Novo Integrated Sciences Reports 2024 Fiscal Year Financial Results

Rhea-AI Summary

Novo Integrated Sciences (NVOS) reported its fiscal year 2024 financial results, showing revenue of $13.29 million, a 6% increase from 2023, primarily driven by higher product sales. However, the company faced increased operating costs of $15.82 million, up 17% year-over-year, and reported a net loss of $16.17 million, 22% higher than 2023.

The company's cash position stood at $844,584, with total assets of $32.14 million and stockholders' equity of $14.89 million. In April 2024, NVOS executed a $6.21 million Securities Purchase Agreement with Streeterville Capital, carrying a 10.9% annual interest rate and 12-month maturity.

Positive

• Revenue increased by 6% to $13.29 million
• Healthcare services revenue grew by 1% year-over-year
• Secured $6.21 million financing through Streeterville Note

Negative

• Net loss increased 22% to $16.17 million
• Operating costs rose 17% to $15.82 million
• Low cash position of $844,584
• Impairment of intangible assets and goodwill recognized
• Foreign currency exchange losses from intercompany balance reconciliation

BELLEVUE, Wash.--(BUSINESS WIRE)-- Novo Integrated Sciences, Inc. (OTC Pink: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 providing services and product innovation, today reported its financial results for the fiscal year ended August 31, 2024.

Robert Mattacchione, the Company’s CEO and Board Chairman, stated, “The Company remains committed to the commercialization of its proprietary product offerings and the expansion and delivery of its essential services and solutions to the rapidly evolving fundamental transformation of how non-catastrophic healthcare is delivered both now and in the future. Specific to increasing the Company’s cash position, management continues to focus on raising capital through non-dilutive structures and solutions.”

Financial Information for the Fiscal Year Ended August 31, 2024:

• As of August 31, 2024, the Company’s cash and cash equivalents were $844,584, total assets were $32,141,276, total liabilities were $17,527,351 and total Company stockholders’ equity was $14,892,621.
• Revenues for the year ended August 31, 2024 were $13,294,357, representing an increase of $722,338, or 6%, from $12,572,019 for the same period in 2023. The increase in revenue is principally due to an increase in product sales. Acenzia’s and Terragenx’s revenue for the year ended August 31, 2024 was $4,713,940 and $122,154, respectively. Revenue from our healthcare services increased by 1%, when comparing the revenue for the year ended August 31, 2024 to the same period in 2023.
• Operating costs for the year ended August 31, 2024 were $15,818,802, representing an increase of $2,312,925, or 17%, from $13,505,877 for the same period in 2023. The increase in operating costs was principally due to (i) impairment of intangible assets and goodwill being recognized; and (ii) an increase in overhead expenses associated with the operations.
• Net loss attributed to Novo Integrated Sciences for the year ended August 31, 2024 was $16,166,744, representing an increase of $2,952,192, or 22%, from $13,214,552 for the same period in 2023. The increase in net loss was principally due to (i) impairment of intangible assets and goodwill being recognized; (ii) foreign currency exchange loss arising as a result of intercompany balance reconciliation; and (iii) amortization of debt discount as compared to the previous year.
• On April 5, 2024, the Company executed a $6.21 million Securities Purchase Agreement and Note (the “Streeterville Note”) with Streeterville Capital LLC (“Streeterville”). The Streeterville Note annual interest is 10.9% with a 12-month maturity date and is secured by Acenzia’s land/building. This Streeterville Note has no warrants or commitment type shares related to the transaction.
• On July 8, 2024, the Company filed a registration statement on Form S-1 relating to the resale of up to 3,500,000 shares of the Company’s common stock by Streeterville issuable by the Company upon conversion of the Streeterville Note. The prices at which Streeterville may sell the common stock will be determined by the prevailing market price for the shares or in negotiated transactions.
• On October 8, 2024, Streeterville notified the Company that it would redeem $950,000 of the Streeterville Note. In lieu of payment by the Company to Streeterville of $950,000, the Company and Streeterville agreed to a one-time fee in the amount of $142,500 (representing 15% of the $950,000 redemption amount) payable by the Company to Streeterville. Such amount was added to the outstanding balance under the Streeterville Note. On October 16, 2024, Streeterville submitted a redemption notice in the amount of $142,500. On October 21, 2024, the Company issued 675,724 shares of common stock to Streeterville in payment of the $142,500 redemption amount. Following such issuance, the outstanding balance under the Streeterville Note was $6,579,658.

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.

NOVO INTEGRATED SCIENCES, INC. CONSOLIDATED BALANCE SHEETS As of August 31, 2024 and 2023
		August 31,				August 31,
		2024				2023
ASSETS
Current Assets:
Cash and cash equivalents		$	844,584			$	416,323
Accounts receivable, net			1,916,819				1,467,028
Inventory, net			1,000,742				1,106,983
Other receivables			1,235,423				1,051,584
Prepaid expenses and other current assets			417,282				346,171
Total current assets			5,414,850				4,388,089
Property and equipment, net			5,110,776				5,390,038
Intangible assets, net			13,369,868				16,218,539
Right-of-use assets, net			1,691,309				1,983,898
Goodwill			6,554,473				7,582,483
TOTAL ASSETS		$	32,141,276			$	35,563,047
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable		$	3,235,800			$	3,513,842
Accrued expenses			1,592,288				1,233,549
Accrued interest (including amounts to related parties)			624,287				382,666
Government loans and notes payable, current portion			45,681				277,405
Convertible notes payable, net of discount of $3,505,849			2,704,151				558,668
Derivative liability			4,685,198				-
Contingent liability			13,836				61,767
Debentures, related parties, current portion			913,598				916,824
Due to related parties			356,928				533,001
Finance lease liability, current portion			4,354				11,744
Operating lease liability, current portion			403,291				415,392
Total current liabilities			14,579,412				7,904,858
Government loans and notes payable, net of current portion			112,001				65,038
Operating lease liability, net of current portion			1,440,367				1,693,577
Deferred tax liability			1,395,571				1,400,499
TOTAL LIABILITIES			17,527,351				11,063,972
Commitments and contingencies			-				-
STOCKHOLDERS’ EQUITY
Novo Integrated Sciences, Inc.
Convertible preferred stock; $0.001 par value; 1,000,000 shares authorized; Nil shares issued and outstanding at August 31, 2024 and August 31, 2023			-				-
Common stock; $0.001 par value; 499,000,000 shares authorized; 19,054,523 and 15,759,325 shares issued and outstanding at August 31, 2024 and August 31, 2023, respectively			19,055				15,760
Additional paid-in capital			96,660,607				90,973,316
Common stock to be issued (1,700 and 91,138 shares at August 31, 2024 and August 31, 2023)			25,500				1,217,293
Other comprehensive (loss) income			1,387,244				(357,383	)
Accumulated deficit			(83,199,785	)			(67,033,041	)
Total Novo Integrated Sciences, Inc. stockholders’ equity			14,892,621				24,815,945
Noncontrolling interest			(278,696	)			(316,870	)
Total stockholders’ equity			14,613,925				24,499,075
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	32,141,276			$	35,563,047
* The consolidated balance sheets’ common stock share amounts have been retroactively adjusted to account for the Company’s 1:10 reverse stock split, effective November 7, 2023.

NOVO INTEGRATED SCIENCES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS For the Years Ended August 31, 2024 and 2023
		Years Ended
		August 31,				August 31,
		2024				2023
Revenues		$	13,294,357			$	12,572,019
Cost of revenues			7,551,853				7,619,304
Gross profit			5,742,504				4,952,715
Operating expenses:
Selling expenses			17,137				15,149
General and administrative expenses			14,039,265				13,490,728
Impairment of assets			761,067				-
Goodwill impairment			1,001,333				-
Total operating expenses			15,818,802				13,505,877
Loss from operations			(10,076,298	)			(8,553,162	)
Non-operating income (expense)
Interest income			202,525				9,027
Interest expense			(652,398	)			(360,571	)
Other (expense) income			(1,032,620	)			607,589
Change in fair value of derivative liability			3,594,171				-
Amortization of debt discount			(6,574,862	)			(4,757,121	)
Foreign currency transaction losses			(1,589,088	)			(215,206	)
Total other income (expense)			(6,052,272	)			(4,716,282	)
Loss before income taxes			(16,128,570	)			(13,269,444	)
Income tax expense (recovery)			-				-
Net loss		$	(16,128,570	)		$	(13,269,444	)
Net loss attributed to noncontrolling interest			38,174				(54,892	)
Net loss attributed to Novo Integrated Sciences, Inc.		$	(16,166,744	)		$	(13,214,552	)
Comprehensive loss:
Net loss			(16,128,570	)			(13,269,444	)
Foreign currency translation loss			(1,744,627	)			(922,609	)
Comprehensive loss:		$	(17,873,197	)		$	(14,192,053	)
Weighted average common shares outstanding - basic and diluted			18,032,015				10,165,548
Net loss per common share - basic and diluted		$	(0.89	)		$	(1.30	)
* The 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.

NOVO INTEGRATED SCIENCES, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY For the Years Ended August 31, 2024 and 2023
	Common Stock						Additional Paid-in				Common Stock To				Other Comprehensive				Accumulated				Total Novo Stockholders’				Noncontrolling				Total
	Shares			Amount			Capital				Be Issued				Income				Deficit				Equity				Interest				Equity
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
Cashless exercise of warrants		583,334			583			1,421,000				-				-				-				1,421,583				-				1,421,583
Share issuance for convertible debt settlement		10,177,834			10,178			9,957,962				-				-				-				9,968,140				-				9,968,140
Exercise of warrants for cash		532,600			533			532,067				-				-				-				532,600				-				532,600
Shares issued with convertible notes		265,167			265			247,622				-				-				-				247,887				-				247,887
Value of warrants issued with convertible notes		-			-			257,994				-				-				-				257,994				-				257,994
Beneficial conversion feature upon issuance on convertible debt		-			-			164,046				-				-				-				164,046				-				164,046
Extinguishment of derivative liability due to conversion		-			-			1,390,380				-				-				-				1,390,380				-				1,390,380
Common stock for services		358,500			359			480,233				-				-				-				480,592				-				480,592
Issuance of common stock to be issued		323,827			324			8,257,190				(8,257,514	)			-				-				-				-				-
Fair value of stock options		-			-			385,335				-				-				-				385,335				-				385,335
Foreign currency translation loss		-			-			-				-				(918,219	)			-				(918,219	)			(4,390	)			(922,609	)
Net loss		-			-			-				-				-				(13,214,552	)			(13,214,552	)			(54,892	)			(13,269,444	)
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
Shares issued for convertible debt settlement		2,283,176			2,283			1,608,600				-				-				-				1,610,883				-				1,610,883
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
Reverse stock split share rounding		27,973			28			(28	)			-				-				-				-				-				-
Fair value of stock options		-			-			147,655				-				-				-				147,655				-				147,655
Cancellation of agreement		-			-			-				(18,943	)			-				-				(18,943	)			-				(18,943	)
Foreign currency translation loss		-			-			-				-				1,744,627				-				1,744,627				-				1,744,627
Net loss		-			-			-				-				-				(16,166,744	)			(16,166,744	)			38,174				(16,128,570	)
Balance, August 31, 2024		19,054,523		$	19,055		$	96,660,607			$	25,500			$	1,387,244			$	(83,199,785	)		$	14,892,621			$	(278,696	)		$	14,613,925
* The consolidated statements of stockholder’s equity share amounts have been retroactively adjusted to account for the Company’s 1:10 reverse stock split, effective November 7, 2023.

NOVO INTEGRATED SCIENCES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended August 31, 2024 and 2023
		Years Ended
		August 31,				August 31,
		2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(16,128,570	)		$	(13,269,444	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			2,261,519				2,302,754
Fair value of vested stock options			147,656				385,335
Financing costs for debt extension			-				1,421,583
Change in fair value of derivative liability			(3,594,171	)			-
Default payment and interest paid through common share issuance			-				205,349
Cashless exercise of warrants			1,323,398				-
Common stock issued for services			1,195,400				480,592
Operating lease expense			616,799				797,515
Cancellation of shares to be issued			62,130				-
Amortization of debt discount			6,574,862				4,757,121
Foreign currency transaction losses			1,589,088				215,206
Impairment of assets			761,067				-
Assets write off			321,872				-
Goodwill impairment			1,001,333				-
Changes in operating assets and liabilities:
Accounts receivable			(453,252	)			(597,191	)
Inventory			(210,883	)			(255,781	)
Prepaid expenses and other current assets			(259,972	)			210,382
Accounts payable			(267,211	)			1,770,589
Accrued expenses			330,276				153,598
Accrued interest			275,618				(58,066	)
Operating lease liability			(616,799	)			(762,852	)
Net cash used in operating activities			(5,069,840	)			(2,243,315	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment			(5,034	)			(49,224	)
Net cash (used in) provided by investing activities			(5,034	)			(49,224	)
CASH FLOWS FROM FINANCING ACTIVITIES:
(Repayments to) receipt from related parties			(396,418	)			7,206
Proceeds from notes payable			402				222,780
Repayments of notes payable			(183,725	)			(37,130	)
Repayments of finance leases			(7,334	)			(8,611	)
Proceeds from issuance of convertible notes			8,649,153				1,285,903
Repayment of convertible notes			(3,311,536	)			(3,033,888	)
Proceeds from the sale of common stock, net of offering costs			-				1,795,000
Proceeds from exercise of warrants			240,400				532,600
Net cash provided by financing activities			4,990,942				763,860
Effect of exchange rate changes on cash and cash equivalents			512,193				(233,685	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			428,261				(1,762,364	)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR			416,323				2,178,687
CASH AND CASH EQUIVALENTS, END OF YEAR		$	844,584			$	416,323
CASH PAID FOR:
Interest		$	190,491			$	432,094
Income taxes		$	-			$	-
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued for convertible debt		$	1,610,883			$	9,968,140
Common stock issued for acquisition		$	-			$	-
Warrants issued with convertible notes		$	-			$	257,994
Beneficial conversion feature upon issuance of convertible notes		$	-			$	164,046
Debt discount recognized on derivative liability		$	-			$	1,390,380
Extinguishment of derivative liability due to conversion		$	-			$	1,390,380
Debt discount recognized on convertible note		$	-			$	975,024
Common stock issued with convertible notes		$	-			$	247,887
Common stock issued for services		$	1,195,400			$	-
Cashless exercise of warrants		$	1,323,398			$	-

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241218007774/en/

Chris David, COO

Novo Integrated Sciences, Inc.

chris.david@novointegrated.com

(888) 512-1195

Source: Novo Integrated Sciences, Inc.

FAQ

What was NVOS's revenue growth in fiscal year 2024?

NVOS reported revenue of $13.29 million in FY2024, representing a 6% increase from $12.57 million in FY2023.

How much was NVOS's net loss in fiscal year 2024?

NVOS reported a net loss of $16.17 million in FY2024, a 22% increase from $13.21 million in FY2023.

What are the terms of NVOS's Streeterville financing agreement?

NVOS executed a $6.21 million Securities Purchase Agreement with Streeterville Capital on April 5, 2024, with 10.9% annual interest and 12-month maturity.

What caused the increase in NVOS's operating costs for FY2024?

Operating costs increased due to impairment of intangible assets and goodwill, plus higher overhead expenses associated with operations.

What was NVOS's cash position as of August 31, 2024?

NVOS reported cash and cash equivalents of $844,584 as of August 31, 2024.