(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were ~~148,434,184~~17,748,320 shares of the Registrant’s $0.001 par value common stock outstanding as of ~~July 17, 2023.~~January 22, 2024.

* The condensed consolidated balance sheets’ common stock amounts have been retroactively adjusted to account for the Company’s 1:10 reverse stock split, effective November 7, 2023.

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

For the Three ~~and Nine~~ Months Ended ~~May 31,~~November 30, 2023 and 2022 (unaudited)

	May 31,			May 31,			May 31,			May 31,			2023			2022
	Three Months Ended						Nine Months Ended						Three Months Ended
	May 31,			May 31,			May 31,			May 31,			November 30,			November 30,
	2023			2022			2023			2022			2023			2022

Revenues	$	3,292,933		$	13,851,883		$	9,268,722		$	19,883,033		$	3,891,218		$	3,419,280

Cost of revenues		1,978,839			11,443,001			5,244,192			14,991,331			1,947,200			1,679,747

Gross profit		1,314,094			2,408,882			4,024,530			4,891,702			1,944,018			1,739,533

Operating expenses:
Selling expenses		1,877			9,802			9,916			36,340			9,586			7,332
General and administrative expenses		2,742,635			3,601,826			9,473,802			9,542,443			5,252,069			3,974,161
Total operating expenses		2,744,512			3,611,628			9,483,718			9,578,783			5,261,655			3,981,493

Loss from operations		(1,430,418	)		(1,202,746	)		(5,459,188	)		(4,687,081	)		(3,317,637	)		(2,241,960	)

Non-operating income (expense)
Interest income		62,397			8,355			6,762			25,233			2,219			2,281
Interest expense		(9,570	)		(513,398	)		(240,520	)		(1,808,310	)		(143,374	)		(167,243	)
Other expense														(652,174	)		-
Change in fair value of derivative liability														585,529			-
Amortization of debt discount		(156,037	)		(2,133,890	)		(4,386,899	)		(3,654,752	)		(1,075,928	)		(1,490,513	)
Foreign currency transaction gain (loss)		48,333			97,654			12,652			(303,714	)
Total other expense		(54,877	)		(2,541,279	)		(4,608,005	)		(5,741,543	)
Foreign currency transaction losses														(59,358	)		(39,301	)
Total non-operating expense														(1,343,086	)		(1,694,776	)

Loss before income taxes		(1,485,295	)		(3,744,025	)		(10,067,193	)		(10,428,624	)		(4,660,723	)		(3,936,736	)

Income tax expense		-			-			-			-			-			-

Net loss	$	(1,485,295	)	$	(3,744,025	)	$	(10,067,193	)	$	(10,428,624	)	$	(4,660,723	)	$	(3,936,736	)

Net loss attributed to noncontrolling interest		12,035			66,029			(13,095	)		(6,816	)
Net income (loss) attributed to noncontrolling interest														19,620			(1,323	)

Net loss attributed to Novo Integrated Sciences, Inc.		(1,497,330	)		(3,810,054	)		(10,054,098	)		(10,421,808	)	$	(4,680,343	)	$	(3,935,413	)

Comprehensive loss:
Net loss		(1,485,295	)		(3,744,025	)		(10,067,193	)		(10,428,624	)		(4,660,723	)		(3,936,736	)
Foreign currency translation (loss) gain		(120,357	)		13,711			(738,022	)		24,916
Foreign currency translation gain (loss)														108,976			(420,982	)
Comprehensive loss:	$	(1,605,652	)	$	(3,730,314	)	$	(10,805,215	)	$	(10,403,708	)	$	(4,551,747	)	$	(4,357,718	)

Weighted average common shares outstanding – basic and diluted		143,600,541			29,817,999			85,832,252			28,498,414
Weighted average common shares outstanding - basic and diluted														16,726,308			3,385,508

Net loss per common share – basic and diluted	$	(0.01	)	$	(0.13	)	$	(0.12	)	$	(0.37	)
Net loss per common share - basic and diluted													$	(0.28	)	$	(1.16	)

* The condensed consolidated statements of operations and comprehensive loss’s share and per share amounts have been retroactively adjusted to account for the Company’s 1:10 reverse stock split, effective November 7, 2023.

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

For the Three ~~and Nine~~ Months Ended ~~May 31,~~November 30, 2023 and 2022 (unaudited)

* The condensed consolidated statements of stockholders’ equity share amounts have been retroactively adjusted to account for the Company’s 1:10 reverse stock split, effective November 7, 2023.

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

For the ~~Nine~~Three Months Ended ~~May 31,~~November 30, 2023 and 2022 (unaudited)

	May 31,			May 31,			2023			2022
	Nine Months Ended						Three Months Ended
	May 31,			May 31,			November 30,			November 30,
	2023			2022			2023			2022

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(10,067,193	)	$	(10,428,624	)	$	(4,660,723	)	$	(3,936,736	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,718,388			2,349,434			572,404			586,166
Fair value of vested stock options		385,335			289,892			-			60,887
Financing costs for debt extension								1,323,398			1,139,050
Common stock issued for services		-			676,750			1,195,400			-
Financing costs for debt extension		1,421,583			-
Operating lease expense		624,246			418,188			149,877			209,846
Amortization of debt discount		4,386,899			3,654,752			1,075,928			1,490,513
Foreign currency transaction (gain) loss		(12,652	)		303,714
Foreign currency transaction losses								59,358			39,301
Change in fair value of derivative liability								(585,529	)		-
Changes in operating assets and liabilities:
Accounts receivable		(308,907	)		(3,650,069	)		(1,168,350	)		28,174
Inventory		(92,260	)		(263,539	)		(166,476	)		(157,118	)
Prepaid expenses and other current assets		333,724			(150,632	)		130,584			1,471
Accounts payable		154,542			117,056			(98,996	)		321,961
Accrued expenses		104,004			(68,871	)		71,214			149,945
Accrued interest		(67,634	)		598,904			99,430			(9,232	)
Operating lease liability		(594,618	)		(406,862	)		(149,877	)		(202,465	)
Net cash used in operating activities		(2,014,543	)		(6,559,907	)		(2,152,358	)		(278,237	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(18,870	)		(190,973	)
Cash acquired with acquisition		-			57,489
Payments received from other receivables		-			296,138
Net cash (used in) provided by investing activities		(18,870	)		162,654

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments to related parties		(56,649	)		(21,932	)		(72,402	)		(48,480	)
Repayments of notes payable								(183,100	)		-
Repayments of finance leases		(6,435	)		(14,797	)		(2,779	)		(2,763	)
Proceeds from (repayments of) notes payable		222,000			(4,430,794	)
Proceeds from the sale of common stock, net of offering costs		1,795,000			-
Proceeds from issuance of convertible notes								3,314,153			-
Repayment of convertible notes								-			(2,777,778	)
Proceeds from the sale of units, net of offering costs								-			1,795,000
Proceeds from exercise of warrants		451,000			-			240,400			-
Repayment of convertible notes		(3,033,888	)		-
Proceeds from issuance of convertible notes, net		925,306			15,270,000
Net cash provided by financing activities		296,334			10,802,477
Net cash provided by (used in) financing activities								3,296,272			(1,034,021	)

Effect of exchange rate changes on cash and cash equivalents		22,403			(20,940	)		79,770			12,271

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(1,714,676	)		4,384,284
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS								1,223,684			(1,299,987	)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		2,178,687			8,293,162			416,323			2,178,687

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	464,011		$	12,677,446		$	1,640,007		$	878,700

CASH PAID FOR:
Interest	$	343,878		$	1,294,912		$	45,321		$	186,911
Income taxes	$	-		$	-		$	-		$	-

SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:
Debt discount recognized on derivative liability							$	3,071,653		$	1,390,380
Common stock issued for convertible debt settlement	$	9,186,329		$	1,247,849		$	577,522		$	-
Common stock to be issued for intangible assets	$	-		$	188,925
Common stock to be issued for acquisition	$	-		$	1,244,550
Common stock issued for acquisition	$	-		$	1,704,000
Beneficial conversion feature upon issuance of convertible notes	$	66,068		$	-
Debt discount recognized on derivative liability	$	1,390,380		$	-
Debt discount recognized on convertible note	$	639,993		$	-		$	3,735,414		$	-
Extinguishment of derivative liability due to conversion	$	1,390,380		$	-
Common stock issued with convertible notes	$	173,095		$	-
Warrants issued with convertible notes	$	180,138		$	-

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

For the ~~Nine~~Three Months Ended ~~May 31,~~November 30, 2023 and 2022 (unaudited)

Novo Integrated Sciences, Inc. (“Novo Integrated”) was incorporated in Delaware on November 27, 2000, under the name Turbine Truck Engines, Inc. On February 20, 2008, the Company was re-domiciled to the State of Nevada. Effective July 12, 2017, the Company’s name was changed to Novo Integrated Sciences, Inc. When used herein, the terms the “Company,” “we,” “us” and “our” refer to Novo Integrated and its consolidated subsidiaries.

The Company owns Canadian and U.S. subsidiaries which provide, or intend to provide, essential and differentiated solutions to the delivery of multidisciplinary primary care and related wellness products through the integration of medical technology, interconnectivity, advanced therapeutics, diagnostic solutions, unique personalized product offerings, 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 now and how it will be delivered 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 and efficient 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:

On April 25, 2017 (the “Effective Date”), we entered into a Share Exchange Agreement (the “Share Exchange Agreement”) by and between (i) Novo Integrated; (ii) Novo Healthnet Limited (“NHL”), (iii) ALMC-ASAP Holdings Inc. (“ALMC”); (iv) Michael Gaynor Family Trust (the “MGFT”); (v) 1218814 Ontario Inc. (“1218814”); and (vi) Michael Gaynor Physiotherapy Professional Corp. (“MGPP,” and together with ALMC, MGFT and 1218814, the “NHL Shareholders”). Pursuant to the terms of the Share Exchange Agreement, Novo Integrated agreed to acquire, from the NHL Shareholders, all of the shares of both common and preferred stock of NHL held by the NHL Shareholders in exchange for the issuance, by Novo Integrated to the NHL Shareholders, of shares of Novo Integrated common stock such that following the closing of the Share Exchange Agreement, the NHL Shareholders would own ~~16,779,741~~1,677,974 restricted shares of Novo Integrated common stock, representing 85% of the issued and outstanding Novo Integrated common stock, calculated including all granted and issued options or warrants to acquire Novo Integrated common stock as of the Effective Date, but to exclude shares of Novo Integrated common stock that ~~are~~were subject to a then-current Regulation S offering that was undertaken by Novo Integrated (the “Exchange”).

On May 9, 2017, the Exchange closed and, as a result, NHL became a wholly owned subsidiary of Novo Integrated. The Exchange was accounted for as a reverse acquisition under the purchase method of accounting since NHL obtained control of Novo Integrated Sciences, Inc. Accordingly, the Exchange was recorded as a recapitalization of NHL, and not as a business combination, with NHL being treated as the continuing entity. The historical financial statements presented are the financial statements of NHL. ~~The Share Exchange Agreement was treated as a recapitalization and not as a business combination; therefore, no pro forma information is disclosed.~~ At the closing date of the Exchange, the net assets of the legal acquirer, ~~novo~~Novo Integrated Sciences, Inc., were $6,904.

~~While all~~On November 7, 2023, the Company effected a 1-for-10 reverse stock split of its common stock. As a result of the ~~Company’s business units are operational at~~reverse stock split, every 10 shares of issued and outstanding common stock were exchanged for one share of common stock, with any fractional shares being rounded up to the ~~time of~~next higher whole share. Unless otherwise noted, the share and per share information in this ~~filing, any future impact of~~report have been retroactively adjusted to give effect to the COVID-19 pandemic on the Company’s operations remains unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption, reduced patient traffic and reduced operations. For more information regarding the impact of COVID-19 on the Company, see “Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Financial Impact of COVID-19” of this quarterly report on Form 10-Q.1-for-10 reverse stock split.

The accompanying unaudited condensed consolidated financial statements were prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The information furnished herein reflects all adjustments, consisting only of normal recurring adjustments, which in the opinion of management, are necessary to fairly state the Company’s financial position, the results of its operations, and cash flows for the periods presented. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with U.S. GAAP were omitted pursuant to such rules and regulations.

The financial information contained in this report should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended August 31, ~~2022,~~2023, that the Company filed on ~~April 3,~~December 14, 2023. The results of operations for the ~~nine~~three months ended ~~May 31,~~November 30, 2023 are not necessarily indicative of the results for the fiscal year ending August 31, ~~2023.~~2024.

The Company’s Canadian subsidiaries’ functional currency is the Canadian Dollar (“CAD”) and the parent company’s functional currency is the United States Dollar (“$” or “USD”); however, the accompanying unaudited condensed consolidated financial statements were translated and presented in USD.

The Company evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date the ~~unaudited~~ condensed consolidated financial statements are issued. The Company has incurred recurring losses from operations, has negative cash flows from operating activities, and has an accumulated deficit as ~~at May 31,~~of November 30, 2023. The Company believes that its cash and other available resources may not be sufficient to meet its operating needs and the payment of obligations related to various business acquisitions as they come due within one year after the date the unaudited condensed consolidated financial statements are issued.

ToIn an effort to alleviate these conditions, the Company ~~is currently in the process of raising funds through a~~has considered equity and/or debt financing ~~and a subsequent public offering in the United States. As the Company’s funding activities are ongoing, there~~and/or asset monetization. There can be no ~~assurances~~assurance that funding would be available, or that the terms of such funding would be on favorable terms if available. Even if the Company ~~will be~~is able to ~~secure funding~~obtain additional financing, it may contain undue restrictions on ~~terms that are acceptable to~~our operations, in the ~~Company,~~case of debt financing, or ~~at all.~~cause substantial dilution for our stockholders, in the case of equity financing. These conditions, along with the matters noted above, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the unaudited condensed consolidated financial statements are issued.

While management has developed and is in process to implement plans that management believes could alleviate in the future the substantial doubt that was raised, management concluded at the date of the issuance of the unaudited condensed consolidated financial statements that substantial doubt exists as those plans are not completely within the control of management. These unaudited condensed consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and consolidated balance sheets classifications that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.

The accounts of the Company’s Canadian subsidiaries are maintained in CAD. The accounts of these subsidiaries are translated into USD in accordance with the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) Topic 830, Foreign Currency Transaction, with the CAD as the functional currency. According to Topic 830, all assets and liabilities are translated at the exchange rate on the balance sheet date, stockholders’ equity is translated at historical rates and statement of operations items are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income (“OCI”) in accordance with ASC Topic 220, Comprehensive Income. Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the condensed consolidated statement of operations and comprehensive loss. The following table details the exchange rates used for the respective periods:

	May 31, 2023		May 31, 2022		August 31, 2022		November 30, 2023		November 30, 2022		August 31, 2023

Period end: CAD to USD exchange rate	$	0.7351	$	0.7910	$	0.7627	$	0.7363	$	0.7403	$	0.7390
Average period: CAD to USD exchange rate	$	0.7400	$	0.7897	$	0.7864	$	0.7324	$	0.7414	$	0.7426

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. This applies in particular to the going concern assessment, useful lives of non-current assets, impairment of non-current assets, allowance for doubtful receivables, allowance for slow moving and obsolete inventory, valuation of share-based compensation and warrants, valuation of derivative liability, and valuation allowance for deferred tax assets. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and entities it controls, including its wholly owned subsidiaries, NHL, Acenzia Inc. (“Acenzia”), Novomerica Health Group, Inc. (“NHG”), Novo Healthnet Rehab Limited, Novo Assessments Inc., PRO-DIP, LLC (“PRO-DIP”), a 91% controlling interest in Terragenx Inc. (“Terragenx”), a 50.1% controlling interest in 12858461 Canada Corp (“1285 Canada”), an 80% controlling interest in Novo Healthnet Kemptville Centre, Inc., a Back on Track Physiotherapy and Health Centre clinic operated by NHL, Clinical Consultants International, LLC and a 70% controlling interest in Novo Earth Therapeutics Inc. (currently inactive).

An entity is controlled when the Company has the ability to direct the relevant activities of the entity, has exposure or rights to variable returns from its involvement with the entity, and is able to use its power over the entity to affect its returns from the entity.

Income or loss and each component of ~~other comprehensive income~~OCI are attributed to the shareholders of the Company and to the noncontrolling interests. Total comprehensive ~~loss~~income is attributed to the shareholders of the Company and to the noncontrolling interests even if this results in the non-controlling interests having a deficit balance on consolidation.

The Company follows FASB ASC Topic 810, Consolidation, which governs the accounting for and reporting of non-controlling interests (“NCIs”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCIs be treated as a separate component of equity, not as a liability, that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially owned consolidated subsidiary be allocated to the NCI even when such allocation might result in a deficit balance.

The net income (loss) attributed to the NCI is separately designated in the accompanying condensed consolidated statements of operations and comprehensive loss.

For the purpose of the condensed consolidated statements of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly liquid debt instruments with original maturities of three months or less.

Accounts receivable are recorded, net of allowance for doubtful accounts and sales returns. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentration, customer credit worthiness, current economic trends and changes in customer payment patterns to determine if the allowance for doubtful accounts is adequate. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Delinquent account balances are written-off after management has determined that the likelihood of collection is not probable and known bad debts are written off against the allowance for doubtful accounts when identified. As of ~~May 31,~~November 30, 2023 and August 31, ~~2022,~~2023, the allowance for uncollectible accounts receivable was $~~1,095,710~~855,116 and $~~992,329~~864,215, respectively.

Inventories are valued at the lower of cost (determined by the first in, first out method) and net realizable value. Management compares the cost of inventories with the net realizable value and allowance is made for writing down their inventories to net realizable value, if lower. Inventory is segregated into three areas: raw materials, work-in-process and finished goods. The Company periodically assessed its inventory for slow moving and/or obsolete items and any change in the allowance is recorded in cost of ~~revenues~~revenue in the accompanying condensed consolidated statements of operations and comprehensive loss. If any are identified an appropriate allowance for those items is made and/or the items are deemed to be impaired. As of ~~May 31,~~November 30, 2023 and August 31, ~~2022,~~2023, the Company’s allowance for slow moving or obsolete inventory was $~~990,501~~nil and $~~1,027,670~~nil, respectively.

Other receivables are recorded at cost and presented as current or long-term based on the terms of the agreements. Management reviews the collectability of other receivables and writes off the portion that is deemed to be uncollectible. During the ~~nine~~three months ended ~~May 31,~~November 30, 2023 and year ended August 31, ~~2022,~~2023, the Company wrote off $nil and $~~299,672~~nil ~~(principal amount of $225,924~~ ~~and accrued interest of $73,748~~), respectively, of other receivables that were not expected to be collected.

Property and equipment are stated at cost less depreciation and impairment. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the declining balance method for substantially all assets with estimated lives as follows:

The Company applies the provisions of ASC Topic 842, Leases which requires lessees to recognize lease assets and lease liabilities on the balance sheet. The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate.

The Company applies the provisions of ASC Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets, including right-of-use assets, used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal. Based on its review at ~~May 31,~~November 30, 2023, the Company believes there was no impairment of its long-lived assets.

The Company’s intangible assets are being amortized over their estimated useful lives as follows:

The Company’s right-of-use assets consist of leased assets recognized in accordance with ASC 842, Leases, which requires lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liability represents the Company’s obligation to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the condensed consolidated balance sheet and are expensed on a straight-line basis over the lease term in the condensed consolidated statements of operations and comprehensive loss. The Company determines the lease term by agreement with ~~the~~ lessor. In cases where the lease does not provide an implicit interest rate, the Company uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.

Goodwill represents the excess of purchase price over the underlying net assets of businesses acquired. Under U.S. GAAP, goodwill is not amortized but is subject to annual impairment tests. The Company recorded goodwill related to its acquisition of APKA Health, Inc. (“APKA”) during the fiscal year ended August 31, 2017, Executive Fitness Leaders (“EFL”) during the fiscal year ended August 31, 2018, Action Plus Physiotherapy Rockland (“Rockland”) during the fiscal year ended August 31, 2019, Acenzia during the fiscal year ended August 31, 2021, and 1285 Canada during the fiscal year ended August 31, 2022. ~~As of August 31, 2022, the Company performed the required impairment reviews and determined that an impairment charge of $1,357,043~~ related to the goodwill for Acenzia was necessary. The Company determined that the carrying value was in excess of the expected fair value of discounted cash flows based on the current market and business environments, resulting in the need for impairment. The impairment was determined based on the discounted cash flow valuation model and the projected future cash flows of the underlying business. Based on its review at ~~May 31,~~November 30, 2023, the Company believes there was no ~~additional~~ impairment of its goodwill.

	APKA			EFL			Rockland			Acenzia			1285 Canada			Total			APKA			EFL			Rockland			Acenzia			1285 Canada			Total
Balance, August 31, 2021	$	197,925		$	129,839		$	229,593		$	8,931,491		$	-		$	9,488,848
Goodwill acquired with purchase of business		-			-			-			-			602			602
Impairment of goodwill		-			-			-			(1,357,043	)		-			(1,357,043	)
Balance, August 31, 2022																			$	190,678		$	125,088		$	221,188		$	7,288,307		$	583		$	7,825,844
Foreign currency translation adjustment		(7,247	)		(4,751	)		(8,405	)		(286,141	)		(19	)		(306,563	)		(5,928	)		(3,892	)		(6,878	)		(226,645	)		(18	)		(243,361	)
Balance, August 31, 2022	$	190,678		$	125,088		$	221,188		$	7,288,307		$	583		$	7,825,844
Balance, August 31, 2023																			$	184,750		$	121,196		$	214,310		$	7,061,662		$	565		$	7,582,483
Beginning balance	$	190,678		$	125,088		$	221,188		$	7,288,307		$	583		$	7,825,844		$	184,750		$	121,196		$	214,310		$	7,061,662		$	565		$	7,582,483
Foreign currency translation adjustment		(6,895	)		(4,526	)		(8,000	)		(263,607	)		(21	)		(283,049	)		(675	)		(443	)		(783	)		(25,801	)		(2	)		(27,704	)
Balance, May 31, 2023	$	183,783		$	120,562		$	213,188		$	7,024,700		$	562		$	7,542,795
Balance, November 30, 2023																			$	184,075		$	120,753		$	213,527		$	7,035,861		$	563		$	7,554,779
Ending balance	$	183,783		$	120,562		$	213,188		$	7,024,700		$	562		$	7,542,795		$	184,075		$	120,753		$	213,527		$	7,035,861		$	563		$	7,554,779

For certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, other receivables, accounts payable, accrued expenses, current portion of finance and operating lease liability, current portion of government loans and notes payable, debentures, convertible notes payable, and due to related parties, the carrying amounts approximate their fair values due to their short-term maturities.

FASB ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosure of the fair value of financial instruments held by the Company. FASB ASC Topic 825, Financial Instruments, defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the condensed consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization, low risk of counterparty default and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic 480, Distinguishing Liabilities from Equity, and FASB ASC Topic 815, Derivatives and Hedging.

For certain financial instruments, the carrying amounts reported in the condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, other receivables, and current liabilities, including accounts payable, accrued expenses, current portion of finance and operating lease liability, current portion of government loans and notes payable, debentures, convertible notes payable, and due to related parties, ~~debentures, operating lease liability and finance lease liability,~~ each qualify as a financial instrument, and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The carrying value of notes payable approximates their fair values due to current market rate on such debt.

As of ~~May 31,~~November 30, 2023 and August 31, ~~2022,~~2023, respectively, the Company did not identify any financial assets and liabilities required to be presented on the condensed consolidated balance sheet at fair value, except for ~~cash and cash equivalents~~contingent liability which ~~are~~is carried at fair value using Level 1 inputs and derivative liability which is carried at fair value using Level 3 inputs.

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815. The Company applies the guidance in ASC 815-40-35-12 to determine the order in which each convertible instrument would be evaluated for derivative classification.

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to the fair value of derivatives.

The Company’s revenue recognition reflects the updated accounting policies as per the requirements of ~~FASB~~ Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“Topic 606”). As sales are and have been primarily from providing healthcare services, the Company has no significant post-delivery obligations.

Revenue from providing healthcare and healthcare related services and product sales are recognized under Topic 606 in a manner that reasonably reflects the delivery of its products and services to customers in return for expected consideration and includes the following elements:

These five elements, as applied to the Company’s revenue category, are summarized below:

In arrangements where another party is involved in providing specified services to a customer, the Company evaluates whether it is the principal or agent. In this evaluation, the Company considers if the Company obtains control of the specified goods or services before they are transferred to the customer, as well as other indicators such as the party primarily responsible for fulfillment, inventory risk, and discretion in establishing price. For product sales where the Company is not the principal, the Company recognizes revenue on a net basis. For the periods presented, revenue for arrangements where the Company is the agent was not material.

Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue. Unearned revenue is included with accrued expenses in the accompanying condensed consolidated balance sheets.

Sales returns and allowances were insignificant for the ~~nine~~three months ended ~~May 31,~~November 30, 2023 and 2022. The Company does not provide unconditional right of return, price protection or any other concessions to its customers.

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented.

The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the requisite service period. The Company recognizes in the condensed consolidated statements of operations and comprehensive loss the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.

Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share. The calculations within these condensed consolidated financial statements have been retroactively adjusted to reflect the effects of the 1-for-10 reverse stock split that was effective on November 7, 2023. Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS assumes that all dilutive securities are converted. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were ~~12,266,165~~659,616 and ~~10,624,849~~1,860,950 options/warrants outstanding at ~~May 31,~~November 30, 2023 and 2022, respectively. In addition, at ~~May 31,~~November 30, 2023, there were outstanding convertible notes that could convert into ~~6,548,571~~3,786,454 shares of common stock and there were ~~911,392~~17,375 shares of common stock to be issued.

Due to the net loss incurred, potentially dilutive instruments would be anti-dilutive. Accordingly, diluted loss per share is the same as basic loss per share for all periods presented.

U.S. GAAP generally requires recognized revenue, expenses, gains and losses be included in net income. Certain statements, however, require entities to report specific changes in assets and liabilities, such as gain or loss on foreign currency translation, as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. The functional currency of the Company’s Canadian subsidiaries is the ~~CAD and the functional currency of the parent company is the United States dollar.~~CAD. Translation ~~losses~~gain of $~~738,022~~ ~~and $431,605~~108,976 for the ~~nine~~three months ended ~~May 31,~~November 30, 2023 and translation loss of $922,609 for the year ended August 31, ~~2022,~~2023, respectively, are classified as an item of other comprehensive ~~income~~loss in the stockholders’ equity section of the condensed consolidated balance sheet.

Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rates. As a result, amounts related to assets and liabilities reported on the condensed consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the condensed consolidated balance sheets.

ASC Topic 280, Segment Reporting, requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has two reportable ~~segments: healthcare services and product sales.~~segments. See Note 16.

Certain prior period amounts were reclassified to conform to the manner of presentation in the current period. These reclassifications had no effect on the net loss or ~~stockholders’~~shareholders’ equity.

Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying condensed consolidated financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

Amounts loaned to the Company by stockholders and officers of the Company are payable upon demand and unsecured. At ~~May 31,~~November 30, 2023 and August 31, ~~2022,~~2023, the amount due to related parties was $~~406,683~~458,266 and $~~478,897~~533,001, respectively. At ~~May 31,~~November 30, 2023, $~~325,247~~376,701 was non-interest bearing, $~~21,156~~nil bears interest at 6% per annum, and $~~60,280~~81,565 bears interest at 13.75% per annum. At August 31, ~~2022,~~2023, $~~394,405~~451,137 was non-interest bearing, $~~21,949~~21,267 bears interest at 6% per annum, and $~~62,543~~60,597 bears interest at 13.75% per annum.

Accounts receivables, net at ~~May 31,~~November 30, 2023 and August 31, ~~2022~~2023 consisted of the following:

Other receivables at ~~May 31,~~November 30, 2023 and August 31, ~~2022~~2023 consisted of the following:

	May 31,			August 31,			November 30, 2023			August 31, 2023
	2023			2022

Advance to corporation; accrues interest at 12% per annum; unsecured; due January 31, 2024, as amended		73,513			76,272
Advance to corporation; accrues interest at 12% per annum; secured by property and other assets of debtor; due September 1, 2023, as amended		531,589			551,536
Advance to corporation; accrues interest at 10% per annum; secured by assets of debtor; due September 1, 2023, as amended		440,978			457,527
Advance to corporation; accrues interest at 12% per annum; unsecured; due January 31, 2024, as amended.							$	73,630		$	73,900
Advance to corporation; accrues interest at 12% per annum; secured by property and other assets of debtor; due February 1, 2024, as amended.								532,433			534,386
Advance to corporation; accrues interest at 10% per annum; secured by assets of debtor; due February 1, 2024, as amended.								441,679			443,298
Total other receivables		1,046,080			1,085,335			1,047,742			1,051,584
Current portion		(1,046,080	)		(1,085,335	)		(1,047,742	)		(1,051,584	)
Long-term portion	$	-		$	-		$	-		$	-

Property and equipment at ~~May 31,~~November 30, 2023 and August 31, ~~2022~~2023 consisted of the following:

	May 31,			August 31,			November 30,			August 31,
	2023			2022			2023			2023
Land	$	441,079		$	457,631		$	441,780		$	443,400
Building		3,308,094			3,432,232			3,313,350			3,325,500
Leasehold improvements		836,967			868,375			838,297			841,371
Clinical equipment		1,876,665			1,927,639			1,909,678			1,916,681
Computer equipment		33,328			34,579			33,381			33,504
Office equipment		44,355			45,406			44,400			44,502
Furniture and fixtures		38,088			39,518			38,149			38,289
Property and equipment gross		6,578,576			6,805,380
Property and Equipment gross								6,619,035			6,643,247
Accumulated depreciation		(1,167,138	)		(1,004,732	)		(1,312,422	)		(1,253,209	)
Total	$	5,411,438		$	5,800,648		$	5,306,613		$	5,390,038

Depreciation expense for the ~~nine~~three months ended ~~May 31,~~November 30, 2023 and 2022 was $~~212,579~~72,604 and $~~408,589~~60,043, respectively.

Certain property and equipment have been used to secure notes payable (See Note 10).

Intangible assets at ~~May 31,~~November 30, 2023 and August 31, ~~2022~~2023 consisted of the following:

	May 31,			August 31,			November 30,			August 31,
	2023			2022			2023			2023
Land use rights	$	11,573,321		$	11,573,321		$	11,573,321		$	11,573,321
Intellectual property		7,479,428			8,059,386			7,487,410			7,497,746
Customer relationships		2,286,313			2,320,154			2,287,746			2,291,058
Brand names		1,918,327			1,990,314			1,921,375			1,928,421
Finite lived intangible assets, gross		23,257,389			23,943,175			23,269,852			23,290,546
Accumulated amortization		(6,561,026	)		(5,102,556	)		(7,565,634	)		(7,072,007	)
Total	$	16,696,363		$	18,840,619		$	15,704,218		$	16,218,539

Amortization expense for the ~~nine~~three months ended ~~May 31,~~November 30, 2023 and 2022 was $~~1,505,809~~499,800 and $~~1,940,845~~526,123, respectively.

Expected amortization expense of intangible assets over the next 5 years and thereafter is as follows:


Twelve Months Ending May 31,
Twelve Months Ending November 30,
2024	$	2,002,272	$	2,003,586
2025		2,002,272		1,820,324
2026		1,569,690		1,454,624
2027		1,374,673		1,208,004
2028		999,187		639,025
Thereafter		8,748,269		8,578,655
Total	$	16,696,363	$	15,704,218

Accrued expenses at ~~May 31,~~November 30, 2023 and August 31, ~~2022~~2023 consisted of the following:

	May 31,		August 31,		November 30,		August 31,
	2023		2022		2023		2023
Accrued liabilities	$	898,009	$	884,024	$	1,049,543	$	961,897
Accrued payroll		244,595		195,214		215,936		236,218
Unearned revenue		35,641		36,887		35,070		35,434
Accrued expenses	$	1,178,245	$	1,116,125
Accrued expense					$	1,300,549	$	1,233,549

Notes payable at ~~May 31,~~November 30, 2023 and August 31, ~~2022~~2023 consisted of the following:

	May 31,			August 31,		November 30,			August 31,
	2023			2022		2023			2023
Government loans issued under the Government of Canada’s Canada Emergency Business Account (“CEBA”) program (A).		88,217			91,526
Note payable to the Small Business Administration. The note bears interest at 3.75% per annum, requires monthly payments of $190 and is due 30 years from the date of issuance, and is secured by certain equipment of PRO-DIP.		40,320			40,320
Note payable dated December 3, 2018; accrues interest at 4.53% per annum; unsecured; annual payments of approximately $4,000; due December 31, 2028		28,542			29,614
Note payable received May 25, 2023, accruing interest at 18% per 3-months term, unsecured, with principal and interest due 3-month from loan issuance.		73,513			-
Note payable received May 10, 2023, accruing interest at 15% per 4-months term, unsecured, with principal and interest due 4-month from loan issuance.		147,026			-
Government loans issued under the Government of Canada’s Canada Emergency Business Account (“CEBA”) program (A).							88,356			88,680
Note payable to the Small Business Administration. The note bears interest at 3.75% per annum, requires monthly payments of $190 after 12 months from funding and is due 30 years from the date of issuance, and is secured by certain equipment of PRO-DIP.							40,320			40,320
Note payable dated December 3, 2018; accrues interest at 4.53% per annum; unsecured; annual payments of approximately $4,000; due December 2, 2028							28,589			28,693
Note payable received May 25, 2023, accruing interest at 18% per 3-months term, unsecured, with principal and interest due 3-month from loan issuance. The note was repaid on October 26, 2023.							-			73,900
Note payable received May 10, 2023, accruing interest at 15% per 4-months term, with a first priority security interest in all of Acenzia’s production equipment, with principal and interest due 4-month from loan issuance. The note was repaid on October 23, 2023.							-			110,850
Total government loans and notes payable		377,618			161,460		157,265			342,443
Less current portion		(312,672	)		-		(93,488	)		(277,405	)
Long-term portion	$	64,946		$	161,460	$	63,777		$	65,038

Future scheduled maturities of outstanding government loans and notes payable are as follows:

Schedule of Future Maturities Outstanding of ~~Government~~government Loans and Notes Payable


Twelve Months Ending May 31,
Twelve Months Ending November 30,
2024	$	312,672	$	93,488
2025		4,777		6,470
2026		4,777		6,469
2027		4,777		6,469
2028		4,777		6,469
Thereafter		45,838		37,900
Total	$	377,618	$	157,265

On December 14, 2021, Novo Integrated issued two convertible notes payable for a total of $16,666,666 (the “$16.66m+ convertible notes”) with each note having a face amount of $8,333,333. The $16.66m+ convertible notes accrue interest at 5% per annum and are due on June 14, 2023. The $16.66m+ convertible notes are secured by all assets of the Company. The $16.66m+ convertible notes are convertible at the option of the note holders to convert into shares of the Company’s common stock at $~~2.00~~20 per share.

In connection with the $16.66m+ convertible notes, the Company issued the note holders warrants to purchase a total of ~~5,833,334~~583,334 shares of the Company’s common stock at a price of $~~2.00~~20 per share. The warrants expire on December 14, 2025. The Company first determined the value of the $16.66m+ convertible notes and the fair value of the detachable warrants issued in connection with this transaction. The estimated value of the warrants of $7,680,156 was determined using the Black-Scholes option pricing model with the following assumptions:

The face amount of the $16.66m+ convertible notes of $16,666,666 was proportionately allocated to the $16.66m+ convertible notes and the warrants in the amount of $11,409,200 and $5,257,466, respectively. The amount allocated to the warrants of $5,257,466 was recorded as a discount to the convertible note and as additional paid in capital. The $16.66m+ convertible notes contained an original issue discount totaling $1,666,666 and the Company also incurred $1,140,000 in loan fees in connection with the $16.66m+ convertible notes. The combined total discount is $8,064,132 and will be amortized over the life of the $16.66m+ convertible notes.

On November 14, 2022, the $16.66m+ convertible notes were amended to provide the holders with conversion rights consisting of a conversion price to the first $1,000,000 of principal amount of each of the notes by the lower of (i) the conversion price in effect at such time and (ii) 82.0% of the lowest VWAP during the five (5) trading days immediately prior to a conversion date. The Company determined that the conversion features of these notes represented embedded derivatives since the notes are convertible into a variable number of shares upon conversion. On the same day, the Company recorded a derivative liability of $1,390,380. The fair value of the derivative liability was calculated using the Black-Scholes pricing model with the following assumptions:

The derivative was recorded as a discount on the convertible notes, but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the convertible notes.

During the ~~nine month period~~year ended ~~May~~August 31, 2023, an aggregate of $8,396,666 in principal and an aggregate of $32,559 in accrued interest were converted into ~~85,278,243~~8,527,835 shares of common stock issued to the $16.66m+ convertible note holders. As a result of the first $1,000,000 principal conversion, the derivative liability of $1,390,380 was extinguished and recognized to additional paid-in capital. As of ~~May 31,~~November 30, 2023 and August 31, ~~2022,~~2023, the derivative liability balance was $nil and $nil, respectively.

During the ~~nine month period~~year ended ~~May~~August 31, 2023, the Company amortized $4,241,429 of the debt discount and as of ~~May~~November 30, 2023 and August 31, 2023, the unamortized debt discount was $nil.

During the ~~nine month period~~year ended ~~May~~August 31, 2023, the Company made cash payments in the aggregate amount of $3,001,442 for the monthly Amortization Payment, $2,833,888 in principal and $167,554 in interest, pursuant to the terms and conditions of the $16.66m+ convertible notes. As of ~~May~~November 30, 2023 and August 31, 2023, the aggregate principal amount owed to the $16.66m+ convertible note holders is $nil.

On November 17, 2021, Terragenx, a 91% owned subsidiary of the Company, issued two convertible notes payable for a total of $1,875,000 (the “$1.875m convertible notes”) with each note having a face amount of $937,500. The $1.875m convertible notes accrue interest at 1% per annum and were due on May 17, 2022~~. On June 1, 2022, the Company made an aggregated payment in full of $948,874~~ ~~to Platinum Point Capital LLC, (the “Platinum Note”) including all principal~~ and interest owed, on one of the two convertible notes payable. As previously disclosed, on June 1, 2022, the Company and Jefferson Street Capital (“Jefferson”) agreed to extend the maturity date of one of the two convertible notes (the “Jefferson Note”),extended to November 29, ~~2022 with a principal amount face value of $946,875~~ ~~and interest rate that shall accrue at a rate equal to~~ 1~~% per annum.~~

2022. The $1.875m convertible notes are secured by all assets of the Company. The $1.875m convertible notes are convertible at the option of the note holders to convert into shares of the Company’s common stock at $~~3.35~~33.50 per share.

In connection with the $1.875m convertible notes, the Company issued the note holders warrants to purchase a total of ~~223,880~~22,388 shares of the Company’s common stock at a price of $~~3.35~~33.50 per share. The warrants expire on November 17, ~~2024~~.2024. The Company first determined the value of the $1.875m convertible notes and the fair value of the detachable warrants issued in connection with this transaction. The estimated value of the warrants of $351,240 and was determined using the Black-Scholes option pricing model with the following assumptions:

The face amount of the $1.875m convertible notes of $1,875,000 was proportionately allocated to the $1.875m convertible notes and the warrants in the amount of $1,579,176 and $295,824, respectively. The amount allocated to the warrants of $295,824 was recorded as a discount to the $1.875m convertible notes and as additional paid in capital. The $1.875m convertible notes contained an original issue discount totaling $375,000 and the Company also incurred $90,000 in loan fees in connection with these $1.875m convertible notes. The combined total discount iswas $760,824 and ~~will be~~ amortized over the life of the $1.875m convertible notes. The debt discount was fully amortized during the year ended August 31, 2022.

On ~~December 2,~~June 1, 2022, the Company paid the balance owed on one of two Terragenx $1.875 million convertible notes for an aggregate payment of $948,874, including all principal and interest owed. On June 1, 2022, the Company made an interest payment to one of two Terragenx $1.875 million convertible notes for a ~~partial cash~~ payment of $~~200,000~~192,188 and the note holder agreed to ~~Jefferson towards~~extend the maturity date to November 29, 2022 with a principal ~~owed on the Jefferson Note, leaving a balance~~amount face value of $~~746,875~~937,500~~. On December 13, 2022, the Company, Terra~~ and ~~Jefferson entered into~~interest rate that shall accrue at a ~~letter agreement. Pursuant~~rate equal to ~~the terms of the letter agreement, Jefferson agreed to forbear from entering an event of default under the terms of the Jefferson Note and related transaction documents until December 29, 2022.~~one percent per annum.

On June 1, 2022, the Company and one of the two Terragenx $1.875 million convertible note holders (the “Jefferson Note”) entered into that certain letter agreement pursuant to which the maturity date of the Jefferson Note was extended to November 29, 2022. On December 13, 2022, the Company, Terragenx and Jefferson entered into that certain letter agreement pursuant to which, among other things, Jefferson agreed to forbear from entering an Event of Default under the terms of the Jefferson Note and the related transaction documents until December 29, 2022. The Jefferson Note was not paid on December 29, 2022. Accordingly, on December 29, 2022, among other things, the Liquidated Damages Charge, in the aggregate amount of $186,719 was an addition to the Principal Amount due under the Jefferson Note.

~~During~~Effective February 16, 2023, aside from the ~~nine month period ended May 31,~~Liquidated Damages Charge, the Jefferson Note was paid in full. On August 21, 2023, ~~an aggregate~~Jefferson converted the additional Liquidated Damages Charge and the interest thereon. On August 21, 2023, as a result of $the conversion, the Company issued ~~746,875~~ ~~in principal and an aggregate of $10,208, in accrued interest were converted into~~ ~~8,907,097~~236,511 shares of common stock ~~issued~~ to Jefferson. ~~Effective February 16, 2023, the Jefferson Note was settled.~~

On February 23, 2023, the Company entered into a securities purchase agreement (the “Mast Hill SPA”) with Mast Hill Fund, L.P. (“Mast Hill”), pursuant to which the Company issued an 12% unsecured promissory note (the “Mast Hill Note”) with a maturity date of February 23, 2024 (the “Mast Hill Maturity Date”), in the principal sum of $573,000 (the “Mast Hill Principal Sum”). In addition, the Company issued a common stock purchase warrant for the purchase of up to ~~1,000,000~~100,000 shares of the Company’s common stock (the “Mast Hill Warrant”) to Mast Hill pursuant to the Mast Hill SPA. Pursuant to the terms of the Mast Hill Note, the Company agreed to pay the Mast Hill Principal Sum to Mast Hill and to pay interest on the principal balance at the rate of 12% per annum. The Mast Hill Note carries an OID of $57,300. Accordingly, on the closing date, Mast Hill paid the purchase price of $515,700 in exchange for the Mast Hill Note and the Mast Hill Warrant. Mast Hill may convert the Mast Hill Note into shares of the Company’s common stock at any time at a conversion price equal to $~~0.175~~1.75 per share, subject to adjustment as provided in the Mast Hill Note (including but not limited to certain price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions) as well as certain beneficial ownership limitations.

Pursuant to the terms of the Mast Hill Note, the Company agreed to pay accrued interest monthly as well as the Mast Hill Principal Sum as follows: (i) $57,300 on August 23, 2023, (ii) 57,300 on September 23, 2023, (iii) $57,300 on October 23, 2023, (iv) $100,000 on November 23, 2023, (v) $100,000 on December 23, 2023, (vi) $100,000 on January 23, ~~2023,~~2024, and (vii) all remaining amounts owed under the Mast Hill Note on the Mast Hill Maturity Date (each of the aforementioned payments are an “Amortization Payment”). If the Company fails to make any Amortization Payment, then Mast Hill shall have the right to convert the amount of such respective Amortization Payment into shares of common stock as provided in the Mast Hill Note at the lesser of (i) the then applicable conversion price under the Mast Hill Note, or (ii) 85% of the lowest VWAP of the Company’s common stock on any trading day during the five trading days prior to the respective conversion date.

The Company may prepay the Mast Hill Note at any time prior to the date that an Event of Default (as defined in the Mast Hill Note) occurs at an amount equal to the Mast Hill Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The Mast Hill Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the Mast Hill Note, Mast Hill Warrant, or Mast Hill SPA.

Upon the occurrence of any Event of Default, the Mast Hill Note shall become immediately due and payable and the Company shall pay to Mast Hill, in full satisfaction of its obligations hereunder, an amount equal to the Mast Hill Principal Sum then outstanding plus accrued interest multiplied by 125%. Upon the occurrence of an Event of Default, additional interest will accrue from the date of the Event of Default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

The Mast Hill Warrant is exercisable for five years from February 23, 2023, at an exercise price of $~~0.25~~2.50 per share, subject to adjustment as provided in the Mast Hill Warrant. The Mast Hill Warrant also contains certain cashless exercise provisions as well as price protection provisions providing for adjustment of the number of shares of the Company’s common stock issuable upon exercise of the Mast Hill Warrant and the exercise price in case of future dilutive offerings, subject to certain customary exempt transactions. The estimated value of the warrants of $86,327 was determined using the Black-Scholes option pricing model with the following assumptions:

As additional consideration for the purchase of the Mast Hill Note and pursuant to the terms of the Mast Hill SPA, on February 24, 2023, the Company issued ~~955,000~~95,500 restricted shares of common stock (the “Commitment Shares”) to Mast Hill at closing. The Mast Hill SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the Commitment Shares as well as the shares of common stock underlying the Mast Hill Note and the Mast Hill Warrant. In addition to the beneficial ownership limitations provided in the Mast Hill Note and the Mast Hill Warrant, the sum of the number of shares of common stock that may be issued under the Mast Hill SPA (including the Commitment Shares), the Mast Hill Note, and the Mast Hill Warrant shall be limited to 19.99% of the issued and outstanding common stock on the closing date (equal to ~~27,720,448~~2,772,045 shares) as further described in the Mast Hill SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

The principal amount of the $573,000 convertible notes was proportionately allocated to the convertible note, common stock issued, and the warrants in the amount of $403,710, $82,963, and $86,327, respectively. The amounts allocated to the equity issuances were recorded as a discount to the convertible note and as additional paid in capital. The convertible note contained an original issue discount totaling $57,300 and the Company also incurred $70,465 in loan fees in connection with the convertible note. The combined total discount is $297,055 and will be amortized over the life of the convertible note. The debt discount was fully amortized during the year ended August 31, 2023.

During the ~~nine months~~year ended ~~May~~August 31, 2023, the ~~Company amortized~~principal amount of $~~78,944~~573,000, interest of $6,028 and other fees of $1,750 were converted into 522,777 common stock of the ~~debt discount~~Company. As of November 30, 2023 and ~~as May~~August 31, 2023, the ~~unamortized debt discount was~~aggregate principal amount owed under the Mast Hill Note is $~~218,111~~nil.

On September 18, 2023, Mast Hill fully exercised all warrants granted under the terms and conditions of the $573,000 Mast Hill Warrant Agreement, dated February 23, 2023. Under certain cashless exercise provisions as well as price protection provisions providing for adjustment of the number of shares of the Company’s common stock issuable upon exercise of the Mast Hill Warrant, the Company issued 53,567 restricted shares of the Company’s common stock.

On March 21, 2023, the Company entered into a securities purchase agreement (the “SPA”) with FirstFire Global Opportunities Fund, LLC (“FirstFire”) pursuant to which the Company issued an 12% unsecured promissory note (the “2023 FirstFire Note”) with a maturity date of March 21, 2024, in the principal sum of $573,000 (the “Principal Sum”). In addition, the Company issued a common stock purchase warrant for the purchase of up to ~~1,000,000~~100,000 shares of the Company’s common stock (the “2023 FirstFire Warrant”) to FirstFire pursuant to the SPA. Pursuant to the terms of the 2023 FirstFire Note, the Company agreed to pay the Principal Sum to FirstFire and to pay interest on the principal balance at the rate of 12% per annum. The 2023 FirstFire Note carries an OID of $57,300. Accordingly, on the closing date, FirstFire paid the purchase price of $515,700 in exchange for the 2023 FirstFire Note and the 2023 FirstFire Warrant. FirstFire may convert the 2023 FirstFire Note into the Company’s common stock at any time at a conversion price equal to $~~0.175~~1.75 per share, subject to adjustment as provided in the 2023 FirstFire Note (including but not limited to certain price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions) as well as certain beneficial ownership limitations.

Pursuant to the terms of the 2023 FirstFire Note, the Company agreed to pay accrued interest monthly as well as the Principal Sum as follows: (i) $57,300 on September 21, 2023, (ii) 57,300 on October 21, 2023, (iii) $57,300 on November 21, 2023, (iv) $100,000 on December 21, 2023, (v) $100,000 on January 21, 2024, (vi) $100,000 on February 21, 2024, and (vii) all remaining amounts owed under the 2023 FirstFire Note on the maturity date (each of the aforementioned payments are an “Amortization Payment”). If the Company fails to make any Amortization Payment, then FirstFire shall have the right to convert the amount of such respective Amortization Payment into shares of common stock as provided in the 2023 FirstFire Note at the lesser of (i) the then applicable conversion price under the 2023 FirstFire Note or (ii) 85% of the lowest VWAP of the Company’s common stock on any trading day during the five trading days prior to the respective conversion date.

The Company may prepay the 2023 FirstFire Note at any time prior to the date that an event of default (as provided in the 2023 FirstFire Note) occurs at an amount equal to the Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The 2023 FirstFire Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the 2023 FirstFire Note, the 2023 FirstFire Warrant, or SPA.

Upon the occurrence of any event of default, the 2023 FirstFire Note shall become immediately due and payable and the Company shall pay to FirstFire, in full satisfaction of its obligations hereunder, an amount equal to the Principal Sum then outstanding plus accrued interest multiplied by 125% (the “Default Amount”). Upon the occurrence of an Event of Default, additional interest will accrue from the date of the Event of Default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

The 2023 FirstFire Warrant is exercisable for five years from March 21, 2023, at an exercise price of $~~0.25~~2.50 per share, subject to adjustment as provided in the 2023 FirstFire Warrant. The 2023 FirstFire Warrant also contains certain cashless exercise provisions as well as price protection provisions providing for adjustment of the number of shares of common stock issuable upon exercise of the 2023 FirstFire Warrants and the exercise price in case of future dilutive offerings, subject to certain customary exempt transactions. The estimated value of the warrants of $93,811 was determined using the Black-Scholes option pricing model with the following assumptions:

As additional consideration for the purchase of the 2023 FirstFire Note and pursuant to the terms of the SPA, on March 22, 2023, the Company issued ~~955,000~~95,500 restricted shares of the Company’s common stock (the “Commitment Shares”) to FirstFire at closing. The SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the Commitment Shares as well as the shares of common stock underlying the 2023 FirstFire Note and the 2023 FirstFire Warrant. In addition to the beneficial ownership limitations provided in the 2023 FirstFire Note and the 2023 FirstFire Warrant, the sum of the number of shares of common stock that may be issued under the SPA (including the Commitment Shares), the 2023 FirstFire Note, and 2023 FirstFire Warrant shall be limited to ~~10,000,000~~1,000,000 shares as further described in the SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

The principal amount of the $573,000 convertible notes was proportionately allocated to the convertible note, common stock issued, and the warrants in the amount of $389,057, $90,132, and $93,811, respectively. The amounts allocated to the equity issuances were recorded as a discount to the convertible note and as additional paid in capital. The convertible note contained an original issue discount totaling $57,300 and the Company also incurred $35,628 in loan fees in connection with the convertible note.

The effective conversion price was determined to be $~~0.1188~~1.188 based on the allocation of the principal amount and the number of shares to be received upon conversion. As the stock price at the issuance date of $~~0.1390~~1.390 was greater than the effective conversion price, it was determined that there was a beneficial conversion feature (“BCF”). The Company recognized the beneficial conversion feature of $66,068, equal to the intrinsic value of the conversion option, as a discount to the convertible note and as additional paid in capital.

The combined total discount is $342,938 and will be amortized over the life of the convertible note. During the ~~nine~~three months ended ~~May 31,~~November 30, 2023, the Company amortized $~~66,526~~190,209 of the debt discount and as ~~May 31,~~November 30, 2023, the unamortized debt discount was $~~276,412~~nil.

During the three months ended November 30, 2023, the principal amount of $573,000 and interest of $4,521 were converted into 519,845 common stock of the Company. As of November 30, 2023, the aggregate principal amount owed under the 2023 FirstFire Note is $nil.

On October 12, 2023, FirstFire fully exercised all warrants granted under the terms and conditions of the $573,000 FirstFire Warrant Agreement, dated March 21, 2023. Under certain cashless exercise provisions as well as price protection provisions providing for adjustment of the number of shares of the Company’s common stock issuable upon exercise of the FirstFire Warrant, the Company issued 53,532 restricted shares of the Company’s common stock.

On June 20, 2023, the Company entered into a securities purchase agreement (the “MH $445,000 SPA”) with Mast Hill, pursuant to which the Company issued an 12% unsecured promissory note (the “MH $445,000 Note”) with a maturity date of June 20, 2024 (the “MH $445,000 Maturity Date”), in the principal sum of $445,000 (the “MH $445,000 Principal Sum”). In addition, the Company issued a common stock purchase warrant for the purchase of up to 77,662 shares of the Company’s common stock (the “MH $445,000 Warrant”) to Mast Hill pursuant to the MH $445,000 SPA. Pursuant to the terms of the MH $445,000 Note, the Company agreed to pay the MH $445,000 Principal Sum to Mast Hill and to pay interest on the principal balance at the rate of 12% per annum. The MH $445,000 Note carries an OID of $44,500. Accordingly, on the Closing Date (as defined in the MH $445,000 SPA), Mast Hill paid the purchase price of $400,500 in exchange for the MH $445,000 Note and MH $445,000 Warrant. Mast Hill may convert the MH $445,000 Note into the Company’s common stock at any time at a conversion price equal to $1.75 per share, subject to adjustment as provided in the MH $445,000 Note (including but not limited to certain price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions), as well as certain beneficial ownership limitations.

Pursuant to the terms of the MH $445,000 Note, the Company agreed to pay accrued interest monthly as well as the MH $445,000 Principal Sum as follows: (i) $44,500 on December 20, 2023, (ii) $44,500 on January 20, 2024, (iii) $44,500 on February 20, 2024, (iv) $77,661 on March 20, 2024, (v) $77,661 on April 20, 2024, (vi) $77,661 on May 20, 2024, and (vii) all remaining amounts owed under the MH $445,000 Note on the MH $445,000 Maturity Date (each of the aforementioned payments are an “MH $445,000 Amortization Payment”). If the Company fails to make any MH $445,000 Amortization Payment, then Mast Hill shall have the right to convert the amount of such respective MH $445,000 Amortization Payment into shares of common stock as provided in the MH $445,000 Note at the lesser of (i) the then applicable conversion price under the MH $445,000 Note or (ii) 85% of the lowest VWAP of the common stock on any trading day during the five trading days prior to the respective conversion date.

The Company may prepay the MH $445,000 Note at any time prior to the date that an Event of Default (as defined in the Note) (each an “MH $445,000 Event of Default”) occurs at an amount equal to the MH $445,000 Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The MH $445,000 Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the MH $445,000 Note, the MH $445,000 Warrant, or the MH $445,000 SPA.

Upon the occurrence of any MH $445,000 Event of Default, the MH $445,000 Note shall become immediately due and payable and the Company shall pay to Mast Hill, in full satisfaction of its obligations hereunder, an amount equal to the MH $445,000 Principal Sum then outstanding plus accrued interest multiplied by 125%. Upon the occurrence of an MH $445,000 Event of Default, additional interest will accrue from the date of the MH $445,000 Event of Default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

The MH $445,000 Warrant is exercisable for five years from June 20, 2023, at an exercise price of $2.50 per share, subject to adjustment as provided in the MH $445,000 Warrant. The MH $445,000 Warrant also contains certain cashless exercise provisions, as well as price protection provisions providing for adjustment of the number of shares of common stock issuable upon exercise of the MH $445,000 Warrant and the exercise price in case of future dilutive offerings, subject to certain customary exempt transactions. The estimated value of the warrants of $77,856 was determined using the Black-Scholes option pricing model with the following assumptions:

As additional consideration for the purchase of the MH $445,000 Note and pursuant to the terms of the MH $445,000 SPA, the Company issued 74,167 restricted shares of the Company’s common stock (the “MH $445,000 Commitment Shares”) to Mast Hill at closing. The MH $445,000 SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the MH $445,000 Commitment Shares as well as the shares of common stock underlying the MH $445,000 Note and MH $445,000 Warrant. In addition to the beneficial ownership limitations provided in the MH $445,000 Note and MH $445,000 Warrant, the sum of the number of shares of common stock that may be issued under the MH $445,000 SPA (including the MH $445,000 Commitment Shares), MH $445,000 Note, and MH $445,000 Warrant shall be limited to 1,772,045 as further described in the MH $445,000 SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

The principal amount of the $445,000 convertible notes was proportionately allocated to the convertible note, common stock issued, and the warrants in the amount of $292,351, $74,793, and $77,856, respectively. The amounts allocated to the equity issuances were recorded as a discount to the convertible note and as additional paid in capital. The convertible note contained an original issue discount totaling $44,500 and the Company also incurred $39,904 in loan fees in connection with the convertible note.

The effective conversion price was determined to be $1.150 based on the allocation of the principal amount and the number of shares to be received upon conversion. As the stock price at the issuance date of $1.535 was greater than the effective conversion price, it was determined that there was a beneficial conversion feature (“BCF”). The Company recognized the beneficial conversion feature of $97,978, equal to the intrinsic value of the conversion option, as a discount to the convertible note and as additional paid in capital.

The combined total discount is $335,031 and will be amortized over the life of the convertible note. During the three months ended November 30, 2023, the Company amortized $83,300 of the debt discount and as at November 30, 2023, the unamortized debt discount was $185,823.

Specific to the MH $445,000 Note, on July 20, 2023, the Company made a monthly interest payment of $4,243. On August 21, 2023, the Company made a monthly interest payment of $4,535. On September 21, 2023, the Company made a monthly interest payment of $4,535. On October 20, 2023, the Company made a monthly interest payment of $4,389.

On October 23, 2023, Mast Hill fully exercised all warrants granted under the terms and conditions of the $445,000 Mast Hill Warrant Agreement, dated June 20, 2023. Under certain cashless exercise provisions as well as price protection provisions providing for adjustment of the number of shares of the Company’s common stock issuable upon exercise of the Mast Hill Warrant, the Company issued 138,703 restricted shares of the Company’s common stock.

On September 12, 2023, the Company entered into a securities purchase agreement (the “September 2023 Mast Hill SPA”) with Mast Hill Fund, L.P. (“Mast Hill”), pursuant to which the Company issued an 12% promissory note (the “September 2023 Mast Hill Note”) with a maturity date of September 12, 2024 (the “September 2023 Mast Hill Maturity Date”), in the principal sum of $3,500,000. Pursuant to the terms of the September 2023 Mast Hill Note, the Company agreed to pay the principal sum to Mast Hill and to pay interest on the principal balance at the rate of 12% per annum. The September 2023 Mast Hill Note carries an original issue discount (“OID”) of $350,000. Accordingly, on the closing date, Mast Hill paid the purchase price of $3,150,000 in exchange for the September 2023 Mast Hill Note. Mast Hill may convert the September 2023 Mast Hill Note into shares of the Company’s common stock at any time at a conversion price equal to the lesser of (i) $4.50 or (ii) 91.5% of the lowest volume weighted average price of the Company’s common stock on any trading day during the five trading day period prior to the respective conversion date, subject to adjustment as provided in the September 2023 Mast Hill Note (including but not limited to price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions) as well as beneficial ownership limitations.

Pursuant to the terms of the September 2023 Mast Hill Note, the Company agreed to pay the principal sum and accrued interest as follows: (i) all accrued interest on December 12, 2023, (ii) $350,000 plus accrued interest on March 12, 2024, (iii) $350,000 plus accrued interest on April 12, 2024, (iv) $350,000 plus accrued interest on May 12, 2024, (v) $595,000 plus accrued interest on June 12, 2024, (vi) $595,000 plus accrued interest on July 12, 2024, (vii) $595,000 plus accrued interest on August 12, 2024, and (viii) all remaining amounts owed under the September 2023 Mast Hill Note on the September 2023 Mast Hill Maturity Date (each of the aforementioned payments is an “Amortization Payment”). If the Company fails to make any Amortization Payment, then Mast Hill will have the right to convert the amount of such respective Amortization Payment into shares of common stock as provided in the September 2023 Mast Hill Note at the lesser of (i) the then applicable conversion price under the September 2023 Mast Hill Note or (ii) 85% the lowest volume weighted average price of the Company’s common stock on any trading day during the five trading day period prior to the respective conversion date.

The Company may prepay the September 2023 Mast Hill Note at any time prior to the date that an Event of Default (as defined in the Note) occurs at an amount equal to the principal sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The September 2023 Mast Hill Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the September 2023 Mast Hill Note or September 2023 Mast Hill SPA.

Upon the occurrence of any Event of Default, the September 2023 Mast Hill Note shall become immediately due and payable and the Company will pay to Mast Hill an amount equal to the principal sum then outstanding plus accrued interest multiplied by 125%. Upon the occurrence of an Event of Default, additional interest will accrue from the date of the Event of Default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

The September 2023 Mast Hill SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the common stock underlying the September 2023 Mast Hill Note. Further, pursuant to the September 2023 Mast Hill SPA, the Company agreed to transfer its rights to the charges/mortgages evidenced by Instrument Nos. CE925256 (in the amount of CDN$1,600,000) and CE888785 (in the amount of CDN$1,800,000) on the property located at 1580 Rossi Drive, Tecumseh, Ontario, Canada, to Mast Hill as security for the Company’s repayment of the September 2023 Mast Hill Note. In addition to the beneficial ownership limitations provided in the September 2023 Mast Hill Note, the sum of the number of shares of common stock that may be issued under the September 2023 Mast Hill SPA and September 2023 Mast Hill Note shall be limited to 1,772,045 as further described in the September 2023 Mast Hill SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

The Company’s subsidiary, Acenzia Inc. (“Acenzia”), entered into a guaranty with Mast Hill on September 12, 2023. Acenzia guaranteed the repayment of the September 2023 Mast Hill Note and granted Mast Hill a security interest in Acenzia’s assets, including but not limited to, the property located at 1580 Rossi Drive, Tecumseh, Ontario, Canada.

The Company determined that the conversion features of these notes represented embedded derivatives since the notes are convertible into a variable number of shares upon conversion. On September 12, 2023, the Company recorded a derivative liability of $3,071,653. The fair value of the derivative liability was calculated using the Black-Scholes pricing model with the following assumptions:

The derivative was recorded as a discount on the convertible notes, but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the convertible note.

As at November 30, 2023, the fair value of the derivative liability was $2,487,726 and for the three months ended November 30, 2023, the Company recorded a gain of $583,927 from the change in fair value of derivative liability as non-operating income in the condensed consolidated statements of operations and comprehensive loss. The fair value of the derivative liability was calculated using the Black-Scholes pricing model with the following assumptions:

The September 2023 Mast Hill Note contained a discount on note of $3,500,000. The total discount will be amortized over the life of the September 2023 Mast Hill Note.

During the three months ended November 30, 2023, the Company amortized $755,464 of the debt discount and as November 30, 2023, the unamortized debt discount was $2,744,536.

On September 18, 2023, the Company entered into a securities purchase agreement (the “September 2023 FirstFire SPA”) with FirstFire Global Opportunities Fund, L.P. (“FirstFire”), pursuant to which the Company issued an 12% promissory note (the “September 2023 FirstFire Note”) with a maturity date of September 18, 2024, in the principal sum of $277,778. Pursuant to the terms of the September 2023 FirstFire Note, the Company agreed to pay the principal sum to FirstFire and to pay interest on the principal balance at the rate of 12% per annum. The September 2023 FirstFire Note carries an OID of $27,778. Accordingly, on the closing date, FirstFire paid the purchase price of $250,000 in exchange for the September 2023 FirstFire Note. FirstFire may convert the September 2023 FirstFire Note into the Company’s common stock, at any time at a conversion price equal to the lesser of (i) $4.50 or (ii) 91.5% of the lowest volume weighted average price of the Company’s common stock on any trading day during the five trading day period prior to the respective conversion date, subject to adjustment as provided in the September 2023 FirstFire Note (including but not limited to price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions) as well as beneficial ownership limitations.

Pursuant to the terms of the September 2023 FirstFire Note, the Company agreed to pay the principal sum and accrued interest as follows: (i) all accrued interest on December 18, 2023, (ii) $27,778 plus accrued interest on March 18, 2024, (iii) $27,778 plus accrued interest on April 18, 2024, (iv) $27,778 plus accrued interest on May 18, 2024, (v) $47,222 plus accrued interest on June 18, 2024, (vi) $47,222 plus accrued interest on July 18, 2024, (vii) $47,222 plus accrued interest on August 18, 2024, and (viii) all remaining amounts owed under the September 2023 FirstFire Note on the maturity date (each of the aforementioned payments is a “FirstFire Amortization Payment”). If the Company fails to make any FirstFire Amortization Payment, then FirstFire shall have the right to convert the amount of such respective FirstFire Amortization Payment into shares of common stock as provided in the September 2023 FirstFire Note at the lesser of (i) the then applicable conversion price under the September 2023 FirstFire Note or (ii) 85% the lowest volume weighted average price of the Company’s common stock on any trading day during the five trading day period prior to the respective conversion date.

The Company may prepay the September 2023 FirstFire Note at any time prior to the date that an event of default occurs at an amount equal to the principal sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The September 2023 FirstFire Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the September 2023 FirstFire Note or September 2023 FirstFire SPA.

Upon the occurrence of any event of default, the September 2023 FirstFire Note shall become immediately due and payable and the Company shall pay to FirstFire, in full satisfaction of its obligations hereunder, an amount equal to the principal sum then outstanding plus accrued interest multiplied by 125%. Upon the occurrence of an event of default, additional interest will accrue from the date of the event of default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

The September 2023 FirstFire SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the common stock underlying the September 2023 FirstFire Note. In addition to the beneficial ownership limitations provided in the September 2023 FirstFire Note, the sum of the number of shares of common stock that may be issued under the September 2023 FirstFire SPA and September 2023 FirstFire Note shall be limited to 480,156 as further described in the September 2023 FirstFire SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

Acenzia entered into a guaranty with FirstFire on September 18, 2023. Acenzia guaranteed the repayment of the September 2023 FirstFire Note and granted FirstFire a security interest in Acenzia’s assets, including but not limited to the property located at 1580 Rossi Drive, Tecumseh, Ontario, Canada, which is junior in priority to the security interest granted by Acenzia to FirstFire.

The Company determined that the conversion features of these notes represented embedded derivatives since the notes are convertible into a variable number of shares upon conversion. On September 18, 2023, the Company recorded a derivative liability of $200,136. The fair value of the derivative liability was calculated using the Black-Scholes pricing model with the following assumptions:

The derivative was recorded as a discount on the convertible notes, but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the convertible note.

As at November 30, 2023, the fair value of the derivative liability was $198,534 and for the three months ended November 30, 2023, the Company recorded a gain of $1,602 from the change in fair value of derivative liability as non-operating income in the condensed consolidated statements of operations and comprehensive loss. The fair value of the derivative liability was calculated using the Black-Scholes pricing model with the following assumptions:

The September 2023 FirstFire Note contained a discount on note of $235,414. The total discount will be amortized over the life of the September 2023 FirstFire Note.

During the three months ended November 30, 2023, the Company amortized $46,954 of the debt discount and as November 30, 2023, the unamortized debt discount was $188,460.

On September 30, 2013, the Company issued five debentures totaling CAD$6,402,512 (approximately $6,225,163 on September 30, 2013) in connection with the acquisition of certain business assets. The holders of the debentures are current stockholders, officers and/or affiliates of the Company. The debentures are secured by all the assets of the Company, accrue interest at 8% per annum and were originally due on September 30, 2016. On December 2, 2017, the debenture holders agreed to extend the due date to September 30, 2019. On September 27, 2019, the debenture holders agreed to extend the due date to September 30, ~~2021~~.2021. On November 2, 2021, the debenture holders agreed to extend the due date to December 1, 2023.

On January 31, 2018, the debenture holders converted 75% of the debenture value of $3,894,809 plus accrued interest of $414,965 into 1,047,588 shares of the Company’s common stock. The per share price used for the conversion of each debenture was $4.11 which was determined as the average price of the five trading days immediately preceding the date of conversion with a 10% premium added to the calculated per share price.

On July 21, 2020, the Company made a partial repayment of a debenture due to a related party of $267,768.

At ~~May 31,~~November 30, 2023 and August 31, ~~2022,~~2023, the amount of debentures outstanding was $~~912,025~~913,474 and $~~946,250~~916,824, respectively.

The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company discounts lease payments based on an estimate of its incremental borrowing rate.

The Company leases its corporate office space and certain facilities under long-term operating leases expiring through fiscal year 2031.

The table below presents the lease related assets and liabilities recorded on the Company’s condensed consolidated balance sheets as of ~~May 31,~~November 30, 2023 and August 31, ~~2022:~~2023:

		May 31,		August 31,			November 30,		August 31,
		2023		2022			2023		2023
	Classification on Balance Sheet					Classification on Balance Sheet
Assets
Operating lease assets	Operating lease right of use assets	$	2,096,376	$	2,673,934	Operating lease right of use assets	$	1,870,204	$	1,983,898
Total lease assets		$	2,096,376	$	2,673,934		$	1,870,204	$	1,983,898

Liabilities
Current liabilities
Operating lease liability	Current operating lease liability	$	428,951	$	582,088	Current operating lease liability	$	413,506	$	415,392
Noncurrent liabilities
Operating lease liability	Long-term operating lease liability		1,786,961		2,185,329	Long-term operating lease liability		1,585,667		1,693,577
Total lease liability		$	2,215,912	$	2,767,417		$	1,999,173	$	2,108,969

Twelve Months Ending May 31,
Twelve Months Ending November 30,
2024	$	601,370		$	568,536
2025		524,288			494,272
2026		502,177			512,495
2027		495,008			417,394
2028		295,839			223,188
Thereafter		358,487			254,641
Total payments		2,777,169			2,470,526
Amount representing interest		(561,257	)		(471,353	)
Lease obligation, net		2,215,912			1,999,173
Less lease obligation, current portion		(428,951	)		413,506
Lease obligation, long-term portion	$	1,786,961		$	1,585,667

During the ~~nine~~three months ended ~~May 31,~~November 30, 2023, the Company did not enter into any new lease obligation.

The lease expense for the ~~nine~~three months ended ~~May 31,~~November 30, 2023 and 2022 was $~~624,246~~149,877 and $~~567,772~~209,846, respectively. The cash paid under operating leases for the ~~nine~~three months ended ~~May 31,~~November 30, 2023 and 2022 was $~~604,387~~145,545 and $~~556,445~~202,465, respectively. At ~~May 31,~~November 30, 2023, the weighted average remaining lease terms were ~~2.86~~3.88 years and the weighted average discount rate was 8%.

The Company leases certain equipment under lease contracts that are accounted for as finance leases. If the contracts meet the criteria for a finance lease, the related equipment underlying the lease contract is capitalized and amortized over its estimated useful life. If the cost of the equipment is not available, the Company calculates the cost by taking the present value of the lease payments using an implicit borrowing rate of 5%.

The net book value of equipment under finance leases included in property and equipment on the accompanying condensed consolidated balance sheets at ~~May 31,~~November 30, 2023 and August 31, ~~2022~~2023 is as follows:

	May 31,			August 31,			November 30,		August 31,
	2023			2022			2023		2023
Cost	$	209,457		$	209,457		$	209,457	$	209,457
Accumulated amortization		(209,457	)		(192,347	)		(209,457)		(209,457)
Net book value	$	-		$	17,110		$	-	$	-

Twelve Months Ending May 31,
Twelve Months Ending November 30,
2024	$	14,054		$	8,973
Total payments		14,054			8,973
Amount representing interest		(240	)		(66	)
Lease obligation, net		13,814			8,907
Less lease obligation, current portion		(13,814	)		(8,907	)
Lease obligation, long-term portion	$	-		$	-

On November 6, 2023, the Company effectuated a 1-for-10 reverse stock split (the “Reverse Stock Split”) effective immediately after the close of trading on the Nasdaq Capital Market (“Nasdaq”) and the Company’s common stock began trading on Nasdaq on a Reverse Stock Split-adjusted basis on November 7, 2023. As a result of the Reverse Stock Split, every 10 pre-split shares of common stock outstanding became one share of common stock, with fractional shares rounded up to the next higher whole share. The Reverse Stock Split did not affect the number of authorized shares of common stock, the par value of the common stock, or modify any rights or preferences of shares of the Company’s common stock. Proportionate adjustments will be made to the exercise prices and the number of shares underlying the Company’s outstanding equity awards and warrants, as applicable.

The Company has authorized 1,000,000 shares of $0.001 par value convertible preferred stock. At ~~May 31,~~November 30, 2023 and August 31, ~~2022,~~2023, there were 0 and 0 convertible preferred shares issued and outstanding, respectively.

The Company has authorized 499,000,000 shares of $0.001 par value common stock. At ~~May 31,~~November 30, 2023 and August 31, ~~2022,~~2023, there were ~~144,857,518~~17,291,192 and ~~31,180,603~~15,759,325 common shares issued and outstanding, respectively.

During the ~~nine months~~three-month period ended ~~May 31,~~November, 2023, the Company issued common stock as follows:

As of ~~May 31,~~November 30, 2023, in connection with the acquisition of ~~Terragenx,~~ 1285 Canada and Poling Taddeo Hovius Physiotherapy Professional Corp, the Company has allotted and is obligated to issue ~~911,392~~17,375 shares of the Company’s common stock. As of November 30, 2023, the fair value of the shares to be issued is $44,443.

On September 8, 2015, the Company’s Board of Directors and stockholders holding a majority of the Company’s outstanding common stock approved the Novo Integrated Sciences, Inc. 2015 Incentive Compensation Plan (the “2015 Plan”), which ~~authorized~~authorizes the issuance of up to ~~500,000~~50,000 shares of common stock to employees, officers, directors or independent consultants of the Company, provided that no person can be granted shares under the 2015 Plan for services related to raising capital or promotional activities. ~~As of May 31,~~During the period ended November 30, 2023, the Company did not grant any awards under the 2015 ~~Plan had~~ ~~498,750~~ ~~shares available for award; however, the~~Plan. The Company does not intend to issue any additional grants under the 2015 Plan.

On January 16, 2018, the Company’s Board of Directors and stockholders holding a majority of the Company’s outstanding common stock approved the Novo Integrated Sciences, Inc. 2018 Incentive Compensation Plan (the “2018 Plan”). Under the 2018 Plan, ~~1,000,000~~100,000 shares of common stock are authorized for the grant of stock options and the issuance of restricted stock, stock appreciation rights, phantom stock and performance awards to officers, directors, employees and eligible consultants to the Company or its subsidiaries. ~~As of May 31,~~During the period ended November 30, 2023, the 2018 Plan had ~~864,900~~86,490 shares available for award; however, the Company does not intend to issue any additional grants under the 2018 Plan.

On February 9, 2021, the Company’s Board of Directors and stockholders holding a majority of the Company’s outstanding common stock approved the Novo Integrated Sciences, Inc. 2021 Equity Incentive Plan (the “2021 Plan”). Under the 2021 Plan, a total of ~~4,500,000~~450,000 shares of common stock are authorized for issuance pursuant to the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares or other cash- or stock-based awards to officers, directors, employees and eligible consultants to the Company or its subsidiaries. Subject to adjustment as provided in the 2021 Plan, the maximum aggregate number of shares that may be issued under the 2021 Plan ~~is eligible to~~may be cumulatively increased on January 1, 2022 and on each subsequent January 1 through and including January 1, ~~2023,~~2024, by a number of shares equal to the smaller of (i) 3% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or (ii) an amount determined by our Board of Directors. The Company chose not to cumulatively increase the shares authorized for issuance under the 2021 Plan, effective January 1, 2022 and January 1, 2023. As of ~~May 31,~~November 30, 2023, the 2021 Plan had ~~1,754,665~~75,463 shares available for award; however, the Company does not intend to issue any additional grants under the 2021 Plan.

On July 26, 2023 and September 29, 2023, the Company’s Board of Directors and stockholders, respectively, approved the Novo Integrated Sciences, Inc. 2023 Equity Incentive Plan (the “2023 Plan”). Under the 2023 Plan, a total of 2,500,000 shares of common stock are authorized for issuance pursuant to the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares or other cash- or stock-based awards to officers, directors, employees and eligible consultants to the Company or its subsidiaries. As of November 30, 2023, the 2023 Plan had 2,500,000 shares available for award.

					Weighted								Weighted
			Weighted		Average						Weighted		Average
			Average		Remaining		Aggregate				Average		Remaining		Aggregate
	Options		Exercise		Contractual		Intrinsic		Options		Exercise		Contractual		Intrinsic
	Outstanding		Price		Life		Value		Outstanding		Price		Life		Value
Outstanding, August 31, 2022		2,164,235		2.15		2.53	$	140,577
Outstanding, August 31, 2023										371,423		11.44		3.98	$	16,000
Granted		2,000,000		0.13		6.00				-
Forfeited		-								-
Exercised		-								-
Outstanding, May 31, 2023		4,164,235		1.19		3.78	$	-
Exercisable, May 31, 2023		4,164,235	$	1.19		3.78	$	-
Outstanding, November 30, 2023										371,423		11.44		3.73	$	-
Exercisable, November 30, 2023										371,423	$	11.44		3.73	$	-

The exercise price for stock options outstanding at ~~May 31,~~November 30, 2023:

Outstanding	Outstanding			Exercisable				Outstanding			Exercisable
Number of	Number of	Exercise		Number of		Exercise		Number of	Exercise		Number of		Exercise
Options	Options	Price		Options		Price		Options	Price		Options		Price
	227,155	$	1.33		227,155	$	1.33	22,715	$	13.30		22,715	$	13.30
	992,000		1.60		992,000		1.60	54,200		16.00		54,200		16.00
	48,000		1.87		48,000		1.87	4,800		18.70		4,800		18.70
	775,000		3.00		775,000		3.00	77,500		30.00		77,500		30.00
	72,600		3.80		72,600		3.80	7,260		38.00		7,260		38.00
	10,000		5.00		10,000		5.00	1,000		50.00		1,000		50.00
	39,480		1.90		39,480		1.90	3,948		19.00		3,948		19.00
	2,000,000		0.13		2,000,000		0.13	200,000		1.32		200,000		1.32
	4,164,235				4,164,235			371,423				371,423

~~For options granted during the nine months ended May 31, 2023 where the exercise price equaled the stock price at the date of the grant, the weighted-average fair value of such options was $0.13, and the weighted-average exercise price of such options was $0.13~~. No options were granted during the ~~nine~~three months ended ~~May 31,~~November 30, 2023 ~~where the exercise price was less than the stock price at the date of grant or the exercise price was greater than the stock price at the date of grant.~~and 2022.

~~For options granted during the nine months ended May 31, 2022 where the exercise price equaled the stock price at the date of the grant, the weighted-average fair value of such options was $1.37, and the weighted-average exercise price of such options was $1.41~~. No options were granted during the nine months ended May 31, 2022 where the exercise price was less than the stock price at the date of grant or the exercise price was greater than the stock price at the date of grant.

The fair value of the stock options is being amortized to stock option expense over the vesting period. The Company recorded stock option expense of $~~385,335~~nil and $~~289,892~~ 60,887during the ~~nine~~three months ended ~~May 31,~~November 30, 2023 and 2022, respectively. At ~~May 31,~~November 30, 2023, the unamortized stock option expense was $0nil.

The assumptions used in calculating the fair value of options granted using the Black-Scholes option-pricing model for options granted are as follows for the options granted during the nine months ended May 31, 2023 and 2022:

						Weighted									Weighted
				Weighted		Average							Weighted		Average
				Average		Remaining		Aggregate					Average		Remaining		Aggregate
	Warrants			Exercise		Contractual		Intrinsic		Warrants			Exercise		Contractual		Intrinsic
	Outstanding			Price		Life		Value		Outstanding			Price		Life		Value
Outstanding, August 31, 2022		8,445,264			2.42		3.75	$	-
Outstanding, August 31, 2023											806,254		$	12.05		3.71	$	106,960
Granted		10,000,000			0.13		4.20				-
Forfeited		-									-
Exercised		(10,343,334	)								(518,061	)
Outstanding, May 31, 2023		8,101,930			1.18		3.83	$	111,680
Exercisable, May 31, 2023		8,101,930		$	1.18		3.83	$	111,680
Outstanding, November 30, 2023											288,193		$	30.46		3.46	$	5,400
Exercisable, November 30, 2023											288,193		$	30.46		3.46	$	5,400

Outstanding and Exercisable	Outstanding and Exercisable			Outstanding and Exercisable
Number of	Number of	Exercise		Number of	Exercise
Warrants	Warrants	Price		Warrants	Price
	2,611,930	$	3.35	261,193	$	33.50
	3,490,000		0.10	27,000		1.00
	2,000,000		0.25	288,193
	8,101,930

The Company is party to certain legal proceedings from time-to-time incidental to the conduct of its business. These proceedings could result in fines, penalties, compensatory or treble damages or non-monetary relief. The nature of legal proceedings is such that the Company cannot assure the outcome of any particular matter, and an unfavorable ruling or development could have a materially adverse effect on our condensed consolidated financial position, results of operations and cash flows in the period in which a ruling or settlement occurs. However, based on information available to the Company’s management to date, the Company’s management does not expect that the outcome of any matter pending against the Company is likely to have a materially adverse effect on the Company’s unaudited condensed consolidated financial position as of ~~May 31,~~November 30, 2023, results of operations, cash flows or liquidity of the Company.

During the period ended November 30, 2023, the Company incurred $652,174 included in other expense which was primarily a result of a repayment for an overpayment received from a former customer. The Company’s management does not expect any additional repayments or remaining obligations to this former customer.

ASC Topic 280, Segment Reporting, requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the Company for making operating decisions and assessing performance. The Company has two reportable segments: healthcare services and product sales.

The following tables summarize the Company’s segment information for the three ~~and nine~~ months ended ~~May 31,~~November 30, 2023 and 2022:

	2023			2022			2023			2022
	Three Months Ended May 31,						Nine Months Ended May 31,						Three Months Ended November 30,
	2023			2022			2023			2022			2023			2022

Sales
Healthcare services	$	2,019,869		$	2,199,889		$	6,075,237		$	6,253,089		$	2,044,510		$	2,021,213
Product manufacturing and development		1,273,064			11,651,994			2,576,196			13,629,944			1,768,458			790,478
Corporate		-			-			617,289			-			78,250			607,589
Sales	$	3,292,933		$	13,851,883		$	9,268,722		$	19,883,033		$	3,891,218		$	3,419,280

Gross profit
Healthcare services	$	684,575		$	939,542		$	2,238,875		$	2,499,608		$	676,416		$	784,031
Product manufacturing and development		629,519			1,469,340			1,168,366			2,392,094			1,189,352			347,914
Corporate		-			-			617,289			-			78,250			607,588
Gross profit	$	1,314,094		$	2,408,882		$	4,024,530		$	4,891,702		$	1,944,018		$	1,739,533

Loss from operations
(Loss) income from operations
Healthcare services	$	(145,364	)	$	(239,981	)	$	(516,064	)	$	(616,303	)	$	(80,327	)	$	(151,691	)
Product manufacturing and development		(430,322	)		336,348			(1,574,441	)		(509,342	)		108,702			(554,842	)
Corporate		(854,732	)		(1,299,113	)		(3,368,683	)		(3,561,436	)		(3,346,012	)		(1,535,427	)
Income (loss) from operations	$	(1,430,418	)	$	(1,202,746	)	$	(5,459,188	)	$	(4,687,081	)	$	(3,317,637	)	$	(2,241,960	)

Depreciation and amortization
Healthcare services	$	31,776		$	249,831		$	95,338		$	393,942		$	30,035		$	28,968
Product manufacturing and development		268,374			266,166			784,724			852,692			262,927			309,042
Corporate		279,441			367,600			838,326			1,102,800			279,442			248,156
Depreciation and amortization	$	579,591		$	881,597		$	1,718,388		$	2,349,434		$	572,404		$	586,166

Capital expenditures
Healthcare services	$	-		$	-		$	-		$	175,418		$	-		$	-
Product manufacturing and development		18,870			-			18,870			15,555			-			-
Corporate		-			-			-			-			-			-
Capital expenditures	$	18,870		$	-		$	18,870		$	190,973		$	-		$	-

Interest expenses
Healthcare services	$	2,605		$	14,532		$	70,109		$	54,686		$	20,532		$	36,303
Product manufacturing and development		6,965			94,765			11,596			1,067,211			462			2,464
Corporate		-			404,101			158,815			686,413			122,380			128,476
Interest expenses	$	9,570		$	513,398		$	240,520		$	1,808,310		$	143,374		$	167,243

Net loss
Net (loss) income
Healthcare services	$	(145,731	)	$	(252,122	)	$	(579,411	)		(663,646	)	$	(98,640	)	$	(185,713	)
Product manufacturing and development		(387,468	)		(21,153	)		(1,563,088	)		(2,641,091	)		48,883			(578,576	)
Corporate		(952,096	)		(3,470,750	)		(7,924,694	)		(7,123,887	)		(4,610,966	)		(3,172,447	)
Net loss	$	(1,485,295	)	$	(3,744,025	)	$	(10,067,193	)		(10,428,624	)	$	(4,660,723	)	$	(3,936,736	)

~~Mast Hill SPA, Note & Warrant~~Purchase and Sale Agreement – Ophir Collection

On ~~June 20,~~November 21, 2023, the Company entered into a ~~securities purchase agreement (the “MH SPA”~~Purchase and Sale Agreement (“Ophir Agreement”) ~~with Mast Hill, pursuant to which~~between the Company ~~issued an~~ 12~~% unsecured promissory note~~and Blake Alsbrook, solely in his capacity as Court-appointed successor receiver (the ~~“MH Note”~~“Successor Receiver”) ~~with a maturity date of~~ ~~June 20, 2024~~ ~~(the “MH Maturity Date”)~~in Ocean Thermal Energy Corporation v. C. Robert Coe II, et al., ~~in the principal sum of $445,000~~ ~~(the “MH Principal Sum”). In addition, the Company issued a common stock purchase warrant~~United States District Court for the ~~purchase~~Central District of ~~up to~~ ~~776,614~~ ~~shares of the Company’s common stock~~California (the ~~“MH Warrant”~~“Court”) ~~to Mast Hill pursuant to the MH SPA.~~Case No. 2:19-cv-04299 VAP (JPRx) (the “Action”). Pursuant to the terms of the ~~MH Note,~~Ophir Agreement, the Company agreed to ~~pay~~purchase, and the ~~MH Principal Sum~~Successor Receiver agreed to ~~Mast Hill~~sell to the Company, the Ophir Collection (as hereinafter defined), subject to the contingencies outlined in the Ophir Agreement, including Court approval, which approval was received on December 1, 2023. The Ophir Agreement was effective upon execution by both parties; however, the Ophir Agreement was subject to approval by the Court.

Pursuant to the Court’s July 2, 2019 order in the Action, as modified by the Court’s February 25, 2022 order in the Action, the Successor Receiver has possession of and right to sell a certain collection of 43 gemstones, 42 of which are certified by the Gemological Institute of America, known as the “Ophir Collection”. Together, the Court’s July 2, 2019 order appointing the original receiver, the Court’s December 3, 2019, order appointing the Successor Receiver, and the Court’s February 25, 2022, order are referred to collectively as the “Receivership Orders.” The Receivership Orders authorized the Successor Receiver to take sole custody, possession, and control of the Ophir Collection and to ~~pay interest on~~sell, assign, transfer, convey and deliver title and rights in and to the ~~principal balance at~~Ophir Collection subject to the ~~rate~~approval of 12~~% per annum. The MH Note carries an OID~~the Court to protect the interests of $certain identified creditors.

~~44,500. Accordingly, on the Closing Date (as defined in the MH SPA), Mast Hill paid the purchase price of $~~

~~400,500~~ ~~in exchange for the MH Note and MH Warrant. Mast Hill may convert the MH Note into~~Within two business days following the Company’s ~~common stock at any time at a conversion price equal~~execution of the Ophir Agreement, the Company was required to, and did, deposit $~~0.175~~25,000 ~~per share, subject to adjustment as provided in~~(the “Deposit”) with the MH Note (including but not limited to certain price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions), as well as certain beneficial ownership limitations.Successor Receiver.

Pursuant to the terms of the ~~MH Note,~~Ophir Agreement, the Company agreed to pay ~~accrued interest monthly~~$60,000,000 to the Successor Receiver to purchase the Ophir Collection as ~~well as the MH Principal Sum as~~ follows: ~~(i) $~~

~~44,500~~ ~~on February 20, 2024, (iv) $77,661.43~~ ~~on March 20, 2024, (v) $77,661.43~~ ~~on April 20, 2024, (vi) $77,661.43~~ on May 20, 2024, and (vii) all remaining amounts owed under the MH Note on the MH Maturity Date (each of the aforementioned payments are an “MH Amortization Payment”). If the Company fails to make any MH Amortization Payment, then Mast Hill ~~shall have~~Conversion of Debt on $445,000 Promissory Note

On December 21, 2023, the ~~right to convert the~~$454,071 total amount of ~~such respective~~principal and interest owed on MH ~~Amortization Payment into~~$445,000 Note was converted to 457,128 shares of common stock ~~as provided~~at $0.99331 per share. The MH $445,000 Note is paid in ~~the MH Note at the lesser of (i) the then applicable conversion price under the MH Note or (ii)~~ 85~~% of the lowest VWAP of the common stock on any trading day during the five trading days prior to the respective conversion date.~~full.

~~The Company may prepay the MH~~Interest Payment on September 2023 Mast Hill Note at any time prior to the date that an Event of Default (as defined in the Note) (each an “MH Event of Default”) occurs at an amount equal to the MH Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $~~750~~ for administrative fees. The MH Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the MH Note, the MH Warrant, or the MH SPA.

~~Upon the occurrence of any MH Event of Default, the MH Note shall become immediately due and payable and~~On December 12, 2023, the Company ~~shall pay~~made an interest-only payment of $104,712 to Mast Hill ~~in full satisfaction of its obligations hereunder, an amount equal to the MH Principal Sum then outstanding plus accrued interest multiplied by~~ ~~125%. Upon the occurrence of an MH Event of Default, additional interest will accrue from the date of the MH Event of Default at the rate equal to the lower of~~ 16~~% per annum or the highest rate permitted by law.~~

~~The MH Warrant is exercisable for five years from June 20, 2023, at an exercise price of $0.25~~ per share, subject to adjustment as provided in the MH Warrant. The MH Warrant also contains certain cashless exercise provisions, as well as price protection provisions providing for adjustment of the number of shares of common stock issuable upon exercise of the MH Warrant and the exercise price in case of future dilutive offerings, subject to certain customary exempt transactions.

~~As additional consideration for the purchase of the MH Note and~~ pursuant to the terms of the ~~MH SPA, the Company issued~~ ~~741,666~~ ~~restricted shares of the Company’s common stock (the “MH Commitment Shares”) to~~September 2023 Mast Hill at closing. The MH SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the MH Commitment Shares as well as the shares of common stock underlying the MH Note and MH Warrant. In addition to the beneficial ownership limitations provided in the MH Note and MH Warrant, the sum of the number of shares of common stock that may be issued under the MH SPA (including the MH Commitment Shares), MH Note, and MH Warrant shall be limited to ~~17,720,448~~ ~~as further described in the MH SPA, unless shareholder approval to exceed such limitation is obtained by the Company.~~Note.

On ~~June 28,~~December 18, 2023, the Company entered into a separation and general release agreement (the “Zsebok Agreement”) with Jim Zsebok and RTZ Consulting Group, Inc. (“RTZ”, and collectively with Mr. Zsebok, the “Zsebok Parties”),made an ~~entity owned by Mr. Zsebok. Pursuant~~interest-only payment of $8,333 to FirstFire pursuant to the terms of the ~~Zsebok Agreement, all independent contract relationships between~~September 2023 FirstFire Note.

On January 16, 2024, the ~~Company~~Board of Directors granted to Christopher David, the Company’s President, Chief Operating Officer and ~~the Zsebok Parties were terminated, and Mr. Zsebok resigned from the position~~member of the ~~Company’s Principal Financial Officer. The Company issued~~Board of Directors, an option to ~~RTZ (i)~~purchase ~~1,000,000~~200,000 shares of the Company’s common stock pursuant to the ~~Company’s 2021~~2023 Equity Incentive ~~Plan;~~Plan. The option was fully vested at grant and ~~(ii)~~ is exercisable until January 16, 2030. The option has an exercise price of $~~335,000~~0.78 ~~unregistered shares of the Company’s common stock for the full satisfaction of the Company’s obligations to the Zsebok Parties in connection with such termination and resignation.~~per share.

On July 7, 2023, the Company’s Board of Directors appointed Vivek “Vik” Sethi, as the Company’s Principal Financial Officer. Mr. Sethi will also serve as the Company’s principal accounting officer.

~~The Company agreed to pay Mr. Sethi an annual base salary of CAD$100,000~~ ~~(approximately $76,000) in exchange for his services as Principal Financial Officer.~~

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), provide a safe harbor for forward-looking statements made by or on behalf of the Company. The Company and its representatives may from time to time make written or oral statements that are “forward-looking,” including statements contained in this report and other filings with the Securities and Exchange Commission (“SEC”) and in our reports and presentations to stockholders or potential stockholders. In some cases, forward-looking statements can be identified by words such as “believe,” “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 can be found in Part I, Item 1A, “Risk Factors,” of the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, ~~2022,~~2023, as the same may be updated from time to time, including in Part II, Item 1A, “Risk Factors,” of this Quarterly Report on Form 10-Q.

Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, it is not possible to foresee or identify all factors that could have a material effect on the future financial performance of the Company. The forward-looking statements in this report are made on the basis of management’s assumptions and analyses, as of the time the statements are made, in light of their experience and perception of historical conditions, expected future developments and other factors believed to be appropriate under the circumstances.

Except as otherwise required by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this Quarterly Report on Form 10-Q and the information incorporated by reference in this report to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.

When used herein, the terms the “Company,” “we,” “us” and “our” refer to Novo Integrated Sciences, Inc. and its consolidated subsidiaries.

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:

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

Our clinicians and practitioners provide certain multidisciplinary primary health care services, and related products, beyond the medical doctor first level contact identified as primary care. Our clinicians and practitioners are not licensed medical doctors, physicians, specialist, nurses or nurse practitioners. Our clinicians and practitioners are not authorized to practice primary care medicine and they are not medically licensed to prescribe pharmaceutical based product solutions.

Our team of multidisciplinary primary health care clinicians and practitioners provide assessment, diagnosis, treatment, pain management, rehabilitation, education and primary prevention for a wide array of orthopedic, musculoskeletal, sports injury, and neurological conditions across various demographics including pediatric, adult, and geriatric populations through our 16 corporate-owned clinics, a contracted network of affiliate clinics, and eldercare related long-term care homes, retirement homes, and community-based locations in Canada.

Our specialized multidisciplinary primary health care services include physiotherapy, chiropractic care, manual/manipulative therapy, occupational therapy, eldercare, massage therapy (including pre- and post-partum), 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 programs, sports medicine therapy, assistive devices, dietitian, holistic nutrition, fall prevention education, sports team conditioning programs including event and game coverage, and private personal training.

Additionally, we continue to expand our patient care philosophy of maintaining an on-going continuous connection with our current and future patient community, beyond the traditional confines of brick-and-mortar facilities, by extending oversight of patient diagnosis, care and monitoring, directly through various Medical Technology Platforms either in-use or under development.

The occupational therapists, physiotherapists, chiropractors, massage therapists, chiropodists and kinesiologists contracted, by NHL, to provide occupational therapy, physical therapy and fall prevention assessment services are registered with the College of Occupational Therapists of Ontario, the College of Physiotherapists of Ontario, College of Chiropractors of Ontario, College of Massage Therapists of Ontario, College of Chiropodists of Ontario, and the College of Kinesiologists of Ontario regulatory authorities.

Our strict adherence to public regulatory standards, as well as self-imposed standards of excellence and regulation, have allowed us to navigate with ease through the industry’s licensing and regulatory framework. Compliant treatment, data and administrative protocols are managed through a team of highly trained, certified health care and administrative professionals. We and our affiliates provide service to the Canadian property and casualty insurance industry, resulting in a regulated framework governed by the Financial Services Commission of Ontario.

Second Pillar – Interconnected Technology for Virtual Ecosystem of Services, Products and Digital Health Offerings

Decentralization through the integration of interconnected technology platforms has been adopted and is thriving in a variety of sectors and industries such as transportation (Uber, Lyft), real estate (Zillow, Redfin, Airbnb, VRBO), used car sales (Carvana, Vroom), stock and financial markets (Robinhood, Acorns, Webull) and so many other sectors. Yet decentralization of the non-critical primary care and wellness sector of healthcare is lagging significantly in capability and benefit for patient access and delivery of services and products. The COVID-19 pandemic has taught both patients and healthcare providers the viability, importance, and benefits of decentralized access to primary care simply through the rapid adoption of telehealth/telemedicine.

The Company’s focus on a holistic approach to patient-first health and wellness, through innovation and decentralization, includes maintaining an on-going continuous connection with our current and future patient community, beyond the traditional confines of brick-and-mortar facilities, by extending oversight of patient evaluation, diagnosis, treatment solutions, and monitoring, directly through various Medical Technology Platforms and periphery tools either in-use or under development. Through the integration and deployment of sophisticated and secure technology and periphery diagnostic tools, the Company is working to expand the reach of our non-critical primary care services and product offerings, beyond the traditional clinic locations, to geographic areas not readily providing advanced primary care service to date, including the patient’s home.

NovoConnect, the Company’s proprietary mobile application with a fully securitized tech stock, telemedicine/telehealth and remote patient monitoring fall under this Second Pillar. In October 2021, we announced the launch of MiTelemed+, Inc. (“MiTelemed”), a joint venture with EK-Tech Solutions Inc. (“EK-Tech”). MiTelemed will operate, support and expand access and functionality of iTelemed, EK-Tech’s enhanced proprietary telehealth platform. MiTelemed+, through the iTelemed platform, will allow us to offer the patient and the practitioner a sophisticated and enhanced telehealth interaction. Through the interface of sophisticated peripheral based diagnostic tools operated by skilled support workers in the patient’s remote location, we believe that the practitioner’s ability and comfort to provide a uniquely comprehensive evaluation, diagnosis, and treatment solution will be dramatically elevated.

We believe our science first approach to product offerings further emphasizes the Company’s strategic vision to innovate, evolve, and deliver over-the-counter preventative and maintenance care solutions as well as therapeutics and personalized diagnostics that enable individualized health optimization.

As the Company’s patient base grows through the expansion of its corporate owned clinics, its affiliate network, its micro-clinic facility openings, its interconnected technology platforms, and other growth initiatives, the development and distribution of high-quality wellness product solutions is integral to (i) offering effective product solutions allowing for the customization of patient preventative care remedies and ultimately a healthier population, and (ii) maintaining an on-going relationship with our patients through the customization of patient preventative and maintenance care solutions.

The Company’s product offering ecosystem is being built through strategic acquisitions and engaging in licensing agreements with partners that share our vision to provide a portfolio of products that offer an essential and differentiated solution to health and wellness globally. Our 2021 acquisitions of Acenzia, PRO-DIP and Terragenx support this Third Pillar. On March 15, 2022, PRO-DIP was issued U.S. Patent No. 11,273,965 by the U.S. Patent and Trademark Office on March 15, 2022. The ‘965 patent relates to PRO-DIP’s novel technology for manufacturing its oral supplement pouches. On April 4, 2022, NHL was granted a Natural Product Number (NPN) by Health Canada for IoNovo GO Iodine which is the Company’s forth iodine related product to recently be granted a NPN by Health Canada following IoNovo Pure Iodine, IoNovo Iodide, and IoNovo for Kids pure iodine oral spray.

We have two reportable segments: healthcare services and product sales. During the quarter ended ~~May 31,~~November 30, 2023, revenues from healthcare services and product sales were ~~61%~~53% and ~~39%~~45%, respectively, of the Company’s total revenues for the quarter.

While all of the Company’s business units are operational at the time of this filing, any future impact of the COVID-19 pandemic on the Company’s operations remains unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption, reduced patient traffic and reduced operations. For more information regarding the impact of COVID-19 on the Company, see “—Liquidity and Capital Resources—Financial Impact of COVID-19” of this quarterly report on Form 10-Q.

On October 13, 2022, the Company entered into a Waiver and Amendment (the “CVI Waiver and Amendment”) with CVI Investments, Inc. (“CVI”). Pursuant to the terms of the CVI Waiver and Amendment, (i) the Company obtained a limited waiver from CVI with respect to certain provisions of a Warrant to Purchase Common Stock, dated as of December 14, 2021, issued by the Company to CVI (the “CVI Warrant”); (ii) the Company and CVI amended certain provisions of the CVI Warrant; (iii) the Company obtained a limited waiver from CVI with respect to certain provisions of a Senior Secured Convertible Note, dated as of December 14, 2021, issued by the Company to CVI (the “CVI Note”); and (iv) the Company and CVI amended certain provisions of the CVI Note, all as more fully described below and as set forth in the CVI Warrant and the CVI Note, as applicable.

Pursuant to the terms of the CVI Waiver and Amendment, the Company obtained a limited waiver from CVI with respect to the provisions of the CVI Warrant that would have reduced the exercise price of the CVI Warrant upon the closing of the sale of the Company’s common stock by the Company (the “Offering”) conducted as set forth in and pursuant to the prospectus contained in the Registration Statement on Form S-1 (File No. 333-267401) filed by the Company on September 13, 2022, as subsequently amended and as declared effective on October 13, 2022. In addition, the Company and CVI agreed to amend the CVI Warrant to provide that the exercise price of the CVI Warrant shall be the price at which the Company’s common stock is offered for sale in the Offering.

Also pursuant to the terms of the CVI Waiver and Amendment, the Company obtained a limited waiver from CVI with respect to the provisions of the CVI Note that would have reduced the conversion price of the CVI Note upon the closing of the Offering. CVI also agreed to extend the date on which the Amortization Redemption Amount (as defined in the CVI Note) may be paid from October 14, 2022 to October 19, 2022. In addition, the Company and CVI agreed to amend the CVI Note to provide that the conversion price set forth in the CVI Note shall be the price at which the Company’s common stock is being offered for sale in the Offering.

Also on October 13, 2022, the Company entered into a Waiver and Amendment (the “Hudson Bay Waiver and Amendment”) with Hudson Bay Master Fund Ltd. (“Hudson Bay”). Pursuant to the terms of the Hudson Bay Waiver and Amendment, (i) the Company obtained a limited waiver from Hudson Bay with respect to certain provisions of a Warrant to Purchase Common Stock, dated as of December 14, 2021, issued by the Company to Hudson Bay (the “Hudson Bay Warrant”); (ii) the Company and Hudson Bay amended certain provisions of the Hudson Bay Warrant; (iii) the Company obtained a limited waiver from Hudson Bay with respect to certain provisions of a Senior Secured Convertible Note, dated as of December 14, 2021, issued by the Company to Hudson Bay (the “Hudson Bay Note”); and (iv) the Company and Hudson Bay amended certain provisions of the Hudson Bay Note, all as more fully described below and as set forth in the Hudson Bay Warrant and the Hudson Bay Note, as applicable.

Pursuant to the terms of the Hudson Bay Waiver and Amendment, the Company obtained a limited waiver from Hudson Bay with respect to the provisions of the Hudson Bay Warrant that would have reduced the exercise price of the Hudson Bay Warrant upon the closing of the Offering. In addition, the Company and Hudson Bay agreed to amend the Hudson Bay Warrant to provide that the exercise price of the Hudson Bay Warrant shall be the price at which the Company’s common stock is offered for sale in the Offering.

Also pursuant to the terms of the Hudson Bay Waiver and Amendment, the Company obtained a limited waiver from Hudson Bay with respect to the provisions of the Hudson Bay Note that would have reduced the conversion price of the Hudson Bay Note upon the closing of the Offering. Hudson Bay also agreed to extend the date on which the Amortization Redemption Amount (as defined in the Hudson Bay Note) may be paid from October 14, 2022 to October 19, 2022. In addition, the Company and Hudson Bay agreed to amend the Hudson Bay Note to provide that the conversion price set forth in the Hudson Bay Note shall be the price at which the company’s common stock is being offered for sale in the Offering.

On October 18, 2022 (the “Closing Date”), the Company sold an aggregate of 4,000,000 units (the “Units”) for an aggregate of $2,000,000, at a purchase price $0.50 per Unit (the “Offering”), consisting of (i) 4,000,000 shares (the “Shares”) of the Company’s common stock, (ii) warrants with a three-year term to purchase 4,000,000 shares of common stock at an exercise price of $0.50 per share (the “Three Year Warrants”), and (iii) warrants with a five-year term to purchase 4,000,000 shares of common stock at an exercise price of $0.50 per share (the “Five Year Warrants” and together with the Three Year Warrants, the “Warrants”).

On October 13, 2022, the Company entered into a Placement Agency Agreement (the “Placement Agency Agreement”) with Maxim Group LLC, as exclusive placement agent thereunder (the “Placement Agent”), pursuant to which the Placement Agent agreed to act as the Company’s exclusive placement agent to solicit offers to purchase the Units, and the Common Stock and Warrants forming part of the Units, offered by the prospectus (“Prospectus”) contained in the Registration Statement on Form S-1 (File No. 333-267401) declared effective by the Securities and Exchange Commission on October 13, 2022 (the “Registration Statement”). The Placement Agent did not purchase or sell any securities, nor was it required to arrange for the purchase and sale of any specific number or dollar amount of securities, other than to use its “reasonable best efforts” to arrange for the sale of the securities by the Company. Accordingly, there was no minimum amount of proceeds that was a condition to closing of the Offering.

The Offering resulted in gross proceeds to the Company of approximately $2,000,000 before deducting the Placement Agent fees and related offering expenses, and excluding proceeds to the Company, if any, that may result from the future exercise of Warrants issued in the Offering which formed part of the Units. Pursuant to the terms of the Placement Agency Agreement, the Company paid the Placement Agent a cash fee of $140,000 equal to 7.0% of the gross proceeds of the Offering as well as reimbursed the Placement Agent for its accountable expenses, resulting in net proceeds to the Company of $1,795,000.

Under the Placement Agency Agreement, the Company agreed to certain restrictions on future stock offerings, including that during the 90-day period following the Closing Date, the Company will not issue (or enter into any agreement to issue) any shares of common stock or common stock equivalents, subject to certain exceptions, and will not file any registration statements. In addition, during the 180-day period following the Closing Date and subject to certain exceptions, the Company is prohibited from entering into (i) a transaction that would result in the Company issuing common stock that has a variable conversion price, exercise price, or exchange rate, or such a price that would reset upon the occurrence of specified or contingent events; or (ii) a transaction in which the Company agrees to issue securities at a future determined price. Each of the Company’s officers, directors, and any holder of 10% or more of the outstanding common stock has agreed to a three-month “lock-up” with respect to their shares of common stock, including securities that are convertible into, or exchangeable or exercisable for, shares of common stock. Subject to certain exceptions, during such lock-up period these holders may not offer, sell, pledge or otherwise dispose of these securities, without the prior written consent of the Placement Agent. The Placement Agency Agreement provides that the Placement Agent’s obligations were subject to conditions contained in the Placement Agency Agreement.

Each Warrant had an exercise price of $0.50 per share and is exercisable upon issuance. As a result of the Company’s entry, on November 14, 2022, into the CVI Exchange Offer and Amendment (as hereinafter defined) and the Hudson Bay Exchange Offer and Amendment (as hereinafter defined), the exercise price of each Warrant was reduced to $0.10 per share. The Three Year Warrants and the Five Year Warrants will expire three years and five years from the date of issuance, respectively.

Each Warrant is exercisable for one share of common stock, subject to adjustment in the event of stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting the common stock as described in the Prospectus. Subject to certain exemptions outlined in the Three Year Warrants and Five Year Warrants, if the Company sells, enters into an agreement to sell, or grants any option to purchase, or sell, enters into an agreement to sell, or grants any right to reprice, or otherwise disposes of or issues (or announces any offer, sale, grant or any option to purchase or other disposition) any shares of common stock or Common Stock Equivalents (as defined in the Three Year Warrants and Five Year Warrants), at an effective price per share less than the exercise price of the Three Year Warrants or Five Year Warrants then in effect, the exercise price of the Three Year Warrants and Five Year Warrants will be reduced to equal the effective price per share in such dilutive issuance; provided, however, in no event will the exercise price of the Three Year Warrants and Five Year Warrants be reduced to an exercise price lower than $0.10. Additionally, on the date that is 60 calendar days immediately following the initial issuance date of the Three Year Warrants and Five Year Warrants, the exercise price will be reduced to the Reset Price (as hereinafter defined), provided that the Reset Price is less than the exercise price in effect on that date. The “Reset Price” is equal to the greater of (a) 50% of the initial exercise price or (b) 100% of the lowest daily volume weighted average price per share of common stock (“VWAP”) occurring during the 60 calendar days following the issuance date of the Three Year Warrants and Five Year Warrants.

On October 13, 2022, the (i) conversion price of the Senior Secured Convertible Notes, and the (ii) exercise price per share of common stock under the warrants to purchase common stock, issued by the Company and held by CVI Investments, Inc. and Hudson Bay Master Fund Ltd. (the “Holders”) was reduced to $0.50 per share of common stock based on the offering price of each Unit in the Offering and in accordance with waivers by the Holders, as further described in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 14, 2022.

The terms of the Three Year warrants and Five year Warrants are governed by a Warrant Agency Agreement (the “Warrant Agency Agreement”), dated as of the Closing Date, by and between the Company and Pacific Stock Transfer Company (the “Warrant Agent”). Pursuant to the terms of the Warrant Agency Agreement, the Company agreed to indemnify the Warrant Agent in its roles as transfer agent and warrant agent, its agents and each of its stockholders, directors, officers and employees against all liabilities, including judgments, costs and reasonable counsel fees that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to any gross negligence, willful misconduct or bad faith of the indemnified person or entity.

On November 14, 2022, the Company entered into an exchange offer and amendment (the “CVI Exchange Offer and Amendment”) with CVI. Pursuant to the terms of the CVI Exchange Offer and Amendment, (i) the Company exchanged one share of the Company’s common stock, for each share of common stock (the “CVI Warrant Exchange”) underlying the warrant to purchase common stock, dated as of December 14, 2021, issued by the Company to CVI (the “CVI Warrant”); and (ii) the Company and CVI amended certain provisions of the senior secured convertible note, dated as of December 14, 2021, issued by the Company to CVI (the “CVI Note”), all as more fully described below and as set forth in the CVI Warrant and the CVI Note, as applicable. On November 15, 2022 and January 5, 2023, 1,757,319 and 1,159,348 shares of common stock were issued under the terms and conditions of the CVI Warrant Exchange.

Pursuant to the terms of the CVI Exchange Offer and Amendment, the Company and CVI agreed to amend the CVI Note such that (i) the Company shall pay the interest originally payable in November 2022 and December 2022 upon execution of the CVI Exchange Offer and Amendment, (ii) the Company shall pay a $50,000 extension fee to CVI ($10,000 on January 15, 2023, $10,000 on February 14, 2023, $10,000 on March 14, 2023, $10,000 on April 14, 2023, and $10,000 on May 15, 2023), (iii) the payment dates for the principal originally payable in November 2022 and December 2022 shall be extended such that 1/5 of such respective principal amount shall instead be paid on each Amortization Date (as defined in the CVI Note) during January 2023, February 2023, March 2023, April 2023, and May 2023, in addition to the Amortization Redemption Amounts (as defined in the CVI Note) (the “Amortization Redemption Amounts”) due on the aforementioned dates in 2023.

Also, pursuant to the terms of the CVI Exchange Offer and Amendment, the Company agreed to hold an annual or special meeting of stockholders on or prior to the date that is 90 calendar days after November 14, 2022, for the purpose of obtaining shareholder approval (“Shareholder Approval”) to amend the CVI Note as follows:

(i) the definition of Conversion Price (as defined in the CVI Note) (the “Conversion Price”) shall be amended such that, as to the first $1,000,000 of principal amount of the CVI Note converted after the date that the Shareholder Approval is obtained, the Conversion Price shall be the lower of (i) the Conversion Price in effect at such time and (ii) 82.0% of the lowest VWAP (as defined in the CVI Note) during the five trading days immediately prior to the applicable conversion date (the “Adjusted Conversion Price”), provided, however, that the portion of the first $1,000,000 of principal amount of the CVI Note that is converted pursuant to a voluntary conversion by CVI shall reduce each of the remaining Amortization Redemption Amounts proportionately on a pro rata basis;

(ii) CVI may accelerate up to four Amortization Redemption Amounts (as defined in the Notes) provided that CVI agrees to accept shares of Common Stock instead of cash for such payments at a price per share equal to the Adjusted Conversion Price as calculated on the immediately preceding Amortization Date (as defined in the CVI Note)); and

~~(iii) upon mutual consent by the Company and CVI, CVI may elect to utilize the Adjusted Conversion Price for the balance of the Notes.~~

The CVI Exchange Offer and Amendment further provides that from November 14, 2022 until 30 days following November 14, 2022, neither the Company nor any of its subsidiaries shall (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any Common Stock or any securities convertible or exchangeable into Common Stock, or (ii) enter into any agreement to amend, exchange or otherwise provide any incentive to exercise any of the warrants originally issued together with the Exchange Warrants or any other warrants of the Company that are outstanding on November 14, 2022, in each such case except with respect to certain exempt issuances.

Also, on November 14, 2022, the Company entered into an exchange offer and amendment (the “Hudson Bay Exchange Offer and Amendment”) with Hudson Bay. Pursuant to the terms of the Hudson Bay Exchange Offer and Amendment, (i) the Company exchanged one share of the Company’s common stock, for each share of common stock (the “Hudson Bay Warrant Exchange”) underlying the warrant to purchase common stock, dated as of December 14, 2021, issued by the Company to Hudson Bay (the “Hudson Bay Warrant”); and (ii) the Company and Hudson Bay amended certain provisions of the senior secured convertible note, dated as of December 14, 2021, issued by the Company to Hudson Bay (the “Hudson Bay Note”), all as more fully described below and as set forth in the Hudson Bay Warrant and the Hudson Bay Note, as applicable. On November 15, 2022, 2,916,667 shares of common stock were issued under the terms and conditions of the Hudson Bay Warrant Exchange.

Pursuant to the terms of the Hudson Bay Exchange Offer and Amendment, the Company and Hudson Bay agreed to amend the Hudson Bay Note such that (i) the Company shall pay the interest originally payable in November 2022 and December 2022 upon execution of the Hudson Bay Exchange Offer and Amendment, (ii) the Company shall pay a $50,000 extension fee to Hudson Bay ($10,000 on January 15, 2023, $10,000 on February 14, 2023, $10,000 on March 14, 2023, $10,000 on April 14, 2023, and $10,000 on May 15, 2023), (iii) the payment dates for the principal originally payable in November 2022 and December 2022 shall be extended such that 1/5 of such respective principal amount shall instead be paid on each Amortization Date (as defined in the Hudson Bay Note) during January 2023, February 2023, March 2023, April 2023, and May 2023, in addition to the Amortization Redemption Amounts (as defined in the Hudson Bay Note) (the “Amortization Redemption Amounts”) due on the aforementioned dates in 2023.

The September 2023 Mast Hill SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the common stock underlying the September 2023 Mast Hill Note. Further, pursuant to the September 2023 Mast Hill SPA, the Company agreed to transfer its rights to the charges/mortgages evidenced by Instrument Nos. CE925256 (in the amount of CDN$1,600,000) and CE888785 (in the amount of CDN$1,800,000) on the property located at 1580 Rossi Drive, Tecumseh, Ontario, Canada, to Mast Hill as security for the Company’s repayment of the September 2023 Mast Hill Note. In addition to the beneficial ownership limitations provided in the September 2023 Mast Hill Note, the sum of the number of shares of common stock that may be issued under the September 2023 Mast Hill SPA and September 2023 Mast Hill Note shall be limited to 1,772,045 shares as further described in the September 2023 Mast Hill SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

On December 12, 2023, the Company made an interest-only payment of $104,712 to Mast Hill pursuant to the terms of the Hudson Bay Exchange Offer and Amendment, the Company agreed to hold an annual or special meeting of stockholders on or prior to the date that is 90 calendar days after November 14, 2022, for the purpose of obtaining shareholder approval (“Shareholder Approval”) to amend the Hudson Bay Note as follows:

(i) the definition of Conversion Price (as defined in the Hudson Bay Note) (the “Conversion Price”) shall be amended such that, as to the first $1,000,000 of principal amount of the Hudson Bay Note converted after the date that the Shareholder Approval is obtained, the Conversion Price shall be the lower of (i) the Conversion Price in effect at such time and (ii) 82.0% of the lowest VWAP (as defined in the Hudson Bay Note) during the five trading days immediately prior to the applicable conversion date (the “Adjusted Conversion Price”), provided, however, that the portion of the first $1,000,000 of principal amount of the Hudson Bay Note that is converted pursuant to a voluntary conversion by Hudson Bay shall reduce each of the remaining Amortization Redemption Amounts proportionately on a pro rata basis;

(ii) Hudson Bay may accelerate up to four Amortization Redemption Amounts (as defined in the Notes) provided that Hudson Bay agrees to accept shares of Common Stock instead of cash for such payments at a price per share equal to the Adjusted Conversion Price as calculated on the immediately preceding Amortization Date (as defined in the Hudson Bay Note)); and

~~(iii) upon mutual consent by the Company and Hudson Bay, Hudson Bay may elect to utilize the Adjusted Conversion Price for the balance of the Notes.~~

The Hudson Bay Exchange Offer and Amendment further provides that from November 14, 2022 until 30 days following November 14, 2022, neither the Company nor any of its subsidiaries shall (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any Common Stock or any securities convertible or exchangeable into Common Stock, or (ii) enter into any agreement to amend, exchange or otherwise provide any incentive to exercise any of the warrants originally issued together with the Exchange Warrants or any other warrants of the Company that are outstanding on November 14, 2022, in each such case except with respect to certain exempt issuances.September 2023 Mast Hill Note.

On November 14, 2022, as provided in the CVI Exchange Offer and Amendment, the Company made a cash payment, in the amount of $37,384, for the monthly interest owed on the CVI Note outstanding principal balance. On November 14, 2022, as provided in the Hudson Bay Exchange Offer and Amendment, the Company made a cash payment, in the amount of $33,056, for the monthly interest owed on the Hudson Bay Note outstanding principal balance.

On January 17, 2023, March 2, 2023, and March 14, 2023, the Company made an interest payment on the Hudson Bay Note, to Hudson Bay, in the amount of $8,333, $625, and $208, respectively. On January 17, 2023, March 2, 2023, and March 14, 2023, pursuant to the terms of the Hudson Bay Exchange Offer and Amendment, the Company paid, to Hudson Bay, extension fees in the amount of $10,000, $10,000, and $10,000, respectively. On March 24, 2023, the Company paid to Hudson Bay an aggregate of $70,069, representing the remaining principal balance on the Hudson Bay Note ($50,000), interest on the Hudson Bay Note ($69), and extension fees ($20,000). As of March 24, 2023, the Hudson Bay Note was settled and no amounts remain due and outstanding in respect of the Hudson Bay Note.

On March 14, 2023, the Company made a principal payment on the CVI Note, to CVI, in the amount of $6,111 and an interest payment on the CVI Note, to CVI, in the amount of $77. Also on March 14, 2023, pursuant to the terms of the CVI Exchange Offer and Amendment, the Company paid, to CVI, an extension fee in the amount of $30,000. On March 24, 2023, the Company paid to CVI an extension fee in the amount of $20,000. As of March 24, 2023, the CVI Note was settled and no amounts remain due and outstanding in respect of the CVI Note.

~~Nasdaq Notification—Minimum Bid Price Requirement~~September 2023 FirstFire SPA & Note

On ~~November 21, 2022,~~September 18, 2023, the Company ~~received~~entered into a ~~notification letter~~securities purchase agreement (the ~~“November Notification Letter”~~“September 2023 FirstFire SPA”) ~~from~~with FirstFire Global Opportunities Fund, L.P. (“FirstFire”), pursuant to which the Company issued an 12% promissory note (the “September 2023 FirstFire Note”) with a maturity date of September 18, 2024, in the principal sum of $277,778. Pursuant to the terms of the September 2023 FirstFire Note, the Company agreed to pay the principal sum to FirstFire and to pay interest on the principal balance at the rate of 12% per annum. The Nasdaq Stock Market, LLC (“Nasdaq”) that it is not in compliance with the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market. Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid priceSeptember 2023 FirstFire Note carries an OID of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. Based$27,778. Accordingly, on the closing ~~bid~~date, FirstFire paid the purchase price of $250,000 in exchange for the September 2023 FirstFire Note. FirstFire may convert the September 2023 FirstFire Note into the Company’s common stock, at any time at a conversion price equal to the lesser of (i) $4.50 or (ii) 91.5% of the lowest volume weighted average price of the Company’s common stock ~~between October 10, 2022 and November 11, 2022,~~on any trading day during the five trading day period prior to the respective conversion date, subject to adjustment as provided in the September 2023 FirstFire Note (including but not limited to price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions) as well as beneficial ownership limitations.

Pursuant to the terms of the September 2023 FirstFire Note, the Company ~~no longer meets~~agreed to pay the ~~minimum bid price requirement. The November Notification Letter had no immediate effect~~principal sum and accrued interest as follows: (i) all accrued interest on December 18, 2023, (ii) $27,778 plus accrued interest on March 18, 2024, (iii) $27,778 plus accrued interest on April 18, 2024, (iv) $27,778 plus accrued interest on May 18, 2024, (v) $47,222 plus accrued interest on June 18, 2024, (vi) $47,222 plus accrued interest on July 18, 2024, (vii) $47,222 plus accrued interest on August 18, 2024, and (viii) all remaining amounts owed under the September 2023 FirstFire Note on the ~~listing~~maturity date (each of the aforementioned payments is a “FirstFire Amortization Payment”). If the Company fails to make any FirstFire Amortization Payment, then FirstFire shall have the right to convert the amount of such respective FirstFire Amortization Payment into shares of common stock as provided in the September 2023 FirstFire Note at the lesser of (i) the then applicable conversion price under the September 2023 FirstFire Note or ~~trading~~(ii) 85% the lowest volume weighted average price of the Company’s common stock on ~~The Nasdaq Capital Market and~~any trading day during the ~~common stock continued to trade on The Nasdaq Capital Market under the symbol “NVOS.”~~

The November Notification Letter provided that the Company had 180 calendar days, or until May 22, 2023, to regain compliance with Nasdaq Listing Rule 5550(a)(2). To regain compliance, the bid price of the Company’s common stock must have a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days.

On May 23, 2023, Nasdaq notified the Company that, although the Company has not yet regained compliance with the minimum bid price requirement, Nasdaq has determined that the Company is eligible for an additional 180 calendarfive trading day period ~~or until November 20, 2023,~~prior to ~~regain compliance. The determination was based in part on~~ the ~~Company’s written notice of its intention to cure the deficiency during the second compliance period be effecting a reverse stock split, if necessary.~~

If the Company does not regain compliance by November 20, 2023, then Nasdaq will notify the Company of its determination to delist the Company’s common stock, at which point the Company will have an opportunity to appeal the delisting determination to a hearings panel.

~~As of the date of this Quarterly Report on 10-Q, the Company’s common stock continues to trade on Nasdaq under the symbol “NVOS.”~~respective conversion date.

The Company ~~intends~~may prepay the September 2023 FirstFire Note at any time prior to ~~monitor~~ the ~~closing bid price~~date that an event of ~~its common stock~~default occurs at an amount equal to the principal sum then outstanding plus accrued and ~~will consider implementing available options~~unpaid interest (no prepayment premium) plus $750 for administrative fees. The September 2023 FirstFire Note contains customary events of default relating to, ~~regain compliance with~~among other things, payment defaults, breach of representations and warranties, and breach of provisions of the ~~minimum bid price requirement under the Nasdaq Listing Rules.~~September 2023 FirstFire Note or September 2023 FirstFire SPA.

~~Information Statement on Schedule 14C~~Upon the occurrence of any event of default, the September 2023 FirstFire Note shall become immediately due and payable and the Company shall pay to FirstFire, in full satisfaction of its obligations hereunder, an amount equal to the principal sum then outstanding plus accrued interest multiplied by 125%. Upon the occurrence of an event of default, additional interest will accrue from the date of the event of default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

~~On January 4,~~The September 2023 FirstFire SPA contains customary representations, warranties, and covenants of the Company, ~~filed~~including, among other things and subject to certain exceptions, piggy-back registration rights with ~~the SEC a definitive information statement on Schedule 14C (the “14C”). The 14C relates~~respect to the ~~notice~~common stock underlying the September 2023 FirstFire Note. In addition to ~~stockholders concerning~~ the ~~approval by written consent of stockholders holding a majority~~beneficial ownership limitations provided in the September 2023 FirstFire Note, the sum of the ~~Company’s~~number of shares of common stock that may be issued under the September 2023 FirstFire SPA and ~~outstanding voting securities (the “Majority Stockholders”)~~September 2023 FirstFire Note shall be limited to 480,156 as further described in the September 2023 FirstFire SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

Acenzia entered into a guaranty with FirstFire on September 18, 2023. Acenzia guaranteed the repayment of the ~~effectuation of the transactions provided for~~September 2023 FirstFire Note and granted FirstFire a security interest in ~~each exchange offer and amendment entered into on November 14, 2022 by the Company (the “Exchange Offers and Amendments”) with CVI and Hudson Bay,~~Acenzia’s assets, including but not limited to the ~~following amendments~~property located at 1580 Rossi Drive, Tecumseh, Ontario, Canada, which is junior in priority to the ~~senior secured convertible notes, dated as of December 14, 2021, issued~~security interest granted by ~~the Company~~Acenzia to ~~CVI and Hudson (the “Notes”):~~FirstFire.

~~(i)~~On December 18, 2023, the ~~definition~~Company made an interest-only payment of ~~Conversion Price (as defined in the Notes) (the “Conversion Price”) shall be amended such that, as~~$8,333 to FirstFire pursuant to the ~~first $1,000,000 of principal amount of each~~terms of the Notes converted after the date that shareholder approval is obtained, the Conversion Price shall be the lower of (i) the Conversion Price in effect at such time and (ii) 82.0% of the lowest VWAP (as defined in Notes) during the five trading days immediately prior to the applicable conversion date (the “Adjusted Conversion Price”), provided, however, that the portion of the first $1,000,000 of principal amount of each of the Notes that is converted pursuant to a voluntary conversion by the holders of each of the Notes shall reduce each of the remaining Amortization Redemption Amounts proportionately on a pro rata basis;

(ii) Each of the holders of the Notes may accelerate up to four Amortization Redemption Amounts (as defined in the Notes) provided that such holder agrees to accept shares of Common Stock instead of cash for such payments at a price per share equal to the Adjusted Conversion Price as calculated on the immediately preceding Amortization Date (as defined in the Notes)); and

~~(iii) upon mutual consent by the Company and each of the holders of the Notes, such holder may elect to utilize the Adjusted Conversion Price for the balance of the Notes.~~September 2023 FirstFire Note.

Accordingly, the Majority Stockholders approved, by written consent, the issuance of the total number of shares of Company common stock of the Company necessary to effectuate the Exchange Offers and Amendments, which is currently an indeterminate number due to the methodology of the conversion pricing as described herein and in the Exchange Offers and Amendments.Bylaws Amendment

~~Stockholder approval~~On September 27, 2023, the Company’s Board of Directors (the “Board”) adopted an amendment (the “Bylaws Amendment”) to the Company’s bylaws that had the effect of reducing the quorum at all meetings of the ~~Exchange Offers and Amendments was required~~Company’s stockholders for the transaction of business, except as otherwise provided by Nasdaq Rule 5635(d), which requires stockholder approval prior to a 20% issuance of securities at a price that is less than the Minimum Price (as defined in the information statement) in a transaction other than a public offering. A 20% issuance is a transaction, other than a public offering, involving the sale, issuancestatute or ~~potential issuance~~ by the ~~company~~Company’s articles of ~~common stock (or securities convertible into or exercisable for common stock), which alone or together with sales by officers, directors or substantial stockholders~~incorporation, as amended, to one-third (33⅓%) of the ~~company, equals 20%~~stock issued and outstanding and entitled to vote thereat, present in person or ~~more of~~represented by proxy. The Company’s bylaws previously provided that the ~~common stock or 20% or more of the voting power outstanding before the issuance.~~

~~Such approval and consent by the Majority Stockholders constitute the approval and consent~~holders of a majority of the ~~total number~~voting power of all outstanding shares of ~~the Company’s outstanding voting~~capital stock and is sufficient under the Nevada Revised Statutes, the Company’s Amended and Restated Articles of Incorporation, as amended, and the Company’s Bylaws to approve the Exchange Offers and Amendments. Accordingly, the actions will not be submitted to the other stockholders of the Company entitled to vote would constitute a quorum at all meetings of stockholders for ~~a vote, and~~ the ~~information statement has been furnished to such other stockholders to provide them with certain information concerning the actions in accordance with the requirements~~transaction of ~~the Exchange Act, and the regulations promulgated under the Exchange Act, including Regulation 14C.~~

As of May 18, 2023, (i) the principal balance owed by the Company to Hudson Bay pursuant to the senior secured convertible note, dated as of December 14, 2021, as amended, issued by the Company to Hudson Bay is $0, and (ii) the principal balance owed by the Company to CVI pursuant to the senior secured convertible note, dated as of December 14, 2021, as amended, issued by the Company to CVI is $0. See “—Share Issuances in Connection with Note Conversions.”business.

As previously disclosed, on June 1, 2022, the Company and Jefferson agreed to extend the maturity date of the Jefferson Note to November 29, 2022 with a principal amount face value of $946,875 and interest rate that shall accrue at a rate equal to 1% per annum. On December 2, 2022, the Company made a partial payment of $200,000 towards the principal owed on the Jefferson Note, leaving a balance of $746,875. On December 13, 2022, the Company, Terra and Jefferson entered into a letter agreement. Pursuant to the terms of the letter agreement, Jefferson agreed to forbear from entering an event of default under the terms of the Jefferson Note and related transaction documents until December 29, 2022. In addition, the parties agreed to release the Collateral Shares to Jefferson. Effective February 16, 2023, the Jefferson Note has been settled.

On ~~December 23, 2022,~~September 27, 2023, the Company ~~SwagCheck Inc. (“SWAG”), and all SWAG shareholders (collectively, the “SWAG Shareholders”)~~ entered into ~~that certain Share Purchase~~a Master (Asset Transfer) Agreement (the ~~“SWAG~~“Master Agreement”) by and between the Company and Blacksheep Trust (“Blacksheep”). Pursuant to the terms of the ~~SWAG~~Master Agreement, Blacksheep agreed to transfer, on such dates as agreed to by the Company ~~agreed to purchase,~~ and ~~the SWAG Shareholders agreed to sell~~Blacksheep, to the Company ~~100%~~certain collateral equal to $1 billion and controlled by Blacksheep (the “Collateral”). The Collateral will be used by the Company for monetization. The consideration for the Collateral is equal to 15% of the ~~outstanding shares~~monetization, advanced within five business days of SWAG in exchange for $1.00 (the “SWAG Purchase”). SWAG holds a specific right of purchase of a precious gem collection (the “Gems”) as provided for in an agreement between SWAG and a Court-appointed Successor Receiver forclear access to the ~~United States District Court for the Central District of California (the “Receiver”).~~monetization or monetization facility.

The parties ~~have made customary representations, warranties~~to the Master Agreement intend that the transfer of Collateral will be duly validated and ~~covenants in~~authenticated by third-party audit procedures, said audit will allow for the ~~SWAG Agreement. In addition to certain customary closing conditions, the obligations of SWAG~~transfer and ~~the SWAG Shareholders to consummate the closing~~monetization of the ~~SWAG Purchase are subject~~transferred Collateral, free and clear of any liens, claims or encumbrances, from Blacksheep to the ~~satisfaction (or waiver by~~Company and that the Collateral will not be a part of Blacksheep’s property for any ~~of SWAG~~purposes under state or the SWAG Shareholders), at or before the closing date, of certain conditions, including that (i) the Company will have received a financing commitment of at least $90 million by December 27, 2022, with a closing date no later than December 30, 2022, (ii) $60 million will be distributed directly to a Receiver for the purchase of the Gems by SWAG, and (iii) $30 million is a Mark-up to be distributed for the benefit of the outgoing SWAG Shareholders.federal law.

In addition to certain customary closing conditions in the SWAG Agreement, the obligations of SWAG and the SWAG Shareholders to consummate the closing of the SWAG Purchase were subject to the satisfaction (or waiver by any of SWAG or the SWAG Shareholders), at or before the closing date, of certain conditions, including that (i) the Company will have provided SWAG with a binding letter of intent (a “LOI”) by a competent financing party for financing in the amount of at least $90 million by December 27, 2022 with a closing date no later than December 30, 2022, (ii) $60 million will be distributed directly to the Receiver for the purchase of the Gems by SWAG, and (iii) $30 million is a mark-up to be distributed for the benefit of the outgoing SWAG Shareholders.

~~On December 30, 2022, the Company, SWAG and the SWAG Shareholders entered into Amendment No. 1 to the SWAG Agreement (the “SWAG Amendment”).~~ Pursuant to the terms of the ~~SWAG Amendment,~~Master Agreement, Blacksheep will be entitled to an annual distribution of 10% of net profits as identified by an independent auditor based on the ~~parties agreed as follows:~~Company’s business activity resulting from the direct investment of any funds derived from the monetization of transferred Collateral.

The Company has the right to the Collateral for no more than 15 years from the date of monetization, with the Company’s exclusive right to repatriate the Collateral to Blacksheep sooner without penalty. Blacksheep will be permitted one seat on the Company’s Board, which position will remain available for the term of the Collateral transfer or until the Collateral is repatriated to Blacksheep.

~~Although~~Any draw against the ~~SWAG~~monetization of the Collateral will require unanimous Board consent.

The Master Agreement ~~has not yet closed, the parties continue to work together with the intention of closing the transaction. Following the intended closing of SWAG Purchase, SWAG will be a wholly owned subsidiary~~contains customary representations, warranties, and covenants of the Company and ~~will own title~~Blacksheep.

On July 26, 2023 and September 29, 2023, the Company’s Board of Directors and stockholders, respectively, approved the Novo Integrated Sciences, Inc. 2023 Plan. Under the 2023 Plan, a total of 2,500,000 shares of common stock are authorized for issuance pursuant to the ~~Gems, which~~grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares or other cash- or stock-based awards to officers, directors, employees and eligible consultants to the Company ~~intends to either collateralize~~ or ~~sell to raise capital.~~its subsidiaries. As of November 30, 2023, the 2023 Plan had 2,500,000 shares available for award.

On ~~January 25,~~October 9, 2023, the Company issued ~~3,202,019~~73,767 restricted shares of common stock in exchange for certain non-voting special shares of NHL, previously issued in connection with NHL’s ~~acquisition~~Share Exchange Agreement with the Terragenx shareholders, the Company’s Asset Purchase Agreement with Mr. Terrence Mullins, and an employment agreement with Mr. Terrence Mullins, each of ~~Acenzia that~~which closed on ~~June 24,~~November 11, 2021. ~~Specific to~~

On November 6, 2023, the ~~Company’s acquisition~~Company effectuated a 1-for-10 reverse stock split (the “Reverse Stock Split”) effective immediately after the close of ~~Acenzia in June 2021, no additional NHL Exchangeable shares remain for exchange to~~trading on the Nasdaq Capital Market (“Nasdaq”) and the Company’s common stock began trading on Nasdaq on a Reverse Stock Split-adjusted basis on November 7, 2023. As a result of the Reverse Stock Split, every 10 pre-split shares of common stock outstanding became one share of common stock, with fractional shares rounded up to the next higher whole share. The Reverse Stock Split did not affect the number of authorized shares of common stock, the par value of the common stock, or modify any rights or preferences of shares of the Company’s common stock. Proportionate adjustments will be made to the exercise prices and the number of shares underlying the Company’s outstanding equity awards and warrants, as applicable.

On November 21, 2023, the Company entered into a Purchase and Sale Agreement (“Ophir Agreement”) between the Company and Blake Alsbrook, solely in his capacity as Court-appointed successor receiver (the “Successor Receiver”) in Ocean Thermal Energy Corporation v. C. Robert Coe II, et al., United States District Court for the Central District of California (the “Court”) Case No. 2:19-cv-04299 VAP (JPRx) (the “Action”). Pursuant to the terms of the Ophir Agreement, the Company agreed to purchase, and the Successor Receiver agreed to sell to the Company, the Ophir Collection (as hereinafter defined), subject to the contingencies outlined in the Ophir Agreement, including Court approval, which was received on December 1, 2023. The Ophir Agreement was effective upon execution by both parties; however, the Ophir Agreement was subject to approval by the Court.

Pursuant to the Court’s July 2, 2019 order in the Action, as modified by the Court’s February 25, 2022 order in the Action, the Successor Receiver has possession of and right to sell a certain collection of 43 gemstones, 42 of which are certified by the Gemological Institute of America, known as the “Ophir Collection”. Together, the Court’s July 2, 2019 order appointing the original receiver, the Court’s December 3, 2019, order appointing the Successor Receiver, and the Court’s February 25, 2022, order are referred to collectively as the “Receivership Orders.” The Receivership Orders authorized the Successor Receiver to take sole custody, possession, and control of the Ophir Collection and to sell, assign, transfer, convey and deliver title and rights in and to the Ophir Collection subject to the approval of the Court to protect the interests of certain identified creditors.

Within two business days following the Company’s execution of the Ophir Agreement, the Company was required to, and did, deposit $25,000 (the “Deposit”) with the Successor Receiver.

Pursuant to the terms of the Ophir Agreement, the Company agreed to pay $60,000,000 to the Successor Receiver to purchase the Ophir Collection as follows:

As a result of entry into the Ophir Agreement, the Company no longer intends to pursue a transaction with SwagCheck Inc. (“SWAG”). The Share Purchase Agreement, dated as of December 23, 2022, by and among the Company, SWAG and all SWAG shareholders, as amended, previously terminated pursuant to its terms.

On November 22, 2023, the Company received notice from Nasdaq informing the Company that it had regained compliance with the minimum bid price requirement as set forth under NASDAQ Listing Rule 5550(a)(2) for continued listing on Nasdaq.

On November 22, 2023, the Company’s Board of Directors adopted a Compensation Recovery Policy (the “Policy”). The Policy is intended to further the Company’s pay-for-performance philosophy and to comply with applicable law by providing for the reasonably prompt recovery of certain incentive-based compensation received by executive officers in the event of an accounting restatement. The Policy is intended to comply with, and will be interpreted in a manner consistent with, Section 10D of the Exchange Act, with Exchange Act Rule 10D-1 and with the Nasdaq listing standards.

Pursuant to the Policy, if the Company is required to prepare an accounting restatement due to the material noncompliance by the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (an “Accounting Restatement”), then the Compensation Committee must determine the Excess Compensation (as hereinafter defined), if any, that must be recovered. The Company’s obligation to recover Excess Compensation is not dependent on if or when the restated financial statements are filed. The Company must recover Excess Compensation reasonably promptly and executive officers are required to repay Excess Compensation to the Company, subject to the terms of the Policy.

The Policy applies to certain incentive-based compensation that is received on or after November 1, 2023, during the three completed fiscal years immediately preceding the Accounting Restatement determination date, as provided in the Policy (the “Covered Period”) while the Company has a class of securities listed on a national securities exchange. The incentive-based compensation is considered “Clawback Eligible Incentive-Based Compensation” if the incentive-based compensation is received by a person after such person became an executive officer and the person served as an executive officer at any time during the performance period to which the incentive-based compensation applies. The “Excess Compensation” that is subject to recovery under the Policy is the amount of Clawback Eligible Incentive-Based Compensation that exceeds the amount of Clawback Eligible Incentive-Based Compensation that otherwise would have been received had such Clawback Eligible Incentive-Based Compensation been determined based on the restated amounts (this is referred to in the listing standards as “erroneously awarded incentive-based compensation”).

Novo Integrated – Mast Hill ~~Securities Purchase Agreement & Note~~Fund, L.P.

On February 23, 2023, the Company entered into a securities purchase agreement (the “Mast Hill SPA”) with Mast Hill Fund, L.P. (“Mast Hill”), pursuant to which the Company issued an 12% unsecured promissory note (the “Mast Hill Note”) with a maturity date of February 23, 2024 (the “Mast Hill Maturity Date”), in the principal sum of $573,000 (the “Mast Hill Principal Sum”). In addition, the Company issued a common stock purchase warrant for the purchase of up to 1,000,000 shares of the Company’s common stock (the “Mast Hill Warrant”) to Mast Hill pursuant to the Mast Hill SPA. Pursuant to the terms of the Mast Hill Note, the Company agreed to pay the Mast Hill Principal Sum to Mast Hill and to pay interest on the principal balance at the rate of 12% per annum. The Mast Hill Note carries an OID of $57,300. Accordingly, on the closing date, Mast Hill paid the purchase price of $515,700 in exchange for the Mast Hill Note and the Mast Hill Warrant. Mast Hill may convert the Mast Hill Note into shares of the Company’s common stock at any time at a conversion price equal to $0.175 per share, subject to adjustment as provided in the Mast Hill Note (including but not limited to certain price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions) as well as certain beneficial ownership limitations.

The Mast Hill Warrant is exercisable for five years from February 23, 2023, at an exercise price of $0.25 per share, subject to adjustment as provided in the Mast Hill Warrant. The Mast Hill Warrant also contains certain cashless exercise provisions as well as price protection provisions providing for adjustment of the number of shares of the Company’s common stock issuable upon exercise of the Mast Hill Warrant and the exercise price in case of future dilutive offerings, subject to certain customary exempt transactions. The estimated value of the warrants of $86,327 was determined using the Black-Scholes option pricing model with the following assumptions:

On ~~March 23, 2023, the Company made a monthly interest-only payment to Mast Hill in the amount of $5,086. On April~~August 24, 2023, the ~~Company made a monthly interest-only payment to~~total principal and interest of $580,778 owed on the $573,000 Mast Hill Note was converted to 522,777 shares of the Company’s common stock at $1.11095 per share. The MH $573,000 Note is paid in full.

On September 18, 2023, Mast Hill fully exercised all warrants issued pursuant to the ~~amount~~terms and conditions of ~~$5,840. On May~~the $573,000 Mast Hill Warrant Agreement, dated February 23, ~~2023,~~2023. Under certain cashless exercise provisions, as well as price protection provisions providing for adjustment of the number of shares of the Company’s common stock issuable upon exercise of the Mast Hill Warrant, the Company ~~made a monthly interest-only payment to Mast Hill in~~issued 53,567 shares of the ~~amount of $5,652.~~Company’s common stock.

~~March 2023~~Novo Integrated – FirstFire ~~Securities Purchase Agreement, Note & Warrant~~Global Opportunities Fund, LLC

On March 21, 2023, the Company entered into a securities purchase agreement (the “SPA”) with FirstFire Global Opportunities Fund, LLC (“FirstFire”) pursuant to which the Company issued an 12% unsecured promissory note (the “2023 FirstFire Note”) with a maturity date of March 21, 2024, in the principal sum of $573,000 (the “Principal Sum”). In addition, the Company issued a common stock purchase warrant for the purchase of up to ~~1,000,000~~100,000 shares of the Company’s common stock (the “2023 FirstFire Warrant”) to FirstFire pursuant to the SPA. Pursuant to the terms of the 2023 FirstFire Note, the Company agreed to pay the Principal Sum to FirstFire and to pay interest on the principal balance at the rate of 12% per annum. The 2023 FirstFire Note carries an OID of $57,300. Accordingly, on the closing date, FirstFire paid the purchase price of $515,700 in exchange for the 2023 FirstFire Note and the 2023 FirstFire Warrant. FirstFire may convert the 2023 FirstFire Note into the Company’s common stock at any time at a conversion price equal to ~~$0.175~~$1.75 per share, subject to adjustment as provided in the 2023 FirstFire Note (including but not limited to certain price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions) as well as certain beneficial ownership limitations.

The 2023 FirstFire Warrant is exercisable for five years from March 21, 2023, at an exercise price of ~~$0.25~~$2.50 per share, subject to adjustment as provided in the 2023 FirstFire Warrant. The 2023 FirstFire Warrant also contains certain cashless exercise provisions as well as price protection provisions providing for adjustment of the number of shares of common stock issuable upon exercise of the 2023 FirstFire Warrants and the exercise price in case of future dilutive offerings, subject to certain customary exempt transactions. The estimated value of the warrants of $93,811 was determined using the Black-Scholes option pricing model with the following assumptions:

On ~~April~~September 21, 2023, the ~~Company made a monthly interest-only payment~~total principal and interest of $577,521 owed on the $573,000 FirstFire Note was converted to 519,845 restricted shares of the Company’s common stock at $1.11095 per share. The FirstFire $573,000 Note is paid in full.

On October 12, 2023, FirstFire fully exercised all warrants issued under the ~~amount~~terms and conditions of ~~$5,730. On May 22, 2023,~~the $573,000 FirstFire Warrant Agreement, dated March 21, 2023. Under certain cashless exercise provisions, as well as price protection provisions providing for adjustment of the number of shares of the Company’s common stock issuable upon exercise of the Mast Hill Warrant, the Company ~~made a monthly interest-only payment to FirstFire in~~issued 53,532 shares of the ~~amount of $5,730.~~Company’s common stock.

~~RC Consulting Group~~Novo Integrated – Mast Hill Fund, L.P. $445,000 Note, SPA, ~~& Unsecured $70 Million Note~~and Warrant

On ~~April 26,~~June 20, 2023, the Company entered into a securities purchase agreement (the ~~“RC~~“MH $445,000 SPA”)~~, dated as of April 26, 2023,~~ with ~~RC Consulting Group LLC in favor of SCP Tourbillion Monaco or registered assigns (the “RC Noteholder”),~~Mast Hill, pursuant to which the Company issued an 12% unsecured ~~15-year~~ promissory note ~~to the RC Noteholder~~ (the ~~“RC~~“MH $445,000 Note”) with a maturity date of ~~April 26, 2038,~~June 20, 2024 (the “MH $445,000 Maturity Date”), in the principal sum of ~~$70,000,000, which amount represents~~$445,000 (the “MH $445,000 Principal Sum”). In addition, the ~~$57,000,000~~Company issued a common stock purchase warrant for the purchase of up to 77,662 shares of the Company’s common stock (the “MH $445,000 Warrant”) to Mast Hill pursuant to the MH $445,000 SPA. Pursuant to the terms of the MH $445,000 Note, the Company agreed to pay the MH $445,000 Principal Sum to Mast Hill and to pay interest on the principal balance at the rate of 12% per annum. The MH $445,000 Note carries an OID of $44,500. Accordingly, on the Closing Date (as defined in the MH $445,000 SPA), Mast Hill paid the purchase price ~~plus~~of $400,500 in exchange for the MH $445,000 Note and MH $445,000 Warrant. Mast Hill may convert the MH $445,000 Note into the Company’s common stock at any time at a ~~yield (non-compounding) of 1.52% (zero coupon)~~conversion price equal to $1.75 per ~~annum from April 26, 2023 until the same becomes due and payable~~share, subject to adjustment as provided in the ~~RC Note. The RC~~MH $445,000 Note ~~may be prepaid~~(including but not limited to certain price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions), as ~~set forth in the RC Note and ranks pari passu with all unsecured indebtedness of the Company.~~well as certain beneficial ownership limitations.

Pursuant to the terms of the RCMH $445,000 Note, the Company agreed to pay accrued interest monthly as well as the MH $445,000 Principal Sum as follows: (i) $44,500 on December 20, 2023, (ii) $44,500 on January 20, 2024, (iii) $44,500 on February 20, 2024, (iv) $77,661 on March 20, 2024, (v) $77,661 on April 20, 2024, (vi) $77,661 on May 20, 2024, and (vii) all remaining amounts owed under the MH $445,000 Note on the MH $445,000 Maturity Date (each of the aforementioned payments are an “MH $445,000 Amortization Payment”). If the Company fails to make any MH $445,000 Amortization Payment, then Mast Hill shall have the right to convert the amount of such respective MH $445,000 Amortization Payment into shares of common stock as provided in the MH $445,000 Note at the ~~RC Noteholder’s option,~~lesser of (i) the ~~sale, conveyance~~then applicable conversion price under the MH $445,000 Note or ~~disposition of all or substantially all~~(ii) 85% of the ~~Company’s assets, or the consolidation, merger or other business combination~~lowest VWAP of the common stock on any trading day during the five trading days prior to the respective conversion date.

The Company ~~with or into~~may prepay the MH $445,000 Note at any ~~other person(s) when~~time prior to the ~~Company is not the survivor will either: (i) be deemed to be~~date that an Event of Default (as defined in the RC Note) ~~pursuant to which the Company will be required to pay to the RC Noteholder upon the consummation~~(each an “MH $445,000 Event of ~~and as a condition to such transaction~~Default”) occurs at an amount equal to the ~~Default Amount (as hereinafter defined), or (ii) be treated pursuant to Section 1.6(b) of the RC Note.~~

MH $445,000 Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The RC Note contains customary covenants for a transaction of this type. Among other things, so long as the RC Note is outstanding, the Company will not enter into any transaction or arrangement structured in accordance with, based upon, or related or pursuant to, in whole or in part, Section 3(a)(10) of the Securities Act of 1933, as amended (a “3(a)(10) Transaction”). In the event that the Company does enter into, or makes any issuance of common stock related to a 3(a)(10) Transaction while the RC Note is outstanding, a liquidated damages charge of 25% of the outstanding principal balance of the RC Note, but not less than $1,000,000, will be assessed and will become immediately due and payable to the RC Noteholder at its election in the form of a cash payment or added to the balance of the RC Note (under the RC Noteholder’s and the Company’s expectation that this amount will tack back to the date of issuance of the RC Note).

~~The RC~~MH $445,000 Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the ~~RC SPA~~MH $445,000 Note, the MH $445,000 Warrant, or the ~~RC Note.~~MH $445,000 SPA.

~~Upon~~As additional consideration for the ~~occurrence~~purchase of ~~any Event~~the MH $445,000 Note and pursuant to the terms of ~~Default (as defined in~~ the ~~RC Note), the RC Note will become immediately due and payable, and~~MH $445,000 SPA, the Company ~~will pay~~issued 74,167 restricted shares of the Company’s common stock (the “MH $445,000 Commitment Shares”) to Mast Hill at closing. The MH $445,000 SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the RC Noteholder, in full satisfaction of its obligations thereunder, an amount equal to the principal amount then outstanding plus accrued interest (including any default interest) through the date of full repayment multiplied by 125% (collectively, the “Default Amount”),MH $445,000 Commitment Shares as well as ~~all costs, including, without~~the shares of common stock underlying the MH $445,000 Note and MH $445,000 Warrant. In addition to the beneficial ownership limitations provided in the MH $445,000 Note and MH $445,000 Warrant, the sum of the number of shares of common stock that may be issued under the MH $445,000 SPA (including the MH $445,000 Commitment Shares), MH $445,000 Note, and MH $445,000 Warrant shall be limited to 1,772,045 as further described in the MH $445,000 SPA, unless shareholder approval to exceed such limitation ~~legal fees and expenses, of collection, all without demand, presentment or notice.~~is obtained by the Company.

On October 23, 2023, Mast Hill fully exercised all warrants issued pursuant to the terms and conditions of the MH $445,000 Mast Hill Warrant Agreement, dated June 20, 2023. Under certain cashless exercise provisions, as well as price protection provisions providing for adjustment of the number of shares of the Company’s common stock issuable upon exercise of the Mast Hill Warrant, the Company issued 138,703 restricted shares of the Company’s common stock.

On December 21, 2023, the total principal and interest of $454,071 owed on the MH $445,00 Note was converted to 457,128 shares of the Company’s common stock at $1.11095 per share. The ~~RC SPA contains customary covenants, representations and warranties for a transaction of this type.~~MH $445,000 Note is paid in full.

During the ~~nine month~~ period ended ~~May 31,~~November 30, 2023, the Company issued ~~4,510,000~~240,400 shares of common stock to certain warrant holders upon exercise of their warrants issued pursuant to the prospectus that forms a part of the Company’s Registration Statement on Form S-1 (File No. 333-267401) declared effective by the SEC on October 13, 2022 (the “S-1 Warrants”).

~~Share Issuances in Connection with Note Conversions~~Stock Issuance – Consulting Agreements

During the ~~nine month~~ period ended ~~May 31,~~November 30, 2023, the Company issued an aggregate of 94,185,340 shares of common stock to certain note holders upon conversion of their notes. As of May 31, 2023, (i) the principal balance owed by the Company to Hudson Bay pursuant to the senior secured convertible note, dated as of December 14, 2021, as amended, issued by the Company to Hudson Bay is $0, (ii) the principal balance owed by the Company to CVI pursuant to the senior secured convertible note, dated as of December 14, 2021, as amended, issued by the Company to CVI is $0; and (iii) the principal balance owed by the Company to Jefferson pursuant to the secured convertible note, dated as of November 17, 2021, as amended, issued by the Company to Jefferson is $0.

On June 20, 2023, the Company entered into a securities purchase agreement (the “MH SPA”) with Mast Hill, pursuant to which the Company issued an 12% unsecured promissory note (the “MH Note”) with a maturity date of June 20, 2024 (the “MH Maturity Date”), in the principal sum of $445,000 (the “MH Principal Sum”). In addition, the Company issued a common stock purchase warrant for the purchase of up to 776,614 shares of the Company’s common stock (the “MH Warrant”) to Mast Hill pursuant to the MH SPA. Pursuant to the terms of the MH Note, the Company agreed to pay the MH Principal Sum to Mast Hill and to pay interest on the principal balance at the rate of 12% per annum. The MH Note carries an OID of $44,500. Accordingly, on the Closing Date (as defined in the MH SPA), Mast Hill paid the purchase price of $400,500 in exchange for the MH Note and MH Warrant. Mast Hill may convert the MH Note into the Company’s common stock at any time at a conversion price equal to $0.175 per share, subject to adjustment as provided in the MH Note (including but not limited to certain price protection provisions in case of future dilutive offerings, subject to certain customary exempt transactions), as well as certain beneficial ownership limitations.

Pursuant to the terms of the MH Note, the Company agreed to pay accrued interest monthly as well as the MH Principal Sum as follows: (i) $44,500 on December 20, 2023, (ii) 44,500 on January 20, 2024, (iii) $44,500 on February 20, 2024, (iv) $77,661.43 on March 20, 2024, (v) $77,661.43 on April 20, 2024, (vi) $77,661.43 on May 20, 2024, and (vii) all remaining amounts owed under the MH Note on the MH Maturity Date (each of the aforementioned payments are an “MH Amortization Payment”). If the Company fails to make any MH Amortization Payment, then Mast Hill shall have the right to convert the amount of such respective MH Amortization Payment into375,000 restricted shares of common stock as provided in the MH Note at the lesser of (i) the then applicable conversion price under the MH Note or (ii) 85% of the lowest VWAP of the common stock on any trading day during the five trading days prior to the respective conversion date.consideration for consulting services.

The Company may prepay the MH Note at any time prior to the date that an Event of Default (as defined in the Note) (each an “MH Event of Default”) occurs at an amount equal to the MH Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750 for administrative fees. The MH Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the MH Note, the MH Warrant, or the MH SPA.

Upon the occurrence of any MH Event of Default, the MH Note shall become immediately due and payable and the Company shall pay to Mast Hill, in full satisfaction of its obligations hereunder, an amount equal to the MH Principal Sum then outstanding plus accrued interest multiplied by 125%. Upon the occurrence of an MH Event of Default, additional interest will accrue from the date of the MH Event of Default at the rate equal to the lower of 16% per annum or the highest rate permitted by law.

The MH Warrant is exercisable for five years from June 20, 2023, at an exercise price of $0.25 per share, subject to adjustment as provided in the MH Warrant. The MH Warrant also contains certain cashless exercise provisions, as well as price protection provisions providing for adjustment of the number of shares of common stock issuable upon exercise of the MH Warrant and the exercise price in case of future dilutive offerings, subject to certain customary exempt transactions.

As additional consideration for the purchase of the MH Note and pursuant to the terms of the MH SPA, the Company issued 741,666 restricted shares of the Company’s common stock (the “MH Commitment Shares”) to Mast Hill at closing. The MH SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the MH Commitment Shares as well as the shares of common stock underlying the MH Note and MH Warrant. In addition to the beneficial ownership limitations provided in the MH Note and MH Warrant, the sum of the number of shares of common stock that may be issued under the MH SPA (including the MH Commitment Shares), MH Note, and MH Warrant shall be limited to 17,720,448 as further described in the MH SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

On June 28, 2023, the Company entered into a separation and general release agreement (the “Zsebok Agreement”) with Jim Zsebok and RTZ Consulting Group, Inc. (“RTZ”, and collectively with Mr. Zsebok, the “Zsebok Parties”), an entity owned by Mr. Zsebok. Pursuant to the terms of the Zsebok Agreement, all independent contract relationships between the Company and the Zsebok Parties were terminated, and Mr. Zsebok resigned from the position of the Company’s Principal Financial Officer. The Company issued to RTZ (i) 1,000,000 shares of the Company’s common stock pursuant to the Company’s 2021 Equity Incentive Plan; and (ii) 335,000 unregistered shares of the Company’s common stock for the full satisfaction of the Company’s obligations to the Zsebok Parties in connection with such termination and resignation.

~~The Company agreed to pay Mr. Sethi an annual base salary of CAD$100,000 (approximately $76,000) in exchange for his services as Principal Financial Officer.~~

For the three months ended ~~May 31,~~November 30, 2023 compared to the three months ended ~~May 31,~~November 30, 2022

Revenues for the three months ended ~~May 31,~~November 30, 2023 were ~~$3,292,933,~~$3,891,218, representing ~~a decrease~~an increase of ~~$10,558,950,~~$471,938, or ~~76%~~14%, from ~~$13,851,883~~$3,419,280 for the same period in 2022. The ~~decrease~~increase in revenue is principally due to ~~the decrease~~an increase in ~~outsourced~~ product ~~sales and IoNovo Iodine.~~sales. Acenzia’s and Terragenx’s revenue for the three months ended ~~May 31,~~November 30, 2023 ~~was $896,405~~were $1,683,850 and ~~$5,866,~~$16,971, respectively. Revenue from our healthcare services ~~decreased~~increased by 8%1.2% when comparing the revenue for the three months ended ~~May 31,~~November 30, 2023 to the same period in 2022.

Cost of revenues for the three months ended ~~May 31,~~November 30, 2023 was ~~$1,978,839,~~$1,947,200, representing ~~a decrease~~an increase of ~~$9,464,162,~~$267,453, or ~~83%~~16%, from ~~$11,443,001~~$1,679,747 for the same period in 2022. Cost of revenues as a percentage of revenue for our healthcare and product sales segments was ~~66%~~67% and ~~51%~~33%, respectively, for the three months ended ~~May 31,~~November 30, 2023. The cost of revenue for our healthcare and product sales segment was ~~57%~~61% and ~~87%~~56%, respectively, for the same period in 2022. The ~~decrease~~overall change in cost of revenues as a percentage of revenue for our product sales segment was principally due to the ~~decrease~~change in product costs.

Operating costs for the three months ended ~~May 31,~~November 30, 2023 were ~~$2,744,512,~~$5,261,655, representing ~~a decrease~~an increase of ~~$867,116,~~$1,280,162, or ~~24%~~32%, from ~~$3,611,628~~$3,981,493 for the same period in 2022. The ~~decrease~~increase in operating costs was principally due to ~~the decrease in overhead expenses~~common stock issuance for services and ~~depreciation and amortization.~~cashless warrant exercise.

Interest expense for the three months ended ~~May 31,~~November 30, 2023 was ~~$9,570,~~$143,374, representing a decrease of ~~$503,828,~~$23,869, or ~~98%~~14%, from ~~$513,398~~$167,243 for the same period in 2022. The decrease was due to cash payment and conversion of some of the Company’s convertible notes to common stock as of ~~May 31,~~November 30, 2023.

Amortization of debt discount for the three months ended ~~May 31,~~November 30, 2023 was ~~$156,037,~~$1,075,928, representing a decrease of ~~$1,977,853~~$414,585, or 28%, from ~~$2,133,890~~$1,490,513 for the same period in 2022. The decrease was due to convertible notes which were settled during the period.

Foreign currency transaction ~~gain~~loss for the three months ended ~~May 31,~~November 30, 2023 was ~~$48,333~~$59,358 compared to ~~$97,654~~$39,301 for the same period in ~~2022.~~2022, representing an increase of $20,057, or 51%. Acenzia and Terragenx both have outstanding debt recorded on their books that is payable in U.S. Dollars. ~~The exchange rate between~~Prior period balance related to the ~~Canadian Dollar and the~~outstanding debt payable in U.S. ~~Dollar decreased during the third fiscal quarter of 2022; therefore, creating a foreign currency transaction gain as it will require more Canadian Dollars to repay the debt.~~Dollars.

Net loss attributed to Novo Integrated Sciences, Inc. for the three months ended ~~May 31,~~November 30, 2023 was ~~$1,497,330,~~$4,680,343, representing ~~a decrease~~an increase of ~~$2,312,724,~~$744,930, or ~~61%~~19%, from ~~$3,810,054~~$3,935,413 for the same period in 2022. The ~~decrease~~increase in net loss was principally due to the ~~decrease~~increase in operating expenses.

~~For the nine months ended May 31, 2023 compared to the nine months ended May 31, 2022~~

Revenues for the nine months ended May 31, 2023 were $9,268,722, representing a decrease of $10,614,311, or 53%, from $19,883,033 for the same period in 2022. The decrease in revenue was principally due to the decrease in outsourced product sales and IoNovo Iodine. Acenzia’s and Terragenx’s revenue for the nine months ended May 31, 2023 was $2,132,554 and $47,190, respectively. Revenue from our healthcare services increased by 7% when comparing the revenue for the nine months ended May 31, 2023 to the same period in 2022.

Cost of revenues for the nine months ended May 31, 2023 were $5,244,192, representing a decrease of $9,747,139, or 65%, from $14,991,331 for the same period in 2022. Cost of revenues as a percentage of revenue for our healthcare and product sales segments was 57% and 55%, respectively, for the nine months ended May 31, 2023. The cost of revenue for our healthcare and product sales segment was 60% and 82%, respectively, for same period in 2022. The decrease in cost of revenues as a percentage of revenue for our product sales segment was principally due to the decrease in product costs.

Operating costs for the nine months ended May 31, 2023 were $9,483,718, representing a decrease of $95,065, or 1%, from $9,578,783 for the same period in 2022. The decrease in operating costs was principally due to the decrease in overhead expenses and depreciation and amortization.

Interest expense for the nine months ended May 31, 2023 was $240,520, representing a decrease of $1,567,790, or 87%, from $1,808,310 for the same period in 2022. The decrease is due to cash payment and conversion of convertible notes to common stock as of May 31, 2023.

Amortization of debt discount for the nine months ended May 31, 2023 was $4,386,899, representing an increase of $732,147 from $3,654,752 for the same period in 2022. The increase is due to amortization of the debt discounts associated with the convertible notes issued in November 2021, December 2021, February 2023, and March 2023.

Foreign currency transaction gains for the nine months ended May 31, 2023 was $12,652 compared to foreign currency transaction losses of $303,714 for the same period in 2022. Acenzia and Terragenx both have outstanding debt recorded on their books that is payable in U.S. Dollars. The exchange rate between the Canadian Dollar and the U.S. Dollar decreased during the third fiscal quarter of 2022; therefore, creating a foreign currency transaction gain as it will require more Canadian Dollars to repay the debt.

Net loss attributed to Novo Integrated Sciences, Inc. for the nine months ended May 31, 2023 was $10,054,098, representing a decrease of $367,710, or 4%, from $10,421,808 for the same period in 2022. The decrease in net loss was principally due to (i) a decrease in overhead expenses associated with the operations of Acenzia, PRO-DIP, and Terragenx which was approximately $2,742,807 for the nine months ended May 31, 2023, and (ii) a decrease in interest expenses.

As shown in the accompanying unaudited condensed consolidated financial statements, for the ~~nine~~three months ended ~~May 31,~~November 30, 2023, the Company had a net loss of ~~$10,067,193.~~$4,660,723.

During the ~~nine~~three months ended ~~May 31,~~November 30, 2023, the Company used cash in operating activities of ~~$2,014,543~~$2,152,358 compared to ~~$6,559,907~~$278,237 of cash used in operating activities for the same period in 2022. The principal reason for the ~~decrease~~increase in cash used in operating activities iswas the net loss incurred, ~~and~~ the changes in noncash expenses and changes in operating asset and liability accounts.

During the ~~nine~~three months ended ~~May 31,~~November 30, 2023 and 2022, the Company did not have any cash flows from investing activities.

During the three months ended November 30, 2023, the Company ~~used~~had cash ~~from investing~~provided by financing activities of ~~$18,870~~$3,296,272 compared to cash ~~provided~~used by ~~investing~~financing activities of ~~$162,654~~$1,034,021 for the same period in 2022. The principal reason for the ~~change is due to no cash acquired with acquisition nor any payments received from other receivables during the nine months ended May 31, 2023 compared to the same period in 2022.~~

~~During the nine months ended May 31, 2023, the Company had cash provided by financing activities of $296,334 compared to $10,802,477 for the same period in 2022. The principal reason for the decrease~~increase in cash provided by financing activities was the ~~repayment~~$3,314,153 proceeds received from the issuance of convertible notes and the $240,400 proceeds received from the exercise of ~~$3,033,888, repayment of finance leases of $6,435,~~warrants, offset by $72,402 repayment to related parties, $183,100 repayment of ~~$56,649 offset by proceeds received from the sale of units, net of issuance costs of $1,795,000, proceeds from exercise of warrants of $451,000~~notes payable, and ~~proceeds from issuance of convertible notes of $925,306.~~$2,779 repayment for finance leases. In the same period for 2022, the Company received ~~$15,270,000~~$1,795,000 from the ~~issuance~~sale of common stock, net of offering costs, offset by $2,777,778 repayment of convertible ~~notes.~~

~~In December 2019, a novel strain of coronavirus (COVID-19) emerged in Wuhan, Hubei Province, China. On March 17, 2020, as a result of COVID-19 pandemic having been reported throughout both Canada~~notes, $48,480 repayment to related parties, and the United States, certain national, provincial, state and local governmental authorities issued proclamations and/or directives aimed at minimizing the spread of COVID-19. Accordingly, on March 17, 2020, the Company closed all corporate clinics$2,763 repayment for all in-clinic non-essential services to protect the health and safety of its employees, partners, and patients. Commencing in May 2020, the Company was able to begin providing some services, and was fully operational again in June 2020. As of May 31, 2023, all corporate clinics were open and fully operational, with staffing shortages in some facilities due to ongoing COVID-19 residual impact, while following all mandated guidelines and protocols from Health Canada, the Ontario Ministry of Health, and the respective disciplines’ regulatory Colleges to ensure a safe treatment environment for our staff and clients, and our eldercare operations are fully operational. In addition, Acenzia, Terragenx, PRO-DIP, and CCI are open and fully operational, with staffing shortages due to ongoing COVID-19 residual impact, while following all local, state, provincial, and national guidelines and protocols related to minimizing the spread of the COVID-19 pandemic.

Canadian federal and provincial COVID-19 governmental proclamations and directives, including interprovincial travel restrictions, have presented unprecedented challenges to launching our Harvest Gold Farms and Kainai Cooperative joint ventures during the period ended May 31, 2023. Accordingly, the Company has decided to delay commencing the projects until the 2023 grow season. These joint ventures relate to the development, management, and arrangement of medicinal farming projects involving industrial hemp for medicinal cannabidiol (CBD) applications.finance leases.

For the three ~~month period~~months ended ~~May 31,~~November 30, 2023, the Company’s total revenue from all clinic and eldercare related contracted services was ~~$2,019,869,~~$2,044,510, representing ~~an 8% decrease~~a 1% increase of ~~$180,020~~$23,297 compared to ~~$2,199,889~~$2,021,213 during the ~~same period in 2022.~~

~~For the nine month~~three-month period ended May 31, 2023, the Company’s total revenue from all clinic and eldercare related contracted services was $6,075,237, representing a 3% decrease of $177,852 compared to $6,253,089 during the same period inNovember 30, 2022.

While all of the Company’s business units are operational at the time of this filing, any future impact of the COVID-19 pandemic on the Company’s operations remains unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including, but not limited to, (i) the duration of the COVID-19 outbreak and additional variants that may be identified, (ii) new information which may emerge concerning the severity of the COVID-19 pandemic, and (iii) any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption, reduced patient traffic, and reduced operations.

Our capital requirements going forward will consist of financing our operations until we are able to reach a level of revenues and gross margins adequate to equal or exceed our ongoing operating expenses. We do not have any credit agreement or source of liquidity immediately available to us.

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

We believe that the following critical policies affect our more significant judgments and estimates used in the preparation of our financial statements.

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. This applies in particular to going concern assessment, useful lives of non-current assets, impairment of non-current assets, allowance for doubtful accounts, allowance for slow moving and obsolete inventory, valuation of share-based compensation and warrants, valuation of derivative liability, and valuation allowance for deferred tax assets. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

The Company has not changed its estimate for the useful lives of its property and equipment, but would expect that a decrease in the estimated useful lives of property and equipment of 20% would result in an annual increase to depreciation expense of approximately ~~$170,149,~~$51,436, and an increase in the estimated useful lives of property and equipment of 20% would result in an annual decrease to depreciation expense of approximately ~~$113,432.~~$51,436.

The Company’s intangible assets are being amortized over their estimated useful lives as follows:

The intangible assets with finite useful lives are reviewed for impairment when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. The Company has not changed its estimate for the useful lives of its intangible assets but would expect that a decrease in the estimated useful lives of intangible assets of 20% would result in an annual increase to amortization expense of approximately $500,568, and an increase in the estimated useful lives of intangible assets of 20% would result in an annual decrease to amortization expense of approximately $333,712.

The Company applies the provisions of ~~ASC~~the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets, including right-of-use assets, used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal.

The Company’s right-of-use assets consist of leased assets recognized in accordance with ASC 842, Leases, which requires lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liability represents the Company’s obligation to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the condensed consolidated balance sheet and are expensed on a straight-line basis over the lease term in the condensed consolidated statements of operations and comprehensive loss. The Company determines the lease term by agreement with the lessor. In cases where the lease does not provide an implicit interest rate, the Company uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.

Goodwill represents the excess of purchase price over the underlying net assets of businesses acquired. Under U.S. GAAP, goodwill is not amortized but is subject to annual impairment tests. The Company recorded goodwill related to its acquisition of APKA Health, Inc. (“APKA”) during the fiscal year ended August 31, 2017, Executive Fitness Leaders (“EFL”) during the fiscal year ended August 31, 2018, Action Plus Physiotherapy Rockland (“Rockland”) during the fiscal year ended August 31, 2019, Acenzia, Inc. (“Acenzia”) during fiscal year ended August 31, 2021, and 1285 Canada, and Fairway Physiotherapy and Sports Injury Clinic (“Fairway”) during fiscal year ended August 31, 2022. As of August 31, 2022, the Company performed the required impairment reviews and determined that an impairment charge of $1,357,043 related to the goodwill for Acenzia was necessary. The Company determined that the carrying value was in excess of the expected fair value of discounted cash flows based on the current market and business environments, resulting in the need for impairment. The impairment was determined based on the discounted cash flow valuation model and the projected future cash flows of the underlying business. Based on its review at ~~May 31,~~November 30, 2023, the Company believes there was no ~~additional~~ impairment of its goodwill.

Accounts Receivable are recorded, net of allowance for doubtful accounts and sales returns. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentration, customer credit worthiness, current economic trends, and changes in customer payment patterns to determine if the allowance for doubtful accounts is adequate. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Delinquent account balances are written-off after management has determined that the likelihood of collection is not probable and known bad debts are written off against the allowance for doubtful accounts when identified. The Company has not changed its methodology for estimating allowance for doubtful accounts and historically the change in estimate has not been significant to the Company’s condensed consolidated financial statements. If there is a deterioration of the Company’s customers’ ability to pay or if future write-offs of receivables differ from those currently anticipated, the Company may have to adjust its allowance for doubtful accounts, which would affect earnings in the period the adjustments are made.

Inventories are valued at the lower of cost (determined by the first in, first out method) and net realizable value. Management compares the cost of inventories with the net realizable value and allowance is made for writing down their inventories to net realizable value, if lower. Inventory is segregated into three areas: raw materials, work-in-process and finished goods. The Company periodically assessed its inventory for slow moving and/or obsolete items and any change in the allowance is recorded in cost of revenue in the accompanying condensed consolidated statements of operations and comprehensive loss. If any are identified an appropriate allowance for those items is made and/or the items are deemed to be impaired.

The Company’s revenue recognition reflects the updated accounting policies as per the requirements of ~~ASU~~FASB’s Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“Topic 606”). As sales are and have been primarily from providing healthcare services, the Company has no significant post-delivery obligations.

These five elements, as applied to the Company’s revenue category, are summarized below:

Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share. Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS assumes that all dilutive securities are converted. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

U.S. GAAP generally requires recognized revenue, expenses, gains and losses be included in net income. Certain statements, however, require entities to report specific changes in assets and liabilities, such as gain or loss on foreign currency translation, as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. The functional currency of the Company’s Canadian subsidiaries is the Canadian dollar and the functional currency of the ~~Parent~~parent is the United States dollar. Translation gains (losses) are classified as an item of other comprehensive income in the stockholders’ equity section of the condensed consolidated balance sheet.

Recent accounting pronouncements issued by the FASB, the American Institute of Certified Public Accountants and the SEC did not or are not believed by management to have a material effect on the Company’s condensed consolidated financial statements.

The Company’s Chief Executive Officer and Principal Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of ~~May 31,~~November 30, 2023. Based upon such evaluation, the Chief Executive Officer and Principal Financial Officer have concluded that, as of ~~May 31,~~November 30, 2023, the Company’s disclosure controls and procedures were not effective as required under Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or 15d-15 of the Exchange Act that occurred during the period ended ~~May 31,~~November 30, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Except as set forth herein, as of the date of this Quarterly Report on Form 10-Q, there are no material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party or which our property is the subject. In addition, none of our officers, directors, affiliates or 5% stockholders (or any associates thereof) is a party adverse to us, or has a material interest adverse to us, in any material proceeding.

~~On March 22,~~During the period ended November 30, 2023, the Company issued ~~955,000~~375,000 restricted shares of common stock as consideration for consulting services.

On September 21, 2023, the Company issued 519,845 restricted shares of common stock as consideration for the total principal and interest of $577,521 owed on the $573,000 FirstFire Note.

On October 9, 2023, the Company issued 73,767 restricted shares of common stock in exchange for certain non-voting special shares of NHL, previously issued in connection with NHL’s Share Exchange Agreement with the Terragenx shareholders, the Company’s Asset Purchase Agreement with Mr. Terrence Mullins, and an employment agreement with Mr. Terrence Mullins, each of which closed on November 11, 2021.

On October 23, 2023, the Company issued 138,703 restricted shares of common stock for fully exercised warrants issued pursuant to ~~a Securities Purchase~~the terms and conditions of the $445,000 Mast Hill Warrant Agreement, dated ~~March 21,~~June 20, 2023.

The above ~~sale was~~sales were made pursuant to an exemption from registration as set forth in Regulation S under the Securities Act, Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act.

(a) ~~None.~~On January 16, 2024, the Board of Directors granted to Christopher David, the Company’s President, Chief Operating Officer and member of the Board of Directors, an option to purchase 200,000 shares of the Company’s common stock pursuant to the 2023 Equity Incentive Plan. The option was fully vested at grant and is exercisable until January 16, 2030. The option has an exercise price of $0.78 per share.

(b) There have been no material changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors since the Company last provided disclosure in response to the requirements of Item 407(c)(3) of Regulation S-K.

(c) During the quarter ended November 30, 2023, no director or officer of the Company adopted or terminated a contract, instruction or written plan for the purchase or sale of securities of the Company intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) and/or a non-Rule 10b5-1 trading arrangement.

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

Title of each class		Trading Symbol(s)		Name of each Exchange on which Registered
Common Stock		NVOS		The Nasdaq Stock Market LLC

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3135

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	51

Item 4.	Controls and Procedures	5251

PART II – OTHER INFORMATION		52

Item 1.	Legal Proceedings	52

Item 1A.	Risk Factors	52

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52

Item 3.	Defaults Upon Senior Securities	52

Item 4.	Mine Safety Disclosures	52

Item 5.	Other Information	52

Item 6.	Exhibits	53

Signatures		54

	November 30,			August 31,
	2023			2023
ASSETS
Current Assets:
Cash and cash equivalents	$	1,640,007		$	416,323
Accounts receivable, net		2,636,174			1,467,028
Inventory, net		1,270,835			1,106,983
Other receivables		1,047,742			1,051,584
Prepaid expenses and other current assets		213,812			346,171
Total current assets		6,808,570			4,388,089

Property and equipment, net		5,306,613			5,390,038
Intangible assets, net		15,704,218			16,218,539
Right-of-use assets, net		1,870,204			1,983,898
Goodwill		7,554,779			7,582,483
TOTAL ASSETS	$	37,244,384		$	35,563,047

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Accounts payable	$	3,403,634		$	3,513,842
Accrued expenses		1,300,549			1,233,549
Accrued interest (including amounts to related parties)		480,719			382,666
Government loans and notes payable, current portion		93,488			277,405
Convertible notes payable, net of discount of $3,118,819		1,103,959			558,668
Derivative liability		2,686,260			-
Contingent liability		52,749			61,767
Debentures, related parties		913,474			916,824
Due to related parties		458,266			533,001
Finance lease liability		8,907			11,744
Operating lease liability, current portion		413,506			415,392
Total current liabilities		10,915,511			7,904,858

Government loans and notes payable, net of current portion		63,777			65,038
Operating lease liability, net of current portion		1,585,667			1,693,577
Deferred tax liability		1,395,381			1,400,499
TOTAL LIABILITIES		13,960,336			11,063,972

Commitments and contingencies		-			-

STOCKHOLDERS’ EQUITY
Novo Integrated Sciences, Inc.
Convertible preferred stock; $0.001 par value; 1,000,000 shares authorized; 0 and 0 shares issued and outstanding at November 30, 2023 and August 31, 2023, respectively		-			-
Common stock; $0.001 par value; 499,000,000 shares authorized; 17,291,192 and 15,759,325 shares issued and outstanding at November 30, 2023 and August 31, 2023, respectively		17,292			15,760
Additional paid-in capital		95,481,354			90,973,316
Common stock to be issued (17,375 and 91,138 shares at November 30, 2023 and August 31, 2023)		44,443			1,217,293
Other comprehensive loss		(246,488	)		(357,383	)
Accumulated deficit		(71,713,384	)		(67,033,041	)
Total Novo Integrated Sciences, Inc. stockholders’ equity		23,583,217			24,815,945
Noncontrolling interest		(299,169	)		(316,870	)
Total stockholders’ equity		23,284,048			24,499,075
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	37,244,384		$	35,563,047

	May 31,			August 31,
	2023			2022
	(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	464,011		$	2,178,687
Accounts receivable, net		1,327,613			1,017,405
Inventory, net		938,940			879,033
Other receivables		1,046,080			1,085,335
Prepaid expenses and other current assets		221,414			571,335
Total current assets		3,998,058			5,731,795

Property and equipment, net		5,411,438			5,800,648
Intangible assets, net		16,696,363			18,840,619
Right-of-use assets, net		2,096,376			2,673,934
Goodwill		7,542,795			7,825,844
TOTAL ASSETS	$	35,745,030		$	40,872,840

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Accounts payable	$	1,896,040		$	1,800,268
Accrued expenses		1,178,245			1,116,125
Accrued interest (including amounts to related parties)		350,831			454,189
Government loans and notes payable, current portion		312,672			-
Convertible notes payable, net of discount of $494,523		651,477			9,099,654
Contingent liability		57,933			534,595
Due to related parties		406,683			478,897
Debentures, related parties, current portion		912,025			-
Finance lease liability, current portion		13,814			8,890
Operating lease liability, current portion		428,951			582,088
Total current liabilities		6,208,671			14,074,706

Debentures, related parties, net of current portion		-			946,250
Government loans and notes payable, net of current portion		64,946			161,460
Finance lease liability, net of current portion		-			12,076
Operating lease liability, net of current portion		1,786,961			2,185,329
Deferred tax liability		1,393,168			1,445,448
TOTAL LIABILITIES		9,453,746			18,825,269

Commitments and contingencies		-			-

STOCKHOLDERS’ EQUITY
Novo Integrated Sciences, Inc.
Convertible preferred stock; $0.001 par value; 1,000,000 shares authorized; 0 and 0 shares issued and outstanding at May 31, 2023 and August 31, 2022, respectively		-			-
Common stock; $0.001 par value; 499,000,000 shares authorized; 144,857,518 and 31,180,603 shares issued and outstanding at May 31, 2023 and August 31, 2022, respectively		144,857			31,181
Additional paid-in capital		89,249,590			66,056,824
Common stock to be issued (911,392 and 4,149,633 shares at May 31, 2023 and August 31, 2022, respectively)		1,217,293			9,474,807
Other comprehensive (loss) income		(172,526	)		560,836
Accumulated deficit		(63,872,587	)		(53,818,489	)
Total Novo Integrated Sciences, Inc. stockholders’ equity		26,566,627			22,305,159
Noncontrolling interest		(275,343	)		(257,588	)
Total stockholders’ equity		26,291,284			22,047,571
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	35,745,030		$	40,872,840


	Common Stock				Additional Paid-in			Common Stock To			Other Comprehensive			Accumulated			Total Novo Stockholders’			Noncontrolling			Total
	Shares		Amount		Capital			Be Issued			(Loss) Income			Deficit			Equity			Interest			Equity

Balance, August 31, 2023		15,759,325	$	15,760	$	90,973,316		$	1,217,293		$	(357,383	)	$	(67,033,041	)	$	24,815,945		$	(316,870	)	$	24,499,075
Cashless exercise of warrants		245,802		246		1,323,152			-			-			-			1,323,398			-			1,323,398
Exercise of warrants for cash		240,400		240		240,160			-			-			-			240,400			-			240,400
Share issuance for convertible debt settlement		519,845		520		577,002			-			-			-			577,522			-			577,522
Issuance of common stock to be issued		73,767		74		1,172,776			(1,172,850	)		-			-			-			-			-
Common stock issued for services		424,080		424		1,194,976			-			-			-			1,195,400			-			1,195,400
Rounding due to stock split		27,973		28		(28	)		-			-			-			-			-			-
Foreign currency translation gain		-		-		-			-			110,895			-			110,895			(1,919	)		108,976
Net (loss) income		-		-		-			-			-			(4,680,343	)		(4,680,343	)		19,620			(4,660,723	)
Balance, November 30, 2023		17,291,192	$	17,292	$	95,481,354		$	44,443		$	(246,488	)	$	(71,713,384	)	$	23,583,217		$	(299,169	)	$	23,284,048

Balance, August 31, 2022		3,118,063	$	3,118	$	66,084,887		$	9,474,807		$	560,836		$	(53,818,489	)	$	22,305,159		$	(257,588	)	$	22,047,571
Balance		3,118,063	$	3,118	$	66,084,887		$	9,474,807		$	560,836		$	(53,818,489	)	$	22,305,159		$	(257,588	)	$	22,047,571

Units issued for cash, net of offering costs		400,000		400		1,794,600			-			-			-			1,795,000			-			1,795,000
Issuance of common stock to be issued		3,623		4		92,362			(92,366	)		-			-			-			-			-
Cashless exercise of warrants		467,399		467		1,138,583			-			-			-			1,139,050			-			1,139,050
Fair value of stock options		-		-		60,887			-			-			-			60,887			-			60,887
Foreign currency translation loss		-		-		-			-			(417,008	)		-			(417,008	)		(3,974	)		(420,982	)
Net loss		-		-		-			-			-			(3,935,413	)		(3,935,413	)		(1,323	)		(3,936,736	)
Net Income (loss)		-		-		-			-			-			(3,935,413	)		(3,935,413	)		(1,323	)		(3,936,736	)
Balance, November 30, 2022		3,989,085	$	3,989	$	69,171,319		$	9,382,441		$	143,828		$	(57,753,902	)	$	20,947,675		$	(262,885	)	$	20,684,790
Balance		3,989,085	$	3,989	$	69,171,319		$	9,382,441		$	143,828		$	(57,753,902	)	$	20,947,675		$	(262,885	)	$	20,684,790

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

	Shares		Amount		Capital			Be Issued			Income			Deficit			Equity			Interest			Equity
	Common Stock				Additional Paid-in			Common Stock To			Other Comprehensive			Accumulated			Novo Stockholders’			Noncontrolling			Total
	Shares		Amount		Capital			Be Issued			Income			Deficit			Equity			Interest			Equity
Balance, August 31, 2022		31,180,603	$	31,181	$	66,056,824		$	9,474,807		$	560,836		$	(53,818,489	)	$	22,305,159		$	(257,588	)	$	22,047,571
Units issued for cash, net of offering costs		4,000,000		4,000		1,791,000			-			-			-			1,795,000			-			1,795,000
Issuance of common stock to be issued		36,222		36		92,330			(92,366	)		-			-			-			-			-
Cashless exercise of warrants		4,673,986		4,674		1,134,376			-			-			-			1,139,050			-			1,139,050
Fair value of stock options		-		-		60,887			-			-			-			60,887			-			60,887
Foreign currency translation loss		-		-		-			-			(417,008	)		-			(417,008	)		(3,974	)		(420,982	)
Net loss		-		-		-			-			-			(3,935,413	)		(3,935,413	)		(1,323	)		(3,936,736	)
Balance, November 30, 2022		39,890,811	$	39,891	$	69,135,417		$	9,382,441		$	143,828		$	(57,753,902	)	$	20,947,675		$	(262,885	)	$	20,684,790

Share issuance for convertible debt settlement		93,109,398		93,110		8,992,941			-			-			-			9,086,051			-			9,086,051
Cashless exercise of warrants		1,159,348		1,159		281,374			-			-			-			282,533			-			282,533
Exercise of warrants for cash		1,310,000		1,310		129,690			-			-			-			131,000			-			131,000
Issuance of common stock to be issued		3,202,019		3,201		8,161,947			(8,165,148	)		-			-			-			-			-
Shares issued with convertible notes		955,000		955		82,008			-			-			-			82,963			-			82,963
Value of warrants issued with convertible notes		-		-		86,327			-			-			-			86,327			-			86,327
Fair value of stock options		-		-		60,887			-			-			-			60,887			-			60,887
Extinguishment of derivative liability due to conversion		-		-		1,390,380			-			-			-			1,390,380			-			1,390,380
Foreign currency translation loss		-		-		-			-			(195,821	)		-			(195,821	)		(862	)		(196,683	)
Net loss		-		-		-			-			-			(4,621,355	)		(4,621,355	)		(23,807	)		(4,645,162	)
Balance, February 28, 2023		139,626,576	$	139,626	$	88,320,971		$	1,217,293		$	(51,993	)	$	(62,375,257	)	$	27,250,640		$	(287,554	)	$	26,963,086
Share issuance for convertible debt settlement		1,075,942		1,076		99,202			-			-			-			100,278			-			100,278
Exercise of warrants for cash		3,200,000		3,200		316,800			-			-			-			320,000			-			320,000
Shares issued with convertible notes		955,000		955		89,177			-			-			-			90,132			-			90,132
Value of warrants issued with convertible notes		-		-		93,811			-			-			-			93,811			-			93,811
Beneficial conversion feature upon issuance on convertible debt		-		-		66,068			-			-			-			66,068			-			66,068
Stock option expense		-		-		263,561			-			-			-			263,561			-			263,561
Foreign currency translation loss		-		-		-			-			(120,533	)		-			(120,533	)		176			(120,357	)
Net loss		-		-		-			-			-			(1,497,330	)		(1,497,330	)		12,035			(1,485,295	)
Balance, May 31, 2023		144,857,518	$	144,857	$	89,249,590		$	1,217,293		$	(172,526	)	$	(63,872,587	)	$	26,566,627		$	(275,343	)	$	26,291,284

Balance, August 31, 2021		26,610,144	$	26,610	$	54,579,396		$	9,236,607		$	991,077		$	(20,969,274	)	$	43,864,416		$	(60,261	)	$	43,804,155
Common stock for services		35,000		35		64,715			-			-			-			64,750			-			64,750
Common stock issued as collateral and held in escrow		2,000,000		2,000		(2,000	)		-			-			-			-			-			-
Common stock to be issued for purchase of Terragenx		-		-		-			983,925			-			-			983,925			97,311			1,081,236
Common stock to be issued for purchase of Mullin assets		-		-		-			188,925			-			-			188,925			-			188,925
Value of warrants issued with convertible notes		-		-		295,824			-			-			-			295,824			-			295,824
Fair value of stock options		-		-		154,135			-			-			-			154,135			-			154,135
Foreign currency translation loss		-		-		-			-			(103,533	)		-			(103,533	)		(855	)		(104,388	)
Net loss		-		-		-			-			-			(1,806,587	)		(1,806,587	)		(9,808	)		(1,816,395	)

Balance, November 30, 2021		28,645,144	$	28,645	$	55,092,070		$	10,409,457		$	887,544		$	(22,775,861	)	$	43,641,855		$	26,387		$	43,668,242
Common stock for services		240,000		240		297,760			-			-			-			298,000			-			298,000
Value of warrants issued with convertible notes		-		-		5,257,466			-			-			-			5,257,466			-			5,257,466
Fair value of stock options		-		-		44,427			-			-			-			44,427			-			44,427
Foreign currency translation gain		-		-		-			-			114,738			-			114,738			355			115,093
Net loss		-		-		-			-			-			(4,805,167	)		(4,805,167	)		(63,037	)		(4,868,204	)
Balance, February 28, 2022		28,885,144	$	28,885	$	60,691,723		$	10,409,457		$	1,002,282		$	(27,581,028	)	$	44,551,319		$	(36,295	)	$	44,515,024
Common stock issued for services		125,000		125		313,875			-			-			-			314,000			-			314,000
Share issuance for convertible debt settlement		623,929		624		1,247,225			-			-			-			1,247,849			-			1,247,849
Common stock issued for acquisition		800,000		800		1,703,200			-			-			-			1,704,000			-			1,704,000
Common stock to be issued for acquisitions		-		-		-			260,625			-			-			260,625			25,402			286,027
Issuance of common stock to be issued		225,000		225		573,525			(573,750	)		-			-			-			-			-
Fair value of stock options		-		-		91,330			-			-			-			91,330			-			91,330
Foreign currency translation gain		-		-		-			-			13,711			-			13,711			51			13,762
Foreign currency translation gain (loss)		-		-		-			-			13,711			-			13,711			51			13,762
Net Loss															(3,810,054	)		(3,810,054	)		66,029			(3,744,025	)
Balance, May 31, 2022		30,659,073	$	30,659	$	64,620,878		$	10,096,332		$	1,015,993		$	(31,391,082	)	$	44,372,780		$	55,187		$	44,427,967

	●	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.

Building		30 years
Leasehold improvements		5 years
Clinical equipment		5 years
Computer equipment		3 years
Office equipment		5 years
Furniture and fixtures		5 years

Land use rights		50 years (the lease period)
Intellectual property		7 years
Customer relationships		5 years
Brand names		7 years

	●	Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

	●	Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

	●	Level 3 inputs to the valuation methodology use one or more unobservable inputs which are significant to the fair value measurement.

	●	executed contracts with the Company’s customers that it believes are legally enforceable;
	●	identification of performance obligations in the respective contract;
	●	determination of the transaction price for each performance obligation in the respective contract;
	●	allocation the transaction price to each performance obligation; and
	●	recognition of revenue only when the Company satisfies each performance obligation.

	●	Healthcare and healthcare related services – gross service revenue is recorded in the accounting records at the time the services are provided (point-in-time) on an accrual basis at the provider’s established rates. The Company reserves a provision for contractual adjustment and discounts that are deducted from gross service revenue. The Company reports revenues net of any sales, use and value added taxes.
	●	Product sales – revenue is recorded at the point of time of ~~delivery~~delivery.

	●	Expected life of 4.0 years;
	●	Volatility of 275%;
	●	Dividend yield of 0%; and
	●	Risk free interest rate of 1.23%

	●	Expected life of 0.58 years;
	●	Volatility of 148.20%;
	●	Dividend yield of 0%; and
	●	Risk free interest rate of 4.55%

	●	Expected life of 3.0years;
	●	Volatility of 300%;
	●	Dividend yield of 0%; and
	●	Risk free interest rate of 0.85%

	●	Expected life of 5.0 years;
	●	Volatility of 252%;
	●	Dividend yield of 0%; and
	●	Risk free interest rate of 4.09%

	●	Dividend yield of 0%; and
	●	Risk free interest rate of 3.73%

	●	Expected life of 5.0 years;
	●	Volatility of 251%;
	●	Dividend yield of 0%; and
	●	Risk free interest rate of 3.96%

	●	Expected life of 1 year;
	●	Volatility of 182.17%;
	●	Dividend yield of 0%; and
	●	Risk free interest rate of 5.42%

	●	Expected life of 0.79 years;
	●	Volatility of 193.48%;
	●	Dividend yield of 0%; and
	●	Risk free interest rate of 5.16%

	●	Expected life of 1 year;
	●	Volatility of 180.36%;
	●	Dividend yield of 0%; and
	●	Risk free interest rate of 5.44%

	●	Expected life of 0.80 years;
	●	Volatility of 193.48%;
	●	Dividend yield of 0%; and
	●	Risk free interest rate of 5.16%

	●	~~4,000,000~~80,200 shares of common stock were issued ~~as offered by~~to various warrant holders upon exercise of their 3-year warrants. The warrants were issued on October 18, 2022, under the prospectus contained in the Registration Statement on Form S-1 (File No. 333-267401) declared effective by the ~~SEC~~Securities and Exchange Commission (the “SEC”) on October 13, ~~2022, for an agreed upon purchase price of $0.50~~ ~~per unit.~~2022. The ~~shares were issued on October 18, 2022.~~ ~~The Company sold an aggregate of~~ ~~4,000,000~~ ~~units for aggregate gross proceeds of $2,000,000, consisting of~~ ~~4,000,000~~ ~~common stock,~~ ~~4,000,000~~ ~~warrants with a~~ ~~three-year term to purchase~~ ~~4,000,000~~ ~~shares of common stock at an exercise price of $0.50~~ ~~per share, and~~ ~~4,000,000~~ ~~warrants with a~~ ~~five-year term to purchase~~ ~~4,000,000~~ ~~shares of common stock at an exercise price of $0.50~~ ~~per share.~~ ~~The Company paid a cash fee of $140,000~~ ~~equal to~~ ~~7.0% of the gross proceeds of the offering as well as reimbursed the agent for its accountable expenses, resulting in~~ net proceeds ~~to the Company of~~were $~~1,795,000~~80,200. ~~The total fair value of the~~ ~~8,000,000~~ ~~warrants granted was estimated on the date of the grant to be $1,137,959. The fair value was determined using the Black-Scholes pricing model with the following assumptions: expected volatility of~~ ~~149.06% to~~ ~~206.90%; expected dividend yield of~~ 0~~%; risk-free interest rate of~~ ~~2.55% to~~ ~~2.89%; stock price of $0.2956; and expected life of~~ 3 to 5 ~~years.~~

	●	~~36,222~~ restricted shares of common stock were issued for NHL Exchangeable Shares under the terms and conditions of a Share Exchange Agreement which closed on June 24, 2021. The fair value was determined based on the market price of the Company’s common stock on the date of closing. The shares were issued on ~~October 26, 2022~~.

	●	~~2,916,667~~ shares of common stock were issued as provided for in an exchange offer and amendment (the “Hudson Bay Exchange Offer and Amendment”) with Hudson Bay, dated November 14, 2022. Pursuant to the terms of the Hudson Bay Exchange Offer and Amendment, the Company exchanged one share of the Company’s common stock for each share of common stock underlying the warrant to purchase common stock, dated as of December 14, 2021, issued by the Company to Hudson Bay. The shares were issued on ~~November 15, 2022~~.

	●	~~39,165,890~~ ~~shares of common stock were issued to a debt holder upon conversion of outstanding debt in the aggregate amount of $3,825,307~~ ~~in principal and interest.~~ The shares were issued on various dates during the ~~fiscal quarter ended~~ ~~February 28, 2023~~3-month period..

	●	~~45,036,411~~160,200 shares of common stock were issued ~~to a debt holder upon conversion of outstanding debt in the aggregate amount of $4,503,640~~ ~~in principal and interest. The shares were issued on various dates during the fiscal quarter ended~~ ~~February 28, 2023~~.

	●	~~8,907,097~~ ~~shares of common stock were issued to a debt holder upon conversion of outstanding debt in the aggregate amount of $757,103~~ ~~in principal and interest. The shares were issued on various dates during the fiscal quarter ended~~ ~~February 28, 2023~~.

	●	~~650,000~~ ~~shares of common stock were issued on January 5, 2023~~ to various warrant holders upon exercise of their 35-year warrants. The warrants were ~~granted~~issued on October 18, 2022, under the prospectus contained in the Registration Statement on Form S-1 (File No. 333-267401) declared effective by the SEC on October 13, 2022. The net proceeds were $~~65,000~~160,200. The shares were issued on various dates during the 3-month period.

	●	75,000 restricted shares of common stock as consideration pursuant to a consulting agreement. The fair value was determined based on the market price of the Company’s common stock on the date of issuance. The shares were issued on September 5, 2023.

	●	~~1,159,348~~53,567 shares were issued to Mast Hill upon the cashless exercise of all warrants. The warrants were issued on February 23, 2023 under the terms and conditions of the warrant agreement between the Company and Mast Hill in connection with the $573,000 promissory note issued, by the Company to Mast Hill, on February 23, 2023. The shares were issued on September 18, 2023.

	●	75,000 restricted shares of common stock were issued as consideration pursuant to a consulting agreement. The fair value was determined based on ~~January 5, 2023 as provided for in~~ the ~~CVI Exchange Offer and Amendment. Pursuant to the terms of the CVI Exchange Offer and Amendment, the Company exchanged one share~~market price of the Company’s common stock ~~for each share~~on the date of ~~common stock underlying the warrant to purchase common stock, dated as of December 14, 2021,~~issuance. The shares were issued ~~by the Company to CVI.~~on September 18, 2023.

	●	~~330,000~~519,845 restricted shares of common stock were issued to FirstFire upon conversion of outstanding debt pursuant to the terms of the securities purchase agreement between FirstFire and the Company. The debt amount converted consisted of principal amount of $573,000 and interest of $4,521, for a total amount of $577,521. The shares were issued on ~~January 12,~~September 21, 2023 ~~to various warrant holders upon exercise of their~~ 5-year warrants. The warrants were granted on October 18, 2022, under the prospectus contained in the Registration Statement on Form S-1 (File No. 333-267401) declared effective by the SEC on October 13, 2022. The net proceeds were $~~33,000~~.

	●	~~330,000~~75,000 restricted shares of common stock were issued as consideration pursuant to a consulting agreement. The fair value was determined based on ~~January 12,~~the market price of the Company’s common stock on the date of issuance. The shares were issued on October 3, 2023 ~~to various warrant holders upon exercise their~~ 3-year warrants. The warrants were granted on October 18, 2022, under the prospectus contained in the Registration Statement on Form S-1 (File No. 333-267401) declared effective by the SEC on October 13, 2022. The net proceeds were $~~33,000~~.

	●	~~3,202,019~~73,767 restricted shares of common stock were issued in exchange for certain non-voting special shares of NHL, ~~Exchangeable Shares as provided for~~previously issued in ~~the~~connection with NHL’s Share Exchange Agreement with the Terragenx shareholders, the Company’s Asset Purchase Agreement with Mr. Terrence Mullins, and an employment agreement with Mr. Terrence Mullins, each of which closed on ~~June 24, 2021, in which the Company acquired Acenzia.~~November 17, 2021. The fair value was determined based on the market price of the Company’s common stock on the date of closing. The shares were issued on ~~January 25,~~October 9, 2023.

	●	~~955,000~~53,532 ~~restricted~~ shares were issued to FirstFire upon the cashless exercise of all warrants. The warrants were issued on March 21, 2023 under the terms and conditions of the ~~Company’s common stock were~~warrant agreement between the Company and Mast Hill in connection with the $573,000 promissory note issued, ~~as provided for in~~by the ~~Securities Purchase Agreement, dated February 23, 2023, with Mast Hill.~~Company to FirstFire, on March 21, 2023. The shares were issued on ~~February 24,~~October 12, 2023.


	●	~~1,075,942~~75,000 restricted shares of common stock were issued as consideration pursuant to a ~~debt holder upon conversion~~consulting agreement. The fair value was determined based on the market price of ~~outstanding debt in~~ the ~~aggregate amount~~Company’s common stock on the date of $~~100,278~~ ~~in principal and interest.~~ ~~537,822~~ ~~shares were issued on March 6, 2023 and~~ ~~538,120~~issuance. The shares were issued on ~~March~~October 18, 2023.

	●	138,703 shares were issued to Mast Hill upon the cashless exercise of all warrants. The warrants were granted on June 20, 2023 under the terms and conditions of the warrant agreement between the Company and Mast Hill in connection with the $445,000 promissory note issued, by the Company to Mast Hill, on June 20, 2023. The shares were issued on October 23, 2023.

	●	75,000 restricted shares of common stock were issued as consideration pursuant to a consulting agreement. The fair value was determined based on the market price of the Company’s common stock on the date of issuance. The shares were issued on November 8, 2023.

	●	~~1,600,000~~30,675 restricted shares of common stock were issued pursuant to the terms and conditions of an executive agreement, dated November 15, 2022, between NHL and an officer of NHL. The fair value was determined based on ~~March 17, 2023 to various warrant holders upon exercise of their~~ 3~~-year warrants. The warrants were granted on October 18, 2022, under~~ the ~~prospectus contained in the Registration Statement on Form S-1 (File No. 333-267401) declared effective by the SEC on October 13, 2022. The net proceeds were $160,000~~.

	●	~~1,000,000~~ ~~shares of common stock were issued on March 17, 2023 to various warrant holders upon exercise of their~~ 5-year warrants. The warrants were granted on October 18, 2022, under the prospectus contained in the Registration Statement on Form S-1 (File No. 333-267401) declared effective by the SEC on October 13, 2022. The net proceeds were $~~100,000~~.

	●	~~955,000~~ ~~restricted shares~~market price of the Company’s common stock ~~were issued as provided for in~~on the ~~Securities Purchase Agreement, dated March 21, 2023, with FirstFire.~~date of issuance. The shares were issued on ~~March 22,~~November 21, 2023.
	●	~~300,000~~ ~~shares of common stock were issued on May 10, 2023 to various warrant holders upon exercise of their~~ 5-year warrants. The warrants were granted on October 18, 2022, under the prospectus contained in the Registration Statement on Form S-1 (File No. 333-267401) declared effective by the SEC on October 13, 2022. The net proceeds were $~~30,000~~.

	●	~~300,000~~18,405 restricted shares of common stock were issued pursuant to the terms and conditions of an executive agreement, dated November 15, 2022, between NHL and an officer of NHL. The fair value was determined based on ~~May 11,~~the market price of the Company’s common stock on the date of issuance. The shares were issued on November 21, 2023.

	●	27,973 shares of common stock issued in lieu of fractional shares resulting from the Company’s 1-for-10 reverse stock split of its common stock, effective November 7, 2023. As a result of the reverse stock split, every 10 shares of issued and outstanding common stock were exchanged for one share of common stock, with any fractional shares being rounded up to ~~various warrant holders upon exercise of their~~ 3~~-year warrants. The warrants were granted on October 18, 2022, under~~ the ~~prospectus contained in the Registration Statement on Form S-1 (File No. 333-267401) declared effective by the SEC on October 13, 2022. The net proceeds were $30,000~~.next higher whole share.

	2023			2022

Risk-free interest rate		3.74	%		0.93 to 1.89	%
Expected life of the options		6 years			2.5 years
Expected volatility		254	%		281	%
Expected dividend yield		0	%		0	%

	As of May 31, 2023		As of August 31, 2022
Total assets
Healthcare services	$	5,305,028	$	5,917,403
Product manufacturing and development		17,663,180		19,595,269
Corporate		12,776,822		15,360,168
	$	35,745,030	$	40,872,840

Accounts receivable
Healthcare services	$	696,635	$	585,492
Product manufacturing and development		626,778		419,417
Corporate		4,200		12,496
	$	1,327,613	$	1,017,405
Intangible assets
Healthcare services	$	128,072	$	159,453
Product manufacturing and development		4,008,786		5,283,333
Corporate		12,559,505		13,397,833
	$	16,696,363	$	18,840,619

Goodwill
Healthcare services	$	518,095	$	537,537
Product manufacturing and development		7,024,700		7,288,307
Corporate		-		-
	$	7,542,795	$	7,825,844

	As of November 30, 2023		As of August 31, 2023

Total assets
Healthcare services	$	5,002,855	$	5,158,851
Product Sales		18,748,475		17,993,652
Corporate		13,493,054		12,410,544
	$	37,244,384	$	35,563,047

Accounts receivable
Healthcare services	$	672,841	$	697,440
Product Sales		1,868,387		765,388
Corporate		94,946		4,200
	$	2,636,174	$	1,467,028

Intangible assets
Healthcare services	$	111,172	$	120,163
Product Sales		3,592,425		3,818,313
Corporate		12,000,621		12,280,063
	$	15,704,218	$	16,218,539

Goodwill
Healthcare services	$	518,918	$	520,821
Product Sales		7,035,861		7,061,662
Corporate		-		-
	$	7,554,779	$	7,582,483

	(i)	The Company has the right, at all times after November 21, 2023, to conduct a full and unfettered inspection of the Ophir Collection. While the Company has the right to inspect the Ophir Collection prior to closing, the Company’s inspection will not be a contingency to closing and the inability of the Company to inspect (or the Company’s decision not to inspect) the Ophir Collection prior to closing will not delay or prevent closing.

	(ii)	After the Successor Receiver obtains Court approval of the Ophir Agreement, the Company will cause $59,975,000 (representing the $60,000,000 purchase price, less the Deposit) to be paid to the Successor Receiver, on or before December 19, 2023. Although such amount has not yet been delivered to the Successor Receiver, the parties continue to work toward closing.

	(iii)	Within one business day thereafter, the Successor Receiver will assign, transfer, convey and deliver free and clear title and interest in and to, and possession of, the Ophir Collection to the Company.

	●	~~The closing of the SWAG Purchase will occur no later than January 10, 2023, with all contemplated extensions being subject to the Receiver’s stipulations, conditions, and limitations.~~

	●	~~The condition for the Company to provide SWAG with a binding LOI has been deleted.~~

	●	A total of $92 million will be distributed as follows: (i) $60 million will be distributed to the Receiver for the purchase of the Gems by SWAG, and (ii) a $32 million mark-up will be distributed directly for the benefit of the outgoing SWAG Shareholders.

	●	Healthcare and healthcare related services - gross service revenue is recorded in the accounting records at the time the services are provided (point-in-time) on an accrual basis at the provider’s established rates. The Company reserves a provision for contractual adjustment and discounts that are deducted from gross service revenue. The Company reports revenues net of any sales, use and value added taxes.

	●	Product sales - revenue is recorded at the point of time of delivery

Exhibit Number		Description of Document

~~4.1~~3.1		~~Common Stock Purchase Warrant~~Amendment to the registrant’s bylaws, dated September 27, 2023 (incorporated by reference to Exhibit ~~4.1~~3.1 to the Company’s Current Report on Form 8-K filed with the Commission on ~~March 1,~~September 27, 2023).

~~4.2~~		Common Stock Purchase Warrant, dated as of June 20, 2023, by and between Novo Integrated Sciences, Inc. and Mast Hill Fund, L.P. (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on June 26, 2023).

10.1		Promissory Note, dated as of ~~February 23,~~September 12, 2023, by and between ~~the Company~~Novo Integrated Sciences, Inc. and Mast Hill Fund, L.P. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on ~~March 1,~~September 18, 2023).

10.2		Securities Purchase Agreement, dated as of ~~February 23,~~September 12, 2023, by and between Novo Integrated Sciences, Inc. and Mast Hill Fund, L.P. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on ~~March 1,~~September 18, 2023).

10.3		Guaranty, dated as of September 12, 2023, by and between Acenzia Inc. and Mast Hill Fund, L.P. (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Commission on September 18, 2023).

10.4		Promissory Note, dated as of ~~March 21,~~September 18, 2023, by and between Novo Integrated Sciences, Inc. and FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on ~~March 27,~~September 22, 2023).

~~10.4~~10.5		Securities Purchase Agreement, dated as of ~~March 21,~~September 18, 2023, by and between Novo Integrated Sciences, Inc. and FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on ~~March 27,~~September 22, 2023).

~~10.5~~10.6		Guaranty, dated as of September 18, 2023, by and between Acenzia Inc. and FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Commission on September 22, 2023).
~~Securities Purchase~~
10.7		Master (Asset Transfer) Agreement, dated as of ~~April 26,~~September 27, 2023, by and between the registrant and ~~RC Consulting Group LLC in favor of SCP Tourbillion Monaco~~Blacksheep Trust (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on ~~April 27,~~September 28, 2023).

~~10.6~~10.8		~~Promissory Note,~~Purchase and Sale Agreement, dated as of April 26, 2023, issued by the registrant to RC Consulting Group LLC in favor of SCP Tourbillion Monaco (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on April 27, 2023).

~~10.7~~		~~Promissory Note, dated as of June 20,~~November 21, 2023, by and between ~~Novo Integrated Sciences, Inc. and Mast Hill Fund, L.P.~~the registrant Blake Alsbrook, solely in his capacity as Court-appointed successor receiver in Ocean Thermal Energy Corporation v. C. Robert Coe II, et al., United States District Court for the Central District of California Case No. 2:19-cv-04299 VAP (JPRx) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on ~~June 26,~~November 27, 2023).

~~10.8~~10.7		~~Securities Purchase Agreement, dated as of June 20,~~ 2023 ~~by and between Novo Integrated Sciences, Inc. and Mast Hill Fund, L.P.~~Equity Incentive Plan (incorporated by reference to Exhibit ~~10.1~~10.54 to the Company’s ~~Current~~Annual Report on Form ~~8-K~~10-K filed with the Commission on ~~June 26,~~December 14, 2023).

~~10.9~~		Separation and General Release Agreement, dated as of June 28, 2023, by and between Novo Integrated Sciences, Inc., Jim Zsebok, and RTZ Consulting Group, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on July 3, 2023)

31.1*		Rule 13a-14(a) Certification of Principal Executive Officer.

31.2*		Rule 13a-14(a) Certification of Principal Financial Officer.

32.1**		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Principal Executive Officer and Principal Financial Officer.

101.INS*		Inline XBRL Instance Document

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase

101.LAB*		Inline XBRL Taxonomy Extension Labels Linkbase

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase

104*		Cover Page Interactive Data File (embedded within the Inline XBRL document)