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Novo Integrated Sciences Closes on $6,210,000 Securities Purchase Agreement

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Novo Integrated Sciences, Inc. (NVOS) announced the repayment of Mast Hill $3,500,000 Note and FirstFire $277,777 Note with cash proceeds from the Streeterville Note. The Company issued a secured convertible promissory note of $6,210,000 to Streeterville Capital, CEO Robert Mattacchione highlighted the importance of reducing dilution.
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The repayment of existing debt with the proceeds from a new financing arrangement is a strategic financial move by Novo Integrated Sciences. By settling the Mast Hill and FirstFire notes, the company has effectively restructured its short-term debt obligations. This action could be seen as an attempt to streamline the capital structure and improve the balance sheet ahead of the RC Consulting Consortium Group LLC transaction and other strategic initiatives.

From a cash flow perspective, the use of cash proceeds to pay off debt indicates that the company is prioritizing current liabilities and is focused on reducing potential equity dilution. This is a positive signal to investors who might be concerned about the impact of new debt on their share value. However, the issuance of a convertible note introduces the possibility of future dilution if Streeterville Capital chooses to convert the note to equity.

It is also worth noting that the discount on the purchase price of the note—$710,000 less than the principal sum—suggests favorable terms for Streeterville, which may raise questions about the cost of capital for Novo Integrated Sciences. Investors should monitor the company's interest expenses and the terms of the convertible feature to assess the impact on future earnings.

The issuance of the $6,210,000 secured convertible promissory note by Novo Integrated Sciences to Streeterville Capital represents a nuanced capital market transaction. Convertible notes are hybrid financial instruments that carry the characteristics of both debt and equity. They provide companies with a mechanism to raise capital with the flexibility of conversion to equity, often used by companies seeking to minimize immediate dilution of shares while still bringing in capital.

For debt market stakeholders, the key elements to consider are the security of the note, the interest rate and the conversion terms. The secured nature of the note implies that Streeterville has collateral backing their investment, potentially lowering the risk profile of the note. However, the specific terms of the security and conversion rights are not detailed and these would significantly influence the risk assessment.

Market participants often view the repayment of shorter-term, higher-interest debt as a positive development, as it can lead to a reduction in the company's cost of capital. However, the long-term implications hinge on the company's ability to either service the new debt from operational cash flows or to successfully execute on its strategic transactions, such as the monetization of the gold-backed bond, without resorting to dilutive conversions.

Both the Mast Hill $3,500,000 Note and the FirstFire $277,777 Note were Paid in Full with Cash Proceeds from the Streeterville Note

BELLEVUE, Wash.--(BUSINESS WIRE)-- Novo Integrated Sciences, Inc. (NASDAQ: NVOS) (the “Company” or “Novo”) announced today the Company has entered into a securities purchase agreement, dated April 5, 2024, with Streeterville Capital, LLC (“Streeterville”) pursuant to which the Company issued a secured convertible promissory note (the “Note”) with a maturity date of April 8, 2025 in the principal sum of $6,210,000. On April 8, 2024, Streeterville paid the purchase price of $5,500,000 in exchange for the Note. On April 10, 2024, the Company repaid in full the remaining outstanding balances for both the Mast Hill $3,500,000 note and the FirstFire $277,777 note, each dated in September 2023.

Robert Mattacchione, the Company’s CEO and Board Chairman, stated, “While the Company continues to work toward closing the previously disclosed RC Consulting Consortium Group LLC transaction, the Ophir gem collection transaction, and monetization of a one-billion dollar gold-backed bond to raise non-dilutive funding, it is very important to have repaid the Mast Hill and FirstFire notes with cash, thereby curtailing dilution.”

About Novo Integrated Sciences, Inc.

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

We believe that “decentralizing” healthcare, through the integration of medical technology and interconnectivity is an essential solution to the rapidly evolving fundamental transformation of how non-catastrophic healthcare is delivered both now and in the future. Specific to non-critical care, ongoing advancements in both medical technology and interconnectivity 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.

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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, Section 21E of the Securities Exchange Act of 1934, as amended, or the Private Securities Litigation Reform Act of 1995. 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.

Chris David, COO

Novo Integrated Sciences, Inc.

chris.david@novointegrated.com

(888) 512-1195

Source: Novo Integrated Sciences, Inc.

FAQ

What notes were repaid by Novo Integrated Sciences, Inc. with cash proceeds from the Streeterville Note?

Novo Integrated Sciences, Inc. repaid both the Mast Hill $3,500,000 Note and the FirstFire $277,777 Note.

Who did Novo Integrated Sciences, Inc. enter into a securities purchase agreement with?

Novo Integrated Sciences, Inc. entered into a securities purchase agreement with Streeterville Capital,

What was the principal sum of the secured convertible promissory note issued by Novo Integrated Sciences, Inc. to Streeterville?

The principal sum of the note issued by Novo Integrated Sciences, Inc. to Streeterville was $6,210,000.

What is the maturity date of the note issued by Novo Integrated Sciences, Inc. to Streeterville?

The maturity date of the note issued by Novo Integrated Sciences, Inc. to Streeterville is April 8, 2025.

What did CEO Robert Mattacchione emphasize regarding the repayment of the Mast Hill and FirstFire notes?

CEO Robert Mattacchione highlighted the importance of reducing dilution by repaying the Mast Hill and FirstFire notes with cash.

Novo Integrated Sciences, Inc.

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About NVOS

novo integrated sciences, inc., together with its subsidiaries, provides primary healthcare services. it offers physiotherapy, chiropractic care, manual/manipulative therapy, occupational therapy, eldercare, massage therapy, acupuncture and functional dry needling, chiropody, stroke and traumatic brain injury/neurological rehabilitation, kinesiology, vestibular therapy, concussion management and baseline testing, trauma sensitive yoga and meditation for concussion-acquired brain injury and occupational stress-ptsd, women's pelvic health program, sports medicine therapy, assistive devices, dietitian, holistic nutrition, fall prevention education, sports team conditioning program, and private personal training services. the company also engages in the assessment, diagnosis, treatment, pain management, rehabilitation, education, and prevention of various orthopedic, musculoskeletal, sports injury, and neurological conditions. in addition, it offers specialty treatment and recovery program