Novo Integrated Sciences’ Board of Directors Approves Increase of Maximum Amount Under Stock Repurchase Program to $10 Million

Rhea-AI Summary

Novo Integrated Sciences' Board of Directors has approved an increase in the stock repurchase program to $10 million, up from $5 million. This decision reflects Novo's confidence in its undervalued shares and dedication to enhancing stockholder value. The repurchase program will use excess funds from a pending program to monetize a Standby Letter of Credit for the Ophir Collection acquisition and a $70 million promissory note. The repurchase amount and timing will depend on multiple factors, including stock price, trading volume, market conditions, and the company's capital position. The program is discretionary and can be discontinued at any time.

Positive

• Increase in stock repurchase program from $5 million to $10 million.
• Reflects confidence in the company's undervalued shares.
• Potential use of $70 million promissory note to fund repurchase.
• Flexibility in timing and amount of repurchase based on market conditions.

Negative

• Repurchase program is discretionary and can be discontinued anytime.
• Dependence on excess funds from a pending program and promissory note.
• No obligation to acquire any particular number of shares.
• Factors like stock price, trading volume, and market conditions may limit repurchase.

Insights

Financial Analyst

The announcement to increase the maximum amount under Novo Integrated Sciences' stock repurchase program to $10 million signals a strong vote of confidence from the company's management in its current valuation. Stock buybacks are often used by companies as a means to return capital to shareholders and are typically seen as a sign that the company's leadership believes its stock is undervalued. This move can reduce the number of shares outstanding, potentially boosting earnings per share (EPS) and providing a floor for the stock price. However, it's essential to consider the broader context in which this decision is made.

The company's ability to execute on this buyback program hinges on the successful monetization of the Standby Letter of Credit and the receipt of funds from the promissory note with RC Consulting Consortium Group. This introduces a level of uncertainty, as these transactions need to be completed as planned to provide the necessary capital for the buyback.

Moreover, the repurchase program's flexibility, with management having discretion over the timing and amount of shares repurchased, means that the market impact may be variable. It's also worth noting that while buybacks can be beneficial, they could also be seen as a missed opportunity if the capital used for repurchasing shares could have been invested into growth opportunities within the company.

Overall, this announcement is likely to be seen positively by investors focused on near-term shareholder value enhancement, but it comes with contingencies that need to be tracked closely.

Market Research Analyst

The decision to expand the stock repurchase program aligns with Novo Integrated Sciences' broader strategy of enhancing shareholder value. From a market perspective, this move may positively influence investor sentiment, as it is often interpreted as a signal that the company's shares are undervalued and that management is confident in its future prospects.

However, the effectiveness of the buyback in supporting the stock price will depend on several market conditions, including trading volumes and overall economic conditions. Investors should also consider the potential opportunity costs. In scenarios where companies have promising growth projects but opt for buybacks instead, the long-term benefits could be compromised.

For investors, it's important to monitor how management balances these repurchases with other strategic investments. A well-executed buyback can provide immediate support to the stock price, but it's the company's ability to generate sustainable growth that will ultimately drive long-term value.

BELLEVUE, Wash.--(BUSINESS WIRE)-- Novo Integrated Sciences, Inc. (NASDAQ: NVOS) (the “Company” or “Novo”), today announced the Company’s Board of Directors has approved an increase of up to $10 million maximum amount, from the previously announced up to $5 million maximum amount, for the repurchase of the Company's outstanding common stock from time to time in the open market at prevailing market prices or in privately negotiated transactions. The increased maximum amount available for purchase under the stock repurchase program is based on the amount, if any, of excess funds that may be generated from the pending program to monetize a Standby Letter of Credit intended to complete the Ophir Collection acquisition.

Pending receipt of funds from the unsecured 15-year $70,000,000 promissory note with RC Consulting Consortium Group, LLC in favor of SCP Tourbillion Monaco for a lump sum debt funding of $57,000,000, less fees and expenses, the amount and timing of any shares repurchased under the repurchase program will be determined at the discretion of management and will depend on a number of factors, including the market price of the Company's stock, trading volume, general market and economic conditions, the Company's capital position, legal requirements, and other factors. The repurchase program does not obligate the Company to acquire any particular number of shares, and the repurchase program may be discontinued at any time at the Company's discretion.

Robert Mattacchione, Novo’s CEO and Chairman of the Board, stated, "Today's announcement conveys our ongoing confidence in our business and dedication to enhancing stockholder value. This stock repurchase program is a direct reflection of our belief that our shares are undervalued, and a demonstration of our confidence in the business and the long-term opportunity ahead."

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, Section 21E of the Securities Exchange Act of 1934, as amended, or the Private Securities Litigation Reform Act of 1995. 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240606170483/en/

Chris David, COO & President

Novo Integrated Sciences, Inc.

chris.david@novointegrated.com

(888) 512-1195

Source: Novo Integrated Sciences, Inc.

FAQ

What did Novo Integrated Sciences announce on their stock repurchase program?

Novo Integrated Sciences announced an increase in their stock repurchase program to $10 million, up from the previous $5 million.

Why did Novo Integrated Sciences increase their stock repurchase program?

Novo increased their stock repurchase program to reflect confidence in their undervalued shares and to enhance stockholder value.

How will Novo Integrated Sciences fund the stock repurchase program?

The repurchase program will be funded through excess funds from a pending monetization program and a $70 million promissory note.

When will Novo Integrated Sciences repurchase their shares?

The timing and amount of shares repurchased will depend on factors such as market price, trading volume, and economic conditions.