Novo integrated sciences reports fiscal full year 2022 financial results
Bellevue, wash.--(business wire)--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 providing services and product innovation, today reported its financial results for the fiscal year ended august 31, 2022. robert mattacchione, the company’s ceo and board chairman, stated, “the company’s fiscal year 2022 revenue increase of 26% compared to fiscal year 2021 revenue includes an adjustment, from gross sales to net sales, reducing novo’s total reflected fiscal year 2022 3rd quarter outsourced product sales by approximately $9.4m. the company elected to apply the adjustment based on the inconsistent and sporadic nature of outsourced product sales and the significant capital required to support the sales cycle. 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 is primarily focused on raising capital through non-dilutive structures and solutions.” financial info for the fiscal year ended august 31, 2022: as of august 31, 2022, the company’s cash and cash equivalents were $2.178 million, total assets were $40.872 million, total liabilities were $18.825 million, and stockholders’ equity was $22.305 million. revenues for the year ended august 31, 2022 were $11,737,937, representing an increase of $2,432,682, or 26%, from $9,305,255 for the same period in 2021. the increase in revenue is principally due to an increase in product sales which resulted in an increase in revenue of $756,428. acenzia’s and terragenx’s revenue for the year ended august 31, 2022 was $3,067,772 and $266,635, respectively. net loss attributed to novo integrated sciences for the year ended august 31, 2022 was $32,849,215, representing an increase of $28,387,068, or 636%, from $4,462,147 for the same period in 2021. the increase in net loss is principally due to (i) an increase in impairment of intangible assets, (ii) an increase in the amortization of debt discount, (iii) an increase in the impairment of goodwill, (iv) an increase in depreciation amortization, (v) an increase in interest expense, and (vi) an increase in overhead expenses associated with the operations of acenzia, pro-dip, and terragenx. on december 14, 2021, novo integrated issued two senior secured convertible notes payable for a total of $16,666,666 (the “$16.66m notes”) with each note having a face amount of $8,333,333. during the year ended august 31, 2022, the company made cash payments in the aggregate amount of $4,307,555 which includes a monthly amortization payment amount of $4,166,667 in principal and $140,888 in interest. subsequent to the end of fiscal year 2022, the $16.66m notes have been paid in full. 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 notes”) with each note having a face amount of $937,500. on june 1, 2022, the company paid the balance owed on the first of two $1.875m notes for an aggregate payment of $948,874, including all principal and interest owed. on june 1, 2022, the company made an interest payment on the second of two $1.875 million convertible notes for a payment of $192,188. on june 1, 2022, the company and the note holder agreed to extend the maturity date to november 29, 2022 with a principal amount face value of $937,500. subsequent to the end of fiscal year 2022, the second of two $1.875m notes was paid in full. operational milestones for fiscal year 2022: acquired 91% of terragenx and the intellectual property portfolio, in an all-share transaction priced at $3.35 per share, for the unique formulation and manufacturing capability to produce a water-soluble iodine micro-nutrient that is fda and health canada approved for over-the-counter and e-commerce distribution. completed acquisition of clinical consultants international llc (cci). pro-dip® issued u.s. patent for oral pouch delivery system technology. completed acquisition of 2 multi-disciplinary clinics in ontario canada. completed an amended and restated master facility license agreement with la fitness in canada. ionovo iodide and ionovo for kids pure iodine oral sprays granted natural product number (npn) by health canada to compliment npn issued products ionovo go iodine and ionovo pure. established a 50/50 joint venture company, mitelemed+, with ek-tech solutions inc. to operate, support, and expand access and functionality of ek-tech’s enhanced proprietary telehealth platform (“itelemed”). mitelemed+, through the itelemed platform, allows novo 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, the practitioner’s ability and comfort to provide a uniquely comprehensive evaluation, diagnosis, and treatment solution is dramatically elevated. novoconnect is in limited commercialization through certain of the company’s corporate owned clinics with expanded commercialization intended to launch in 2023. corporate highlights for the fiscal year ended august 31, 2022: chief medical officer, dr. joseph m. chalil, selected as top physician of the year by iaotp for outstanding leadership, dedication, and innovation medical contributions. 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. twitter, linkedin, facebook, instagram, youtube 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, 2022 and 2021 august 31, august 31, 2022 2021 assets current assets: cash and cash equivalents $ 2,178,687 $ 8,293,162 accounts receivable, net 1,017,405 1,468,429 inventory, net 879,033 339,385 other receivables, current portion 1,085,335 814,157 prepaid expenses and other current assets 571,335 218,376 total current assets 5,731,795 11,133,509 property and equipment, net 5,800,648 6,070,291 intangible assets, net 18,840,619 32,029,499 right-of-use assets, net 2,673,934 2,543,396 other receivables, net of current portion - 692,738 goodwill 7,825,844 9,488,848 total assets $ 40,872,840 $ 61,958,281 liabilities and stockholders’ equity current liabilities: accounts payable $ 1,800,268 $ 1,449,784 accrued expenses 1,116,125 1,129,309 accrued interest (including amounts to related parties) 454,189 366,280 government loans and notes payable, current portion - 4,485,649 convertible notes payable, net of discount of $2,851,048 9,099,654 - contingent liability 534,595 - due to related parties 478,897 478,920 finance lease liability, current portion 8,890 23,184 operating lease liability, current portion 582,088 530,797 total current liabilities 14,074,706 8,463,923 debentures, related parties 946,250 982,205 government loans and notes payable, net of current portion 161,460 5,133,604 finance lease liability, net of current portion 12,076 16,217 operating lease liability, net of current portion 2,185,329 2,057,805 deferred tax liability 1,445,448 1,500,372 total liabilities 18,825,269 18,154,126 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, 2022 and august 31, 2021, respectively - - common stock; $0.001 par value; 499,000,000 shares authorized; 31,180,603 and 26,610,144 shares issued and outstanding at august 31, 2022 and august 31, 2021, respectively 31,181 26,610 additional paid-in capital 66,056,824 54,579,396 common stock to be issued (4,149,633 and 3,622,199 shares at august 31, 2022 and august 31, 2021) 9,474,807 9,236,607 other comprehensive income 560,836 991,077 accumulated deficit (53,818,489 ) (20,969,274 ) total novo integrated sciences, inc. stockholders’ equity 22,305,159 43,864,416 noncontrolling interest (257,588 ) (60,261 ) total stockholders’ equity 22,047,571 43,804,155 total liabilities and stockholders’ equity $ 40,872,840 $ 61,958,281 consolidated statements of operations and comprehensive loss for the years ended august 31, 2022 and 2021 years ended august 31, august 31, 2022 2021 revenues $ 11,737,937 $ 9,305,255 cost of revenues 6,938,699 5,482,257 gross profit 4,799,238 3,822,998 operating expenses: selling expenses 20,702 7,525 general and administrative expenses 14,364,639 8,089,641 impairment of assets 14,083,531 - goodwill impairment 1,357,043 99,351 total operating expenses 29,825,915 8,196,517 loss from operations (25,026,677 ) (4,373,519 ) non-operating income (expense) interest income 169,088 45,687 interest expense (1,594,275 ) (165,003 ) other income - 21,900 amortization of debt discount (5,973,973 ) - foreign currency transaction losses (641,643 ) - total other income (expense) (8,040,803 ) (97,416 ) loss before income taxes (33,067,480 ) (4,470,935 ) income tax expense (22,302 ) - net loss $ (33,045,178 ) $ (4,470,935 ) net loss attributed to noncontrolling interest (195,963 ) (8,788 ) net loss attributed to novo integrated sciences, inc. $ (32,849,215 ) $ (4,462,147 ) comprehensive loss: net loss (33,045,178 ) (4,470,935 ) foreign currency translation loss (431,605 ) (210,233 ) comprehensive loss: $ (33,476,783 ) $ (4,681,168 ) weighted average common shares outstanding - basic and diluted 29,122,621 24,774,454 net loss per common share - basic and diluted $ (1.13 ) $ (0.18 consolidated statements of stockholders’ equity for the years ended august 31, 2022 and 2021 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, 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 common stock for services 750,000 750 1,329,000 - - - 1,329,750 - 1,329,750 common stock issued as collateral and held in escrow 2,000,000 2,000 (2,000 ) - - - - - - common stock for conversion of convertible notes 636,501 637 1,272,357 - - - 1,272,994 - 1,272,994 common stock issued for acquisitions 800,000 800 1,703,200 - - - 1,704,000 - 1,704,000 common stock to be issued for acquisitions - - - 1,433,475 - - 1,433,475 - 1,433,475 value of warrants issued with convertible notes - - 5,553,290 - - - 5,553,290 - 5,553,290 issuance of common stock to be issued 383,958 384 1,194,891 (1,195,275 ) - - - - - fair value of stock options - - 426,690 - - - 426,690 - 426,690 foreign currency translation loss - - - - (430,241 ) - (430,241 ) (1,364 ) (431,605 ) net loss - - - - - (32,849,215 ) (32,849,215 ) (195,963 ) (33,045,178 ) balance, august 31, 2022 31,180,603 $ 31,181 $ 66,056,824 $ 9,474,807 $ 560,836 $ (53,818,489 ) $ 22,305,159 $ (257,588 ) $ 22,047,571 novo integrated sciences, inc. consolidated statements of cash flows for the years ended august 31, 2022 and 2021 years ended august 31, august 31, 2022 2021 cash flows from operating activities: net loss $ (33,045,178 ) $ (4,470,935 ) adjustments to reconcile net loss to net cash used in operating activities: depreciation and amortization 3,019,253 1,724,122 fair value of vested stock options 426,690 155,496 common stock issued for services 1,329,750 875,173 operating lease expense 852,580 642,991 amortization of debt discount 5,973,973 - foreign currency transaction losses 641,643 - gain on forgiveness of debt - (21,900 ) impairment of assets 14,083,531 - other receivables write-off 299,672 - goodwill impairment 1,357,043 99,351 changes in operating assets and liabilities: accounts receivable 457,006 1,103,800 inventory (527,397 ) (147,814 ) prepaid expenses and other current assets (369,647 ) (43,194 ) accounts payable 283,234 (45,228 ) accrued expenses 38,743 (287,034 ) accrued interest 101,353 9,015 operating lease liability (806,394 ) (618,645 ) net cash used in operating activities (5,884,145 ) (1,024,802 ) cash flows from investing activities: purchase of property and equipment (190,168 ) (255,949 ) cash paid for acquisition - (10,000 ) cash acquired with acquisition 57,489 3,738,171 amounts loaned for other receivables - (473,100 ) collection of other receivable 296,138 - net cash provided by investing activities 163,459 2,999,122 cash flows from financing activities: receipts from (repayments to) related parties 16,600 (246,327 ) repayments of notes payable (10,591,115 ) (2,767,519 ) repayments of finance leases (18,435 ) (8,872 ) proceeds from issuance of convertible notes 15,270,000 - repayment of convertible notes (5,104,167 ) - proceeds from the sale of common stock, net of offering costs - 7,327,580 proceeds from exercise of stock options - 12,000 net cash (used in) provided by financing activities (427,117 ) 4,316,862 effect of exchange rate changes on cash and cash equivalents (33,328 ) (65,738 ) net (decrease) increase in cash and cash equivalents (6,114,475 ) 6,225,444 cash and cash equivalents, beginning of year 8,293,162 2,067,718 cash and cash equivalents, end of year $ 2,178,687 $ 8,293,162 cash paid for: interest $ 1,502,819 $ 144,987 income taxes $ - $ - supplemental non-cash investing and financing activities: common stock issued for intangible assets $ - $ 876,000 common stock issued for convertible debt $ 1,272,994 $ - common stock issued for acquisition $ 1,704,000 $ 430,837 warrants issued with convertible notes $ 5,553,290 $ -
