Novo Integrated Sciences Reports Fiscal Year 2023 Second Quarter Financial Results

BELLEVUE, Wash. , May 26 /Businesswire/ - Novo Integrated Sciences, Inc. (NASDAQ:NVOS) (the “Company” or “Novo”), pioneering a holistic approach to patient-first health and wellness through a multidisciplinary healthcare ecosystem of multiple patient and consumer touchpoints for services and product innovation, today reported its financial results for the fiscal quarter ended February 28, 2023.

Robert Mattacchione, Novo’s CEO and Board Chairman, stated, “During the fiscal year 2023 second quarter period, the Company paid a total of $9,086,050 to certain note holders upon conversion of their notes. Additionally, the Company announced the signing of agreements for an unsecured, non-dilutive 15-year debt instrument, with a principal sum of $70,000,000, which provides for the Company to receive net proceeds of approximately $55,000,000 after fees. In today’s environment of tight capital markets and expensive capital raises, this cash infusion is consequential and will provide the Company with the foundational capital and repayment terms required to support and accelerate the further implementation and growth of Novo’s three-pillar business model.”

Financial Highlights for the three month period ended February 28, 2023:

• Cash and cash equivalents were $609,738, total assets were $36.5 million, total liabilities were $9.5 million, and stockholders’ equity was $27.2 million.
• Revenues were $2,556,509, representing a decrease of $312,714, or 11%, from $2,869,223 for the same period in 2022. The decrease in revenue is principally due to the decrease in outsourced product sales and IoNovo Iodine. Acenzia’s and Terragenx’s revenue for the three months ended February 28, 2023 was $458,920 and $32,167, respectively. Revenue from our healthcare services increased by 9% when comparing the revenue for the three months ended February 28, 2022.
• Operating costs were $2,757,713, representing a decrease of $579,317, or 17%, from $3,337,030 for the same period in 2022. The decrease in operating costs is principally due to the decrease in overhead expenses and depreciation and amortization.
• Net loss attributed to Novo Integrated Sciences, Inc. for the three months ended February 28, 2023 was $4,621,355, representing a decrease of $183,812, or 4%, from $4,805,167 for the same period in 2022. The decrease in net loss is principally due to the decrease in operating expenses.
• On February 23, 2023, the Company issued a $573,000 promissory note (12% per annum interest rate) and completed the related Securities Purchase Agreement with Mast Hill Fund, L.P. for gross proceeds of $515,700. The Company granted 5-year warrants with an exercise price of $0.25 per share and issued 955,000 restricted shares to Mast Hill Fund, L.P.
• On April 26, 2023, the Company entered into a securities purchase agreement with RC Consulting Group LLC in favor of SCP Tourbillion Monaco or registered assigns pursuant to which the Company issued an unsecured 15-year promissory note to the RC Noteholder (the “RC Note”) with a maturity date of April 26, 2038, in the principal sum of $70,000,000, which amount represents the $57,000,000 purchase price plus a yield (non-compounding) of 1.52% (zero coupon) per annum from April 26, 2023 until the same becomes due and payable as provided in the RC Note.

About Novo Integrated Sciences, Inc.

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

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

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

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

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

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

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Forward-Looking Statements

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

NOVO INTEGRATED SCIENCES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS As of February 28, 2023 (unaudited) and August 31, 2022
		February 28,				August 31,
		2023				2022
			(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents		$	609,738			$	2,178,687
Accounts receivable, net			923,556				1,017,405
Inventory, net			925,107				879,033
Other receivables			1,045,619				1,085,335
Prepaid expenses and other current assets			546,604				571,335
Total current assets			4,050,624				5,731,795
Property and equipment, net			5,449,163				5,800,648
Intangible assets, net			17,199,620				18,840,619
Right-of-use assets, net			2,250,442				2,673,934
Goodwill			7,539,469				7,825,844
TOTAL ASSETS		$	36,489,318			$	40,872,840
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable		$	2,040,073			$	1,800,268
Accrued expenses			1,222,832				1,116,125
Accrued interest (including amounts to related parties)			469,308				454,189
Government loans and notes payable, current portion			92,050				-
Convertible notes payable, net of discount of $307,623			421,489				9,099,654
Contingent liability			62,388				534,595
Due to related parties			468,749				478,897
Debentures, related parties, current portion			911,623				-
Finance lease liability, current portion			15,938				8,890
Operating lease liability, current portion			473,628				582,088
Total current liabilities			6,178,078				14,074,706
Debentures, related parties, net of current portion			-				946,250
Government loans and notes payable, net of current portion			64,977				161,460
Finance lease liability, net of current portion			-				12,076
Operating lease liability, net of current portion			1,890,624				2,185,329
Deferred tax liability			1,392,553				1,445,448
TOTAL LIABILITIES			9,526,232				18,825,269
Commitments and contingencies			-				-
STOCKHOLDERS’ EQUITY
Novo Integrated Sciences, Inc.
Convertible preferred stock; $0.001 par value; 1,000,000 shares authorized; 0 and 0 shares issued and outstanding at February 28, 2023 and August 31, 2022, respectively			-				-
Common stock; $0.001 par value; 499,000,000 shares authorized; 139,626,576 and 31,180,603 shares issued and outstanding at February 28, 2023 and August 31, 2022, respectively			139,626				31,181
Additional paid-in capital			88,320,971				66,056,824
Common stock to be issued (911,392 and 4,149,633 shares at February 28, 2023 and August 31, 2022)			1,217,293				9,474,807
Other comprehensive (loss) income			(51,993	)			560,836
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