Novo Integrated Sciences Reports Fiscal 2022 Second Quarter Financial Results

Management expects Triple-digit Percentage Revenue Growth sequentially for the Fiscal 2022 Third Quarter

Novo Integrated Sciences, Inc. (NASDAQ:NVOS) (the “Company” or “Novo”), pioneering a holistic approach to patient-first health and wellness through a multidisciplinary healthcare ecosystem of multiple patient and consumer touchpoints for services and product innovation, today reported its financial results for the fiscal quarter ended February 28, 2022.

Robert Mattacchione, Novo’s CEO and Board Chairman, stated, “The 38.2% year-over-year revenue growth we experienced for the fiscal second quarter is directly related to the expansion of our essential and differentiated ecosystem for the delivery of healthcare related services and products. The Company projects 'triple-digit' percentage revenue growth sequentially for the fiscal third quarter ending May 31, 2022 primarily due to product and diagnostic technology sales. This projected acceleration in revenue growth in future quarters is directly related to the effects of commercializing our three-pillar model and crystalizes the Company’s mission for a fully integrated healthcare ecosystem, with global reach, resulting in rapid growth and profitability.”

Financial Highlights for the Period Ended February 28, 2022:

• Cash and cash equivalents were $15.9 million, total assets were $70.3 million, total liabilities were $25.8 million, and stockholders’ equity was $44.5 million.
• Revenues were $2,869,223, representing an increase of $793,329, or 38.2%, from $2,075,894 for the same period in 2021 principally due to the acquisition of Acenzia, Inc. in June 2021 and Terragenx in November 2021. Acenzia’s and Terragenx’ revenue for the three months ended February 28, 2022 was $749,345 and $245,658, respectively. Revenue from healthcare services decreased by 9.7%, when comparing the revenue for the three months ended February 28, 2022 to the same period in 2021, primarily due to a surge of COVID-19 in the province of Ontario, Canada, limiting clinic and eldercare patient-practitioner direct personal interaction.
• Operating costs were $3,337,030, representing an increase of $1,259,640, or 60.6%, from $2,077,390 for the same period in 2021 principally due to (i) an increase in legal and professional fees related to fund raising, and (ii) an increase in overhead expenses associated with the acquisitions of Acenzia, PRO-DIP, and Terragenx which was approximately $1,133,000. In subsequent quarters, this increase in overhead expenses associated with Acenzia, PRO-DIP, and Terragenx is projected to decrease as the Company integrates and consolidates operations.
• Net loss attributed to Novo Integrated Sciences, Inc. was $4,805,167, representing an increase of $3,465,297, or 258.6%, from $1,339,870 for the same period in 2021 principally due to (i) an increase in interest expense, (ii) an increase in amortization of debt discounts, (iii) an increase in legal and professional fees related to fund raising, (iv) an increase in overhead expenses associated with the acquisitions of Acenzia, PRO-DIP, and Terragenx which was approximately $1,133,000, and (v) an increase in foreign currency transaction losses.
• On December 14, 2022, the Company completed a registered direct offering with accredited institutional investors, resulting in gross proceeds of $15 million to Novo.

Operational Milestones:

• Completed an amended and restated Master Facility License Agreement with LA Fitness in Canada.
• IoNovo Iodide and IoNovo for Kids Pure Iodine oral sprays granted Natural Product Number (NPN) by Health Canada.
• Signed an Asset Purchase Agreement with the shareholder of Poling Taddeo Hovius Physiotherapy Professional Corp. (“PTHPC”), a clinic-based physiotherapy, rehabilitative, and related ancillary services and products business known as Fairway Physiotherapy and Sports Injury Clinic in Ontario province, Canada, to acquire all assets of PTHPC for a purchase price of $627,000 in exchange for an allotment of 156,750 restricted shares of the Company’s common stock at $4.00 per share. The transaction closed on March 1, 2022.
• Signed a Share Exchange Agreement with the shareholder of 12858461 Canada Corp. (“1285”), a clinic-based physiotherapy and related ancillary services and products business in Ontario province, Canada, to acquire 50.1% of 1285 for a purchase price of $68,000 in exchange for an allotment of 17,000 restricted shares of the Company’s common stock at $4.00 per share. The transaction closed on March 1, 2022.

Operational Milestones Subsequent to End of Fiscal 2022 Second Quarter:

• Completed Acquisition of Clinical Consultants International LLC (CCI).
• As a result of CCI acquisition, Novo signed a memorandum of understanding with Boditech Med, a global point-of-care testing leader, to market and distribute in North America.
• PRO-DIP® issued U.S. Patent for oral pouch delivery system technology.

About Novo Integrated Sciences, Inc.

Novo Integrated Sciences, Inc. is pioneering a holistic approach to patient-first health and wellness through a multidisciplinary healthcare ecosystem of multiple patient and consumer touchpoints for services and product innovation. Novo offers an essential and differentiated solution to deliver, or intend to deliver, these services and products through the integration of medical technology, diagnostic and therapeutic solutions, and rehabilitative science.

We believe that “decentralizing” healthcare, through the integration of medical technology and interconnectivity, is an essential solution to the rapidly evolving fundamental transformation of how non-catastrophic healthcare is delivered both now and in the future. Specific to non-critical care, ongoing advancements in both medical technology and inter-connectivity are allowing for a shift of the patient/practitioner relationship to the patient’s home and away from on-site visits to primary medical centers with mass-services. This acceleration of “ease-of-access” in the patient/practitioner interaction for non-critical care diagnosis and subsequent treatment minimizes the degradation of non-critical health conditions to critical conditions as well as allowing for more cost-effective healthcare distribution.

The Company’s decentralized healthcare business model is centered on three primary pillars to best support the transformation of non-catastrophic healthcare delivery to patients and consumers:

• First Pillar: Service Networks. Deliver multidisciplinary primary care services through (i) an affiliate network of clinic facilities, (ii) small and micro footprint sized clinic facilities primarily located within the footprint of box-store commercial enterprises, (iii) clinic facilities operated through a franchise relationship with the Company, and (iv) corporate operated clinic facilities.
• Second Pillar: Technology. Develop, deploy, and integrate sophisticated interconnected technology, interfacing the patient to the healthcare practitioner thus expanding the reach and availability of the Company’s services, beyond the traditional clinic location, to geographic areas not readily providing advanced, peripheral based healthcare services, including the patient’s home.
• Third Pillar: Products. Develop and distribute effective, personalized health and wellness product solutions allowing for the customization of patient preventative care remedies and ultimately a healthier population. The Company’s science-first approach to product innovation further emphasizes our mandate to create and provide over-the-counter preventative and maintenance care solutions.

Innovation through science combined with the integration of sophisticated, secure technology assures Novo Integrated Sciences of continued cutting-edge advancement in patient first platforms.

For more information concerning Novo Integrated Sciences, please visit www.novointegrated.com. For more information on Novo Healthnet Limited, Novo’s wholly owned subsidiary, please visit www.novohealthnet.com.

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Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this press release are forward-looking statements. In some cases, forward-looking statements can be identified by words such as "believe," “intend,” "expect," "anticipate," "plan," "potential," "continue" or similar expressions. Such forward-looking statements include risks and uncertainties, and there are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors, risks and uncertainties are discussed in Novo’s filings with the Securities and Exchange Commission. Investors should not place any undue reliance on forward-looking statements since they involve known and unknown, uncertainties and other factors which are, in some cases, beyond Novo’s control which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects Novo’s current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to operations, results of operations, growth strategy and liquidity. Novo assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The contents of any website referenced in this press release are not incorporated by reference herein.

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