Attached files
| file | filename |
|---|---|
| EX-99.1 - Novo Integrated Sciences, Inc. | ex99-1.htm |
| 8-K/A - Novo Integrated Sciences, Inc. | form8-ka.htm |
Exhibit 99.2
Novo Integrated Sciences, Inc.,
and Acenzia Inc.
Pro Forma Consolidated Financial Statements
(unaudited)
Contents
| 1 |
Novo Integrated Sciences, Inc.,
and Acenzia Inc.
Pro Forma Consolidated Balance Sheet
May 31, 2021
(unaudited)
| Novo Integrated | Pro forma | Pro forma | ||||||||||||||||
| Sciences | Acenzia | Adjustments | Consolidated | |||||||||||||||
| (historical) | (historical) | |||||||||||||||||
| ASSETS | ||||||||||||||||||
| Current Assets: | ||||||||||||||||||
| Cash and cash equivalents | $ | 8,367,045 | $ | 22,011 | $ | $ | 8,389,056 | |||||||||||
| Accounts receivable, net | 1,295,726 | 518,518 | 1,814,244 | |||||||||||||||
| Inventory, net | 424,622 | 424,622 | ||||||||||||||||
| Other receivables, current portion | 805,804 | 805,804 | ||||||||||||||||
| Due from related parties | - | |||||||||||||||||
| Prepaid expenses and other current assets | 363,272 | 57,339 | 420,611 | |||||||||||||||
| Total current assets | 10,831,847 | 1,022,490 | - | 11,854,337 | ||||||||||||||
| Property and equipment, net | 549,902 | 2,137,050 | 2,686,952 | |||||||||||||||
| Intangible assets, net | 26,894,115 | 16,692,809 | a | 43,586,924 | ||||||||||||||
| Right-of-use assets | 2,539,226 | 2,539,226 | ||||||||||||||||
| Other receivables, net of current portion | 310,650 | 310,650 | ||||||||||||||||
| Acquisition deposits | 414,200 | 414,200 | ||||||||||||||||
| Goodwill | 687,572 | 687,572 | ||||||||||||||||
| TOTAL ASSETS | $ | 42,227,512 | $ | 3,159,540 | $ | 16,692,809 | $ | 62,079,861 | ||||||||||
| LIABILITIES AND DEFICIT | ||||||||||||||||||
| Current Liabilities: | ||||||||||||||||||
| Accounts payable | $ | 849,302 | $ | 802,974 | $ | $ | 1,652,276 | |||||||||||
| Accrued expenses | 278,519 | 402,068 | 680,587 | |||||||||||||||
| Accrued interest (principally to related parties) | 381,671 | 381,671 | ||||||||||||||||
| Customer deposits | 80,354 | 80,354 | ||||||||||||||||
| Government loans and note payable | 88,956 | 615,946 | 704,902 | |||||||||||||||
| Due to related parties | 382,468 | 186,255 | 568,723 | |||||||||||||||
| Debentures, related parties | 1,027,736 | 1,027,736 | ||||||||||||||||
| Financing lease liability, current portion | 37,879 | 37,879 | ||||||||||||||||
| Operating lease liability, current portion | 514,931 | 514,931 | ||||||||||||||||
| Total current liabilities | 3,523,583 | 2,125,476 | - | 5,649,059 | ||||||||||||||
| Debentures, related parties | - | - | ||||||||||||||||
| Financing lease liability, net of current portion | 20,884 | 20,884 | ||||||||||||||||
| Operating lease liability, net of current portion | 2,054,268 | 2,054,268 | ||||||||||||||||
| Government loans and note payable, net of current portion | 39,536 | 7,999,006 | 8,038,542 | |||||||||||||||
| TOTAL LIABILITIES | 5,617,387 | 10,145,366 | - | 15,762,753 | ||||||||||||||
| Commitments and contingencies | - | - | - | - | ||||||||||||||
| DEFICIT | ||||||||||||||||||
| Common stock | 26,489 | 275 | 3,532 | a | 30,296 | |||||||||||||
| Additional paid-in capital | 54,297,875 | 9,703,176 | a | 64,001,051 | ||||||||||||||
| Other comprehensive income | 1,376,045 | (539,632 | ) | 539,632 | a | 1,376,045 | ||||||||||||
| Accumulated deficit | (19,029,654 | ) | (6,446,469 | ) | 6,446,469 | a | (19,029,654 | ) | ||||||||||
| Total Novo stockholders’ deficit | 36,670,755 | (6,985,826 | ) | 16,692,809 | 46,377,738 | |||||||||||||
| Noncontrolling interest | (60,630 | ) | (60,630 | ) | ||||||||||||||
| Total deficit | 36,610,125 | (6,985,826 | ) | 16,692,809 | 46,317,108 | |||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | 42,227,512 | $ | 3,159,540 | $ | 16,692,809 | $ | 62,079,861 | ||||||||||
See accompanying footnotes to the pro forma consolidated financial statements.
| 2 |
Novo Integrated Sciences, Inc.,
and Acenzia Inc.
Pro Forma Consolidated Statement of Operations
For the Nine Months Ended May 31, 2021
(unaudited)
| Novo Integrated | Pro forma | Pro forma | ||||||||||||||||
| Sciences | Acenzia | Adjustments | Consolidated | |||||||||||||||
| (historical) | (historical) | |||||||||||||||||
| Sales | $ | 6,612,374 | $ | 2,937,768 | $ | $ | 9,550,142 | |||||||||||
| Cost of goods sold | 3,769,020 | 2,370,483 | 6,139,503 | |||||||||||||||
| Gross profit | 2,843,354 | 567,285 | - | 3,410,639 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Selling expenses | 4,226 | 274 | 4,500 | |||||||||||||||
| General and administrative expenses | 5,324,768 | 921,649 | 1,788,515 | b | 8,034,932 | |||||||||||||
| Total operating expenses | 5,328,994 | 921,923 | 1,788,515 | 8,039,432 | ||||||||||||||
| Income (loss) from operations | (2,485,640 | ) | (354,638 | ) | (1,788,515 | ) | (4,628,793 | ) | ||||||||||
| Non operating income (expense) | ||||||||||||||||||
| Interest income | 25,265 | 25,265 | ||||||||||||||||
| Interest expense | (68,590 | ) | (414,032 | ) | (482,622 | ) | ||||||||||||
| Total other income (expense) | (43,325 | ) | (414,032 | ) | - | (457,357 | ) | |||||||||||
| Loss before income taxes | (2,528,965 | ) | (768,670 | ) | (1,788,515 | ) | (5,086,150 | ) | ||||||||||
| Income tax expense | - | - | - | - | ||||||||||||||
| Net loss | $ | (2,528,965 | ) | $ | (768,670 | ) | $ | (1,788,515 | ) | $ | (5,086,150 | ) | ||||||
| Net loss attributed to noncontrolling interest | (6,438 | ) | (6,438 | ) | ||||||||||||||
| Net loss attributed to Novo | $ | (2,522,527 | ) | $ | (768,670 | ) | $ | (1,788,515 | ) | $ | (5,079,712 | ) | ||||||
| Weighted average common shares outstanding - basic and diluted | 24,192,998 | 27,999,658 | ||||||||||||||||
| Net loss per common share - basic and diluted | $ | (0.10 | ) | $ | (0.18 | ) | ||||||||||||
See accompanying footnotes to the pro forma consolidated financial statements.
| 3 |
Novo Integrated Sciences, Inc.,
and Acenzia Inc.
Pro Forma Consolidated Statement of Operations
For the Year Ended August 31, 2020
| Novo Integrated | Pro forma | Pro forma | ||||||||||||||||
| Sciences | Acenzia | Adjustments | Consolidated | |||||||||||||||
| (historical) | (historical) | |||||||||||||||||
| Sales | $ | 7,860,567 | $ | 6,187,292 | $ | $ | 14,047,859 | |||||||||||
| Cost of goods sold | 4,802,195 | 3,618,318 | 8,420,513 | |||||||||||||||
| Gross profit | 3,058,372 | 2,568,974 | - | 5,627,346 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Selling expenses | 4,921 | - | 4,921 | |||||||||||||||
| General and administrative expenses | 7,286,305 | 2,156,283 | 2,384,687 | b | 11,827,275 | |||||||||||||
| Debt restructuring costs | - | 3,724,639 | 3,724,639 | |||||||||||||||
| Write down of assets | 29,744 | 29,744 | ||||||||||||||||
| Total operating expenses | 7,320,970 | 5,880,922 | 2,384,687 | 15,586,579 | ||||||||||||||
| Income (loss) from operations | (4,262,598 | ) | (3,311,948 | ) | (2,384,687 | ) | (9,959,233 | ) | ||||||||||
| Non operating income (expense) | ||||||||||||||||||
| Interest income | 33,627 | 33,627 | ||||||||||||||||
| Interest expense | (156,662 | ) | (295,680 | ) | (452,342 | ) | ||||||||||||
| Other income (expense) | (194,055 | ) | (194,055 | ) | ||||||||||||||
| Gain on settlement of debt | - | - | ||||||||||||||||
| Write off of acquisition deposit | (344,521 | ) | (344,521 | ) | ||||||||||||||
| Total other income (expense) | (661,611 | ) | (295,680 | ) | - | (957,291 | ) | |||||||||||
| Loss before income taxes | (4,924,209 | ) | (3,607,628 | ) | (2,384,687 | ) | (10,916,524 | ) | ||||||||||
| Income tax expense | - | - | - | - | ||||||||||||||
| Net loss | $ | (4,924,209 | ) | $ | (3,607,628 | ) | $ | (2,384,687 | ) | $ | (10,916,524 | ) | ||||||
| Net loss attributed to noncontrolling interest | (9,055 | ) | (9,055 | ) | ||||||||||||||
| Net loss attributed to Novo | $ | (4,915,154 | ) | $ | (3,607,628 | ) | $ | (2,384,687 | ) | $ | (10,907,469 | ) | ||||||
| Weighted average common shares outstanding - basic and diluted | 23,034,081 | 26,840,741 | ||||||||||||||||
| Net loss per common share - basic and diluted | $ | (0.21 | ) | $ | (0.41 | ) | ||||||||||||
See accompanying footnotes to the pro forma consolidated financial statements.
| 4 |
Novo Integrated Sciences, Inc.,
and Acenzia Inc.
Notes to Pro form Consolidated Financial Statements
(unaudited)
NOTE 1 - BASIS OF PRESENTATION
On May 28, 2021, the Company, Novo Integrated Sciences, Inc., a Nevada corporation (“Novo”), and Novo Healthnet Limited, a wholly owned subsidiary of Novo (“NHL”), entered into a Share Exchange Agreement (“SEA”) by and among Novo and NHL, on the one hand, and Acenzia, Inc. (“Acenzia” and the “Acenzia Shareholders”).
Pursuant to the terms of the SEA, NHL agreed to purchase from the Acenzia Shareholders, and the Acenzia Shareholders agreed to sell to NHL, in exchange for payment by NHL of the purchase price of $25,000,000, less Acenzia’s long-term debt evidenced on the closing balance sheet (the “Purchase Price”), and subject to the Working Capital Adjustment and the working capital allowance advanced (the “Adjusted Purchase Price”). The Adjusted Purchase Price will be paid by the issuance by NHL to the Acenzia Shareholders of certain non-voting NHL preferred shares exchangeable into restricted shares of Novo’s common stock, par value $0.001.
On June 24, 2021, the SEA closed and as a result of this transaction, the Company is a wholly owned subsidiary of NHL.
The accompanying pro forma consolidated balance sheet (unaudited) presents the accounts of Novo and Acenzia as if the Merger occurred May 31, 2021. The accompanying pro forma consolidated statement of operations (unaudited) presents the accounts of Novo and Acenzia for the nine months ended May 31, 2021, and the year ended August 31, 2020 as if the Merger occurred on September 1, 2019. The financial statement information for Novo comes from its Form 10K for the year ended August 31, 2020 and Form 10Q for the nine months ended May 31, 2021. The financial statement information for Acenzia includes its balance sheet as of April 30, 2021 contained elsewhere is this Form 8-K/A and internally generated statements of operations for the nine months ended April 30, 2021 and for the twelve months ended July 31, 2020.
The following adjustments would be required if the acquisition occurred as indicated above:
| a) | To record the purchase price adjustment for the issuance of 3,806,660 shares of Novo’s $0.001 par value common stock for all the issued and outstanding share of stock of Acenzia. The adjustment also removed the stockholder equity accounts of Acenzia. | |
| b) | To record amortization expense related to the intangible assets purchased as a result of the above acquisition of Acenzia by Novo. |
The unaudited consolidated pro forma financial information is presented for informational purposes only and is subject to a number of uncertainties and assumptions and do not purport to represent what the Company’s actual performance or financial position would have been had the transaction occurred on the dates indicated and does not purport to indicate the financial position or results of operations as of any future date or for any future period.
| 5 |