UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 31, 2024 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______, 20___, to _____, 20___. Commission File Number: 001-40089 Novo Integrated Sciences, Inc. (Exact Name of Registrant as Specified in its Charter) (State or Other Jurisdi ...

Exhibit 99.1 Robert Mattacchione, Novo's CEO and Board Chairman, stated, "The Company's fiscal year 2024 third quarter emphasized maximizing operational efficiencies for all business units. The Company continues to work with certain prospective financial partners to close previously announced nontraditional financing opportunities to raise foundational capital with repayment terms necessary to support and accelerate the further growth of Novo's three-pillar business model. The Company remains committed to t ...

[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents the company's unaudited financial statements, detailed notes, management's discussion and analysis, and controls and procedures [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company presents its unaudited condensed consolidated financial statements for the period ended February 29, 2024, highlighting a net loss of $7.4 million and a "Going Concern" warning - The company has incurred recurring losses, negative cash flows from operations, and an accumulated deficit, raising substantial doubt about its ability to continue as a going concern[90](index=90&type=chunk)[91](index=91&type=chunk)[93](index=93&type=chunk) Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | February 29, 2024 | August 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $5,019,227 | $4,388,089 | | **Total Assets** | $34,949,271 | $35,563,047 | | **Total Current Liabilities** | $9,959,061 | $7,904,858 | | **Total Liabilities** | $13,058,987 | $11,063,972 | | **Total Stockholders' Equity** | $21,890,284 | $24,499,075 | Condensed Consolidated Statements of Operations Highlights (Unaudited) | Metric | Six Months Ended Feb 29, 2024 | Six Months Ended Feb 28, 2023 | | :--- | :--- | :--- | | **Revenues** | $7,061,810 | $5,975,789 | | **Gross Profit** | $3,268,104 | $2,710,436 | | **Loss from Operations** | ($4,857,405) | ($4,028,770) | | **Net Loss** | ($7,406,283) | ($8,581,898) | | **Net Loss Per Share (Basic & Diluted)** | ($0.43) | ($1.52) | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | Cash Flow Activity | Six Months Ended Feb 29, 2024 | Six Months Ended Feb 28, 2023 | | :--- | :--- | :--- | | **Net cash used in operating activities** | ($3,865,953) | ($1,156,821) | | **Net cash provided by (used in) financing activities** | $3,299,455 | ($604,704) | | **Net increase (decrease) in cash** | $235,424 | ($1,568,949) | [Note 1: Organization and Basis of Presentation](index=8&type=section&id=Note%201%20-%20Organization%20and%20Basis%20of%20Presentation) Novo Integrated Sciences operates a decentralized healthcare model based on three pillars: Service Networks, Technology, and Products, with a 1-for-10 reverse stock split in November 2023 - The company's business model is centered on three pillars: Service Networks (multidisciplinary primary care), Technology (interconnected platforms), and Products (health and wellness solutions)[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) - On November 7, 2023, the company executed a 1-for-10 reverse stock split, retroactively adjusting all share and per-share data in the report[86](index=86&type=chunk) - Management concluded that substantial doubt exists about the Company's ability to continue as a going concern within one year, as its plans to raise capital are not entirely within its control[90](index=90&type=chunk)[91](index=91&type=chunk)[93](index=93&type=chunk) [Note 3: Related Party Transactions](index=16&type=section&id=Note%203%20%E2%80%93%20Related%20Party%20Transactions) This note details transactions with related parties, primarily consisting of loans from stockholders and officers, which decreased from $533,001 to $434,039 Due to Related Parties | Date | Amount Due | | :--- | :--- | | February 29, 2024 | $434,039 | | August 31, 2023 | $533,001 | [Note 5: Inventory](index=17&type=section&id=Note%205%20%E2%80%93%20Inventory) Inventory, net of allowances, decreased from $1.11 million to $0.95 million, with a significant write-off due to spoilage - Inventory worth **$1,175,306** was written off due to spoilage during the six months ended February 29, 2024[4](index=4&type=chunk) Inventory, Net | Date | Amount | | :--- | :--- | | February 29, 2024 | $947,351 | | August 31, 2023 | $1,106,983 | [Note 8: Intangible Assets](index=18&type=section&id=Note%208%20%E2%80%93%20Intangible%20Assets) Total net intangible assets decreased from $16.22 million to $15.21 million, primarily due to approximately $1.0 million in amortization expense for the six-month period Intangible Assets, Net | Date | Amount | | :--- | :--- | | February 29, 2024 | $15,205,967 | | August 31, 2023 | $16,218,539 | - Amortization expense for intangible assets was **$1,002,693** for the six months ended February 29, 2024[154](index=154&type=chunk) [Note 11: Convertible Notes Payable](index=19&type=section&id=Note%2011%20%E2%80%93%20Convertible%20Notes%20Payable) This note details the company's extensive use of convertible notes for financing, including agreements with Mast Hill Fund and FirstFire Global Opportunities Fund, many of which were converted or repaid - The **$16.66 million+** convertible notes from December 2021 were fully settled, with the aggregate principal amount owed being **$nil** as of February 29, 2024[14](index=14&type=chunk) - On September 12, 2023, the company entered into a **$3.5 million** promissory note with Mast Hill Fund, featuring a **12% interest rate**, a **$350,000 OID**, and a variable conversion price, resulting in a derivative liability of **$3.07 million**[44](index=44&type=chunk)[49](index=49&type=chunk) - On September 18, 2023, the company entered into a **$277,778** promissory note with FirstFire, also with a **12% interest rate**, an OID, and a variable conversion price, resulting in a derivative liability of **$200,136**[190](index=190&type=chunk)[199](index=199&type=chunk) - Multiple convertible notes from Mast Hill and FirstFire were fully converted into common stock during the period, settling the outstanding principal and interest[23](index=23&type=chunk)[43](index=43&type=chunk)[180](index=180&type=chunk) [Note 12: Debentures, Related Parties](index=29&type=section&id=Note%2012%20%E2%80%93%20Debentures%2C%20Related%20Parties) The company is in breach of its debenture agreements with related parties due to failure to make scheduled repayments, reclassifying the entire $914,219 outstanding balance as a current liability - The company is in breach of its debenture loan agreement with related parties due to failure to make scheduled repayments, reclassifying the outstanding balance of **$914,219** to current liabilities[201](index=201&type=chunk)[202](index=202&type=chunk) [Note 13: Leases](index=29&type=section&id=Note%2013%20%E2%80%93%20Leases) The company has operating leases for corporate office space and facilities expiring through fiscal 2031, with total lease liabilities of $2.06 million and a weighted average remaining lease term of 3.89 years Lease Liabilities | Date | Total Lease Liability | | :--- | :--- | | February 29, 2024 | $2,056,733 | | August 31, 2023 | $2,108,969 | - At February 29, 2024, the weighted average remaining lease term was **3.89 years** with a weighted average discount rate of **8.68%**[431](index=431&type=chunk) [Note 14: Stockholders' Equity](index=31&type=section&id=Note%2014%20%E2%80%93%20Stockholders%27%20Equity) This note details significant changes in stockholders' equity, including a 1-for-10 reverse stock split, substantial share issuances for debt settlement and services, and the approval of a new 2023 Equity Incentive Plan - A **1-for-10 reverse stock split** was effectuated on November 7, 2023[422](index=422&type=chunk) - During the six-month period, common stock was issued for various purposes, including conversion of debt (e.g., **519,845 shares** to FirstFire, **457,128 shares** to Mast Hill), cashless exercise of warrants, and as consideration for consulting services[436](index=436&type=chunk)[217](index=217&type=chunk)[425](index=425&type=chunk) - The 2023 Equity Incentive Plan was approved, authorizing **2,500,000 shares** of common stock for issuance, with **2,300,000 shares** available for award as of February 29, 2024[221](index=221&type=chunk) [Note 16: Segment Reporting](index=35&type=section&id=Note%2016%20%E2%80%93%20Segment%20Reporting) The company operates in healthcare services and product manufacturing/development segments, with the product segment showing significant growth in sales and gross profit for the six months ended February 29, 2024 Segment Sales (Six Months Ended) | Segment | February 29, 2024 | February 28, 2023 | | :--- | :--- | :--- | | Healthcare services | $4,148,105 | $4,055,368 | | Product manufacturing & development | $2,835,455 | $1,303,132 | Segment Gross Profit (Six Months Ended) | Segment | February 29, 2024 | February 28, 2023 | | :--- | :--- | :--- | | Healthcare services | $1,459,808 | $1,554,300 | | Product manufacturing & development | $1,730,046 | $538,847 | [Note 17: Subsequent Events](index=37&type=section&id=Note%2017%20%E2%80%93%20Subsequent%20Events) After the reporting period, the company engaged in significant financing activities, including a $6.21 million secured convertible promissory note with Streeterville Capital, LLC, used to repay prior notes - On April 5, 2024, the company issued a **$6.21 million** secured convertible promissory note to Streeterville Capital, LLC, with proceeds used to repay prior notes from Mast Hill and FirstFire[342](index=342&type=chunk) - The Streeterville note has a **10.9% interest rate**, a maturity date of April 8, 2025, and a conversion price equal to **85%** of the lowest daily VWAP during the five trading days prior to conversion[342](index=342&type=chunk)[343](index=343&type=chunk) - Subsequent to the period end, the company issued **826,203 shares** to Mast Hill and **480,000 shares** to FirstFire to convert remaining note balances[340](index=340&type=chunk)[341](index=341&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's business strategy, recent developments including significant financing agreements and asset transfers, and financial results showing an 18% revenue increase and a 13% net loss decrease - The company entered into a Master Agreement with Blacksheep Trust for the transfer of **$1 billion** in collateral to be used for monetization, with Blacksheep receiving **15%** of the monetization proceeds[264](index=264&type=chunk) - The company entered into an agreement to purchase the 'Ophir Collection,' a collection of 43 gemstones, for **$60 million** from a court-appointed receiver, with the transaction pending closing[289](index=289&type=chunk)[291](index=291&type=chunk) - The company received a Nasdaq notification for non-compliance with the minimum **$1.00** bid price requirement and has until August 7, 2024, to regain compliance[319](index=319&type=chunk) - For the six months ended February 29, 2024, cash used in operating activities increased to **$3.9 million** from **$1.2 million** in the prior year period, while cash from financing activities was a source of **$3.3 million**, a significant reversal from the prior year's use of cash[355](index=355&type=chunk)[336](index=336&type=chunk) [Results of Operations](index=48&type=section&id=Results%20of%20Operations) For the six months ended February 29, 2024, revenues increased by 18% to $7.1 million, gross profit rose 21% to $3.3 million, operating costs increased 21% to $8.1 million, and net loss decreased by 13% to $7.4 million Comparison of Results (Six Months Ended) | Metric | Feb 29, 2024 | Feb 28, 2023 | Change (%) | | :--- | :--- | :--- | :--- | | **Revenues** | $7,061,810 | $5,975,789 | +18% | | **Cost of Revenues** | $3,793,706 | $3,265,353 | +16% | | **Operating Costs** | $8,125,509 | $6,739,206 | +21% | | **Net Loss Attributed to Novo** | ($7,426,471) | ($8,556,768) | -13% | [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) The company reported a net loss of $7.4 million and negative operating cash flow of $3.9 million for the six months ended February 29, 2024, relying on financing activities, primarily convertible notes, for liquidity - The company had a net loss of **$7,406,283** for the six months ended February 29, 2024[354](index=354&type=chunk) - Cash provided by financing activities was **$3,299,455**, mainly from **$3.31 million** in proceeds from convertible notes[336](index=336&type=chunk) - Management states the company does not have any credit agreement or source of liquidity immediately available[357](index=357&type=chunk) [Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of February 29, 2024, with no material changes to internal control over financial reporting identified - The Chief Executive Officer and Principal Financial Officer concluded that as of February 29, 2024, the Company's disclosure controls and procedures were not effective[404](index=404&type=chunk) - There were no changes in internal control over financial reporting during the period that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[405](index=405&type=chunk) [PART II – OTHER INFORMATION](index=55&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section addresses legal proceedings and any defaults on senior securities [Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company states that it is not a party to any material pending legal proceedings, other than ordinary routine litigation incidental to its business - The company is not party to any material pending legal proceedings, other than ordinary routine litigation incidental to its business[395](index=395&type=chunk) [Defaults Upon Senior Securities](index=55&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports a default on its debentures, having failed to make scheduled repayments to debenture holders and is currently in discussions to formalize a new payment arrangement - The Company could not make repayments to debenture holders in accordance with the revised repayment schedule and is in breach of the loan agreement as of the period end[407](index=407&type=chunk)

● 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. NOVO INTEGRATED SCIENCES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS As of February 29, 2024 (unaudited) and August 31, ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______, 20___, to _____, 20___. Commission File Number: 001-40089 Novo Integrated Sciences, Inc. (Exact Name of Registrant as Specified in its Charter) (State or Other Ju ...

[Part I](index=5&type=section&id=Part%20I) This section details the company's decentralized healthcare model, service networks, technology platforms, health products, recent strategic developments, and corporate history, alongside risk factors and operational disclosures [Business](index=5&type=section&id=Item%201.%20Business) Novo Integrated Sciences, Inc. operates a decentralized healthcare model focused on multidisciplinary primary care and wellness products, structured around three pillars: Service Networks (clinics and eldercare in Canada), Technology (telehealth and patient monitoring platforms), and Products (nutraceuticals and health solutions through subsidiaries like Acenzia and PRO-DIP). The company is pursuing growth through strategic acquisitions, expansion into the U.S. market, and development of its technology and product portfolios [Business Overview](index=5&type=section&id=Business%20Overview) The company provides multidisciplinary primary care and wellness products through a decentralized model integrating medical technology, advanced therapeutics, and rehabilitative science - The Company provides multidisciplinary primary care and wellness products through a decentralized model integrating medical technology, advanced therapeutics, and rehabilitative science[15](index=15&type=chunk) - Novo's business model is centered on three primary pillars: Service Networks for hands-on care, interconnected Technology for virtual services, and development of health and wellness Products[17](index=17&type=chunk)[19](index=19&type=chunk) [Service Networks](index=5&type=section&id=Service%20Networks) The company operates 16 corporate-owned multidisciplinary primary health care clinics in Canada and maintains a contracted affiliate network, also providing eldercare services - The company operates **16 corporate-owned multidisciplinary primary health care clinics** in Canada, providing services like physiotherapy, chiropractic care, and occupational therapy[20](index=20&type=chunk)[21](index=21&type=chunk) - Novo maintains a contracted affiliate network of **127 clinics** across Canada, which serves as a key referral source from a Preferred Provider Network (PPN) of **26 major insurance companies**[25](index=25&type=chunk)[26](index=26&type=chunk) - The company provides eldercare services, including physiotherapy and occupational therapy, to long-term care homes, retirement homes, and community-based locations across Ontario, Canada[32](index=32&type=chunk) - An agreement with LA Fitness to operate micro-clinics within their facilities was amended for Canada, removing specific opening timeline obligations, while the U.S. agreement's status remains uncertain[28](index=28&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) [Technology Platforms](index=9&type=section&id=Technology%20Platforms) The company is developing "Novo Connect" for patient health management, enhancing telehealth with diagnostic tools, and creating a Remote Patient Monitoring program - The company is developing 'Novo Connect,' a proprietary mobile application designed as a secure, cloud-based platform for patients to manage their health and wellness needs. It is in limited commercialization with a broader launch planned for spring 2024[41](index=41&type=chunk)[44](index=44&type=chunk) - Novo is working to enhance its telehealth services by integrating sophisticated peripheral diagnostic tools (e.g., derma scope, otoscope) to improve the effectiveness of virtual visits[46](index=46&type=chunk) - A Remote Patient Monitoring (RPM) program is being developed to allow patients to collect and monitor real-time vital signs, maintaining a direct link to their clinician or practitioner from home[47](index=47&type=chunk) [Health and Wellness Products](index=11&type=section&id=Health%20and%20Wellness%20Products) The company has acquired Acenzia Inc. for nutraceuticals, PRO-DIP, LLC for oral pouches, and a controlling interest in Terragenx Inc. for iodine oral spray - Acquired Acenzia Inc., a company specializing in nutraceutical health solutions, advanced bio-science R&D, and personalized diagnostics, including a patented technology platform (Zgraft) for cancer cell analysis[51](index=51&type=chunk) - Acquired PRO-DIP, LLC, which developed a proprietary, patent-pending oral pouch (ION Energy) for delivering vitamins and natural energy supplements. The technology received U.S. Patent No. 11,273,965 in March 2022[53](index=53&type=chunk) - Acquired a **91% controlling interest** in Terragenx Inc. and its intellectual property for IoNovo, a water-soluble, iodine micro-nutrient oral spray approved by the FDA and Health Canada for over-the-counter distribution[57](index=57&type=chunk) [Recent Developments](index=13&type=section&id=Recent%20Developments) Recent developments include securing $3.77 million in financing, an agreement for $1 billion in collateral, a 1-for-10 reverse stock split, and the purchase of the "Ophir Collection" gemstones - In September 2023, the Company secured financing through promissory notes with Mast Hill Fund, L.P. for **$3.5 million** and FirstFire Global Opportunities Fund, L.P. for **$277,778**[62](index=62&type=chunk)[69](index=69&type=chunk) - Entered into a Master (Asset Transfer) Agreement with Blacksheep Trust on September 27, 2023, for the transfer of **$1 billion in collateral** to be used by the Company for monetization[77](index=77&type=chunk) - Effectuated a **1-for-10 reverse stock split** on November 7, 2023, and subsequently regained compliance with Nasdaq's minimum bid price requirement on November 22, 2023[84](index=84&type=chunk)[89](index=89&type=chunk) - On November 21, 2023, the Company agreed to purchase the "Ophir Collection," a set of **43 gemstones**, for **$60 million** from a court-appointed receiver, with the sale receiving court approval on December 1, 2023[85](index=85&type=chunk)[87](index=87&type=chunk)[94](index=94&type=chunk) [Corporate History and Acquisitions](index=33&type=section&id=Corporate%20History%20and%20Acquisitions) The company, incorporated in 2000 as Turbine Truck Engines, Inc., changed its name to Novo Integrated Sciences, Inc. in 2017, following the acquisition of Novo Healthnet Limited and subsequent product portfolio expansions - The Company was incorporated as Turbine Truck Engines, Inc. in 2000, re-domiciled to Nevada in 2008, and changed its name to Novo Integrated Sciences, Inc. in 2017[192](index=192&type=chunk) - On May 9, 2017, the Company acquired Novo Healthnet Limited (NHL) through a share exchange agreement, making NHL a wholly-owned subsidiary and shifting the company's focus to healthcare[195](index=195&type=chunk)[196](index=196&type=chunk) - Key acquisitions to build its product portfolio include PRO-DIP, LLC (May 2021), Acenzia Inc. (June 2021), and a **91% controlling interest** in Terragenx Inc. (November 2021)[207](index=207&type=chunk)[208](index=208&type=chunk)[211](index=211&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) The Company faces numerous risks, including a history of operating losses and negative cash flow, challenges in implementing its growth strategy through acquisitions, and competition in the healthcare market. It is also subject to extensive healthcare regulations in both Canada and the U.S., which could impact reimbursement and operations. Additional risks relate to the successful commercialization of its technology platforms, potential changes in laws governing its planned CBD products, and the volatility of its common stock - The Company has a history of operating losses, reporting net losses of **$13.2 million** in FY2023 and **$32.8 million** in FY2022, with an accumulated deficit of **$67.0 million** as of August 31, 2023[233](index=233&type=chunk) - The healthcare industry is heavily regulated in both Canada and the U.S. Failure to comply with laws such as the Canada Health Act, HIPAA, Anti-Kickback Statute, and others could result in significant penalties and operational changes[230](index=230&type=chunk)[318](index=318&type=chunk) - Successful commercialization of the Company's Medical Technology Platforms (Telemedicine, RPM, Novo Connect) is uncertain and depends on market acceptance, development of provider relationships, and platform reliability[230](index=230&type=chunk)[388](index=388&type=chunk)[392](index=392&type=chunk) - The planned entry into the medicinal CBD market is subject to regulatory risks, including potential changes in federal and state laws (such as the 2018 Farm Act) and FDA oversight, which could render products illegal or restrict sales[232](index=232&type=chunk)[406](index=406&type=chunk)[407](index=407&type=chunk) - The Company's common stock is classified as a "penny stock," which imposes additional sales practice requirements on broker-dealers and may reduce trading activity and liquidity[424](index=424&type=chunk) [Unresolved Staff Comments](index=74&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[462](index=462&type=chunk) [Properties](index=74&type=section&id=Item%202.%20Properties) The company's principal executive office is in Bellevue, Washington. Its Canadian subsidiary, Novo Healthnet Limited, has a corporate office in Vaughan, Ontario, and operates 16 corporate-owned clinics out of leased properties across Ontario, with lease terms expiring between 2023 and 2031 - The Company's U.S. corporate address is in Bellevue, Washington, for which it pays no rent[463](index=463&type=chunk) - Novo Healthnet Limited operates **16 corporate-owned clinics** in Canada from leased properties with varying terms and monthly rents. The aggregate monthly rent for these clinics is approximately **CAD$103,650**[466](index=466&type=chunk)[468](index=468&type=chunk) [Legal Proceedings](index=76&type=section&id=Item%203.%20Legal%20Proceedings) As of the filing date, the company is not a party to any material pending legal proceedings, other than ordinary routine litigation incidental to its business - The Company reports no material pending legal proceedings outside of ordinary routine litigation[469](index=469&type=chunk) [Mine Safety Disclosures](index=76&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business - Not applicable[470](index=470&type=chunk) [Part II](index=76&type=section&id=Part%20II) This section covers the company's common stock market, management's discussion and analysis of financial performance, liquidity, critical accounting policies, and audited financial statements, including internal controls [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=76&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the Nasdaq Capital Market under the symbol "NVOS". As of December 13, 2023, the closing price was $1.18 with approximately 527 shareholders of record. The company has not paid cash dividends and does not anticipate doing so. During fiscal year 2023, several unregistered stock issuances were made for transactions including warrant exchanges, consulting agreements, and securities purchase agreements - The Company's common stock is traded on the Nasdaq Capital Market under the symbol "NVOS"[472](index=472&type=chunk) - As of December 13, 2023, there were approximately **527 shareholders of record**[473](index=473&type=chunk) - The Company has not paid any cash dividends and does not plan to in the foreseeable future[474](index=474&type=chunk) - During fiscal year 2023, the Company issued unregistered common stock for various purposes, including share exchanges, securities purchase agreements, and consulting services, under exemptions from registration[476](index=476&type=chunk)[477](index=477&type=chunk)[483](index=483&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=77&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) For fiscal year 2023, revenues increased 7% to $12.6 million, driven by product sales, while the net loss attributed to the company decreased by 60% to $13.2 million, primarily due to lower operating costs and the absence of impairment charges recorded in the prior year. The company has a history of net losses and negative operating cash flow, raising substantial doubt about its ability to continue as a going concern. Management is pursuing debt financing and public offerings to secure funding [Results of Operations](index=85&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance for fiscal years 22 and 23, highlighting changes in revenues, operating costs, and net loss Fiscal Year 2023 vs. 2022 Performance | Metric | FY 2023 | FY 2022 | Change (%) | | :--- | :--- | :--- | :--- | | **Revenues** | $12,572,019 | $11,737,937 | 7% Increase | | **Cost of Revenues** | $7,619,304 | $6,938,699 | 10% Increase | | **Operating Costs** | $13,505,877 | $29,825,915 | 55% Decrease | | **Other Expense** | $4,716,282 | $8,040,803 | 41% Decrease | | **Net Loss (Attributed to Novo)** | $13,214,552 | $32,849,215 | 60% Decrease | - The **7% increase in revenue** was principally due to higher product sales. Revenue from healthcare services decreased by **2%**[537](index=537&type=chunk) - The significant decrease in operating costs and net loss was primarily due to the absence of impairment charges for intangible assets and goodwill, which were recognized in fiscal year 2022[539](index=539&type=chunk)[541](index=541&type=chunk) [Liquidity and Capital Resources](index=85&type=section&id=Liquidity%20and%20Capital%20Resources) This section examines the company's cash flow, recurring losses, and accumulated deficit, outlining management's strategies to address liquidity and secure funding Cash Flow Summary (Fiscal Years Ended August 31) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | **Net Cash Used in Operating Activities** | ($2,243,315) | ($5,884,145) | | **Net Cash (Used in)/Provided by Investing Activities** | ($49,224) | $163,459 | | **Net Cash Provided by/(Used in) Financing Activities** | $763,860 | ($427,117) | - The Company has incurred recurring net losses (**$13.3 million** in FY2023, **$33.0 million** in FY2022), which raises substantial doubt about its ability to continue as a going concern[542](index=542&type=chunk)[620](index=620&type=chunk) - Management is actively seeking to raise funds through debt financing and a subsequent public offering to alleviate liquidity concerns[621](index=621&type=chunk) [Critical Accounting Policies and Estimates](index=86&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section describes the significant management judgments and estimates applied in financial reporting, including going concern, asset impairment, and revenue recognition - The preparation of financial statements requires significant management estimates, particularly regarding going concern assessment, useful lives and impairment of non-current assets, allowance for doubtful accounts, and valuation of share-based compensation[553](index=553&type=chunk) - Goodwill is not amortized but is tested for impairment annually. In FY2022, an impairment charge of **$1,357,043** related to the Acenzia acquisition was recorded. No additional impairment was identified in FY2023[559](index=559&type=chunk) - Revenue is recognized under Topic 606. Healthcare service revenue is recorded at the time services are provided, while product sales revenue is recorded at the point of delivery[567](index=567&type=chunk)[654](index=654&type=chunk) - A full valuation allowance is established against all net deferred tax assets due to the uncertainty of their realization, given the Company's history of losses[562](index=562&type=chunk)[762](index=762&type=chunk) [Financial Statements and Supplementary Data](index=91&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited consolidated financial statements for the fiscal years ended August 31, 2023, and 2022. The independent auditor's report includes a "Going Concern" paragraph, highlighting that the company's recurring losses, negative cash flows, and accumulated deficit raise substantial doubt about its ability to continue as a going concern - The Report of Independent Registered Public Accounting Firm includes a "Going Concern" paragraph, citing recurring losses, negative cash flows from operations, and an accumulated deficit as factors that raise substantial doubt about the Company's ability to continue as a going concern[585](index=585&type=chunk) Consolidated Balance Sheet Highlights (As of August 31) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | **Total Assets** | $35,563,047 | $40,872,840 | | **Total Liabilities** | $11,063,972 | $18,825,269 | | **Total Stockholders' Equity** | $24,499,075 | $22,047,571 | | **Accumulated Deficit** | ($67,033,041) | ($53,818,489) | Consolidated Statement of Operations Highlights (For the Year Ended August 31) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | **Revenues** | $12,572,019 | $11,737,937 | | **Gross Profit** | $4,952,715 | $4,799,238 | | **Loss from Operations** | ($8,553,162) | ($25,026,677) | | **Net Loss** | ($13,269,444) | ($33,045,178) | | **Net Loss per Share** | ($1.30) | ($11.28) | [Controls and Procedures](index=140&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures and its internal control over financial reporting were not effective as of August 31, 2023. A material weakness was identified due to a lack of segregation of duties. The company contracts with an outside certified public accountant to assist with its SEC filings - Management concluded that the Company's disclosure controls and procedures were not effective as of August 31, 2023[835](index=835&type=chunk) - Management identified a material weakness in its internal control over financial reporting due to a lack of segregation of duties[840](index=840&type=chunk) [Part III](index=141&type=section&id=Part%20III) This section outlines the company's corporate governance structure, executive compensation, beneficial ownership, related party transactions, and principal accounting fees [Directors, Executive Officers and Corporate Governance](index=141&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company's leadership includes Robert Mattacchione as Chairman & CEO and Christopher David as COO & President. The Board of Directors consists of five members, a majority of whom (Messrs. Pope, Flesias, and Ali) are determined to be independent under Nasdaq listing rules. The Board has established an audit committee, a compensation committee, and a nominating and corporate governance committee, each composed of independent directors - The executive team includes Robert Mattacchione (Chairman & CEO), Christopher David (COO, President), and Vivek Sethi (Principal Financial Officer)[845](index=845&type=chunk) - The Board of Directors has five members, with a majority (**three members**: Michael Pope, Alex Flesias, and Sarfaraz Ali) determined to be independent[861](index=861&type=chunk)[862](index=862&type=chunk) - The Board has three standing committees: Audit, Compensation, and Nominating and Corporate Governance, all comprised of independent directors[865](index=865&type=chunk) [Executive Compensation](index=147&type=section&id=Item%2011.%20Executive%20Compensation) For fiscal year 2023, CEO Robert Mattacchione's total compensation was $185,000, and COO-President Christopher David's was $434,561, which included a significant option award. Executive agreements include base salaries and performance-based bonuses tied to net income and market capitalization milestones. The company's stockholders approved a new 2023 Equity Incentive Plan, and the Board adopted a new clawback policy in November 2023 FY 2023 Named Executive Officer Compensation | Name | Position | Salary | Option Awards | Total Compensation | | :--- | :--- | :--- | :--- | :--- | | Robert Mattacchione | CEO | $185,000 | $0 | $185,000 | | Christopher David | COO-President | $171,000 | $263,561 | $434,561 | - Executive employment agreements for the CEO and COO include performance bonuses tied to positive net income and increases in the company's market capitalization[883](index=883&type=chunk)[893](index=893&type=chunk) - Stockholders approved the 2023 Equity Incentive Plan, authorizing **2,500,000 shares** for issuance as various stock-based awards to attract and retain key personnel[903](index=903&type=chunk)[911](index=911&type=chunk) - On November 22, 2023, the Board adopted a Compensation Recovery Policy (clawback policy) to comply with Section 10D of the Exchange Act, allowing for the recovery of incentive-based compensation in the event of an accounting restatement[925](index=925&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=155&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of December 14, 2023, CEO Robert Mattacchione beneficially owned approximately 7.48% of the company's outstanding common stock, primarily through ALMC-ASAP Holdings, Inc. All directors and executive officers as a group beneficially owned 9.45%. The company maintains several equity compensation plans, with the newest being the 2023 Equity Incentive Plan, which authorizes 2.5 million shares for future issuance - CEO Robert Mattacchione is the largest insider beneficial owner, holding **7.48% of outstanding common stock** through ALMC-ASAP Holdings, Inc. and his family trust[933](index=933&type=chunk) - All directors and executive officers as a group beneficially own **9.45% of the outstanding common stock**[933](index=933&type=chunk) - The Company has multiple equity compensation plans, with **2,737,424 shares** remaining available for future issuance as of August 31, 2023, the majority of which (**2,500,000 shares**) are under the newly approved 2023 Equity Incentive Plan[938](index=938&type=chunk)[943](index=943&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=157&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company has several related party transactions, primarily consisting of outstanding advances and debentures. As of August 31, 2023, advances due to related parties (stockholders, officers, and affiliates) totaled $533,001. Additionally, debentures with a principal balance of $916,824 were outstanding to related parties, stemming from a 2013 asset acquisition, with a maturity date extended to December 1, 2023 - As of August 31, 2023, the Company had outstanding advances totaling **$533,001** due to related parties, including stockholders and officers[946](index=946&type=chunk)[949](index=949&type=chunk) - The Company has outstanding debentures with a principal amount of **$916,824** due to related parties, originating from a 2013 asset acquisition. The maturity date for these debentures was extended to December 1, 2023[947](index=947&type=chunk)[948](index=948&type=chunk) [Principal Accounting Fees and Services](index=158&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Fruci & Associates II, PLLC was appointed as the company's independent registered public accounting firm on July 27, 2022. For the fiscal year ended August 31, 2023, the total fees billed by Fruci were $165,000, all of which were for audit fees Audit Fees (Fruci & Associates II, PLLC) | Fee Category | Fiscal Year 2023 | Fiscal Year 2022 | | :--- | :--- | :--- | | Audit Fees | $165,000 | $ - | | Audit-Related Fees | - | - | | Tax Fees | - | - | | All Other Fees | - | - | | **Total** | **$165,000** | **$ -** | - Fruci & Associates II, PLLC was appointed as the Company's independent auditor on July 27, 2022[950](index=950&type=chunk)

PART I – FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Novo Integrated Sciences reported significant revenue decline and net loss for the nine months ended May 31, 2023, with a going concern warning [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $35.7 million, liabilities significantly reduced to $9.5 million due to debt conversion Condensed Consolidated Balance Sheet Highlights (unaudited) | Metric | May 31, 2023 | August 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $464,011 | $2,178,687 | | Total current assets | $3,998,058 | $5,731,795 | | Total Assets | $35,745,030 | $40,872,840 | | **Liabilities & Equity** | | | | Total current liabilities | $6,208,671 | $14,074,706 | | Convertible notes payable, net | $651,477 | $9,099,654 | | Total Liabilities | $9,453,746 | $18,825,269 | | Total stockholders' equity | $26,291,284 | $22,047,571 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Revenues plummeted for both three and nine-month periods, with a $10.1 million net loss for the nine months ended May 31, 2023 Statement of Operations Summary (unaudited) | Metric | Three Months Ended May 31, 2023 | Three Months Ended May 31, 2022 | Nine Months Ended May 31, 2023 | Nine Months Ended May 31, 2022 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $3,292,933 | $13,851,883 | $9,268,722 | $19,883,033 | | Gross Profit | $1,314,094 | $2,408,882 | $4,024,530 | $4,891,702 | | Loss from Operations | ($1,430,418) | ($1,202,746) | ($5,459,188) | ($4,687,081) | | Net Loss | ($1,485,295) | ($3,744,025) | ($10,067,193) | ($10,428,624) | | Net Loss per Share | ($0.01) | ($0.13) | ($0.12) | ($0.37) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations improved to $2.0 million, but financing cash provided decreased sharply, leading to a $1.7 million net cash decrease Cash Flow Summary (unaudited) | Metric | Nine Months Ended May 31, 2023 | Nine Months Ended May 31, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($2,014,543) | ($6,559,907) | | Net cash (used in) provided by investing activities | ($18,870) | $162,654 | | Net cash provided by financing activities | $296,334 | $10,802,477 | | Net (decrease) increase in cash | ($1,714,676) | $4,384,284 | | Cash and cash equivalents, end of period | $464,011 | $12,677,446 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail business structure, accounting policies, and significant financial events, including a going concern warning and convertible debt financings - The company has incurred recurring losses and has an accumulated deficit, raising substantial doubt about its ability to continue as a going concern. Management's plans to raise additional funds are ongoing and not assured[26](index=26&type=chunk)[27](index=27&type=chunk) - During the nine months ended May 31, 2023, an aggregate of **$8.4 million** in principal and interest from the **$16.66m+** convertible notes were converted into **85.3 million** shares of common stock. The company also made cash repayments of **$3.0 million** on these notes[89](index=89&type=chunk)[91](index=91&type=chunk) - Subsequent to the quarter end, the company entered into another securities purchase agreement with Mast Hill Fund for a **$445,000** promissory note and warrants. Additionally, the Principal Financial Officer, Jim Zsebok, resigned on June 28, 2023, and Vivek Sethi was appointed as his replacement on July 7, 2023[143](index=143&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) Segment Revenue (Nine Months Ended May 31) | Segment | 2023 | 2022 | | :--- | :--- | :--- | | Healthcare services | $6,075,237 | $6,253,089 | | Product manufacturing and development | $2,576,196 | $13,629,944 | | Corporate | $617,289 | - | | **Total** | **$9,268,722** | **$19,883,033** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 53% revenue decline to decreased product sales, highlighting ongoing financing activities, Nasdaq non-compliance, and going concern risk [Overview of the Company](index=37&type=section&id=Overview%20of%20the%20Company) The company's decentralized healthcare model relies on Service Networks, Technology, and Products, with revenues split between healthcare services and product sales - The company's decentralized healthcare business model is centered on three pillars: Service Networks, Technology, and Products[159](index=159&type=chunk) - The company operates through two reportable segments: healthcare services and product sales. For the quarter ended May 31, 2023, these segments contributed **61%** and **39%** of total revenues, respectively[173](index=173&type=chunk) [Recent Developments](index=40&type=section&id=Recent%20Developments) Recent developments include Nasdaq non-compliance, multiple financing agreements, a strategic acquisition attempt, and significant convertible note settlements - The company received a notification from Nasdaq for non-compliance with the minimum bid price requirement and has been granted an extension until **November 20, 2023**, to regain compliance[201](index=201&type=chunk)[202](index=202&type=chunk) - On April 26, 2023, the company issued a **$70 million**, 15-year unsecured promissory note to RC Consulting Group, representing a significant capital infusion[229](index=229&type=chunk) - The company entered into an agreement to acquire SwagCheck Inc. to gain rights to a precious gem collection, intending to use it to raise capital. The transaction has been amended and has not yet closed[209](index=209&type=chunk)[212](index=212&type=chunk) - During the nine-month period, the company issued an aggregate of **94.2 million** shares of common stock to settle convertible notes with Hudson Bay, CVI, and Jefferson[237](index=237&type=chunk) [Results of Operations](index=51&type=section&id=Results%20of%20Operations) Revenue decreased significantly for both periods due to product sales decline, while net loss for the nine months decreased to $10.1 million Financial Performance Comparison | Period | Metric | Q3 2023 | Q3 2022 | Change | 9M 2023 | 9M 2022 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | Total | $3.3M | $13.9M | -76% | $9.3M | $19.9M | -53% | | | Healthcare Services | $2.0M | $2.2M | -8% | $6.1M | $6.3M | -3% | | **Cost of Revenues** | Total | $2.0M | $11.4M | -83% | $5.2M | $15.0M | -65% | | **Net Loss** | Attributed to Novo | ($1.5M) | ($3.8M) | -61% | ($10.1M) | ($10.4M) | -4% | [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) The company reported a $10.1 million net loss and used $2.0 million in operations cash, with financing cash significantly reduced, raising going concern doubts - For the nine months ended May 31, 2023, the company had a net loss of **$10.1 million** and used **$2.0 million** in cash for operating activities[261](index=261&type=chunk)[262](index=262&type=chunk) - Cash provided by financing activities was only **$296,334** for the nine months ended May 31, 2023, compared to **$10.8 million** in the same period of 2022, primarily due to large convertible note proceeds in the prior year[264](index=264&type=chunk) - The company has no credit agreements or immediate sources of liquidity and its capital requirements depend on financing operations until revenues can cover expenses[269](index=269&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=58&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable to the company - The company has indicated that there are no applicable quantitative and qualitative disclosures about market risk[294](index=294&type=chunk) [Controls and Procedures](index=59&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of May 31, 2023, with no material changes to internal controls - The company's management concluded that as of May 31, 2023, its disclosure controls and procedures were not effective[296](index=296&type=chunk) - There were no changes in internal control over financial reporting during the period that have materially affected, or are reasonably likely to materially affect, these controls[297](index=297&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material pending legal proceedings, other than ordinary routine litigation - As of the report date, there are no material pending legal proceedings against the company[299](index=299&type=chunk) [Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) No new risk factors are disclosed in this quarterly report - No new risk factors are disclosed in this quarterly report[300](index=300&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued 955,000 shares of common stock on March 22, 2023, under a registration exemption - The company issued **955,000** shares of common stock on March 22, 2023, in a sale exempt from registration under Regulation S, Section 4(a)(2), and/or Rule 506 of Regulation D[301](index=301&type=chunk) [Exhibits](index=60&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including various agreements and certifications

Washington D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 28, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______, 20___, to _____, 20___. UNITED STATES SECURITIES AND EXCHANGE COMMISSION (State or Other Jurisdiction of Incorporation or Organization) 11120 NE 2nd Street, Suite 100 Bellevue, Washington 98004 (Address of Princ ...

Part I [Item 1. Business](index=5&type=section&id=Item%201.%20Business) Novo Integrated Sciences operates a decentralized healthcare model, integrating service networks, technology, and health products for primary care [Business Overview and Strategy](index=5&type=section&id=Business%20Overview%20and%20Strategy) The company's strategy leverages Service Networks, Interconnected Technology, and Health Products to expand primary care and product offerings - The Company's **business model** is centered on three primary pillars: **Service Networks** for hands-on care, **Interconnected Technology** for virtual services, and **Health and Wellness Products**[16](index=16&type=chunk)[19](index=19&type=chunk) - The **Service Networks** pillar includes **17 corporate-owned clinics** and a contracted affiliate network of **115 clinics** across Canada, providing multidisciplinary primary health care services such as physiotherapy, chiropractic care, and eldercare[18](index=18&type=chunk)[24](index=24&type=chunk) - The **Technology** pillar focuses on developing platforms like the Novo Connect mobile app, telehealth services, and remote patient monitoring (RPM) through a licensing agreement with Cloud DX to extend patient care beyond physical clinics[41](index=41&type=chunk)[48](index=48&type=chunk)[40](index=40&type=chunk) - The **Products** pillar is being built through strategic acquisitions, including Acenzia (nutraceuticals), PRO-DIP (oral energy pouches), and Terragenx (water-soluble iodine micro-nutrient), to offer a portfolio of preventative and maintenance care solutions[51](index=51&type=chunk)[52](index=52&type=chunk)[59](index=59&type=chunk) - The Company has acquired and is developing a portfolio of **intellectual property**, including patents for an oral supplement pouch (U.S. Patent No. 11,273,965), a personalized cancer diagnostic platform called Zgraft (U.S. Patent No. 10,760,060B2), and various iodine-based product formulations[65](index=65&type=chunk) [Recent Developments](index=14&type=section&id=Recent%20Developments) Recent developments include a **$15 million** offering, Terragenx and CCI acquisitions, a **$2 million** unit offering, and a Nasdaq non-compliance notice - On December 14, 2021, the Company completed a registered direct offering, raising **gross proceeds of $15,000,000** through the sale of **$16.67 million** in senior secured convertible notes and warrants[89](index=89&type=chunk)[90](index=90&type=chunk) - The Company acquired a **91% controlling interest** in Terragenx Inc. and its related **intellectual property** for iodine-based products on November 17, 2021, financed in part by issuing two secured convertible promissory notes totaling **$1.875 million**[68](index=68&type=chunk)[73](index=73&type=chunk)[81](index=81&type=chunk) - On April 5, 2022, the Company acquired **100%** of Clinical Consultants International LLC (CCI) in exchange for **800,000 restricted shares** of **common stock** and appointed CCI's Dr. Joseph Chalil as the Company's Chief Medical Officer[100](index=100&type=chunk)[101](index=101&type=chunk)[103](index=103&type=chunk) - In October 2022, the Company sold **4,000,000 units** at **$0.50 per unit** in an offering, raising **gross proceeds of approximately $2,000,000**. Each **unit** consisted of one **share** of **common stock** and two warrants[130](index=130&type=chunk)[132](index=132&type=chunk) - Subsequent to the fiscal year end, the Company received a notification from Nasdaq on November 21, 2022, for non-compliance with the minimum bid price requirement of **$1.00 per share**[156](index=156&type=chunk) [Business Growth Initiatives](index=29&type=section&id=Business%20Growth%20Initiatives) Growth initiatives target increased Canadian **market share**, U.S. expansion through micro-clinics and technology, and building an **intellectual property** portfolio - **Increase market share** in Canada through organic **growth**, acquisitions, and expanding the affiliate network for both clinic and eldercare operations[181](index=181&type=chunk) - Expand operations into the United States via **technology platforms**, micro-clinics in partnership with retailers, and strategic acquisitions of clinics and pharmacies[186](index=186&type=chunk) - Open micro-clinic facilities within LA Fitness locations in the U.S. and Canada, focusing on physiotherapy and occupational therapy services[186](index=186&type=chunk) - Further develop and commercialize **technology platforms**, including the Novo Connect app, enhanced telehealth services, and the Remote Patient Monitoring (RPM) platform licensed from Cloud DX[186](index=186&type=chunk)[189](index=189&type=chunk) - Build the **intellectual property** portfolio through acquisitions or licensing, with a specific interest in medical cannabis-related medicines and nano-formulation[190](index=190&type=chunk) [Competition and Regulation](index=35&type=section&id=Competition%20and%20Regulation) The company faces intense competition and extensive, evolving healthcare regulations in Canada and the U.S., especially for planned CBD products - The company operates in a highly competitive primary healthcare sector in both Canada and the U.S., competing with other clinics, pharmacies, hospitals, and non-traditional providers for patients, acquisitions, and payor contracts[206](index=206&type=chunk)[207](index=207&type=chunk) - In Canada, the healthcare system is a mix of public and private funding, with federal and provincial governments sharing regulatory jurisdiction. The Canada Health Act governs the publicly funded system, but many services are privately delivered and paid for[213](index=213&type=chunk)[214](index=214&type=chunk)[219](index=219&type=chunk) - Expansion into the U.S. will subject the company to extensive regulation, including state-level Certificate of Need (CON) programs, licensure requirements, and federal laws like the Anti-Kickback Statute, False Claims Act (FCA), HIPAA, and the Stark Law[237](index=237&type=chunk)[238](index=238&type=chunk)[247](index=247&type=chunk) - The company's future plans for medicinal Cannabidiol (CBD) products are subject to complex and evolving regulations in both Canada (Cannabis Act) and the U.S. (2018 Farm Bill and FDA oversight)[269](index=269&type=chunk)[272](index=272&type=chunk)[275](index=275&type=chunk) [Corporate History and Acquisitions](index=47&type=section&id=Corporate%20History%20and%20Acquisitions) Novo Integrated Sciences, formerly Turbine Truck Engines, transformed through Novo Healthnet's reverse acquisition and subsequent purchases of PRO-DIP, Acenzia, and CCI - The Company was originally incorporated as Turbine Truck Engines, Inc. in **2000** and changed its name to Novo Integrated Sciences, Inc. in July **2017**[279](index=279&type=chunk) - On May 9, **2017**, the Company acquired Novo Healthnet Limited (NHL) in a reverse acquisition, making NHL a wholly-owned subsidiary and shifting the Company's focus to healthcare services[282](index=282&type=chunk)[283](index=283&type=chunk) - In May **2021**, the Company acquired PRO-DIP, LLC, a provider of nutritional oral energy pouches, for **189,796 restricted shares** and **$10,000** in cash[302](index=302&type=chunk) - In June **2021**, the Company's subsidiary NHL acquired Acenzia Inc., a nutraceutical research, development, and manufacturing company, for a final purchase price valued at **$14.16 million**, payable in exchangeable shares[303](index=303&type=chunk) - In March **2022**, the Company acquired Clinical Consultants International LLC (CCI) for **800,000 restricted shares** of **common stock**, accounted for as an **asset acquisition** with a **purchase price of $1,704,000**[316](index=316&type=chunk)[317](index=317&type=chunk)[318](index=318&type=chunk) [Item 1A. Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) The Company faces significant risks from **operating losses**, negative **cash flow**, and **going concern** doubts, alongside competitive and regulatory challenges - The Company has a history of **operating losses**, with a **net loss of $32.8 million** in FY **2022** and an accumulated **deficit of $53.8 million**, raising substantial doubt about its ability to continue as a **going concern**[325](index=325&type=chunk) - The healthcare industry is heavily regulated in both Canada and the U.S. Failure to comply with laws such as the Canada Health Act, U.S. Anti-Kickback Statute, False Claims Act, and HIPAA could result in significant penalties[411](index=411&type=chunk)[428](index=428&type=chunk)[460](index=460&type=chunk) - The successful development and **market acceptance** of the Company's Telemedicine, Remote Patient Monitoring, and Novo Connect **technology platforms** are uncertain and subject to risks such as software defects and competition[482](index=482&type=chunk)[487](index=487&type=chunk) - The planned entry into the medicinal CBD market is subject to significant regulatory risk, as changes in federal or state laws in the U.S. (e.g., the **2018 Farm Act**) or FDA regulations could render products illegal or restrict sales[501](index=501&type=chunk)[504](index=504&type=chunk) - The Company's **common stock** is classified as a "**penny stock**" under SEC rules, which may impose additional sales practice requirements on broker-dealers, potentially reducing trading activity and liquidity[521](index=521&type=chunk) [Item 2. Properties](index=91&type=section&id=Item%202.%20Properties) The Company's corporate address is in Bellevue, Washington; its subsidiary operates **17** leased clinics across Canada - The Company's U.S. corporate address is **11120 NE 2nd Street, Suite 100, Bellevue, Washington 98004**, for which it pays no rent[561](index=561&type=chunk) - Novo Healthnet Limited (NHL) operates **17 corporate-owned clinics** in Canada, all located in leased properties[563](index=563&type=chunk) - The aggregate monthly rent for the **17 clinic properties** is **CAD$109,575** (approximately **$143,412** as of August 31, 2022), with leases expiring between **2023** and **2031**[564](index=564&type=chunk) [Item 3. Legal Proceedings](index=92&type=section&id=Item%203.%20Legal%20Proceedings) The Company is not a party to any material pending legal proceedings beyond routine litigation as of the filing date - There are no material pending legal proceedings against the Company, other than ordinary routine litigation incidental to its business[566](index=566&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=93&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The Company's **common stock** trades on Nasdaq under 'NVOS', with **634 shareholders**, no **dividends** paid, and unregistered stock issuances in FY2022 - The Company's **common stock** is traded on the Nasdaq Capital Market under the symbol "**NVOS**"[569](index=569&type=chunk) - As of March 31, **2023**, there were approximately **634 shareholders** of record, and the closing **stock price** was **$0.1228**[570](index=570&type=chunk) - The Company has not paid any cash **dividends** and intends to retain future earnings for **business development** and expansion[571](index=571&type=chunk) - During fiscal year **2022**, the Company issued restricted **common stock** in multiple transactions for consulting services, as collateral for a convertible note, and for an acquisition, all exempt from registration under the Securities Act[572](index=572&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=94&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) FY2022 **revenues increased 26%** to **$11.7 million**, but **net loss** widened to **$32.8 million** due to higher **operating costs** and impairments, raising **going concern** doubts [Results of Operations](index=116&type=section&id=Results%20of%20Operations) FY2022 **revenues increased 26%** to **$11.7 million** from **product sales**, while **net loss** widened to **$32.8 million** due to increased **operating costs** and impairments Fiscal Year 2022 vs. 2021 Performance | Metric | FY 2022 | FY 2021 | Change (%) | | :--- | :--- | :--- | :--- | | **Revenues** | **$11,737,937** | **$9,305,255** | **+26%** | | Cost of Revenues | $6,938,699 | $5,482,257 | +27% | | Operating Costs | $29,825,915 | $8,196,517 | +264% | | Other Expense | $8,040,803 | $97,416 | +8154% | | **Net Loss (Attributed to Novo)** | **$32,849,215** | **$4,462,147** | **+636%** | - The **26% increase in revenue** was principally due to an **increase in product sales**, with Acenzia and Terragenx contributing **$3,067,772** and **$266,635**, respectively. **Revenue** from healthcare services **decreased by 5.2%** due to COVID-19 related impacts[715](index=715&type=chunk) - The significant **increase in net loss** was primarily driven by higher impairment of intangible **assets** and goodwill, increased amortization of debt discount related to convertible notes, and higher overhead from acquired operations[717](index=717&type=chunk)[718](index=718&type=chunk)[719](index=719&type=chunk) [Liquidity and Capital Resources](index=116&type=section&id=Liquidity%20and%20Capital%20Resources) The Company reported a **$33.0 million loss** in FY2022 with negative **operating cash flow**, raising substantial doubt about its **going concern** ability - The Company has a history of recurring **net losses**, reporting a **loss of $33.0 million** for FY **2022**, which raises substantial doubt about its ability to continue as a **going concern**[720](index=720&type=chunk)[824](index=824&type=chunk) Cash Flow Summary (Fiscal Year Ended August 31) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($5,884,145) | ($1,024,802) | | Net Cash Provided by Investing Activities | $163,459 | $2,999,122 | | Net Cash (Used in) Provided by Financing Activities | ($427,117) | $4,316,862 | - **Financing activities** in FY **2022** included receiving **$15.27 million** from convertible notes, offset by repayments of **$5.1 million** for convertible notes and **$10.6 million** for other notes payable[723](index=723&type=chunk) - The COVID-19 pandemic continued to impact operations, with healthcare services **revenue decreasing by 5.2%** in FY **2022** due to a surge in Ontario and related staffing shortages[733](index=733&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=123&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) FY2022 consolidated financial statements show **total assets** of **$40.9 million**, a **$33.0 million net loss**, and an auditor's '**Going Concern**' uncertainty Consolidated Balance Sheet Highlights (As of August 31) | | 2022 | 2021 | | :--- | :--- | :--- | | **Total Assets** | **$40,872,840** | **$61,958,281** | | Total Current Assets | $5,731,795 | $11,133,509 | | Goodwill & Intangibles, net | $26,666,463 | $41,518,347 | | **Total Liabilities** | **$18,825,269** | **$18,154,126** | | Total Current Liabilities | $14,074,706 | $8,463,923 | | **Total Stockholders' Equity** | **$22,047,571** | **$43,804,155** | Consolidated Statement of Operations Highlights (For the Year Ended August 31) | | 2022 | 2021 | | :--- | :--- | :--- | | **Revenues** | **$11,737,937** | **$9,305,255** | | Gross Profit | $4,799,238 | $3,822,998 | | Loss from Operations | ($25,026,677) | ($4,373,519) | | **Net Loss** | **($33,045,178)** | **($4,470,935)** | | **Net Loss per Share** | **($1.13)** | **($0.18)** | - The **independent auditor's report** expresses substantial doubt about the Company's ability to continue as a **going concern** due to recurring **losses**, negative **cash flows**, and an accumulated **deficit**[771](index=771&type=chunk) - Critical Audit Matters identified by the auditor include the impairment of goodwill & intangibles, accounting for **business combinations**, and determining the Company's role as principal vs. agent in **revenue recognition**[775](index=775&type=chunk) [Item 9A. Controls and Procedures](index=176&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded **disclosure controls** were ineffective as of August 31, 2022, citing a **material weakness** from lack of **segregation of duties** - Management concluded that the Company's **disclosure controls** and procedures were not effective as of August 31, **2022**[1041](index=1041&type=chunk) - A **material weakness** was identified in the Company's **internal control over financial reporting** due to a lack of **segregation of duties**[1046](index=1046&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=177&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The **board** comprises **five directors**, a majority **independent**, with Robert Mattacchione as **Chairman and CEO**, and three independent standing committees - The **Board of Directors** consists of **five members**: Robert Mattacchione (**Chairman & CEO**), Christopher David (**COO**, President), Sarfaraz Ali, Alex Flesias, and Michael Pope[1053](index=1053&type=chunk)[1068](index=1068&type=chunk) - A majority of the **Board** is **independent**, with Messrs. Pope, Flesias, and Ali determined to be **independent** under Nasdaq listing rules[1069](index=1069&type=chunk) - The **Board** has three standing committees: **Audit**, **Compensation**, and **Nominating and Corporate Governance**, each composed entirely of **independent directors**[1072](index=1072&type=chunk) - Michael Pope serves as the **Chairman of the Audit Committee** and qualifies as an "**audit committee financial expert**"[1073](index=1073&type=chunk) [Item 11. Executive Compensation](index=183&type=section&id=Item%2011.%20Executive%20Compensation) **Executive compensation** for **CEO** and **COO** includes **base salaries** and **performance bonuses** linked to **net income** and **market capitalization**; non-employee directors receive **equity** 2022 Summary Compensation Table | Name and Principal Position | Fiscal Year | Salary | Total | | :--- | :--- | :--- | :--- | | Robert Mattacchione, CEO | 2022 | $185,000 | $185,000 | | Christopher David, COO-President | 2021 | $171,000 | $171,000 | - The **CEO** and **COO** have executive agreements that include bonuses based on a percentage of positive **net income** (PNI) and significant **stock-based bonuses** tied to achieving **market capitalization** milestones (e.g., for every **$50 million increase**)[1089](index=1089&type=chunk)[1099](index=1099&type=chunk) - On February 23, **2022**, each of the then-**independent directors** was granted a **stock option** to purchase **93,955 shares** of **common stock** at an exercise price of **$1.33**[1109](index=1109&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=188&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) **CEO** Robert Mattacchione beneficially owned **9.0%** of **common stock**; all **directors and executive officers** held **10.0%** as a group, with **5.1 million shares** available for future **equity issuance** - As of March 31, **2023**, **CEO** Robert Mattacchione is the largest **beneficial owner**, holding approximately **9.0%** of the **common stock**, primarily through ALMC-ASAP Holdings, Inc[1116](index=1116&type=chunk) - All **directors and executive officers** as a group beneficially owned approximately **14.5 million shares**, representing **10.0%** of the **outstanding common stock** as of March 31, **2023**[1116](index=1116&type=chunk)[1117](index=1117&type=chunk) - As of August 31, **2022**, the Company had approximately **5.1 million securities** remaining available for future issuance under its **equity compensation plans**, primarily the **2021 Equity Incentive Plan**[1121](index=1121&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=190&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The Company has **related party transactions**, including **$478,897** in **advances** to stockholders and officers, and **$946,250** in outstanding **debentures** due to related parties - As of August 31, **2022**, the Company owed **$478,897** in demand-payable **advances** to various **related parties**, including stockholders and officers[1126](index=1126&type=chunk)[1129](index=1129&type=chunk) - The Company has outstanding **debentures** due to **related parties** with a principal balance of **$946,250** as of August 31, **2022**. These **debentures** accrue interest at **8%** and the maturity date has been extended to December 1, **2023**[1127](index=1127&type=chunk)[1128](index=1128&type=chunk) [Item 14. Principal Accounting Fees and Services](index=191&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Fruci & Associates II, PLLC was appointed new **independent auditor** on July 27, 2022, billing **no fees** for FY2022 or FY2021, with all services requiring **board pre-approval** - On July 27, **2022**, Fruci & Associates II, PLLC was appointed as the Company's new **independent registered public accounting firm**[1131](index=1131&type=chunk) - **No fees** were billed by Fruci & Associates II, PLLC for the fiscal years ended August 31, **2022**, and **2021**[1132](index=1132&type=chunk)[1133](index=1133&type=chunk) Part IV [Item 15. Exhibits, Financial Statement Schedules](index=192&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all Form 10-K **exhibits**, including **corporate governance**, **financing**, **acquisition**, and **employment agreements**, plus required **certifications** - Lists key **corporate documents** including the Amended and Restated Articles of Incorporation (Exhibit **3.1**) and Bylaws (Exhibit **3.7**)[1136](index=1136&type=chunk) - Includes major **financing** and **acquisition agreements**, such as the Membership Interest Purchase Agreement for Clinical Consultants International (Exhibit **2.1**) and various Securities Purchase Agreements and Promissory Notes (Exhibits **10.37-10.54**)[1136](index=1136&type=chunk)[1139](index=1139&type=chunk)[1140](index=1140&type=chunk) - Contains executive **employment agreements** (Exhibits **10.26**, **10.44**) and **equity incentive plans** (Exhibits **10.1**, **10.6**, **10.21**)[1137](index=1137&type=chunk)[1138](index=1138&type=chunk)[1139](index=1139&type=chunk) - Includes required **certifications** from the Principal Executive Officer and Principal Financial Officer pursuant to Sarbanes-Oxley Act Sections **302** and **906** (Exhibits **31.1**, **31.2**, **32.1**)[1140](index=1140&type=chunk)

PART I – FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Revenue surged to $19.9 million, but net loss widened to $10.4 million due to increased operating costs and debt financing expenses [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $71.8 million, driven by cash and receivables, while liabilities rose to $27.4 million due to new convertible notes Condensed Consolidated Balance Sheet Highlights (unaudited) | Balance Sheet Item | May 31, 2022 | August 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$71,792,814** | **$61,958,281** | | Total current assets | $20,078,685 | $11,133,509 | | Goodwill | $11,366,618 | $9,488,848 | | **Total Liabilities** | **$27,364,847** | **$18,154,126** | | Convertible notes payable, net | $12,127,017 | $- | | Total current liabilities | $12,730,450 | $8,463,923 | | **Total Stockholders' Equity** | **$44,427,967** | **$43,804,155** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Revenues surged to $19.9 million, but net loss widened significantly to $10.4 million due to increased costs, operating expenses, and debt-related charges Statement of Operations Highlights (unaudited) | Metric | Nine Months Ended May 31, 2022 | Nine Months Ended May 31, 2021 | | :--- | :--- | :--- | | **Revenues** | **$19,883,033** | **$6,612,374** | | Gross Profit | $4,891,702 | $2,843,354 | | Loss from Operations | ($4,687,081) | ($2,485,640) | | Amortization of debt discount | ($3,654,752) | $- | | **Net Loss** | **($10,428,624)** | **($2,528,965)** | | Net Loss per Share | ($0.37) | ($0.10) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations increased to $6.6 million, while financing activities provided $10.8 million, primarily from new convertible notes, increasing cash to $12.7 million Cash Flow Summary (unaudited) | Cash Flow Activity | Nine Months Ended May 31, 2022 | Nine Months Ended May 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($6,559,907) | ($279,280) | | Net cash provided by (used in) investing activities | $162,654 | ($681,409) | | Net cash provided by financing activities | $10,802,477 | $7,162,046 | | **Net Increase in Cash** | **$4,384,284** | **$6,299,327** | | **Cash and cash equivalents, end of period** | **$12,677,446** | **$8,367,045** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail business structure, recent acquisitions, significant convertible note financing, customer concentration risk, and subsequent debt repayments and board changes - The company's business model is centered on three pillars: Service Networks, Technology, and Products, aiming to decentralize non-catastrophic healthcare delivery[19](index=19&type=chunk)[20](index=20&type=chunk) - In December 2021, the company issued **$16.67 million** in convertible notes, and in November 2021, its subsidiary Terragenx issued **$1.875 million** in convertible notes, significantly increasing debt and future potential dilution[83](index=83&type=chunk)[86](index=86&type=chunk) - The company completed several acquisitions to expand its business, including Terragenx (Nov 2021), 1285 Canada Corp. (Mar 2022), Fairway Physiotherapy (Mar 2022), and Clinical Consultants International (Apr 2022)[110](index=110&type=chunk)[120](index=120&type=chunk)[125](index=125&type=chunk)[131](index=131&type=chunk) - A significant customer concentration exists, with one customer accounting for approximately **70% of sales** during the three months ended May 31, 2022, and **40% of accounts receivable**[63](index=63&type=chunk) - Subsequent to the quarter end, in June 2022, the company made several large debt payments totaling over **$7.6 million** and undertook a major board restructuring, with three directors resigning and one new independent director appointed[139](index=139&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue increased 200.7% to $19.9 million, but net loss grew 313.1% to $10.4 million due to acquisition overhead, interest expense, and debt amortization Results of Operations Comparison (Nine Months Ended May 31) | Metric | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $19,883,033 | $6,612,374 | +200.7% | | Cost of Revenues | $14,991,331 | $3,769,020 | +297.8% | | Operating Costs | $9,578,783 | $5,328,994 | +79.7% | | Interest Expense | $1,808,310 | $68,590 | +2,536% | | Net Loss | ($10,421,808) | ($2,522,527) | +313.1% | - The increase in revenue is principally due to outsourced product sales, IoNovo iodine, and the acquisitions of Acenzia and Terragenx[208](index=208&type=chunk) - The increase in net loss was driven by higher overhead from acquisitions (approx. **$2.4 million**), increased interest expense from new convertible notes, and **$3.7 million** in amortization of debt discounts[210](index=210&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk)[214](index=214&type=chunk) - The company's liquidity was supported by net proceeds of **$15.27 million** from the issuance of convertible notes in November and December 2021[219](index=219&type=chunk) - COVID-19 negatively impacted the healthcare services segment, with revenue decreasing **7.6%** in Q3 2022 compared to Q3 2021 due to a virus surge in Ontario and related staffing shortages[222](index=222&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable to the company for this reporting period - The company states that this item is not applicable[253](index=253&type=chunk) [Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's disclosure controls and procedures were deemed ineffective as of May 31, 2022, with no material changes to internal control over financial reporting - Management concluded that the Company's disclosure controls and procedures were not effective as of May 31, 2022[254](index=254&type=chunk) - There were no changes in internal control over financial reporting during the fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[255](index=255&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material pending legal proceedings outside of ordinary routine litigation incidental to its business - As of the report date, there are no material pending legal proceedings, other than ordinary routine litigation incidental to the business[257](index=257&type=chunk) [Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) The company did not report any new or updated risk factors in this section for the quarter - This section is marked as 'None', indicating no new risk factors are being disclosed in this report[258](index=258&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued 1,125,000 restricted common shares in unregistered sales for various agreements, utilizing Regulation S, Section 4(a)(2), and/or Rule 506 exemptions - Issued **75,000** restricted shares for Independent Contractor Agreements in March 2022[259](index=259&type=chunk) - Issued **800,000** restricted shares for a Membership Interest Purchase Agreement in April 2022[260](index=260&type=chunk) - Issued **275,000** restricted shares for a Consulting Agreement and a prior Share Exchange Agreement in May 2022[261](index=261&type=chunk) [Defaults Upon Senior Securities](index=54&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults on any material payments upon senior securities during the reporting period - There have been no defaults in any material payments during the covered period[263](index=263&type=chunk) [Other Information](index=54&type=section&id=Item%205.%20Other%20Information) The company reports no other material information and no material changes to procedures for security holders to recommend Board nominees - There have been no material changes to the procedures for security holders to recommend nominees to the Company's Board of Directors[265](index=265&type=chunk)