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NOVO INTEGRATED SCIENCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

As of May 31, 2024 (unaudited) and August 31, 2023

May 31,

August 31,

2024

2023

ASSETS

Current Assets:

Cash and cash equivalents

$

1,539,771

$

416,323

Accounts receivable, net

2,251,528

1,467,028

Inventory, net

1,112,068

1,106,983

Other receivables, current portion

1,043,473

1,051,584

Prepaid expenses and other current assets

214,436

346,171

Total current assets

6,161,276

4,388,089

Property and equipment, net

5,157,781

5,390,038

Intangible assets, net

14,690,038

16,218,539

Right-of-use assets, net

1,793,907

1,983,898

Goodwill

7,523,998

7,582,483

TOTAL ASSETS

$

35,327,000

$

35,563,047

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts payable

$

3,894,602

$

3,513,842

Accrued expenses

1,332,485

1,233,549

Accrued interest (including amounts to related parties)

450,795

382,666

Government loans and notes payable, current portion

93,488

277,405

Convertible notes payable, net of discount of $4,985,381

1,224,619

558,668

Derivative liability

14,048,576

–

Contingent liability

45,968

61,767

Debentures, related parties

909,753

916,824

Due to related parties

262,295

533,001

Finance lease liability, net of current portion

4,336

11,744

Operating lease liability, current portion

409,516

415,392

Total current liabilities

22,676,433

7,904,858

Government loans and notes payable, net of current portion

63,572

65,038

Operating lease liability, net of current portion

1,534,078

1,693,577

Deferred tax liability

1,389,696

1,400,499

TOTAL LIABILITIES

25,663,779

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 May 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 May 31, 2024 and August 31, 2023, respectively

19,055

15,760

Additional paid-in capital

96,660,608

90,973,316

Common stock to be issued (1,700 and 91,138 shares at May 31, 2024 and August 31, 2023)

25,500

1,217,293

Other comprehensive (loss) income

1,452,386

(357,383

)

Accumulated deficit

(88,201,415

)

(67,033,041

)

Total Novo Integrated Sciences, Inc. stockholders’ equity

9,956,134

24,815,945

Noncontrolling interest

(292,913

)

(316,870

)

Total stockholders’ equity

9,663,221

24,499,075

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

35,327,000

$

35,563,047

NOVO INTEGRATED SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Three and Nine Months Ended May 31, 2024 and 2023 (unaudited)

Three Months Ended

Nine Months Ended

May 31,

May 31,

May 31,

May 31,

2024

2023

2024

2023

(unaudited)

(unaudited)

(unaudited)

(unaudited)

Revenues

$

3,151,851

$

3,292,933

$

10,213,661

$

9,268,722

Cost of revenues

2,254,958

1,978,839

6,048,664

5,244,192

Gross profit

896,893

1,314,094

4,164,997

4,024,530

Operating expenses:

Selling expenses

2,635

1,877

14,811

9,916

General and administrative expenses

3,414,461

2,742,635

11,527,794

9,473,802

Total operating expenses

3,417,096

2,744,512

11,542,605

9,483,718

Loss from operations

(2,520,203

)

(1,430,418

)

(7,377,608

)

(5,459,188

)

Non operating income (expense)

Interest income

2,214

62,397

6,910

6,762

Interest expense

(178,445

)

(9,570

)

(460,503

)

(240,520

)

Other expense

(3,431

)

–

(964,368

)

–

Change in fair value of derivative liability

(6,724,690

)

–

(5,765,822

)

–

Amortization of debt discount

(2,904,830

)

(156,037

)

(5,095,331

)

(4,386,899

)

Exchange currency (loss) gain

(1,406,915

)

48,333

(1,485,861

)

12,652

Total other expense

(11,216,097

)

(54,877

)

(13,764,975

)

(4,608,005

)

Loss before income taxes

(13,736,300

)

(1,485,295

)

(21,142,583

)

(10,067,193

)

Income tax expense

–

–

–

–

Net loss

$

(13,736,300

)

$

(1,485,295

)

$

(21,142,583

)

$

(10,067,193

)

...

Net income (loss) attributed to noncontrolling interest

5,603

12,035

25,791

(13,095

)

Net loss attributed to Novo Integrated Sciences, Inc.

$

(13,741,903

)

$

(1,497,330

)

$

(21,168,374

)

$

(10,054,098

)

Comprehensive loss:

Net loss

(13,736,300

)

(1,485,295

)

(21,142,583

)

(10,067,193

)

Foreign currency translation gain (loss)

750,067

(120,357

)

1,809,769

(738,022

)

Comprehensive loss:

$

(12,986,233

)

$

(1,605,652

)

$

(19,332,814

)

$

(10,805,215

)

Weighted average common shares outstanding - basic and diluted

18,685,979

14,360,058

17,688,692

8,583,229

Net loss per common share - basic and diluted

$

(0.74

)

$

(0.10

)

$

(1.20

)

$

(1.17

)

NOVO INTEGRATED SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three and Nine Months Ended May 31, 2024 and 2023 (unaudited)

Additional

Common

Other

Total 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, 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

Share issuance for convertible debt settlement

519,845

520

577,002

–

–

–

577,522

–

577,522

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

)

–

–

–

–

–

–

Foreign currency translation gain

–

–

–

–

110,895

–

110,895

(1,919

)

108,976

Net loss

–

–

–

–

–

(4,680,343

)

(4,680,343

)

19,620

(4,660,723

)

Balance, November 30, 2023

17,291,192

$

17,292

$

95,481,354

$

44,443

$

(246,488

)

$

(71,713,384

)

$

23,583,217

$

(299,169

)

$

23,284,048

Share issuance for convertible debt settlement

457,128

457

453,616

–

–

–

454,073

–

454,073

Foreign currency translation gain

–

–

–

–

749,869

–

749,869

198

750,067

Fair value of stock options

–

–

147,656

–

–

–

147,656

–

147,656

Net loss

–

–

–

–

–

(2,746,128

)

(2,746,128

)

568

(2,745,560

)

Balance, February 29, 2024

17,748,320

$

17,749

$

96,082,626

$

44,443

$

503,381

$

(74,459,512

)

$

22,188,687

$

(298,403

)

$

21,890,284

Share issuance for convertible debt settlement

1,306,203

1,306

577,982

–

–

–

579,288

–

579,288

Cancellation of agreement

–

–

–

(18,943

)

–

–

(18,943

)

–

(18,943

)

Foreign currency translation gain

–

–

–

–

949,005

–

949,005

(113

)

948,892

Net loss

–

–

–

–

–

(13,741,903

)

(13,741,903

)

5,603

(13,736,300

)

Balance, May 31, 2024

19,054,523

$

19,055

$

96,660,608

$

25,500

$

1,452,386

$

(88,201,415

)

$

9,956,134

$

(292,913

)

$

9,663,221

Additional

Common

Other

Total 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, 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

Common stock issued for cash, net of offering costs

400,000

400

1,794,600

–

–

–

1,795,000

–

1,795,000

Issuance of common stock to be issued

3,623

4

92,362

(92,366

)

–

–

–

–

–

Cashless exercise of warrants

467,399

467

1,138,583

–

–

–

1,139,050

–

1,139,050

Fair value of stock options

–

–

60,887

–

–

–

60,887

–

60,887

Foreign currency translation loss

–

–

–

–

(417,008

)

–

(417,008

)

(3,974

)

(420,982

)

Net loss

–

–

–

–

–

(3,935,413

)

(3,935,413

)

(1,323

)

(3,936,736

)

Balance, November 30, 2022

3,989,085

$

3,989

$

69,171,319

$

9,382,441

$

143,828

$

(57,753,902

)

$

20,947,675

$

(262,885

)

$

20,684,790

Share issuance for convertible debt settlement

9,310,940

9,311

9,076,740

–

–

–

9,086,051

–

9,086,051

Exercise of warrants (Cashless Exercise)

115,935

116

282,417

–

–

–

282,533

–

282,533

Exercise of warrants for cash

131,000

131

130,869

–

–

–

131,000

–

131,000

Issuance of common stock to be issued

320,202

320

8,164,828

(8,165,148

)

–

–

–

–

–

Shares issued with convertible notes

95,500

96

82,868

–

–

–

82,963

–

82,963

Value of warrants issued with convertible notes

–

–

86,327

–

–

–

86,327

–

86,327

Fair value of stock options

–

–

60,887

–

–

–

60,887

–

60,887

Extinguishment of derivative liability due to conversion

–

–

1,390,380

–

–

–

1,390,380

–

1,390,380

Foreign currency translation loss

–

–

–

–

(195,821

)

–

(195,821

)

(862

)

(196,683

)

Net loss

–

–

–

–

–

(4,621,355

)

(4,621,355

)

(23,807

)

(4,645,162

)

Balance, February 28, 2023

13,962,662

13,963

88,446,635

1,217,293

(51,993

)

(62,375,257

)

27,250,640

(287,554

)

26,963,086

Share issuance for convertible debt settlement

107,594

108

100,170

–

–

–

100,278

–

100,278

Exercise of warrants for cash

320,000

320

319,680

–

–

–

320,000

–

320,000

Shares issued with convertible notes

95,500

96

90,037

–

–

–

90,132

–

90,132

Value of warrants issued with convertible notes

–

–

93,811

–

–

–

93,811

–

93,811

Beneficial conversion feature upon issuance of convertible debt

–

–

66,068

–

–

–

66,068

–

66,068

Stock option expense

–

–

263,561

–

–

–

263,561

–

263,561

Foreign currency translation loss

–

–

–

–

(120,533

)

–

(120,533

)

176

(120,357

)

Net loss

–

–

–

–

–

(1,497,330

)

(1,497,330

)

12,035

(1,485,295

)

Balance, May 31, 2023

14,485,756

$

14,486

$

89,379,961

$

1,217,293

$

(172,526

)

$

(63,872,587

)

$

26,566,627

$

(275,343

)

$

26,291,284

NOVO INTEGRATED SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended May 31, 2024 and 2023 (unaudited)

Nine Months Ended

May 31,

May 31,

2024

2023

(unaudited)

(unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss

$

(21,142,583

)

$

(10,067,193

)

Adjustments for non-cash items:

Depreciation and amortization

1,697,317

1,718,388

Fair value of vested stock options

147,656

385,335

Change in fair value of derivative liability

5,765,822

–

Cashless exercise of warrants

1,323,398

1,421,583

Common stock issued for services

1,195,400

–

Operating lease expense

466,276

624,246

Amortization of debt discount

5,095,331

4,386,899

Foreign currency transaction losses

1,485,861

(12,652

)

Changes in operating assets and liabilities:

Accounts receivable

(797,692

)

(308,907

)

Inventory

(12,548

)

(92,260

)

Prepaid expenses and other current assets

130,015

333,724

Accounts payable

408,067

154,542

Accrued expenses

76,428

104,004

Accrued interest

103,605

(67,634

)

Operating lease liability

(466,276

)

(594,618

)

Net cash used in operating activities

(4,523,923

)

(2,014,543

)