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30,			August 31,
	2023			2023
Government loans issued under the Government of Canada’s Canada Emergency Business Account (“CEBA”) program (A).		88,356			88,680
Note payable to the Small Business Administration. The note bears interest at 3.75% per annum, requires monthly payments of $190 after 12 months from funding and is due 30 years from the date of issuance, and is secured by certain equipment of PRO-DIP.		40,320			40,320
Note payable dated December 3, 2018; accrues interest at 4.53% per annum; unsecured; annual payments of approximately $4,000; due December 2, 2028		28,589			28,693
Note payable received May 25, 2023, accruing interest at 18% per 3-months term, unsecured, with principal and interest due 3-month from loan issuance. The note was repaid on October 26, 2023.		-			73,900
Note payable received May 10, 2023, accruing interest at 15% per 4-months term, with a first priority security interest in all of Acenzia’s production equipment, with principal and interest due 4-month from loan issuance. The note was repaid on October 23, 2023.		-			110,850
Total government loans and notes payable		157,265			342,443
Less current portion		(93,488	)		(277,405	)
Long-term portion	$	63,777		$	65,038

(A) The Government of Canada launched CEBA loan to ensure that small businesses have access to the capital that they need during the current challenges faced due to the COVID-19 virus. The Company obtained CAD$80,000 loan (US$58,904 at November 30, 2023), which is unsecured, non-interest bearing and due on or before January 18, 2024. If the loan amount is paid on or before January 18, 2024, 25% of the loan will be forgiven (“Early Payment Credit”). In the event that the Company does not repay 75% of such term debt on or before January 18, 2024, the Early Payment Credit will not apply and the lender will automatically extend the term of the loan until December 31, 2026 and will accrue interest on the outstanding amount of the CEBA loan at a fixed rate of 5% per year. In addition, with acquisition of Terragenx, the Company acquired a CEBA loan in the amount of CAD$60,000 net of CAD$20,000 repayment (US$29,452 at November 30, 2023) under the same terms.

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Future scheduled maturities of outstanding government loans and notes payable are as follows:

Twelve Months Ending November 30,
2024	$	93,488
2025		6,470
2026		6,469
2027		6,469
2028		6,469
Thereafter		37,900
Total	$	157,265

Note 11 – Convertible Notes Payable

Novo Integrated

On December 14, 2021, Novo Integrated issued two convertible notes payable for a total of $16,666,666 (the “$16.66m+ convertible notes”) with each note having a face amount of $8,333,333. The $16.66m+ convertible notes accrue interest at 5% per annum and are due on June 14, 2023. The $16.66m+ convertible notes are secured by all assets of the Company. The $16.66m+ convertible notes are convertible at the option of the note holders to convert into shares of the Company’s common stock at $20 per share.

In connection with the $16.66m+ convertible notes, the Company issued the note holders warrants to purchase a total of 583,334 shares of the Company’s common stock at a price of $20 per share. The warrants expire on December 14, 2025. The Company first determined the value of the $16.66m+ convertible notes and the fair value of the detachable warrants issued in connection with this transaction. The estimated value of the warrants of $7,680,156 was determined using the Black-Scholes option pricing model with the following assumptions:

● Expected life of 4.0 years;

● Volatility of 275%;

● Dividend yield of 0%; and

● Risk free interest rate of 1.23%

The face amount of the $16.66m+ convertible notes of $16,666,666 was proportionately allocated to the $16.66m+ convertible notes and the warrants in the amount of $11,409,200 and $5,257,466, respectively. The amount allocated to the warrants of $5,257,466 was recorded as a discount to the convertible note and as additional paid in capital. The $16.66m+ convertible notes contained an original issue discount totaling $1,666,666 and the Company also incurred $1,140,000 in loan fees in connection with the $16.66m+ convertible notes. The combined total discount is $8,064,132 and will be amortized over the life of the $16.66m+ convertible notes.

On November 14, 2022, the $16.66m+ convertible notes were amended to provide the holders with conversion rights consisting of a conversion price to the first $1,000,000 of principal amount of each of the notes by the lower of (i) the conversion price in effect at such time and (ii) 82.0% of the lowest VWAP during the five (5) trading days immediately prior to a conversion date. The Company determined that the conversion features of these notes represented embedded derivatives since the notes are convertible into a variable number of shares upon conversion. On the same day, the Company recorded a derivative liability of $1,390,380. The fair value of the derivative liability was calculated using the Black-Scholes pricing model with the following assumptions:

● Expected life of 0.58 years;

● Volatility of 148.20%;

● Dividend yield of 0%; and

● Risk free interest rate of 4.55%

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The derivative was recorded as a discount on the convertible notes, but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the convertible notes.

During the year ended August 31, 2023, an aggregate of $8,396,666 in principal and an aggregate of $32,559 in accrued interest were converted into 8,527,835 shares of common stock issued to the $16.66m+ convertible note holders. As a result of the first $1,000,000 principal conversion, the derivative liability of $1,390,380 was extinguished and recognized to additional paid-in capital. As of November 30, 2023 and August 31, 2023, the derivative liability balance was $nil and $nil, respectively.

During the year ended August 31, 2023, the Company amortized $4,241,429 of the debt discount and as of November 30, 2023 and August 31, 2023, the unamortized debt discount was $nil.

During the year ended August 31, 2023, the Company made cash payments in the aggregate amount of $3,001,442 for the monthly Amortization Payment, $2,833,888 in principal and $167,554 in interest, pursuant to the terms and conditions of the $16.66m+ convertible notes. As of November 30, 2023 and August 31, 2023, the aggregate principal amount owed to the $16.66m+ convertible note holders is $nil.

Terragenx

On November 17, 2021, Terragenx, a 91% owned subsidiary of the Company, issued two convertible notes payable for a total of $1,875,000 (the “$1.875m convertible notes”) with each note having a face amount of $937,500. The $1.875m convertible notes accrue interest at 1% per annum and were due on May 17, 2022 and extended to November 29, 2022. The $1.875m convertible notes are secured by all assets of the Company. The $1.875m convertible notes are convertible at the option of the note holders to convert into shares of the Company’s common stock at $33.50 per share.

In connection with the $1.875m convertible notes, the Company issued the note holders warrants to purchase a total of 22,388 shares of the Company’s common stock at a price of $33.50 per share. The warrants expire on November 17, 2024. The Company first determined the value of the $1.875m convertible notes and the fair value of the detachable warrants issued in connection with this transaction. The estimated value of the warrants of $351,240 and was determined using the Black-Scholes option pricing model with the following assumptions:

● Expected life of 3.0 years;

● Volatility of 300%;

● Dividend yield of 0%; and

● Risk free interest rate of 0.85%

The face amount of the $1.875m convertible notes of $1,875,000 was proportionately allocated to the $1.875m convertible notes and the warrants in the amount of $1,579,176 and $295,824, respectively. The amount allocated to the warrants of $295,824 was recorded as a discount to the $1.875m convertible notes and as additional paid in capital. The $1.875m convertible notes contained an original issue discount totaling $375,000 and the Company also incurred $90,000 in loan fees in connection with these $1.875m convertible notes. The combined total discount was $760,824 and amortized over the life of the $1.875m convertible notes. The debt discount was fully amortized during the year ended August 31, 2022.

On June 1, 2022, the Company paid the balance owed on one of two Terragenx $1.875 million convertible notes for an aggregate payment of $948,874, including all principal and interest owed. On June 1, 2022, the Company made an interest payment to one of two Terragenx $1.875 million convertible notes for a payment of $192,188 and the note holder agreed to extend the maturity date to November 29, 2022 with a principal amount face value of $937,500 and interest rate that shall accrue at a rate equal to one percent per annum.

19

On June 1, 2022, the Company and one of the two Terragenx $1.875 million convertible note holders (the “Jefferson Note”) entered into that certain letter agreement pursuant to which the maturity date of the Jefferson Note was extended to November 29, 2022. On December 13, 2022, the Company, Terragenx and Jefferson entered into that certain letter agreement pursuant to which, among other things, Jefferson agreed to forbear from entering an Event of Default under the terms of the Jefferson Note and the related transaction documents until December 29, 2022. The Jefferson Note was not paid on December 29, 2022. Accordingly, on December 29, 2022, among other things, the Liquidated Damages Charge, in the aggregate amount of $186,719 was an addition to the Principal Amount due under the Jefferson Note.

Effective February 16, 2023, aside from the Liquidated Damages Charge, the Jefferson Note was paid in full. On August 21, 2023, Jefferson converted the additional Liquidated Damages Charge and the interest thereon. On August 21, 2023, as a result of the conversion, the Company issued 236,511 shares of common stock to Jefferson.

Novo Integrated – Mast Hill Fund, L.P.

On February 23, 2023, the Company entered into a securities purchase agreement (the “Mast Hill SPA”) with Mast Hill Fund, L.P. (“Mast Hill”), pursuant to which the Company issued an 12% unsecured promissory note (the “Mast Hill Note”) with a maturity date of February 23, 2024 (the “Mast Hill Maturity Date”), in the principal sum of $573,000 (the “Mast Hill Principal Sum”). In addition, the Company issued a common stock purchase warrant for the purchase of up to 100,000 shares of the Company’s common stock (the “Mast Hill Warrant”) to Mast Hill pursuant to the Mast Hill SPA. Pursuant to the terms of the Mast Hill Note, the Company agreed to pay the Mast Hill Principal Sum to Mast Hill and to pay interest on the principal balance at the rate of 12% per annum. The Mast Hill Note carries an OID of $57,300. Accordingly, on the closing date, Mast Hill paid the purchase price of $515,700 in exchange for the Mast Hill Note and the Mast Hill Warrant. Mast Hill may convert the Mast Hill Note into shares of the Company’s common stock at any time at a conversion price equal to $1.75 per share, subject to adjustment as provided in the Mast Hill Note (including but not limited to certain price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions) as well as certain beneficial ownership limitations.

Pursuant to the terms of the Mast Hill Note, the Company agreed to pay accrued interest monthly as well as the Mast Hill Principal Sum as follows: (i) $57,300 on August 23, 2023, (ii) 57,300 on September 23, 2023, (iii) $57,300 on October 23, 2023, (iv) $100,000 on November 23, 2023, (v) $100,000 on December 23, 2023, (vi) $100,000 on January 23, 2024, and (vii) all remaining amounts owed under the Mast Hill Note on the Mast Hill Maturity Date (each of the aforementioned payments are an “Amortization Payment”). If the Company fails to make any Amortization Payment, then Mast Hill shall have the right to convert the amount of such respective Amortization Payment into shares of common stock as provided in the Mast Hill Note at the lesser of (i) the then applicable conversion price under the Mast Hill Note, or (ii) 85% of the lowest VWAP of the Company’s common stock on any trading day during the five trading days prior to the respective conversion date.

The Company may prepay the Mast Hill Note at any time prior to the date that an Event of Default (as defined in the Mast Hill Note) occurs at an amount equal to the Mast Hill Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The Mast Hill Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the Mast Hill Note, Mast Hill Warrant, or Mast Hill SPA.

Upon the occurrence of any Event of Default, the Mast Hill Note shall become immediately due and payable and the Company shall pay to Mast Hill, in full satisfaction of its obligations hereunder, an amount equal to the Mast Hill Principal Sum then outstanding plus accrued interest multiplied by 125%. Upon the occurrence of an Event of Default, additional interest will accrue from the date of the Event of Default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

20

The Mast Hill Warrant is exercisable for five years from February 23, 2023, at an exercise price of $2.50 per share, subject to adjustment as provided in the Mast Hill Warrant. The Mast Hill Warrant also contains certain cashless exercise provisions as well as price protection provisions providing for adjustment of the number of shares of the Company’s common stock issuable upon exercise of the Mast Hill Warrant and the exercise price in case of future dilutive offerings, subject to certain customary exempt transactions. The estimated value of the warrants of $86,327 was determined using the Black-Scholes option pricing model with the following assumptions:

● Expected life of 5.0 years;

● Volatility of 252%;

● Dividend yield of 0%; and

● Risk free interest rate of 4.09%

As additional consideration for the purchase of the Mast Hill Note and pursuant to the terms of the Mast Hill SPA, on February 24, 2023, the Company issued 95,500 restricted shares of common stock (the “Commitment Shares”) to Mast Hill at closing. The Mast Hill SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the Commitment Shares as well as the shares of common stock underlying the Mast Hill Note and the Mast Hill Warrant. In addition to the beneficial ownership limitations provided in the Mast Hill Note and the Mast Hill Warrant, the sum of the number of shares of common stock that may be issued under the Mast Hill SPA (including the Commitment Shares), the Mast Hill Note, and the Mast Hill Warrant shall be limited to 19.99% of the issued and outstanding common stock on the closing date (equal to 2,772,045 shares) as further described in the Mast Hill SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

The principal amount of the $573,000 convertible notes was proportionately allocated to the convertible note, common stock issued, and the warrants in the amount of $403,710, $82,963, and $86,327, respectively. The amounts allocated to the equity issuances were recorded as a discount to the convertible note and as additional paid in capital. The convertible note contained an original issue discount totaling $57,300 and the Company also incurred $70,465 in loan fees in connection with the convertible note. The combined total discount is $297,055 and will be amortized over the life of the convertible note. The debt discount was fully amortized during the year ended August 31, 2023.

During the year ended August 31, 2023, the principal amount of $573,000, interest of $6,028 and other fees of $1,750 were converted into 522,777 common stock of the Company. As of November 30, 2023 and August 31, 2023, the aggregate principal amount owed under the Mast Hill Note is $nil.

On September 18, 2023, Mast Hill fully exercised all warrants granted under the terms and conditions of the $573,000 Mast Hill Warrant Agreement, dated February 23, 2023. Under certain cashless exercise provisions as well as price protection provisions providing for adjustment of the number of shares of the Company’s common stock issuable upon exercise of the Mast Hill Warrant, the Company issued 53,567 restricted shares of the Company’s common stock.

Novo Integrated – FirstFire Global Opportunities Fund, LLC

On March 21, 2023, the Company entered into a securities purchase agreement (the “SPA”) with FirstFire Global Opportunities Fund, LLC (“FirstFire”) pursuant to which the Company issued an 12% unsecured promissory note (the “2023 FirstFire Note”) with a maturity date of March 21, 2024, in the principal sum of $573,000 (the “Principal Sum”). In addition, the Company issued a common stock purchase warrant for the purchase of up to 100,000 shares of the Company’s common stock (the “2023 FirstFire Warrant”) to FirstFire pursuant to the SPA. Pursuant to the terms of the 2023 FirstFire Note, the Company agreed to pay the Principal Sum to FirstFire and to pay interest on the principal balance at the rate of 12% per annum. The 2023 FirstFire Note carries an OID of $57,300. Accordingly, on the closing date, FirstFire paid the purchase price of $515,700 in exchange for the 2023 FirstFire Note and the 2023 FirstFire Warrant. FirstFire may convert the 2023 FirstFire Note into the Company’s common stock at any time at a conversion price equal to $1.75 per share, subject to adjustment as provided in the 2023 FirstFire Note (including but not limited to certain price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions) as well as certain beneficial ownership limitations.

Pursuant to the terms of the 2023 FirstFire Note, the Company agreed to pay accrued interest monthly as well as the Principal Sum as follows: (i) $57,300 on September 21, 2023, (ii) 57,300 on October 21, 2023, (iii) $57,300 on November 21, 2023, (iv) $100,000 on December 21, 2023, (v) $100,000 on January 21, 2024, (vi) $100,000 on February 21, 2024, and (vii) all remaining amounts owed under the 2023 FirstFire Note on the maturity date (each of the aforementioned payments are an “Amortization Payment”). If the Company fails to make any Amortization Payment, then FirstFire shall have the right to convert the amount of such respective Amortization Payment into shares of common stock as provided in the 2023 FirstFire Note at the lesser of (i) the then applicable conversion price under the 2023 FirstFire Note or (ii) 85% of the lowest VWAP of the Company’s common stock on any trading day during the five trading days prior to the respective conversion date.

The Company may prepay the 2023 FirstFire Note at any time prior to the date that an event of default (as provided in the 2023 FirstFire Note) occurs at an amount equal to the Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The 2023 FirstFire Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the 2023 FirstFire Note, the 2023 FirstFire Warrant, or SPA.

Upon the occurrence of any event of default, the 2023 FirstFire Note shall become immediately due and payable and the Company shall pay to FirstFire, in full satisfaction of its obligations hereunder, an amount equal to the Principal Sum then outstanding plus accrued interest multiplied by 125% (the “Default Amount”). Upon the occurrence of an Event of Default, additional interest will accrue from the date of the Event of Default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

21

The 2023 FirstFire Warrant is exercisable for five years from March 21, 2023, at an exercise price of $2.50 per share, subject to adjustment as provided in the 2023 FirstFire Warrant. The 2023 FirstFire Warrant also contains certain cashless exercise provisions as well as price protection provisions providing for adjustment of the number of shares of common stock issuable upon exercise of the 2023 FirstFire Warrants and the exercise price in case of future dilutive offerings, subject to certain customary exempt transactions. The estimated value of the warrants of $93,811 was determined using the Black-Scholes option pricing model with the following assumptions:

● Expected life of 5.0 years;

● Volatility of 251%;

● Dividend yield of 0%; and

● Risk free interest rate of 3.73%

As additional consideration for the purchase of the 2023 FirstFire Note and pursuant to the terms of the SPA, on March 22, 2023, the Company issued 95,500 restricted shares of the Company’s common stock (the “Commitment Shares”) to FirstFire at closing. The SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the Commitment Shares as well as the shares of common stock underlying the 2023 FirstFire Note and the 2023 FirstFire Warrant. In addition to the beneficial ownership limitations provided in the 2023 FirstFire Note and the 2023 FirstFire Warrant, the sum of the number of shares of common stock that may be issued under the SPA (including the Commitment Shares), the 2023 FirstFire Note, and 2023 FirstFire Warrant shall be limited to 1,000,000 shares as further described in the SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

The principal amount of the $573,000 convertible notes was proportionately allocated to the convertible note, common stock issued, and the warrants in the amount of $389,057, $90,132, and $93,811, respectively. The amounts allocated to the equity issuances were recorded as a discount to the convertible note and as additional paid in capital. The convertible note contained an original issue discount totaling $57,300 and the Company also incurred $35,628 in loan fees in connection with the convertible note.

The effective conversion price was determined to be $1.188 based on the allocation of the principal amount and the number of shares to be received upon conversion. As the stock price at the issuance date of $1.390 was greater than the effective conversion price, it was determined that there was a beneficial conversion feature (“BCF”). The Company recognized the beneficial conversion feature of $66,068, equal to the intrinsic value of the conversion option, as a discount to the convertible note and as additional paid in capital.

22

The combined total discount is $342,938 and will be amortized over the life of the convertible note. During the three months ended November 30, 2023, the Company amortized $190,209 of the debt discount and as November 30, 2023, the unamortized debt discount was $nil.

During the three months ended November 30, 2023, the principal amount of $573,000 and interest of $4,521 were converted into 519,845 common stock of the Company. As of November 30, 2023, the aggregate principal amount owed under the 2023 FirstFire Note is $nil.

On October 12, 2023, FirstFire fully exercised all warrants granted under the terms and conditions of the $573,000 FirstFire Warrant Agreement, dated March 21, 2023. Under certain cashless exercise provisions as well as price protection provisions providing for adjustment of the number of shares of the Company’s common stock issuable upon exercise of the FirstFire Warrant, the Company issued 53,532 restricted shares of the Company’s common stock.

Novo Integrated – Mast Hill Fund, L.P. $445,000 Note, SPA, and Warrant

On June 20, 2023, the Company entered into a securities purchase agreement (the “MH $445,000 SPA”) with Mast Hill, pursuant to which the Company issued an 12% unsecured promissory note (the “MH $445,000 Note”) with a maturity date of June 20, 2024 (the “MH $445,000 Maturity Date”), in the principal sum of $445,000 (the “MH $445,000 Principal Sum”). In addition, the Company issued a common stock purchase warrant for the purchase of up to 77,662 shares of the Company’s common stock (the “MH $445,000 Warrant”) to Mast Hill pursuant to the MH $445,000 SPA. Pursuant to the terms of the MH $445,000 Note, the Company agreed to pay the MH $445,000 Principal Sum to Mast Hill and to pay interest on the principal balance at the rate of 12% per annum. The MH $445,000 Note carries an OID of $44,500. Accordingly, on the Closing Date (as defined in the MH $445,000 SPA), Mast Hill paid the purchase price of $400,500 in exchange for the MH $445,000 Note and MH $445,000 Warrant. Mast Hill may convert the MH $445,000 Note into the Company’s common stock at any time at a conversion price equal to $1.75 per share, subject to adjustment as provided in the MH $445,000 Note (including but not limited to certain price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions), as well as certain beneficial ownership limitations.

Pursuant to the terms of the MH $445,000 Note, the Company agreed to pay accrued interest monthly as well as the MH $445,000 Principal Sum as follows: (i) $44,500 on December 20, 2023, (ii) $44,500 on January 20, 2024, (iii) $44,500 on February 20, 2024, (iv) $77,661 on March 20, 2024, (v) $77,661 on April 20, 2024, (vi) $77,661 on May 20, 2024, and (vii) all remaining amounts owed under the MH $445,000 Note on the MH $445,000 Maturity Date (each of the aforementioned payments are an “MH $445,000 Amortization Payment”). If the Company fails to make any MH $445,000 Amortization Payment, then Mast Hill shall have the right to convert the amount of such respective MH $445,000 Amortization Payment into shares of common stock as provided in the MH $445,000 Note at the lesser of (i) the then applicable conversion price under the MH $445,000 Note or (ii) 85% of the lowest VWAP of the common stock on any trading day during the five trading days prior to the respective conversion date.

The Company may prepay the MH $445,000 Note at any time prior to the date that an Event of Default (as defined in the Note) (each an “MH $445,000 Event of Default”) occurs at an amount equal to the MH $445,000 Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The MH $445,000 Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the MH $445,000 Note, the MH $445,000 Warrant, or the MH $445,000 SPA.

Upon the occurrence of any MH $445,000 Event of Default, the MH $445,000 Note shall become immediately due and payable and the Company shall pay to Mast Hill, in full satisfaction of its obligations hereunder, an amount equal to the MH $445,000 Principal Sum then outstanding plus accrued interest multiplied by 125%. Upon the occurrence of an MH $445,000 Event of Default, additional interest will accrue from the date of the MH $445,000 Event of Default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

23

The MH $445,000 Warrant is exercisable for five years from June 20, 2023, at an exercise price of $2.50 per share, subject to adjustment as provided in the MH $445,000 Warrant. The MH $445,000 Warrant also contains certain cashless exercise provisions, as well as price protection provisions providing for adjustment of the number of shares of common stock issuable upon exercise of the MH $445,000 Warrant and the exercise price in case of future dilutive offerings, subject to certain customary exempt transactions. The estimated value of the warrants of $77,856 was determined using the Black-Scholes option pricing model with the following assumptions:

● Expected life of 5.0 years;

● Volatility of 251%;

● Dividend yield of 0%; and

● Risk free interest rate of 3.96%

As additional consideration for the purchase of the MH $445,000 Note and pursuant to the terms of the MH $445,000 SPA, the Company issued 74,167 restricted shares of the Company’s common stock (the “MH $445,000 Commitment Shares”) to Mast Hill at closing. The MH $445,000 SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the MH $445,000 Commitment Shares as well as the shares of common stock underlying the MH $445,000 Note and MH $445,000 Warrant. In addition to the beneficial ownership limitations provided in the MH $445,000 Note and MH $445,000 Warrant, the sum of the number of shares of common stock that may be issued under the MH $445,000 SPA (including the MH $445,000 Commitment Shares), MH $445,000 Note, and MH $445,000 Warrant shall be limited to 1,772,045 as further described in the MH $445,000 SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

The principal amount of the $445,000 convertible notes was proportionately allocated to the convertible note, common stock issued, and the warrants in the amount of $292,351, $74,793, and $77,856, respectively. The amounts allocated to the equity issuances were recorded as a discount to the convertible note and as additional paid in capital. The convertible note contained an original issue discount totaling $44,500 and the Company also incurred $39,904 in loan fees in connection with the convertible note.

The effective conversion price was determined to be $1.150 based on the allocation of the principal amount and the number of shares to be received upon conversion. As the stock price at the issuance date of $1.535 was greater than the effective conversion price, it was determined that there was a beneficial conversion feature (“BCF”). The Company recognized the beneficial conversion feature of $97,978, equal to the intrinsic value of the conversion option, as a discount to the convertible note and as additional paid in capital.

The combined total discount is $335,031 and will be amortized over the life of the convertible note. During the three months ended November 30, 2023, the Company amortized $83,300 of the debt discount and as at November 30, 2023, the unamortized debt discount was $185,823.

Specific to the MH $445,000 Note, on July 20, 2023, the Company made a monthly interest payment of $4,243. On August 21, 2023, the Company made a monthly interest payment of $4,535. On September 21, 2023, the Company made a monthly interest payment of $4,535. On October 20, 2023, the Company made a monthly interest payment of $4,389.

On October 23, 2023, Mast Hill fully exercised all warrants granted under the terms and conditions of the $445,000 Mast Hill Warrant Agreement, dated June 20, 2023. Under certain cashless exercise provisions as well as price protection provisions providing for adjustment of the number of shares of the Company’s common stock issuable upon exercise of the Mast Hill Warrant, the Company issued 138,703 restricted shares of the Company’s common stock.

September 2023 Mast Hill SPA

On September 12, 2023, the Company entered into a securities purchase agreement (the “September 2023 Mast Hill SPA”) with Mast Hill Fund, L.P. (“Mast Hill”), pursuant to which the Company issued an 12% promissory note (the “September 2023 Mast Hill Note”) with a maturity date of September 12, 2024 (the “September 2023 Mast Hill Maturity Date”), in the principal sum of $3,500,000. Pursuant to the terms of the September 2023 Mast Hill Note, the Company agreed to pay the principal sum to Mast Hill and to pay interest on the principal balance at the rate of 12% per annum. The September 2023 Mast Hill Note carries an original issue discount (“OID”) of $350,000. Accordingly, on the closing date, Mast Hill paid the purchase price of $3,150,000 in exchange for the September 2023 Mast Hill Note. Mast Hill may convert the September 2023 Mast Hill Note into shares of the Company’s common stock at any time at a conversion price equal to the lesser of (i) $4.50 or (ii) 91.5% of the lowest volume weighted average price of the Company’s common stock on any trading day during the five trading day period prior to the respective conversion date, subject to adjustment as provided in the September 2023 Mast Hill Note (including but not limited to price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions) as well as beneficial ownership limitations.

24

Pursuant to the terms of the September 2023 Mast Hill Note, the Company agreed to pay the principal sum and accrued interest as follows: (i) all accrued interest on December 12, 2023, (ii) $350,000 plus accrued interest on March 12, 2024, (iii) $350,000 plus accrued interest on April 12, 2024, (iv) $350,000 plus accrued interest on May 12, 2024, (v) $595,000 plus accrued interest on June 12, 2024, (vi) $595,000 plus accrued interest on July 12, 2024, (vii) $595,000 plus accrued interest on August 12, 2024, and (viii) all remaining amounts owed under the September 2023 Mast Hill Note on the September 2023 Mast Hill Maturity Date (each of the aforementioned payments is an “Amortization Payment”). If the Company fails to make any Amortization Payment, then Mast Hill will have the right to convert the amount of such respective Amortization Payment into shares of common stock as provided in the September 2023 Mast Hill Note at the lesser of (i) the then applicable conversion price under the September 2023 Mast Hill Note or (ii) 85% the lowest volume weighted average price of the Company’s common stock on any trading day during the five trading day period prior to the respective conversion date.

The Company may prepay the September 2023 Mast Hill Note at any time prior to the date that an Event of Default (as defined in the Note) occurs at an amount equal to the principal sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The September 2023 Mast Hill Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the September 2023 Mast Hill Note or September 2023 Mast Hill SPA.

Upon the occurrence of any Event of Default, the September 2023 Mast Hill Note shall become immediately due and payable and the Company will pay to Mast Hill an amount equal to the principal sum then outstanding plus accrued interest multiplied by 125%. Upon the occurrence of an Event of Default, additional interest will accrue from the date of the Event of Default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

The September 2023 Mast Hill SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the common stock underlying the September 2023 Mast Hill Note. Further, pursuant to the September 2023 Mast Hill SPA, the Company agreed to transfer its rights to the charges/mortgages evidenced by Instrument Nos. CE925256 (in the amount of CDN$1,600,000) and CE888785 (in the amount of CDN$1,800,000) on the property located at 1580 Rossi Drive, Tecumseh, Ontario, Canada, to Mast Hill as security for the Company’s repayment of the September 2023 Mast Hill Note. In addition to the beneficial ownership limitations provided in the September 2023 Mast Hill Note, the sum of the number of shares of common stock that may be issued under the September 2023 Mast Hill SPA and September 2023 Mast Hill Note shall be limited to 1,772,045 as further described in the September 2023 Mast Hill SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

The Company’s subsidiary, Acenzia Inc. (“Acenzia”), entered into a guaranty with Mast Hill on September 12, 2023. Acenzia guaranteed the repayment of the September 2023 Mast Hill Note and granted Mast Hill a security interest in Acenzia’s assets, including but not limited to, the property located at 1580 Rossi Drive, Tecumseh, Ontario, Canada.

25

The Company determined that the conversion features of these notes represented embedded derivatives since the notes are convertible into a variable number of shares upon conversion. On September 12, 2023, the Company recorded a derivative liability of $3,071,653. The fair value of the derivative liability was calculated using the Black-Scholes pricing model with the following assumptions:

● Expected life of 1 year;

● Volatility of 182.17%;

● Dividend yield of 0%; and

● Risk free interest rate of 5.42%

The derivative was recorded as a discount on the convertible notes, but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the convertible note.

As at November 30, 2023, the fair value of the derivative liability was $2,487,726 and for the three months ended November 30, 2023, the Company recorded a gain of $583,927 from the change in fair value of derivative liability as non-operating income in the condensed consolidated statements of operations and comprehensive loss. The fair value of the derivative liability was calculated using the Black-Scholes pricing model with the following assumptions:

● Expected life of 0.79 years;

● Volatility of 193.48%;

● Dividend yield of 0%; and

● Risk free interest rate of 5.16%

The September 2023 Mast Hill Note contained a discount on note of $3,500,000. The total discount will be amortized over the life of the September 2023 Mast Hill Note.

During the three months ended November 30, 2023, the Company amortized $755,464 of the debt discount and as November 30, 2023, the unamortized debt discount was $2,744,536.

September 2023 FirstFire SPA & Note

On September 18, 2023, the Company entered into a securities purchase agreement (the “September 2023 FirstFire SPA”) with FirstFire Global Opportunities Fund, L.P. (“FirstFire”), pursuant to which the Company issued an 12% promissory note (the “September 2023 FirstFire Note”) with a maturity date of September 18, 2024, in the principal sum of $277,778. Pursuant to the terms of the September 2023 FirstFire Note, the Company agreed to pay the principal sum to FirstFire and to pay interest on the principal balance at the rate of 12% per annum. The September 2023 FirstFire Note carries an OID of $27,778. Accordingly, on the closing date, FirstFire paid the purchase price of $250,000 in exchange for the September 2023 FirstFire Note. FirstFire may convert the September 2023 FirstFire Note into the Company’s common stock, at any time at a conversion price equal to the lesser of (i) $4.50 or (ii) 91.5% of the lowest volume weighted average price of the Company’s common stock on any trading day during the five trading day period prior to the respective conversion date, subject to adjustment as provided in the September 2023 FirstFire Note (including but not limited to price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions) as well as beneficial ownership limitations.

Pursuant to the terms of the September 2023 FirstFire Note, the Company agreed to pay the principal sum and accrued interest as follows: (i) all accrued interest on December 18, 2023, (ii) $27,778 plus accrued interest on March 18, 2024, (iii) $27,778 plus accrued interest on April 18, 2024, (iv) $27,778 plus accrued interest on May 18, 2024, (v) $47,222 plus accrued interest on June 18, 2024, (vi) $47,222 plus accrued interest on July 18, 2024, (vii) $47,222 plus accrued interest on August 18, 2024, and (viii) all remaining amounts owed under the September 2023 FirstFire Note on the maturity date (each of the aforementioned payments is a “FirstFire Amortization Payment”). If the Company fails to make any FirstFire Amortization Payment, then FirstFire shall have the right to convert the amount of such respective FirstFire Amortization Payment into shares of common stock as provided in the September 2023 FirstFire Note at the lesser of (i) the then applicable conversion price under the September 2023 FirstFire Note or (ii) 85% the lowest volume weighted average price of the Company’s common stock on any trading day during the five trading day period prior to the respective conversion date.

The Company may prepay the September 2023 FirstFire Note at any time prior to the date that an event of default occurs at an amount equal to the principal sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The September 2023 FirstFire Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the September 2023 FirstFire Note or September 2023 FirstFire SPA.

Upon the occurrence of any event of default, the September 2023 FirstFire Note shall become immediately due and payable and the Company shall pay to FirstFire, in full satisfaction of its obligations hereunder, an amount equal to the principal sum then outstanding plus accrued interest multiplied by 125%. Upon the occurrence of an event of default, additional interest will accrue from the date of the event of default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

26

The September 2023 FirstFire SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the common stock underlying the September 2023 FirstFire Note. In addition to the beneficial ownership limitations provided in the September 2023 FirstFire Note, the sum of the number of shares of common stock that may be issued under the September 2023 FirstFire SPA and September 2023 FirstFire Note shall be limited to 480,156 as further described in the September 2023 FirstFire SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

Acenzia entered into a guaranty with FirstFire on September 18, 2023. Acenzia guaranteed the repayment of the September 2023 FirstFire Note and granted FirstFire a security interest in Acenzia’s assets, including but not limited to the property located at 1580 Rossi Drive, Tecumseh, Ontario, Canada, which is junior in priority to the security interest granted by Acenzia to FirstFire.

The Company determined that the conversion features of these notes represented embedded derivatives since the notes are convertible into a variable number of shares upon conversion. On September 18, 2023, the Company recorded a derivative liability of $200,136. The fair value of the derivative liability was calculated using the Black-Scholes pricing model with the following assumptions:

● Expected life of 1 year;

● Volatility of 180.36%;

● Dividend yield of 0%; and

● Risk free interest rate of 5.44%

The derivative was recorded as a discount on the convertible notes, but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the convertible note.

As at November 30, 2023, the fair value of the derivative liability was $198,534 and for the three months ended November 30, 2023, the Company recorded a gain of $1,602 from the change in fair value of derivative liability as non-operating income in the condensed consolidated statements of operations and comprehensive loss. The fair value of the derivative liability was calculated using the Black-Scholes pricing model with the following assumptions:

● Expected life of 0.80 years;

● Volatility of 193.48%;

● Dividend yield of 0%; and

● Risk free interest rate of 5.16%

The September 2023 FirstFire Note contained a discount on note of $235,414. The total discount will be amortized over the life of the September 2023 FirstFire Note.

During the three months ended November 30, 2023, the Company amortized $46,954 of the debt discount and as November 30, 2023, the unamortized debt discount was $188,460.

Note 12 – Debentures, Related Parties

On September 30, 2013, the Company issued five debentures totaling CAD$6,402,512 (approximately $6,225,163 on September 30, 2013) in connection with the acquisition of certain business assets. The holders of the debentures are current stockholders, officers and/or affiliates of the Company. The debentures are secured by all the assets of the Company, accrue interest at 8% per annum and were originally due on September 30, 2016. On December 2, 2017, the debenture holders agreed to extend the due date to September 30, 2019. On September 27, 2019, the debenture holders agreed to extend the due date to September 30, 2021. On November 2, 2021, the debenture holders agreed to extend the due date to December 1, 2023.

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On January 31, 2018, the debenture holders converted 75% of the debenture value of $3,894,809 plus accrued interest of $414,965 into 1,047,588 shares of the Company’s common stock. The per share price used for the conversion of each debenture was $4.11 which was determined as the average price of the five trading days immediately preceding the date of conversion with a 10% premium added to the calculated per share price.

On July 21, 2020, the Company made a partial repayment of a debenture due to a related party of $267,768.

At November 30, 2023 and August 31, 2023, the amount of debentures outstanding was $913,474 and $916,824, respectively.

Note 13 – Leases

Operating leases

The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company discounts lease payments based on an estimate of its incremental borrowing rate.

The Company leases its corporate office space and certain facilities under long-term operating leases expiring through fiscal year 2031.

The table below presents the lease related assets and liabilities recorded on the Company’s condensed consolidated balance sheets as of November 30, 2023 and August 31, 2023:

		November 30,		August 31,
		2023		2023
	Classification on Balance Sheet
Assets
Operating lease assets	Operating lease right of use assets	$	1,870,204	$	1,983,898
Total lease assets		$	1,870,204	$	1,983,898
Liabilities
Current liabilities
Operating lease liability	Current operating lease liability	$	413,506	$	415,392
Noncurrent liabilities
Operating lease liability	Long-term operating lease liability		1,585,667		1,693,577
Total lease liability		$	1,999,173	$	2,108,969

Future minimum operating lease payments are as follows:

Twelve Months Ending November 30,
2024	$	568,536
2025		494,272
2026		512,495
2027		417,394
2028		223,188
Thereafter		254,641
Total payments		2,470,526
Amount representing interest		(471,353	)
Lease obligation, net		1,999,173
Less lease obligation, current portion		413,506
Lease obligation, long-term portion	$	1,585,667

During the three months ended November 30, 2023, the Company did not enter into any new lease obligation.

The lease expense for the three months ended November 30, 2023 and 2022 was $149,877 and $209,846, respectively. The cash paid under operating leases for the three months ended November 30, 2023 and 2022 was $145,545 and $202,465, respectively. At November 30, 2023, the weighted average remaining lease terms were 3.88 years and the weighted average discount rate was 8%.

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Finance Leases

The Company leases certain equipment under lease contracts that are accounted for as finance leases. If the contracts meet the criteria for a finance lease, the related equipment underlying the lease contract is capitalized and amortized over its estimated useful life. If the cost of the equipment is not available, the Company calculates the cost by taking the present value of the lease payments using an implicit borrowing rate of 5%.

The net book value of equipment under finance leases included in property and equipment on the accompanying condensed consolidated balance sheets at November 30, 2023 and August 31, 2023 is as follows:

	November 30,		August 31,
	2023		2023
Cost	$	209,457	$	209,457
Accumulated amortization		(209,457)		(209,457)
Net book value	$	-	$	-

Future minimum finance lease payments are as follows:

Twelve Months Ending November 30,
2024	$	8,973
Total payments		8,973
Amount representing interest		(66	)
Lease obligation, net		8,907
Less lease obligation, current portion		(8,907	)
Lease obligation, long-term portion	$	-

Note 14 – Stockholders’ Equity

Reverse Stock Split

On November 6, 2023, the Company effectuated a 1-for-10 reverse stock split (the “Reverse Stock Split”) effective immediately after the close of trading on the Nasdaq Capital Market (“Nasdaq”) and the Company’s common stock began trading on Nasdaq on a Reverse Stock Split-adjusted basis on November 7, 2023. As a result of the Reverse Stock Split, every 10 pre-split shares of common stock outstanding became one share of common stock, with fractional shares rounded up to the next higher whole share. The Reverse Stock Split did not affect the number of authorized shares of common stock, the par value of the common stock, or modify any rights or preferences of shares of the Company’s common stock. Proportionate adjustments will be made to the exercise prices and the number of shares underlying the Company’s outstanding equity awards and warrants, as applicable.

Convertible Preferred Stock

The Company has authorized 1,000,000 shares of $0.001 par value convertible preferred stock. At November 30, 2023 and August 31, 2023, there were 0 and 0 convertible preferred shares issued and outstanding, respectively.

Common Stock

The Company has authorized 499,000,000 shares of $0.001 par value common stock. At November 30, 2023 and August 31, 2023, there were 17,291,192 and 15,759,325 common shares issued and outstanding, respectively.

During the three-month period ended November, 2023, the Company issued common stock as follows:

● 80,200 shares of common stock were issued to various warrant holders upon exercise of their 3-year warrants. The warrants were issued on October 18, 2022, under the prospectus contained in the Registration Statement on Form S-1 (File No. 333-267401) declared effective by the Securities and Exchange Commission (the “SEC”) on October 13, 2022. The net proceeds were $80,200. The shares were issued on various dates during the 3-month period.

● 160,200 shares of common stock were issued to various warrant holders upon exercise of their 5-year warrants. The warrants were issued on October 18, 2022, under the prospectus contained in the Registration Statement on Form S-1 (File No. 333-267401) declared effective by the SEC on October 13, 2022. The net proceeds were $160,200. The shares were issued on various dates during the 3-month period.

● 75,000 restricted shares of common stock as consideration pursuant to a consulting agreement. The fair value was determined based on the market price of the Company’s common stock on the date of issuance. The shares were issued on September 5, 2023.

● 53,567 shares were issued to Mast Hill upon the cashless exercise of all warrants. The warrants were issued on February 23, 2023 under the terms and conditions of the warrant agreement between the Company and Mast Hill in connection with the $573,000 promissory note issued, by the Company to Mast Hill, on February 23, 2023. The shares were issued on September 18, 2023.

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● 75,000 restricted shares of common stock were issued as consideration pursuant to a consulting agreement. The fair value was determined based on the market price of the Company’s common stock on the date of issuance. The shares were issued on September 18, 2023.

● 519,845 restricted shares of common stock were issued to FirstFire upon conversion of outstanding debt pursuant to the terms of the securities purchase agreement between FirstFire and the Company. The debt amount converted consisted of principal amount of $573,000 and interest of $4,521, for a total amount of $577,521. The shares were issued on September 21, 2023.

● 75,000 restricted shares of common stock were issued as consideration pursuant to a consulting agreement. The fair value was determined based on the market price of the Company’s common stock on the date of issuance. The shares were issued on October 3, 2023.

● 73,767 restricted shares of common stock were issued in exchange for certain non-voting special shares of NHL, previously issued in connection with NHL’s Share Exchange Agreement with the Terragenx shareholders, the Company’s Asset Purchase Agreement with Mr. Terrence Mullins, and an employment agreement with Mr. Terrence Mullins, each of which closed on November 17, 2021. The fair value was determined based on the market price of the Company’s common stock on the date of closing. The shares were issued on October 9, 2023.

● 53,532 shares were issued to FirstFire upon the cashless exercise of all warrants. The warrants were issued on March 21, 2023 under the terms and conditions of the warrant agreement between the Company and Mast Hill in connection with the $573,000 promissory note issued, by the Company to FirstFire, on March 21, 2023. The shares were issued on October 12, 2023.

● 75,000 restricted shares of common stock were issued as consideration pursuant to a consulting agreement. The fair value was determined based on the market price of the Company’s common stock on the date of issuance. The shares were issued on October 18, 2023.

● 138,703 shares were issued to Mast Hill upon the cashless exercise of all warrants. The warrants were granted on June 20, 2023 under the terms and conditions of the warrant agreement between the Company and Mast Hill in connection with the $445,000 promissory note issued, by the Company to Mast Hill, on June 20, 2023. The shares were issued on October 23, 2023.

● 75,000 restricted shares of common stock were issued as consideration pursuant to a consulting agreement. The fair value was determined based on the market price of the Company’s common stock on the date of issuance. The shares were issued on November 8, 2023.

● 30,675 restricted shares of common stock were issued pursuant to the terms and conditions of an executive agreement, dated November 15, 2022, between NHL and an officer of NHL. The fair value was determined based on the market price of the Company’s common stock on the date of issuance. The shares were issued on November 21, 2023.

● 18,405 restricted shares of common stock were issued pursuant to the terms and conditions of an executive agreement, dated November 15, 2022, between NHL and an officer of NHL. The fair value was determined based on the market price of the Company’s common stock on the date of issuance. The shares were issued on November 21, 2023.

● 27,973 shares of common stock issued in lieu of fractional shares resulting from the Company’s 1-for-10 reverse stock split of its common stock, effective November 7, 2023. As a result of the reverse stock split, every 10 shares of issued and outstanding common stock were exchanged for one share of common stock, with any fractional shares being rounded up to the next higher whole share.

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Common Stock to be Issued

As of November 30, 2023, in connection with the acquisition of 1285 Canada and Poling Taddeo Hovius Physiotherapy Professional Corp, the Company has allotted and is obligated to issue 17,375 shares of the Company’s common stock. As of November 30, 2023, the fair value of the shares to be issued is $44,443.

Stock Options

On September 8, 2015, the Company’s Board of Directors and stockholders holding a majority of the Company’s outstanding common stock approved the Novo Integrated Sciences, Inc. 2015 Incentive Compensation Plan (the “2015 Plan”), which authorizes the issuance of up to 50,000 shares of common stock to employees, officers, directors or independent consultants of the Company, provided that no person can be granted shares under the 2015 Plan for services related to raising capital or promotional activities. During the period ended November 30, 2023, the Company did not grant any awards under the 2015 Plan. The Company does not intend to issue any additional grants under the 2015 Plan.

On January 16, 2018, the Company’s Board of Directors and stockholders holding a majority of the Company’s outstanding common stock approved the Novo Integrated Sciences, Inc. 2018 Incentive Compensation Plan (the “2018 Plan”). Under the 2018 Plan, 100,000 shares of common stock are authorized for the grant of stock options and the issuance of restricted stock, stock appreciation rights, phantom stock and performance awards to officers, directors, employees and eligible consultants to the Company or its subsidiaries. During the period ended November 30, 2023, the 2018 Plan had 86,490 shares available for award; however, the Company does not intend to issue any additional grants under the 2018 Plan.

On February 9, 2021, the Company’s Board of Directors and stockholders holding a majority of the Company’s outstanding common stock approved the Novo Integrated Sciences, Inc. 2021 Equity Incentive Plan (the “2021 Plan”). Under the 2021 Plan, a total of 450,000 shares of common stock are authorized for issuance pursuant to the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares or other cash- or stock-based awards to officers, directors, employees and eligible consultants to the Company or its subsidiaries. Subject to adjustment as provided in the 2021 Plan, the maximum aggregate number of shares that may be issued under the 2021 Plan may be cumulatively increased on January 1, 2022 and on each subsequent January 1 through and including January 1, 2024, by a number of shares equal to the smaller of (i) 3% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or (ii) an amount determined by our Board of Directors. The Company chose not to cumulatively increase the shares authorized for issuance under the 2021 Plan, effective January 1, 2022 and January 1, 2023. As of November 30, 2023, the 2021 Plan had 75,463 shares available for award; however, the Company does not intend to issue any additional grants under the 2021 Plan.

On July 26, 2023 and September 29, 2023, the Company’s Board of Directors and stockholders, respectively, approved the Novo Integrated Sciences, Inc. 2023 Equity Incentive Plan (the “2023 Plan”). Under the 2023 Plan, a total of 2,500,000 shares of common stock are authorized for issuance pursuant to the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares or other cash- or stock-based awards to officers, directors, employees and eligible consultants to the Company or its subsidiaries. As of November 30, 2023, the 2023 Plan had 2,500,000 shares available for award.

The following is a summary of stock options activity:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
	Options		Exercise		Contractual		Intrinsic
	Outstanding		Price		Life		Value
Outstanding, August 31, 2023		371,423		11.44		3.98	$	16,000
Granted		-
Forfeited		-
Exercised		-
Outstanding, November 30, 2023		371,423		11.44		3.73	$	-
Exercisable, November 30, 2023		371,423	$	11.44		3.73	$	-

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The exercise price for stock options outstanding at November 30, 2023:

Outstanding				Exercisable
Number of		Exercise		Number of		Exercise
Options		Price		Options		Price
	22,715	$	13.30		22,715	$	13.30
	54,200		16.00		54,200		16.00
	4,800		18.70		4,800		18.70
	77,500		30.00		77,500		30.00
	7,260		38.00		7,260		38.00
	1,000		50.00		1,000		50.00
	3,948		19.00		3,948		19.00
	200,000		1.32		200,000		1.32
	371,423				371,423

No options were granted during the three months ended November 30, 2023 and 2022.

The fair value of the stock options is being amortized to stock option expense over the vesting period. The Company recorded stock option expense of $nil and $60,887 during the three months ended November 30, 2023 and 2022, respectively. At November 30, 2023, the unamortized stock option expense was $nil.

Warrants

The following is a summary of warrant activity:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Warrants			Exercise		Contractual		Intrinsic
	Outstanding			Price		Life		Value
Outstanding, August 31, 2023		806,254		$	12.05		3.71	$	106,960
Granted		-
Forfeited		-
Exercised		(518,061	)
Outstanding, November 30, 2023		288,193		$	30.46		3.46	$	5,400
Exercisable, November 30, 2023		288,193		$	30.46		3.46	$	5,400

The exercise price for warrants outstanding at November 30, 2023:

Outstanding and Exercisable
Number of		Exercise
Warrants		Price
	261,193	$	33.50
	27,000		1.00
	288,193

Note 15 – Commitments and Contingencies

Litigation

The Company is party to certain legal proceedings from time-to-time incidental to the conduct of its business. These proceedings could result in fines, penalties, compensatory or treble damages or non-monetary relief. The nature of legal proceedings is such that the Company cannot assure the outcome of any particular matter, and an unfavorable ruling or development could have a materially adverse effect on our condensed consolidated financial position, results of operations and cash flows in the period in which a ruling or settlement occurs. However, based on information available to the Company’s management to date, the Company’s management does not expect that the outcome of any matter pending against the Company is likely to have a materially adverse effect on the Company’s unaudited condensed consolidated financial position as of November 30, 2023, results of operations, cash flows or liquidity of the Company.

During the period ended November 30, 2023, the Company incurred $652,174 included in other expense which was primarily a result of a repayment for an overpayment received from a former customer. The Company’s management does not expect any additional repayments or remaining obligations to this former customer.

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Note 16 – Segment Reporting

ASC Topic 280, Segment Reporting, requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the Company for making operating decisions and assessing performance. The Company has two reportable segments: healthcare services and product sales.

The following tables summarize the Company’s segment information for the three months ended November 30, 2023 and 2022:

	Three Months Ended November 30,
	2023			2022
Sales
Healthcare services	$	2,044,510		$	2,021,213
Product manufacturing and development		1,768,458			790,478
Corporate		78,250			607,589
	$	3,891,218		$	3,419,280
Gross profit
Healthcare services	$	676,416		$	784,031
Product manufacturing and development		1,189,352			347,914
Corporate		78,250			607,588
	$	1,944,018		$	1,739,533
(Loss) income from operations
Healthcare services	$	(80,327	)	$	(151,691	)
Product manufacturing and development		108,702			(554,842	)
Corporate		(3,346,012	)		(1,535,427	)
	$	(3,317,637	)	$	(2,241,960	)
Depreciation and amortization
Healthcare services	$	30,035		$	28,968
Product manufacturing and development		262,927			309,042
Corporate		279,442			248,156
	$	572,404		$	586,166
Capital expenditures
Healthcare services	$	-		$	-
Product manufacturing and development		-			-
Corporate		-			-
	$	-		$	-
Interest expenses
Healthcare services	$	20,532		$	36,303
Product manufacturing and development		462			2,464
Corporate		122,380			128,476
	$	143,374		$	167,243
Net (loss) income
Healthcare services	$	(98,640	)	$	(185,713	)
Product manufacturing and development		48,883			(578,576	)
Corporate		(4,610,966	)		(3,172,447	)
	$	(4,660,723	)	$	(3,936,736	)

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	As of November 30, 2023		As of August 31, 2023
Total assets
Healthcare services	$	5,002,855	$	5,158,851
Product Sales		18,748,475		17,993,652
Corporate		13,493,054		12,410,544
	$	37,244,384	$	35,563,047
Accounts receivable
Healthcare services	$	672,841	$	697,440
Product Sales		1,868,387		765,388
Corporate		94,946		4,200
	$	2,636,174	$	1,467,028
Intangible assets
Healthcare services	$	111,172	$	120,163
Product Sales		3,592,425		3,818,313
Corporate		12,000,621		12,280,063
	$	15,704,218	$	16,218,539
Goodwill
Healthcare services	$	518,918	$	520,821
Product Sales		7,035,861		7,061,662
Corporate		-		-
	$	7,554,779	$	7,582,483

Note 17 – Subsequent Events

Purchase and Sale Agreement – Ophir Collection

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) (the “Action”). 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 (as hereinafter defined), subject to the contingencies outlined in the Ophir Agreement, including Court approval, which approval was received on December 1, 2023. The Ophir Agreement was effective upon execution by both parties; however, the Ophir Agreement was subject to approval by the Court.

Pursuant to the Court’s July 2, 2019 order in the Action, as modified by the Court’s February 25, 2022 order in the Action, the Successor Receiver has possession of and right to sell a certain collection of 43 gemstones, 42 of which are certified by the Gemological Institute of America, known as the “Ophir Collection”. Together, the Court’s July 2, 2019 order appointing the original receiver, the Court’s December 3, 2019, order appointing the Successor Receiver, and the Court’s February 25, 2022, order are referred to collectively as the “Receivership Orders.” The Receivership Orders authorized the Successor Receiver to take sole custody, possession, and control of the Ophir Collection and to sell, assign, transfer, convey and deliver title and rights in and to the Ophir Collection subject to the approval of the Court to protect the interests of certain identified creditors.

Within two business days following the Company’s execution of the Ophir Agreement, the Company was required to, and did, deposit $25,000 (the “Deposit”) with the Successor Receiver.

Pursuant to the terms of the Ophir Agreement, the Company agreed to pay $60,000,000 to the Successor Receiver to purchase the Ophir Collection as follows:

(i)	The Company has the right, at all times after November 21, 2023, to conduct a full and unfettered inspection of the Ophir Collection. While the Company has the right to inspect the Ophir Collection prior to closing, the Company’s inspection will not be a contingency to closing and the inability of the Company to inspect (or the Company’s decision not to inspect) the Ophir Collection prior to closing will not delay or prevent closing.
(ii)	After the Successor Receiver obtains Court approval of the Ophir Agreement, the Company will cause $59,975,000 (representing the $60,000,000 purchase price, less the Deposit) to be paid to the Successor Receiver, on or before December 19, 2023. Although such amount has not yet been delivered to the Successor Receiver, the parties continue to work toward closing.
(iii)	Within one business day thereafter, the Successor Receiver will assign, transfer, convey and deliver free and clear title and interest in and to, and possession of, the Ophir Collection to the Company.

Mast Hill Conversion of Debt on $445,000 Promissory Note

On December 21, 2023, the $454,071 total amount of principal and interest owed on MH $445,000 Note was converted to 457,128 shares of common stock at $0.99331 per share. The MH $445,000 Note is paid in full.

Interest Payment on September 2023 Mast Hill Note

On December 12, 2023, the Company made an interest-only payment of $104,712 to Mast Hill pursuant to the terms of the September 2023 Mast Hill Note.

Interest Payment on September 2023 FirstFire Note

On December 18, 2023, the Company made an interest-only payment of $8,333 to FirstFire pursuant to the terms of the September 2023 FirstFire Note.

Officer Option Grant

On January 16, 2024, the Board of Directors granted to Christopher David, the Company’s President, Chief Operating Officer and member of the Board of Directors, an option to purchase 200,000 shares of the Company’s common stock pursuant to the 2023 Equity Incentive Plan. The option was fully vested at grant and is exercisable until January 16, 2030. The option has an exercise price of $0.78 per share.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), provide a safe harbor for forward-looking statements made by or on behalf of the Company. The Company and its representatives may from time to time make written or oral statements that are “forward-looking,” including statements contained in this report and other filings with the Securities and Exchange Commission (“SEC”) and in our reports and presentations to stockholders or potential stockholders. In some cases, forward-looking statements can be identified by words such as “believe,” “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 can be found in Part I, Item 1A, “Risk Factors,” of the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2023, as the same may be updated from time to time, including in Part II, Item 1A, “Risk Factors,” of this Quarterly Report on Form 10-Q.

Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, it is not possible to foresee or identify all factors that could have a material effect on the future financial performance of the Company. The forward-looking statements in this report are made on the basis of management’s assumptions and analyses, as of the time the statements are made, in light of their experience and perception of historical conditions, expected future developments and other factors believed to be appropriate under the circumstances.

Except as otherwise required by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this Quarterly Report on Form 10-Q and the information incorporated by reference in this report to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.

Overview of the Company

When used herein, the terms the “Company,” “we,” “us” and “our” refer to Novo Integrated Sciences, Inc. and its consolidated subsidiaries. The Company owns Canadian and U.S. subsidiaries which provide, or intend to provide, essential and differentiated solutions to the delivery of multidisciplinary primary care and related wellness products through the integration of medical technology, interconnectivity, advanced therapeutics, diagnostic solutions, unique personalized product offerings, 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 now and how it will be delivered 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 and efficient 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 of continued cutting edge advancement in patient first platforms.

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First Pillar – Service Networks for Hands-on Patient Care

Our clinicians and practitioners provide certain multidisciplinary primary health care services, and related products, beyond the medical doctor first level contact identified as primary care. Our clinicians and practitioners are not licensed medical doctors, physicians, specialist, nurses or nurse practitioners. Our clinicians and practitioners are not authorized to practice primary care medicine and they are not medically licensed to prescribe pharmaceutical based product solutions.

Our team of multidisciplinary primary health care clinicians and practitioners provide assessment, diagnosis, treatment, pain management, rehabilitation, education and primary prevention for a wide array of orthopedic, musculoskeletal, sports injury, and neurological conditions across various demographics including pediatric, adult, and geriatric populations through our 16 corporate-owned clinics, a contracted network of affiliate clinics, and eldercare related long-term care homes, retirement homes, and community-based locations in Canada.

Our specialized multidisciplinary primary health care services include physiotherapy, chiropractic care, manual/manipulative therapy, occupational therapy, eldercare, massage therapy (including pre- and post-partum), acupuncture and functional dry needling, chiropody, stroke and traumatic brain injury/neurological rehabilitation, kinesiology, vestibular therapy, concussion management and baseline testing, trauma sensitive yoga and meditation for concussion-acquired brain injury and occupational stress-PTSD, women’s pelvic health programs, sports medicine therapy, assistive devices, dietitian, holistic nutrition, fall prevention education, sports team conditioning programs including event and game coverage, and private personal training.

Additionally, we continue to expand our patient care philosophy of maintaining an on-going continuous connection with our current and future patient community, beyond the traditional confines of brick-and-mortar facilities, by extending oversight of patient diagnosis, care and monitoring, directly through various Medical Technology Platforms either in-use or under development.

The occupational therapists, physiotherapists, chiropractors, massage therapists, chiropodists and kinesiologists contracted, by NHL, to provide occupational therapy, physical therapy and fall prevention assessment services are registered with the College of Occupational Therapists of Ontario, the College of Physiotherapists of Ontario, College of Chiropractors of Ontario, College of Massage Therapists of Ontario, College of Chiropodists of Ontario, and the College of Kinesiologists of Ontario regulatory authorities.

Our strict adherence to public regulatory standards, as well as self-imposed standards of excellence and regulation, have allowed us to navigate with ease through the industry’s licensing and regulatory framework. Compliant treatment, data and administrative protocols are managed through a team of highly trained, certified health care and administrative professionals. We and our affiliates provide service to the Canadian property and casualty insurance industry, resulting in a regulated framework governed by the Financial Services Commission of Ontario.

Second Pillar – Interconnected Technology for Virtual Ecosystem of Services, Products and Digital Health Offerings

Decentralization through the integration of interconnected technology platforms has been adopted and is thriving in a variety of sectors and industries such as transportation (Uber, Lyft), real estate (Zillow, Redfin, Airbnb, VRBO), used car sales (Carvana, Vroom), stock and financial markets (Robinhood, Acorns, Webull) and so many other sectors. Yet decentralization of the non-critical primary care and wellness sector of healthcare is lagging significantly in capability and benefit for patient access and delivery of services and products. The COVID-19 pandemic has taught both patients and healthcare providers the viability, importance, and benefits of decentralized access to primary care simply through the rapid adoption of telehealth/telemedicine.

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The Company’s focus on a holistic approach to patient-first health and wellness, through innovation and decentralization, includes maintaining an on-going continuous connection with our current and future patient community, beyond the traditional confines of brick-and-mortar facilities, by extending oversight of patient evaluation, diagnosis, treatment solutions, and monitoring, directly through various Medical Technology Platforms and periphery tools either in-use or under development. Through the integration and deployment of sophisticated and secure technology and periphery diagnostic tools, the Company is working to expand the reach of our non-critical primary care services and product offerings, beyond the traditional clinic locations, to geographic areas not readily providing advanced primary care service to date, including the patient’s home.

NovoConnect, the Company’s proprietary mobile application with a fully securitized tech stock, telemedicine/telehealth and remote patient monitoring fall under this Second Pillar. In October 2021, we announced the launch of MiTelemed+, Inc. (“MiTelemed”), a joint venture with EK-Tech Solutions Inc. (“EK-Tech”). MiTelemed will operate, support and expand access and functionality of iTelemed, EK-Tech’s enhanced proprietary telehealth platform. MiTelemed+, through the iTelemed platform, will allow us to offer the patient and the practitioner a sophisticated and enhanced telehealth interaction. Through the interface of sophisticated peripheral based diagnostic tools operated by skilled support workers in the patient’s remote location, we believe that the practitioner’s ability and comfort to provide a uniquely comprehensive evaluation, diagnosis, and treatment solution will be dramatically elevated.

Third Pillar – Health and Wellness Products

We believe our science first approach to product offerings further emphasizes the Company’s strategic vision to innovate, evolve, and deliver over-the-counter preventative and maintenance care solutions as well as therapeutics and personalized diagnostics that enable individualized health optimization.

As the Company’s patient base grows through the expansion of its corporate owned clinics, its affiliate network, its micro-clinic facility openings, its interconnected technology platforms, and other growth initiatives, the development and distribution of high-quality wellness product solutions is integral to (i) offering effective product solutions allowing for the customization of patient preventative care remedies and ultimately a healthier population, and (ii) maintaining an on-going relationship with our patients through the customization of patient preventative and maintenance care solutions.

The Company’s product offering ecosystem is being built through strategic acquisitions and engaging in licensing agreements with partners that share our vision to provide a portfolio of products that offer an essential and differentiated solution to health and wellness globally. Our 2021 acquisitions of Acenzia, PRO-DIP and Terragenx support this Third Pillar. On March 15, 2022, PRO-DIP was issued U.S. Patent No. 11,273,965 by the U.S. Patent and Trademark Office on March 15, 2022. The ‘965 patent relates to PRO-DIP’s novel technology for manufacturing its oral supplement pouches. On April 4, 2022, NHL was granted a Natural Product Number (NPN) by Health Canada for IoNovo GO Iodine which is the Company’s forth iodine related product to recently be granted a NPN by Health Canada following IoNovo Pure Iodine, IoNovo Iodide, and IoNovo for Kids pure iodine oral spray.

We have two reportable segments: healthcare services and product sales. During the quarter ended November 30, 2023, revenues from healthcare services and product sales were 53% and 45%, respectively, of the Company’s total revenues for the quarter.

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Recent Developments

September 2023 Mast Hill SPA

On September 12, 2023, the Company entered into a securities purchase agreement (the “September 2023 Mast Hill SPA”) with Mast Hill Fund, L.P. (“Mast Hill”), pursuant to which the Company issued an 12% promissory note (the “September 2023 Mast Hill Note”) with a maturity date of September 12, 2024 (the “September 2023 Mast Hill Maturity Date”), in the principal sum of $3,500,000. Pursuant to the terms of the September 2023 Mast Hill Note, the Company agreed to pay the principal sum to Mast Hill and to pay interest on the principal balance at the rate of 12% per annum. The September 2023 Mast Hill Note carries an original issue discount (“OID”) of $350,000. Accordingly, on the closing date, Mast Hill paid the purchase price of $3,150,000 in exchange for the September 2023 Mast Hill Note. Mast Hill may convert the September 2023 Mast Hill Note into shares of the Company’s common stock at any time at a conversion price equal to the lesser of (i) $4.50 or (ii) 91.5% of the lowest volume weighted average price of the Company’s common stock on any trading day during the five trading day period prior to the respective conversion date, subject to adjustment as provided in the September 2023 Mast Hill Note (including but not limited to price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions) as well as beneficial ownership limitations.

Pursuant to the terms of the September 2023 Mast Hill Note, the Company agreed to pay the principal sum and accrued interest as follows: (i) all accrued interest on December 12, 2023, (ii) $350,000 plus accrued interest on March 12, 2024, (iii) $350,000 plus accrued interest on April 12, 2024, (iv) $350,000 plus accrued interest on May 12, 2024, (v) $595,000 plus accrued interest on June 12, 2024, (vi) $595,000 plus accrued interest on July 12, 2024, (vii) $595,000 plus accrued interest on August 12, 2024, and (viii) all remaining amounts owed under the September 2023 Mast Hill Note on the September 2023 Mast Hill Maturity Date (each of the aforementioned payments is an “Amortization Payment”). If the Company fails to make any Amortization Payment, then Mast Hill will have the right to convert the amount of such respective Amortization Payment into shares of common stock as provided in the September 2023 Mast Hill Note at the lesser of (i) the then applicable conversion price under the September 2023 Mast Hill Note or (ii) 85% the lowest volume weighted average price of the Company’s common stock on any trading day during the five trading day period prior to the respective conversion date.

The Company may prepay the September 2023 Mast Hill Note at any time prior to the date that an Event of Default (as defined in the Note) occurs at an amount equal to the principal sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The September 2023 Mast Hill Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the September 2023 Mast Hill Note or September 2023 Mast Hill SPA.

Upon the occurrence of any Event of Default, the September 2023 Mast Hill Note shall become immediately due and payable and the Company will pay to Mast Hill an amount equal to the principal sum then outstanding plus accrued interest multiplied by 125%. Upon the occurrence of an Event of Default, additional interest will accrue from the date of the Event of Default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

The September 2023 Mast Hill SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the common stock underlying the September 2023 Mast Hill Note. Further, pursuant to the September 2023 Mast Hill SPA, the Company agreed to transfer its rights to the charges/mortgages evidenced by Instrument Nos. CE925256 (in the amount of CDN$1,600,000) and CE888785 (in the amount of CDN$1,800,000) on the property located at 1580 Rossi Drive, Tecumseh, Ontario, Canada, to Mast Hill as security for the Company’s repayment of the September 2023 Mast Hill Note. In addition to the beneficial ownership limitations provided in the September 2023 Mast Hill Note, the sum of the number of shares of common stock that may be issued under the September 2023 Mast Hill SPA and September 2023 Mast Hill Note shall be limited to 1,772,045 shares as further described in the September 2023 Mast Hill SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

The Company’s subsidiary, Acenzia Inc. (“Acenzia”), entered into a guaranty with Mast Hill on September 12, 2023. Acenzia guaranteed the repayment of the September 2023 Mast Hill Note and granted Mast Hill a security interest in Acenzia’s assets, including but not limited to, the property located at 1580 Rossi Drive, Tecumseh, Ontario, Canada.

On December 12, 2023, the Company made an interest-only payment of $104,712 to Mast Hill pursuant to the terms of the September 2023 Mast Hill Note.

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September 2023 FirstFire SPA & Note

On September 18, 2023, the Company entered into a securities purchase agreement (the “September 2023 FirstFire SPA”) with FirstFire Global Opportunities Fund, L.P. (“FirstFire”), pursuant to which the Company issued an 12% promissory note (the “September 2023 FirstFire Note”) with a maturity date of September 18, 2024, in the principal sum of $277,778. Pursuant to the terms of the September 2023 FirstFire Note, the Company agreed to pay the principal sum to FirstFire and to pay interest on the principal balance at the rate of 12% per annum. The September 2023 FirstFire Note carries an OID of $27,778. Accordingly, on the closing date, FirstFire paid the purchase price of $250,000 in exchange for the September 2023 FirstFire Note. FirstFire may convert the September 2023 FirstFire Note into the Company’s common stock, at any time at a conversion price equal to the lesser of (i) $4.50 or (ii) 91.5% of the lowest volume weighted average price of the Company’s common stock on any trading day during the five trading day period prior to the respective conversion date, subject to adjustment as provided in the September 2023 FirstFire Note (including but not limited to price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions) as well as beneficial ownership limitations.

Pursuant to the terms of the September 2023 FirstFire Note, the Company agreed to pay the principal sum and accrued interest as follows: (i) all accrued interest on December 18, 2023, (ii) $27,778 plus accrued interest on March 18, 2024, (iii) $27,778 plus accrued interest on April 18, 2024, (iv) $27,778 plus accrued interest on May 18, 2024, (v) $47,222 plus accrued interest on June 18, 2024, (vi) $47,222 plus accrued interest on July 18, 2024, (vii) $47,222 plus accrued interest on August 18, 2024, and (viii) all remaining amounts owed under the September 2023 FirstFire Note on the maturity date (each of the aforementioned payments is a “FirstFire Amortization Payment”). If the Company fails to make any FirstFire Amortization Payment, then FirstFire shall have the right to convert the amount of such respective FirstFire Amortization Payment into shares of common stock as provided in the September 2023 FirstFire Note at the lesser of (i) the then applicable conversion price under the September 2023 FirstFire Note or (ii) 85% the lowest volume weighted average price of the Company’s common stock on any trading day during the five trading day period prior to the respective conversion date.

The Company may prepay the September 2023 FirstFire Note at any time prior to the date that an event of default occurs at an amount equal to the principal sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The September 2023 FirstFire Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the September 2023 FirstFire Note or September 2023 FirstFire SPA.

Upon the occurrence of any event of default, the September 2023 FirstFire Note shall become immediately due and payable and the Company shall pay to FirstFire, in full satisfaction of its obligations hereunder, an amount equal to the principal sum then outstanding plus accrued interest multiplied by 125%. Upon the occurrence of an event of default, additional interest will accrue from the date of the event of default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

The September 2023 FirstFire SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the common stock underlying the September 2023 FirstFire Note. In addition to the beneficial ownership limitations provided in the September 2023 FirstFire Note, the sum of the number of shares of common stock that may be issued under the September 2023 FirstFire SPA and September 2023 FirstFire Note shall be limited to 480,156 as further described in the September 2023 FirstFire SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

Acenzia entered into a guaranty with FirstFire on September 18, 2023. Acenzia guaranteed the repayment of the September 2023 FirstFire Note and granted FirstFire a security interest in Acenzia’s assets, including but not limited to the property located at 1580 Rossi Drive, Tecumseh, Ontario, Canada, which is junior in priority to the security interest granted by Acenzia to FirstFire.

On December 18, 2023, the Company made an interest-only payment of $8,333 to FirstFire pursuant to the terms of the September 2023 FirstFire Note.

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Bylaws Amendment

On September 27, 2023, the Company’s Board of Directors (the “Board”) adopted an amendment (the “Bylaws Amendment”) to the Company’s bylaws that had the effect of reducing the quorum at all meetings of the Company’s stockholders for the transaction of business, except as otherwise provided by statute or by the Company’s articles of incorporation, as amended, to one-third (33⅓%) of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy. The Company’s bylaws previously provided that the holders of a majority of the voting power of all outstanding shares of capital stock of the Company entitled to vote would constitute a quorum at all meetings of stockholders for the transaction of business.

Blacksheep Master (Asset Transfer) Agreement

On September 27, 2023, the Company entered into a Master (Asset Transfer) Agreement (the “Master Agreement”) by and between the Company and Blacksheep Trust (“Blacksheep”). Pursuant to the terms of the Master Agreement, Blacksheep agreed to transfer, on such dates as agreed to by the Company and Blacksheep, to the Company certain collateral equal to $1 billion and controlled by Blacksheep (the “Collateral”). The Collateral will be used by the Company for monetization. The consideration for the Collateral is equal to 15% of the monetization, advanced within five business days of clear access to the monetization or monetization facility.

The parties to the Master Agreement intend that the transfer of Collateral will be duly validated and authenticated by third-party audit procedures, said audit will allow for the transfer and monetization of the transferred Collateral, free and clear of any liens, claims or encumbrances, from Blacksheep to the Company and that the Collateral will not be a part of Blacksheep’s property for any purposes under state or federal law.

Pursuant to the terms of the Master Agreement, Blacksheep will be entitled to an annual distribution of 10% of net profits as identified by an independent auditor based on the Company’s business activity resulting from the direct investment of any funds derived from the monetization of transferred Collateral.

The Company has the right to the Collateral for no more than 15 years from the date of monetization, with the Company’s exclusive right to repatriate the Collateral to Blacksheep sooner without penalty. Blacksheep will be permitted one seat on the Company’s Board, which position will remain available for the term of the Collateral transfer or until the Collateral is repatriated to Blacksheep.

Any draw against the monetization of the Collateral will require unanimous Board consent.

The Master Agreement contains customary representations, warranties, and covenants of the Company and Blacksheep.

2023 Equity Incentive Plan

On July 26, 2023 and September 29, 2023, the Company’s Board of Directors and stockholders, respectively, approved the Novo Integrated Sciences, Inc. 2023 Plan. Under the 2023 Plan, a total of 2,500,000 shares of common stock are authorized for issuance pursuant to the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares or other cash- or stock-based awards to officers, directors, employees and eligible consultants to the Company or its subsidiaries. As of November 30, 2023, the 2023 Plan had 2,500,000 shares available for award.

Stock Issuance in Exchange for Certain NHL Non-Voting Special Shares

On October 9, 2023, the Company issued 73,767 restricted shares of common stock in exchange for certain non-voting special shares of NHL, previously issued in connection with NHL’s Share Exchange Agreement with the Terragenx shareholders, the Company’s Asset Purchase Agreement with Mr. Terrence Mullins, and an employment agreement with Mr. Terrence Mullins, each of which closed on November 11, 2021.

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Reverse Stock Split

On November 6, 2023, the Company effectuated a 1-for-10 reverse stock split (the “Reverse Stock Split”) effective immediately after the close of trading on the Nasdaq Capital Market (“Nasdaq”) and the Company’s common stock began trading on Nasdaq on a Reverse Stock Split-adjusted basis on November 7, 2023. As a result of the Reverse Stock Split, every 10 pre-split shares of common stock outstanding became one share of common stock, with fractional shares rounded up to the next higher whole share. The Reverse Stock Split did not affect the number of authorized shares of common stock, the par value of the common stock, or modify any rights or preferences of shares of the Company’s common stock. Proportionate adjustments will be made to the exercise prices and the number of shares underlying the Company’s outstanding equity awards and warrants, as applicable.

Purchase and Sale Agreement – Ophir Collection

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) (the “Action”). 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 (as hereinafter defined), subject to the contingencies outlined in the Ophir Agreement, including Court approval, which was received on December 1, 2023. The Ophir Agreement was effective upon execution by both parties; however, the Ophir Agreement was subject to approval by the Court.

Pursuant to the Court’s July 2, 2019 order in the Action, as modified by the Court’s February 25, 2022 order in the Action, the Successor Receiver has possession of and right to sell a certain collection of 43 gemstones, 42 of which are certified by the Gemological Institute of America, known as the “Ophir Collection”. Together, the Court’s July 2, 2019 order appointing the original receiver, the Court’s December 3, 2019, order appointing the Successor Receiver, and the Court’s February 25, 2022, order are referred to collectively as the “Receivership Orders.” The Receivership Orders authorized the Successor Receiver to take sole custody, possession, and control of the Ophir Collection and to sell, assign, transfer, convey and deliver title and rights in and to the Ophir Collection subject to the approval of the Court to protect the interests of certain identified creditors.

Within two business days following the Company’s execution of the Ophir Agreement, the Company was required to, and did, deposit $25,000 (the “Deposit”) with the Successor Receiver.

Pursuant to the terms of the Ophir Agreement, the Company agreed to pay $60,000,000 to the Successor Receiver to purchase the Ophir Collection as follows:

(i)	The Company has the right, at all times after November 21, 2023, to conduct a full and unfettered inspection of the Ophir Collection. While the Company has the right to inspect the Ophir Collection prior to closing, the Company’s inspection will not be a contingency to closing and the inability of the Company to inspect (or the Company’s decision not to inspect) the Ophir Collection prior to closing will not delay or prevent closing.
(ii)	After the Successor Receiver obtains Court approval of the Ophir Agreement, the Company will cause $59,975,000 (representing the $60,000,000 purchase price, less the Deposit) to be paid to the Successor Receiver, on or before December 19, 2023. Although such amount has not yet been delivered to the Successor Receiver, the parties continue to work toward closing.
(iii)	Within one business day thereafter, the Successor Receiver will assign, transfer, convey and deliver free and clear title and interest in and to, and possession of, the Ophir Collection to the Company.

As a result of entry into the Ophir Agreement, the Company no longer intends to pursue a transaction with SwagCheck Inc. (“SWAG”). The Share Purchase Agreement, dated as of December 23, 2022, by and among the Company, SWAG and all SWAG shareholders, as amended, previously terminated pursuant to its terms.

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Nasdaq Notification – Compliance of Minimum Bid Price Requirement

On November 22, 2023, the Company received notice from 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 Nasdaq.

Clawback Policy

On November 22, 2023, the Company’s Board of Directors adopted a Compensation Recovery Policy (the “Policy”). The Policy is intended to further the Company’s pay-for-performance philosophy and to comply with applicable law by providing for the reasonably prompt recovery of certain incentive-based compensation received by executive officers in the event of an accounting restatement. The Policy is intended to comply with, and will be interpreted in a manner consistent with, Section 10D of the Exchange Act, with Exchange Act Rule 10D-1 and with the Nasdaq listing standards.

Pursuant to the Policy, if the Company is required to prepare an accounting restatement due to the material noncompliance by the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (an “Accounting Restatement”), then the Compensation Committee must determine the Excess Compensation (as hereinafter defined), if any, that must be recovered. The Company’s obligation to recover Excess Compensation is not dependent on if or when the restated financial statements are filed. The Company must recover Excess Compensation reasonably promptly and executive officers are required to repay Excess Compensation to the Company, subject to the terms of the Policy.

The Policy applies to certain incentive-based compensation that is received on or after November 1, 2023, during the three completed fiscal years immediately preceding the Accounting Restatement determination date, as provided in the Policy (the “Covered Period”) while the Company has a class of securities listed on a national securities exchange. The incentive-based compensation is considered “Clawback Eligible Incentive-Based Compensation” if the incentive-based compensation is received by a person after such person became an executive officer and the person served as an executive officer at any time during the performance period to which the incentive-based compensation applies. The “Excess Compensation” that is subject to recovery under the Policy is the amount of Clawback Eligible Incentive-Based Compensation that exceeds the amount of Clawback Eligible Incentive-Based Compensation that otherwise would have been received had such Clawback Eligible Incentive-Based Compensation been determined based on the restated amounts (this is referred to in the listing standards as “erroneously awarded incentive-based compensation”).

Novo Integrated – Mast Hill Fund, L.P.

On February 23, 2023, the Company entered into a securities purchase agreement (the “Mast Hill SPA”) with Mast Hill Fund, L.P. (“Mast Hill”), pursuant to which the Company issued an 12% unsecured promissory note (the “Mast Hill Note”) with a maturity date of February 23, 2024 (the “Mast Hill Maturity Date”), in the principal sum of $573,000 (the “Mast Hill Principal Sum”). In addition, the Company issued a common stock purchase warrant for the purchase of up to 1,000,000 shares of the Company’s common stock (the “Mast Hill Warrant”) to Mast Hill pursuant to the Mast Hill SPA. Pursuant to the terms of the Mast Hill Note, the Company agreed to pay the Mast Hill Principal Sum to Mast Hill and to pay interest on the principal balance at the rate of 12% per annum. The Mast Hill Note carries an OID of $57,300. Accordingly, on the closing date, Mast Hill paid the purchase price of $515,700 in exchange for the Mast Hill Note and the Mast Hill Warrant. Mast Hill may convert the Mast Hill Note into shares of the Company’s common stock at any time at a conversion price equal to $0.175 per share, subject to adjustment as provided in the Mast Hill Note (including but not limited to certain price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions) as well as certain beneficial ownership limitations.

Pursuant to the terms of the Mast Hill Note, the Company agreed to pay accrued interest monthly as well as the Mast Hill Principal Sum as follows: (i) $57,300 on August 23, 2023, (ii) 57,300 on September 23, 2023, (iii) $57,300 on October 23, 2023, (iv) $100,000 on November 23, 2023, (v) $100,000 on December 23, 2023, (vi) $100,000 on January 23, 2024, and (vii) all remaining amounts owed under the Mast Hill Note on the Mast Hill Maturity Date (each of the aforementioned payments are an “Amortization Payment”). If the Company fails to make any Amortization Payment, then Mast Hill shall have the right to convert the amount of such respective Amortization Payment into shares of common stock as provided in the Mast Hill Note at the lesser of (i) the then applicable conversion price under the Mast Hill Note, or (ii) 85% of the lowest VWAP of the Company’s common stock on any trading day during the five trading days prior to the respective conversion date.

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The Company may prepay the Mast Hill Note at any time prior to the date that an Event of Default (as defined in the Mast Hill Note) occurs at an amount equal to the Mast Hill Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The Mast Hill Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the Mast Hill Note, Mast Hill Warrant, or Mast Hill SPA.

Upon the occurrence of any Event of Default, the Mast Hill Note shall become immediately due and payable and the Company shall pay to Mast Hill, in full satisfaction of its obligations hereunder, an amount equal to the Mast Hill Principal Sum then outstanding plus accrued interest multiplied by 125%. Upon the occurrence of an Event of Default, additional interest will accrue from the date of the Event of Default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

The Mast Hill Warrant is exercisable for five years from February 23, 2023, at an exercise price of $0.25 per share, subject to adjustment as provided in the Mast Hill Warrant. The Mast Hill Warrant also contains certain cashless exercise provisions as well as price protection provisions providing for adjustment of the number of shares of the Company’s common stock issuable upon exercise of the Mast Hill Warrant and the exercise price in case of future dilutive offerings, subject to certain customary exempt transactions. The estimated value of the warrants of $86,327 was determined using the Black-Scholes option pricing model with the following assumptions:

● Expected life of 5.0 years;

● Volatility of 252%;

● Dividend yield of 0%; and

● Risk free interest rate of 4.09%

As additional consideration for the purchase of the Mast Hill Note and pursuant to the terms of the Mast Hill SPA, on February 24, 2023, the Company issued 95,500 restricted shares of common stock (the “Commitment Shares”) to Mast Hill at closing. The Mast Hill SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the Commitment Shares as well as the shares of common stock underlying the Mast Hill Note and the Mast Hill Warrant. In addition to the beneficial ownership limitations provided in the Mast Hill Note and the Mast Hill Warrant, the sum of the number of shares of common stock that may be issued under the Mast Hill SPA (including the Commitment Shares), the Mast Hill Note, and the Mast Hill Warrant shall be limited to 19.99% of the issued and outstanding common stock on the closing date (equal to 2,772,045 shares) as further described in the Mast Hill SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

On August 24, 2023, the total principal and interest of $580,778 owed on the $573,000 Mast Hill Note was converted to 522,777 shares of the Company’s common stock at $1.11095 per share. The MH $573,000 Note is paid in full.

On September 18, 2023, Mast Hill fully exercised all warrants issued pursuant to the terms and conditions of the $573,000 Mast Hill Warrant Agreement, dated February 23, 2023. Under certain cashless exercise provisions, as well as price protection provisions providing for adjustment of the number of shares of the Company’s common stock issuable upon exercise of the Mast Hill Warrant, the Company issued 53,567 shares of the Company’s common stock.

Novo Integrated – FirstFire Global Opportunities Fund, LLC

On March 21, 2023, the Company entered into a securities purchase agreement (the “SPA”) with FirstFire Global Opportunities Fund, LLC (“FirstFire”) pursuant to which the Company issued an 12% unsecured promissory note (the “2023 FirstFire Note”) with a maturity date of March 21, 2024, in the principal sum of $573,000 (the “Principal Sum”). In addition, the Company issued a common stock purchase warrant for the purchase of up to 100,000 shares of the Company’s common stock (the “2023 FirstFire Warrant”) to FirstFire pursuant to the SPA. Pursuant to the terms of the 2023 FirstFire Note, the Company agreed to pay the Principal Sum to FirstFire and to pay interest on the principal balance at the rate of 12% per annum. The 2023 FirstFire Note carries an OID of $57,300. Accordingly, on the closing date, FirstFire paid the purchase price of $515,700 in exchange for the 2023 FirstFire Note and the 2023 FirstFire Warrant. FirstFire may convert the 2023 FirstFire Note into the Company’s common stock at any time at a conversion price equal to $1.75 per share, subject to adjustment as provided in the 2023 FirstFire Note (including but not limited to certain price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions) as well as certain beneficial ownership limitations.

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Pursuant to the terms of the 2023 FirstFire Note, the Company agreed to pay accrued interest monthly as well as the Principal Sum as follows: (i) $57,300 on September 21, 2023, (ii) 57,300 on October 21, 2023, (iii) $57,300 on November 21, 2023, (iv) $100,000 on December 21, 2023, (v) $100,000 on January 21, 2024, (vi) $100,000 on February 21, 2024, and (vii) all remaining amounts owed under the 2023 FirstFire Note on the maturity date (each of the aforementioned payments are an “Amortization Payment”). If the Company fails to make any Amortization Payment, then FirstFire shall have the right to convert the amount of such respective Amortization Payment into shares of common stock as provided in the 2023 FirstFire Note at the lesser of (i) the then applicable conversion price under the 2023 FirstFire Note or (ii) 85% of the lowest VWAP of the Company’s common stock on any trading day during the five trading days prior to the respective conversion date.

The Company may prepay the 2023 FirstFire Note at any time prior to the date that an event of default (as provided in the 2023 FirstFire Note) occurs at an amount equal to the Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The 2023 FirstFire Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the 2023 FirstFire Note, the 2023 FirstFire Warrant, or SPA.

Upon the occurrence of any event of default, the 2023 FirstFire Note shall become immediately due and payable and the Company shall pay to FirstFire, in full satisfaction of its obligations hereunder, an amount equal to the Principal Sum then outstanding plus accrued interest multiplied by 125% (the “Default Amount”). Upon the occurrence of an Event of Default, additional interest will accrue from the date of the Event of Default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

The 2023 FirstFire Warrant is exercisable for five years from March 21, 2023, at an exercise price of $2.50 per share, subject to adjustment as provided in the 2023 FirstFire Warrant. The 2023 FirstFire Warrant also contains certain cashless exercise provisions as well as price protection provisions providing for adjustment of the number of shares of common stock issuable upon exercise of the 2023 FirstFire Warrants and the exercise price in case of future dilutive offerings, subject to certain customary exempt transactions. The estimated value of the warrants of $93,811 was determined using the Black-Scholes option pricing model with the following assumptions:

● Expected life of 5.0 years;

● Volatility of 251%;

● Dividend yield of 0%; and

● Risk free interest rate of 3.73%

As additional consideration for the purchase of the 2023 FirstFire Note and pursuant to the terms of the SPA, on March 22, 2023, the Company issued 95,500 restricted shares of the Company’s common stock (the “Commitment Shares”) to FirstFire at closing. The SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the Commitment Shares as well as the shares of common stock underlying the 2023 FirstFire Note and the 2023 FirstFire Warrant. In addition to the beneficial ownership limitations provided in the 2023 FirstFire Note and the 2023 FirstFire Warrant, the sum of the number of shares of common stock that may be issued under the SPA (including the Commitment Shares), the 2023 FirstFire Note, and 2023 FirstFire Warrant shall be limited to 1,000,000 shares as further described in the SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

On September 21, 2023, the total principal and interest of $577,521 owed on the $573,000 FirstFire Note was converted to 519,845 restricted shares of the Company’s common stock at $1.11095 per share. The FirstFire $573,000 Note is paid in full.

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On October 12, 2023, FirstFire fully exercised all warrants issued under the terms and conditions of the $573,000 FirstFire Warrant Agreement, dated March 21, 2023. Under certain cashless exercise provisions, as well as price protection provisions providing for adjustment of the number of shares of the Company’s common stock issuable upon exercise of the Mast Hill Warrant, the Company issued 53,532 shares of the Company’s common stock.

Novo Integrated – Mast Hill Fund, L.P. $445,000 Note, SPA, and Warrant

On June 20, 2023, the Company entered into a securities purchase agreement (the “MH $445,000 SPA”) with Mast Hill, pursuant to which the Company issued an 12% unsecured promissory note (the “MH $445,000 Note”) with a maturity date of June 20, 2024 (the “MH $445,000 Maturity Date”), in the principal sum of $445,000 (the “MH $445,000 Principal Sum”). In addition, the Company issued a common stock purchase warrant for the purchase of up to 77,662 shares of the Company’s common stock (the “MH $445,000 Warrant”) to Mast Hill pursuant to the MH $445,000 SPA. Pursuant to the terms of the MH $445,000 Note, the Company agreed to pay the MH $445,000 Principal Sum to Mast Hill and to pay interest on the principal balance at the rate of 12% per annum. The MH $445,000 Note carries an OID of $44,500. Accordingly, on the Closing Date (as defined in the MH $445,000 SPA), Mast Hill paid the purchase price of $400,500 in exchange for the MH $445,000 Note and MH $445,000 Warrant. Mast Hill may convert the MH $445,000 Note into the Company’s common stock at any time at a conversion price equal to $1.75 per share, subject to adjustment as provided in the MH $445,000 Note (including but not limited to certain price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions), as well as certain beneficial ownership limitations.

Pursuant to the terms of the MH $445,000 Note, the Company agreed to pay accrued interest monthly as well as the MH $445,000 Principal Sum as follows: (i) $44,500 on December 20, 2023, (ii) $44,500 on January 20, 2024, (iii) $44,500 on February 20, 2024, (iv) $77,661 on March 20, 2024, (v) $77,661 on April 20, 2024, (vi) $77,661 on May 20, 2024, and (vii) all remaining amounts owed under the MH $445,000 Note on the MH $445,000 Maturity Date (each of the aforementioned payments are an “MH $445,000 Amortization Payment”). If the Company fails to make any MH $445,000 Amortization Payment, then Mast Hill shall have the right to convert the amount of such respective MH $445,000 Amortization Payment into shares of common stock as provided in the MH $445,000 Note at the lesser of (i) the then applicable conversion price under the MH $445,000 Note or (ii) 85% of the lowest VWAP of the common stock on any trading day during the five trading days prior to the respective conversion date.

The Company may prepay the MH $445,000 Note at any time prior to the date that an Event of Default (as defined in the Note) (each an “MH $445,000 Event of Default”) occurs at an amount equal to the MH $445,000 Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The MH $445,000 Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the MH $445,000 Note, the MH $445,000 Warrant, or the MH $445,000 SPA.

Upon the occurrence of any MH $445,000 Event of Default, the MH $445,000 Note shall become immediately due and payable and the Company shall pay to Mast Hill, in full satisfaction of its obligations hereunder, an amount equal to the MH $445,000 Principal Sum then outstanding plus accrued interest multiplied by 125%. Upon the occurrence of an MH $445,000 Event of Default, additional interest will accrue from the date of the MH $445,000 Event of Default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

The MH $445,000 Warrant is exercisable for five years from June 20, 2023, at an exercise price of $2.50 per share, subject to adjustment as provided in the MH $445,000 Warrant. The MH $445,000 Warrant also contains certain cashless exercise provisions, as well as price protection provisions providing for adjustment of the number of shares of common stock issuable upon exercise of the MH $445,000 Warrant and the exercise price in case of future dilutive offerings, subject to certain customary exempt transactions. The estimated value of the warrants of $77,856 was determined using the Black-Scholes option pricing model with the following assumptions:

● Expected life of 5.0 years;

● Volatility of 251%;

● Dividend yield of 0%; and

● Risk free interest rate of 3.96%

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As additional consideration for the purchase of the MH $445,000 Note and pursuant to the terms of the MH $445,000 SPA, the Company issued 74,167 restricted shares of the Company’s common stock (the “MH $445,000 Commitment Shares”) to Mast Hill at closing. The MH $445,000 SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the MH $445,000 Commitment Shares as well as the shares of common stock underlying the MH $445,000 Note and MH $445,000 Warrant. In addition to the beneficial ownership limitations provided in the MH $445,000 Note and MH $445,000 Warrant, the sum of the number of shares of common stock that may be issued under the MH $445,000 SPA (including the MH $445,000 Commitment Shares), MH $445,000 Note, and MH $445,000 Warrant shall be limited to 1,772,045 as further described in the MH $445,000 SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

Specific to the MH $445,000 Note, on July 20, 2023, the Company made a monthly interest payment of $4,243. On August 21, 2023, the Company made a monthly interest payment of $4,535. On September 21, 2023, the Company made a monthly interest payment of $4,535. On October 20, 2023, the Company made a monthly interest payment of $4,389.

On October 23, 2023, Mast Hill fully exercised all warrants issued pursuant to the terms and conditions of the MH $445,000 Mast Hill Warrant Agreement, dated June 20, 2023. Under certain cashless exercise provisions, as well as price protection provisions providing for adjustment of the number of shares of the Company’s common stock issuable upon exercise of the Mast Hill Warrant, the Company issued 138,703 restricted shares of the Company’s common stock.

On December 21, 2023, the total principal and interest of $454,071 owed on the MH $445,00 Note was converted to 457,128 shares of the Company’s common stock at $1.11095 per share. The MH $445,000 Note is paid in full.

Stock Issuances in Connection with S-1 Warrant Exercises

During the period ended November 30, 2023, the Company issued 240,400 shares of common stock to certain warrant holders upon exercise of their warrants issued pursuant to the prospectus that forms a part of the Company’s Registration Statement on Form S-1 (File No. 333-267401) declared effective by the SEC on October 13, 2022 (the “S-1 Warrants”).

Stock Issuance – Consulting Agreements

During the period ended November 30, 2023, the Company issued 375,000 restricted shares of common stock as consideration for consulting services.

For the three months ended November 30, 2023 compared to the three months ended November 30, 2022

Revenues for the three months ended November 30, 2023 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 is 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 three months ended November 30, 2023 to the same period in 2022.

Cost of revenues for the three months ended November 30, 2023 was $1,947,200, representing an increase of $267,453, or 16%, from $1,679,747 for the same period in 2022. Cost of revenues as a percentage of revenue for our healthcare and product sales segments was 67% and 33%, respectively, for the three months ended November 30, 2023. The cost of revenue for our healthcare and product sales segment was 61% and 56%, respectively, for the same period in 2022. The overall change in cost of revenues as a percentage of revenue for our product sales segment was principally due to the change in product costs.

Operating costs for the three months ended November 30, 2023 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.

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Interest expense for the three months ended November 30, 2023 was $143,374, representing a decrease of $23,869, or 14%, from $167,243 for the same period in 2022. The decrease was due to cash payment and conversion of some of the Company’s convertible notes to common stock as of November 30, 2023.

Amortization of debt discount for the three months ended November 30, 2023 was $1,075,928, representing a decrease of $414,585, or 28%, from $1,490,513 for the same period in 2022. The decrease was due to convertible notes which were settled during the period.

Foreign currency transaction loss for the three months ended November 30, 2023 was $59,358 compared to $39,301 for the same period in 2022, representing an increase of $20,057, or 51%. Acenzia and Terragenx both have outstanding debt recorded on their books that is payable in U.S. Dollars. Prior period balance related to the outstanding debt payable in U.S. Dollars.

Net loss attributed to Novo Integrated Sciences, Inc. for the three months ended November 30, 2023 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.

Liquidity and Capital Resources

As shown in the accompanying unaudited condensed consolidated financial statements, for the three months ended November 30, 2023, the Company had a net loss of $4,660,723.

During the three months ended November 30, 2023, the Company used cash in operating activities of $2,152,358 compared to $278,237 of cash used in operating activities for the same period in 2022. The principal reason for the increase in cash used in operating activities was the net loss incurred, the changes in noncash expenses and changes in operating asset and liability accounts.

During the three months ended November 30, 2023 and 2022, the Company did not have any cash flows from investing activities.

During the three months ended November 30, 2023, the Company had cash provided by financing activities of $3,296,272 compared to cash used by financing activities of $1,034,021 for the same period in 2022. The principal reason for the increase in cash provided by financing activities was the $3,314,153 proceeds received from the issuance of convertible notes and the $240,400 proceeds received from the exercise of warrants, offset by $72,402 repayment to related parties, $183,100 repayment of notes payable, and $2,779 repayment for finance leases. In the same period for 2022, the Company received $1,795,000 from the sale of common stock, net of offering costs, offset by $2,777,778 repayment of convertible notes, $48,480 repayment to related parties, and $2,763 repayment for finance leases.

For the three months ended November 30, 2023, the Company’s total revenue from all clinic and eldercare related contracted services was $2,044,510, representing a 1% increase of $23,297 compared to $2,021,213 during the three-month period ended November 30, 2022.

Our capital requirements going forward will consist of financing our operations until we are able to reach a level of revenues and gross margins adequate to equal or exceed our ongoing operating expenses. We do not have any credit agreement or source of liquidity immediately available to us.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Critical Accounting Policies and Estimates

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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We believe that the following critical policies affect our more significant judgments and estimates used in the preparation of our financial statements.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. This applies in particular to going concern assessment, useful lives of non-current assets, impairment of non-current assets, allowance for doubtful accounts, allowance for slow moving and obsolete inventory, valuation of share-based compensation and warrants, valuation of derivative liability, and valuation allowance for deferred tax assets. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Property and Equipment

Property and equipment are stated at cost less depreciation and impairment. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the declining balance method for substantially all assets with estimated lives as follows:

Building	30 years
Leasehold improvements	5 years
Clinical equipment	5 years
Computer equipment	3 years
Office equipment	5 years
Furniture and fixtures	5 years

The Company has not changed its estimate for the useful lives of its property and equipment, but would expect that a decrease in the estimated useful lives of property and equipment of 20% would result in an annual increase to depreciation expense of approximately $51,436, and an increase in the estimated useful lives of property and equipment of 20% would result in an annual decrease to depreciation expense of approximately $51,436.

Intangible Assets

The Company’s intangible assets are being amortized over their estimated useful lives as follows:

Land use rights	50 years (the lease period)
Intellectual property	7 years
Customer relationships	5 years
Brand names	7 years

The intangible assets with finite useful lives are reviewed for impairment when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. The Company has not changed its estimate for the useful lives of its intangible assets but would expect that a decrease in the estimated useful lives of intangible assets of 20% would result in an annual increase to amortization expense of approximately $500,568, and an increase in the estimated useful lives of intangible assets of 20% would result in an annual decrease to amortization expense of approximately $333,712.

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Long-Lived Assets

The Company applies the provisions of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets, including right-of-use assets, used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal.

Right-of-use Assets

The Company’s right-of-use assets consist of leased assets recognized in accordance with ASC 842, Leases, which requires lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liability represents the Company’s obligation to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the condensed consolidated balance sheet and are expensed on a straight-line basis over the lease term in the condensed consolidated statements of operations and comprehensive loss. The Company determines the lease term by agreement with the lessor. In cases where the lease does not provide an implicit interest rate, the Company uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.

Goodwill

Goodwill represents the excess of purchase price over the underlying net assets of businesses acquired. Under U.S. GAAP, goodwill is not amortized but is subject to annual impairment tests. The Company recorded goodwill related to its acquisition of APKA Health, Inc. (“APKA”) during the fiscal year ended August 31, 2017, Executive Fitness Leaders (“EFL”) during the fiscal year ended August 31, 2018, Action Plus Physiotherapy Rockland (“Rockland”) during the fiscal year ended August 31, 2019, Acenzia, Inc. (“Acenzia”) during fiscal year ended August 31, 2021, and 1285 Canada, and Fairway Physiotherapy and Sports Injury Clinic (“Fairway”) during fiscal year ended August 31, 2022. Based on its review at November 30, 2023, the Company believes there was no impairment of its goodwill.

Accounts Receivable

Accounts Receivable are recorded, net of allowance for doubtful accounts and sales returns. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentration, customer credit worthiness, current economic trends, and changes in customer payment patterns to determine if the allowance for doubtful accounts is adequate. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Delinquent account balances are written-off after management has determined that the likelihood of collection is not probable and known bad debts are written off against the allowance for doubtful accounts when identified. The Company has not changed its methodology for estimating allowance for doubtful accounts and historically the change in estimate has not been significant to the Company’s condensed consolidated financial statements. If there is a deterioration of the Company’s customers’ ability to pay or if future write-offs of receivables differ from those currently anticipated, the Company may have to adjust its allowance for doubtful accounts, which would affect earnings in the period the adjustments are made.

Inventory

Inventories are valued at the lower of cost (determined by the first in, first out method) and net realizable value. Management compares the cost of inventories with the net realizable value and allowance is made for writing down their inventories to net realizable value, if lower. Inventory is segregated into three areas: raw materials, work-in-process and finished goods. The Company periodically assessed its inventory for slow moving and/or obsolete items and any change in the allowance is recorded in cost of revenue in the accompanying condensed consolidated statements of operations and comprehensive loss. If any are identified an appropriate allowance for those items is made and/or the items are deemed to be impaired.

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Income Taxes

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company has not changed its methodology for estimating the valuation allowance. A change in valuation allowance affects earnings in the period the adjustments are made and could be significant due to the large valuation allowance currently established.

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented.

Revenue Recognition

The Company’s revenue recognition reflects the updated accounting policies as per the requirements of FASB’s Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“Topic 606”). As sales are and have been primarily from providing healthcare services, the Company has no significant post-delivery obligations.

Revenue from providing healthcare and healthcare related services and product sales are recognized under Topic 606 in a manner that reasonably reflects the delivery of its products and services to customers in return for expected consideration and includes the following elements:

● executed contracts with the Company’s customers that it believes are legally enforceable;

● identification of performance obligations in the respective contract;

● determination of the transaction price for each performance obligation in the respective contract;

● allocation the transaction price to each performance obligation; and

● recognition of revenue only when the Company satisfies each performance obligation.

These five elements, as applied to the Company’s revenue category, are summarized below:

● Healthcare and healthcare related services - gross service revenue is recorded in the accounting records at the time the services are provided (point-in-time) on an accrual basis at the provider’s established rates. The Company reserves a provision for contractual adjustment and discounts that are deducted from gross service revenue. The Company reports revenues net of any sales, use and value added taxes.

● Product sales - revenue is recorded at the point of time of delivery

In arrangements where another party is involved in providing specified services to a customer, the Company evaluates whether it is the principal or agent. In this evaluation, the Company considers if the Company obtains control of the specified goods or services before they are transferred to the customer, as well as other indicators such as the party primarily responsible for fulfillment, inventory risk, and discretion in establishing price. For product sales where the Company is not the principal, the Company recognizes revenue on a net basis. For the periods presented, revenue for arrangements where the Company is the agent was not material.

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Derivative Financial Instruments

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815. The Company applies the guidance in ASC 815-40-35-12 to determine the order in which each convertible instrument would be evaluated for derivative classification.

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to the fair value of derivatives.

Stock-Based Compensation

The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the requisite service period. The Company recognizes in the condensed consolidated statements of operations and comprehensive loss the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.

Basic and Diluted Earnings Per Share

Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share. Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS assumes that all dilutive securities are converted. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

Foreign Currency Transactions and Comprehensive Income

U.S. GAAP generally requires recognized revenue, expenses, gains and losses be included in net income. Certain statements, however, require entities to report specific changes in assets and liabilities, such as gain or loss on foreign currency translation, as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. The functional currency of the Company’s Canadian subsidiaries is the Canadian dollar and the functional currency of the parent is the United States dollar. Translation gains (losses) are classified as an item of other comprehensive income in the stockholders’ equity section of the condensed consolidated balance sheet.

New Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying condensed consolidated financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

Recent accounting pronouncements issued by the FASB, the American Institute of Certified Public Accountants and the SEC did not or are not believed by management to have a material effect on the Company’s condensed consolidated financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company’s Chief Executive Officer and Principal Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of November 30, 2023. Based upon such evaluation, the Chief Executive Officer and Principal Financial Officer have concluded that, as of November 30, 2023, the Company’s disclosure controls and procedures were not effective as required under Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or 15d-15 of the Exchange Act that occurred during the period ended November 30, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Except as set forth herein, as of the date of this Quarterly Report on Form 10-Q, there are no material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party or which our property is the subject. In addition, none of our officers, directors, affiliates or 5% stockholders (or any associates thereof) is a party adverse to us, or has a material interest adverse to us, in any material proceeding.

ITEM 1A. RISK FACTORS

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the period ended November 30, 2023, the Company issued 375,000 restricted shares of common stock as consideration for consulting services.

On September 21, 2023, the Company issued 519,845 restricted shares of common stock as consideration for the total principal and interest of $577,521 owed on the $573,000 FirstFire Note.

On October 9, 2023, the Company issued 73,767 restricted shares of common stock in exchange for certain non-voting special shares of NHL, previously issued in connection with NHL’s Share Exchange Agreement with the Terragenx shareholders, the Company’s Asset Purchase Agreement with Mr. Terrence Mullins, and an employment agreement with Mr. Terrence Mullins, each of which closed on November 11, 2021.

On October 23, 2023, the Company issued 138,703 restricted shares of common stock for fully exercised warrants issued pursuant to the terms and conditions of the $445,000 Mast Hill Warrant Agreement, dated June 20, 2023.

The above sales were made pursuant to an exemption from registration as set forth in Regulation S under the Securities Act, Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

There have been no defaults in any material payments during the covered period.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

(a) On January 16, 2024, the Board of Directors granted to Christopher David, the Company’s President, Chief Operating Officer and member of the Board of Directors, an option to purchase 200,000 shares of the Company’s common stock pursuant to the 2023 Equity Incentive Plan. The option was fully vested at grant and is exercisable until January 16, 2030. The option has an exercise price of $0.78 per share.

(b) There have been no material changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors since the Company last provided disclosure in response to the requirements of Item 407(c)(3) of Regulation S-K.

(c) During the quarter ended November 30, 2023, no director or officer of the Company adopted or terminated a contract, instruction or written plan for the purchase or sale of securities of the Company intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) and/or a non-Rule 10b5-1 trading arrangement.

52

ITEM 6. EXHIBITS

Exhibit Number	Description of Document
3.1	Amendment to the registrant’s bylaws, dated September 27, 2023 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 27, 2023).
10.1	Promissory Note, dated as of September 12, 2023, by and between Novo Integrated Sciences, Inc. and Mast Hill Fund, L.P. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 18, 2023).
10.2	Securities Purchase Agreement, dated as of September 12, 2023, by and between Novo Integrated Sciences, Inc. and Mast Hill Fund, L.P. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on September 18, 2023).
10.3	Guaranty, dated as of September 12, 2023, by and between Acenzia Inc. and Mast Hill Fund, L.P. (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Commission on September 18, 2023).
10.4	Promissory Note, dated as of September 18, 2023, by and between Novo Integrated Sciences, Inc. and FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 22, 2023).
10.5	Securities Purchase Agreement, dated as of September 18, 2023, by and between Novo Integrated Sciences, Inc. and FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on September 22, 2023).
10.6	Guaranty, dated as of September 18, 2023, by and between Acenzia Inc. and FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Commission on September 22, 2023).
10.7	Master (Asset Transfer) Agreement, dated as of September 27, 2023, by and between the registrant and Blacksheep Trust (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 28, 2023).
10.8	Purchase and Sale Agreement, dated November 21, 2023, by and between the registrant Blake Alsbrook, solely in his capacity as Court-appointed successor receiver in Ocean Thermal Energy Corporation v. C. Robert Coe II, et al., United States District Court for the Central District of California Case No. 2:19-cv-04299 VAP (JPRx) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on November 27, 2023).
10.7	2023 Equity Incentive Plan (incorporated by reference to Exhibit 10.54 to the Company’s Annual Report on Form 10-K filed with the Commission on December 14, 2023).
31.1*	Rule 13a-14(a) Certification of Principal Executive Officer.
31.2*	Rule 13a-14(a) Certification of Principal Financial Officer.
32.1**	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Principal Executive Officer and Principal Financial Officer.
101.INS*	Inline XBRL Instance Document
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB*	Inline XBRL Taxonomy Extension Labels Linkbase
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase
104*	Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.

** Furnished herewith

53

SIGNATURES

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

	NOVO INTEGRATED SCIENCES, INC.
Dated: January 22, 2024	By:	/s/ Robert Mattacchione
		Robert Mattacchione
		Chief Executive Officer (principal executive officer)
Dated: January 22, 2024	By:	/s/ Vivek Sethi
		Vivek Sethi
		Principal Financial Officer (principal financial officer and principal accounting officer)

54

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Robert Mattacchione, certify that:

1.	I have reviewed this quarterly report on Form 10-Q for the quarter ended November 30, 2023 of Novo Integrated Sciences, Inc.; and
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; and
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; and
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 22, 2024	By:	/s/ Robert Mattacchione
		Robert Mattacchione
		Chief Executive Officer (principal executive officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Vivek Sethi, certify that:

1.	I have reviewed this quarterly report on Form 10-Q for the quarter ended November 30, 2023 of Novo Integrated Sciences, Inc.; and
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; and
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; and
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 22, 2024	By:	/s/ Vivek Sethi
		Vivek Sethi
		Principal Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Novo Integrated Sciences, Inc. (the “Company”) on Form 10-Q for the quarter ended November 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert Mattacchione, Chief Executive Officer of the Company, and I, Vivek Sethi, CPA CA, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: January 22, 2024	/s/ Robert Mattacchione
	Robert Mattacchione, Chief Executive Officer
	(principal executive officer)
Date: January 22, 2024	/s/ Vivek Sethi
	Vivek Sethi, Principal Financial Officer
	(principal financial officer)

This certification accompanies this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

XML

Cover - shares	3 Months Ended
	Nov. 30, 2023	Jan. 22, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Nov. 30, 2023
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--08-31
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 100
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
Title of 12(b) Security	Common Stock
Trading Symbol	NVOS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		17,748,320

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Nov. 30, 2023	Aug. 31, 2023
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
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
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
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
Related Party [Member]
Current Liabilities:
Due to related parties	$ 458,266	$ 533,001

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Nov. 30, 2023	Aug. 31, 2023
Statement of Financial Position [Abstract]
Convertible notes payable net of discount current	$ 3,118,819	$ 3,118,819
Convertible preferred stock, par value	$ 0.001	$ 0.001
Convertible preferred stock, shares authorized	1,000,000	1,000,000
Convertible preferred stock, shares issued	0	0
Convertible preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	499,000,000	499,000,000
Common stock, shares issued	17,291,192	15,759,325
Common stock, shares outstanding	17,291,192	15,759,325
Common stock to be issued, shares	17,375	91,138

XML

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended
	Nov. 30, 2023	Nov. 30, 2022
Income Statement [Abstract]
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	16,726,308	3,385,508
Weighted average common shares outstanding - diluted	16,726,308	3,385,508
Net loss per common share - basic	$ (0.28)	$ (1.16)
Net loss per common share - diluted	$ (0.28)	$ (1.16)

XML

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Common Stock To Be Issued [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Total Novo Stockholders Equity [Member]	Noncontrolling Interest [Member]	Total
Balance at Aug. 31, 2022	$ 3,118	$ 66,084,887	$ 9,474,807	$ 560,836	$ (53,818,489)	$ 22,305,159	$ (257,588)	$ 22,047,571
Balance, shares at Aug. 31, 2022	3,118,063
Cashless exercise of warrants	$ 467	$ 1,138,583				$ 1,139,050		$ 1,139,050
Cashless exercise of warrants, shares	467,399
Issuance of common stock to be issued	4	92,362	(92,366)
Issuance of common stock to be issued, shares	3,623
Foreign currency translation loss				$ (417,008)		$ (417,008)	$ (3,974)	$ (420,982)
Net Income (loss)					(3,935,413)	(3,935,413)	(1,323)	(3,936,736)
Units issued for cash, net of offering costs	$ 400	1,794,600				1,795,000		1,795,000
Units issued for cash, net of offering costs, shares	400,000
Fair value of stock options		60,887				60,887		60,887
Balance at Nov. 30, 2022	$ 3,989	69,171,319	9,382,441	143,828	(57,753,902)	20,947,675	(262,885)	20,684,790
Balance, shares at Nov. 30, 2022	3,989,085
Balance at Aug. 31, 2023	$ 15,760	90,973,316	1,217,293	(357,383)	(67,033,041)	24,815,945	(316,870)	24,499,075
Balance, shares at Aug. 31, 2023	15,759,325
Cashless exercise of warrants	$ 246	1,323,152				1,323,398		1,323,398
Cashless exercise of warrants, shares	245,802
Exercise of warrants for cash	$ 240	240,160				240,400		240,400
Exercise of warrants for cash, shares	240,400
Share issuance for convertible debt settlement	$ 520	$ 577,002				$ 577,522		$ 577,522
Share issuance for convertible debt settlement, shares	519,845
Issuance of common stock to be issued	74	1,172,776	(1,172,850)
Issuance of common stock to be issued, shares	73,767
Common stock issued for services	$ 424	$ 1,194,976				$ 1,195,400		$ 1,195,400
Common stock issued for services, shares	424,080
Rounding due to stock split	$ 28	(28)
Rounding due to stock split	27,973
Foreign currency translation loss				110,895		110,895	(1,919)	108,976
Net Income (loss)					(4,680,343)	(4,680,343)	19,620	(4,660,723)
Balance at Nov. 30, 2023	$ 17,292	$ 95,481,354	$ 44,443	$ (246,488)	$ (71,713,384)	$ 23,583,217	$ (299,169)	$ 23,284,048
Balance, shares at Nov. 30, 2023	17,291,192

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended		12 Months Ended
	Nov. 30, 2023	Nov. 30, 2022	Aug. 31, 2023
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	$ 2,178,687
CASH AND CASH EQUIVALENTS, END OF PERIOD	1,640,007	878,700	$ 416,323
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

XML

Pay vs Performance Disclosure - USD ($)	3 Months Ended
	Nov. 30, 2023	Nov. 30, 2022
Pay vs Performance Disclosure [Table]
Net Income (Loss) Attributable to Parent	$ (4,680,343)	$ (3,935,413)

XML

Insider Trading Arrangements	3 Months Ended
	Nov. 30, 2023
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

XML

Organization and Basis of Presentation

3 Months Ended

Nov. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Basis of Presentation

Note 1 - Organization and Basis of Presentation

Organization and Line of Business

Novo Integrated Sciences, Inc. (“Novo Integrated”) was incorporated in Delaware on November 27, 2000, under the name Turbine Truck Engines, Inc. On February 20, 2008, the Company was re-domiciled to the State of Nevada. Effective July 12, 2017, the Company’s name was changed to Novo Integrated Sciences, Inc. When used herein, the terms the “Company,” “we,” “us” and “our” refer to Novo Integrated and its consolidated subsidiaries.

The Company owns Canadian and U.S. subsidiaries which provide, or intend to provide, essential and differentiated solutions to the delivery of multidisciplinary primary care and related wellness products through the integration of medical technology, interconnectivity, advanced therapeutics, diagnostic solutions, unique personalized product offerings, 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 now and how it will be delivered 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 and efficient 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.

On April 25, 2017 (the “Effective Date”), we entered into a Share Exchange Agreement (the “Share Exchange Agreement”) by and between (i) Novo Integrated; (ii) Novo Healthnet Limited (“NHL”), (iii) ALMC-ASAP Holdings Inc. (“ALMC”); (iv) Michael Gaynor Family Trust (the “MGFT”); (v) 1218814 Ontario Inc. (“1218814”); and (vi) Michael Gaynor Physiotherapy Professional Corp. (“MGPP,” and together with ALMC, MGFT and 1218814, the “NHL Shareholders”). Pursuant to the terms of the Share Exchange Agreement, Novo Integrated agreed to acquire, from the NHL Shareholders, all of the shares of both common and preferred stock of NHL held by the NHL Shareholders in exchange for the issuance, by Novo Integrated to the NHL Shareholders, of shares of Novo Integrated common stock such that following the closing of the Share Exchange Agreement, the NHL Shareholders would own 1,677,974 restricted shares of Novo Integrated common stock, representing 85% of the issued and outstanding Novo Integrated common stock, calculated including all granted and issued options or warrants to acquire Novo Integrated common stock as of the Effective Date, but to exclude shares of Novo Integrated common stock that were subject to a then-current Regulation S offering that was undertaken by Novo Integrated (the “Exchange”).

On May 9, 2017, the Exchange closed and, as a result, NHL became a wholly owned subsidiary of Novo Integrated. The Exchange was accounted for as a reverse acquisition under the purchase method of accounting since NHL obtained control of Novo Integrated Sciences, Inc. Accordingly, the Exchange was recorded as a recapitalization of NHL, and not as a business combination, with NHL being treated as the continuing entity. The historical financial statements presented are the financial statements of NHL. At the closing date of the Exchange, the net assets of the legal acquirer, Novo Integrated Sciences, Inc., were $6,904.

Reverse Stock Split

On November 7, 2023, the Company effected a 1-for-10 reverse stock split of its common stock. As a result of the reverse stock split, every 10 shares of issued and outstanding common stock were exchanged for one share of common stock, with any fractional shares being rounded up to the next higher whole share. Unless otherwise noted, the share and per share information in this report have been retroactively adjusted to give effect to the 1-for-10 reverse stock split.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements were prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The information furnished herein reflects all adjustments, consisting only of normal recurring adjustments, which in the opinion of management, are necessary to fairly state the Company’s financial position, the results of its operations, and cash flows for the periods presented. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with U.S. GAAP were omitted pursuant to such rules and regulations.

The financial information contained in this report should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended August 31, 2023, that the Company filed on December 14, 2023. The results of operations for the three months ended November 30, 2023 are not necessarily indicative of the results for the fiscal year ending August 31, 2024.

The Company’s Canadian subsidiaries’ functional currency is the Canadian Dollar (“CAD”) and the parent company’s functional currency is the United States Dollar (“$” or “USD”); however, the accompanying unaudited condensed consolidated financial statements were translated and presented in USD.

Going Concern

The Company evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date the condensed consolidated financial statements are issued. The Company has incurred recurring losses from operations, has negative cash flows from operating activities, and has an accumulated deficit as of November 30, 2023. The Company believes that its cash and other available resources may not be sufficient to meet its operating needs and the payment of obligations related to various business acquisitions as they come due within one year after the date the unaudited condensed consolidated financial statements are issued.

In an effort to alleviate these conditions, the Company has considered equity and/or debt financing and/or asset monetization. There can be no assurance that funding would be available, or that the terms of such funding would be on favorable terms if available. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing. These conditions, along with the matters noted above, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the unaudited condensed consolidated financial statements are issued.

While management has developed and is in process to implement plans that management believes could alleviate in the future the substantial doubt that was raised, management concluded at the date of the issuance of the unaudited condensed consolidated financial statements that substantial doubt exists as those plans are not completely within the control of management. These unaudited condensed consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and consolidated balance sheets classifications that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.

Foreign Currency Translation

The accounts of the Company’s Canadian subsidiaries are maintained in CAD. The accounts of these subsidiaries are translated into USD in accordance with the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) Topic 830, Foreign Currency Transaction, with the CAD as the functional currency. According to Topic 830, all assets and liabilities are translated at the exchange rate on the balance sheet date, stockholders’ equity is translated at historical rates and statement of operations items are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income (“OCI”) in accordance with ASC Topic 220, Comprehensive Income. Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the condensed consolidated statement of operations and comprehensive loss. The following table details the exchange rates used for the respective periods:

	November 30, 2023		November 30, 2022		August 31, 2023
Period end: CAD to USD exchange rate	$	0.7363	$	0.7403	$	0.7390
Average period: CAD to USD exchange rate	$	0.7324	$	0.7414	$	0.7426

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Summary of Significant Accounting Policies

3 Months Ended

Nov. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2 – Summary of Significant Accounting Policies

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. This applies in particular to the going concern assessment, useful lives of non-current assets, impairment of non-current assets, allowance for doubtful receivables, allowance for slow moving and obsolete inventory, valuation of share-based compensation and warrants, valuation of derivative liability, and valuation allowance for deferred tax assets. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and entities it controls, including its wholly owned subsidiaries, NHL, Acenzia Inc. (“Acenzia”), Novomerica Health Group, Inc. (“NHG”), Novo Healthnet Rehab Limited, Novo Assessments Inc., PRO-DIP, LLC (“PRO-DIP”), a 91% controlling interest in Terragenx Inc. (“Terragenx”), a 50.1% controlling interest in 12858461 Canada Corp (“1285 Canada”), an 80% controlling interest in Novo Healthnet Kemptville Centre, Inc., a Back on Track Physiotherapy and Health Centre clinic operated by NHL, Clinical Consultants International, LLC and a 70% controlling interest in Novo Earth Therapeutics Inc. (currently inactive).

All intercompany transactions have been eliminated.

An entity is controlled when the Company has the ability to direct the relevant activities of the entity, has exposure or rights to variable returns from its involvement with the entity, and is able to use its power over the entity to affect its returns from the entity.

Income or loss and each component of OCI are attributed to the shareholders of the Company and to the noncontrolling interests. Total comprehensive income is attributed to the shareholders of the Company and to the noncontrolling interests even if this results in the non-controlling interests having a deficit balance on consolidation.

Noncontrolling Interest

The Company follows FASB ASC Topic 810, Consolidation, which governs the accounting for and reporting of non-controlling interests (“NCIs”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCIs be treated as a separate component of equity, not as a liability, that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially owned consolidated subsidiary be allocated to the NCI even when such allocation might result in a deficit balance.

The net income (loss) attributed to the NCI is separately designated in the accompanying condensed consolidated statements of operations and comprehensive loss.

Cash Equivalents

For the purpose of the condensed consolidated statements of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly liquid debt instruments with original maturities of three months or less.

Accounts Receivable

Accounts receivable are recorded, net of allowance for doubtful accounts and sales returns. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentration, customer credit worthiness, current economic trends and changes in customer payment patterns to determine if the allowance for doubtful accounts is adequate. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Delinquent account balances are written-off after management has determined that the likelihood of collection is not probable and known bad debts are written off against the allowance for doubtful accounts when identified. As of November 30, 2023 and August 31, 2023, the allowance for uncollectible accounts receivable was $855,116 and $864,215, respectively.

Inventory

Inventories are valued at the lower of cost (determined by the first in, first out method) and net realizable value. Management compares the cost of inventories with the net realizable value and allowance is made for writing down their inventories to net realizable value, if lower. Inventory is segregated into three areas: raw materials, work-in-process and finished goods. The Company periodically assessed its inventory for slow moving and/or obsolete items and any change in the allowance is recorded in cost of revenue in the accompanying condensed consolidated statements of operations and comprehensive loss. If any are identified an appropriate allowance for those items is made and/or the items are deemed to be impaired. As of November 30, 2023 and August 31, 2023, the Company’s allowance for slow moving or obsolete inventory was $nil and $nil, respectively.

Other Receivables

Other receivables are recorded at cost and presented as current or long-term based on the terms of the agreements. Management reviews the collectability of other receivables and writes off the portion that is deemed to be uncollectible. During the three months ended November 30, 2023 and year ended August 31, 2023, the Company wrote off $nil and $nil, respectively, of other receivables that were not expected to be collected.

Property and Equipment

Property and equipment are stated at cost less depreciation and impairment. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the declining balance method for substantially all assets with estimated lives as follows:

Building	30 years
Leasehold improvements	5 years
Clinical equipment	5 years
Computer equipment	3 years
Office equipment	5 years
Furniture and fixtures	5 years

Leases

The Company applies the provisions of ASC Topic 842, Leases which requires lessees to recognize lease assets and lease liabilities on the balance sheet. The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate.

Long-Lived Assets

The Company applies the provisions of ASC Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets, including right-of-use assets, used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal. Based on its review at November 30, 2023, the Company believes there was no impairment of its long-lived assets.

Intangible Assets

The Company’s intangible assets are being amortized over their estimated useful lives as follows:

Land use rights	50 years (the lease period)
Intellectual property	7 years
Customer relationships	5 years
Brand names	7 years

The intangible assets with finite useful lives are reviewed for impairment when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Based on its review at November 30, 2023, the Company believes there was no impairment of its intangible assets.

Right-of-use Assets

The Company’s right-of-use assets consist of leased assets recognized in accordance with ASC 842, Leases, which requires lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liability represents the Company’s obligation to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the condensed consolidated balance sheet and are expensed on a straight-line basis over the lease term in the condensed consolidated statements of operations and comprehensive loss. The Company determines the lease term by agreement with lessor. In cases where the lease does not provide an implicit interest rate, the Company uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.

Goodwill

Goodwill represents the excess of purchase price over the underlying net assets of businesses acquired. Under U.S. GAAP, goodwill is not amortized but is subject to annual impairment tests. The Company recorded goodwill related to its acquisition of APKA Health, Inc. (“APKA”) during the fiscal year ended August 31, 2017, Executive Fitness Leaders (“EFL”) during the fiscal year ended August 31, 2018, Action Plus Physiotherapy Rockland (“Rockland”) during the fiscal year ended August 31, 2019, Acenzia during the fiscal year ended August 31, 2021, and 1285 Canada during the fiscal year ended August 31, 2022. Based on its review at November 30, 2023, the Company believes there was no impairment of its goodwill.

Summary of changes in goodwill by acquired businesses is as follows:

	APKA			EFL			Rockland			Acenzia			1285 Canada			Total
Balance, August 31, 2022	$	190,678		$	125,088		$	221,188		$	7,288,307		$	583		$	7,825,844
Foreign currency translation adjustment		(5,928	)		(3,892	)		(6,878	)		(226,645	)		(18	)		(243,361	)
Balance, August 31, 2023	$	184,750		$	121,196		$	214,310		$	7,061,662		$	565		$	7,582,483
Foreign currency translation adjustment		(675	)		(443	)		(783	)		(25,801	)		(2	)		(27,704	)
Balance, November 30, 2023	$	184,075		$	120,753		$	213,527		$	7,035,861		$	563		$	7,554,779

Fair Value of Financial Instruments

For certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, other receivables, accounts payable, accrued expenses, current portion of finance and operating lease liability, current portion of government loans and notes payable, debentures, convertible notes payable, and due to related parties, the carrying amounts approximate their fair values due to their short-term maturities.

FASB ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosure of the fair value of financial instruments held by the Company. FASB ASC Topic 825, Financial Instruments, defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the condensed consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization, low risk of counterparty default and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

● Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

● Level 3 inputs to the valuation methodology use one or more unobservable inputs which are significant to the fair value measurement.

The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic 480, Distinguishing Liabilities from Equity, and FASB ASC Topic 815, Derivatives and Hedging.

For certain financial instruments, the carrying amounts reported in the condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, other receivables, and current liabilities, including accounts payable, accrued expenses, current portion of finance and operating lease liability, current portion of government loans and notes payable, debentures, convertible notes payable, and due to related parties, each qualify as a financial instrument, and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The carrying value of notes payable approximates their fair values due to current market rate on such debt.

As of November 30, 2023 and August 31, 2023, respectively, the Company did not identify any financial assets and liabilities required to be presented on the condensed consolidated balance sheet at fair value, except for contingent liability which is carried at fair value using Level 1 inputs and derivative liability which is carried at fair value using Level 3 inputs.

Derivative Financial Instruments

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815. The Company applies the guidance in ASC 815-40-35-12 to determine the order in which each convertible instrument would be evaluated for derivative classification.

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to the fair value of derivatives.

Revenue Recognition

The Company’s revenue recognition reflects the updated accounting policies as per the requirements of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“Topic 606”). As sales are and have been primarily from providing healthcare services, the Company has no significant post-delivery obligations.

Revenue from providing healthcare and healthcare related services and product sales are recognized under Topic 606 in a manner that reasonably reflects the delivery of its products and services to customers in return for expected consideration and includes the following elements:

● executed contracts with the Company’s customers that it believes are legally enforceable;

● identification of performance obligations in the respective contract;

● determination of the transaction price for each performance obligation in the respective contract;

● allocation the transaction price to each performance obligation; and

● recognition of revenue only when the Company satisfies each performance obligation.

These five elements, as applied to the Company’s revenue category, are summarized below:

● Healthcare and healthcare related services – gross service revenue is recorded in the accounting records at the time the services are provided (point-in-time) on an accrual basis at the provider’s established rates. The Company reserves a provision for contractual adjustment and discounts that are deducted from gross service revenue. The Company reports revenues net of any sales, use and value added taxes.

● Product sales – revenue is recorded at the point of time of delivery.

In arrangements where another party is involved in providing specified services to a customer, the Company evaluates whether it is the principal or agent. In this evaluation, the Company considers if the Company obtains control of the specified goods or services before they are transferred to the customer, as well as other indicators such as the party primarily responsible for fulfillment, inventory risk, and discretion in establishing price. For product sales where the Company is not the principal, the Company recognizes revenue on a net basis. For the periods presented, revenue for arrangements where the Company is the agent was not material.

Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue. Unearned revenue is included with accrued expenses in the accompanying condensed consolidated balance sheets.

Sales returns and allowances were insignificant for the three months ended November 30, 2023 and 2022. The Company does not provide unconditional right of return, price protection or any other concessions to its customers.

Income Taxes

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented.

Stock-Based Compensation

The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the requisite service period. The Company recognizes in the condensed consolidated statements of operations and comprehensive loss the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.

Basic and Diluted Earnings Per Share

Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share. The calculations within these condensed consolidated financial statements have been retroactively adjusted to reflect the effects of the 1-for-10 reverse stock split that was effective on November 7, 2023. Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS assumes that all dilutive securities are converted. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were 659,616 and 1,860,950 options/warrants outstanding at November 30, 2023 and 2022, respectively. In addition, at November 30, 2023, there were outstanding convertible notes that could convert into 3,786,454 shares of common stock and there were 17,375 shares of common stock to be issued.

Due to the net loss incurred, potentially dilutive instruments would be anti-dilutive. Accordingly, diluted loss per share is the same as basic loss per share for all periods presented.

Foreign Currency Transactions and Comprehensive Income

U.S. GAAP generally requires recognized revenue, expenses, gains and losses be included in net income. Certain statements, however, require entities to report specific changes in assets and liabilities, such as gain or loss on foreign currency translation, as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. The functional currency of the Company’s Canadian subsidiaries is the CAD. Translation gain of $108,976 for the three months ended November 30, 2023 and translation loss of $922,609 for the year ended August 31, 2023, respectively, are classified as an item of other comprehensive loss in the stockholders’ equity section of the condensed consolidated balance sheet.

Condensed Consolidated Statements of Cash Flows

Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rates. As a result, amounts related to assets and liabilities reported on the condensed consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the condensed consolidated balance sheets.

Segment Reporting

ASC Topic 280, Segment Reporting, requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has two reportable segments. See Note 16.

Reclassifications

Certain prior period amounts were reclassified to conform to the manner of presentation in the current period. These reclassifications had no effect on the net loss or shareholders’ equity.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying condensed consolidated financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

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Related Party Transactions

3 Months Ended

Nov. 30, 2023

Related Party Transactions [Abstract]

Related Party Transactions

Note 3 – Related Party Transactions

Due to related parties

Amounts loaned to the Company by stockholders and officers of the Company are payable upon demand and unsecured. At November 30, 2023 and August 31, 2023, the amount due to related parties was $458,266 and $533,001, respectively. At November 30, 2023, $376,701 was non-interest bearing, $nil bears interest at 6% per annum, and $81,565 bears interest at 13.75% per annum. At August 31, 2023, $451,137 was non-interest bearing, $21,267 bears interest at 6% per annum, and $60,597 bears interest at 13.75% per annum.

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Accounts Receivables, Net

3 Months Ended

Nov. 30, 2023

Receivables [Abstract]

Accounts Receivables, Net

Note 4 – Accounts Receivables, Net

Accounts receivables, net at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30,			August 31,
	2023			2023
Trade receivables	$	3,412,783		$	2,223,243
Amounts earned but not billed		78,507			108,000
		3,491,290			2,331,243
Allowance for doubtful accounts		(855,116	)		(864,215	)
Accounts receivable, net	$	2,636,174		$	1,467,028

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Inventory

3 Months Ended

Nov. 30, 2023

Inventory Disclosure [Abstract]

Inventory

Note 5 – Inventory

Inventory at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30,		August 31,
	2023		2023
Raw materials	$	516,811	$	388,391
Work in process		108,244		81,696
Finished Goods		645,780		636,896
		1,270,835		1,106,983
Allowance for slow moving and obsolete inventory		-		-
Inventory, net	$	1,270,835	$	1,106,983

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Other Receivables

3 Months Ended

Nov. 30, 2023

Receivables [Abstract]

Other Receivables

Note 6 – Other Receivables

Other receivables at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30, 2023			August 31, 2023
Advance to corporation; accrues interest at 12% per annum; unsecured; due January 31, 2024, as amended.	$	73,630		$	73,900
Advance to corporation; accrues interest at 12% per annum; secured by property and other assets of debtor; due February 1, 2024, as amended.		532,433			534,386
Advance to corporation; accrues interest at 10% per annum; secured by assets of debtor; due February 1, 2024, as amended.		441,679			443,298
Total other receivables		1,047,742			1,051,584
Current portion		(1,047,742	)		(1,051,584	)
Long-term portion	$	-		$	-

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Property and Equipment

3 Months Ended

Nov. 30, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment

Note 7 – Property and Equipment

Property and equipment at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30,			August 31,
	2023			2023
Land	$	441,780		$	443,400
Building		3,313,350			3,325,500
Leasehold improvements		838,297			841,371
Clinical equipment		1,909,678			1,916,681
Computer equipment		33,381			33,504
Office equipment		44,400			44,502
Furniture and fixtures		38,149			38,289
		6,619,035			6,643,247
Accumulated depreciation		(1,312,422	)		(1,253,209	)
Total	$	5,306,613		$	5,390,038

Depreciation expense for the three months ended November 30, 2023 and 2022 was $72,604 and $60,043, respectively.

Certain property and equipment have been used to secure notes payable (See Note 10).

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Intangible Assets

3 Months Ended

Nov. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Note 8 – Intangible Assets

Intangible assets at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30,			August 31,
	2023			2023
Land use rights	$	11,573,321		$	11,573,321
Intellectual property		7,487,410			7,497,746
Customer relationships		2,287,746			2,291,058
Brand names		1,921,375			1,928,421
		23,269,852			23,290,546
Accumulated amortization		(7,565,634	)		(7,072,007	)
Total	$	15,704,218		$	16,218,539

Amortization expense for the three months ended November 30, 2023 and 2022 was $499,800 and $526,123, respectively.

Expected amortization expense of intangible assets over the next 5 years and thereafter is as follows:

Twelve Months Ending November 30,
2024	$	2,003,586
2025		1,820,324
2026		1,454,624
2027		1,208,004
2028		639,025
Thereafter		8,578,655
Total	$	15,704,218

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Accrued Expenses

3 Months Ended

Nov. 30, 2023

Payables and Accruals [Abstract]

Accrued Expenses

Note 9 – Accrued Expenses

Accrued expenses at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30,		August 31,
	2023		2023
Accrued liabilities	$	1,049,543	$	961,897
Accrued payroll		215,936		236,218
Unearned revenue		35,070		35,434
	$	1,300,549	$	1,233,549

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Government Loans and Notes Payable

3 Months Ended

Nov. 30, 2023

Government Loans And Notes Payable

Government Loans and Notes Payable

Note 10 – Government Loans and Notes Payable

Notes payable at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30,			August 31,
	2023			2023
Government loans issued under the Government of Canada’s Canada Emergency Business Account (“CEBA”) program (A).		88,356			88,680
Note payable to the Small Business Administration. The note bears interest at 3.75% per annum, requires monthly payments of $190 after 12 months from funding and is due 30 years from the date of issuance, and is secured by certain equipment of PRO-DIP.		40,320			40,320
Note payable dated December 3, 2018; accrues interest at 4.53% per annum; unsecured; annual payments of approximately $4,000; due December 2, 2028		28,589			28,693
Note payable received May 25, 2023, accruing interest at 18% per 3-months term, unsecured, with principal and interest due 3-month from loan issuance. The note was repaid on October 26, 2023.		-			73,900
Note payable received May 10, 2023, accruing interest at 15% per 4-months term, with a first priority security interest in all of Acenzia’s production equipment, with principal and interest due 4-month from loan issuance. The note was repaid on October 23, 2023.		-			110,850
Total government loans and notes payable		157,265			342,443
Less current portion		(93,488	)		(277,405	)
Long-term portion	$	63,777		$	65,038

(A) The Government of Canada launched CEBA loan to ensure that small businesses have access to the capital that they need during the current challenges faced due to the COVID-19 virus. The Company obtained CAD$80,000 loan (US$58,904 at November 30, 2023), which is unsecured, non-interest bearing and due on or before January 18, 2024. If the loan amount is paid on or before January 18, 2024, 25% of the loan will be forgiven (“Early Payment Credit”). In the event that the Company does not repay 75% of such term debt on or before January 18, 2024, the Early Payment Credit will not apply and the lender will automatically extend the term of the loan until December 31, 2026 and will accrue interest on the outstanding amount of the CEBA loan at a fixed rate of 5% per year. In addition, with acquisition of Terragenx, the Company acquired a CEBA loan in the amount of CAD$60,000 net of CAD$20,000 repayment (US$29,452 at November 30, 2023) under the same terms.

Future scheduled maturities of outstanding government loans and notes payable are as follows:

Twelve Months Ending November 30,
2024	$	93,488
2025		6,470
2026		6,469
2027		6,469
2028		6,469
Thereafter		37,900
Total	$	157,265

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Convertible Notes Payable

3 Months Ended

Nov. 30, 2023

Convertible Notes Payable

Convertible Notes Payable

Note 11 – Convertible Notes Payable

Novo Integrated

On December 14, 2021, Novo Integrated issued two convertible notes payable for a total of $16,666,666 (the “$16.66m+ convertible notes”) with each note having a face amount of $8,333,333. The $16.66m+ convertible notes accrue interest at 5% per annum and are due on June 14, 2023. The $16.66m+ convertible notes are secured by all assets of the Company. The $16.66m+ convertible notes are convertible at the option of the note holders to convert into shares of the Company’s common stock at $20 per share.

In connection with the $16.66m+ convertible notes, the Company issued the note holders warrants to purchase a total of 583,334 shares of the Company’s common stock at a price of $20 per share. The warrants expire on December 14, 2025. The Company first determined the value of the $16.66m+ convertible notes and the fair value of the detachable warrants issued in connection with this transaction. The estimated value of the warrants of $7,680,156 was determined using the Black-Scholes option pricing model with the following assumptions:

● Expected life of 4.0 years;

● Volatility of 275%;

● Dividend yield of 0%; and

● Risk free interest rate of 1.23%

The face amount of the $16.66m+ convertible notes of $16,666,666 was proportionately allocated to the $16.66m+ convertible notes and the warrants in the amount of $11,409,200 and $5,257,466, respectively. The amount allocated to the warrants of $5,257,466 was recorded as a discount to the convertible note and as additional paid in capital. The $16.66m+ convertible notes contained an original issue discount totaling $1,666,666 and the Company also incurred $1,140,000 in loan fees in connection with the $16.66m+ convertible notes. The combined total discount is $8,064,132 and will be amortized over the life of the $16.66m+ convertible notes.

On November 14, 2022, the $16.66m+ convertible notes were amended to provide the holders with conversion rights consisting of a conversion price to the first $1,000,000 of principal amount of each of the notes by the lower of (i) the conversion price in effect at such time and (ii) 82.0% of the lowest VWAP during the five (5) trading days immediately prior to a conversion date. The Company determined that the conversion features of these notes represented embedded derivatives since the notes are convertible into a variable number of shares upon conversion. On the same day, the Company recorded a derivative liability of $1,390,380. The fair value of the derivative liability was calculated using the Black-Scholes pricing model with the following assumptions:

● Expected life of 0.58 years;

● Volatility of 148.20%;

● Dividend yield of 0%; and

● Risk free interest rate of 4.55%

The derivative was recorded as a discount on the convertible notes, but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the convertible notes.

During the year ended August 31, 2023, an aggregate of $8,396,666 in principal and an aggregate of $32,559 in accrued interest were converted into 8,527,835 shares of common stock issued to the $16.66m+ convertible note holders. As a result of the first $1,000,000 principal conversion, the derivative liability of $1,390,380 was extinguished and recognized to additional paid-in capital. As of November 30, 2023 and August 31, 2023, the derivative liability balance was $nil and $nil, respectively.

During the year ended August 31, 2023, the Company amortized $4,241,429 of the debt discount and as of November 30, 2023 and August 31, 2023, the unamortized debt discount was $nil.

During the year ended August 31, 2023, the Company made cash payments in the aggregate amount of $3,001,442 for the monthly Amortization Payment, $2,833,888 in principal and $167,554 in interest, pursuant to the terms and conditions of the $16.66m+ convertible notes. As of November 30, 2023 and August 31, 2023, the aggregate principal amount owed to the $16.66m+ convertible note holders is $nil.

Terragenx

On November 17, 2021, Terragenx, a 91% owned subsidiary of the Company, issued two convertible notes payable for a total of $1,875,000 (the “$1.875m convertible notes”) with each note having a face amount of $937,500. The $1.875m convertible notes accrue interest at 1% per annum and were due on May 17, 2022 and extended to November 29, 2022. The $1.875m convertible notes are secured by all assets of the Company. The $1.875m convertible notes are convertible at the option of the note holders to convert into shares of the Company’s common stock at $33.50 per share.

In connection with the $1.875m convertible notes, the Company issued the note holders warrants to purchase a total of 22,388 shares of the Company’s common stock at a price of $33.50 per share. The warrants expire on November 17, 2024. The Company first determined the value of the $1.875m convertible notes and the fair value of the detachable warrants issued in connection with this transaction. The estimated value of the warrants of $351,240 and was determined using the Black-Scholes option pricing model with the following assumptions:

● Expected life of 3.0 years;

● Volatility of 300%;

● Dividend yield of 0%; and

● Risk free interest rate of 0.85%

The face amount of the $1.875m convertible notes of $1,875,000 was proportionately allocated to the $1.875m convertible notes and the warrants in the amount of $1,579,176 and $295,824, respectively. The amount allocated to the warrants of $295,824 was recorded as a discount to the $1.875m convertible notes and as additional paid in capital. The $1.875m convertible notes contained an original issue discount totaling $375,000 and the Company also incurred $90,000 in loan fees in connection with these $1.875m convertible notes. The combined total discount was $760,824 and amortized over the life of the $1.875m convertible notes. The debt discount was fully amortized during the year ended August 31, 2022.

On June 1, 2022, the Company paid the balance owed on one of two Terragenx $1.875 million convertible notes for an aggregate payment of $948,874, including all principal and interest owed. On June 1, 2022, the Company made an interest payment to one of two Terragenx $1.875 million convertible notes for a payment of $192,188 and the note holder agreed to extend the maturity date to November 29, 2022 with a principal amount face value of $937,500 and interest rate that shall accrue at a rate equal to one percent per annum.

On June 1, 2022, the Company and one of the two Terragenx $1.875 million convertible note holders (the “Jefferson Note”) entered into that certain letter agreement pursuant to which the maturity date of the Jefferson Note was extended to November 29, 2022. On December 13, 2022, the Company, Terragenx and Jefferson entered into that certain letter agreement pursuant to which, among other things, Jefferson agreed to forbear from entering an Event of Default under the terms of the Jefferson Note and the related transaction documents until December 29, 2022. The Jefferson Note was not paid on December 29, 2022. Accordingly, on December 29, 2022, among other things, the Liquidated Damages Charge, in the aggregate amount of $186,719 was an addition to the Principal Amount due under the Jefferson Note.

Effective February 16, 2023, aside from the Liquidated Damages Charge, the Jefferson Note was paid in full. On August 21, 2023, Jefferson converted the additional Liquidated Damages Charge and the interest thereon. On August 21, 2023, as a result of the conversion, the Company issued 236,511 shares of common stock to Jefferson.

Novo Integrated – Mast Hill Fund, L.P.

On February 23, 2023, the Company entered into a securities purchase agreement (the “Mast Hill SPA”) with Mast Hill Fund, L.P. (“Mast Hill”), pursuant to which the Company issued an 12% unsecured promissory note (the “Mast Hill Note”) with a maturity date of February 23, 2024 (the “Mast Hill Maturity Date”), in the principal sum of $573,000 (the “Mast Hill Principal Sum”). In addition, the Company issued a common stock purchase warrant for the purchase of up to 100,000 shares of the Company’s common stock (the “Mast Hill Warrant”) to Mast Hill pursuant to the Mast Hill SPA. Pursuant to the terms of the Mast Hill Note, the Company agreed to pay the Mast Hill Principal Sum to Mast Hill and to pay interest on the principal balance at the rate of 12% per annum. The Mast Hill Note carries an OID of $57,300. Accordingly, on the closing date, Mast Hill paid the purchase price of $515,700 in exchange for the Mast Hill Note and the Mast Hill Warrant. Mast Hill may convert the Mast Hill Note into shares of the Company’s common stock at any time at a conversion price equal to $1.75 per share, subject to adjustment as provided in the Mast Hill Note (including but not limited to certain price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions) as well as certain beneficial ownership limitations.

Pursuant to the terms of the Mast Hill Note, the Company agreed to pay accrued interest monthly as well as the Mast Hill Principal Sum as follows: (i) $57,300 on August 23, 2023, (ii) 57,300 on September 23, 2023, (iii) $57,300 on October 23, 2023, (iv) $100,000 on November 23, 2023, (v) $100,000 on December 23, 2023, (vi) $100,000 on January 23, 2024, and (vii) all remaining amounts owed under the Mast Hill Note on the Mast Hill Maturity Date (each of the aforementioned payments are an “Amortization Payment”). If the Company fails to make any Amortization Payment, then Mast Hill shall have the right to convert the amount of such respective Amortization Payment into shares of common stock as provided in the Mast Hill Note at the lesser of (i) the then applicable conversion price under the Mast Hill Note, or (ii) 85% of the lowest VWAP of the Company’s common stock on any trading day during the five trading days prior to the respective conversion date.

The Company may prepay the Mast Hill Note at any time prior to the date that an Event of Default (as defined in the Mast Hill Note) occurs at an amount equal to the Mast Hill Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The Mast Hill Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the Mast Hill Note, Mast Hill Warrant, or Mast Hill SPA.

Upon the occurrence of any Event of Default, the Mast Hill Note shall become immediately due and payable and the Company shall pay to Mast Hill, in full satisfaction of its obligations hereunder, an amount equal to the Mast Hill Principal Sum then outstanding plus accrued interest multiplied by 125%. Upon the occurrence of an Event of Default, additional interest will accrue from the date of the Event of Default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

The Mast Hill Warrant is exercisable for five years from February 23, 2023, at an exercise price of $2.50 per share, subject to adjustment as provided in the Mast Hill Warrant. The Mast Hill Warrant also contains certain cashless exercise provisions as well as price protection provisions providing for adjustment of the number of shares of the Company’s common stock issuable upon exercise of the Mast Hill Warrant and the exercise price in case of future dilutive offerings, subject to certain customary exempt transactions. The estimated value of the warrants of $86,327 was determined using the Black-Scholes option pricing model with the following assumptions:

● Expected life of 5.0 years;

● Volatility of 252%;

● Dividend yield of 0%; and

● Risk free interest rate of 4.09%

As additional consideration for the purchase of the Mast Hill Note and pursuant to the terms of the Mast Hill SPA, on February 24, 2023, the Company issued 95,500 restricted shares of common stock (the “Commitment Shares”) to Mast Hill at closing. The Mast Hill SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the Commitment Shares as well as the shares of common stock underlying the Mast Hill Note and the Mast Hill Warrant. In addition to the beneficial ownership limitations provided in the Mast Hill Note and the Mast Hill Warrant, the sum of the number of shares of common stock that may be issued under the Mast Hill SPA (including the Commitment Shares), the Mast Hill Note, and the Mast Hill Warrant shall be limited to 19.99% of the issued and outstanding common stock on the closing date (equal to 2,772,045 shares) as further described in the Mast Hill SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

The principal amount of the $573,000 convertible notes was proportionately allocated to the convertible note, common stock issued, and the warrants in the amount of $403,710, $82,963, and $86,327, respectively. The amounts allocated to the equity issuances were recorded as a discount to the convertible note and as additional paid in capital. The convertible note contained an original issue discount totaling $57,300 and the Company also incurred $70,465 in loan fees in connection with the convertible note. The combined total discount is $297,055 and will be amortized over the life of the convertible note. The debt discount was fully amortized during the year ended August 31, 2023.

During the year ended August 31, 2023, the principal amount of $573,000, interest of $6,028 and other fees of $1,750 were converted into 522,777 common stock of the Company. As of November 30, 2023 and August 31, 2023, the aggregate principal amount owed under the Mast Hill Note is $nil.

On September 18, 2023, Mast Hill fully exercised all warrants granted under the terms and conditions of the $573,000 Mast Hill Warrant Agreement, dated February 23, 2023. Under certain cashless exercise provisions as well as price protection provisions providing for adjustment of the number of shares of the Company’s common stock issuable upon exercise of the Mast Hill Warrant, the Company issued 53,567 restricted shares of the Company’s common stock.

Novo Integrated – FirstFire Global Opportunities Fund, LLC

On March 21, 2023, the Company entered into a securities purchase agreement (the “SPA”) with FirstFire Global Opportunities Fund, LLC (“FirstFire”) pursuant to which the Company issued an 12% unsecured promissory note (the “2023 FirstFire Note”) with a maturity date of March 21, 2024, in the principal sum of $573,000 (the “Principal Sum”). In addition, the Company issued a common stock purchase warrant for the purchase of up to 100,000 shares of the Company’s common stock (the “2023 FirstFire Warrant”) to FirstFire pursuant to the SPA. Pursuant to the terms of the 2023 FirstFire Note, the Company agreed to pay the Principal Sum to FirstFire and to pay interest on the principal balance at the rate of 12% per annum. The 2023 FirstFire Note carries an OID of $57,300. Accordingly, on the closing date, FirstFire paid the purchase price of $515,700 in exchange for the 2023 FirstFire Note and the 2023 FirstFire Warrant. FirstFire may convert the 2023 FirstFire Note into the Company’s common stock at any time at a conversion price equal to $1.75 per share, subject to adjustment as provided in the 2023 FirstFire Note (including but not limited to certain price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions) as well as certain beneficial ownership limitations.

Pursuant to the terms of the 2023 FirstFire Note, the Company agreed to pay accrued interest monthly as well as the Principal Sum as follows: (i) $57,300 on September 21, 2023, (ii) 57,300 on October 21, 2023, (iii) $57,300 on November 21, 2023, (iv) $100,000 on December 21, 2023, (v) $100,000 on January 21, 2024, (vi) $100,000 on February 21, 2024, and (vii) all remaining amounts owed under the 2023 FirstFire Note on the maturity date (each of the aforementioned payments are an “Amortization Payment”). If the Company fails to make any Amortization Payment, then FirstFire shall have the right to convert the amount of such respective Amortization Payment into shares of common stock as provided in the 2023 FirstFire Note at the lesser of (i) the then applicable conversion price under the 2023 FirstFire Note or (ii) 85% of the lowest VWAP of the Company’s common stock on any trading day during the five trading days prior to the respective conversion date.

The Company may prepay the 2023 FirstFire Note at any time prior to the date that an event of default (as provided in the 2023 FirstFire Note) occurs at an amount equal to the Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The 2023 FirstFire Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the 2023 FirstFire Note, the 2023 FirstFire Warrant, or SPA.

Upon the occurrence of any event of default, the 2023 FirstFire Note shall become immediately due and payable and the Company shall pay to FirstFire, in full satisfaction of its obligations hereunder, an amount equal to the Principal Sum then outstanding plus accrued interest multiplied by 125% (the “Default Amount”). Upon the occurrence of an Event of Default, additional interest will accrue from the date of the Event of Default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

The 2023 FirstFire Warrant is exercisable for five years from March 21, 2023, at an exercise price of $2.50 per share, subject to adjustment as provided in the 2023 FirstFire Warrant. The 2023 FirstFire Warrant also contains certain cashless exercise provisions as well as price protection provisions providing for adjustment of the number of shares of common stock issuable upon exercise of the 2023 FirstFire Warrants and the exercise price in case of future dilutive offerings, subject to certain customary exempt transactions. The estimated value of the warrants of $93,811 was determined using the Black-Scholes option pricing model with the following assumptions:

● Expected life of 5.0 years;

● Volatility of 251%;

● Dividend yield of 0%; and

● Risk free interest rate of 3.73%

As additional consideration for the purchase of the 2023 FirstFire Note and pursuant to the terms of the SPA, on March 22, 2023, the Company issued 95,500 restricted shares of the Company’s common stock (the “Commitment Shares”) to FirstFire at closing. The SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the Commitment Shares as well as the shares of common stock underlying the 2023 FirstFire Note and the 2023 FirstFire Warrant. In addition to the beneficial ownership limitations provided in the 2023 FirstFire Note and the 2023 FirstFire Warrant, the sum of the number of shares of common stock that may be issued under the SPA (including the Commitment Shares), the 2023 FirstFire Note, and 2023 FirstFire Warrant shall be limited to 1,000,000 shares as further described in the SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

The principal amount of the $573,000 convertible notes was proportionately allocated to the convertible note, common stock issued, and the warrants in the amount of $389,057, $90,132, and $93,811, respectively. The amounts allocated to the equity issuances were recorded as a discount to the convertible note and as additional paid in capital. The convertible note contained an original issue discount totaling $57,300 and the Company also incurred $35,628 in loan fees in connection with the convertible note.

The effective conversion price was determined to be $1.188 based on the allocation of the principal amount and the number of shares to be received upon conversion. As the stock price at the issuance date of $1.390 was greater than the effective conversion price, it was determined that there was a beneficial conversion feature (“BCF”). The Company recognized the beneficial conversion feature of $66,068, equal to the intrinsic value of the conversion option, as a discount to the convertible note and as additional paid in capital.

The combined total discount is $342,938 and will be amortized over the life of the convertible note. During the three months ended November 30, 2023, the Company amortized $190,209 of the debt discount and as November 30, 2023, the unamortized debt discount was $nil.

During the three months ended November 30, 2023, the principal amount of $573,000 and interest of $4,521 were converted into 519,845 common stock of the Company. As of November 30, 2023, the aggregate principal amount owed under the 2023 FirstFire Note is $nil.

On October 12, 2023, FirstFire fully exercised all warrants granted under the terms and conditions of the $573,000 FirstFire Warrant Agreement, dated March 21, 2023. Under certain cashless exercise provisions as well as price protection provisions providing for adjustment of the number of shares of the Company’s common stock issuable upon exercise of the FirstFire Warrant, the Company issued 53,532 restricted shares of the Company’s common stock.

Novo Integrated – Mast Hill Fund, L.P. $445,000 Note, SPA, and Warrant

On June 20, 2023, the Company entered into a securities purchase agreement (the “MH $445,000 SPA”) with Mast Hill, pursuant to which the Company issued an 12% unsecured promissory note (the “MH $445,000 Note”) with a maturity date of June 20, 2024 (the “MH $445,000 Maturity Date”), in the principal sum of $445,000 (the “MH $445,000 Principal Sum”). In addition, the Company issued a common stock purchase warrant for the purchase of up to 77,662 shares of the Company’s common stock (the “MH $445,000 Warrant”) to Mast Hill pursuant to the MH $445,000 SPA. Pursuant to the terms of the MH $445,000 Note, the Company agreed to pay the MH $445,000 Principal Sum to Mast Hill and to pay interest on the principal balance at the rate of 12% per annum. The MH $445,000 Note carries an OID of $44,500. Accordingly, on the Closing Date (as defined in the MH $445,000 SPA), Mast Hill paid the purchase price of $400,500 in exchange for the MH $445,000 Note and MH $445,000 Warrant. Mast Hill may convert the MH $445,000 Note into the Company’s common stock at any time at a conversion price equal to $1.75 per share, subject to adjustment as provided in the MH $445,000 Note (including but not limited to certain price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions), as well as certain beneficial ownership limitations.

Pursuant to the terms of the MH $445,000 Note, the Company agreed to pay accrued interest monthly as well as the MH $445,000 Principal Sum as follows: (i) $44,500 on December 20, 2023, (ii) $44,500 on January 20, 2024, (iii) $44,500 on February 20, 2024, (iv) $77,661 on March 20, 2024, (v) $77,661 on April 20, 2024, (vi) $77,661 on May 20, 2024, and (vii) all remaining amounts owed under the MH $445,000 Note on the MH $445,000 Maturity Date (each of the aforementioned payments are an “MH $445,000 Amortization Payment”). If the Company fails to make any MH $445,000 Amortization Payment, then Mast Hill shall have the right to convert the amount of such respective MH $445,000 Amortization Payment into shares of common stock as provided in the MH $445,000 Note at the lesser of (i) the then applicable conversion price under the MH $445,000 Note or (ii) 85% of the lowest VWAP of the common stock on any trading day during the five trading days prior to the respective conversion date.

The Company may prepay the MH $445,000 Note at any time prior to the date that an Event of Default (as defined in the Note) (each an “MH $445,000 Event of Default”) occurs at an amount equal to the MH $445,000 Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The MH $445,000 Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the MH $445,000 Note, the MH $445,000 Warrant, or the MH $445,000 SPA.

Upon the occurrence of any MH $445,000 Event of Default, the MH $445,000 Note shall become immediately due and payable and the Company shall pay to Mast Hill, in full satisfaction of its obligations hereunder, an amount equal to the MH $445,000 Principal Sum then outstanding plus accrued interest multiplied by 125%. Upon the occurrence of an MH $445,000 Event of Default, additional interest will accrue from the date of the MH $445,000 Event of Default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

The MH $445,000 Warrant is exercisable for five years from June 20, 2023, at an exercise price of $2.50 per share, subject to adjustment as provided in the MH $445,000 Warrant. The MH $445,000 Warrant also contains certain cashless exercise provisions, as well as price protection provisions providing for adjustment of the number of shares of common stock issuable upon exercise of the MH $445,000 Warrant and the exercise price in case of future dilutive offerings, subject to certain customary exempt transactions. The estimated value of the warrants of $77,856 was determined using the Black-Scholes option pricing model with the following assumptions:

● Expected life of 5.0 years;

● Volatility of 251%;

● Dividend yield of 0%; and

● Risk free interest rate of 3.96%

As additional consideration for the purchase of the MH $445,000 Note and pursuant to the terms of the MH $445,000 SPA, the Company issued 74,167 restricted shares of the Company’s common stock (the “MH $445,000 Commitment Shares”) to Mast Hill at closing. The MH $445,000 SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the MH $445,000 Commitment Shares as well as the shares of common stock underlying the MH $445,000 Note and MH $445,000 Warrant. In addition to the beneficial ownership limitations provided in the MH $445,000 Note and MH $445,000 Warrant, the sum of the number of shares of common stock that may be issued under the MH $445,000 SPA (including the MH $445,000 Commitment Shares), MH $445,000 Note, and MH $445,000 Warrant shall be limited to 1,772,045 as further described in the MH $445,000 SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

The principal amount of the $445,000 convertible notes was proportionately allocated to the convertible note, common stock issued, and the warrants in the amount of $292,351, $74,793, and $77,856, respectively. The amounts allocated to the equity issuances were recorded as a discount to the convertible note and as additional paid in capital. The convertible note contained an original issue discount totaling $44,500 and the Company also incurred $39,904 in loan fees in connection with the convertible note.

The effective conversion price was determined to be $1.150 based on the allocation of the principal amount and the number of shares to be received upon conversion. As the stock price at the issuance date of $1.535 was greater than the effective conversion price, it was determined that there was a beneficial conversion feature (“BCF”). The Company recognized the beneficial conversion feature of $97,978, equal to the intrinsic value of the conversion option, as a discount to the convertible note and as additional paid in capital.

The combined total discount is $335,031 and will be amortized over the life of the convertible note. During the three months ended November 30, 2023, the Company amortized $83,300 of the debt discount and as at November 30, 2023, the unamortized debt discount was $185,823.

Specific to the MH $445,000 Note, on July 20, 2023, the Company made a monthly interest payment of $4,243. On August 21, 2023, the Company made a monthly interest payment of $4,535. On September 21, 2023, the Company made a monthly interest payment of $4,535. On October 20, 2023, the Company made a monthly interest payment of $4,389.

On October 23, 2023, Mast Hill fully exercised all warrants granted under the terms and conditions of the $445,000 Mast Hill Warrant Agreement, dated June 20, 2023. Under certain cashless exercise provisions as well as price protection provisions providing for adjustment of the number of shares of the Company’s common stock issuable upon exercise of the Mast Hill Warrant, the Company issued 138,703 restricted shares of the Company’s common stock.

September 2023 Mast Hill SPA

On September 12, 2023, the Company entered into a securities purchase agreement (the “September 2023 Mast Hill SPA”) with Mast Hill Fund, L.P. (“Mast Hill”), pursuant to which the Company issued an 12% promissory note (the “September 2023 Mast Hill Note”) with a maturity date of September 12, 2024 (the “September 2023 Mast Hill Maturity Date”), in the principal sum of $3,500,000. Pursuant to the terms of the September 2023 Mast Hill Note, the Company agreed to pay the principal sum to Mast Hill and to pay interest on the principal balance at the rate of 12% per annum. The September 2023 Mast Hill Note carries an original issue discount (“OID”) of $350,000. Accordingly, on the closing date, Mast Hill paid the purchase price of $3,150,000 in exchange for the September 2023 Mast Hill Note. Mast Hill may convert the September 2023 Mast Hill Note into shares of the Company’s common stock at any time at a conversion price equal to the lesser of (i) $4.50 or (ii) 91.5% of the lowest volume weighted average price of the Company’s common stock on any trading day during the five trading day period prior to the respective conversion date, subject to adjustment as provided in the September 2023 Mast Hill Note (including but not limited to price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions) as well as beneficial ownership limitations.

Pursuant to the terms of the September 2023 Mast Hill Note, the Company agreed to pay the principal sum and accrued interest as follows: (i) all accrued interest on December 12, 2023, (ii) $350,000 plus accrued interest on March 12, 2024, (iii) $350,000 plus accrued interest on April 12, 2024, (iv) $350,000 plus accrued interest on May 12, 2024, (v) $595,000 plus accrued interest on June 12, 2024, (vi) $595,000 plus accrued interest on July 12, 2024, (vii) $595,000 plus accrued interest on August 12, 2024, and (viii) all remaining amounts owed under the September 2023 Mast Hill Note on the September 2023 Mast Hill Maturity Date (each of the aforementioned payments is an “Amortization Payment”). If the Company fails to make any Amortization Payment, then Mast Hill will have the right to convert the amount of such respective Amortization Payment into shares of common stock as provided in the September 2023 Mast Hill Note at the lesser of (i) the then applicable conversion price under the September 2023 Mast Hill Note or (ii) 85% the lowest volume weighted average price of the Company’s common stock on any trading day during the five trading day period prior to the respective conversion date.

The Company may prepay the September 2023 Mast Hill Note at any time prior to the date that an Event of Default (as defined in the Note) occurs at an amount equal to the principal sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The September 2023 Mast Hill Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the September 2023 Mast Hill Note or September 2023 Mast Hill SPA.

Upon the occurrence of any Event of Default, the September 2023 Mast Hill Note shall become immediately due and payable and the Company will pay to Mast Hill an amount equal to the principal sum then outstanding plus accrued interest multiplied by 125%. Upon the occurrence of an Event of Default, additional interest will accrue from the date of the Event of Default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

The September 2023 Mast Hill SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the common stock underlying the September 2023 Mast Hill Note. Further, pursuant to the September 2023 Mast Hill SPA, the Company agreed to transfer its rights to the charges/mortgages evidenced by Instrument Nos. CE925256 (in the amount of CDN$1,600,000) and CE888785 (in the amount of CDN$1,800,000) on the property located at 1580 Rossi Drive, Tecumseh, Ontario, Canada, to Mast Hill as security for the Company’s repayment of the September 2023 Mast Hill Note. In addition to the beneficial ownership limitations provided in the September 2023 Mast Hill Note, the sum of the number of shares of common stock that may be issued under the September 2023 Mast Hill SPA and September 2023 Mast Hill Note shall be limited to 1,772,045 as further described in the September 2023 Mast Hill SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

The Company’s subsidiary, Acenzia Inc. (“Acenzia”), entered into a guaranty with Mast Hill on September 12, 2023. Acenzia guaranteed the repayment of the September 2023 Mast Hill Note and granted Mast Hill a security interest in Acenzia’s assets, including but not limited to, the property located at 1580 Rossi Drive, Tecumseh, Ontario, Canada.

The Company determined that the conversion features of these notes represented embedded derivatives since the notes are convertible into a variable number of shares upon conversion. On September 12, 2023, the Company recorded a derivative liability of $3,071,653. The fair value of the derivative liability was calculated using the Black-Scholes pricing model with the following assumptions:

● Expected life of 1 year;

● Volatility of 182.17%;

● Dividend yield of 0%; and

● Risk free interest rate of 5.42%

The derivative was recorded as a discount on the convertible notes, but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the convertible note.

As at November 30, 2023, the fair value of the derivative liability was $2,487,726 and for the three months ended November 30, 2023, the Company recorded a gain of $583,927 from the change in fair value of derivative liability as non-operating income in the condensed consolidated statements of operations and comprehensive loss. The fair value of the derivative liability was calculated using the Black-Scholes pricing model with the following assumptions:

● Expected life of 0.79 years;

● Volatility of 193.48%;

● Dividend yield of 0%; and

● Risk free interest rate of 5.16%

The September 2023 Mast Hill Note contained a discount on note of $3,500,000. The total discount will be amortized over the life of the September 2023 Mast Hill Note.

During the three months ended November 30, 2023, the Company amortized $755,464 of the debt discount and as November 30, 2023, the unamortized debt discount was $2,744,536.

September 2023 FirstFire SPA & Note

On September 18, 2023, the Company entered into a securities purchase agreement (the “September 2023 FirstFire SPA”) with FirstFire Global Opportunities Fund, L.P. (“FirstFire”), pursuant to which the Company issued an 12% promissory note (the “September 2023 FirstFire Note”) with a maturity date of September 18, 2024, in the principal sum of $277,778. Pursuant to the terms of the September 2023 FirstFire Note, the Company agreed to pay the principal sum to FirstFire and to pay interest on the principal balance at the rate of 12% per annum. The September 2023 FirstFire Note carries an OID of $27,778. Accordingly, on the closing date, FirstFire paid the purchase price of $250,000 in exchange for the September 2023 FirstFire Note. FirstFire may convert the September 2023 FirstFire Note into the Company’s common stock, at any time at a conversion price equal to the lesser of (i) $4.50 or (ii) 91.5% of the lowest volume weighted average price of the Company’s common stock on any trading day during the five trading day period prior to the respective conversion date, subject to adjustment as provided in the September 2023 FirstFire Note (including but not limited to price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions) as well as beneficial ownership limitations.

Pursuant to the terms of the September 2023 FirstFire Note, the Company agreed to pay the principal sum and accrued interest as follows: (i) all accrued interest on December 18, 2023, (ii) $27,778 plus accrued interest on March 18, 2024, (iii) $27,778 plus accrued interest on April 18, 2024, (iv) $27,778 plus accrued interest on May 18, 2024, (v) $47,222 plus accrued interest on June 18, 2024, (vi) $47,222 plus accrued interest on July 18, 2024, (vii) $47,222 plus accrued interest on August 18, 2024, and (viii) all remaining amounts owed under the September 2023 FirstFire Note on the maturity date (each of the aforementioned payments is a “FirstFire Amortization Payment”). If the Company fails to make any FirstFire Amortization Payment, then FirstFire shall have the right to convert the amount of such respective FirstFire Amortization Payment into shares of common stock as provided in the September 2023 FirstFire Note at the lesser of (i) the then applicable conversion price under the September 2023 FirstFire Note or (ii) 85% the lowest volume weighted average price of the Company’s common stock on any trading day during the five trading day period prior to the respective conversion date.

The Company may prepay the September 2023 FirstFire Note at any time prior to the date that an event of default occurs at an amount equal to the principal sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The September 2023 FirstFire Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the September 2023 FirstFire Note or September 2023 FirstFire SPA.

Upon the occurrence of any event of default, the September 2023 FirstFire Note shall become immediately due and payable and the Company shall pay to FirstFire, in full satisfaction of its obligations hereunder, an amount equal to the principal sum then outstanding plus accrued interest multiplied by 125%. Upon the occurrence of an event of default, additional interest will accrue from the date of the event of default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

The September 2023 FirstFire SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the common stock underlying the September 2023 FirstFire Note. In addition to the beneficial ownership limitations provided in the September 2023 FirstFire Note, the sum of the number of shares of common stock that may be issued under the September 2023 FirstFire SPA and September 2023 FirstFire Note shall be limited to 480,156 as further described in the September 2023 FirstFire SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

Acenzia entered into a guaranty with FirstFire on September 18, 2023. Acenzia guaranteed the repayment of the September 2023 FirstFire Note and granted FirstFire a security interest in Acenzia’s assets, including but not limited to the property located at 1580 Rossi Drive, Tecumseh, Ontario, Canada, which is junior in priority to the security interest granted by Acenzia to FirstFire.

The Company determined that the conversion features of these notes represented embedded derivatives since the notes are convertible into a variable number of shares upon conversion. On September 18, 2023, the Company recorded a derivative liability of $200,136. The fair value of the derivative liability was calculated using the Black-Scholes pricing model with the following assumptions:

● Expected life of 1 year;

● Volatility of 180.36%;

● Dividend yield of 0%; and

● Risk free interest rate of 5.44%

The derivative was recorded as a discount on the convertible notes, but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the convertible note.

As at November 30, 2023, the fair value of the derivative liability was $198,534 and for the three months ended November 30, 2023, the Company recorded a gain of $1,602 from the change in fair value of derivative liability as non-operating income in the condensed consolidated statements of operations and comprehensive loss. The fair value of the derivative liability was calculated using the Black-Scholes pricing model with the following assumptions:

● Expected life of 0.80 years;

● Volatility of 193.48%;

● Dividend yield of 0%; and

● Risk free interest rate of 5.16%

The September 2023 FirstFire Note contained a discount on note of $235,414. The total discount will be amortized over the life of the September 2023 FirstFire Note.

During the three months ended November 30, 2023, the Company amortized $46,954 of the debt discount and as November 30, 2023, the unamortized debt discount was $188,460.

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Debentures, Related Parties

3 Months Ended

Nov. 30, 2023

Debt Disclosure [Abstract]

Debentures, Related Parties

Note 12 – Debentures, Related Parties

On September 30, 2013, the Company issued five debentures totaling CAD$6,402,512 (approximately $6,225,163 on September 30, 2013) in connection with the acquisition of certain business assets. The holders of the debentures are current stockholders, officers and/or affiliates of the Company. The debentures are secured by all the assets of the Company, accrue interest at 8% per annum and were originally due on September 30, 2016. On December 2, 2017, the debenture holders agreed to extend the due date to September 30, 2019. On September 27, 2019, the debenture holders agreed to extend the due date to September 30, 2021. On November 2, 2021, the debenture holders agreed to extend the due date to December 1, 2023.

On January 31, 2018, the debenture holders converted 75% of the debenture value of $3,894,809 plus accrued interest of $414,965 into 1,047,588 shares of the Company’s common stock. The per share price used for the conversion of each debenture was $4.11 which was determined as the average price of the five trading days immediately preceding the date of conversion with a 10% premium added to the calculated per share price.

On July 21, 2020, the Company made a partial repayment of a debenture due to a related party of $267,768.

At November 30, 2023 and August 31, 2023, the amount of debentures outstanding was $913,474 and $916,824, respectively.

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Leases

3 Months Ended

Nov. 30, 2023

Leases

Leases

Note 13 – Leases

Operating leases

The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company discounts lease payments based on an estimate of its incremental borrowing rate.

The Company leases its corporate office space and certain facilities under long-term operating leases expiring through fiscal year 2031.

The table below presents the lease related assets and liabilities recorded on the Company’s condensed consolidated balance sheets as of November 30, 2023 and August 31, 2023:

		November 30,		August 31,
		2023		2023
	Classification on Balance Sheet
Assets
Operating lease assets	Operating lease right of use assets	$	1,870,204	$	1,983,898
Total lease assets		$	1,870,204	$	1,983,898
Liabilities
Current liabilities
Operating lease liability	Current operating lease liability	$	413,506	$	415,392
Noncurrent liabilities
Operating lease liability	Long-term operating lease liability		1,585,667		1,693,577
Total lease liability		$	1,999,173	$	2,108,969

Future minimum operating lease payments are as follows:

Twelve Months Ending November 30,
2024	$	568,536
2025		494,272
2026		512,495
2027		417,394
2028		223,188
Thereafter		254,641
Total payments		2,470,526
Amount representing interest		(471,353	)
Lease obligation, net		1,999,173
Less lease obligation, current portion		413,506
Lease obligation, long-term portion	$	1,585,667

During the three months ended November 30, 2023, the Company did not enter into any new lease obligation.

The lease expense for the three months ended November 30, 2023 and 2022 was $149,877 and $209,846, respectively. The cash paid under operating leases for the three months ended November 30, 2023 and 2022 was $145,545 and $202,465, respectively. At November 30, 2023, the weighted average remaining lease terms were 3.88 years and the weighted average discount rate was 8%.

Finance Leases

The Company leases certain equipment under lease contracts that are accounted for as finance leases. If the contracts meet the criteria for a finance lease, the related equipment underlying the lease contract is capitalized and amortized over its estimated useful life. If the cost of the equipment is not available, the Company calculates the cost by taking the present value of the lease payments using an implicit borrowing rate of 5%.

The net book value of equipment under finance leases included in property and equipment on the accompanying condensed consolidated balance sheets at November 30, 2023 and August 31, 2023 is as follows:

	November 30,		August 31,
	2023		2023
Cost	$	209,457	$	209,457
Accumulated amortization		(209,457)		(209,457)
Net book value	$	-	$	-

Future minimum finance lease payments are as follows:

Twelve Months Ending November 30,
2024	$	8,973
Total payments		8,973
Amount representing interest		(66	)
Lease obligation, net		8,907
Less lease obligation, current portion		(8,907	)
Lease obligation, long-term portion	$	-

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Stockholders’ Equity

3 Months Ended

Nov. 30, 2023

Equity [Abstract]

Stockholders’ Equity

Note 14 – Stockholders’ Equity

Reverse Stock Split

On November 6, 2023, the Company effectuated a 1-for-10 reverse stock split (the “Reverse Stock Split”) effective immediately after the close of trading on the Nasdaq Capital Market (“Nasdaq”) and the Company’s common stock began trading on Nasdaq on a Reverse Stock Split-adjusted basis on November 7, 2023. As a result of the Reverse Stock Split, every 10 pre-split shares of common stock outstanding became one share of common stock, with fractional shares rounded up to the next higher whole share. The Reverse Stock Split did not affect the number of authorized shares of common stock, the par value of the common stock, or modify any rights or preferences of shares of the Company’s common stock. Proportionate adjustments will be made to the exercise prices and the number of shares underlying the Company’s outstanding equity awards and warrants, as applicable.

Convertible Preferred Stock

The Company has authorized 1,000,000 shares of $0.001 par value convertible preferred stock. At November 30, 2023 and August 31, 2023, there were 0 and 0 convertible preferred shares issued and outstanding, respectively.

Common Stock

The Company has authorized 499,000,000 shares of $0.001 par value common stock. At November 30, 2023 and August 31, 2023, there were 17,291,192 and 15,759,325 common shares issued and outstanding, respectively.

During the three-month period ended November, 2023, the Company issued common stock as follows:

● 80,200 shares of common stock were issued to various warrant holders upon exercise of their 3-year warrants. The warrants were issued on October 18, 2022, under the prospectus contained in the Registration Statement on Form S-1 (File No. 333-267401) declared effective by the Securities and Exchange Commission (the “SEC”) on October 13, 2022. The net proceeds were $80,200. The shares were issued on various dates during the 3-month period.

● 160,200 shares of common stock were issued to various warrant holders upon exercise of their 5-year warrants. The warrants were issued on October 18, 2022, under the prospectus contained in the Registration Statement on Form S-1 (File No. 333-267401) declared effective by the SEC on October 13, 2022. The net proceeds were $160,200. The shares were issued on various dates during the 3-month period.

● 75,000 restricted shares of common stock as consideration pursuant to a consulting agreement. The fair value was determined based on the market price of the Company’s common stock on the date of issuance. The shares were issued on September 5, 2023.

● 53,567 shares were issued to Mast Hill upon the cashless exercise of all warrants. The warrants were issued on February 23, 2023 under the terms and conditions of the warrant agreement between the Company and Mast Hill in connection with the $573,000 promissory note issued, by the Company to Mast Hill, on February 23, 2023. The shares were issued on September 18, 2023.

● 75,000 restricted shares of common stock were issued as consideration pursuant to a consulting agreement. The fair value was determined based on the market price of the Company’s common stock on the date of issuance. The shares were issued on September 18, 2023.

● 519,845 restricted shares of common stock were issued to FirstFire upon conversion of outstanding debt pursuant to the terms of the securities purchase agreement between FirstFire and the Company. The debt amount converted consisted of principal amount of $573,000 and interest of $4,521, for a total amount of $577,521. The shares were issued on September 21, 2023.

● 75,000 restricted shares of common stock were issued as consideration pursuant to a consulting agreement. The fair value was determined based on the market price of the Company’s common stock on the date of issuance. The shares were issued on October 3, 2023.

● 73,767 restricted shares of common stock were issued in exchange for certain non-voting special shares of NHL, previously issued in connection with NHL’s Share Exchange Agreement with the Terragenx shareholders, the Company’s Asset Purchase Agreement with Mr. Terrence Mullins, and an employment agreement with Mr. Terrence Mullins, each of which closed on November 17, 2021. The fair value was determined based on the market price of the Company’s common stock on the date of closing. The shares were issued on October 9, 2023.

● 53,532 shares were issued to FirstFire upon the cashless exercise of all warrants. The warrants were issued on March 21, 2023 under the terms and conditions of the warrant agreement between the Company and Mast Hill in connection with the $573,000 promissory note issued, by the Company to FirstFire, on March 21, 2023. The shares were issued on October 12, 2023.

● 75,000 restricted shares of common stock were issued as consideration pursuant to a consulting agreement. The fair value was determined based on the market price of the Company’s common stock on the date of issuance. The shares were issued on October 18, 2023.

● 138,703 shares were issued to Mast Hill upon the cashless exercise of all warrants. The warrants were granted on June 20, 2023 under the terms and conditions of the warrant agreement between the Company and Mast Hill in connection with the $445,000 promissory note issued, by the Company to Mast Hill, on June 20, 2023. The shares were issued on October 23, 2023.

● 75,000 restricted shares of common stock were issued as consideration pursuant to a consulting agreement. The fair value was determined based on the market price of the Company’s common stock on the date of issuance. The shares were issued on November 8, 2023.

● 30,675 restricted shares of common stock were issued pursuant to the terms and conditions of an executive agreement, dated November 15, 2022, between NHL and an officer of NHL. The fair value was determined based on the market price of the Company’s common stock on the date of issuance. The shares were issued on November 21, 2023.

● 18,405 restricted shares of common stock were issued pursuant to the terms and conditions of an executive agreement, dated November 15, 2022, between NHL and an officer of NHL. The fair value was determined based on the market price of the Company’s common stock on the date of issuance. The shares were issued on November 21, 2023.

● 27,973 shares of common stock issued in lieu of fractional shares resulting from the Company’s 1-for-10 reverse stock split of its common stock, effective November 7, 2023. As a result of the reverse stock split, every 10 shares of issued and outstanding common stock were exchanged for one share of common stock, with any fractional shares being rounded up to the next higher whole share.

Common Stock to be Issued

As of November 30, 2023, in connection with the acquisition of 1285 Canada and Poling Taddeo Hovius Physiotherapy Professional Corp, the Company has allotted and is obligated to issue 17,375 shares of the Company’s common stock. As of November 30, 2023, the fair value of the shares to be issued is $44,443.

Stock Options

On September 8, 2015, the Company’s Board of Directors and stockholders holding a majority of the Company’s outstanding common stock approved the Novo Integrated Sciences, Inc. 2015 Incentive Compensation Plan (the “2015 Plan”), which authorizes the issuance of up to 50,000 shares of common stock to employees, officers, directors or independent consultants of the Company, provided that no person can be granted shares under the 2015 Plan for services related to raising capital or promotional activities. During the period ended November 30, 2023, the Company did not grant any awards under the 2015 Plan. The Company does not intend to issue any additional grants under the 2015 Plan.

On January 16, 2018, the Company’s Board of Directors and stockholders holding a majority of the Company’s outstanding common stock approved the Novo Integrated Sciences, Inc. 2018 Incentive Compensation Plan (the “2018 Plan”). Under the 2018 Plan, 100,000 shares of common stock are authorized for the grant of stock options and the issuance of restricted stock, stock appreciation rights, phantom stock and performance awards to officers, directors, employees and eligible consultants to the Company or its subsidiaries. During the period ended November 30, 2023, the 2018 Plan had 86,490 shares available for award; however, the Company does not intend to issue any additional grants under the 2018 Plan.

On February 9, 2021, the Company’s Board of Directors and stockholders holding a majority of the Company’s outstanding common stock approved the Novo Integrated Sciences, Inc. 2021 Equity Incentive Plan (the “2021 Plan”). Under the 2021 Plan, a total of 450,000 shares of common stock are authorized for issuance pursuant to the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares or other cash- or stock-based awards to officers, directors, employees and eligible consultants to the Company or its subsidiaries. Subject to adjustment as provided in the 2021 Plan, the maximum aggregate number of shares that may be issued under the 2021 Plan may be cumulatively increased on January 1, 2022 and on each subsequent January 1 through and including January 1, 2024, by a number of shares equal to the smaller of (i) 3% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or (ii) an amount determined by our Board of Directors. The Company chose not to cumulatively increase the shares authorized for issuance under the 2021 Plan, effective January 1, 2022 and January 1, 2023. As of November 30, 2023, the 2021 Plan had 75,463 shares available for award; however, the Company does not intend to issue any additional grants under the 2021 Plan.

On July 26, 2023 and September 29, 2023, the Company’s Board of Directors and stockholders, respectively, approved the Novo Integrated Sciences, Inc. 2023 Equity Incentive Plan (the “2023 Plan”). Under the 2023 Plan, a total of 2,500,000 shares of common stock are authorized for issuance pursuant to the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares or other cash- or stock-based awards to officers, directors, employees and eligible consultants to the Company or its subsidiaries. As of November 30, 2023, the 2023 Plan had 2,500,000 shares available for award.

The following is a summary of stock options activity:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
	Options		Exercise		Contractual		Intrinsic
	Outstanding		Price		Life		Value
Outstanding, August 31, 2023		371,423		11.44		3.98	$	16,000
Granted		-
Forfeited		-
Exercised		-
Outstanding, November 30, 2023		371,423		11.44		3.73	$	-
Exercisable, November 30, 2023		371,423	$	11.44		3.73	$	-

The exercise price for stock options outstanding at November 30, 2023:

Outstanding				Exercisable
Number of		Exercise		Number of		Exercise
Options		Price		Options		Price
	22,715	$	13.30		22,715	$	13.30
	54,200		16.00		54,200		16.00
	4,800		18.70		4,800		18.70
	77,500		30.00		77,500		30.00
	7,260		38.00		7,260		38.00
	1,000		50.00		1,000		50.00
	3,948		19.00		3,948		19.00
	200,000		1.32		200,000		1.32
	371,423				371,423

No options were granted during the three months ended November 30, 2023 and 2022.

The fair value of the stock options is being amortized to stock option expense over the vesting period. The Company recorded stock option expense of $nil and $60,887 during the three months ended November 30, 2023 and 2022, respectively. At November 30, 2023, the unamortized stock option expense was $nil.

Warrants

The following is a summary of warrant activity:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Warrants			Exercise		Contractual		Intrinsic
	Outstanding			Price		Life		Value
Outstanding, August 31, 2023		806,254		$	12.05		3.71	$	106,960
Granted		-
Forfeited		-
Exercised		(518,061	)
Outstanding, November 30, 2023		288,193		$	30.46		3.46	$	5,400
Exercisable, November 30, 2023		288,193		$	30.46		3.46	$	5,400

The exercise price for warrants outstanding at November 30, 2023:

Outstanding and Exercisable
Number of		Exercise
Warrants		Price
	261,193	$	33.50
	27,000		1.00
	288,193

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Commitments and Contingencies

3 Months Ended

Nov. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 15 – Commitments and Contingencies

Litigation

The Company is party to certain legal proceedings from time-to-time incidental to the conduct of its business. These proceedings could result in fines, penalties, compensatory or treble damages or non-monetary relief. The nature of legal proceedings is such that the Company cannot assure the outcome of any particular matter, and an unfavorable ruling or development could have a materially adverse effect on our condensed consolidated financial position, results of operations and cash flows in the period in which a ruling or settlement occurs. However, based on information available to the Company’s management to date, the Company’s management does not expect that the outcome of any matter pending against the Company is likely to have a materially adverse effect on the Company’s unaudited condensed consolidated financial position as of November 30, 2023, results of operations, cash flows or liquidity of the Company.

During the period ended November 30, 2023, the Company incurred $652,174 included in other expense which was primarily a result of a repayment for an overpayment received from a former customer. The Company’s management does not expect any additional repayments or remaining obligations to this former customer.

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Segment Reporting

3 Months Ended

Nov. 30, 2023

Segment Reporting [Abstract]

Segment Reporting

Note 16 – Segment Reporting

ASC Topic 280, Segment Reporting, requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the Company for making operating decisions and assessing performance. The Company has two reportable segments: healthcare services and product sales.

The following tables summarize the Company’s segment information for the three months ended November 30, 2023 and 2022:

	Three Months Ended November 30,
	2023			2022
Sales
Healthcare services	$	2,044,510		$	2,021,213
Product manufacturing and development		1,768,458			790,478
Corporate		78,250			607,589
	$	3,891,218		$	3,419,280
Gross profit
Healthcare services	$	676,416		$	784,031
Product manufacturing and development		1,189,352			347,914
Corporate		78,250			607,588
	$	1,944,018		$	1,739,533
(Loss) income from operations
Healthcare services	$	(80,327	)	$	(151,691	)
Product manufacturing and development		108,702			(554,842	)
Corporate		(3,346,012	)		(1,535,427	)
	$	(3,317,637	)	$	(2,241,960	)
Depreciation and amortization
Healthcare services	$	30,035		$	28,968
Product manufacturing and development		262,927			309,042
Corporate		279,442			248,156
	$	572,404		$	586,166
Capital expenditures
Healthcare services	$	-		$	-
Product manufacturing and development		-			-
Corporate		-			-
	$	-		$	-
Interest expenses
Healthcare services	$	20,532		$	36,303
Product manufacturing and development		462			2,464
Corporate		122,380			128,476
	$	143,374		$	167,243
Net (loss) income
Healthcare services	$	(98,640	)	$	(185,713	)
Product manufacturing and development		48,883			(578,576	)
Corporate		(4,610,966	)		(3,172,447	)
	$	(4,660,723	)	$	(3,936,736	)

	As of November 30, 2023		As of August 31, 2023
Total assets
Healthcare services	$	5,002,855	$	5,158,851
Product Sales		18,748,475		17,993,652
Corporate		13,493,054		12,410,544
	$	37,244,384	$	35,563,047
Accounts receivable
Healthcare services	$	672,841	$	697,440
Product Sales		1,868,387		765,388
Corporate		94,946		4,200
	$	2,636,174	$	1,467,028
Intangible assets
Healthcare services	$	111,172	$	120,163
Product Sales		3,592,425		3,818,313
Corporate		12,000,621		12,280,063
	$	15,704,218	$	16,218,539
Goodwill
Healthcare services	$	518,918	$	520,821
Product Sales		7,035,861		7,061,662
Corporate		-		-
	$	7,554,779	$	7,582,483

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Subsequent Events

3 Months Ended

Nov. 30, 2023

Subsequent Events [Abstract]

Subsequent Events

Note 17 – Subsequent Events

Purchase and Sale Agreement – Ophir Collection

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) (the “Action”). 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 (as hereinafter defined), subject to the contingencies outlined in the Ophir Agreement, including Court approval, which approval was received on December 1, 2023. The Ophir Agreement was effective upon execution by both parties; however, the Ophir Agreement was subject to approval by the Court.

Pursuant to the Court’s July 2, 2019 order in the Action, as modified by the Court’s February 25, 2022 order in the Action, the Successor Receiver has possession of and right to sell a certain collection of 43 gemstones, 42 of which are certified by the Gemological Institute of America, known as the “Ophir Collection”. Together, the Court’s July 2, 2019 order appointing the original receiver, the Court’s December 3, 2019, order appointing the Successor Receiver, and the Court’s February 25, 2022, order are referred to collectively as the “Receivership Orders.” The Receivership Orders authorized the Successor Receiver to take sole custody, possession, and control of the Ophir Collection and to sell, assign, transfer, convey and deliver title and rights in and to the Ophir Collection subject to the approval of the Court to protect the interests of certain identified creditors.

Within two business days following the Company’s execution of the Ophir Agreement, the Company was required to, and did, deposit $25,000 (the “Deposit”) with the Successor Receiver.

Pursuant to the terms of the Ophir Agreement, the Company agreed to pay $60,000,000 to the Successor Receiver to purchase the Ophir Collection as follows:

(i)	The Company has the right, at all times after November 21, 2023, to conduct a full and unfettered inspection of the Ophir Collection. While the Company has the right to inspect the Ophir Collection prior to closing, the Company’s inspection will not be a contingency to closing and the inability of the Company to inspect (or the Company’s decision not to inspect) the Ophir Collection prior to closing will not delay or prevent closing.
(ii)	After the Successor Receiver obtains Court approval of the Ophir Agreement, the Company will cause $59,975,000 (representing the $60,000,000 purchase price, less the Deposit) to be paid to the Successor Receiver, on or before December 19, 2023. Although such amount has not yet been delivered to the Successor Receiver, the parties continue to work toward closing.
(iii)	Within one business day thereafter, the Successor Receiver will assign, transfer, convey and deliver free and clear title and interest in and to, and possession of, the Ophir Collection to the Company.

Mast Hill Conversion of Debt on $445,000 Promissory Note

On December 21, 2023, the $454,071 total amount of principal and interest owed on MH $445,000 Note was converted to 457,128 shares of common stock at $0.99331 per share. The MH $445,000 Note is paid in full.

Interest Payment on September 2023 Mast Hill Note

On December 12, 2023, the Company made an interest-only payment of $104,712 to Mast Hill pursuant to the terms of the September 2023 Mast Hill Note.

Interest Payment on September 2023 FirstFire Note

On December 18, 2023, the Company made an interest-only payment of $8,333 to FirstFire pursuant to the terms of the September 2023 FirstFire Note.

Officer Option Grant

On January 16, 2024, the Board of Directors granted to Christopher David, the Company’s President, Chief Operating Officer and member of the Board of Directors, an option to purchase 200,000 shares of the Company’s common stock pursuant to the 2023 Equity Incentive Plan. The option was fully vested at grant and is exercisable until January 16, 2030. The option has an exercise price of $0.78 per share.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Nov. 30, 2023

Accounting Policies [Abstract]

Use of Estimates

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. This applies in particular to the going concern assessment, useful lives of non-current assets, impairment of non-current assets, allowance for doubtful receivables, allowance for slow moving and obsolete inventory, valuation of share-based compensation and warrants, valuation of derivative liability, and valuation allowance for deferred tax assets. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Principles of Consolidation

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and entities it controls, including its wholly owned subsidiaries, NHL, Acenzia Inc. (“Acenzia”), Novomerica Health Group, Inc. (“NHG”), Novo Healthnet Rehab Limited, Novo Assessments Inc., PRO-DIP, LLC (“PRO-DIP”), a 91% controlling interest in Terragenx Inc. (“Terragenx”), a 50.1% controlling interest in 12858461 Canada Corp (“1285 Canada”), an 80% controlling interest in Novo Healthnet Kemptville Centre, Inc., a Back on Track Physiotherapy and Health Centre clinic operated by NHL, Clinical Consultants International, LLC and a 70% controlling interest in Novo Earth Therapeutics Inc. (currently inactive).

All intercompany transactions have been eliminated.

An entity is controlled when the Company has the ability to direct the relevant activities of the entity, has exposure or rights to variable returns from its involvement with the entity, and is able to use its power over the entity to affect its returns from the entity.

Income or loss and each component of OCI are attributed to the shareholders of the Company and to the noncontrolling interests. Total comprehensive income is attributed to the shareholders of the Company and to the noncontrolling interests even if this results in the non-controlling interests having a deficit balance on consolidation.

Noncontrolling Interest

Noncontrolling Interest

The Company follows FASB ASC Topic 810, Consolidation, which governs the accounting for and reporting of non-controlling interests (“NCIs”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCIs be treated as a separate component of equity, not as a liability, that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially owned consolidated subsidiary be allocated to the NCI even when such allocation might result in a deficit balance.

The net income (loss) attributed to the NCI is separately designated in the accompanying condensed consolidated statements of operations and comprehensive loss.

Cash Equivalents

Cash Equivalents

For the purpose of the condensed consolidated statements of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly liquid debt instruments with original maturities of three months or less.

Accounts Receivable

Accounts Receivable

Accounts receivable are recorded, net of allowance for doubtful accounts and sales returns. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentration, customer credit worthiness, current economic trends and changes in customer payment patterns to determine if the allowance for doubtful accounts is adequate. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Delinquent account balances are written-off after management has determined that the likelihood of collection is not probable and known bad debts are written off against the allowance for doubtful accounts when identified. As of November 30, 2023 and August 31, 2023, the allowance for uncollectible accounts receivable was $855,116 and $864,215, respectively.

Inventory

Inventory

Inventories are valued at the lower of cost (determined by the first in, first out method) and net realizable value. Management compares the cost of inventories with the net realizable value and allowance is made for writing down their inventories to net realizable value, if lower. Inventory is segregated into three areas: raw materials, work-in-process and finished goods. The Company periodically assessed its inventory for slow moving and/or obsolete items and any change in the allowance is recorded in cost of revenue in the accompanying condensed consolidated statements of operations and comprehensive loss. If any are identified an appropriate allowance for those items is made and/or the items are deemed to be impaired. As of November 30, 2023 and August 31, 2023, the Company’s allowance for slow moving or obsolete inventory was $nil and $nil, respectively.

Other Receivables

Other Receivables

Other receivables are recorded at cost and presented as current or long-term based on the terms of the agreements. Management reviews the collectability of other receivables and writes off the portion that is deemed to be uncollectible. During the three months ended November 30, 2023 and year ended August 31, 2023, the Company wrote off $nil and $nil, respectively, of other receivables that were not expected to be collected.

Property and Equipment

Property and Equipment

Property and equipment are stated at cost less depreciation and impairment. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the declining balance method for substantially all assets with estimated lives as follows:

Building	30 years
Leasehold improvements	5 years
Clinical equipment	5 years
Computer equipment	3 years
Office equipment	5 years
Furniture and fixtures	5 years

Leases

Leases

The Company applies the provisions of ASC Topic 842, Leases which requires lessees to recognize lease assets and lease liabilities on the balance sheet. The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate.

Long-Lived Assets

Long-Lived Assets

The Company applies the provisions of ASC Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets, including right-of-use assets, used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal. Based on its review at November 30, 2023, the Company believes there was no impairment of its long-lived assets.

Intangible Assets

Intangible Assets

The Company’s intangible assets are being amortized over their estimated useful lives as follows:

Land use rights	50 years (the lease period)
Intellectual property	7 years
Customer relationships	5 years
Brand names	7 years

The intangible assets with finite useful lives are reviewed for impairment when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Based on its review at November 30, 2023, the Company believes there was no impairment of its intangible assets.

Right-of-use Assets

Right-of-use Assets

The Company’s right-of-use assets consist of leased assets recognized in accordance with ASC 842, Leases, which requires lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liability represents the Company’s obligation to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the condensed consolidated balance sheet and are expensed on a straight-line basis over the lease term in the condensed consolidated statements of operations and comprehensive loss. The Company determines the lease term by agreement with lessor. In cases where the lease does not provide an implicit interest rate, the Company uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.

Goodwill

Goodwill

Goodwill represents the excess of purchase price over the underlying net assets of businesses acquired. Under U.S. GAAP, goodwill is not amortized but is subject to annual impairment tests. The Company recorded goodwill related to its acquisition of APKA Health, Inc. (“APKA”) during the fiscal year ended August 31, 2017, Executive Fitness Leaders (“EFL”) during the fiscal year ended August 31, 2018, Action Plus Physiotherapy Rockland (“Rockland”) during the fiscal year ended August 31, 2019, Acenzia during the fiscal year ended August 31, 2021, and 1285 Canada during the fiscal year ended August 31, 2022. Based on its review at November 30, 2023, the Company believes there was no impairment of its goodwill.

Summary of changes in goodwill by acquired businesses is as follows:

	APKA			EFL			Rockland			Acenzia			1285 Canada			Total
Balance, August 31, 2022	$	190,678		$	125,088		$	221,188		$	7,288,307		$	583		$	7,825,844
Foreign currency translation adjustment		(5,928	)		(3,892	)		(6,878	)		(226,645	)		(18	)		(243,361	)
Balance, August 31, 2023	$	184,750		$	121,196		$	214,310		$	7,061,662		$	565		$	7,582,483
Foreign currency translation adjustment		(675	)		(443	)		(783	)		(25,801	)		(2	)		(27,704	)
Balance, November 30, 2023	$	184,075		$	120,753		$	213,527		$	7,035,861		$	563		$	7,554,779

Fair Value of Financial Instruments

Fair Value of Financial Instruments

For certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, other receivables, accounts payable, accrued expenses, current portion of finance and operating lease liability, current portion of government loans and notes payable, debentures, convertible notes payable, and due to related parties, the carrying amounts approximate their fair values due to their short-term maturities.

FASB ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosure of the fair value of financial instruments held by the Company. FASB ASC Topic 825, Financial Instruments, defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the condensed consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization, low risk of counterparty default and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

● Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

● Level 3 inputs to the valuation methodology use one or more unobservable inputs which are significant to the fair value measurement.

The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic 480, Distinguishing Liabilities from Equity, and FASB ASC Topic 815, Derivatives and Hedging.

For certain financial instruments, the carrying amounts reported in the condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, other receivables, and current liabilities, including accounts payable, accrued expenses, current portion of finance and operating lease liability, current portion of government loans and notes payable, debentures, convertible notes payable, and due to related parties, each qualify as a financial instrument, and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The carrying value of notes payable approximates their fair values due to current market rate on such debt.

As of November 30, 2023 and August 31, 2023, respectively, the Company did not identify any financial assets and liabilities required to be presented on the condensed consolidated balance sheet at fair value, except for contingent liability which is carried at fair value using Level 1 inputs and derivative liability which is carried at fair value using Level 3 inputs.

Derivative Financial Instruments

Derivative Financial Instruments

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815. The Company applies the guidance in ASC 815-40-35-12 to determine the order in which each convertible instrument would be evaluated for derivative classification.

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to the fair value of derivatives.

Revenue Recognition

Revenue Recognition

The Company’s revenue recognition reflects the updated accounting policies as per the requirements of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“Topic 606”). As sales are and have been primarily from providing healthcare services, the Company has no significant post-delivery obligations.

Revenue from providing healthcare and healthcare related services and product sales are recognized under Topic 606 in a manner that reasonably reflects the delivery of its products and services to customers in return for expected consideration and includes the following elements:

● executed contracts with the Company’s customers that it believes are legally enforceable;

● identification of performance obligations in the respective contract;

● determination of the transaction price for each performance obligation in the respective contract;

● allocation the transaction price to each performance obligation; and

● recognition of revenue only when the Company satisfies each performance obligation.

These five elements, as applied to the Company’s revenue category, are summarized below:

● Healthcare and healthcare related services – gross service revenue is recorded in the accounting records at the time the services are provided (point-in-time) on an accrual basis at the provider’s established rates. The Company reserves a provision for contractual adjustment and discounts that are deducted from gross service revenue. The Company reports revenues net of any sales, use and value added taxes.

● Product sales – revenue is recorded at the point of time of delivery.

In arrangements where another party is involved in providing specified services to a customer, the Company evaluates whether it is the principal or agent. In this evaluation, the Company considers if the Company obtains control of the specified goods or services before they are transferred to the customer, as well as other indicators such as the party primarily responsible for fulfillment, inventory risk, and discretion in establishing price. For product sales where the Company is not the principal, the Company recognizes revenue on a net basis. For the periods presented, revenue for arrangements where the Company is the agent was not material.

Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue. Unearned revenue is included with accrued expenses in the accompanying condensed consolidated balance sheets.

Sales returns and allowances were insignificant for the three months ended November 30, 2023 and 2022. The Company does not provide unconditional right of return, price protection or any other concessions to its customers.

Income Taxes

Income Taxes

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented.

Stock-Based Compensation

Stock-Based Compensation

The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the requisite service period. The Company recognizes in the condensed consolidated statements of operations and comprehensive loss the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.

Basic and Diluted Earnings Per Share

Basic and Diluted Earnings Per Share

Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share. The calculations within these condensed consolidated financial statements have been retroactively adjusted to reflect the effects of the 1-for-10 reverse stock split that was effective on November 7, 2023. Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS assumes that all dilutive securities are converted. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were 659,616 and 1,860,950 options/warrants outstanding at November 30, 2023 and 2022, respectively. In addition, at November 30, 2023, there were outstanding convertible notes that could convert into 3,786,454 shares of common stock and there were 17,375 shares of common stock to be issued.

Due to the net loss incurred, potentially dilutive instruments would be anti-dilutive. Accordingly, diluted loss per share is the same as basic loss per share for all periods presented.

Foreign Currency Transactions and Comprehensive Income

Foreign Currency Transactions and Comprehensive Income

U.S. GAAP generally requires recognized revenue, expenses, gains and losses be included in net income. Certain statements, however, require entities to report specific changes in assets and liabilities, such as gain or loss on foreign currency translation, as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. The functional currency of the Company’s Canadian subsidiaries is the CAD. Translation gain of $108,976 for the three months ended November 30, 2023 and translation loss of $922,609 for the year ended August 31, 2023, respectively, are classified as an item of other comprehensive loss in the stockholders’ equity section of the condensed consolidated balance sheet.

Condensed Consolidated Statements of Cash Flows

Condensed Consolidated Statements of Cash Flows

Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rates. As a result, amounts related to assets and liabilities reported on the condensed consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the condensed consolidated balance sheets.

Segment Reporting

Segment Reporting

ASC Topic 280, Segment Reporting, requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has two reportable segments. See Note 16.

Reclassifications

Reclassifications

Certain prior period amounts were reclassified to conform to the manner of presentation in the current period. These reclassifications had no effect on the net loss or shareholders’ equity.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying condensed consolidated financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

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Organization and Basis of Presentation (Tables)

3 Months Ended

Nov. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Foreign Currency Translation, Exchange Rate Used

	November 30, 2023		November 30, 2022		August 31, 2023
Period end: CAD to USD exchange rate	$	0.7363	$	0.7403	$	0.7390
Average period: CAD to USD exchange rate	$	0.7324	$	0.7414	$	0.7426

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Nov. 30, 2023

Accounting Policies [Abstract]

Schedule of Estimated Useful lives of Assets

Building	30 years
Leasehold improvements	5 years
Clinical equipment	5 years
Computer equipment	3 years
Office equipment	5 years
Furniture and fixtures	5 years

Schedule of Intangible Assets Amortized Estimated Useful Lives

The Company’s intangible assets are being amortized over their estimated useful lives as follows:

Land use rights	50 years (the lease period)
Intellectual property	7 years
Customer relationships	5 years
Brand names	7 years

Schedule of Changes in Goodwill

Summary of changes in goodwill by acquired businesses is as follows:

	APKA			EFL			Rockland			Acenzia			1285 Canada			Total
Balance, August 31, 2022	$	190,678		$	125,088		$	221,188		$	7,288,307		$	583		$	7,825,844
Foreign currency translation adjustment		(5,928	)		(3,892	)		(6,878	)		(226,645	)		(18	)		(243,361	)
Balance, August 31, 2023	$	184,750		$	121,196		$	214,310		$	7,061,662		$	565		$	7,582,483
Foreign currency translation adjustment		(675	)		(443	)		(783	)		(25,801	)		(2	)		(27,704	)
Balance, November 30, 2023	$	184,075		$	120,753		$	213,527		$	7,035,861		$	563		$	7,554,779

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Accounts Receivables, Net (Tables)

3 Months Ended

Nov. 30, 2023

Receivables [Abstract]

Schedule of Accounts Receivable, Net

Accounts receivables, net at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30,			August 31,
	2023			2023
Trade receivables	$	3,412,783		$	2,223,243
Amounts earned but not billed		78,507			108,000
		3,491,290			2,331,243
Allowance for doubtful accounts		(855,116	)		(864,215	)
Accounts receivable, net	$	2,636,174		$	1,467,028

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Inventory (Tables)

3 Months Ended

Nov. 30, 2023

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30,		August 31,
	2023		2023
Raw materials	$	516,811	$	388,391
Work in process		108,244		81,696
Finished Goods		645,780		636,896
		1,270,835		1,106,983
Allowance for slow moving and obsolete inventory		-		-
Inventory, net	$	1,270,835	$	1,106,983

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Other Receivables (Tables)

3 Months Ended

Nov. 30, 2023

Receivables [Abstract]

Schedule of Other Receivables

Other receivables at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30, 2023			August 31, 2023
Advance to corporation; accrues interest at 12% per annum; unsecured; due January 31, 2024, as amended.	$	73,630		$	73,900
Advance to corporation; accrues interest at 12% per annum; secured by property and other assets of debtor; due February 1, 2024, as amended.		532,433			534,386
Advance to corporation; accrues interest at 10% per annum; secured by assets of debtor; due February 1, 2024, as amended.		441,679			443,298
Total other receivables		1,047,742			1,051,584
Current portion		(1,047,742	)		(1,051,584	)
Long-term portion	$	-		$	-

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Property and Equipment (Tables)

3 Months Ended

Nov. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30,			August 31,
	2023			2023
Land	$	441,780		$	443,400
Building		3,313,350			3,325,500
Leasehold improvements		838,297			841,371
Clinical equipment		1,909,678			1,916,681
Computer equipment		33,381			33,504
Office equipment		44,400			44,502
Furniture and fixtures		38,149			38,289
		6,619,035			6,643,247
Accumulated depreciation		(1,312,422	)		(1,253,209	)
Total	$	5,306,613		$	5,390,038

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Intangible Assets (Tables)

3 Months Ended

Nov. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

Intangible assets at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30,			August 31,
	2023			2023
Land use rights	$	11,573,321		$	11,573,321
Intellectual property		7,487,410			7,497,746
Customer relationships		2,287,746			2,291,058
Brand names		1,921,375			1,928,421
		23,269,852			23,290,546
Accumulated amortization		(7,565,634	)		(7,072,007	)
Total	$	15,704,218		$	16,218,539

Schedule of Expected Amortization Expense of intangible Assets

Expected amortization expense of intangible assets over the next 5 years and thereafter is as follows:

Twelve Months Ending November 30,
2024	$	2,003,586
2025		1,820,324
2026		1,454,624
2027		1,208,004
2028		639,025
Thereafter		8,578,655
Total	$	15,704,218

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Accrued Expenses (Tables)

3 Months Ended

Nov. 30, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Expenses

Accrued expenses at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30,		August 31,
	2023		2023
Accrued liabilities	$	1,049,543	$	961,897
Accrued payroll		215,936		236,218
Unearned revenue		35,070		35,434
	$	1,300,549	$	1,233,549

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Government Loans and Notes Payable (Tables)

3 Months Ended

Nov. 30, 2023

Government Loans And Notes Payable

Schedule of Governmental Loans and Note Payable

Notes payable at November 30, 2023 and August 31, 2023 consisted of the following:

	November 30,			August 31,
	2023			2023
Government loans issued under the Government of Canada’s Canada Emergency Business Account (“CEBA”) program (A).		88,356			88,680
Note payable to the Small Business Administration. The note bears interest at 3.75% per annum, requires monthly payments of $190 after 12 months from funding and is due 30 years from the date of issuance, and is secured by certain equipment of PRO-DIP.		40,320			40,320
Note payable dated December 3, 2018; accrues interest at 4.53% per annum; unsecured; annual payments of approximately $4,000; due December 2, 2028		28,589			28,693
Note payable received May 25, 2023, accruing interest at 18% per 3-months term, unsecured, with principal and interest due 3-month from loan issuance. The note was repaid on October 26, 2023.		-			73,900
Note payable received May 10, 2023, accruing interest at 15% per 4-months term, with a first priority security interest in all of Acenzia’s production equipment, with principal and interest due 4-month from loan issuance. The note was repaid on October 23, 2023.		-			110,850
Total government loans and notes payable		157,265			342,443
Less current portion		(93,488	)		(277,405	)
Long-term portion	$	63,777		$	65,038

(A) The Government of Canada launched CEBA loan to ensure that small businesses have access to the capital that they need during the current challenges faced due to the COVID-19 virus. The Company obtained CAD$80,000 loan (US$58,904 at November 30, 2023), which is unsecured, non-interest bearing and due on or before January 18, 2024. If the loan amount is paid on or before January 18, 2024, 25% of the loan will be forgiven (“Early Payment Credit”). In the event that the Company does not repay 75% of such term debt on or before January 18, 2024, the Early Payment Credit will not apply and the lender will automatically extend the term of the loan until December 31, 2026 and will accrue interest on the outstanding amount of the CEBA loan at a fixed rate of 5% per year. In addition, with acquisition of Terragenx, the Company acquired a CEBA loan in the amount of CAD$60,000 net of CAD$20,000 repayment (US$29,452 at November 30, 2023) under the same terms.

Schedule of Future Maturities Outstanding of government Loans and Notes Payable

Future scheduled maturities of outstanding government loans and notes payable are as follows:

Twelve Months Ending November 30,
2024	$	93,488
2025		6,470
2026		6,469
2027		6,469
2028		6,469
Thereafter		37,900
Total	$	157,265

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Leases (Tables)

3 Months Ended

Nov. 30, 2023

Leases

Schedule of Lease Related Assets and Liabilities

The table below presents the lease related assets and liabilities recorded on the Company’s condensed consolidated balance sheets as of November 30, 2023 and August 31, 2023:

		November 30,		August 31,
		2023		2023
	Classification on Balance Sheet
Assets
Operating lease assets	Operating lease right of use assets	$	1,870,204	$	1,983,898
Total lease assets		$	1,870,204	$	1,983,898
Liabilities
Current liabilities
Operating lease liability	Current operating lease liability	$	413,506	$	415,392
Noncurrent liabilities
Operating lease liability	Long-term operating lease liability		1,585,667		1,693,577
Total lease liability		$	1,999,173	$	2,108,969

Schedule of Operating Lease Payments

Future minimum operating lease payments are as follows:

Twelve Months Ending November 30,
2024	$	568,536
2025		494,272
2026		512,495
2027		417,394
2028		223,188
Thereafter		254,641
Total payments		2,470,526
Amount representing interest		(471,353	)
Lease obligation, net		1,999,173
Less lease obligation, current portion		413,506
Lease obligation, long-term portion	$	1,585,667

Schedule of Finance Leases

The net book value of equipment under finance leases included in property and equipment on the accompanying condensed consolidated balance sheets at November 30, 2023 and August 31, 2023 is as follows:

	November 30,		August 31,
	2023		2023
Cost	$	209,457	$	209,457
Accumulated amortization		(209,457)		(209,457)
Net book value	$	-	$	-

Schedule of Future Minimum Lease Payments

Future minimum finance lease payments are as follows:

Twelve Months Ending November 30,
2024	$	8,973
Total payments		8,973
Amount representing interest		(66	)
Lease obligation, net		8,907
Less lease obligation, current portion		(8,907	)
Lease obligation, long-term portion	$	-

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Stockholders’ Equity (Tables)

3 Months Ended

Nov. 30, 2023

Equity [Abstract]

Schedule of Stock Option Activity

The following is a summary of stock options activity:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
	Options		Exercise		Contractual		Intrinsic
	Outstanding		Price		Life		Value
Outstanding, August 31, 2023		371,423		11.44		3.98	$	16,000
Granted		-
Forfeited		-
Exercised		-
Outstanding, November 30, 2023		371,423		11.44		3.73	$	-
Exercisable, November 30, 2023		371,423	$	11.44		3.73	$	-

Schedule of Options Outstanding and Exercisable

The exercise price for stock options outstanding at November 30, 2023:

Outstanding				Exercisable
Number of		Exercise		Number of		Exercise
Options		Price		Options		Price
	22,715	$	13.30		22,715	$	13.30
	54,200		16.00		54,200		16.00
	4,800		18.70		4,800		18.70
	77,500		30.00		77,500		30.00
	7,260		38.00		7,260		38.00
	1,000		50.00		1,000		50.00
	3,948		19.00		3,948		19.00
	200,000		1.32		200,000		1.32
	371,423				371,423

Schedule of Warrant Activity

The following is a summary of warrant activity:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Warrants			Exercise		Contractual		Intrinsic
	Outstanding			Price		Life		Value
Outstanding, August 31, 2023		806,254		$	12.05		3.71	$	106,960
Granted		-
Forfeited		-
Exercised		(518,061	)
Outstanding, November 30, 2023		288,193		$	30.46		3.46	$	5,400
Exercisable, November 30, 2023		288,193		$	30.46		3.46	$	5,400

Schedule of Warrants Outstanding

The exercise price for warrants outstanding at November 30, 2023:

Outstanding and Exercisable
Number of		Exercise
Warrants		Price
	261,193	$	33.50
	27,000		1.00
	288,193

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Segment Reporting (Tables)

3 Months Ended

Nov. 30, 2023

Segment Reporting [Abstract]

Schedule of Segment Reporting Information

The following tables summarize the Company’s segment information for the three months ended November 30, 2023 and 2022:

	Three Months Ended November 30,
	2023			2022
Sales
Healthcare services	$	2,044,510		$	2,021,213
Product manufacturing and development		1,768,458			790,478
Corporate		78,250			607,589
	$	3,891,218		$	3,419,280
Gross profit
Healthcare services	$	676,416		$	784,031
Product manufacturing and development		1,189,352			347,914
Corporate		78,250			607,588
	$	1,944,018		$	1,739,533
(Loss) income from operations
Healthcare services	$	(80,327	)	$	(151,691	)
Product manufacturing and development		108,702			(554,842	)
Corporate		(3,346,012	)		(1,535,427	)
	$	(3,317,637	)	$	(2,241,960	)
Depreciation and amortization
Healthcare services	$	30,035		$	28,968
Product manufacturing and development		262,927			309,042
Corporate		279,442			248,156
	$	572,404		$	586,166
Capital expenditures
Healthcare services	$	-		$	-
Product manufacturing and development		-			-
Corporate		-			-
	$	-		$	-
Interest expenses
Healthcare services	$	20,532		$	36,303
Product manufacturing and development		462			2,464
Corporate		122,380			128,476
	$	143,374		$	167,243
Net (loss) income
Healthcare services	$	(98,640	)	$	(185,713	)
Product manufacturing and development		48,883			(578,576	)
Corporate		(4,610,966	)		(3,172,447	)
	$	(4,660,723	)	$	(3,936,736	)

	As of November 30, 2023		As of August 31, 2023
Total assets
Healthcare services	$	5,002,855	$	5,158,851
Product Sales		18,748,475		17,993,652
Corporate		13,493,054		12,410,544
	$	37,244,384	$	35,563,047
Accounts receivable
Healthcare services	$	672,841	$	697,440
Product Sales		1,868,387		765,388
Corporate		94,946		4,200
	$	2,636,174	$	1,467,028
Intangible assets
Healthcare services	$	111,172	$	120,163
Product Sales		3,592,425		3,818,313
Corporate		12,000,621		12,280,063
	$	15,704,218	$	16,218,539
Goodwill
Healthcare services	$	518,918	$	520,821
Product Sales		7,035,861		7,061,662
Corporate		-		-
	$	7,554,779	$	7,582,483

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Schedule of Foreign Currency Translation, Exchange Rate Used (Details)	Nov. 30, 2023	Aug. 31, 2023	Nov. 30, 2022
Period End [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Foreign currency exchange rate	0.7363	0.7390	0.7403
Average Period [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Foreign currency exchange rate	0.7324	0.7426	0.7414

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Organization and Basis of Presentation (Details Narrative) - USD ($)					3 Months Ended
	Nov. 07, 2023	Nov. 06, 2023	May 09, 2017	Apr. 25, 2017	Nov. 30, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Reverse stock split	1-for-10 reverse stock split	1-for-10 reverse stock split			1-for-10 reverse stock split
Parent Company [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Common stock issued in connection with reverse merger transaction			$ 6,904
Share Exchange Agreement [Member] | NHL [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of restricted shares of common stock, shares				1,677,974
Percentage of common stock issued and outstanding				85.00%

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Schedule of Estimated Useful lives of Assets (Details)	Nov. 30, 2023
Building [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, estimated lives	30 years
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, estimated lives	5 years
Clinical Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, estimated lives	5 years
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, estimated lives	3 years
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, estimated lives	5 years
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, estimated lives	5 years

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Schedule of Intangible Assets Amortized Estimated Useful Lives (Details)	Nov. 30, 2023
Land Use Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, estimated lives	50 years
Intellectual Property [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, estimated lives	7 years
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, estimated lives	5 years
Brand Names [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, estimated lives	7 years

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Schedule of Changes in Goodwill (Details) - USD ($)	3 Months Ended	12 Months Ended
	Nov. 30, 2023	Aug. 31, 2023
Beginning balance	$ 7,582,483	$ 7,825,844
Foreign currency translation adjustment	(27,704)	(243,361)
Ending balance	7,554,779	7,582,483
APKA Health, Inc. [Member]
Beginning balance	184,750	190,678
Foreign currency translation adjustment	(675)	(5,928)
Ending balance	184,075	184,750
Executive Fitness Leaders [Member]
Beginning balance	121,196	125,088
Foreign currency translation adjustment	(443)	(3,892)
Ending balance	120,753	121,196
Rockland [Member]
Beginning balance	214,310	221,188
Foreign currency translation adjustment	(783)	(6,878)
Ending balance	213,527	214,310
Acenzia Inc [Member]
Beginning balance	7,061,662	7,288,307
Foreign currency translation adjustment	(25,801)	(226,645)
Ending balance	7,035,861	7,061,662
12858461 Canada Corp [Member]
Beginning balance	565	583
Foreign currency translation adjustment	(2)	(18)
Ending balance	$ 563	$ 565

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Summary of Significant Accounting Policies (Details Narrative)		3 Months Ended		12 Months Ended
	Nov. 07, 2023 shares	Nov. 30, 2023 USD ($) Integer shares	Nov. 30, 2022 USD ($) shares	Aug. 31, 2023 USD ($)
Allowance for uncollectible accounts receivable		$ 855,116		$ 864,215
Inventory
Other receivable written off
Impairment of long-lived assets		0
Impairment of intangible assets		$ 0
Contract lease term		12 months
Goodwill impairment charge
Debt conversion, converted instrument, shares issued | shares	27,973
Foreign currency translation gain (loss)		$ 108,976	$ (420,982)	$ 922,609
Number of reportable segments | Integer		2
Common Stock [Member]
Debt conversion, converted instrument, shares issued | shares		3,786,454
Common Stock To Be Issued [Member]
Debt conversion, converted instrument, shares issued | shares		17,375
Options/Warrants Outstanding [Member]
Potentially dilutive common stock options and warrants outstanding, shares | shares		659,616	1,860,950
Terragenx Inc [Member]
Equity method investment, ownership percentage		91.00%
12858461 Canada Corp [Member]
Equity method investment, ownership percentage		50.10%
Novo Healthnet Kemptville Centre Inc [Member]
Equity method investment, ownership percentage		80.00%
Novo Earth Therapeutics Inc [Member]
Equity method investment, ownership percentage		70.00%

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Related Party Transactions (Details Narrative) - USD ($)	3 Months Ended	12 Months Ended
	Nov. 30, 2023	Aug. 31, 2023
6% Interest Rate [Member]
Related Party Transaction [Line Items]
Bearing interest rate	6.00%	6.00%
13.75% Interest Rate [Member]
Related Party Transaction [Line Items]
Bearing interest rate	13.75%	13.75%
Related Party [Member]
Related Party Transaction [Line Items]
Due to related parties	$ 458,266	$ 533,001
Related Party [Member] | Non-Interest Bearing [Member]
Related Party Transaction [Line Items]
Due to related parties	376,701	451,137
Related Party [Member] | 6% Interest Rate [Member]
Related Party Transaction [Line Items]
Due to related parties		21,267
Related Party [Member] | 13.75% Interest Rate [Member]
Related Party Transaction [Line Items]
Due to related parties	$ 81,565	$ 60,597

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Schedule of Accounts Receivable, Net (Details) - USD ($)	Nov. 30, 2023	Aug. 31, 2023
Receivables [Abstract]
Trade receivables	$ 3,412,783	$ 2,223,243
Amounts earned but not billed	78,507	108,000
Accounts receivables gross	3,491,290	2,331,243
Allowance for doubtful accounts	(855,116)	(864,215)
Accounts receivable, net	$ 2,636,174	$ 1,467,028

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Schedule of Inventory (Details) - USD ($)	Nov. 30, 2023	Aug. 31, 2023
Inventory Disclosure [Abstract]
Raw materials	$ 516,811	$ 388,391
Work in process	108,244	81,696
Finished Goods	645,780	636,896
Inventory Gross	1,270,835	1,106,983
Allowance for slow moving and obsolete inventory
Inventory, net	$ 1,270,835	$ 1,106,983

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Schedule of Other Receivables (Details) - USD ($)	Nov. 30, 2023	Aug. 31, 2023
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total other receivables	$ 1,047,742	$ 1,051,584
Current portion	(1,047,742)	(1,051,584)
Long-term portion
Advance to Corporation One [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total other receivables	73,630	73,900
Advance to Corporation Two [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total other receivables	532,433	534,386
Advance to Corporation Three [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total other receivables	$ 441,679	$ 443,298

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Schedule of Other Receivables (Details) (Parenthetical)	3 Months Ended	12 Months Ended
	Nov. 30, 2023	Aug. 31, 2023
Advance to Corporation One [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of interest accrued per annum	12.00%	12.00%
Notes receivable due date	Jan. 31, 2024	Jan. 31, 2024
Advance to Corporation Two [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of interest accrued per annum	12.00%	12.00%
Notes receivable due date	Feb. 01, 2024	Feb. 01, 2024
Advance to Corporation Three [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of interest accrued per annum	10.00%	10.00%
Notes receivable due date	Feb. 01, 2024	Feb. 01, 2024

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Schedule of Property and Equipment (Details) - USD ($)	Nov. 30, 2023	Aug. 31, 2023
Property, Plant and Equipment [Line Items]
Property and Equipment gross	$ 6,619,035	$ 6,643,247
Accumulated depreciation	(1,312,422)	(1,253,209)
Total	5,306,613	5,390,038
Land [Member]
Property, Plant and Equipment [Line Items]
Property and Equipment gross	441,780	443,400
Building [Member]
Property, Plant and Equipment [Line Items]
Property and Equipment gross	3,313,350	3,325,500
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and Equipment gross	838,297	841,371
Clinical Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and Equipment gross	1,909,678	1,916,681
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and Equipment gross	33,381	33,504
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and Equipment gross	44,400	44,502
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and Equipment gross	$ 38,149	$ 38,289

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Property and Equipment (Details Narrative) - USD ($)	3 Months Ended
	Nov. 30, 2023	Nov. 30, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 72,604	$ 60,043

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Schedule of Intangible Assets (Details) - USD ($)	Nov. 30, 2023	Aug. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible assets, gross	$ 23,269,852	$ 23,290,546
Accumulated amortization	(7,565,634)	(7,072,007)
Total	15,704,218	16,218,539
Land Use Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible assets, gross	11,573,321	11,573,321
Intellectual Property [Member]
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible assets, gross	7,487,410	7,497,746
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible assets, gross	2,287,746	2,291,058
Brand Names [Member]
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible assets, gross	$ 1,921,375	$ 1,928,421

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Schedule of Expected Amortization Expense of intangible Assets (Details) - USD ($)	Nov. 30, 2023	Aug. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
2024	$ 2,003,586
2025	1,820,324
2026	1,454,624
2027	1,208,004
2028	639,025
Thereafter	8,578,655
Total	$ 15,704,218	$ 16,218,539

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Intangible Assets (Details Narrative) - USD ($)	3 Months Ended
	Nov. 30, 2023	Nov. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 499,800	$ 526,123

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Schedule of Accrued Expenses (Details) - USD ($)	Nov. 30, 2023	Aug. 31, 2023
Payables and Accruals [Abstract]
Accrued liabilities	$ 1,049,543	$ 961,897
Accrued payroll	215,936	236,218
Unearned revenue	35,070	35,434
Accrued expense	$ 1,300,549	$ 1,233,549

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Schedule of Governmental Loans and Note Payable (Details) - USD ($)		3 Months Ended	12 Months Ended
		Nov. 30, 2023	Aug. 31, 2023
Short-Term Debt [Line Items]
Total government loans and notes payable		$ 157,265	$ 342,443
Less current portion		(93,488)	(277,405)
Long-term portion		63,777	65,038
Notes Payable One [Member]
Short-Term Debt [Line Items]
Total government loans and notes payable	[1]	88,356	88,680
Notes Payable Two [Member]
Short-Term Debt [Line Items]
Total government loans and notes payable		40,320	40,320
Notes Payable Three [Member]
Short-Term Debt [Line Items]
Total government loans and notes payable		$ 28,589	$ 28,693
Debt instrument, maturity date		Dec. 02, 2028	Dec. 02, 2028
Notes Payable Four [Member]
Short-Term Debt [Line Items]
Total government loans and notes payable			$ 73,900
Notes Payable Five [Member]
Short-Term Debt [Line Items]
Total government loans and notes payable			$ 110,850

[1] The Government of Canada launched CEBA loan to ensure that small businesses have access to the capital that they need during the current challenges faced due to the COVID-19 virus. The Company obtained CAD$80,000 loan (US$58,904 at November 30, 2023), which is unsecured, non-interest bearing and due on or before January 18, 2024. If the loan amount is paid on or before January 18, 2024, 25% of the loan will be forgiven (“Early Payment Credit”). In the event that the Company does not repay 75% of such term debt on or before January 18, 2024, the Early Payment Credit will not apply and the lender will automatically extend the term of the loan until December 31, 2026 and will accrue interest on the outstanding amount of the CEBA loan at a fixed rate of 5% per year. In addition, with acquisition of Terragenx, the Company acquired a CEBA loan in the amount of CAD$60,000 net of CAD$20,000 repayment (US$29,452 at November 30, 2023) under the same terms.

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Schedule of Governmental Loans and Note Payable (Details) (Parenthetical)	3 Months Ended		12 Months Ended
	Nov. 30, 2023 USD ($)	Nov. 30, 2023 CAD ($)	Aug. 31, 2023 USD ($)	Nov. 30, 2023 CAD ($)
Short-Term Debt [Line Items]
Default in repayment rate	75.00%	75.00%
Interest rate during fixed rate	5.00%			5.00%
Canada Emergency Business Account Loan [Member]
Short-Term Debt [Line Items]
Debt instrument, maturity date	Jan. 18, 2024	Jan. 18, 2024
Debt description	If the loan amount is paid on or before January 18, 2024, 25% of the loan will be forgiven (“Early Payment Credit”). In the event that the Company does not repay 75% of such term debt on or before January 18, 2024, the Early Payment Credit will not apply	If the loan amount is paid on or before January 18, 2024, 25% of the loan will be forgiven (“Early Payment Credit”). In the event that the Company does not repay 75% of such term debt on or before January 18, 2024, the Early Payment Credit will not apply
Forgiveness percentage	25.00%	25.00%
Canada Emergency Business Account Loan [Member] | Terragenx [Member]
Short-Term Debt [Line Items]
Notes Payable	$ 29,452			$ 60,000
Repayment of debt		$ 20,000
Notes Payable Two [Member]
Short-Term Debt [Line Items]
Debt instrument, interest rate during period	3.75%	3.75%	3.75%
Periodic payment	$ 190		$ 190
Notes Payable Three [Member]
Short-Term Debt [Line Items]
Debt instrument, interest rate during period	4.53%	4.53%	4.53%
Periodic payment	$ 4,000		$ 4,000
Debt instrument, maturity date	Dec. 02, 2028	Dec. 02, 2028	Dec. 02, 2028
Notes Payable Four [Member]
Short-Term Debt [Line Items]
Debt instrument, interest rate during period	18.00%	18.00%	18.00%
Notes Payable Five [Member]
Short-Term Debt [Line Items]
Debt instrument, interest rate during period	15.00%	15.00%	15.00%
Canada Emergency Business Account Loan [Member]
Short-Term Debt [Line Items]
Notes Payable	$ 58,904			$ 80,000

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Schedule of Future Maturities Outstanding of government Loans and Notes Payable (Details)	Nov. 30, 2023 USD ($)
Government Loans And Notes Payable
2024	$ 93,488
2025	6,470
2026	6,469
2027	6,469
2028	6,469
Thereafter	37,900
Total	$ 157,265

XML

Convertible Notes Payable (Details Narrative)																																																		1 Months Ended	3 Months Ended		12 Months Ended
	Aug. 18, 2024 USD ($)	Aug. 12, 2024 USD ($)	Jul. 18, 2024 USD ($)	Jul. 12, 2024 USD ($)	Jun. 18, 2024 USD ($)	Jun. 12, 2024 USD ($)	May 18, 2024 USD ($)	May 12, 2024 USD ($)	Apr. 20, 2024 USD ($)	Apr. 18, 2024 USD ($)	Apr. 12, 2024 USD ($)	Mar. 20, 2024 USD ($)	Mar. 18, 2024 USD ($)	Mar. 12, 2024 USD ($)	Feb. 21, 2024 USD ($)	Feb. 20, 2024 USD ($)	Jan. 23, 2024 USD ($)	Jan. 21, 2024 USD ($)	Jan. 20, 2024 USD ($)	Jan. 16, 2024 shares	Dec. 23, 2023 USD ($)	Dec. 21, 2023 USD ($)	Dec. 21, 2023 USD ($) shares	Dec. 20, 2023 USD ($)	Dec. 18, 2023 USD ($)	Dec. 12, 2023 USD ($)	Nov. 23, 2023 USD ($)	Nov. 21, 2023 USD ($)	Nov. 07, 2023 shares	Oct. 23, 2023 USD ($) shares	Oct. 21, 2023 USD ($)	Oct. 12, 2023 USD ($) shares	Sep. 23, 2023 USD ($)	Sep. 21, 2023 USD ($)	Sep. 18, 2023 USD ($) $ / shares shares	Sep. 12, 2023 USD ($) $ / shares shares	Sep. 12, 2023 CAD ($) shares	Aug. 23, 2023 USD ($)	Aug. 21, 2023 USD ($) shares	Jun. 20, 2023 USD ($) $ / shares shares	Jun. 20, 2023 USD ($) $ / shares shares	May 20, 2023 USD ($)	Mar. 21, 2023 USD ($) $ / shares shares	Feb. 24, 2023 shares	Feb. 23, 2023 USD ($) $ / shares shares	Nov. 14, 2022 USD ($)	Jun. 01, 2022 USD ($)	Dec. 14, 2021 USD ($) $ / shares shares	Nov. 17, 2021 USD ($) $ / shares shares	Sep. 30, 2023 USD ($)	Nov. 30, 2023 USD ($) shares	Nov. 30, 2022 USD ($) shares	Aug. 31, 2023 USD ($) shares	Oct. 20, 2023 USD ($)	Sep. 12, 2023 CAD ($)	Jul. 20, 2023 USD ($)
Debt face amount																																																	$ 1,875,000
Convertible notes payable, note holders issued warrants to purchase total, shares | shares																																																	22,388
Estimated value warrants																																																	$ 351,240
Discount on convertable note and additional paid in capital																																																	295,824
Loan fees																																																	$ 90,000
Debt amortized discount																																																			$ 1,075,928	$ 1,490,513
Debt converted into common stock | shares																													27,973
Share price | $ / shares																																																	$ 33.50
Redemption of warrants description																																																	The warrants expire on November 17, 2024. The Company first determined the value of the $1.875m convertible notes and the fair value of the detachable warrants issued in connection with this transaction.
Convertible notes payable																																																	$ 1,579,176
Original issue discount																																																	$ 375,000
Convertible notes payable																																																			1,103,959		$ 558,668
Common stock issuable upon exercise																																																			577,522
Change in fair value of derivative liability																																																			(585,529)
Subsequent Event [Member]
Debt converted into common stock | shares																							457,128
Mast Hill Securities Purchase Agreement [Member]
Debt face amount																						$ 445,000	$ 445,000													$ 3,500,000				$ 445,000	$ 445,000				$ 573,000
Maturity date																																				Sep. 12, 2024	Sep. 12, 2024			Jun. 20, 2024					Feb. 23, 2024
Debt conversion price | $ / shares																																				$ 4.50				$ 1.75	$ 1.75				$ 1.75
Exercise price of warrants or rights | $ / shares																																								$ 2.50	$ 2.50				$ 2.50
Estimated value warrants																																													$ 86,327
Debt instrument, unamortized discount																																													57,300						2,744,536
Loan fees																																								$ 39,904	$ 39,904				70,465
Debt amortized discount																																													$ 297,055					$ 3,500,000	755,464
Fair value of the derivative liability																																				$ 3,071,653															$ 2,487,726
Accrued interest																																																					$ 6,028
Debt converted into common stock | shares																																																					522,777
Debt instrument aggregate principal amount																																																					$ 573,000
Share price | $ / shares																																								$ 1.535	$ 1.535
Original issue discount																																				$ 350,000				$ 44,500	$ 44,500
Convertible notes payable																																		$ 4,535					$ 4,535															$ 4,389		$ 4,243
Debt instrument, interest rate, effective percentage																																				12.00%				12.00%	12.00%				12.00%										12.00%
Class of warrant or right, number of shares | shares																																								1,772,045	1,772,045				2,772,045
Accrued liabilities																											$ 100,000			$ 57,300			$ 57,300					$ 57,300				$ 77,661
Percentage of stock price trigger																																				85.00%	85.00%			85.00%					85.00%
Administrative fees expense																																				$ 750				$ 750					$ 750
Variable interest, percentage rate																																				125.00%				125.00%	125.00%				125.00%										125.00%
Number of restricted shares | shares																																												95,500							53,567
Percentage of issued and outstanding common stock																																													19.99%
Other fees																																																					1,750
Debt instrument, effective conversion price | $ / shares																																								$ 1.150	$ 1.150
Beneficial conversion feature																																									$ 97,978
Payments for repurchase of warrants																																								$ 400,500
Common stock issuable upon exercise																																									445,000
Estimated value of the warrants																																									$ 77,856
Shares new issues | shares																																				1,772,045	1,772,045			74,167
Repayments of debt																																				$ 3,150,000
Percentage of stock price trigger																																				0.915	0.915
Restructuring charges																																					$ 1,600,000
Financial instruments owned, mortgages																																																							$ 1,800,000
Change in fair value of derivative liability																																																			$ 583,927
Mast Hill Securities Purchase Agreement [Member] | Subsequent Event [Member]
Debt interest amount																										$ 104,712
Accrued liabilities																	$ 100,000
Mast Hill Securities Purchase Agreement [Member] | Forecast [Member]
Accrued liabilities		$ 595,000		$ 595,000		$ 595,000		$ 350,000	$ 77,661		$ 350,000	$ 77,661		$ 350,000		$ 44,500			$ 44,500		$ 100,000			$ 445,000
Mast Hill Securities Purchase Agreement [Member] | Maximum [Member]
Class of warrant or right, number of shares | shares																																								77,662	77,662				100,000
Variable interest, percentage rate																																				16.00%									16.00%										16.00%
Mast Hill Note and Mast Hill Warrant [Member]
Debt instrumment converted amount																																													$ 515,700
MastHill Warrant Agreement [Member]
Number of restricted shares | shares																														138,703					53,567
Proceeds from warrant exercises																														$ 445,000					$ 573,000
First Fire Global Opportunities Fund LLC Securities Purchase Agreement [Member]
Debt face amount																																											$ 573,000
Maturity date																																											Mar. 21, 2024
Debt conversion price | $ / shares																																											$ 1.75
Exercise price of warrants or rights | $ / shares																																											$ 2.50
Estimated value warrants																																											$ 93,811
Debt instrument, unamortized discount																																											57,300
Loan fees																																											35,628
Debt amortized discount																																											$ 342,938								190,209
Accrued interest																																																			$ 4,521
Debt converted into common stock | shares																																																			519,845
Debt instrument aggregate principal amount																																																			$ 573,000
Share price | $ / shares																																											$ 1.390
Debt instrument, interest rate, effective percentage																																											12.00%
Class of warrant or right, number of shares | shares																																											1,000,000
Accrued liabilities																												$ 57,300			$ 57,300			$ 57,300
Percentage of stock price trigger																																											85.00%
Administrative fees expense																																											$ 750
Variable interest, percentage rate																																											125.00%
Number of restricted shares | shares																																											95,500
Debt instrument, effective conversion price | $ / shares																																											$ 1.188
Beneficial conversion feature																																											$ 66,068
First Fire Global Opportunities Fund LLC Securities Purchase Agreement [Member] | Forecast [Member]
Accrued liabilities															$ 100,000			$ 100,000				$ 100,000
First Fire Global Opportunities Fund LLC Securities Purchase Agreement [Member] | Maximum [Member]
Class of warrant or right, number of shares | shares																																											100,000
Variable interest, percentage rate																																											16.00%
First Fire Note and First Fire Warrant [Member]
Debt instrumment converted amount																																											$ 515,700
First Fire Warrant Agreement [Member]
Debt face amount																																																			$ 573,000
Number of restricted shares | shares																																53,532																			53,532
Proceeds from warrant exercises																																$ 573,000
FirstFire Securities Purchase Agreement [Member]
Debt face amount																																			$ 277,778
Maturity date																																			Sep. 18, 2024
Debt conversion price | $ / shares																																			$ 4.50
Debt instrument, unamortized discount																																																			$ 188,460
Debt amortized discount																																																		$ 235,414	46,954
Fair value of the derivative liability																																			$ 200,136																198,534
Original issue discount																																			$ 27,778
Debt instrument, interest rate, effective percentage																																			12.00%
Percentage of stock price trigger																																			85.00%
Administrative fees expense																																			$ 750
Variable interest, percentage rate																																			125.00%
Shares new issues | shares																																				480,156	480,156
Repayments of debt																																			$ 250,000
Percentage of stock price trigger																																			0.915
Change in fair value of derivative liability																																																			$ 1,602
FirstFire Securities Purchase Agreement [Member] | Subsequent Event [Member]
Debt interest amount																									$ 8,333
FirstFire Securities Purchase Agreement [Member] | Forecast [Member]
Accrued liabilities	$ 47,222		$ 47,222		$ 47,222		$ 27,778			$ 27,778			$ 27,778
FirstFire Securities Purchase Agreement [Member] | Maximum [Member]
Variable interest, percentage rate																																			16.00%
Terragenx Inc [Member]
Ownership percentage																																																	91.00%
Terragenx Inc [Member] | Promissory Notes Payment [Member]
Convertible notes payable																																															$ 1,875,000
Notes payable																																															948,874
Terragenx Inc [Member] | Promissory Notes Payment and Extension [Member]
Convertible notes payable																																															1,875,000
Notes payable																																															937,500
Convertible notes payable																																															$ 192,188
Maturity date																																															Nov. 29, 2022
Jefferson Street Capital [Member]
Debt converted into common stock | shares																																							236,511
Convertible notes payable																																															$ 1,875,000
Notes payable																																															$ 186,719
Maturity date																																															Nov. 29, 2022
Warrant [Member]
Debt face amount																																																$ 5,257,466
Warrants and rights outstanding, term																																																			3 years
Shares new issues | shares																																																			80,200
Warrant [Member] | Mast Hill Securities Purchase Agreement [Member]
Debt face amount																																								$ 77,856	$ 77,856				86,327
Warrant [Member] | First Fire Global Opportunities Fund LLC Securities Purchase Agreement [Member]
Debt face amount																																											93,811
Common Stock [Member]
Debt converted into common stock | shares																																																			3,786,454
Common stock issuable upon exercise																																																			$ 520
Shares new issues | shares																																																				400,000
Common Stock [Member] | Subsequent Event [Member]
Shares new issues | shares																				200,000
Common Stock [Member] | Mast Hill Securities Purchase Agreement [Member]
Debt face amount																																								74,793	74,793				82,963
Common Stock [Member] | First Fire Global Opportunities Fund LLC Securities Purchase Agreement [Member]
Debt face amount																																											90,132
Convertible Debt [Member]
Debt face amount																																																$ 11,409,200
Convertible Debt [Member] | Mast Hill Securities Purchase Agreement [Member]
Debt face amount																																								$ 292,351	$ 292,351				$ 403,710
Convertible Debt [Member] | First Fire Global Opportunities Fund LLC Securities Purchase Agreement [Member]
Debt face amount																																											$ 389,057
Convertible Notes [Member]
Debt amortized discount																																																	$ 760,824
Debt description																																														(i) the conversion price in effect at such time and (ii) 82.0% of the lowest VWAP during the five (5) trading days immediately prior to a conversion date. The Company determined that the conversion features of these notes represented embedded derivatives since the notes are convertible into a variable number of shares upon conversion.
Measurement Input, Expected Term [Member]
Warrants and rights outstanding, term																																								5 years	5 years		5 years		5 years			4 years	3 years
Derivative liability, measurement input, term																																			1 year	1 year	1 year									6 months 29 days
Measurement Input, Expected Term [Member] | Mast Hill Securities Purchase Agreement [Member]
Derivative liability, measurement input, term																																																			9 months 14 days
Measurement Input, Expected Term [Member] | FirstFire Securities Purchase Agreement [Member]
Derivative liability, measurement input, term																																																			9 months 18 days
Measurement Input, Price Volatility [Member]
Warrants measurement input percentage																																								251	251		251		252			275	300
Derivative liability measurement input percentage																																			180.36	182.17										148.20									182.17
Measurement Input, Price Volatility [Member] | Mast Hill Securities Purchase Agreement [Member]
Derivative liability measurement input percentage																																																			193.48
Measurement Input, Price Volatility [Member] | FirstFire Securities Purchase Agreement [Member]
Derivative liability measurement input percentage																																																			193.48
Measurement Input, Expected Dividend Rate [Member]
Warrants measurement input percentage																																								0	0		0		0			0	0
Derivative liability measurement input percentage																																			0	0										0									0
Measurement Input, Expected Dividend Rate [Member] | Mast Hill Securities Purchase Agreement [Member]
Derivative liability measurement input percentage																																																			0
Measurement Input, Expected Dividend Rate [Member] | FirstFire Securities Purchase Agreement [Member]
Derivative liability measurement input percentage																																																			0
Measurement Input, Risk Free Interest Rate [Member]
Warrants measurement input percentage																																								3.96	3.96		3.73		4.09			1.23	0.85
Derivative liability measurement input percentage																																			5.44	5.42										4.55									5.42
Measurement Input, Risk Free Interest Rate [Member] | Mast Hill Securities Purchase Agreement [Member]
Derivative liability measurement input percentage																																																			5.16
Measurement Input, Risk Free Interest Rate [Member] | FirstFire Securities Purchase Agreement [Member]
Derivative liability measurement input percentage																																																			5.16
Two Convertible Notes [Member]
Debt face amount																																																$ 16,666,666					8,396,666
Interest Rate, Stated Percentage																																																5.00%
Maturity date																																																Jun. 14, 2023
Debt conversion price | $ / shares																																																$ 20
Convertible notes payable, note holders issued warrants to purchase total, shares | shares																																																583,334
Exercise price of warrants or rights | $ / shares																																																$ 20
Warrant maturity date																																																Dec. 14, 2025
Estimated value warrants																																																$ 7,680,156
Discount on convertable note and additional paid in capital																																																5,257,466
Debt instrument, unamortized discount																																																1,666,666
Loan fees																																																1,140,000
Debt amortized discount																																																8,064,132					4,241,429
Debt face amount																																																					2,833,888
Derivative Liability, Current, Statement of Financial Position [Extensible Enumeration]																																														Convertible notes payable
Fair value of the derivative liability																																														$ 1,390,380
Accrued interest																																																					$ 32,559
Debt converted into common stock | shares																																																					8,527,835
Debt instrumment converted amount																																																					$ 1,000,000
Extinguishment of derivative liability due to conversion																																																					1,390,380
Amortization payment																																																					3,001,442
Debt interest amount																																																					167,554
Debt instrument aggregate principal amount
Two Convertible Notes [Member] | Terragenx Inc [Member]
Debt face amount																																																	$ 1,875,000
Interest Rate, Stated Percentage																																																	1.00%
Maturity date																																																	May 17, 2022
Convertible Debt Two [Member]
Debt face amount																																																$ 8,333,333
Debt face amount																																														1,000,000
Convertible Debt Two [Member] | Terragenx Inc [Member]
Debt face amount																																																	$ 937,500
Convertible Debt One [Member]
Debt face amount																																														$ 1,000,000
Convertible Notes [Member] | Mast Hill Securities Purchase Agreement [Member]
Debt instrument, unamortized discount																																																			185,823
Debt amortized discount																																									$ 335,031										$ 83,300

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Debentures, Related Parties (Details Narrative)							3 Months Ended
	Nov. 07, 2023 shares	Nov. 02, 2021	Jul. 21, 2020 USD ($)	Jan. 31, 2018 USD ($) $ / shares shares	Dec. 02, 2017	Sep. 30, 2013 USD ($)	Nov. 30, 2023 USD ($)	Nov. 30, 2022 USD ($)	Sep. 30, 2013 CAD ($)
Short-Term Debt [Line Items]
Debentures, outstanding							$ 913,474	$ 916,824
Debt converted, shares issued | shares	27,973
Repayment of related party debt			$ 267,768				$ (72,402)	$ (48,480)
Five Debentures [Member]
Short-Term Debt [Line Items]
Debentures, outstanding						$ 6,225,163			$ 6,402,512
Debt interest rate						8.00%			8.00%
Debt due date		Dec. 01, 2023			Sep. 30, 2019	Sep. 30, 2016
Debentures [Member]
Short-Term Debt [Line Items]
Debentures, outstanding				$ 3,894,809
Percentage of debt converted				75.00%
Accrued interest				$ 414,965
Debt converted, shares issued | shares				1,047,588
Debt conversion price | $ / shares				$ 4.11
Debt conversion description				the average price of the five trading days immediately preceding the date of conversion with a 10% premium added to the calculated per share price.

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Schedule of Lease Related Assets and Liabilities (Details) - USD ($)	Nov. 30, 2023	Aug. 31, 2023
Leases
Operating lease assets	$ 1,870,204	$ 1,983,898
Total lease assets	1,870,204	1,983,898
Current liabilities- Operating lease liability	413,506	415,392
Noncurrent liabilities - Operating lease liability	1,585,667	1,693,577
Total lease liability	$ 1,999,173	$ 2,108,969

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Schedule of Operating Lease Payments (Details) - USD ($)	Nov. 30, 2023	Aug. 31, 2023
Leases
2024	$ 568,536
2025	494,272
2026	512,495
2027	417,394
2028	223,188
Thereafter	254,641
Total payments	2,470,526
Amount representing interest	(471,353)
Total lease liability	1,999,173	$ 2,108,969
Less lease obligation, current portion	413,506	415,392
Lease obligation, long-term portion	$ 1,585,667	$ 1,693,577

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Schedule of Finance Leases (Details) - USD ($)	Nov. 30, 2023	Aug. 31, 2023
Leases
Cost	$ 209,457	$ 209,457
Accumulated amortization	(209,457)	(209,457)
Net book value
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Property and equipment, net	Property and equipment, net

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Schedule of Future Minimum Lease Payments (Details) - USD ($)	Nov. 30, 2023	Aug. 31, 2023
Leases
2024	$ 8,973
Total payments	8,973
Amount representing interest	(66)
Lease obligation, net	8,907
Less lease obligation, current portion	(8,907)	$ (11,744)
Lease obligation, long-term portion

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Leases (Details Narrative) - USD ($)	3 Months Ended
	Nov. 30, 2023	Nov. 30, 2022
Leases
Lease expense	$ 149,877	$ 209,846
Cash paid under operating leases	$ 145,545	$ 202,465
Weighted average remaning lease term	3 years 10 months 17 days
Weighted average discount rate	8.00%
Lease payments implicit borrowing rate	5.00%

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Schedule of Stock Option Activity (Details) - USD ($)	3 Months Ended	12 Months Ended
	Nov. 30, 2023	Aug. 31, 2023
Equity [Abstract]
Options outstanding, balance	371,423
Weighted average exercise price, outstanding, balance	$ 11.44
Weighted average remaining contractual life, outstanding	3 years 8 months 23 days	3 years 11 months 23 days
Aggregate intrinsic value, outstanding, balance	$ 16,000
Options outstanding, granted
Options outstanding, forfeited
Options outstanding, exercised
Options outstanding, balance	371,423	371,423
Weighted average exercise price, outstanding, balance	$ 11.44	$ 11.44
Aggregate intrinsic value, outstanding, balance		$ 16,000
Options outstanding, exercisable	371,423
Weighted average exercise price, exercisable	$ 11.44
Weighted average remaining contractual life, Exercisable	3 years 8 months 23 days
Aggregate intrinsic value, Exercisable

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Schedule of Options Outstanding and Exercisable (Details) - $ / shares	Nov. 30, 2023	Aug. 31, 2023
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of options, outstanding	371,423	371,423
Number of options, exercisable	371,423
Exercise Price Range One [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of options, outstanding	22,715
Exercise price, outstanding	$ 13.30
Number of options, exercisable	22,715
Exercise price, exercisable	$ 13.30
Exercise Price Range Two [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of options, outstanding	54,200
Exercise price, outstanding	$ 16.00
Number of options, exercisable	54,200
Exercise price, exercisable	$ 16.00
Exercise Price Range Three [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of options, outstanding	4,800
Exercise price, outstanding	$ 18.70
Number of options, exercisable	4,800
Exercise price, exercisable	$ 18.70
Exercise Price Range Four [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of options, outstanding	77,500
Exercise price, outstanding	$ 30.00
Number of options, exercisable	77,500
Exercise price, exercisable	$ 30.00
Exercise Price Range Five [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of options, outstanding	7,260
Exercise price, outstanding	$ 38.00
Number of options, exercisable	7,260
Exercise price, exercisable	$ 38.00
Exercise Price Range Six [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of options, outstanding	1,000
Exercise price, outstanding	$ 50.00
Number of options, exercisable	1,000
Exercise price, exercisable	$ 50.00
Exercise Price Range Seven [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of options, outstanding	3,948
Exercise price, outstanding	$ 19.00
Number of options, exercisable	3,948
Exercise price, exercisable	$ 19.00
Exercise Price Range Eight [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of options, outstanding	200,000
Exercise price, outstanding	$ 1.32
Number of options, exercisable	200,000
Exercise price, exercisable	$ 1.32

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Schedule of Warrant Activity (Details) - USD ($)	3 Months Ended	12 Months Ended
	Nov. 30, 2023	Aug. 31, 2023
Equity [Abstract]
Warrants outstanding, beginning balance	806,254
Weighted average exercise price, outstanding, beginning balance	$ 12.05
Weighted average remaining contractual life, outstanding, beginning balance	3 years 5 months 15 days	3 years 8 months 15 days
Aggregate intrinsic value, outstanding, beginning balance	$ 106,960
Warrants outstanding, granted
Warrants outstanding, forfeited
Warrants outstanding, exercised	(518,061)
Warrants outstanding, beginning balance	288,193	806,254
Weighted average exercise price, outstanding, beginning balance	$ 30.46	$ 12.05
Aggregate intrinsic value, outstanding, beginning balance	$ 5,400	$ 106,960
Warrants outstanding, exercisable	288,193
Weighted average exercise price, exercisable	$ 30.46
Weighted average remaining contractual life, exercisable	3 years 5 months 15 days
Aggregate intrinsic value, exercisable	$ 5,400

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Schedule of Warrants Outstanding (Details) - $ / shares	Nov. 30, 2023	Aug. 31, 2023
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of Warrants, Outstanding and Exercisable	288,193	806,254
Exercise Price Range One [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of Warrants, Outstanding and Exercisable	261,193
Exercise Price, Outstanding and Exercisable	$ 33.50
Exercise Price Range Two [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of Warrants, Outstanding and Exercisable	27,000
Exercise Price, Outstanding and Exercisable	$ 1.00
Exercise Price Range [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of Warrants, Outstanding and Exercisable	288,193

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Stockholders’ Equity (Details Narrative) - USD ($)									3 Months Ended		12 Months Ended	15 Months Ended
	Nov. 07, 2023	Nov. 06, 2023	Oct. 12, 2023	Sep. 12, 2023	Jun. 20, 2023	Mar. 21, 2023	Feb. 24, 2023	Feb. 09, 2021	Nov. 30, 2023	Nov. 30, 2022	Aug. 31, 2023	Nov. 30, 2023	Dec. 21, 2023	Sep. 29, 2023	Jul. 26, 2023	Feb. 23, 2023	Dec. 14, 2021	Nov. 17, 2021	Jan. 16, 2018	Sep. 08, 2015
Accumulated Other Comprehensive Income (Loss) [Line Items]
Reverse stock split	1-for-10 reverse stock split	1-for-10 reverse stock split							1-for-10 reverse stock split
Convertible preferred stock, shares authorized									1,000,000		1,000,000	1,000,000
Convertible preferred stock, par value									$ 0.001		$ 0.001	$ 0.001
Convertible preferred stock, shares issued									0		0	0
Convertible preferred stock, shares outstanding									0		0	0
Common stock, shares authorized									499,000,000		499,000,000	499,000,000
Common stock, par value									$ 0.001		$ 0.001	$ 0.001
Common stock, shares issued									17,291,192		15,759,325	17,291,192
Common stock, shares outstanding									17,291,192		15,759,325	17,291,192
Proceeds of warrants									$ 240,400
Promissory note issued																		$ 1,875,000
Debt conversion, converted instrument, shares issued	27,973
Common stock to be issued									44,443		$ 1,217,293	$ 44,443
Stock option expense										$ 60,887
Unamortized stock option expense
2015 Incentive Compensation Plan [Member] | Maximum [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of common stock shares authorized																				50,000
2018 Incentiven Plan [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of common stock shares authorized																			100,000
Number of shares available for future grant									86,490			86,490
2021 Equity Incentive Plan [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of common stock shares authorized								450,000
Number of shares available for future grant									75,463			75,463
Term of award description								the maximum aggregate number of shares that may be issued under the 2021 Plan may be cumulatively increased on January 1, 2022 and on each subsequent January 1 through and including January 1, 2024, by a number of shares equal to the smaller of (i) 3% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or (ii) an amount determined by our Board of Directors. The Company chose not to cumulatively increase the shares authorized for issuance under the 2021 Plan, effective January 1, 2022 and January 1, 2023. As of November 30, 2023, the 2021 Plan had 75,463 shares available for award; however, the Company does not intend to issue any additional grants under the 2021 Plan
Two Thousand And Twenty Three Equity Incentive Plan [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of common stock shares authorized									2,500,000			2,500,000
Taddeo Hovius Physiotherapy Professional Corp [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Shares issued for acquisition, shares												17,375
Common stock to be issued									$ 44,443			$ 44,443
Board of Directors Chairman [Member] | Two Thousand And Twenty Three Equity Incentive Plan [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of common stock shares authorized														2,500,000	2,500,000
Share Exchange Agreement One [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of restricted shares									75,000
Shares issuance date									Sep. 05, 2023
Mast Hill Securities Purchase Agreement [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Units issued for cash, net of offering costs				1,772,045	74,167
Number of restricted shares							95,500		53,567
Shares issuance date									Sep. 18, 2023
Promissory note issued				$ 3,500,000	$ 445,000								$ 445,000			$ 573,000
Interest											$ 6,028
Debt conversion, converted instrument, shares issued											522,777
Consulting Agreement [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of restricted shares									75,000
Shares issuance date						Oct. 12, 2023			Sep. 18, 2023
Securities Purchase Agreement [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of restricted shares									519,845
Shares issuance date									Sep. 21, 2023
Promissory note issued									$ 573,000			573,000
Interest									$ 4,521			4,521
Debt conversion, converted instrument, shares issued									577,521
First Fire Warrant Agreement [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of restricted shares			53,532						53,532
Promissory note issued									$ 573,000			$ 573,000
Consulting Agreement One [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of restricted shares									75,000
Shares issuance date									Oct. 18, 2023
Mast Hil lSecurities Warrant Agreement [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of restricted shares									138,703
Shares issuance date									Oct. 23, 2023
Promissory note issued					445,000
Consulting Agreement Two [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of restricted shares									75,000
Shares issuance date									Nov. 08, 2023
Excutive Agreement [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of restricted shares									30,675
Shares issuance date									Nov. 21, 2023
Excutive Agreement One [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of restricted shares									18,405
Shares issuance date									Nov. 21, 2023
Warrant [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Units issued for cash, net of offering costs									80,200
Warrants and rights outstanding term									3 years			3 years
Proceeds of warrants									$ 80,200
Promissory note issued																	$ 5,257,466
Warrant [Member] | Mast Hill Securities Purchase Agreement [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Promissory note issued					77,856											86,327
Warrant One [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Units issued for cash, net of offering costs									160,200
Warrants and rights outstanding term									5 years			5 years
Proceeds of warrants									$ 160,200
Common Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Units issued for cash, net of offering costs										400,000
Debt conversion, converted instrument, shares issued									3,786,454
Common Stock [Member] | Mast Hill Securities Purchase Agreement [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Promissory note issued					$ 74,793											$ 82,963
Common Stock [Member] | Consulting Agreement [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Shares issuance date									Oct. 03, 2023
Common Stock [Member] | Share Exchange Agreement [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of restricted shares									73,767
Shares issuance date									Oct. 09, 2023

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Commitments and Contingencies (Details Narrative)	3 Months Ended
	Nov. 30, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Other expenses	$ 652,174

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Schedule of Segment Reporting Information (Details) - USD ($)	3 Months Ended
	Nov. 30, 2023	Nov. 30, 2022	Aug. 31, 2023	Aug. 31, 2022
Segment Reporting Information [Line Items]
Sales	$ 3,891,218	$ 3,419,280
Gross profit	1,944,018	1,739,533
Income (loss) from operations	(3,317,637)	(2,241,960)
Depreciation and amortization	572,404	586,166
Capital expenditures
Interest expenses	143,374	167,243
Net loss	(4,660,723)	(3,936,736)
Total assets	37,244,384		$ 35,563,047
Accounts receivable	2,636,174		1,467,028
Intangible assets	15,704,218		16,218,539
Goodwill	7,554,779		7,582,483	$ 7,825,844
Healthcare Services [Member]
Segment Reporting Information [Line Items]
Sales	2,044,510	2,021,213
Gross profit	676,416	784,031
Income (loss) from operations	(80,327)	(151,691)
Depreciation and amortization	30,035	28,968
Capital expenditures
Interest expenses	20,532	36,303
Net loss	(98,640)	(185,713)
Total assets	5,002,855		5,158,851
Accounts receivable	672,841		697,440
Intangible assets	111,172		120,163
Goodwill	518,918		520,821
Product Manufacturing and Development [Member]
Segment Reporting Information [Line Items]
Sales	1,768,458	790,478
Gross profit	1,189,352	347,914
Income (loss) from operations	108,702	(554,842)
Depreciation and amortization	262,927	309,042
Capital expenditures
Interest expenses	462	2,464
Net loss	48,883	(578,576)
Corporate Segment [Member]
Segment Reporting Information [Line Items]
Sales	78,250	607,589
Gross profit	78,250	607,588
Income (loss) from operations	(3,346,012)	(1,535,427)
Depreciation and amortization	279,442	248,156
Capital expenditures
Interest expenses	122,380	128,476
Net loss	(4,610,966)	$ (3,172,447)
Total assets	13,493,054		12,410,544
Accounts receivable	94,946		4,200
Intangible assets	12,000,621		12,280,063
Goodwill
Product Sales [Member]
Segment Reporting Information [Line Items]
Total assets	18,748,475		17,993,652
Accounts receivable	1,868,387		765,388
Intangible assets	3,592,425		3,818,313
Goodwill	$ 7,035,861		$ 7,061,662

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Subsequent Events (Details Narrative) - USD ($)									3 Months Ended		12 Months Ended
	Jan. 16, 2024	Dec. 21, 2023	Dec. 18, 2023	Dec. 12, 2023	Nov. 21, 2023	Nov. 07, 2023	Sep. 12, 2023	Jun. 20, 2023	Nov. 30, 2023	Nov. 30, 2022	Aug. 31, 2023	Sep. 18, 2023	Feb. 23, 2023	Nov. 17, 2021
Subsequent Event [Line Items]
Debt face amount														$ 1,875,000
Debt conversion, converted instrument, shares issued						27,973
Debt conversion, rate									$ 0.001		$ 0.001
Promissory note paid in full									$ 183,100
Common Stock [Member]
Subsequent Event [Line Items]
Debt conversion, converted instrument, shares issued									3,786,454
Units issued for cash, net of offering costs, shares										400,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Amount of debt converted		$ 454,071
Debt conversion, converted instrument, shares issued		457,128
Debt conversion, rate		$ 0.99331
Promissory note paid in full		$ 445,000
Shares issued, price per share	$ 0.78
Subsequent Event [Member] | Common Stock [Member]
Subsequent Event [Line Items]
Units issued for cash, net of offering costs, shares	200,000
Ophir Agreement [Member]
Subsequent Event [Line Items]
Security deposit					$ 25,000
Repayments of related party					60,000,000
Repayments of related party excluding deposit					$ 59,975,000
Mast Hill Securities Purchase Agreement [Member]
Subsequent Event [Line Items]
Debt face amount		$ 445,000					$ 3,500,000	$ 445,000					$ 573,000
Debt conversion, converted instrument, shares issued											522,777
Units issued for cash, net of offering costs, shares							1,772,045	74,167
Mast Hill Securities Purchase Agreement [Member] | Common Stock [Member]
Subsequent Event [Line Items]
Debt face amount								$ 74,793					$ 82,963
Mast Hill Securities Purchase Agreement [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Convertible notes interest				$ 104,712
FirstFire Securities Purchase Agreement [Member]
Subsequent Event [Line Items]
Debt face amount												$ 277,778
Units issued for cash, net of offering costs, shares							480,156
FirstFire Securities Purchase Agreement [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Convertible notes interest			$ 8,333