Press release of the registrant issued on December 14, 2021

Contract Categories: Business Finance - Release Agreements
EX-10.1 2 ex10-1.htm

 

Exhibit 10.1

 

 

Novo Integrated Sciences Reports Fiscal Full Year 2021 Financial Results

 

BELLEVUE, Wash., December 14, 2021 - 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 services and product innovation, today reported its financial results for the fiscal year ended August 31, 2021.

 

“This has been a transformative year for Novo. We have invested in several undervalued assets that collectively are core to our differentiated platform solution for healthcare delivery that puts the patient-first. In addition, the Company invested in the necessary human capital required to commercialize our technology offerings, as well as many of our product solutions,” stated Robert Mattacchione, the Company’s CEO and Board Chairman. “We have strategically made investments in Acenzia, PRO-DIP, EK-Tech Solutions, Terragenx, and brick and mortar pharmacy locations, each of which complements our organic operations. This diverse patient offering of products and services will be overlaid on Novo Connect, our sophisticated and secure mobile application, to provide data to patients in real time. We look forward to the official launch of NovoConnect in early 2022 and making further investments in the healthcare space by expanding into new jurisdictions both in North America and overseas.”

 

Financial Highlights for the Fiscal Year Ended August 31, 2021:

 

  As of August 31, 2021, the Company’s cash and cash equivalents were $8.3 million, total assets were $61.9 million, total liabilities were $18.2 million, and stockholders’ equity was $43.9 million.
     
  Revenues for the fiscal year ended August 31, 2021 were $9.3 million, representing an increase of $1.4 million, or 17.7%, from $7.9 million for the same period in 2020, principally due to periodic easing of COVID pandemic-related restrictions and approximately $0.4 million of revenue from Acenzia from the date of acquisition (June 24, 2021) through August 31, 2021.
     
  Net loss attributed to Novo Integrated Sciences, Inc. for the year ended August 31, 2021 was $4,462,147, representing a decrease of $453,007, or 9.2%, from $4,915,154 for the same period in 2020. The decrease in net loss is principally due to (i) an increase in revenues and gross profit offset by additional operating costs associated with the Acenzia acquisition, (ii) an increase in amortization of intangible assets, (iii) common stock issued for services including successful uplist to the Nasdaq Capital Markets, (iv) salary expense due to hiring of senior level executives, and (v) legal fees related to the Company’s Nasdaq listing and filing of the Company’s registration statement on Form S-3.

 

Operational Milestones to Date:

 

  Signed letter of intent to acquire seven pharmacies in the United States that collectively generated $55 million in annualized sales in 2020.
     
  Acquired majority stake in Terragenx and intellectual property for FDA and Health Canada approved water-soluble iodine micro-nutrient in an all-share transaction priced at $3.35 per share.
     
  Completed acquisition of Acenzia, a company that provides nutraceutical health solutions through advanced bio-science research and development, proprietary manufacturing, and personalized diagnostics in an all-share transaction at $3.91 per share.
     
  Completed the acquisition of PRO-DIP, a company that has developed an innovative, patent-pending oral pouch delivery system technology which allows for broad market applications related to nutritionally focused products and medicinal based formulations in an all-share transaction at $3.98 per share.
     
  Announced joint venture with EK-Tech Solutions for enhanced telehealth platform.

 

 
 

 

Corporate Highlights for the Fiscal Year Ended August 31, 2021:

 

  Uplisted to the Nasdaq Capital Market in February 2021.
     
  Closed on a registered direct offering of approximately $8 million at $3.35 per share.
     
  Appointed Dr. Indrajit (Indra) Sinha, Ph.D. as Chief Scientific Officer.
     
  Formed a Medical Advisory Board comprised of Dr. Joseph M. Chalil, Dr. Michael G. Muhonen, and Dr. Zach P. Zachariah to provide important insight and expertise as the Company expands its personalized consumer engagement across all aspects of the patient/practitioner relationship through the integration of medical technology, advanced therapeutics, and rehabilitative sciences.
     
  Appointed new President and senior leadership for Novo Healthnet Limited, Novo’s wholly owned subsidiary.
     
  Increased size of Board of Directors from 4 to 7 members and appointed Michael Pope, Robert Oliva, and Alex Flesias as independent directors.
     
  Formed Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee.

 

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 . For more information on NHL, please visit www.novohealthnet.com

 

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Forward-Looking Statements

 

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

 

Chris David, COO-President

Novo Integrated Sciences, Inc.

***@***

(888) 512-1195

 

 
 

 

NOVO INTEGRATED SCIENCES, INC.

CONSOLIDATED BALANCE SHEETS

As of August 31, 2021 and 2020

 

   August 31,   August 31, 
   2021   2020 
         
ASSETS          
           
Current Assets:          
Cash and cash equivalents  $8,293,162   $2,067,718 
Accounts receivable, net   1,468,429    1,732,432 
Inventory   339,385    - 
Other receivables, current portion   814,157    302,664 
Prepaid expenses and other current assets   218,376    191,723 
Total current assets   11,133,509    4,294,537 
           
Property and equipment, net   6,070,291    353,660 
Intangible assets, net   32,436,468    26,623,448 
Right-of-use assets, net   2,543,396    2,810,556 
Other receivables, net of current portion   692,738    287,775 
Acquisition deposits   -    383,700 
Goodwill   9,081,879    636,942 
TOTAL ASSETS  $61,958,281   $35,390,618 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
Current Liabilities:          
Accounts payable  $1,449,784   $883,773 
Accrued expenses   1,129,309    194,708 
Accrued interest (principally to related parties)   366,280    346,264 
Government loans and notes payable, current portion   4,485,649    83,292 
Due to related parties   478,920    528,213 
Finance lease liability, current portion   23,184    - 
Operating lease liability, current portion   530,797    563,793 
Total current liabilities   8,463,923    2,600,043 
           
Debentures, related parties   982,205    952,058 
Notes payable, net of current portion   5,133,604    - 
Finance lease liability, net of current portion   16,217    - 
Operating lease liability, net of current portion   2,057,805    2,266,887 
Deferred tax liability   1,500,372    - 
TOTAL LIABILITIES   18,154,126    5,818,988 
           
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 August 31, 2021 and 2020, respectively   -    - 
Common stock; $0.001 par value; 499,000,000 shares authorized; 26,610,144 and 23,466,236 shares issued and outstanding at August 31, 2021 and 2020, respectively   26,610    23,466 
Additional paid-in capital   54,579,396    44,905,454 
Common stock to be issued (3,622,199 shares)   9,236,607    - 
Other comprehensive income   991,077    1,199,696 
Accumulated deficit   (20,969,274)   (16,507,127)
Total Novo Integrated Sciences, Inc. stockholders’ equity   43,864,416    29,621,489 
Noncontrolling interest   (60,261)   (49,859)
Total stockholders’ equity   43,804,155    29,571,630 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $61,958,281   $35,390,618 

 

 
 

 

NOVO INTEGRATED SCIENCES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Years Ended August 31, 2021 and 2020

 

   Years Ended 
   August 31,   August 31, 
   2021   2020 
         
Revenues  $9,305,255   $7,860,567 
           
Cost of revenues   5,482,257    4,802,195 
           
Gross profit   3,822,998    3,058,372 
           
Operating expenses:          
Selling expenses   7,525    4,921 
General and administrative expenses   8,089,641    7,286,305 
Write down of assets   99,351    29,744 
Total operating expenses   8,196,517    7,320,970 
           
Loss from operations   (4,373,519)   (4,262,598)
           
Non operating income (expense)          
Interest income   45,687    33,627 
Interest expense   (165,003)   (156,662)
Other income (expense)   21,900    (194,055)
Write off of acquisition deposit   -    (344,521)
Total other income (expense)   (97,416)   (661,611)
           
Loss before income taxes   (4,470,935)   (4,924,209)
           
Income tax expense   -    - 
           
Net loss  $(4,470,935)  $(4,924,209)
           
Net loss attributed to noncontrolling interest   (8,788)   (9,055)
           
Net loss attributed to Novo Integrated Sciences, Inc.  $(4,462,147)  $(4,915,154)
           
Comprehensive loss:          
Net loss   (4,470,935)   (4,924,209)
Foreign currency translation (loss) gain   (208,619)   60,777 
Comprehensive loss:  $(4,679,554)  $(4,863,432)
           
Weighted average common shares outstanding - basic and diluted   24,774,454    23,034,081 
           
Net loss per common share - basic and diluted  $(0.18)  $(0.21)

 

 
 

 

NOVO INTEGRATED SCIENCES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Years Ended August 31, 2021 and 2020

 

                           Total         
           Additional   Common   Other       Novo         
   Common Stock   Paid-in   Stock To   Comprehensive   Accumulated   Stockholders’   Noncontrolling   Total 
   Shares   Amount   Capital   Be Issued   Income   Deficit   Equity   Interest   Equity 
                                     
Balance, August 31, 2019   22,369,150   $22,369   $36,014,525   $-   $1,138,919   $(11,591,973)  $25,583,840   $(39,632)   25,544,208 
                                              
Common stock issued for cash   35,437    35    113,364    -    -    -    113,399    -    113,399 
Common stock issued for licensing agreement   800,000    800    5,247,200    -    -    -    5,248,000    -    5,248,000 
Common stock issued for software license   96,558    97    386,134    -    -    -    386,231    -    386,231 
Common stock issued for conversion of related party debt   15,091    15    226,348    -    -    -    226,363    -    226,363 
Common stock issued for services   150,000    150    589,850    -    -    -    590,000    -    590,000 
Fair value of modification of stock option terms   -    -    62,822    -    -    -    62,822    -    62,822 
Fair value of stock options   -    -    2,265,211    -    -    -    2,265,211    -    2,265,211 

Foreign currency translation gain

   -    -    -    -    60,777         60,777    (1,172)   59,605 
Net loss   -    -    -    -    -    (4,915,154)   (4,915,154)   (9,055)   (4,924,209)
                                              
Balance, August 31, 2020   23,466,236    23,466    44,905,454    -    1,199,696    (16,507,127)   29,621,489    (49,859)   29,571,630 
                                              
Common stock issued for cash, net of offering costs   2,409,955    2,410    7,325,170    -    -    -    7,327,580    -    7,327,580 
Common stock for services   295,700    295    874,878    -    -    -    875,173    -    875,173 
Common stock issued for acquisition   189,796    190    430,647    -    -    -    430,837    -    430,837 
Common stock issued for intellectual property   240,000    240    875,760    -    -    -    876,000    -    876,000 
Common stock to be issued for purchase of Acenzia, Inc.   -    -    -    9,236,607    -    -    9,236,607    -    9,236,607 
Exercise of stock options   7,500    8    11,992    -    -    -    12,000    -    12,000 
Fair value of stock options   -    -    155,496    -    -    -    155,496    -    155,496 
Rounding due to stock split   957    1    (1)   -    -    -    -    -    - 
Foreign currency translation loss   -    -    -    -    (208,619)   -    (208,619)   (1,614)   (210,233)
Net loss   -    -    -    -    -    (4,462,147)   (4,462,147)   (8,788)   (4,470,935)
                                              
Balance, August 31, 2021   26,610,144   $26,610   $54,579,396   $9,236,607   $991,077   $(20,969,274)  $43,864,416   $(60,261)  $43,804,155 

 

 
 

 

NOVO INTEGRATED SCIENCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended August 31, 2021 and 2020

 

   Years Ended 
   August 31,   August 31, 
   2021   2020 
         
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(4,470,935)  $(4,924,209)
Adjustments to reconcile net loss to  net cash used in operating activities:          
Depreciation and amortization   1,724,122    1,445,076 
Fair value of vested stock options   155,496    2,265,211 
Expense associated with modified stock option terms   -    62,822 
Common stock issued for services   875,173    590,000 
Operating lease expense   642,991    541,530 
Gain on forgiveness of debt   (21,900)   - 
Write down of assets   99,351    29,744 
Loss on settlement of other receivable   -    74,360 
Write off of acquisition deposit   -    344,521 
Changes in operating assets and liabilities:          
Accounts receivable   1,103,800    (229,015)
Inventory   (147,814)   - 
Prepaid expenses and other current assets   (43,194)   61,218 
Accounts payable   (45,228)   (275,895)
Accrued expenses   (287,034)   (15,591)
Accrued interest   9,015    114,815 
Operating lease liability   (618,645)   (526,281)
Net cash used in operating activities   (1,024,802)   (441,694)
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchase of property and equipment   (255,949)   (12,110)
Cash paid for acquisition   (10,000)   - 
Cash acquired with acquisition   3,738,171    - 
Amounts loaned for other receivables   (473,100)   - 
Payment for acquisition deposit   -    (636,985)
Return of acquisition deposit   -    636,985 
Collection of other receivable   -    669,240 
Net cash provided by investing activities   2,999,122    657,130 
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Repayments to related parties   (246,327)   (198,778)
Repayments of debenture, related party   -    (267,696)
Repayments of notes payable   (2,767,519)   - 
Repayments of finance leases   (8,872)   - 
Proceeds from government loans and note payable   -    81,388 
Proceeds from the sale of common stock, net of offering costs   7,327,580    113,399 
Proceeds from exercise of stock options   12,000    - 
Net cash provided by (used in) financing activities   4,316,862    (271,687)
           
Effect of exchange rate changes on cash and cash equivalents   (65,738)   40,303 
           
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   6,225,444    (15,948)
           
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR   2,067,718    2,083,666 
           
CASH AND CASH EQUIVALENTS, END OF YEAR  $8,293,162   $2,067,718 
           
CASH PAID FOR:          
Interest  $144,987   $95,219 
Income taxes  $-   $- 
           
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:          
Common stock issued for intangible assets  $876,000   $5,634,231 
Common stock issued for debt  $-   $226,363 
Common stock issued for acquisition  $430,837   $-