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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-K

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended August 31, ~~2023~~2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______, 20 ____, to ______, 20_____.

Commission File Number 001-40089

Novo Integrated Sciences, Inc.

(Exact Name of Registrant as Specified in its Charter)

Nevada		59-3691650
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

11120 NE 2nd Street, Suite 100 Bellevue, Washington		98004
(Address of Principal Executive Offices)		(Zip Code)

(206) 617-9797

(Registrant’s Telephone Number, Including Area Code)

N/A

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered ~~Common~~N/A ~~Stock~~N/A ~~NVOS Nasdaq Capital Market~~N/A

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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. (Check one):

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

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 has filed a report on an attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter, February 2829, ~~2023~~2024, was $1610,~~082~~240,~~780~~619.

There were 1719,~~291~~730,~~192~~247 shares of the registrant’s common stock, $0.001 par value per share, outstanding as of December 1417, ~~2023~~2024.

Documents Incorporated by Reference

None

Novo Integrated Sciences, Inc.

Contents

		Page
Part I
Cautionary Statement Regarding Forward-Looking Statements
Item 1.	Business	1
Item 1A.	Risk Factors	3441
Item 1B.	Unresolved Staff Comments	7079
Item 2.	Properties	70
Item 1C.	Cybersecurity	79
Item 3.	Legal Proceedings	72
Item 2.	Properties	80
Item 4.	Mine Safety Disclosures	72
Item 3.	Legal Proceedings	81
Item 4.	Mine Safety Disclosures	81
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	7281
Item 6.	[Reserved]	7382
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	7383
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	86101
Item 8.	Financial Statements and Supplementary Data	87102
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	88103
Item 9A.	Controls and Procedures	88103
Item 9B.	Other Information	88103
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	88103
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	89104
Item 11.	Executive Compensation	95110
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~103~~119
Item 13.	Certain Relationships and Related Transactions, and Director Independence	~~104~~121
Item 14.	Principal Accounting Fees and Services	~~105~~122
Item 15.	Exhibits, Financial Statement Schedules	~~106~~123
Item 16.	Form 10-K Summary	~~112~~129
	Signatures	~~113~~130

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K and the documents incorporated herein by reference contain forward-looking statements. Such forward-looking statements are based on current expectations, estimates and projections about Novo Integrated Sciences, Inc.’s industry, management beliefs, and assumptions made by management. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict; therefore, actual results and outcomes may differ materially from what is expressed or forecasted in any such forward-looking statements. 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 Annual Report on Form 10-K 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 Annual Report on Form 10-K and the information incorporated by reference in this Annual Report on Form 10-K to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.

PART I

ITEM 1. BUSINESS

Business Overview

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:

	●	First Pillar – Service Networks: Deliver multidisciplinary primary care services through (i) an affiliate network of clinic facilities, (ii) small and micro footprint sized clinic facilities primarily located within the footprint of box-store commercial enterprises, (iii) clinic facilities operated through a franchise relationship with the Company, and (iv) corporate operated clinic facilities.

	●	Second Pillar – Technology: Develop, deploy, and integrate sophisticated interconnected technology, interfacing the patient to the healthcare practitioner thus expanding the reach and availability of the Company’s services, beyond the traditional clinic location, to geographic areas not readily providing advanced, peripheral based healthcare services, including the patient’s home.

	●	Third Pillar – Products: Develop and distribute effective, personalized health and wellness product solutions allowing for the customization of patient preventative care remedies and ultimately a healthier population. The Company’s science-first approach to product innovation further emphasizes our mandate to create and provide over-the-counter preventative and maintenance care solutions.

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

First Pillar – Service Networks for Hands-on Patient Care

Our clinicians and practitioners provide certain multidisciplinary primary ~~health~~healthcare ~~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~~specialists, 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 healthcare 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 14 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 ~~team~~specialized of multidisciplinary primary ~~health~~healthcare ~~care~~services ~~clinicians~~include ~~and~~physiotherapy, ~~practitioners~~chiropractic ~~provide~~care, ~~assessment~~manual/manipulative therapy, ~~diagnosis~~occupational therapy, ~~treatment~~eldercare, ~~pain~~massage ~~management~~therapy (including pre- and post-partum), ~~rehabilitation,~~ ~~education~~acupuncture and ~~primary~~functional ~~prevention~~dry ~~for~~needling, achiropody, ~~wide~~stroke ~~array~~and traumatic ofbrain ~~orthopedic~~injury/neurological rehabilitation, ~~musculoskeletal~~kinesiology, ~~sports~~vestibular ~~injury~~therapy, concussion management and ~~neurological~~baseline ~~conditions~~testing, trauma ~~across~~sensitive ~~various~~yoga ~~demographics~~and ~~including~~meditation ~~pediatric,~~for ~~adult,~~concussion-acquired brain injury and ~~geriatric~~occupational ~~populations~~stress-PTSD, ~~through~~women’s ~~our~~pelvic 16health ~~corporate-owned~~programs, sports ~~clinics~~medicine therapy, aassistive ~~contracted network~~devices, ofdietitian, ~~affiliate~~holistic ~~clinics~~nutrition, ~~and~~fall ~~eldercare~~prevention ~~related~~education, ~~long-term~~sports ~~care~~team ~~homes,~~conditioning ~~retirement~~programs including ~~homes,~~event and ~~community-based~~game ~~locations~~coverage, inand ~~Canada~~private personal training.

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 Novo Healthnet Limited, a wholly owned subsidiary of Novo Integrated (“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~~healthcare ~~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.

Affiliate Clinics

In order to strengthen our position within the Canadian Preferred Provider Network (“PPN”), we’ve built a contracted affiliate relationship with ~~127~~ clinics across Canada with 97a majority of our affiliate clinics located in Ontario province and 30other affiliate clinics located ~~throughout~~ in Alberta, Nova Scotia and Newfoundland. The PPN receives referrals from insurance companies, licensed in Canada, for patients in need of specific multidisciplinary primary healthcare solutions.

The ~~PPN~~services isprovided aby ~~network~~our ofaffiliate ~~five~~clinics ~~major~~are ~~insurance~~consistent ~~companies~~with ~~and~~the ~~their subsidiaries, totaling 26 insurance companies. PPN member insurance companies, in need of specific~~ multidisciplinary primary ~~health~~healthcare ~~care~~services ~~solutions~~provided ~~for~~by ~~their~~our ~~patients, send referrals to specific clinics registered~~own ~~through~~corporate ~~the PPN~~clinics. ~~We,~~While aseach ~~one~~affiliate ofclinic ~~three~~may ~~major~~provide ~~providers~~additional tounique ~~the~~healthcare ~~PPN~~solutions, ~~receive~~all ~~referrals~~affiliate ~~through the PPN. This subset of business is a continuous source of referrals, from the insurance company payer to the approved group of~~ clinics ~~meeting~~must ~~the~~meet ~~insurance companies’ pre-determined~~specific ~~set of~~ criteria ~~for~~established ~~what~~under ~~they~~the ~~believe~~PPN tocreating ~~be an appropriate clinical setting. Affiliate clinics pay us~~ a ~~mix~~single ofstandard ~~a flat fee and a percentage-based fee upon receipt~~ of aexcellence ~~payment~~across ~~for~~all aclinics ~~service~~within ~~referral~~our ~~through the PPN~~network.

The services provided by our affiliate clinics are consistent with the multidisciplinary primary health care services provided by our own corporate clinics. While each affiliate clinic may provide additional unique health care solutions, all affiliate clinics must meet specific criteria established under the PPN, creating a single standard of excellence across all clinics within our network.

LA Fitness U.S. and Canada Micro Clinics

In September 2019, through its U.S. subsidiary Novomerica Health Group, Inc. (“Novomerica”) and its Canadian subsidiary, ~~Novo Healthnet Limited~~NHL, the Company entered into exclusive Master Facility License Agreements (“License Agreement”) to establish and operate reduced footprint clinics, or “micro-clinics”, to provide outpatient physical and/or occupational therapy services and related products within LA Fitness facilities in both the U.S. and Canada. In March 2020, as a result of guidelines issued by local, state, federal, and provincial authorities due to the COVID-19 pandemic, LA Fitness U.S. and Canada closed all facilities nationwide. As a result, all contractual terms and conditions of both our U.S. and Canada Master Facility License Agreements were placed on hold through fiscal year 2021 with all parties expressing the intent to amend both the U.S. and Canada License Agreements and related timelines to launch our LA Fitness micro-clinic facilities as “normal” activity resumes in the LA Fitness U.S. and Canada facilities.

On December 15, 2021, NHL entered into an Amended and Restated Master Facility License Agreement (the “Amended and Restated Canada License Agreement”) with LAF Canada Company (“LA Fitness Canada”). The Amended and Restated Canada License Agreement had the effect of (i) removing NHL’s obligation to develop and open a certain number of facilities within certain designated time periods; and (ii) revising the default provisions such that certain defaults will result only in termination with respect to a specific facility, rather than of the license itself. As a result of the Amended and Restated Canada License Agreement, NHL may continue to develop and open additional facilities for business. The initial location is in the Brampton Ontario LA Fitness facility with more locations to follow in Ontario province.

We cannot guarantee that the U.S. License Agreement will be amended to allow for an extension of its timeline. Opening of our micro-clinic facilities may vary from state to state; however, our model plan to partner and sub-license with existing local clinic ownership to launch and operate in U.S. based LA Fitness locations remains intact and we are unable to verify our schedule to commence opening our micro-clinics in U.S. based LA Fitness locations.

Eldercare

The Company’s eldercare related operations provide physiotherapy (“PT”), occupational therapy (“OT”), assessment and application assistance for assistive devices, fall prevention programs, community-based strengthening and general flexibility exercise classes, rehabilitative strategies and continuing education to eldercare clients, including caregivers and family members as applicable, in various long-term care homes, retirement homes and community-based locations across the province of Ontario, Canada.

As a result of NHL’s September 2013 asset acquisition of Peak Health LTC Inc, an Ontario corporation formed in 2006, NHL has more than ~~15-~~20 years’ ~~experience~~ of experience providing certain multidisciplinary related healthcare services and products to the eldercare community. In 2017, based on the philosophical overlap and synchronicity between PT and OT, NHL launched its occupational therapy sector of services for our eldercare clients. NHL’s eldercare focused OT and PT services and products are in direct competition with the top providers in this sector. We offer an extensive roster of both OT and PT clinicians certified by the Ministry of Health for assistive device assessment under the Assistive Device Program which, when the individual meets the criteria, allows our eldercare clients access to significant funding subsidies to purchase varying mobility aids (such as walkers, wheelchairs, seating, and power wheelchairs/scooters).

Additionally, our proprietary Electronic Rehabilitation Record and Management Reporting software solution provides us the ability to deliver each eldercare location with a wide-array of detailed PT and OT reports that include, among other things: (i) client specific treatment details, (ii) identifying cost and optimization possibilities, (iii) outlining a wide variety of client outcome measurements, (iv) analyzing overall contract effectiveness, and (v) producing indicators which assist the NHL team to target opportunities for improved team efficiency. This software comes with an ability to provide a graphically illustrated ‘report card’ for contribution to annual, interdisciplinary care conferences with staff and family members, as well as fall reporting capacities, which are central to many homes’ fall prevention committee meetings. Additionally, data generated by the software allows members from both the NHL team and the eldercare facility team to identify residents who fall frequently and allow for the inter-disciplinary team to put strategies in place to better reduce a resident’s “fall-risk”.

NHL has created and delivers, through online virtual technology, a variety of eldercare ~~related~~oriented educational in-service programs which include topics such as nursing restorative education, back education and other eldercare-relevant topics such as osteoporosis, fall prevention, wheelchair positioning, and least restraints. NHL has designed its virtual online education in-service programs and modules to be presented in a variety of formats to facilitate the different capacity and styles of learning common to senior-aged individuals.

Our eldercare PT services are provided as follows:

	1.	Long-Term Care Homes. NHL contracts with long-term care homes to provide individualized, onsite PT and group exercise classes for its residents. Registered physiotherapists are assisted by on-site support personnel to deliver individualized care, based on assessed needs, and with a goal of assisting each resident to attain and maintain their highest level of function possible with their activities of daily living. These services are primarily funded by the Ontario Ministry of Long-Term Care (“MLTC”). The NHL team assists in providing assistive device assessments allowing residents access to funding assistance for varying mobility aids (such as walkers, wheelchairs, seating, and power wheelchairs/scooters). In addition to providing PT services, our team assists the long-term care home’s interdisciplinary team in the homes’ annual care conferences with its residents. Through the provision of education regarding nursing restorative programming, our team assists the long-term care home’s team in back education, fall prevention and many other subjects related to PT or physical health and wellness. The NHL team works together with the interdisciplinary team to assist with mandatory coding of Canada’s Resident Assessment Instrument Minimum Data Set (“RAI-MDS”) which is the standardized assessment tool required for the home to access payment from the MLTC for each resident. Additionally, through NHL’s proprietary software, the homes have access to abundant reporting solutions to help provide objective and quantitative measures for their continuous quality improvement program. NHL’s proprietary software provides our eldercare client locations with the unique ability to login and access multiple data points related to a multitude of therapy services provided to its residents, allowing for detailed, rapid reporting and accountability.
	2.	Retirement Homes. We contract with client retirement homes to provide individualized PTphysiotherapy and group exercise classes to the retirement homes’ residents. Registered physiotherapists are assisted by the onsite support personnel to deliver individualized care based on assessed needs, again with a goal of assisting the residents participating in therapy to attain and maintain their level of function related to the activities of daily living. These services are partially funded by the individual and partly funded by the MLTC. Similar to the long-term care sector, our team assists with education of the nursing/interdisciplinary team, provides in depth service reports to the homes to measure desired service delivery and our proprietary software allows for the retirement home to have the same unique login capacity. In addition to the services above, some of the residents in the retirement homes, and as applicable the resident’s family members, can request and authorize receiving an increased level of physiotherapy related services available privately on a fee-for-service basis paid by the individual. In addition, access to Registered Occupational Therapists, Massage Therapists and Speech Language Pathologists is also offered on a fee-for-service basis.

	3.	Community Based Home Care Physiotherapy. Throughout the province of Ontario, the MLTC operates 14 ~~Home~~Ontario ~~and~~Health ~~Community~~AtHome ~~Care~~branches ~~Support Services organizations~~ (“~~HCCSS~~OHaH”) which are health authorities responsible for regional administration of public ~~health~~healthcare ~~care~~ services. ~~The~~OHaH ~~HCCSS’s~~serves ~~serve~~ as contact points, information clearing houses, referral resources, and assessment / care coordinators for eligible residents who need ~~health~~healthcare ~~care~~ assistance at home or a safer place to live through aging at home strategies that can be put in place by ~~health~~healthcare ~~care~~ providers. Through service contracts, ~~the~~OHaH ~~HCCSS’s~~engages ~~engage~~ “cluster providers” to provide services to clients living in the community, clients living at-home or clients living in a retirement home. These service contracts are funded by the MLTC.
		NHL is a “cluster provider” sub-contractor for home care physiotherapy in the Northeast HCCSS which encompasses more than 565,000 people across 400,000 square kilometers and five sub-regions. Through this subcontract arrangement, we provide one-on-one physiotherapy assessment and treatment to clients who cannot easily access outpatient services due to mobility challenges. Primarily, these clients are elderly with multiple co-morbidities, although some clients are not elderly and are instead simply post-operative with mobility challenges.
		NHL is a “cluster provider” sub-contractor for home care physiotherapy in the Northeast OHaH which encompasses more than 565,000 people across 400,000 square kilometers and five sub-regions. Through this subcontract arrangement, we provide one-on-one physiotherapy assessment and treatment to clients who cannot easily access outpatient services due to mobility challenges. Primarily, these clients are elderly with multiple co-morbidities, although some clients are not elderly and are instead simply post-operative with mobility challenges.
	4.	Community Based Group Exercise Classes & Fall Prevention Programs. NHL has contracted with 2 “cluster providers” to provide group exercise classes and fall prevention programs (consisting of an assessment accompanied by education and group exercise classes) in 3 separate ~~HCCSS’s~~OHaH branches (Central, Toronto Central and Central East) which encompass the Greater Toronto area with an estimated aggregate population of 4.4 million people. In 2013, the MLTC introduced several initiatives designed to assist seniors in maintaining an active and healthy lifestyle while still living at home. Under the 2013 initiative, exercise instructors under contract with NHL, deliver group exercise classes over a 48-week period each year.

In addition, another component of the 2013 MLTC initiative is the delivery of fall prevention programs with entry and exit assessments completed by specialized registered providers such as kinesiologists and physiotherapists with the assistance of exercise instructors for the group class and education portion of the program. The goal of these classes is to assess seniors’ general health status, identify defined levels of risk pertaining to balance and falling, and educate seniors about fall prevention through a combination of increased knowledge and teaching exercises designed to improve strength and balance.

Community-based Outpatient Clinics. NHL provides outpatient physiotherapy, chiropractic, and laser technology services through a community-based clinic in the province of Ontario. The services provided at the clinic are funded by Motor Vehicle Accident treatment plans, extended health benefits insurance coverage, or private payment. A portion of the services provided at the clinic are funded by the MLTC in the form of Episodes of Care and these services are specifically targeted to be delivered to clients who meet the following criteria:

	●	Aged 65 years of age and older or aged 18 years of age and younger, and
	●	Are post-operative, or
	●	Have just been discharged from a hospital, or
	●	Are receiving services from the Ontario Disability Services Program or Ontario Works.

Our eldercare OT services are provided, through two separate sectors, as follows:

Long-Term Care Sector. We contract with client homes to provide the following OT services:

● Assessments and interventions to support maintenance and restoration of function related to seating, mobility, positioning for self-care, prevention of pressure ulcers, falls and use of restraints, ● Speech language pathology services, including evaluation and treatment, by registered speech language pathologists. ● Swallowing and eating assessments and interventions, ● Cognitive behavioral assessments and care planning, ● Our occupational therapists have specialized training in mobility providing assistive device assessments when required. This service is funded primarily by the MLTC.

Retirement Home & Community. We provide the following OT services through individual contracts with private payers:

● Home safety assessments, ● Functional assessments, ● In-home activities of daily living assessments, ● Assessment and completion of applications for assistive devices (mobility aids), ● Custom seating and mobility consultations, ● Case management services, and ● Speech language pathology services, including evaluation and treatment by registered speech language pathologists.

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 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.

Novo Connect

The Company believes the healthcare industry is in the early stages of a fundamental transformation of the patient-practitioner-health insurer relationship whereby the patient is demanding greater control and care collaboration for their health and wellness needs while the practitioner desires dramatic improved efficiency in the delivery of their expertise to the patient. Novo Connect, the Company’s proprietary mobile application with a fully securitized tech stock, telemedicine/telehealth and remote patient monitoring, is a secure, cloud-based health and commerce web application intended to assist patients as they explore, connect, manage, and have direct control of their personalized health and wellness needs. Novo Connect is designed to integrate the Company’s interconnected technology and provide the patient a single platform with a robust healthcare ecosystem of services, products, and digital health offerings.

In October 2021, we launched MiTelemed+, Inc. (“MiTelemed”), a joint venture with EK-Tech Solutions Inc. (“EK-Tech”). MiTelemed operates, supports and expands access and functionality of iTelemed, EK-Tech’s enhanced proprietary telehealth platform. MiTelemed+, through the iTelemed platform, allows 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 is dramatically elevated.

The current system for delivery and access to primary care is fragmented, requiring patients to use multiple access points, portals, and applications to track various practitioner and health plan interactions for which each practitioner and health plan maintains separate records. Too many times, as a patient ages, the current systems make it almost impossible to have a central data set of a patients’ health history, many times losing various time periods of health history. Novo Connect is intended to empower the patient by providing a single platform that offers care services, tracking, and secure recordkeeping to better navigate care choices.

Specific to non-critical care, the patient-practitioner relationship is shifting away from on-site visits to primary medical centers with mass-services and to the patient’s home and micro-clinics. Novo Connect is intended to provide “ease-of-access” in the patient/practitioner interaction for non-critical care diagnosis and subsequent treatment minimizing the degradation of non-critical health conditions to critical conditions as well as allowing for more cost-effective healthcare distribution. The services and products available through Novo Connect may be provided either directly by the Company or an affiliated network of service or product providers across a variety of specialties.

Novo Connect is intended to provide a suite of secure, reliable engagement features including, but not limited to,

● Connect Now: a real-time scheduling solution to connect ~~with~~clinic ~~our affiliate~~ practitioners and physicians. ● Connect Storage: Secure Document storage. ● Connect Community: a community chat forum to share and discuss various conditions to include curated “channels” offering health and wellness solutions and insight. ● Connect CarePlan – a patient-specific care plan developed by providers, augmented with product and service solutions, to address various conditions. ● Remote bill pay. ● Remote patient monitoring interface.

As of August 31, ~~2023~~2024, Novo Connect iswas in limited commercialization through certain of the Company’s corporate -owned clinics with expanded commercialization intended to launch in the spring of ~~2024~~2025.

Telemedicine/Telehealth

The COVID-19 pandemic has taught both patients and healthcare providers the viability, importance, and benefits of telemedicine technology for non-catastrophic primary care. Telemedicine is transforming traditional approaches to healthcare by providing ease of access and reduced costs for patients, particularly in areas with limited access to both clinicians and medically licensed providers. In a post-pandemic global environment, telemedicine is more readily being adopted by patients, practitioners, clinicians, medical licensed providers, and health insurers for limited diagnostic and treatment solutions. We believe to date, that telehealth technology usage is one dimensional and limiting in comfort for practitioners to provide in-depth diagnosis and treatment solutions.

Through both internal development and partnerships, the Company is working to provide the next generation of telehealth technology to offer the patient and the practitioner a sophisticated and enhanced telehealth interaction using an interface of sophisticated periphery based diagnostic tools, such as a blood pressure reading device, a derma scope, an ophthalmoscope, otoscope, and other add-ons operated by skilled support workers in the patient’s remote location. This enhanced telehealth experience allows for the practitioner and patient to have a much higher level of ability and comfort to provide a uniquely comprehensive evaluation, diagnosis, and treatment solution thus dramatically elevating the effectiveness of virtual visits that are more resource efficient and as effective as a physical visit.

Remote Patient Monitoring (“RPM”)

Our RPM program is intended to empower a patient to have direct control of collecting and monitoring real-time vital sign information while maintaining a direct technology link from patient to clinician or medical practitioner. The transfer of vital information from home to clinic or patient to clinician allows for the delivery of high quality, non-redundant diagnostic based proactive healthcare. The implementation of in-clinic patient metrics equivalent to those derived via a remote application in the home environment is the first step in engaging patient retention to remote review. The RPM program allows us to further expand on our patient-first care philosophy of maintaining an on-going connection with our patient community, beyond the traditional confines of a clinic, extending oversight of patient care and monitoring directly into the patient’s home.

Third Pillar – Health and Wellness Products

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 ishas ~~being~~been 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, LLC (“PRO-DIP”) and Terragenx Inc. (“Terragenx”) support this Third Pillar. The Company owns a 91% controlling interest in Terragenx. On March 15, 2022, PRO-DIP was issued U.S. Patent No. 11,273,965 by the U.S. Patent and Trademark Office. 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.

Acenzia Inc.

Acenzia Inc. (“Acenzia”), was acquired by ~~the~~NHL ~~Company’s wholly-owned subsidiary, Novo Healthnet Limited~~ in June 2021. Acenzia is in the business of providing nutraceutical health solutions through advanced bio-science research and development, proprietary manufacturing, and personalized diagnostics. In addition, Acenzia has developed a multiple international jurisdiction patented technology platform called Zgraft, using ~~zebra fish~~zebrafish, which enables rapid analysis of cancer cells, offering cancer patients and their healthcare providers prediction of early metastasis and drug sensitivity thereby providing important information for diagnosis and treatment ~~(“Zgraft”)~~.

Acenzia, founded in 2015, is licensed by multiple international government agencies including Health Canada, the U.S. FDA and the European Union for Good Manufacturing Practices (GMP) for over-the-counter and dietary supplement manufacturing. In addition, Acenzia maintains multiple third-party licenses including from the National Sanitation Foundation International (NSF) for meeting the required public health standards for manufacturing food, nutrition, and supplements. Acenzia is dedicated to the creation of innovative therapeutics and diagnostics that enables individualized health optimization.

Acenzia’s 36,000 square foot facility is located in Windsor Ontario Canada and includes Class 100 pharmaceutical grade cleanrooms and certified laboratories from which Acenzia creates and manufactures evidenced-based dietary, nutraceutical, and food products that can be validated through personalized diagnostics.

PRO-DIP, LLC

PRO-DIP, LLC (“PRO-DIP”), founded in 2015 and based in San Jose, California, was acquired by the Company in May 2021. PRO-DIP has developed and commercialized its proprietary, patent-pending ION Energy oral pouch that delivers flavorful bursts of vitamins and natural energy supplements through small, semi-permeable sachets placed in the mouth, between the gum and cheek or lip. The initial burst of supplements is followed by extended absorption of the nutrients, providing long-lasting energy, even at high-exertion levels. With its hand-free ease of consumption, the ION energy-rich pouch is an alternative to traditional sports supplements. 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.

In addition to the ION Energy oral pouch, PRO-DIP is developing other pouch types for applications such as hydration, immunity, multi-vitamin, antioxidants, creatine, and sleep.

The PRO-DIP oral pouch delivery system offers broad market applications related to (i) nutritionally focused products and, (ii) medicinal based formulations. The dissolvable oral pouch as the delivery mechanism for certain medications, normally swallowed in pill or tablet format, between the cheek and gum for buccal absorption into the mouth’s small blood vessels.

PRO-DIP’s current distribution chain includes ADS, Inc., a leading value-added logistics and supply chain solutions provider that serves all branches of the U.S. Military, federal, state, and local government organizations, law enforcement agencies, first responders, partner nations and the defense industry. In addition, PRO-DIP is working to expand its distribution network to include convenience store chains in North America.

Terragenx Inc. and Iodine Micro-nutrient

On November 17, 2021, NHL acquired a 91% controlling interest in Terragenx Inc. and the Company acquired the intellectual property portfolio for the unique formulation and manufacturing capability to produce a water-soluble, iodine micro-nutrient oral sprays that is 100% pure and natural with no chemicals, no plastics, and no alcohol (“IoNovo”). The IoNovo oral spray line of products are (i) designed to be delivered via oral spray which is proven to be significantly more effective in absorption than pill or gel capsules, and (ii) FDA and Health Canada approved for over-the-counter and e-commerce distribution.

Iodine is a naturally occurring element and essential nutrient used by the thyroid gland to manufacture necessary hormones in the human body. Iodine is recognized as a world class disinfectant and is one of nature’s finest microbial killers of bacteria and virus deactivators. For decades, the global medical community has recognized Iodine as an essential micronutrient that assists the thyroid to produce T3 and T4 hormones needed for a healthy metabolism, immune system, increased energy levels, and cognitive development, Additionally, Iodine is known to promote healthy skin, nails, and hair.

While iodine alone cannot be ingested as a stand-alone ingredient, through the acquisition of Terragenx and the Iodine IP, Novo has acquired the intellectual property for iodine in an aqueous form that can be safely ingested and has been proven to kill viruses, bacteria and protozoa when sprayed onto your mucous membranes, the entry points for various airborne viruses.

The Company has been granted Natural Product Numbers (NPN) by Health Canada for each of IoNovo GO Iodine, IoNovo Pure Iodine, IoNovo Iodide, and IoNovo for Kids pure iodine oral spray. An NPN is a product license assessed and granted by Health Canada to commercialize a product that is found to be safe, effective, and of high quality. In addition, Turkey’s Ministry of Health has granted a registration number and provided regulatory approval for both IoNovo for Kids and IoNovo Iodine as a dietary supplement determined to be safe, effective, of high quality, and eligible for sale in Turkey.

Intellectual Property and Patents

The Company has acquired intellectual property, including patents, related to health sciences, personal diagnostics, and product applications which include:

U.S. Patent No. 11,273,965 issued by the U.S. Patent and Trademark Office on March 15, 2022 for oral and/or buccal delivery pouch and the method of making same. The ‘965 patent relates to PRO-DIP’s novel technology for manufacturing its oral supplement pouches. PRO-DIP’s innovative, patented oral supplement pouch delivery system technology provides for broad market applications related to nutritionally focused products and medicinal based formulations. PRO-DIP’s initial oral pouch commercial product offering, the ION Energy pouch, is designed for the delivery of flavorful bursts of vitamins and natural energy supplements through small, semi-permeable sachets placed in the mouth, between the gum and cheek or lip. The initial burst of supplements is followed by extended absorption of the nutrients, providing long-lasting energy, even at high-exertion levels. With its hands-free ease of consumption, the energy-rich pouches are an alternative to traditional sports supplements and deliver a daily serving of natural vitamins and nutrients. The invention of the pouch delivery system for nutraceuticals continues to gain mainstream interest from health product manufacturers, medical organizations, big pharma, the military, space organizations, CBD/hemp companies, humanitarian aid groups and the list goes on.

82. U.S. Patent No. 10,760,060B2, issued by the U.S. Patent and Trademark Office on September 1, 2020 for injection and incubation of circulating tumor cells from a cancer biopsy in zebrafish for accelerated prediction of cancer progression and response to treatment. Referred to as Zgraft, this is a multiple international jurisdiction patented personalized diagnostic technology platform which, using zebrafish, enables rapid analysis of cancer cells, offering cancer patients and their healthcare providers prediction of early metastasis and drug sensitivity thereby providing important information for diagnosis and treatment. The Zgraft platform models tumor progression and analyzes a cancer cell’s response to various treatments by transplanting human tumor tissue into a zebrafish allowing researchers to test an individual’s tumor cells under various conditions to see how they might respond to certain drug combinations and how the cancer progresses — all without exposing patients to the adverse effects of trying drug combinations that, ultimately, aren’t effective for their cases. Essentially, by taking a sample of cancer cells from a patient’s own tumors and studying them in a variety of conditions, doctors can now provide a more accurate prognosis of that individual’s case. More importantly, we believe doctors can now test a variety of possible drug combinations to see how that particular patient’s cancer will respond to them. 3. Intellectual property for generic primary and sub-primary drug formulations (known as bioequivalence) of name brand pharmaceutical reference products related to usage as injectables, ophthalmic, and topical applications. 4. Intellectual property for proprietary designs for a cannabis dosing device, TruDose, which provides real-time analysis for the amount of THC/CBD in the smoke/vapor stream, after the heat point, allowing that once the device has detected the medically prescribed pre-set amount of THC/CBD has been detected, the device shuts off the flow of smoke/vapor so that only the pre-determined dose can be inhaled. The TruDose device is designed and intended to create assurance to delivered doses potentially allowing for broader medical application adoption. 5. Iodine and IoNovo related intellectual property, patents, and patent pending as follows:

2. U.S. Patent No. 10,760,060B2, issued by the U.S. Patent and Trademark Office on September 1, 2020 for injection and incubation of circulating tumor cells from a cancer biopsy in zebrafish for accelerated prediction of cancer progression and response to treatment (“Zgraft”). Zgraft is a multiple international jurisdiction patented personalized diagnostic technology platform which , using zebra fish, enables rapid analysis of cancer cells, offering cancer patients and their healthcare providers prediction of early metastasis and drug sensitivity thereby providing important information for diagnosis and treatment. The Zgraft platform models tumor progression and analyzes a cancer cell’s response to various treatment by transplanting human tumor tissue into a zebrafish allowing researchers to test an individual’s tumor cells under various conditions to see how they might respond to certain drug combinations and how the cancer progresses — all without exposing patients to the adverse effects of trying drug combinations that, ultimately, aren’t effective for their cases. Essentially, by taking a sample of cancer cells from a patient’s own tumors and studying them in a variety of conditions, doctors can now provide a more accurate prognosis of that individual’s case. More importantly, we believe doctors can now test a variety of possible drug combinations to see how that articular patient’s cancer will respond to them. 3. Intellectual property for generic primary and sub-primary drug formulations (known as bioequivalence) of name brand pharmaceutical reference products related to usage as injectables, ophthalmic, and topical applications. 4. Intellectual property for proprietary designs for a cannabis dosing device, TruDose, which provides real-time analysis for the amount of THC/CBD in the smoke/vapor stream, after the heat point, allowing that once the device has detected the medically prescribed pre-set amount of THC/CBD has been detected, the device shuts off the flow of smoke/vapor so that only the pre-determined dose can be inhaled. The TruDose device is designed and intended to create assurance to delivered doses potentially allowing for broader medical application adoption. 5. Iodine and IoNovo related Intellectual Property and patent pending as follows:

	a.	Canada patent pending for spray devices for dispensing aqueous iodine, and methods of making and using spray devices that dispense aqueous iodine
	b.	U.S. patent pending for controlled gaseous iodine sublimation from solid iodine for atmospheric iodine nutrition, disinfection and therapeutic uses
	c.	U.S. patent pending for an apparatus to produce atmospheric nutritional & disinfectant iodine
	d.	U.S. patent pending for automated high output aqueous iodine production and bottling system

Recent Developments

September 2023 Mast Hill SPA

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 shares 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.

Pursuant to the terms of the September 2023 Mast Hill Note, on December 12, 2023, the Company made an interest-only payment of $104,712 to Mast Hill. Between March 14, 2024 and April 4, 2024, the Company issued 826,203 shares of common stock to Mast Hill upon conversion of outstanding debt which consisted of a principal amount of $271,226 and an interest amount of $104,712, for a total amount of $375,938.

On April 9, 2024, the Company paid the full balance owed on the September 2023 Mast Hill Note in the principal amount of $3,228,774 and the interest amount of $30,571. As of August 31, 2024, the September 2023 Mast Hill Note was paid in full.

September 2023 FirstFire SPA & Note

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.

Pursuant to the terms of the September 2023 FirstFire Note, on December 18, 2023, the Company made an interest-only payment of $8,333 to FirstFire. On April 4, 2024, the Company issued 480,000 shares of common stock to FirstFire upon conversion of outstanding debt which consisted of a principal amount of $195,016 and an interest amount of $8,333, for a total amount of $203,349.

On April 9, 2024, the Company paid the full balance owed on the September 2023 FirstFire Note in the principal amount of $82,761 and the interest amount of $1,552. As of August 31, 2024, the September 2023 FirstFire Note was paid in full.

Bylaws Amendment

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 Company’s stockholders for the transaction of business, except as otherwise provided by statute or by the Company’s articles of incorporation, as amended, to one-third (33⅓%) of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy ~~(the “Reduced Quorum Requirement”)~~. The Company’s bylaws previously provided that the holders of a majority of the voting power of all outstanding shares of capital stock of the Company entitled to vote would constitute a quorum at all meetings of stockholders for the transaction of business.

Blacksheep Master (Asset Transfer) Agreement

On September 27, 2023, the Company entered into a Master (Asset Transfer) Agreement (the “Master Agreement”) by and between the Company and Blacksheep Trust (“Blacksheep”). Pursuant to the terms of the Master Agreement, Blacksheep agreed to transfer, on such dates as agreed to by the Company and Blacksheep, to the Company 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 monetization, advanced within five business days of clear access to the monetization or monetization facility.

The parties to the Master Agreement intend that the transfer of Collateral will be duly validated and authenticated by third-party audit procedures, said audit will allow for the transfer and monetization of the transferred Collateral, free and clear of any liens, claims or encumbrances, from Blacksheep to the Company and that the Collateral will not be a part of Blacksheep’s property for any purposes under state or federal law.

Pursuant to the terms of the Master Agreement, Blacksheep will be entitled to an annual distribution of 10% of net profits as identified by an independent auditor based on the 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.

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

The Master Agreement contains customary representations, warranties, and covenants of the Company and Blacksheep.

2023 Equity Incentive Plan

On September 29, 2023, stockholders of the Company approved the 2023 Equity Incentive Plan.

Reverse Stock Split

~~The~~On ~~Company~~November ~~effectuated~~6, a2023, ~~1-for-10~~the ~~reverse~~Company ~~stock~~effectuated ~~split (~~the “Reverse Stock Split”) effective immediately after the close of trading on the Nasdaq Capital Market ~~(“Nasdaq”) on November 6, 2023,~~ and the Company’s common stock began trading on the Nasdaq Capital Market 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. See “—Nasdaq Delisting” below.

Purchase and Sale Agreement – Ophir Collection

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:

	(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.
	(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.

Within two business days following the Company’s execution of the Ophir Agreement, the Company was required to, and did, deposit $25,000 with the Successor Receiver. In addition, to extend and maintain exclusivity related to the Ophir Agreement, (i) during the three month period ended February 2024, the Company paid additional deposits, totaling $75,000, to the Successor Receiver; (ii) during the three-month period ended May 2024, the Company paid additional deposits, totaling $100,000, to the Successor Receiver; and (iii) subsequent to the period ended May 31, 2024, the Company paid an additional deposit, totaling $30,000, to the Successor Receiver for an aggregate deposit amount of $230,000. These amounts are non-refundable.

AsPursuant ato ~~result~~the terms of ~~entry into~~ the Ophir Agreement, the Company noagreed ~~longer~~to ~~intends~~pay $60,000,000 to ~~pursue~~the aSuccessor ~~transaction~~Receiver ~~with~~to ~~SwagCheck~~purchase ~~Inc.~~the ~~(“SWAG”)~~Ophir Collection. ~~The~~On ~~Share~~October ~~Purchase~~17, ~~Agreement~~2024, ~~dated~~the asOphir ofAgreement ~~December~~was ~~23,~~terminated. ~~2022~~On such date, bythe ~~and~~Successor ~~among~~Receiver ~~the~~filed ~~Company,~~notice ~~SWAG~~with ~~and~~the ~~all~~Court ~~SWAG~~that ~~shareholders,~~the asSuccessor Receiver ~~amended~~canceled, ~~previously terminated~~without ~~pursuant~~objection toby ~~its~~the ~~terms~~Company, the Ophir Agreement.

Nasdaq Notification – Compliance of Minimum Bid Price Requirement

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

As previously disclosed, on November 21, 2022, Nasdaq notified the Company that its common stock failed to maintain a minimum bid price of $1.00 over the previous 30 consecutive business days as required by the Nasdaq listing rules. As previously disclosed on May 25, 2023, Nasdaq notified the Company that it had until November 20, 2023, to regain compliance by maintaining a minimum closing bid price of $1.00 or more for a minimum of 10 consecutive trading days. The Nasdaq notice states that Nasdaq has determined that for the last 11 consecutive business days, from November 7,2023 to November 21, 2023, the closing bid price of the Company’s common stock has been at $1.00 per share or greater. Accordingly, Nasdaq has confirmed that the Company has regained compliance with Listing Rule 5550(a)(2) and this matter is now closed.

Clawback Policy

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. The Company is evaluating the status of the Policy in light of the delisting from the Nasdaq Capital Market.

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”).

Officer Option Grant

On January 16, 2024, the Board of Directors granted to Christopher David, the Company’s Chief Operating Officer and a 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.

~~Stock~~Nasdaq ~~Issuance in Exchange for Certain NHL Non-Voting Special Shares~~Delisting

~~Subsequent~~On toFebruary 9, 2024, the ~~fiscal~~Company ~~year~~received ~~ended~~a ~~August~~letter ~~31,~~from ~~2023,~~Nasdaq’s ~~the~~Listing ~~Company~~Qualifications ~~issued~~Staff ~~737~~indicating that,~~642~~ ~~restricted~~based ~~shares~~upon the closing bid price of the Company’s common stock for the last 30 consecutive business days, the Company was not in ~~exchange~~compliance ~~for~~with ~~certain~~the ~~non-voting~~requirement ~~special~~to ~~shares~~maintain a minimum bid price of ~~NHL~~$1.00 per share (the “Minimum Bid Price Requirement”) for continued listing on the Nasdaq Capital Market, ~~previously~~as ~~issued~~set forth in ~~connection~~Nasdaq ~~with~~Listing ~~NHL’s~~Rule ~~Share~~5550(a)(2) ~~Exchange~~(the ~~Agreement~~“Original ~~with~~Notice”). ~~the~~At ~~Terragenx~~that ~~shareholders~~time, the Company’s ~~Asset~~was ~~Purchase~~provided a ~~Agreement~~compliance ~~with~~period ~~Mr.~~of ~~Terrence~~180 ~~Mullins,~~calendar ~~and~~days anfrom ~~employment~~the ~~agreement~~date ~~with~~of ~~Mr.~~the ~~Terrence~~Original ~~Mullins~~Notice, ~~each~~or ofuntil ~~which~~August 7, 2024, to regain compliance with the ~~closed~~Minimum onBid ~~November~~Price 11Requirement, ~~2021~~pursuant to Nasdaq Listing Rule 5810(c)(3)(A).

~~Stock~~As ~~Issuances~~the inCompany ~~Connection~~did not regain compliance with Sthe Minimum Bid Price Requirement by August 7, 2024, and it was determined by the Nasdaq Staff that the Company should not be eligible for another 180 calendar-1day ~~Warrant~~extension, ~~Exercises~~the Company received a delisting determination letter on August 9, 2024. The Company timely requested a hearing before a Nasdaq Hearing Panel (“Panel”) and provided the Panel with a plan to regain compliance. The hearing request automatically stayed any suspension or delisting action pending the hearing and the expiration of any additional extension period granted by the Panel following the hearing.

~~Subsequent~~On toNovember 4, 2024, the ~~fiscal~~Company ~~year~~received ~~ended~~a ~~August~~letter ~~31,~~from ~~2023,~~Nasdaq indicating that the Company’s ~~issued~~common ~~240,400~~stock ~~shares~~would ofbe delisted from Nasdaq and trading in the Company’s common stock towould ~~certain~~be ~~warrant~~suspended ~~holders~~at ~~upon~~the ~~exercise~~ open of ~~their~~trading ~~warrants~~on ~~issued~~November ~~pursuant~~6, to2024. Beginning at the ~~prospectus~~open of ~~that~~trading ~~forms~~on aNovember ~~part~~6, 2024, trading of the Company’s ~~Registration~~common ~~Statement~~stock continued on ~~Form~~the ~~S-1~~OTC ~~(File No.~~Market’s ~~333-267401)~~Pink ~~declared~~Current ~~effective~~Information tier byunder the ~~SEC~~symbol ~~on October 13, 2022 (the~~ “~~S-1 Warrants”)~~NVOS.”

~~Stock~~Departure ~~Issuance~~of –Christopher ~~Consulting~~David ~~Agreements~~as President

~~Subsequent~~On toFebruary ~~the~~15, ~~fiscal~~2024, ~~year~~Mr. ~~ended~~David, ~~August~~the ~~31,~~Company’s ~~2023~~then-President, Chief Operating Officer and member of the Company’s ~~issued~~Board ~~375,000~~of Directors ~~restricted~~informed ~~shares~~the Company of ~~common~~his ~~stock~~decision to voluntarily resign from his position as ~~consideration~~the ~~for~~Company’s ~~consulting~~President effective as ~~services~~of February 15, 2024. Mr. David did not resign as a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

~~Stock~~Appointment ~~Issuance~~of –Robert ~~Mast~~Oliva ~~Hill~~as ~~Cashless Warrant Exercise~~President

OnPursuant ~~September~~to ~~18,~~Mr. ~~2023,~~David’s ~~Mast~~departure ~~Hill~~as ~~fully~~President, ~~exercised~~the ~~all~~Board ~~warrants~~of ~~granted~~Directors ~~under~~of the ~~terms~~Company ~~and~~appointed ~~conditions~~Robert ofOliva ~~the~~as ~~$573~~President,~~000~~ ~~Mast~~effective ~~Hill~~February 15, ~~Warrant~~2024. ~~Agreement~~Mr. Oliva previously served the Company between January 26, ~~dated~~ ~~February~~2021 23and June 30, ~~2023.~~2022 ~~Under~~in ~~certain~~the ~~cashless~~role ~~exercise~~of ~~provisions~~Director. asDuring ~~well~~his time as ~~price~~Director, ~~protection~~Mr. ~~provisions~~Oliva ~~providing~~has ~~for~~also ~~adjustment~~served of the ~~number~~Company ofas ~~shares~~a member of the ~~Company’s~~Compensation ~~common~~Committee ~~stock~~and ~~issuable~~Nominating ~~upon~~and ~~exercise~~Corporate ofGovernance Committees. ~~the~~On ~~Mast~~June ~~Hill~~30, ~~Warrant~~2022, ~~the~~Mr. ~~Company~~Oliva ~~issued~~resigned ~~53,567~~from ~~restricted shares~~the Board of ~~the~~Directors. ~~Company’s~~See ~~common~~“—Resignation ~~stock~~of Robert Oliva.”

OnStreeterville ~~October 23~~Capital, ~~2023,~~LLC ~~Mast~~April ~~Hill~~2024 ~~fully~~Note ~~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.SPA

~~Stock~~On ~~Issuance~~April –5, ~~FirstFire~~2024, ~~Cashless~~the ~~Warrant~~Company ~~Exercise~~entered into a securities purchase agreement (the “SPA”) with Streeterville, pursuant to which the Company issued a secured convertible promissory note (the “Note”) with a maturity date of April 8, 2025 (the “Maturity Date”), in the principal sum of $6,210,000 (the “Principal Sum”). Pursuant to the terms of the Note, the Company agreed to pay the Principal Sum to Streeterville and to pay interest on the principal balance at the rate of 10.9% per annum. The Note carries an original issue discount (“OID”) of $660,000. In addition, $50,000 was withheld from the Principal Sum to cover Streeterville’s transaction costs. Accordingly, on April 8, 2024, Streeterville paid the purchase price of $5,500,000 in exchange for the Note. Upon receipt of the Purchase Price, the Company repaid in full the remaining outstanding balances under that certain promissory note in the original principal amount of $3,500,000 issued on September 12, 2023, as well as that certain promissory note in the original principal amount of $277,777.77 issued on September 18, 2023.

OnStreeterville ~~October~~may ~~12,~~convert ~~2023,~~the ~~FirstFire~~Note ~~fully~~into ~~exercised~~the ~~all~~Company’s ~~warrants~~common ~~granted~~stock ~~under~~on ~~the~~any ~~terms~~trading day (and ~~conditions~~the offollowing ~~the~~trading ~~$573,000~~day) ~~FirstFire~~that ~~Warrant~~any ~~Agreement,~~intraday trade ~~dated~~price ~~March~~of ~~21,~~the ~~2023.~~common ~~Under~~stock ~~certain~~is ~~cashless~~10% ~~exercise~~greater ~~provisions~~than asthe ~~well~~closing astrade price ~~protection~~on ~~provisions~~the ~~providing~~previous ~~for~~trading ~~adjustment~~day of(each ~~the~~a “Voluntary Conversion”). ~~number~~With ofrespect ~~shares~~to any Voluntary Conversion, the conversion price is equal to 85% of the ~~Company’s~~lowest daily volume weighted average price of the common stock ~~issuable~~on ~~upon~~any ~~exercise~~trading ofday during the ~~FirstFire~~five ~~Warrant,~~trading day period prior to the ~~Company~~respective ~~issued~~conversion ~~53,532~~date ~~restricted~~(the “Conversion Price”), ~~shares~~subject ofto adjustment as provided in the ~~Company’s~~Note ~~common~~as ~~stock~~well as beneficial ownership limitations.

Business Growth Initiatives

The Company’s mission is to provide excellence in multidisciplinary primary health care evaluation, assessment, diagnosis, treatment, pain management and prevention through the integration of medical technology, advanced therapeutics, and rehabilitative science combined with the development and distribution of high-quality health and wellness product solutions. Key elements of our business growth initiatives include:

● Increase Market Share in Canada through Organic Growth, Asset Acquisition and Affiliate Network Expansion for both our Clinic and Eldercare Operations. Specific to our clinic operations, the Company has an ongoing initiative to expand our Canadian market share through organic growth, increasing our affiliate network of clinics, as well as strategic acquisitions and Joint Ventures of operating multidisciplinary primary health care clinics in markets in which we currently operate as well as new geographic markets. Specific to our eldercare based operations, we intend to increase our Canada market share of providing contracted-occupational therapy and physiotherapy services to eldercare centric homes through network affiliation growth, new contract awards, and increased usage of telemedicine. ● Expand Operations into the United States through:

○Beginning on ~~the~~October ~~introduction~~8, ~~and~~2024, ~~deployment~~Streeterville ofhad ~~our~~the ~~various~~right ~~interconnected~~to ~~technology~~redeem ~~platforms~~up to ~~deliver~~$950,000 ~~the Company’s array~~ of ~~primary~~the ~~care~~Note ~~services~~per ~~and~~calendar ~~products~~month. ○The ~~Establish~~Company ~~micro~~is ~~clinics~~required into ~~existing facilities through partnerships with existing U.S. based operators of healthcare related services and products~~ pay such asredemption ~~pharmacies~~amounts ~~and~~in ~~big-box~~cash, ~~retail~~provided, ~~outlets.~~however, ○that ~~The~~if ~~strategic~~certain ~~acquisition~~equity ofconditions ~~targeted~~are ~~U.S.~~satisfied, ~~operating~~then ~~clinics~~the inCompany ~~key~~may ~~geographical~~pay ~~areas.~~all ○or any ~~The~~portion ~~strategic acquisition~~ of ~~targeted~~such ~~U.S.~~applicable ~~operating~~redemption ~~pharmacies~~amount inby ~~key~~issuing ~~geographical~~shares ~~areas. ○ Establishment~~ of ~~strategic~~common ~~affiliations,~~stock ~~alliances~~at ~~and~~the ~~partnerships~~applicable ~~with~~Conversion ~~existing~~Price ~~U.S.~~at ~~health~~such ~~care provider facilities allowing us immediate access to their client base~~time.

●The Company ~~Open~~may ~~Micro-Clinic~~prepay ~~Facilities~~the ~~through~~Note ~~our~~at ~~Canada~~any ~~and~~time ~~U.S.LA~~prior ~~Fitness~~to ~~Master~~the ~~Facility~~date ~~License~~that ~~Agreements.~~an ~~Micro-clinic~~Event ~~facilities~~of ~~are~~Default ~~reduced~~(as ~~footprint~~defined ~~clinics,~~in ~~primarily located within~~ the ~~footprint~~Note) ~~of box-store commercial enterprises, focused on providing both~~ (i)each ~~multidisciplinary~~an ~~primary~~“Event ~~care and medical technology related services, and (ii~~of Default”) ~~health~~occurs ~~and~~at ~~wellness~~an ~~products.~~amount ~~Under~~equal ~~the~~to ~~terms~~105% of ~~our~~the ~~agreements~~Outstanding ~~with~~Balance ~~LA Fitness~~ (~~U.S.~~as ~~and~~defined ~~Canada~~below),. we“Outstanding ~~are~~Balance” ~~planning to operate micro-clinic facilities within~~ means the ~~footprint~~Principal ofSum LAthen ~~Fitness~~outstanding ~~facilities~~plus ~~throughout~~accrued ~~both~~and ~~the~~unpaid Uinterest.S. ~~and~~The ~~Canada.~~Note ~~Each~~contains ~~micro-clinic~~customary ~~exists~~events ~~through~~of ~~either~~default ~~third-party~~relating ~~sub-license~~to, ~~agreements~~among other orthings, ~~corporate~~payment ~~sponsored~~defaults, ~~arrangement.~~breach ~~The~~of ~~Company’s~~representations LAand ~~Fitness~~warranties, ~~based~~and ~~micro-clinic~~breach ~~facilities~~of ~~will~~covenants ~~primarily~~in ~~provide~~the ~~outpatient~~Note ~~physiotherapy~~or ~~and occupational therapy services~~SPA.

Upon the occurrence of any Event of Default, the Note shall become immediately due and payable and the Company shall pay to Streeterville, in full satisfaction of its obligations hereunder, an amount equal to the Outstanding Balance plus the Trigger Effect (as defined herein). The “Trigger Effect” means 20% of the Outstanding Balance upon the occurrence of any Major Trigger Event (as defined in the Note) and 5% of the Outstanding Balance upon the occurrence of any Minor Trigger Event (as defined in the Note). The Trigger Effect for any Minor Trigger Event may occur up to three times. 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 22% per annum or the highest rate permitted by law.

In addition to the beneficial ownership limitations provided in the Note, the sum of the number of shares of common stock that may be issued under the SPA and Note shall be limited to 19.99% of the outstanding common stock of the Company on April 5, 2024, unless shareholder approval to exceed such limitation is obtained by the Company. The Company is required, under the terms of the Note, to seek shareholder approval with respect to the transaction within six months of April 5, 2024. If the Company is unable to obtain such shareholder approval within nine months of April 5, 2024, then the Company must repay the Note in cash.

The SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, registration rights with respect to the common stock underlying the Note. The SPA also requires the Company to file a registration statement covering Streeterville’s resale of the common stock underlying the Note within 75 days of the closing date.

In connection with the Note and SPA, the Company and Streeterville also entered into a security agreement (the “Security Agreement”). Pursuant to the Security Agreement, the Company granted Streeterville a security interest in all of the assets of the Company.

Acenzia, a wholly owned subsidiary of the Company, entered into a guaranty with Streeterville on April 5, 2024 (the “Acenzia Guaranty”). Acenzia guaranteed the repayment of the Note and granted Streeterville a security interest in the assets of Acenzia, including but not limited to the property located at 1580 Rossi Drive, Tecumseh, Ontario, Canada. Further, NHL, a wholly owned subsidiary of the Company, entered into a guaranty with Streeterville on April 5, 2024 (the “NHL Guaranty”). NHL guaranteed the repayment of the Note and granted Streeterville a security interest in the assets of NHL.

On October 8, 2024, Streeterville notified the Company that it would redeem $950,000 of the Note. In lieu of payment by the Company to Streeterville of $950,000, the Company and Streeterville agreed to a one-time fee in the amount of $142,500 (representing 15% of the $950,000 redemption amount) payable by the Company to Streeterville. Such amount was added to the outstanding balance under the Note. On October 16, 2024, Streeterville submitted a redemption notice in the amount of $142,500. On October 21, 2024, the Company issued 675,724 shares of common stock to Streeterville in payment of the $142,500 redemption amount. Following such issuance, the outstanding balance under the Note was $6,579,657.54.

RC Consulting Consortium Group LLC Amendment

On April 26, 2023, the Company entered into a securities purchase agreement with RC Consulting Consortium Group LLC (“RC”) in favor of SCP Tourbillion Monaco or registered assigns (the “Holder”), pursuant to which the Company issued an unsecured 15-year promissory note to the Holder (the “RC Note”) with a maturity date of April 26, 2038, in the principal sum of $70,000,000, which amount represents the $57,000,000 purchase price plus a yield (non-compounding) of 1.52% (zero coupon) per annum from the issue date.

On June 3, 2024, the Company and RC Consulting Consortium Group LLC entered into an amendment (the “June 2024 Amendment”) to the RC Note. Pursuant to the terms of the June 2024 Amendment, at any time after 12 months and no later than 60 months from the commencement of the term and prior to an event of default, if the Company’s listed common stock closes over $15 per share for a period of five consecutive trading days, the Company may (upon its sole discretion), prepay up to 50% of the outstanding RC Note in restricted shares of the Company’s common stock, as prescribed under Rule 144, at a value equal to 15% greater than the average closing price of the Company’s common stock over the five consecutive days above $15 per share. In the event the Company elects to prepay any outstanding amount in restricted stock, upon the removal of the restriction, RC Consulting Consortium Group LLC (or its designates) will be limited to selling no more than one-sixth the amount of shares available from the lifting of the Rule 144 restriction over a single 30-day period.

Except as set forth in the June 2024 Amendment, all other provisions and conditions of the Note remain in full force and effect, including the Company’s right, on 15 days’ prior written notice, to prepay the Note at any time prior to an event of default.

Robert Mattacchione Executive Agreement Amendment

On June 18, 2021, the Company entered into an executive agreement (the “June 2021 Mattacchione Agreement”) with GPE Global Holdings Inc., an entity controlled by Robert Mattacchione and through which Mr. Mattacchione agreed to provide services to the Company (“GPE”). Pursuant to the terms of the June 2021 Mattacchione Agreement, Mr. Mattacchione agreed to serve as the Company’s Chief Executive Officer in exchange for the compensation set forth therein, and consistent with the terms thereof. Mr. Mattacchione also serves as the Company’s Chairman of the Board.

On June 18, 2024, the Company and GPE entered into an amendment to the June 2021 Mattacchione Agreement (the “Mattacchione Amendment”), pursuant to which the parties agreed to extend the term of the June 2021 Mattacchione Agreement by one year, such that the term of the June 2021 Mattacchione Agreement will continue until June 18, 2025. Except as set forth in the Mattacchione Amendment, the June 2021 Mattacchione Agreement remains in full force and effect. See “—Resignation of Robert Mattacchione as Chief Executive Officer” below.

Christopher David Executive Agreement Amendment

On June 18, 2021, the Company entered into an executive agreement (the “June 2021 David Agreement”) with Christopher David. Mr. David serves as the Company’s Chief Operating Officer.

On June 18, 2024, the Company and Mr. David entered into an amendment to the June 2021 David Agreement (the “David Amendment”), pursuant to which the parties agreed to extend the term of the June 2021 David Agreement by one year, such that the term of the June 2021 David Agreement will continue until June 18, 2025. Additionally, the parties agreed to update Mr. David’s title to Chief Operating Officer of the Company, as opposed to President and Chief Operating Officer. Except as set forth in the David Amendment, the June 2021 David Agreement remains in full force and effect.

Streeterville Capital LLC SPA Amendment No. 1

On June 23, 2024, the Company and Streeterville entered into the First Amendment to the Transaction Documents (the “First Amendment”), pursuant to which (i) the Streeterville SPA was amended to provide that the Registration Statement may be filed on Form S-1 or S-3 and the Registration Statement will be filed on or before July 3, 2024, and (ii) Streeterville waived any breach or default that occurred under the Streeterville Note as of the June 23, 2024, if any, as a result of any breach by the Company relating to its failure to timely file the Registration Statement.

Resale Registration Statement on Form S-1

On July 8, 2024, the Company filed a registration statement on Form S-1 relating to the resale of up to 3,500,000 shares of the Company’s common stock by Streeterville issuable by the Company upon conversion of the Streeterville Note. The prices at which Streeterville may sell the common stock will be determined by the prevailing market price for the shares or in negotiated transactions. The Company will not receive any of the proceeds from the sale of common stock owned by Streeterville, and the Company will not receive any proceeds from the conversion of the Streeterville Note.

Mast Hill Fund, L.P.

On February 23, 2023, the Company entered into a securities purchase agreement (the “Mast Hill SPA”) with 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 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 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, 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 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.

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 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 2,772,045 shares) as further described in the Mast Hill SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

On August 24, 2023, the 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. As of August 31, 2024, the Mast Hill Note was paid in full.

On September 18, 2023, Mast Hill fully exercised all warrants issued pursuant to 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 shares of the Company’s common stock. As of August 31, 2024, all warrants granted under the $573,000 Mast Hill Warrant Agreement have been exercised.

FirstFire 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 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 $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 $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.

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 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 1,000,000 shares as further described in the SPA, unless shareholder approval to exceed such limitation is obtained by the Company.

On September 21, 2023, the 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. As of August 31, 2024, the FirstFire $573,000 Note is paid in full.

On October 12, 2023, FirstFire fully exercised all warrants issued 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 Mast Hill Warrant, the Company issued 53,532 shares of the Company’s common stock. As of August 31, 2024, all warrants granted under the $573,000 FirstFire Warrant Agreement have been exercised.

Mast Hill Fund, L.P. $445,000 Note, SPA, and Warrant

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.

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.

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 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. As of August 31, 2024, the MH $445,000 Note is paid in full and all outstanding warrants have been exercised.

Registration Statement on Form S-8

On September 23, 2024, the Company filed a registration statement on Form S-8 (File No. 333-282277) registering 2,500,000 shares of common stock issuable pursuant to the 2023 Equity Incentive Plan.

Resignation of Robert Oliva

On October 25, 2024, Mr. Oliva resigned as President of the Company. His resignation was not a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

Resignation of Robert Mattacchione as Chief Executive Officer

On November 7, 2024, Mr. Mattacchione resigned as the Company’s Chief Executive Officer, effective 90 days following the notification date (i.e. effective February 5, 2025). The 90-day notice period is intended to provide the Company with a fluid transition and to allow the Company time to appoint a suitable replacement. Following the 90-day transition period, Mr. Mattacchione intends to continue to serve as (i) the Company’s Chairman of the Board, and (ii) Chairman of NHL, a wholly owned subsidiary of the Company. Mr. Mattacchione’s resignation was not a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

Approval of Reverse Stock Split

On November 22, 2024, stockholders approved the amendment of the Company’s articles of incorporation, as amended, to effectuate a reverse stock split of the Company’s outstanding shares of common stock at a ratio of no less than 1-for-10 and no more than 1-for-30, with such ratio to be determined at the sole discretion of the Board. Although stockholders approved such amendment, the Board may determine in its discretion to abandon and to not effectuate the reverse stock split.

Business Growth Initiatives

The Company’s mission is to provide excellence in multidisciplinary primary healthcare evaluation, assessment, diagnosis, treatment, pain management and prevention through the integration of medical technology, advanced therapeutics, and rehabilitative science combined with the development and distribution of high-quality health and wellness product solutions. Key elements of our business growth initiatives include:

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Increase Market Share in Canada through Organic Growth, Asset Acquisition and Affiliate Network Expansion for both our Clinic and Eldercare Operations. Specific to our clinic operations, the Company has an ongoing initiative to expand our Canadian market share through organic growth, increasing our affiliate network of clinics, as well as strategic acquisitions and Joint Ventures of operating multidisciplinary primary healthcare clinics in markets in which we currently operate as well as new geographic markets. Specific to our eldercare based operations, we intend to increase our Canada market share of providing contracted-occupational therapy and physiotherapy services to eldercare centric homes through network affiliation growth, new contract awards, and increased usage of telemedicine.

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Expand Operations into the United States through:

	○	The introduction and deployment of our various interconnected technology platforms to deliver the Company’s array of multidisciplinary primary care and related wellness products;
	○	The establishment of micro clinics in existing facilities through partnerships with existing U.S. based operators of healthcare related services and products such as pharmacies and big-box retail outlets;
	○	The strategic acquisition of targeted U.S. operating clinics in key geographical areas;
	○	The strategic acquisition of targeted U.S. operating pharmacies in key geographical areas; and
	○	Establishment of strategic affiliations, alliances and partnerships with existing U.S. healthcare provider facilities allowing us immediate access to their client base.

●

Open Micro-Clinic Facilities through our Canada and U.S. LA Fitness Master Facility License Agreements. Micro-clinic facilities are reduced footprint clinics, primarily located within the footprint of box-store commercial enterprises, focused on providing both (i) multidisciplinary primary care and medical technology related services, and (ii) health and wellness products. Under the terms of our agreements with LA Fitness (U.S. and Canada), we are planning to operate micro-clinic facilities within the footprint of LA Fitness facilities throughout both the U.S. and Canada. Each micro-clinic exists through either third-party sub-license agreements or corporate sponsored arrangement. The Company’s LA Fitness based micro-clinic facilities will primarily provide outpatient physiotherapy and occupational therapy services.

●

Further Development and Usage of Novo Connect and Telemedicine/Telehealth Medical Technology Platform.

The Company believes the healthcare industry is in the early stages of a fundamental transformation of the patient-practitioner-health insurer relationship whereby the patient is demanding greater control and care collaboration for their health and wellness needs while the practitioner desires dramatic improved efficiency in the delivery of their expertise to the patient. Through both internal development and partnerships, the Company is working to provide the next generation of telehealth technology capability to offer the patient and the practitioner a sophisticated and enhanced telehealth interaction through laptop, desktop or the Company’s Novo Connect mobile application.

Novo Connect is the Company’s proprietary mobile application designed and built to be a secure, cloud-based health and commerce web application intended to assist patients as they explore, connect, manage, and have direct control of their personalized health and wellness needs. Novo Connect is designed to integrate the Company’s interconnected technology and provide ~~the~~patients ~~patient~~with a single platform with a robust healthcare ecosystem of services, products, and digital health offerings.

Through the interface of sophisticated peripheral based diagnostic tools, such as a blood pressure reading device, a derma scope, an ophthalmoscope otoscope, and other add-ons operated by skilled support workers in the patient’s remote location, the practitioner’s ability and comfort to provide a uniquely comprehensive evaluation, diagnosis, and treatment solution is dramatically elevated creating virtual visits that are intended to be as real and as effective as a physical visit.

15Specific to our eldercare operations, prior to COVID-19 our Telemedicine Medical Technology Platform was primarily focused on providing physiotherapy related “virtual-care” services to both smaller and remote eldercare focused facilities to ensure access to service providers, when needed; and continuity of care to eldercare patients without service providers in their area. With the profound impact COVID-19 has had on the delivery of healthcare services sector wide, we expanded our eldercare-related Telemedicine Medical Technology Platform to include non-critical resident reviews, exercise related activity and additional physiotherapy sessions, ensuring continuity of service for our long-term care and retirement home clients.

Specific to our eldercare operations, prior to COVID-19 our Telemedicine Medical Technology Platform was primarily focused on providing physiotherapy related “virtual-care” services to both smaller and remote eldercare focused facilities to ensure access to service providers, when needed; and continuity of care to eldercare patients without service providers in their area. With the profound impact COVID-19 has had on the delivery of healthcare services sector wide, we expanded our eldercare related Telemedicine Medical Technology Platform to include non-critical resident reviews, exercise related activity and additional physiotherapy sessions, ensuring continuity of service for our long-term care and retirement home clients.

Specific to our Clinic based operations, the success of telemedicine has always depended on the adoption of virtual technology by clinicians, medically licensed providers and the patient. A basic checklist approach to results allows both multidisciplinary clinicians and medically licensed providers to remotely determine if direct medical attention is required rather than remote or virtual guidance to care. The patient friendly telemedicine platform removes the traditional barrier represented by intimidating peripherals along with necessary precision use and application of the peripherals to obtain accurate data necessary for appropriate diagnosis. A patient can now feel certain of their role in the assessment process without sophisticated and exhaustive training.

● Develop and Launch our Remote Patient Monitoring Medical Technology Platform. Beyond the traditional confines of in-clinic visits, our Remote Patient Monitoring Medical Technology Platform (“RPM platform” or “RPM”) ~~provides~~will provide clinicians and practitioners the ability to maintain an on-going continuous connection with their patient community extending patient care directly into the patient’s home. Our RPM platform ~~empowers~~is intended to empower a patient to have direct control of collecting and monitoring real-time vital sign information while maintaining a direct technology link from patient to clinician or medical practitioner. The transfer of vital information from home to clinic or patient to clinician allows for the delivery of high quality, non-redundant diagnostic based proactive healthcare. The implementation of in-clinic patient metrics equivalent to those derived via a remote application in the home environment is the first step in engaging patient retention to remote review.

● Build an Intellectual Property and Patent Portfolio. In addition to the Company’s current portfolio of Intellectual Property (IP), patent-pending and patent assets, we intend to acquire or obtain licensing rights for IP and patents related to health sciences and health and wellness products, and nano-formulation. When considering nano-formulation patent and IP assets, one specific area we intend to pursue relates to medical cannabis related medicines, beverages and foods infused with dry powder, liquid or oil with further formulation into creams and gels, allowing for oral, intravenous and/or transdermal delivery.22

● ~~Expand~~Build ~~our~~an ~~Posture,~~Intellectual ~~Stride,~~Property and ~~Kinetic~~Patent ~~Body~~Portfolio. ~~Movement~~In ~~Scanning~~addition ~~Technologies~~to ~~and~~the ~~Protocols.~~Company’s ~~When~~current ~~combined~~portfolio ~~with~~of ~~decades~~Intellectual ofProperty ~~data~~(IP), ~~harvesting~~patent-pending and ~~analysis~~patent assets, we ~~believe~~intend ~~these~~to ~~specialized~~acquire ~~technologies~~or ~~and~~obtain ~~protocols~~licensing ~~provide~~rights ~~our~~for ~~clinics~~IP ~~with~~and ~~the~~patents ~~ability~~related to ~~deliver~~health ~~better healthcare~~sciences, ~~through~~health ~~early diagnosis~~ and ~~preventative~~wellness ~~health care strategies~~products, ~~to both our patients~~ and ~~patients under the care of other providers~~nano-formulation. ●When ~~Launch~~considering ~~our~~nano-formulation ~~Exclusive~~patent ~~Medicinal Cannabidiol (“CBD”) Product Platform based in Canada. As we continue to build our health science platform of services~~ and ~~products~~IP ~~through the integration of technology and rehabilitative science~~assets, one ~~component~~specific ofarea ~~our~~we ~~lateral~~intend ~~business~~to ~~growth~~pursue ~~strategy~~relates ~~includes~~to ~~developing~~medical ~~business~~cannabis ~~units~~related ~~centered on the direct control of the cultivation~~medicines, ~~processing,~~beverages and ~~manufacturing~~foods ofinfused ~~CBD~~with ~~products~~dry ~~in Canada~~powder, ~~and~~liquid ~~the~~or ~~sale~~oil ~~and~~with ~~distribution~~further offormulation ~~medicinal~~into ~~CBD~~creams ~~products in Canada~~ and ~~authorized~~gels, ~~U.S.~~allowing ~~states. We expect our prospective medicinal CBD products will be specifically focused on CBD~~ for ~~use~~oral, ~~(i)~~intravenous ~~as a treatment aid; (ii) to provide relief for a large array of neurological~~ and/or ~~musculoskeletal~~transdermal ~~system disorders; and (iii) as an alternative option for health care providers in place of prescribing opioids to patients~~delivery.

	●	Expand our Posture, Stride, and Kinetic Body Movement Scanning Technologies and Protocols. When combined with decades of data harvesting and analysis, we believe these specialized technologies and protocols provide our clinics with the ability to deliver better healthcare, through early diagnosis and preventative healthcare strategies, to both our patients and patients under the care of other providers.

	●	Launch our Exclusive Medicinal Cannabidiol (“CBD”) Product Platform based in Canada. As we continue to build our health science platform of services and products through the integration of technology and rehabilitative science, one component of our lateral business growth strategy includes developing business units centered on the direct control of the cultivation, processing, and manufacturing of CBD products in Canada, and the sale and distribution of medicinal CBD products in Canada. We expect our prospective medicinal CBD products will be specifically focused on CBD for use (i) as a treatment aid; (ii) to provide relief for a large array of neurological and musculoskeletal system disorders; and (iii) as an alternative option for healthcare providers in place of prescribing opioids to patients.

Offering our patients access to non-hallucinogenic and non-addictive natural remedies, under required clinical oversight policies and procedures as they relate to medicinal CBD, combined with our existing clinic-based treatment protocols, allows us to enter this market segment with a unique integration model not readily available in the marketplace.

LA Fitness U.S. and Canada License Agreement & Guaranty for Micro Clinics

In September 2019, through its U.S. subsidiary Novomerica Health Group, Inc. (“Novomerica”) and its Canadian subsidiary, Novo Healthnet Limited, the Company entered into exclusive Master Facility License Agreements (“License Agreement”) to establish and operate reduced footprint clinics, or “micro-clinics”, to provide outpatient physical and/or occupational therapy services and related products within LA Fitness facilities in both the U.S. and Canada. In March 2020, as a result of guidelines issued by local, state, federal, and provincial authorities due to the COVID-19 pandemic, LA Fitness U.S. and Canada closed all facilities nationwide. As a result, all contractual terms and conditions of both our U.S. and Canada Master Facility License Agreements were placed on hold through fiscal year 2021 with all parties expressing the intent to amend both the U.S. and Canada License Agreements and related timelines to launch our LA Fitness micro-clinic facilities as “normal” activity resumes in the LA Fitness U.S. and Canada facilities.

Contracts

Certain contracts held with client homes and client companies follow standard formats and include generally accepted terms of reference. Specific clauses within the NHL contracts for services contain language intended to (1) clarify which entity is the health information custodian of the medical files (usually held by the client home or company), (2) define release of liability, (3) ensure privacy and confidentiality of proprietary information or private health information, (4) define provisions of worker’s compensation clearance or benefits for employees and/or contractors, (5) detail provisions of value-added items, services or programs, (6) set out terms and conditions of the contract (often for a set number of years with an option to a renew), (7) provide for termination conditions, and (8) detail invoicing and billing procedures.

Employees

As of August 31, ~~2023~~2024, we employed ~~127~~115 full-time employees and ~~103~~149 part-time employees across all Company subsidiaries. Specific to our clinic and eldercare services, approximately 90% of our clinicians and practitioners are contracted as independent contractors. We believe that a diverse workforce is important to our success. We will continue to focus on the hiring, retention and advancement of women and underrepresented populations, and to cultivate an inclusive and diverse corporate culture. In the future, we intend to continue to evaluate our use of human capital measures or objectives in managing our business such as the factors we employ or seek to employ in the development, attraction and retention of personnel and maintenance of diversity in our workforce.

The success of our business is fundamentally connected to the well-being of our people. Accordingly, we are committed to the health, safety and wellness of our employees. We provide our employees and their families with access to a variety of innovative, flexible and convenient health and wellness programs, including benefits that provide protection and security so they can have peace of mind concerning events that may require time away from work or that impact their financial well-being; that support their physical and mental health by providing tools and resources to help them improve or maintain their health status and encourage engagement in healthy behaviors; and that offer choice where possible so they can customize their benefits to meet their needs and the needs of their families.

We also provide robust compensation and benefits programs to help meet the needs of our employees. We believe that we maintain a satisfactory working relationship with our employees and have not experienced any labor disputes.

Competition

In both Canada and the U.S., the primary healthcare service sector in which we operate is highly competitive. Specific to both our clinic and eldercare operations, with a finite number of patients and corporate clients, companies providing multidisciplinary primary ~~health~~healthcare ~~care~~ services operate within an overlapping patient and client landscape.

Our principal competitors include other multidisciplinary primary healthcare providers, clinics, pharmacies, other micro clinic-oriented facilities, hospitals, and general primary care facilities. An important part of our business strategy is to continue making targeted acquisitions of other multidisciplinary primary healthcare providers. However, reduced capacity, the passage of healthcare parity legislation, and increased demand for multidisciplinary primary healthcare related services and products are likely to attract other potential buyers, including diversified healthcare companies, other pure-play multidisciplinary primary healthcare providers, companies, and private equity firms.

In addition to the competition we face for acquisitions, we must also compete for patients. Patients are referred to our multidisciplinary primary healthcare facilities through a number of different sources, including healthcare practitioners, public programs, other treatment facilities, insurance providers, legal practitioners, and word of mouth from previously treated patients and their families, among others. These referral sources may instead refer patients to other providers of services similar to ours.

There is additional competition from non-traditional healthcare providers, such as holistic and Eastern medicine-based clinics. We believe we can successfully compete based on providing high-quality specialized multidisciplinary primary ~~health~~healthcare ~~care~~ services, products, meaningful interconnected technology applications, competitive pricing, building and maintaining a solid reputation and our caregiver’s devotion to maintaining the highest quality patient satisfaction.

The health and wellness product industry is highly competitive. Our ability to remain competitive depends on many factors, including having relevant products that meet consumer needs, enhanced education and tools, innovation in our products and services, competitive pricing, a strong reputation, and a financially viable company.

Health Insurance Plans

Additionally, our ability to effectively compete for patients is impacted by commercial and managed care payor programs that influence patient choice by offering health insurance plans that restrict patient choice of provider.

Canadian ~~Health~~Healthcare ~~Care~~ System

Our competition will also be the Canadian ~~health~~healthcare ~~care~~ system which is a government sponsored system that began in 1957, when Parliament approved the Hospital Insurance and Diagnostics Services Act. The Act provided free acute hospital care, laboratory and radiological diagnostic services to Canadians. By 1961, agreements were in place with all the provinces and 99% of Canadians had free access to the ~~health care~~healthcare services covered by the legislation. The Act was followed by the Medical Care Act of 1966 that provided free access to physician services. By 1972, each province had established its own system of free access to physician services. The federal government shared in the funding. In 1984, the Government of Canada passed the Canada Health Act (CHA). The Canada Health Act created a publicly administered ~~health care~~healthcare system that is comprehensive, universal and accessible. All medically necessary procedures are provided free of charge. The system provides diagnostic, treatment and preventive services regardless of income level or station in life. Access to care is not based on health status or ability to pay. Coverage is portable between provinces and territories. We can give no assurance that we will be able to effectively compete in this market.

Government Regulation and ~~Health~~Healthcare ~~Care~~ Regulation

Canada

In Canada, some ~~health~~healthcare ~~care~~ services are public, some are private and there are a number of different entities involved in regulating and providing their delivery. While there is a perception that all ~~health~~healthcare ~~care~~ in Canada is publicly funded, the publicly funded system is generally restricted to “medically necessary” hospital and physician services, and provincial or territorial drug plans that provide access to prescription drugs to residents over the age of 65 or those residents who rely on social assistance programs. Publicly funded services are delivered through a combination of public and private providers and funding comes from the Canadian federal government, which sets national standards, and the provincial and territorial governments, which regulates the delivery of services and determines those services that are deemed “medically necessary” (i.e., publicly funded) within the context of their own unique fiscal and political environment. In addition, there are a wide array of health products and services that are not subject to coverage under the public health insurance plans that are provided on a private payer basis. See “Risks Related to our Multidisciplinary Primary ~~Health~~Healthcare ~~Care~~ Business”.

Federal/Provincial Government Division of Power

As is the case for many important industries and economic sectors, neither the federal, nor the provincial/territorial level of government has exclusive jurisdiction over health. Instead, the Constitution Act, 1867, divides the legislative powers relevant to the regulation of the delivery of health products and services between the federal and provincial levels of government.

The federal government is responsible for regulating important aspects of various health industries or sectors including the regulation of selling, importing, distributing and marketing of drugs and medical devices and maintains significant influence over health policy and national objectives through the use of its spending power.

The provincial/territorial level of government has comprehensive authority over the delivery of ~~health~~healthcare ~~care~~ services. Other examples of provincial responsibility include the regulation of hospitals and other health facilities, administration of health insurance plans, distribution of prescription drugs and regulation of health professionals.

However, many health industry sectors are subject to at least some degree of regulation or oversight by both levels of government.

Canada’s National Health Insurance Program

Canada’s “national” health insurance program, a publicly funded single-payer system often referred to as “Medicare,” is designed to ensure that all Canadian residents have universal access to medically necessary hospital and physician services through the provincial and territorial ~~health~~healthcare ~~care~~ insurance plans.

The Canada Health Act

The Canada Health Act is the federal legislation that provides the foundation for the Canadian ~~health~~healthcare ~~care~~ system. The Act is administered by Health Canada, the federal department with primary responsibility for maintaining and improving the health of Canadians. However, neither the Canada Health Act nor Health Canada have direct authority to regulate the health insurance plans that give effect to the publicly funded health insurance system that is in place across the country. Instead, the Act establishes certain values and principles and sets out criteria and conditions that each publicly funded health insurance plan is required to meet in order to qualify for federal funding through the Canada Health Transfer. As federal funding is critical to the ability to fund “medically necessary” hospital and physician services, each provincial and territorial health insurance plan must satisfy the requirements of public administration; universality; portability; comprehensiveness; and accessibility.

Notably, these requirements relate only to funding and administration and establish broad principles rather than a prescriptive code. In addition, the Canada Health Act is silent with respect to the delivery of health services and does not prohibit or discourage the delivery of insured health services by the private sector. As a result, there is significant variation in the funding and administration of health insurance plans from one jurisdiction to another. However, most provinces permit the delivery of a broad range of publicly funded health services through a combination of both public and private providers. Indeed, many publicly funded services in Canada are privately delivered.

The requirement that publicly funded health insurance plans be comprehensive requires that “medically necessary” hospital and physician services be covered. If a service is determined to be “medically necessary” then the full cost of the service must be covered by the public plan. However, the term is not defined and the services that must be covered are intentionally and broadly defined in order to accommodate the ability of each province and territory to make its own coverage decisions within the context of its unique fiscal and political environment. Typically, such decisions are made in consultation with the relevant medical associations in the jurisdiction. However, determining whether a particular service is “medical necessary” is a determination that has both a fiscal and political dimension. Ultimately, these coverage decisions are decisions about the allocation of scarce public resources.

19The products and services available to Canadians through the publicly funded health insurance system are supplemented by a wide array of health products and services that are not, as a general matter, subject to coverage under the public health insurance plans. For example, prescription drug coverage, dental services and vision care are generally provided on a private payer basis. However, many jurisdictions provide coverage for these types of services to seniors and those who face financial or other barriers to privately funded healthcare. There are also a growing number of providers that offer non-medically necessary ancillary health services. Examples include elective surgical or cosmetic procedures.

The products and services available to Canadians through the publicly funded health insurance system are supplemented by a wide array of health products and services that are not, as a general matter, subject to coverage under the public health insurance plans. For example, prescription drug coverage, dental services and vision care are generally provided on a private payer basis. However, many jurisdictions provide coverage for these types of services to seniors and those who face financial or other barriers to privately funded health care. There are also a growing number of providers that offer non-medically necessary ancillary health services. Examples include elective surgical or cosmetic procedures.

Regulation of Health Professionals and Health Facilities

Health professionals and ~~health~~healthcare ~~care~~ facilities are subject to federal laws of general application, but the regulation of such matters is largely a matter of provincial jurisdiction.

Health Professionals

Through legislation, the provinces have delegated the regulation of health professionals to self-governing professional bodies (with varying degrees of discretion). Such legislation generally seeks to protect the public through a combination of “input regulations” that focus on who is entitled to provide a particular health service and “output regulations” that focus on the quality and delivery of the service being provided. Such regulations also generally include conflict of interest (or anti-kickback) provisions, as such matters are generally dealt with as part of the regulation of health professions rather than the regulation of health facilities.

Health industry participants that offer a particular service need to understand how the service is regulated. If the service involves the performance of a regulated or controlled act (i.e., acts that can only be performed by a particular category or categories of regulated health professionals or their delegates) then the involvement of one or more duly qualified health professionals will likely be required. Also, it may be necessary to implement certain protocols and procedures in order to comply with the requirements of the regulatory colleges that govern the practices of any such professionals. Complying with such requirements can have significant commercial implications.

Health Facilities

Operating a regulated health facility can be challenging and often involves a degree of regulatory risk.

Residential ~~health~~healthcare ~~care~~ facilities other than hospitals, such as nursing homes, long-term care facilities, pharmacies, laboratories and specimen ~~collection~~ collection clinics are, in most jurisdictions, privately owned and operated pursuant to provincial licenses and oversight. However, the degree to which such health facilities and other providers are regulated generally depends on the nature of the products and services being provided.

The operation of health facilities by private sector entities still typically involves some element of reimbursement through public funds. Where public funds are being used to acquire goods and services, additional accountability measures such as procurement requirements often apply.

Regulation of Drugs

The process of obtaining marketing authorizations and approvals of prescription drugs is administered by Health Canada’s Therapeutic Products Directorate (“TPD”).

The TPD applies the Food and Drugs Act and the regulations applicable to prescription drugs to ensure that drug products sold in Canada are safe and effective. No drug product can be offered for sale in Canada unless and until, after review, it is issued a marketing authorization by Health Canada.

In addition to its review of drug products, Health Canada is responsible for the ongoing monitoring of drug products being sold in Canada, as well as the regulation of good manufacturing practices and establishment licenses, which are required in connection with the import, manufacture, distribution and/or sale of drug products.

The Patented Medicines Prices Review Board

The Patented Medicines Prices Review Board (“PMPRB”) is an independent quasi-judicial body created in 1987 under amendments to the Patent Act. The PMPRB is responsible for regulating the prices that patentees charge for prescription and non-prescription patented drugs sold in Canada. Based on a review of the information required to be filed by a patentee, the PMPRB considers whether the price of a medicine appears excessive based on certain factors including: (i) the prices that the patented medicine is sold in the Canadian market; (ii) the prices at which other medicines in the same therapeutic class are sold in the Canadian market; and (iii) the prices at which the medicine and other medicines in the same therapeutic class have been sold in other countries other than Canada. If the PMPRB considers the price of a medicine appears excessive, revised pricing is the usual outcome.

Public Market Access

Each province has a provincial drug plan that allows certain individuals to access drugs at a reduced cost. Products that will be paid for by the provincial government (in some provinces, for all residents, while in others for certain prescribed individuals such as seniors and individuals receiving social assistance), are typically listed on provincial formularies. For innovator products, the manufacturer negotiates the pricing for inclusion on the provincial formulary with the provincial government. For generic products, the price to be paid for the generic product is determined by a sliding scale of fixed prices related to when such products enter the market and the price of the innovator product (i.e., a percent of the price of the innovator pharmaceutical product depending on whether they are first, second or third entry products). If a drug is a generic product and listed as interchangeable on the provincial formulary, a pharmacist is permitted to dispense the interchangeable product for the innovator product. Under most provincial benefit plans, interchanging a generic product for the innovator product by pharmacists is mandatory and generally most provinces will only reimburse the pharmacist for the lowest cost interchangeable product. Government drug plans account for approximately 50% of all sales of prescription drugs in Canada.

The scope and enforcement of each of these laws is uncertain and subject to constant change. Federal and provincial enforcement entities have significantly increased their scrutiny of health care companies and providers which has led to investigations, prosecutions, convictions and large settlements. Although we conduct our business in compliance with all applicable federal and provincial fraud and abuse laws, many of these laws are broadly worded and may be interpreted or applied in ways that cannot be predicted with any certainty. Therefore, we cannot assure you that our arrangements or business practices will not be subject to government scrutiny or that they will be found to be in compliance with applicable fraud and abuse laws. Further, responding to investigations can be time consuming and result in significant legal fees and can potentially divert management’s attention from the Company.27

The scope and enforcement of each of these laws is uncertain and subject to constant change. Federal and provincial enforcement entities have significantly increased their scrutiny of healthcare companies and providers which has led to investigations, prosecutions, convictions and large settlements. Although we conduct our business in compliance with all applicable federal and provincial fraud and abuse laws, many of these laws are broadly worded and may be interpreted or applied in ways that cannot be predicted with any certainty. Therefore, we cannot assure you that our arrangements or business practices will not be subject to government scrutiny or that they will be found to be in compliance with applicable fraud and abuse laws. Further, responding to investigations can be time consuming and result in significant legal fees and can potentially divert management’s attention from the Company.

Client Information Privacy

In Canada, under the Personal Information Protection and Electronic Documents Act and under various provincial laws, comprehensive privacy laws have been introduced to protect the privacy of individuals from the undisclosed or non-consensual sharing of sensitive information for commercial purposes. As the gathering and use of information is such an integral component of our business, we must always be alert for and respond to changes in the information regulatory environment.

Protection of Environment and Human Health and Safety

We are subject to various federal, state and local and regulations relating to the protection of the environment and human health and safety, including those governing the management and disposal of hazardous substances and wastes, the cleanup of contaminated sites and the maintenance of a safe workplace. Some of our operations include the use, generation and disposal of hazardous materials. We also plan to acquire ownership in new facilities and properties, some of which may have had a history of commercial or other operations. We may, in the future, incur liability under environmental statutes and regulations with respect to contamination of sites we own or operate, including contamination caused by prior owners or operators of such sites, abutters or other persons, and the off-site disposal of hazardous substances. Violations of these laws and regulations may result in substantial civil penalties or fines.

United States

The United States ~~health~~healthcare ~~care~~ industry is subject to extensive regulation by federal, state and local governments. Government regulation ~~affects~~ affects our businesses in several ways, including requiring licensure or certification of facilities, regulating billing and payment for certain of our services, regulating how we maintain health-related information and patient privacy, and regulating how we pay and contract with our physicians. Our ability to conduct our business and to operate profitability depends in part upon obtaining and maintaining all necessary licenses and other approvals; and complying with applicable healthcare laws and regulations. See “Risk Factors — Risks Related to ~~Health~~Healthcare ~~Care~~ Regulation.”

State Law Regulation of Construction, Acquisition or Expansion of Healthcare Facilities

Thirty-six states have certificate of need programs that require some level of prior approval for the construction of a new facility, acquisition or expansion of an existing facility, or the addition of new services at various healthcare facilities. Following the acquisition of one or more clinics or staffing primary healthcare practitioners in the United States, states where we may seek to operate may require a certificate of need to acquire or operate our clinics.

State Licensure

Only a few states may require the licensure of multidimensional primary ~~health~~healthcare ~~care~~ clinics and clinics such as ours. This absence of a uniform licensing process leads to inconsistencies in the nature and scope of services offered at our care clinics. To effectively control both the nature of services rendered and the environment in which services are offered, state legislators or regulators may attempt to regulate the urgent care industry in a manner similar to hospitals and freestanding emergency rooms. Following the acquisition of one or more clinics or staffing primary healthcare practitioners in the United States, such regulations could have a material impact on our growth strategy and expansion plans.

Laws and Rules Regarding Billing

Additionally, on January 16, 2009, the United States Department of Health and Human Services (“HHS”), released the final rule (implemented on October 1, 2015) mandating that providers covered by the Administrative Simplification Provisions of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), including our clinics, comply with ICD-10. Following the acquisition of one or more clinics or staffing primary healthcare practitioners in the United States, we will incur additional compliance related costs.

Medicare and Medicaid

Since 1992, Medicare has paid for the “medically necessary” services of physicians, non-physician practitioners, clinicians and certain other suppliers under a physician fee schedule, a system that pays for covered physicians’ services furnished to a person with Medicare Part B coverage. Under the physician fee schedule, relative values are assigned to each of more than 7,000 services to reflect the amount of work, the direct and indirect (overhead) practice expenses, and the malpractice expenses typically involved in furnishing that service. Each of these three relative value components is multiplied by a geographic adjustment factor to adjust the payment for variations in the costs of furnishing services in different localities. Relative value units, or RVUs, are summed for each service and then are multiplied by a fixed-dollar conversion factor to establish the payment amount for each service. The higher the number of RVUs assigned to a service, the higher the payment. Under the Medicare fee-for-service payment system, an individual can choose any licensed physician enrolled in Medicare and use the services of any healthcare provider or facility certified by Medicare.

On November 2, 2017, the Clinics for Medicare & Medicaid Services (“CMS”) issued a final rule updating the Quality Payment Program (“QPP”) under the Medicare and CHIP Reauthorization Act of 2015 (“MACRA”). MACRA was signed into law on April 16, 2015, ending the Sustained Growth Rate (“SGR”) formula for determining Medicare spending on physician services. MACRA created two provider payment tracks—the Medicare Incentive Payment System (“MIPS”) and the Advanced Alternative Payment Models (“A-APM”) track. Under MIPS, clinicians receive an annual composite score, which drives either an upward or downward rate adjustment two years after the performance period. Under the A-APM track, participants in Medicare Alternative Payment Models that exceed specified levels of clinician risk become MIPS-exempt and receive special bonuses equivalent to 5% of their annual Part B revenue. MACRA requirements on clinicians are already in effect for calendar year 2017, with payment adjustments under the new system due to start in 2019. However, in rulemaking last year, CMS significantly scaled back MIPS requirements for Performance Year 2017 to address concerns about physician buy-in and participation. Under the Final Rule, CMS would continue this “go slow” trajectory for MIPS, notably by increasing MIPS exemptions and once again scaling back potential downside payment adjustments through design of the MIPS scoring system. Reductions in Medicare payments could have a material adverse effect on our business.

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CMS’s RAC Program

The Medicare Prescription Drug Improvement and Modernization Act of 2003 (“MMA”) introduced on a trial basis the use of Recovery Audit Contractors (“RACs”) for the purpose of identifying and recouping Medicare overpayments and underpayments. Any overpayment received from Medicare is considered a debt owed to the federal government. In October 2008, CMS made the RAC program permanent. RACs review Medicare claims to determine whether such claims were appropriately reimbursed by Medicare. RACs engage in an automated review and in a complex review of claims. Automated reviews are conducted when a review of the medical record is not required and there is certainty that the service is not covered or is coded incorrectly. Complex reviews involve the review of all underlying medical records supporting the claim and are generally conducted where there is a high likelihood, but not certainty, that an overpayment has occurred. RACs are paid a contingency fee based on overpayments they identified and collected.

A Medicare administrative contractor, or MAC, may suspend Medicare payments to a provider if it determines that an overpayment has occurred. When a Medicare claim for payment is filed, the MAC will notify the patient and the provider of its initial determination regarding reimbursement. The MAC may deny the claim for one of several reasons, including the lack of necessary information or lack of medical necessity for the services rendered. Providers may appeal any denials for claim payment.

Anti-Kickback Statute

Following the intended acquisition, or opening, of one or more multidisciplinary primary healthcare clinics or the staffing of multidisciplinary primary healthcare clinics, affiliate clinics or eldercare centric homes with clinicians and practitioners in the United States, if we are participants in the Medicare program, we will be subject to the Anti-kickback Statute. The Anti-Kickback Statute prohibits the knowing and willful offer, payment, solicitation or receipt of remuneration, directly or indirectly, in return for the referral of patients or arranging for the referral of patients, or in return for the recommendation, arrangement, purchase, lease or order of items or services that are covered, in whole or in part, by a federal healthcare program such as Medicare or Medicaid. The term “remuneration” has been broadly interpreted to include anything of value such as gifts, discounts, rebates, waiver of payments or providing anything at less than its fair market value. The ACA amended the intent requirement of the Anti-Kickback Statute such that a person or entity can be found guilty of violating the statute without actual knowledge of the statute or specific intent to violation the statute. Further, the ACA now provides that claims submitted in violation of the Anti-Kickback Statute constitute false or fraudulent claims for purposes of the civil False Claims Act (“FCA”) including the failure to timely return an overpayment. Many states have adopted similar prohibitions against kickbacks and other practices that are intended to influence the purchase, lease or ordering of healthcare items and services reimbursed by a governmental health program or state Medicaid program. Some of these state prohibitions apply to remuneration for referrals of healthcare items or services reimbursed by any third-party payor, including commercial payors.

False Claims Act

The federal civil FCA prohibits providers from, among other things, (1) knowingly presenting or causing to be presented, claims for payments from the Medicare, Medicaid or other federal healthcare programs that are false or fraudulent; (2) knowingly making, using or causing to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the federal government; or (3) knowingly making, using or causing to be made or used, a false record or statement to avoid, decrease or conceal an obligation to pay money to the federal government. The “qui tam” or “whistleblower” provisions of the FCA allow private individuals to bring actions under the FCA on behalf of the government. These private parties are entitled to share in any amounts recovered by the government, and, as a result, the number of “whistleblower” lawsuits that have been filed against providers has increased significantly in recent years. Defendants found to be liable under the FCA may be required to pay three times the actual damages sustained by the government, plus mandatory civil penalties ~~ranging between $5,500 and $11,000~~ for each separate false claim.

There are many potential bases for liability under the FCA. The government has used the FCA to prosecute Medicare and other government healthcare program fraud such as coding errors, billing for services not provided, and providing care that is not medically necessary or that is substandard in quality. The ACA also provides that claims submitted in connection with patient referrals that results from violations of the Anti-Kickback Statute constitute false claims for the purpose of the FCA with some courts determining that a violation of the Stark law can result in FCA liability as well. In addition, a number of states have adopted their own false claims and whistleblower provisions whereby a private party may file a civil lawsuit in state court. Following the acquisition of one or more clinics or staffing primary healthcare practitioners in the United States, we will be required to provide information to our employees and certain contractors about state and federal false claims laws and whistleblower provisions and protections.

Civil Monetary Penalties Statute

The federal Civil Monetary Penalties statute prohibits, among other things, the offering or giving of remuneration to a Medicare or Medicaid beneficiary that the person or entity knows or should know is likely to influence the beneficiary’s selection of a particular provider or supplier of items or services reimbursable by a federal or state healthcare program.

Electronic Health Records

As required by the American Recovery and Reinvestment Act of 2009, the Secretary of HHS has developed and implemented an incentive payment program for eligible healthcare professionals that adopt and meaningfully use electronic health record, or EHR, technology. HHS uses the Provider Enrollment, Chain and Ownership System, or PECOS, to verify Medicare enrollment prior to making EHR incentive program payments. If our employed professionals are unable to meet the requirements for participation in the incentive payment program, including having an enrollment record in PECOS, we will not be eligible to receive incentive payments that could offset some of the costs of implementing EHR systems. Further, healthcare professionals that fail to demonstrate meaningful use of certified EHR technology are subject to reduced payments from Medicare. System conversions to comply with EHR could be time consuming and disruptive for physicians and employees. Failure to implement EHR systems effectively and in a timely manner could have a material adverse effect on our financial position and results of operations.

Privacy and Security Requirements of Our Business Lines

Following the intended acquisition, or opening, of one or more multidisciplinary primary healthcare clinics or the staffing of multidisciplinary primary healthcare clinics, affiliate clinics or eldercare centric homes with clinicians and practitioners in the United States, numerous federal and state laws and regulations, including HIPAA and the Health Information Technology for Economic and Clinical Health Act, as amended (“HITECH”) will govern the collection, dissemination, security, use and confidentiality of patient-identifiable health information. As required by HIPAA, HHS has adopted standards to protect the privacy and security of this health-related information. The HIPAA privacy regulations contain detailed requirements concerning the use and disclosure of individually identifiable health information and the grant of certain rights to patients with respect to such information by “covered entities.” We believe that all or substantially all of our entities qualify as covered entities under HIPAA. We will take actions to comply with the HIPAA privacy regulations including the creation and implementation of policies and procedures, staff training, execution of HIPAA-compliant contractual arrangements with certain service providers and various other measures. Although we believe we will be in substantial compliance, ongoing implementation and oversight of these measures involves significant time, effort and expense.

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In addition to the privacy requirements, HIPAA covered entities must implement certain administrative, physical, and technical security standards to protect the integrity, confidentiality and availability of certain electronic health-related information received, maintained, or transmitted by covered entities or their business associates. Although we have taken actions in an effort to be in compliance with these security regulations, a security incident that bypasses our information security systems causing an information security breach, loss of PHI, or other data subject to privacy laws or a material disruption of our operational systems could have a material adverse effect on our business, along with fines. Furthermore, ongoing implementation and oversight of these security measures involves significant time, effort and expense.

Further, HITECH, as implemented in part by an omnibus final rule published in the Federal Register on January 25, 2013, further requires that patients be notified of any unauthorized acquisition, access, use, or disclosure of their unsecured protected health information, or PHI, that compromises the privacy or security of such information. HHS has established the presumption that all unauthorized uses or disclosures of unsecured PHI constitute breaches unless the covered entity or business associate establishes there is a low probability that the information has been compromised. HITECH and implementing regulations specify that such notifications must be made without unreasonable delay and in no case later than 60 calendar days after discovery of the breach. Breaches affecting 500 patients or more must be reported immediately to HHS, which will post the name of the breaching entity on its public website. Furthermore, breaches affecting 500 patients or more in the same state or jurisdiction must also be reported to the local media. If a breach involves fewer than 500 people, the covered entity must record it in a log and notify HHS of such breaches at least annually. These breach notification requirements apply not only to unauthorized disclosures of unsecured PHI to outside third parties but also to unauthorized internal access to or use of such PHI.

The scope of the privacy and security requirements under HIPAA was substantially expanded by HITECH, which also increased penalties for violations. Penalties for violations of these laws vary. For instance, penalties for failure to comply with a requirement of HIPAA and HITECH vary significantly, and include significant civil monetary penalties and, in certain circumstances, criminal penalties with fines up to $250,000 per violation and/or imprisonment. In addition, numerous breach incidents could lead to possible penalties in excess of $1.68 million. A person who knowingly obtains or discloses individually identifiable health information in violation of HIPAA may face a criminal penalty of up to $50,000 and up to one-year imprisonment. The criminal penalties increase if the wrongful conduct involves false pretenses or the intent to sell, transfer or use identifiable health information for commercial advantage, personal gain or malicious harm. The amount of penalty that may be assessed depends, in part, upon the culpability of the applicable covered entity or business associate in committing the violation. Some penalties for certain violations that were not due to “willful neglect” may be waived by the Secretary of HHS in whole or in part, to the extent that the payment of the penalty would be excessive relative to the violation. HITECH also authorized state attorneys general to file suit on behalf of residents of their states. Applicable courts may be able to award damages, costs and attorneys’ fees related to violations of HIPAA in such cases. HITECH also mandates that the Secretary of HHS conduct periodic compliance audits of a cross-section of HIPAA covered entities and business associates. Every covered entity and business associate is subject to being audited, regardless of the entity’s compliance record.

State laws may impose more protective privacy restrictions related to health information and may afford individuals a private right of action with respect to the violation of such laws. Both state and federal laws are subject to modification or enhancement of privacy protection at any time. We are subject to any federal or state privacy-related laws that are more restrictive than the privacy regulations issued under HIPAA. These statutes vary and could impose additional requirements on us and more severe penalties for disclosures of health information. If we fail to comply with HIPAA, similar state laws or any new laws, including laws ~~addressing~~that address data confidentiality, security or breach notification, we could incur substantial monetary penalties and substantial damage to our reputation.

States may also impose restrictions related to the confidentiality of personal information that is not considered PHI under HIPAA, including certain identifying information and financial information of our patients. ~~Theses~~These state laws may impose additional notification requirements in the event of a breach of such personal information. Failure to comply with such data confidentiality, security and breach notification laws may result in substantial monetary penalties.

HIPAA and HITECH also include standards for common healthcare electronic transactions and code sets, such as claims information, plan eligibility and payment information. Covered entities such as the Company and each of our clinics will be required to conform to such transaction set standards.

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Telemedicine Medical Technology Platform, ~~Remote~~RPM ~~Patient Monitoring Medical~~ Technology Platform and Novo Connect Medical Technology Platform (~~collectively~~each, a “Medical Technology Platform” and collectively, “Medical Technology Platforms”)

Both our ~~Telemedicine~~telemedicine Medical Technology Platform and ~~Remote~~RPM ~~Patient Monitoring~~ Medical Technology Platform are operational in Canada on a very limited usage basis; , but are primarily in development. Our Novo Connect Medical Technology Platform is under development ~~and~~with limited commercialization. All of our Medical Technology Platforms are subject to governmental ~~health~~healthcare ~~care~~ regulations in Canada including, but not limited to, the Canada Health Act. While our Medical Technology Platforms are not currently operational in the United States, once operational our Medical Technology Platforms’ usage will be subject to United States laws, regulations, and directives such as, but not limited to, Medicare, Medicaid, RAC, Anti-Kick Back Statute, False Claims Act, Civil Monetary Penalties Statute, HIPAA, and HITECH. In addition, we will be subject to data privacy, security and breach notification requirements of United States federal, state, and local statutes and other data privacy and security laws.

Our Medical Technology Platforms are intended to collect and transmit a patient’s personal data, vital statistics and other medical history information, and both are subject to governmental ~~health~~healthcare ~~care~~ regulations, data privacy, security and breach notification requirements of United States federal, state, and local statutes and other data privacy and security laws.

Stark Law

Our Medical Technology Platforms, once fully operational in the United States, will provide patients with real-time access to third-party primary care medically licensed physicians, specialists, nurses and nurse practitioners in various medical disciplines as well as multidisciplinary primary care clinicians. Because we will participate through our Medical Technology Platforms in the Medicare program, we will also be subject to the Stark Law. Unlike the Fraud and Abuse Law, the Stark Law is a strict liability statute. Proof of intent to violate the Stark Law is not required. Physical therapy services are among the “designated health services”. Further, the Stark Law has application to the Company’s management contracts with individual physicians, physician groups, multidisciplinary primary care clinicians, as well as any other financial relationship between us and referring physicians, specialists, nurses and nurse practitioners in various medical disciplines as well as multidisciplinary primary care clinicians, including any financial transaction resulting from a clinic acquisition. The Stark Law also prohibits billing for services rendered pursuant to a prohibited referral. Several states have enacted laws like the Stark Law. These state laws may cover all (not just Medicare and Medicaid) patients. Many federal healthcare reform proposals in the past few years have attempted to expand the Stark Law to cover all patients as well. As with the Fraud and Abuse Law, we consider the Stark Law in operating our Medical Technology Platforms and intend to operate our Medical Technology Platforms in compliance with the Stark Law. If we violate the Stark Law, our financial results and operations could be adversely affected. Penalties for violations include denial of payment for the services, significant civil monetary penalties, and exclusion from the Medicare and Medicaid programs.

E-Commerce

We are subject to general business regulations and laws as well as Federal and provincial regulations and laws specifically governing the Internet and e-commerce. Existing and future laws and regulations may impede the growth of the use of the Internet, availability of economic broadband access, or other online services, and increase the cost of providing our digital delivery of content and services. These regulations and laws may cover taxation, tariffs, user privacy, data protection, pricing, content, copyrights, distribution, electronic contracts and other communications, consumer protection, broadband internet access and the characteristics and quality of services. It is not clear how existing laws which govern issues such as property ownership, sales, use and other taxes, libel and personal privacy apply to the internet and e-commerce. Unfavorable resolution of these issues may harm our business and results of operations.

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Medical Cannabidiol Product Offering (Future Growth Initiative)

As discussed in ~~the~~ “—Business Growth ~~Initiative~~Initiatives” ~~section~~ above, we intend to ~~expand~~develop ~~our~~ business tounits ~~include~~centered on the direct control of the cultivation, processing, and manufacturing of CBD products in Canada, and the sale and distribution of medicinal CBD products in Canada ~~and authorized U~~.S. ~~states.~~ We expect our prospective medicinal CBD products will be specifically focused on CBD for use (i) as a treatment aid; (ii) to provide relief for a large array of neurological and musculoskeletal system disorders; and (iii) as an alternative option for ~~health care providers~~healthcare providers in place of prescribing opioids to patients.

Offering our patients access to non-hallucinogenic and non-addictive natural remedies, under required clinical oversight policies and procedures as they relate to medicinal cannabis and medicinal CBD, combined with our existing clinic-based treatment protocols, allows us to enter this market segment with a unique integration model not readily available in the marketplace.

Cannabis Versus Hemp

While hemp and cannabis are both derived from the same species (Cannabis sativa), there are major differences in the characteristics of the respective plant strains that produce industrial hemp on the one hand, and cannabis products on the other. In short, hemp is a strain of the Cannabis sativa plant that is grown primarily for use in industrial applications. It has been specifically cultivated to produce a low tetrahydrocannabinol (“THC”) content and a high cannabidiol content. THC is the psychoactive constituent of cannabis and is responsible for producing the effects of the drug. CBD is another active ingredient present in Cannabis sativa plants, and it largely acts to neutralize the psychoactive effects of THC. Since hemp strains have extremely low levels of THC and high levels of CBD, they do not produce psychoactive effects when ingested.

Canada

Cannabis is legal in Canada for both recreational and medicinal purposes. Medicinal use of cannabis was legalized nationwide on July 30, 2001 under conditions outlined in the Marijuana for Medical Purposes Regulations, later superseded by the Access to Cannabis for Medical Purposes Regulations, issued by Health Canada and seed, grain, and fiber production was permitted under license by Health Canada. The federal Cannabis Act came into effect on October 17, 2018 and made Canada the second country in the world to formally legalize the cultivation, possession, acquisition and consumption of cannabis and its by-products.

As set out in the ~~Cannabis~~Canadian ~~Regulations~~cannabis regulations:

●

Licenses are required for:

	○	cultivating and processing cannabis,
	○	sale of cannabis for medical purposes or recreational purposes, and
	○	analytical testing of and research with cannabis.

●

Permits are required to import or export:

	○	cannabis for scientific or medical purposes, and
	○	industrial hemp.

● License holders are subject to strict physical and personnel security requirements. ● Plain packaging is required for cannabis products.

● Plain packaging is required for cannabis products.

	○	The regulations set out strict requirements for logos, colors and branding.
	○	Cannabis products must also be labeled with mandatory health warnings, a standardized cannabis symbol, and specific information about the product.

● Access to cannabis for medical purposes continues to be provided for patients who need it. ● Manufacturers of prescription drugs containing cannabis, while primarily subject to the Food and Drugs Act and its ~~Regulations~~regulations, are also subject to certain regulatory requirements set out in the Canadian Cannabis ~~Regulations~~regulations.

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Patients authorized by their ~~health~~healthcare ~~care~~ provider are still able to access cannabis for medical purposes by:

	●	buying directly from a federally licensed seller,
	●	registering with Health Canada to produce a limited amount of cannabis for their own medical purposes, or
	●	designating someone to produce it for them.

Under the new regulations, there are improvements for patients accessing cannabis for medical purposes from federally licensed sellers. These improvements include:

● the ability to request the return of their medical document from a federally licensed seller, ● the ability to request the transfer of their medical document to a different federally licensed seller, ● that the effective date on the registration document will be the day it is issued, rather than the day the medical document was signed by the ~~health~~healthcare ~~care~~ provider, ● removal of the 30-day limitation period for buying cannabis from a federally licensed seller (to ensure no break in a patient’s supply), ● a broader range of permitted products, and ● access to an increasing number of licensed producers and sellers (Health Canada has licensed more producers in the last year than in the four previous years combined), which enables:

	○	competitive prices,
	○	more supply of cannabis, and
	○	an increased availability of a range of products.

United States

Until 2014, when 7 U.S. Code §5940 became federal law as part of the Agricultural Act of 2014 (the “2014 Farm Act”), products containing oils derived from hemp, notwithstanding a minimal or non-existing THC content, were classified as Schedule I illegal drugs. The 2014 Farm Act expired on September 30, 2018, and was thereafter replaced by the Agricultural Improvement Act of 2018 on December 20, 2018 (the “2018 Farm Act “), which amended various sections of the U.S. Code, thereby removing hemp, defined as cannabis with less than 0.3% of THC, from Schedule 1 status under the Controlled Substances Act (“CSA”), and legalizing the cultivation and sale of hemp at the federal level, subject to compliance with certain federal requirements and state law, ~~amongst~~among other things. THC is the psychoactive component of plants in the cannabis family generally identified as marihuana or marijuana. We anticipate that our prospective medicinal CBD products will be federally legal in the United States in that they will contain less than 0.3% of THC in compliance with the 2018 Farm Bill guidelines and will have no psychoactive effects on our patients’ and customers’ bodies. Notwithstanding, there is no assurance that the 2018 Farm Act will not be repealed or amended such that our prospective products containing hemp-derived CBD would once again be deemed illegal under federal law.

The 2018 Farm Bill also shifted regulatory authority from the Drug Enforcement Administration to the Department of Agriculture. The 2018 Farm Bill did not change the United States Food and Drug Administration’s (“FDA”) oversight authority over CBD products. The 2018 Farm Act delegated the authority to the states to regulate and limit the production of hemp and hemp derived products within their territories. Although many states have adopted laws and regulations that allow for the production and sale of hemp and hemp derived products under certain circumstances, no assurance can be given that such state laws may not be repealed or amended such that our intended products containing hemp-derived CBD would once again be deemed illegal under the laws of one or more states now permitting such products, which in turn would render such intended products illegal in those states under federal law even if the federal law is unchanged. In the event of either repeal of federal or of state laws and regulations, or of amendments thereto that are adverse to our prospective medical CBD products, we may be restricted or limited with respect to those products that we may sell or distribute, which could adversely impact our intended business plan with respect to such intended products.

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Additionally, the FDA has indicated its view that certain types of products containing CBD may not be permissible under the United States Federal Food, Drug and Cosmetic Act (“FDCA”). The FDA’s position is related to its approval of Epidiolex, a marijuana-derived prescription medicine to be available in the United States. The active ingredient in Epidiolex is CBD. On December 20, 2018, after the passage of the 2018 Farm Bill, FDA Commissioner Scott Gottlieb issued a statement in which he reiterated the FDA’s position that, among other things, the FDA requires a cannabis product (hemp-derived or otherwise) that is marketed with a claim of therapeutic benefit, or with any other disease claim, to be approved by the FDA for its intended use before it may be introduced into interstate commerce and that the FDCA prohibits introducing into interstate commerce food products containing added CBD, and marketing products containing CBD as a dietary supplement, regardless of whether the substances are hemp-derived. Although we believe our prospective medicinal CBD product offering will comply with applicable federal and state laws and regulations, legal proceedings alleging violations of such laws could have a material adverse effect on our business, financial condition and results of operations.

We do not intend to offer, and we do not intend to compete with companies that offer, cannabis products containing high levels of psychoactive THC. Although legal in some states, and in Canada, we do not intend to enter into this market. We may offer prospective medicinal CBD (hemp-based) products to patients and customers but will not compete with any medical or recreational marijuana sellers of products for high THC content sales due to legal and regulatory restrictions and uncertainty in the United States. Because of regulatory challenges facing marijuana companies in the United States, the vast majority of the companies focused on THC are Canadian and foreign, although several have begun to pursue domestic activities in states that permit marijuana sales. Federal law does not generally recognize marijuana (or hemp that exceeds 0.3% THC) as lawful, although that may change in the future.

Corporate History

Novo Integrated Sciences, Inc. was incorporated in Delaware on November 27, 2000, under the name Turbine Truck Engines, Inc. On February 20, 2008, Novo Integrated was re-domiciled to the State of Nevada. Effective July 12, 2017, the Company’s name was changed to Novo Integrated Sciences, Inc.

Since inception and through May 9, 2017, our activities and business operations were limited to raising capital, organizational matters and the implementation of our business plan related to research, development, testing and commercialization of various alternative energy technologies.

On September 5, 2013, NHL was incorporated under the laws of Ontario province Canada. On September 16, 2013, Novo Assessments Inc., Novo Community Care Inc, and Novo Healthnet Rehab Limited were formed, under the laws of Ontario province Canada, as wholly owned subsidiaries of NHL. On September 20, 2013, Novo Community Care Inc.’s name was changed to Novo Peak Health Inc. On September 30, 2013, NHL acquired substantially all the assets of the following operational Ontario Canada based entities, (i) Peak Health LTC Inc.; (ii) ICC Healthnet Canada Inc. and its related companies; and (iii) Michael Gaynor Physiotherapy Professional Corporation, operating as Back on Track. On November 18, 2014, Novo Healthnet Kemptville Centre, Inc., was formed under the laws of Ontario province Canada, with NHL owning an 80% interest. On April 1, 2017, NHL purchased substantially all of the assets of APKA Health, an occupational therapy entity operating in Ontario province Canada.

Acquisition of Novo Healthnet Limited

On April 25, 2017 (the “Effective Date”), the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”) by and between (i) the Company; (ii) 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.; and collectively ALMC, MGFT and 1218814 herein referred to as “the NHL Shareholders”). Pursuant to the terms of the Share Exchange Agreement, the Company 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 the Company, to the NHL Shareholders, shares of the Company’s common stock, such that following the closing of the Share Exchange Agreement, the NHL Shareholders would own 161,~~779~~677,~~741~~975 restricted shares of Company common stock, representing 85% of the issued and outstanding Company common stock, calculated including all granted and issued options or warrants to acquire the Company common stock as of the Effective Date, but to exclude shares of Company common stock that are subject to a then-current Regulation S Offering that was undertaking by the Company (the “Exchange”).

On May 9, 2017, the Exchange closed and, as a result, NHL became a wholly owned subsidiary of Novo Integrated Sciences, Inc.

Acquisition of Executive Fitness Leaders

On December 1, 2017, the Company, NHL and Executive Fitness Leaders, located in Ottawa Ontario Canada, entered into an Asset Purchase Agreement, pursuant to which NHL acquired substantially all of the assets of Executive Fitness Leaders in exchange for the issuance, by the Company, of 383,~~411~~842 restricted shares of its common stock.

Formation of Novomerica Health Group, Inc. in U.S.

On November 3, 2017, Novomerica Health Group, Inc. was incorporated, under the laws of the state of Nevada, as a wholly owned subsidiary of Novo Integrated Sciences, Inc. for the purpose of expanding the Company’s operations into the United States.

Novo Peak Health Inc. Amalgamated with NHL

On September 25, 2018, Novo Peak Health, Inc. was amalgamated with Novo Healthnet Limited.

Assignment of Joint Venture Agreement

On January 7, 2019, 2478659 Ontario Ltd. (“247”) and Kainai Cooperative (“Kainai”) entered into a Joint Venture Agreement (the “Joint Venture Agreement”) for the purpose of developing, managing and arranging for financing of greenhouse and farming projects involving hemp and cannabis cash crops on Kainai related lands, and developing additional infrastructure projects creating jobs and food supply to local communities. On January 8, 2019, we and 247 entered into an Agreement of Transfer and Assignment, pursuant to which 247 agreed to sell, assign and transfer to the Company all rights, contracts, contacts and any and all other assets related in any way to the Joint Venture Agreement. Pursuant to the terms of the Joint Venture Agreement, as assigned to us, the parties will work in a joint venture relationship with the Company providing the finance, development and operation of the project, including sales, and Kainai providing the land and approvals for the development of the projects.

The joint venture will distribute to the Company and Kainai all net proceeds after debt and principal servicing and repayment allocation, as well as operating capital allotment, on a ratio equal to 80% to the Company and 20% to Kainai.

The Joint Venture Agreement has an initial term of 50 years and Kainai may renew the Joint Venture Agreement within five years of the expiry of the initial term upon mutual agreement.

On January 30, 2019, pursuant to the terms of the Joint Venture Agreement, the Company issued 1120,~~200,~~000 restricted common shares to 247 ~~with~~ with a value of $21,600,000.

Acquisition of Societe Professionnelle de Physiotherapie M Dignard, carrying on business as Action Plus Physiotherapy Rockland

On July 22, 2019, the Company and Societe Professionnelle de Physiotherapie M Dignard, carrying on business as Action Plus Physiotherapy Rockland and providing physiotherapy and related ancillary services (“APPR”), entered into an Asset Purchase Agreement (“APA”) pursuant to which APPR agreed to sell, assign and transfer to the Company, free and clear of all encumbrances, other than permitted encumbrances, and the Company agreed to purchase from APPR all of APPR’s right, title and interest in and to all of its assets, with the exception of certain limited exclusions, and the rights, privileges, claims and properties of any kind whatsoever that are related thereto, whether owned or leased, real or personal, tangible or intangible, of every kind and description and wheresoever situated.

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Pursuant to the terms of the APA, the purchase price is determined as six times APPR’s purported EBITDA, equaling CAD$300,000, of which, APPR (1) received a cash payment of CAD$175,000; and (2) was issued CAD$125,000 worth of the Company’s common stock, par value $0.001, as restricted common shares pursuant to an exemption from registration as set forth in Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). Pursuant to the terms of the APA, APPR was issued ~~8,456~~846 restricted common shares of the Company’s common stock as consideration for the CAD$125,000 payment owed to APPR. On the business day immediately preceding the closing date of the APA, determined as July 19, 2019, the CAD-to-USD conversion rate, per x-rates.com, was 0.7644 which converts CAD$125,000 to $95,550 rounded to the nearest whole number dollar amount. Based on the determined 30-trading day closing average price per share of $~~11.30~~113, the calculated number of the Company’s restricted common shares issued to APPR was 8846 shares,~~456,~~ which includes ~~rounding~~ rounding the calculation up to the nearest whole number of shares.

The transaction closed on July 22, 2019. The purchase of these assets was not considered significant for accounting purposes; therefore, pro -forma financial statements were not presented.

Intellectual Property Asset Purchase Agreement

On December 17, 2019, the Company entered into that certain Intellectual Property Asset Purchase Agreement (the “APA”) by and between the Company and 2731861 Ontario Corp. (the “Seller”), pursuant to which the Company agreed to purchase, and Seller agreed to sell (the “Acquisition”), proprietary designs for an innovative cannabis dosing device, in addition to designs, plans, procedures, and all other material pertaining to the application, construction, operation, and marketing of a cannabis business under the regulations of Health Canada (the “Intellectual Property”). Pursuant to the terms of the APA, the purchase price of the intellectual property is ~~800~~80,000 shares of restricted common stock of the Company. The Acquisition closed on December 17, 2019.

Acquisition of PRO-DIP, LLC

On May 24, 2021, the Company completed the acquisition of PRO-DIP, a New York state limited liability company in the business of providing nutritional oral energy and medicinal supplement pouches through a proprietary process, under the terms and conditions of a Share Exchange Agreement, dated May 11, 2021, resulting in PRO-DIP being a wholly owned subsidiary of the Company. The Company issued ~~189~~18,~~796~~980 restricted shares of common stock and $10,000 in cash as full consideration for the transaction.

Acquisition of Acenzia Inc.

On May 28, 2021, the Company and NHL entered into a Share Exchange Agreement (the “ACZ SEA”) by and among the Company and NHL, on the one hand, and Acenzia Inc., Avec8 Holdings Inc., Ambour Holdings Inc., Indrajit Sinha, Grant Bourdeau and Derrick Bourdeau, on the other hand (collectively the “ACZ Shareholders”). On June 24, 2021, pursuant to the terms of the ACZ SEA, the acquisition of Acenzia by NHL closed. The closing purchase price may be adjusted within 90 days of the closing date pending completion of an audit and working capital requirement provisions (the “Post-Closing Purchase Price Adjustment”). On October 22, 2021, the parties (i) set the final Purchase Price, as determined by the Post-Closing Purchase Price Adjustment, at a value of $14,162,795, and (ii) agreed to the issuance of that number of NHL Exchangeable Shares (as defined in the ACZ SEA) exchangeable into 3362,~~622,199~~220 restricted shares of Company common stock at an agreed upon price of $339.9110 allotted for the ACZ Shareholders as provided for in the ACZ SEA. The price of the Company’s common stock on the closing date was $225.5550; therefore the purchase price for accounting purposes was $9,236,607.

Joint Venture Agreement with EK-Tech Solutions Inc. to Form MiTelemed+ Inc.

On October 8, 2021, the Company and NHL completed a Joint Venture Agreement (the “MiTelemed+ JV”) with EK-Tech Solutions Inc. (“EK-Tech”) to establish the joint venture company MiTelemed+ Inc., an Ontario province Canada corporation (“MiTelemed+”), to operate, support, and expand access and functionality of EK-Tech’s enhanced proprietary Telehealth platform. At closing, EK-Tech contributed all intellectual property, source code, and core data of the iTelemed platform, valued at CAD$1,500,000, and NHL issued to EK-Tech, non-voting NHL Exchangeable Special Shares, free and clear of all liens and encumbrances, which are issued solely for the purpose of EK-Tech to exchange, for ~~185~~18,~~000~~500 restricted shares of Company’s common stock solely upon EK-Tech meeting terms and conditions for exchange of the NHL Exchangeable Special Shares as defined in the MiTelemed+ JV. Additionally, MiTelemed+ is contracted with EK-Tech to operate, maintain, support, provide software hosting, and for further development of iTelemed’s capabilities. NHL is responsible for global commercialization as well as fulfilling all administrative functions for the JV. The net profits and net losses of the JV will be split 50/50 between NHL and EK-Tech.

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Terragenx Share Exchange Agreement

On November 17, 2021, the Company and NHL entered into that certain Share Exchange Agreement (the “Terra SEA”), dated as of November 17, 2021, by and among the Company, NHL, Terragenx Inc. (“Terra”), TMS Inc. (“TMS”), Shawn Mullins, Claude Fournier, and The Coles Optimum Health and Vitality Trust (“COHV” and collectively with TMS, Mr. Mullins and Mr. Fournier, the “Terra Shareholders”). Collectively, the Terra Shareholders own 91% of the outstanding shares of Terra (the “Terra Purchased Shares”).

Pursuant to the terms of the Terra SEA, NHL agreed to purchase from the Terra Shareholders, and the Terra Shareholders agreed to sell to NHL, the Terra Purchased Shares on the closing date, in exchange for payment by NHL of the purchase price (the “Purchase Price”) of CAD$500,000 (approximately $398,050) (the “Exchange”). The Purchase Price was to be paid with the issuance, by NHL to the Terra Shareholders, of certain non-voting NHL special shares exchangeable into restricted shares of the Company’s common stock (the “NHL Exchangeable Shares”). The total shares of Company common stock allotted in favor of the Terra Shareholders was calculated at a per share price of $333.3550.

The Exchange closed on November 17, 2021. At the closing of the Exchange, (i) the Terra Shareholders transferred to NHL a total of 910 shares of Terra common stock, representing 91% of Terra’s outstanding shares, and (ii) a total of 100 NHL Exchangeable Shares were issued to the Terra Shareholders, which NHL Exchangeable Shares are exchangeable into a total of ~~118~~11,~~821~~883 restricted shares of the Company’s common stock. As a result of the Exchange, NHL has 91% ownership of Terra and full control of the Terra business.

The Terra SEA contains customary representations, warranties and closing conditions.

Mullins Asset Purchase Agreement

On November 17, 2021, the Company entered into that certain Asset Purchase Agreement (the “Mullins APA”), dated as of November 17, 2021, by and between the Company and Terence Mullins. Pursuant to the terms of the Mullins APA, Mr. Mullins agreed to sell, and the Company agreed to purchase, all of Mr. Mullins’ right, title and interest in and to certain assets directly and indirectly related to any and all iodine-based related products and technologies as specified in the Mullins APA (the “Mullins IP Assets”), in exchange for a purchase price of CAD$2,500,000 (approximately $1,990,250) which is to be paid as follows:

	(a)	CAD$2,000,000 (approximately $1,592,200) is to be issued or allotted to Mr. Mullins only after patent-pending status, in the U.S. or internationally, is designated for all Mullins IP Assets (the “Mullins IP Assets CAD$2m Shares”), as either restricted shares of Company common stock or NHL Exchangeable Shares, as determined by Mr. Mullins. Once issued or allotted, the Mullins IP Assets CAD $2m Shares will be held in escrow pending registration and approval for all Mullins IP Assets, and
	(b)	CAD$500,000 (approximately $398,050) is to be issued in the form of ~~118~~11,~~821~~883 restricted shares of Company common stock, free and clear of all liens, pledges, encumbrances, charges, or known claims of any kind, nature, or description, upon closing of the Mullins APA

All shares issued or allotted under the terms and conditions of the Mullins APA are calculated at a value of $333.3550 per share.

In addition, the Company will pay a royalty equal to 10% of net revenue (net profit) of all iodine related sales reported through the Company or any of its wholly owned subsidiaries for a period equal to the commercial validity of the intellectual property.

The Mullins APA includes customary representations and warranties and closing conditions.

Share Exchange Agreement to Acquire 50.1% of 12858461 Canada Corp.

On March 1, 2022, the Company and NHL completed a Share Exchange Agreement (the “1285 SEA”) with 12858461 Canada Corp. (“1285”), a Canada federal corporation in the business of providing clinic-based physiotherapy and related ancillary services and products, and Prashant A. Jani, a Canadian citizen and sole shareholder of 1285 (the “1285 Shareholder”) to acquire 50.1% ownership of 1285 for a purchase price of $68,000 (the “1285 Purchase Price”) paid with the issuance, by NHL to the 1285 Shareholder, of certain non-voting NHL Exchangeable Special Shares which can only be utilized for the purpose of exchange into an allotment of 171,~~000~~700 restricted shares of the Company’s common stock (the “Parent 1285 SEA Shares”) at the determination of the 1285 Shareholder. The number of Parent 1285 SEA Shares was calculated by dividing the 1285 Purchase Price by $440.00 per share.

Asset Purchase Agreement with Poling Taddeo Hovius Physiotherapy Professional Corp., operating as Fairway Physiotherapy and Sports Injury Clinic

On March 1, 2022, the Company and NHL completed an Asset Purchase Agreement (the “PTHPC APA”) with Poling Taddeo Hovius Physiotherapy Professional Corp. (“PTHPC”), operating a clinic-based physiotherapy, rehabilitative, and related ancillary services and products business known as Fairway Physiotherapy and Sports Injury Clinic (“FAIR”), and Jason Taddeo, a Canadian citizen and the sole shareholder of PTHPC (the “PTHPC Shareholder”), Under the terms and conditions of the PTHPC APA, PTHPC agreed to sell, assign and transfer to NHL, free and clear of all encumbrances, other than permitted encumbrances, and NHL agreed to purchase from PTHPC all of PTHPC’s right, title and interest in and to all of its assets related to FAIR and the FAIR Business, with the exception of certain limited exclusions, and the rights, privileges, claims and properties of any kind whatsoever that are related thereto, whether owned or leased, real or personal, tangible or intangible, of every kind and description and wheresoever situated. Under the terms and conditions of the PTHPC APA, the purchase price is $627,000 (the “FAIR Purchase Price”) paid with the issuance, by NHL to the PTHPC Shareholder, of certain non-voting NHL Exchangeable Special Shares which can only be utilized for the purpose of exchange into an allotment of ~~156~~15,~~750~~675 restricted shares of the Company’s common stock (the “Parent PTHPC APA Shares”) at the determination of the PTHPC Shareholder. The number of Parent PTHPC APA Shares was calculated by dividing the FAIR Purchase Price by $440.00 per share. Effective April 1, 2024, all parties agreed to terminate the PTHPC APA with all parties relieved of any further financial or equity consideration.

Membership Interest Purchase Agreement with Clinical Consultants International LLC

On March 17, 2022, the Company entered into a Membership Interest Purchase Agreement (the “CCI Agreement”) by and among the Company, Clinical Consultants International LLC (“CCI”), each of the members of CCI (the “Members”), and Dr. Joseph Chalil as the representative of the Members.

Pursuant to the terms of the CCI Agreement, among other things, the CCI Members will sell and assign to the Company all of their membership interests of CCI, in exchange for a total of ~~800~~80,000 restricted shares of the Company’s common stock (the “Exchange Shares”) (“CCI Acquisition”). The Exchange Shares will be apportioned among the Members pro rata based on their respective membership ~~interest~~ interest ownership percentage of CCI. Following the closing of the CCI Acquisition (the “Closing”), the Company will own 100% of the issued and outstanding membership interests of CCI, and the CCI Members or their designees will collectively own ~~800~~80,000 restricted shares of the Company’s common stock. The restricted shares were issued on April 7, 2022.

This CCI Acquisition was accounted for as an asset acquisition, as substantially all of the fair value of the assets being acquired under the arrangement was concentrated in the customer. Accordingly, the $1,704,000 purchase price was primarily allocated to the customer relationships intangible asset, for $1,701,814, and amortized over an estimated useful life of 5 years. The remaining purchase price was allocated to cash and cash equivalents.

Pursuant to the terms of the CCI Agreement, the Company agreed to (i) name, at the Closing, Dr. Chalil as the Chief Medical Officer of the Company and the President of Novomerica Healthcare Group, Inc., which is a wholly owned subsidiary of the Company, (ii) enter into an employment agreement with Dr. Chalil, and (iii) name Dr. Chalil to the Company’s Board of Directors.

The CCI Agreement may be terminated under certain customary and limited circumstances prior to the Closing, including by either party if the conditions to Closing of an opposing party have not been satisfied or waived by the applicable party on or prior to April 15, 2022. ~~The~~On April 5, 2022, the CCI Acquisition closed. As a result, immediately after the Closing on April 5, 2022, the Company owned 100% of the issued and outstanding membership interests of CCI. ~~See~~On ~~“—Closing~~April 7, 2022, the Company issued an aggregate of 80,000 restricted shares of the Company’s common stock to the Members in connection with the CCI Acquisition” ~~below~~and pursuant to the terms of the CCI Agreement.

On April 5, 2022, the CCI Acquisition closed. As a result, immediately after the Closing on April 5, 2022, the Company owned 100% of the issued and outstanding membership interests of CCI. On April 7, 2022, the Company issued an aggregate of 800,000 restricted shares of the Company’s common stock to the Members in connection with the CCI Acquisition and pursuant to the terms of the CCI Agreement.

Joint Venture Agreement with Farm 7 Group Inc. for the Kenya Agricultural Cooperative Project

On August 14, 2023, the Company and Farm 7 Group Inc., a Canada corporation (“F7”), completed a Joint Venture Agreement (the “Farm 7 JV”) to establish a joint venture entity in a Canadian jurisdiction, mutually acceptable to both parties, to assist in development, administration and the arrangement of structured financing for the implementation and commencement of the “Kenya Agricultural Cooperative Project”, in particular a Kenya centric agricultural project with executed uptake contracts for agricultural goods with a term of thirty years involving up to 9 million hectares of land participating under a cooperative structure. The Farm 7 JV provides for the annual distribution of the net profits with 75% to F7 and 25% to the Company.

ITEM 1A. RISK FACTORS

Our business is subject to numerous risks and uncertainties. These risks represent challenges to the successful implementation of our strategy and to the growth and future profitability of our business. These risks include, but are not limited to, the following:

● We have a history of operating losses; ● We may ~~not~~have beactual ~~able~~or toperceived ~~implement~~limitations ~~successfully~~on our ~~growing~~ability ~~our~~to ~~multidisciplinary~~raise ~~primary~~capital ~~health~~when ~~care~~we ~~business~~require byit, ~~opening~~ and ~~acquiring new clinics and expanding the staffing of multidisciplinary primary health care clinicians~~ to ~~affiliate~~raise ~~clinics~~such ~~and~~capital ~~eldercare~~on ~~centric~~favorable ~~homes~~terms; ● Public health epidemics or outbreaks (such as the novel strain of coronavirus (COVID-19)) could adversely impact our business; ● We may not be able to increase our market share in existing eldercare services, occupational therapy services, physiotherapy services and speech language pathology services through network affiliation growth and new contracts; ● We may be unable to attract sufficient demand for and obtain acceptance of our multidisciplinary primary ~~health~~healthcare ~~care~~ services and our medical cannabidiol products by both multidisciplinary primary ~~health~~healthcare ~~care~~ clinicians and patients; ● The clinics that we acquire or open may not meet our expectations; ● If we open new clinics in existing markets, revenue at our existing clinics may be affected negatively; ● The multidisciplinary primary healthcare market is highly competitive, including competition for patients, strategic relationships, and commercial payor contracts, each of which could adversely affect our contract and revenue base; ● We may be unable to obtain reimbursement for our multidisciplinary primary healthcare services from the government or third-party healthcare insurers of our patients; ● We may not be able to successfully make acceptable financial arrangements for patients who desire treatment but cannot afford to pay in full or part, and for whom third-party insurance coverage is either limited or non-existent; ● Prospective patients may be unwilling to pay out-of-pocket for certain of our multidisciplinary primary healthcare and primary care services, in the absence of reimbursement from the government or third-party healthcare insurers for such multidisciplinary primary healthcare and services;

● The multidisciplinary primary health care market is highly competitive, including competition for patients, strategic relationships, and commercial payor contracts, each of which could adversely affect our contract and revenue base; ● We may be unable to obtain reimbursement for our multidisciplinary primary health care services from the government or third-party health care insurers of our patients; ● We may not be able to successfully make acceptable financial arrangements for patients who desire treatment but cannot afford to pay in full or part, and for whom third-party insurance coverage is either limited or non-existent; ● Prospective patients may be unwilling to pay out-of-pocket for certain of our multidisciplinary primary health care and primary care services, in the absence of reimbursement from the government or third-party health care insurers for such multidisciplinary primary health care and services; ● The success of alternative treatments, therapies and medical products as opposed to the multidisciplinary primary health care services, therapies and prospective medical CBD products that we might offer in the future could adversely affect us;41

34● The success of alternative treatments, therapies and medical products as opposed to the multidisciplinary primary healthcare services, therapies and prospective medical CBD products that we might offer in the future could adversely affect us; ● We may not be able to recruit and retain qualified multidisciplinary primary healthcare clinicians for our multidisciplinary primary healthcare clinics and staffing of affiliate clinics and eldercare centric homes; ● We may not be able to prohibit or limit our multidisciplinary primary healthcare clinicians from competing with us in our local markets; ● We may be unable to enter into or maintain contracts for our multidisciplinary primary healthcare services on favorable terms with commercial payors in Canada and the United States; ● Government healthcare programs may reduce reimbursement rates; ● The healthcare industry is heavily regulated, and if we fail to comply with these laws and governmental regulations, we could incur penalties or be required to make significant changes to our operations; ● Our multidisciplinary primary healthcare clinics are and will be subject to numerous statutes and regulations in the Canadian provinces in which we operate or intend to operate and states in the United States in which we intend to operate. Failure to comply with these laws and regulations could result in civil or criminal sanctions; ● Past and future healthcare reform legislation and other changes in the healthcare industry could adversely affect our business, financial condition and results of operations; ● We are subject to the Canada Health Act, Canada’s National Health Insurance Program and Food and Drugs Act and analogous provisions of applicable federal, provincial, state and local laws and could face substantial penalties if we fail to comply with such laws; ● If the Company acquires one or more multidisciplinary primary healthcare clinics or primary care facilities in the United States, we will be subject to the Anti-Kickback Statute, FCA, Civil Monetary Penalties statute and analogous provisions of applicable state laws and could face substantial penalties if we fail to comply with such laws; ● We will be subject to the data privacy, security and breach notification requirements of Canadian and United States federal statutes and other data privacy and security laws, and the failure to comply with these rules, or allegations that we have failed to do so, could result in civil or criminal sanctions; ● Our Telemedicine Medical Technology Platform is currently in early-stage roll-out and we may be unsuccessful in the commercialization of the Telemedicine Medical Technology Platform; ● Our success with the Telemedicine Medical Technology Platform will highly be dependent upon our ability to develop relationships with primary care physicians, specialists and clinicians; ● Our Telemedicine Medical Technology Platform may not be accepted in the marketplace; ● Our RPM Medical Technology Platform is currently in early-stage roll-out and development and we may be unsuccessful in the commercialization of the RPM platform; ● Our success with the RPM Medical Technology Platform will highly be dependent upon our ability to develop relationships with primary care physicians and specialists; ● Our RPM Medical Technology Platform may not be accepted in the marketplace; ● Our Novo Connect Medical Technology Platform is currently in early-stage roll-out and development and we may be unsuccessful in the commercialization of the Novo Connect Medical Technology Platform; ● Our success with the Novo Connect Medical Technology Platform will highly be dependent upon our ability to develop relationships with primary care physicians and specialists;

● We may not be able to recruit and retain qualified multidisciplinary primary health care clinicians for our multidisciplinary primary health care clinics and staffing of affiliate clinics and eldercare centric homes; ● We may not be able to prohibit or limit our multidisciplinary primary health care clinicians from competing with us in our local markets; ● We may be unable to enter into or maintain contracts for our multidisciplinary primary health care services on favorable terms with commercial payors in Canada and the United States; ● Government health care programs may reduce reimbursement rates; ● The health care industry is heavily regulated, and if we fail to comply with these laws and governmental regulations, we could incur penalties or be required to make significant changes to our operations; ● Our multidisciplinary primary health care clinics are and will be subject to numerous statutes and regulations in the Canadian provinces in which we operate or intend to operate and states in the United States in which we intend to operate. Failure to comply with these laws and regulations could result in civil or criminal sanctions; ● Past and future health care reform legislation and other changes in the health care industry could adversely affect our business, financial condition and results of operations;42

● WeOur ~~are~~Novo ~~subject~~Connect toMedical Technology Platform may not be accepted in the ~~Canada~~marketplace; ~~Health~~● ~~Act,~~Government ~~Canada’s~~regulation ~~National~~of ~~Health~~the ~~Insurance~~internet ~~Program~~and e-commerce is evolving, and ~~Food~~unfavorable changes could substantially harm our business and ~~Drugs~~results ~~Act~~of operations; ● We may be unable to attract sufficient demand for and ~~analogous~~obtain ~~provisions~~acceptance of ~~applicable~~our ~~federal,~~medical ~~provincial,~~CBD ~~state~~products by both multidisciplinary primary healthcare clinicians and ~~local~~patients; ~~laws~~● Possible yet unanticipated changes in federal and state law could ~~face~~cause ~~substantial~~any ~~penalties~~products ifthat we ~~fail~~intend to ~~comply~~launch, containing hemp-derived CBD oil to be illegal, or could otherwise prohibit, limit or restrict any of our products containing CBD; ● Risks associated with ~~such~~the ~~laws~~CBD products industry; ● IfFDA regulation could negatively affect the ~~Company~~hemp ~~acquires~~industry, ~~one~~which orwould ~~more~~directly ~~multidisciplinary~~affect ~~primary~~our ~~health~~financial ~~care~~condition; ~~clinics~~● orSources ~~primary~~of ~~care~~hemp-derived ~~facilities~~CBD independ upon legality of cultivation, processing, marketing, and sales of products derived from those plants under state law of the United States,; we● ~~will~~Because beour ~~subject~~distributors tomay ~~the~~only ~~Anti~~sell and ship our products containing hemp-~~Kickback~~derived ~~Statute,~~CBD ~~FCA,~~in ~~Civil~~states ~~Monetary~~that ~~Penalties~~have ~~statute~~adopted laws and ~~analogous~~regulations ~~provisions~~qualifying under the 2018 Farm Act, a reduction in the number of ~~applicable~~states ~~state~~having such qualifying laws and regulations could ~~face~~limit, ~~substantial~~restrict ~~penalties~~or ifotherwise wepreclude ~~fail~~the tosale ~~comply~~of ~~with~~intended ~~such~~products ~~laws~~containing hemp-derived CBD; ● WeThere ~~will~~may be ~~subject~~unanticipated todelays in the ~~data~~development ~~privacy,~~and ~~security~~introduction ~~and~~of ~~breach~~our ~~notification~~prospective ~~requirements~~medicinal ofCBD ~~Canadian~~products and/or ~~United~~our ~~States~~inability ~~federal~~to ~~statutes~~control ~~and~~costs; ~~other~~● ~~data~~If ~~privacy~~needed, ~~and~~we ~~security~~may ~~laws~~be unable to consistently retain or hire third-party manufacturers, ~~and~~suppliers, ~~the~~or ~~failure~~other service providers to ~~comply~~produce our prospective medicinal CBD products; ● We do not have control over all third parties involved in the manufacturing of our products and their compliance with government health and safety standards. Even if our products meet these ~~rules~~standards, orthey ~~allegations~~could otherwise become contaminated; ● The sale of our products involves product liability and related risks that wecould ~~have~~expose ~~failed~~us to dosignificant ~~so,~~insurance ~~could~~and ~~result~~loss expenses; ● Confusion between legal CBD and illegal cannabis; ● Seasonal fluctuations in ~~civil~~revenue; ● Our failure to promote and maintain a strong brand; ● Failure to achieve or ~~criminal~~sustain ~~sanctions~~profitability; ● Our ~~Telemedicine~~failure ~~Medical~~to ~~Technology~~successfully ~~Platform~~or iscost-effectively ~~currently~~manage inour ~~early-stage~~marketing ~~roll-out~~efforts and wechannels, ~~may~~and the failure of such efforts and channels to be ~~unsuccessful~~effective in generating leads and business for the ~~commercialization~~Company or any of its affiliated providers; ● Significant competition; ● Adequate protection of confidential information; ● The business risks of United States and international operations; ● Our vulnerability to changes in consumer preferences and economic conditions; ● Potential litigation from competitors and health related claims from patients and customers; ● A limited market for our common stock; ● Our ability to adequately protect the ~~Telemedicine~~intellectual ~~Medical~~property ~~Technology~~used ~~Platform~~to produce our prospective medicinal CBD products; and ● Our ability to stay abreast of modified or new laws and regulations applying to our business.

● Our success with the Telemedicine Medical Technology Platform will highly be dependent upon our ability to develop relationships with primary care physicians, specialists and clinicians; ● Our Telemedicine Medical Technology Platform may not be accepted in the marketplace; ● Our Remote Patient Monitoring Medical Technology Platform is currently in early-stage roll-out and development and we may be unsuccessful in the commercialization of the RPM platform; ● Our success with the Remote Patient Monitoring Medical Technology Platform will highly be dependent upon our ability to develop relationships with primary care physicians and specialists; ● Our Remote Patient Monitoring Medical Technology Platform may not be accepted in the marketplace; ● Our Novo Connect Medical Technology Platform is currently in early-stage roll-out and development and we may be unsuccessful in the commercialization of the Novo Connect Medical Technology Platform; ● Our success with the Novo Connect Medical Technology Platform will highly be dependent upon our ability to develop relationships with primary care physicians and specialists; ● Our Novo Connect Medical Technology Platform may not be accepted in the marketplace;43

● Government regulation of the internet and e-commerce is evolving, and unfavorable changes could substantially harm our business and results of operations; ● We may be unable to attract sufficient demand for and obtain acceptance of our medical CBD products by both multidisciplinary primary health care clinicians and patients; ● Possible yet unanticipated changes in federal and state law could cause any products that we intend to launch, containing hemp-derived CBD oil to be illegal, or could otherwise prohibit, limit or restrict any of our products containing CBD; ● Risks associated with the CBD products industry; ● FDA regulation could negatively affect the hemp industry, which would directly affect our financial condition; ● Sources of hemp-derived CBD depend upon legality of cultivation, processing, marketing, and sales of products derived from those plants under state law of the United States;

● Because our distributors may only sell and ship our products containing hemp-derived CBD in states that have adopted laws and regulations qualifying under the 2018 Farm Act, a reduction in the number of states having such qualifying laws and regulations could limit, restrict or otherwise preclude the sale of intended products containing hemp-derived CBD; ● There may be unanticipated delays in the development and introduction of our prospective medicinal CBD products and/or our inability to control costs; ● If needed, we may be unable to consistently retain or hire third-party manufacturers, suppliers, or other service providers to produce our prospective medicinal CBD products; ● We do not have control over all third parties involved in the manufacturing of our products and their compliance with government health and safety standards. Even if our products meet these standards, they could otherwise become contaminated; ● The sale of our products involves product liability and related risks that could expose us to significant insurance and loss expenses; ● Confusion between legal CBD and illegal cannabis; ● Seasonal fluctuations in revenue; ● Our failure to promote and maintain a strong brand; ● Failure to achieve or sustain profitability; ● Our failure to successfully or cost-effectively manage our marketing efforts and channels, and the failure of such efforts and channels to be effective in generating leads and business for the Company or any of its affiliated providers; ● Significant competition; ● Adequate protection of confidential information; ● The business risks of United States and international operations; ● Our vulnerability to changes in consumer preferences and economic conditions; ● Potential litigation from competitors and health related claims from patients and customers;

● A limited market for our common stock; ● Our ability to adequately protect the intellectual property used to produce our prospective medicinal CBD products; and ● Our ability to stay abreast of modified or new laws and regulations applying to our business.

History of operating losses and negative cash flow.

For the fiscal years ended August 31, ~~2023~~2024 and ~~2022~~2023, we reported net losses attributed to Novo Integrated Sciences of $1316,~~214~~166,~~552~~744 and $3213,~~849~~214,~~215~~552, respectively, and negative cash flow from operating activities of $25,~~243~~069,~~315~~840 and $52,~~884~~243,~~145~~315, respectively. As of August 31, ~~2023~~2024, we had an aggregate accumulated deficit of $6783,~~033~~199,~~041~~785.

Such losses have historically required us to seek additional funding through the issuance of debt or equity securities. Our long-term success is dependent upon among other things, achieving positive cash flows from operations and if necessary, augmenting such cash flows using external resources to satisfy our cash needs. There can be no assurance that we will be able to obtain additional funding, if needed, on commercially reasonable terms, or of all.

Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. These adjustments would likely include substantial impairment of the carrying amount of our assets and potential contingent liabilities that may arise if we are unable to fulfill various operational commitments. In addition, the value of our securities would be greatly impaired. Our long-term success is dependent upon generating sufficient cash flow from operations and obtaining additional capital and financing. If our ability to generate cash flow from operations is delayed or reduced and we are unable to raise additional funding from other sources, we may be unable to continue in business.

Novo Integrated Sciences, Inc. is a parent company and depends upon our subsidiaries for our cash flows.

We are a parent company. All of our operations are conducted, and some of our assets are owned, by our subsidiaries. Consequently, our cash flows and our ability to meet our obligations depend upon the cash flows of our subsidiaries and the payment of funds by these subsidiaries to us in the form of dividends, distributions or otherwise. The ability of our subsidiaries to make any payments to us depends on their earnings, the terms of their indebtedness, including the terms of any credit facilities and legal restrictions. Any failure to receive dividends or distributions from our subsidiaries when needed could have a material adverse effect on our business, results of operations or financial condition.

Future acquisitions or strategic investments could disrupt our business and harm our business, results of operations or financial condition.

We may in the future explore potential acquisitions of companies or strategic investments to strengthen our business. Even if we identify an appropriate acquisition candidate, we may not be successful in negotiating the terms or financing of the acquisition, and our due diligence may fail to identify all of the problems, liabilities or other shortcomings or challenges of an acquired business.

Acquisitions involve numerous risks, any of which could harm our business, including:

	●	straining our financial resources to acquire a company;
	●	anticipated benefits may not materialize as rapidly as we expect, or at all;
	●	diversion of management time and focus from operating our business to address acquisition integration challenges;
	●	retention of employees from the acquired company;
	●	cultural challenges associated with integrating employees from the acquired company into our organization;
	●	integration of the acquired company’s accounting, management information, human resources and other administrative systems;
	●	the need to implement or improve controls, procedures and policies at a business that prior to the acquisition may have lacked effective controls, procedures and policies; and
	●	litigation or other claims in connection with the acquired company, including claims from terminated employees, former stockholders or other third parties.

Failure to appropriately mitigate these risks or other issues related to such strategic investments and acquisitions could result in reducing or eliminating any anticipated benefits of transactions and harm our business generally. Future acquisitions could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, amortization expenses or the impairment of goodwill, any of which could have a material adverse effect on business, results of operations or financial condition.

~~We may require additional funding for our growth plans, and such funding may result in a dilution of your investment.~~44

We ~~have~~require ~~estimated~~additional ~~our~~ funding ~~requirements~~for ~~in order to implement~~ our growth plans~~. If the costs of implementing such plans should exceed these estimates significantly or if we come across opportunities to grow through expansion plans which cannot be predicted at this time~~, and ~~our funds generated from our operations prove insufficient for~~ such ~~purposes,~~funding we may ~~need~~result toin ~~raise~~a ~~additional~~dilution ~~funds~~of toyour ~~meet these funding requirements~~investment.

~~These additional funds may be raised by issuing equity or debt securities or by borrowing from banks or other resources.~~ We ~~cannot assure you~~ ~~that~~have weestimated ~~will~~our befunding ~~able~~requirements toin ~~obtain~~order ~~any additional financing on terms that are acceptable~~ to ~~us,~~implement orour atgrowth ~~all~~plans. If wethe ~~fail~~costs toof ~~obtain~~implementing ~~additional financing~~such onplans ~~terms~~should ~~that~~exceed these ~~are~~estimates ~~acceptable~~significantly toor ~~us,~~if we ~~will~~come ~~not~~across beopportunities ~~able~~ to ~~implement~~grow ~~such~~through expansion plans ~~fully~~which ifcannot atbe ~~all.~~predicted ~~Such~~at ~~financing~~this ~~even if obtained~~time, ~~may~~and beour ~~accompanied~~funds bygenerated ~~conditions~~from ~~that limit~~ our ~~ability~~operations toprove ~~pay~~insufficient ~~dividends or require us to seek lenders’ consent~~ for ~~payment~~such ~~of dividends~~purposes, orwe ~~restrict~~will ~~our~~need ~~freedom~~ to ~~operate~~raise ~~our~~additional ~~business~~funding byto ~~requiring~~successfully complete ~~lender’s~~these ~~consent~~growth ~~for certain corporate actions~~opportunities.

These additional funds may be raised by issuing equity or debt securities or by borrowing from banks or other resources. We cannot assure you that we will be able to obtain any additional financing on terms that are acceptable to us, or at all. If we fail to obtain additional financing on terms that are acceptable to us, we will not be able to implement such plans fully if at all. Such financing, even if obtained, may be accompanied by conditions that limit our ability to pay dividends or require us to seek lenders’ consent for payment of dividends, or restrict our freedom to operate our business by requiring lender’s consent for certain corporate actions.

Further, if we raise additional funds by way of a rights offering or through the issuance of new shares, any shareholders who are unable or unwilling to participate in such an additional round of fund raising may suffer dilution in their investment.

Most of our executive officers do not reside in the United State.

Our U.S. stockholders would face difficulty in:

● ~~Effecting~~Effectuating service of process within the United States on most of our executive officers, if considered necessary. ● Enforcing judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against the executive officers. ● Enforcing judgments of U.S. courts based on civil liability provisions of U.S. federal securities laws in foreign courts against the executive officers. ● Bringing an original action in foreign courts to enforce liabilities based on the U.S. federal securities laws against the executive officers.

Accordingly, persons contemplating an investment in our common stock should seriously consider these factors before making an investment decision.

Our future success depends on the continuing efforts of our key employees and our ability to attract, hire, retain and motivate highly skilled and creative employees in the future.

Our future success depends on the continuing efforts of our ~~executive officers~~affiliates, ~~our founders and other key employees,~~ in particular Robert Mattacchione, our Chief Executive Officer (until February 5, 2025) and Chairman of the Board; Christopher David, our Chief Operating Officer~~/President~~; and Vivek Sethi, CPA, CA, our Principal Financial Officer. We rely on the leadership, knowledge and experience that our executive officers, ~~founders~~ and ~~key~~directors ~~employees~~ provide. They foster our corporate culture, which we believe has been instrumental to our ability to attract and retain new talent. Any failure to attract new or retain key creative talent could have a material adverse effect on our business, financial condition, and results of operations.

On November 7, 2024, Mr. Mattacchione resigned as our Chief Executive Officer, effective 90 days following the notification date (i.e. effective February 5, 2025). The 90-day notice period is intended to provide the Company with a fluid transition and to allow the Company time to appoint a suitable replacement. Following the 90-day transition period, Mr. Mattacchione intends to continue to serve as (i) the Company’s Chairman of the Board, and (ii) Chairman of Novo Healthnet Limited, a wholly owned subsidiary of the Company.

The market for talent in our key areas of operations is intensely competitive, which could increase our costs to attract and retain talented employees. As a result, we may incur significant costs to attract and retain employees, including significant expenditures related to salaries and benefits and compensation expenses related to equity awards, and we may lose new employees to our competitors or other companies before we realize the benefit of our investment in recruiting and training them.

38Employee turnover, including changes in our management team, could disrupt our business. The loss of one or more of our executive officers or other key employees, or our inability to attract and retain highly skilled and creative employees, could have a material adverse effect on our business, results of operations or financial condition.

Employee turnover, including changes in our management team, could disrupt our business. The loss of one or more of our executive officers, founders or other key employees, or our inability to attract and retain highly skilled and creative employees, could have a material adverse effect on our business, results of operations or financial condition.

We believe our corporate culture has contributed to our success and, if we are unable to maintain it as we grow, our business could be harmed.

We believe our corporate culture has been a key element of our success. However, as our organization grows, it may be difficult to maintain our culture, which could reduce our ability to attract and maintain new talent and operate effectively. The failure to maintain the key aspects of our culture as our organization grows could result in decreased employee satisfaction, increased difficulty in attracting top talent and increased turnover and could compromise the quality of our client service, all of which are important to our success and to the effective execution of our business strategy. Accordingly, if we are unable to maintain our corporate culture as we grow our business, this could have a material adverse effect on our business, results of operations or financial condition.

We may not have sufficient insurance coverage and an interruption of our business or loss of a significant amount of property could have a material adverse effect on our financial condition and operations.

We currently do not maintain any insurance policies against loss of key personnel. We do maintain insurance coverage for business interruption as well as product liability claims. In addition, we do maintain director and officer insurance coverage. If any event were to occur which required our insurance coverage to be applicable as well as a loss of key personnel, our business, financial performance, and financial position may be materially and adversely affected.

We could become involved in claims or ~~litigations~~litigation that may result in adverse outcomes.

~~From~~Periodically, ~~time-to-time~~the weCompany may be involved in a variety of claims or ~~litigations~~litigation. Such proceeding may initially be viewed as immaterial but could ~~prove~~ prove to be material. ~~Litigations~~Litigation ~~are~~is inherently unpredictable and excessive verdicts do occur. Given the inherent uncertainties in litigation, even when we can reasonably estimate the amount of possible loss or range of loss and reasonably estimable loss contingencies, the actual outcome may change in the future due to new developments or changes in approach. In addition, such claims or ~~litigations~~litigation could involve significant expense and diversion of management’s attention and resources from other matters.

We may be unable to adequately safeguard our intellectual property or we may face claims that may be costly to resolve or that limit our ability to use such intellectual property in the future.

Where litigation is necessary to safeguard our intellectual property, or to determine the validity and scope of the proprietary rights of others, this could result in substantial costs and diversion of our resources and could have a material adverse effect on our business, financial condition, operating results, or future prospects.

We are unable to assure you that third parties will not assert infringement claims against us in respect of our intellectual property or that such claims will not be successful. It may be difficult for us to establish or protect our intellectual property against such third parties and we could incur substantial costs and diversion of management resources in defending any claims relating to proprietary rights. If any party succeeds in asserting a claim against us relating to the disputed intellectual property, we may need to obtain licenses to continue to use the same. We cannot assure you that we will be able to obtain these licenses on commercially reasonable terms, if at all. The failure to obtain the necessary licenses or other rights could cause our business results to suffer.

We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar international anti-bribery and anti-kickback laws with respect to our activities outside the United States.

We anticipate rendering multidisciplinary primary ~~health~~healthcare ~~care~~ services through our clinics and distributing our medical cannabidiol products to locations in Canada and United States as well as operate our business in Canada and United States. The U.S. Foreign Corrupt Practices Act, and other similar anti-bribery and anti-kickback laws and regulations, generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. We cannot assure you that we will be successful in preventing our agents from taking actions in violation of these laws or regulations. Such violations, or allegations of such violations, could disrupt our business and result in a material adverse effect on our financial condition, results of operations and cash flows.

We are subject to a number of risks related to credit card and debit card payments we accept.

We accept payments through credit card and debit card transactions. For credit card and debit card payments, we pay interchange and other fees, which may increase over time. An increase in those fees would require us to either increase the prices we charge for our services which could cause us to lose clients or suffer an increase in our operating expenses, either of which could harm our operating results. If we or any of our processing vendors have problems with our billing software, or the billing software malfunctions, it could have an adverse effect on our customer satisfaction and could cause one or more of the major credit card companies to disallow our continued use of their payment products. In addition, if our billing software fails to work properly and, as a result, we do not automatically charge our clients’ credit cards, debit cards or bank accounts on a timely basis or at all, we could lose revenues, which would harm our operating results. If we fail to adequately control fraudulent credit card and debit card transactions, we may face civil liability, diminished public perception of our security measures and significantly higher credit card and debit card related costs, each of which could adversely affect our business, financial condition and results of operations. The termination of our ability to process payments on any major credit or debit card would significantly impair our ability to operate our business.

Security breaches of confidential customer information, in connection with our electronic processing of credit and debit card transactions, or confidential employee information may adversely affect our business.

Our business requires the collection, transmission and retention of large volumes of customer and employee data, including credit and debit card numbers and other personally identifiable information, in various information technology systems that are maintained internally and by third parties with whom we contract to provide services. The integrity and protection of that customer and employee data is critical to us. Our customers and employees have a high expectation that we and our service providers will adequately protect their personal information. The information, security and privacy requirements imposed by ~~governmental~~government ~~regulation~~regulations are increasingly demanding. Our systems may not be able to satisfy these changing requirements and customer and employee expectations or may require significant additional investments or time in order to do so. Efforts to hack or breach security measures, failures of systems or software to operate as designed or intended, viruses, operator error or inadvertent releases of data all threaten our information systems and records. A breach in the security of our service providers’ information technology systems could lead to an interruption in the operation of our systems, resulting in operational inefficiencies and a loss of profits. A significant theft, loss or misappropriation of, or access to, customers’ or other proprietary data or other breach of our information technology systems could result in fines, legal claims or proceedings, including regulatory investigations and actions, or liability for failure to comply with privacy and information security laws, which could disrupt our operations, damage our reputation and expose us to claims from customers and employees, any of which could have a material adverse effect on our financial condition and results of operations.

We rely on third parties to provide services in connection with our business, and any failure by these third parties to perform their obligations could have an adverse effect on our business, financial condition and results of operations.

We have entered into agreements with third parties that include, but are not limited to, information technology systems (including hosting our website, mobile application and our point-of-sale system), select marketing services, and employee benefits servicing. Services provided by third-party suppliers could be interrupted as a result of many factors, such as acts of nature or contract disputes. Accordingly, we are subject to the risks associated with the third parties’ abilities to provide these services to meet our needs. Any failure by a third party to provide services for which we have contracted on a timely basis or within ~~expected~~defined service level and performance ~~standards~~ standards could result in a disruption of our business and have an adverse effect on our business, financial condition, and results of operations.

Our amended and rested articles of incorporation provide that the state or federal court located within the state of Nevada will be the sole and exclusive forum for substantially all disputes between us and our shareholders, which could limit its stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or other employees.

Our amended and restated articles of incorporation provide that “[u]nless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) an action asserting a claim arising pursuant to any provision of the NRS, or (iv) any action asserting a claim governed by the internal affairs doctrine, shall be a state or federal court located within the state of Nevada, in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants. This exclusive forum provision is intended to apply to claims arising under Nevada state law and would not apply to claims brought pursuant to the Exchange Act of 1934, as amended (the “Exchange Act”) or Securities Act of 1933, as amended (the “Securities Act”), or any other claim for which the federal courts have exclusive jurisdiction. The exclusive forum provision in our amended and restated articles of incorporation will not relieve us of our duty to comply with the federal securities laws and the rules and regulations thereunder, and shareholders will not be deemed to have waived compliance with these laws, rules and regulations.

Public health epidemics or outbreaks could adversely impact our business.

~~While~~Any ~~all~~future ofimpact ~~the~~from ~~Company’s~~a ~~business~~spread ~~units are operational at the time~~ of ~~this filing~~virus, ~~any~~a ~~future impact of the COVID-19~~ pandemic, or any other public health epidemic 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 or other potential public health epidemic,~~and ~~new information which may emerge concerning the~~ severity of ~~the~~such ~~COVID-19~~potential ~~pandemic or~~ public health ~~epidemic~~epidemics, 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 annual report on Form 10-K.~~

Risks Related to our Multidisciplinary Primary ~~Health~~Healthcare ~~Care~~ Business

We may not be able to successfully implement our business growth initiatives for our multidisciplinary primary ~~health~~healthcare ~~care~~ business on a timely basis or at all, which could harm our business, financial performance, financial position, and results of operations.

The growth of our multidisciplinary primary ~~health~~healthcare ~~care~~ business depends on our ability to open and acquire new clinics and expand our roster of clinicians and staff to best service our multidisciplinary primary ~~health~~healthcare ~~care~~ clinics and eldercare centric homes.

A component of our growth strategy is to increase the number of our multidisciplinary primary ~~health~~healthcare ~~care~~ clinics through both the acquisition of existing clinics and the opening of new clinics while also engaging new contracts with new affiliate clinics and elder centric homes. Our ability to acquire and open profitable clinics and expand our clinician and staffing requirements depends on many factors, including our ability to:

● access capital to fund future acquisitions and preopening expenses; ● achieve brand awareness in new and existing markets; ● manage costs, which could give rise to delays or cost overruns; ● recruit, train, and retain qualified multidisciplinary primary ~~health~~healthcare ~~care~~ clinicians and other staff in our local markets; ● obtain favorable reimbursement rates for services rendered at the clinics; ● successfully staff and operate new clinics and affiliated clinics and elder centric homes; ● obtain all required governmental approvals, certificates, licenses and permits on a timely basis; ● manage delays in the acquisition or opening of clinics; ● compete for appropriate sites in new markets against other multidisciplinary primary ~~health~~healthcare ~~care~~ competitors and clinics; and ● maintain adequate information systems and other operational system capabilities.

Further, additional federal or state legislative or regulatory restrictions or licensure requirements could negatively impact our ability to operate both new and existing clinics.

Accordingly, we may not be able to achieve our planned growth or, even if we are able to grow our clinic base as planned, any new clinics may not be profitable or otherwise perform as planned. Failure to implement successfully our growth strategy would likely have an adverse impact on our business, financial condition or results of operations.

The long-term success of our multidisciplinary primary ~~health~~healthcare ~~care~~ business is highly dependent on our ability to successfully identify and acquire target clinics and identify and secure staffing opportunities.

To achieve our business growth initiative, we will need to acquire and open new clinics and operate them on a profitable basis. We expect this to be the case for the foreseeable future. In addition, we will need to identify and secure staffing opportunities as well. We consider numerous factors in identifying target markets where we can enter or expand and staffing opportunities that we can secure.

The number and timing of new clinics acquired and opened during any given period may be negatively impacted by a number of factors including, without limitation:

	●	the identification and availability of attractive sites for new clinics and the ability to negotiate suitable lease terms;
	●	our ability to successfully identify and address pertinent risks during acquisition due diligence;
	●	the preparation of target clinics’ financial statements on methods of accounting other than generally accepted accounting principles, or GAAP;
	●	the proximity of potential sites to one of our or our competitors’ existing clinics;
	●	our ability to obtain required governmental licenses, permits and authorizations on a timely basis; and
	●	our ability to recruit qualified clinicians and other personnel to staff our clinics.

If we are unable to find and secure attractive target clinics to expand in existing markets or enter new markets, our revenues and profitability may be harmed, we may not be able to implement our business growth initiatives and our financial results may be negatively affected.

Our intended acquisition and opening of clinics and increase in staffing in new markets exposes us to various risks and may require us to develop new business models.

Our growth and profitability depend on our ability to implement our business growth initiatives by expanding the number of clinics we operate and the amount of staffing in both new and existing markets. We cannot assure you our efforts to expand into new markets, particularly where we do not currently operate, will succeed. To operate in new markets, we may be required to modify our existing business model and cost structure to comply with local regulatory or other requirements, which may expose us to new operational, regulatory or legal risks.

We may be unable to acquire target clinics within our current price ranges. This may reduce the pace of our growth and increase the need for additional debt and equity capital. The patient population of clinics we acquire may be loyal to existing ownership, making it difficult to maintain pre-closing revenue and profit levels. The re-branding of acquired clinics may have an adverse market effect in local communities, and our brand may not be received as favorably in the local communities as we anticipate.

The process of integration of an acquired clinic may subject us to a number of risks, including:

● Failure to successfully manage relationships with multidisciplinary primary ~~health~~healthcare ~~care~~ clinicians and other staff of the acquired clinic; ● Demands on management related to the increase in size of our Company after the acquisition; ● Diversion of management attention; ● Potential difficulties integrating and harmonizing financial reporting systems; ● Difficulties in the assimilation and retention of employees; ● Inability to retain the multidisciplinary primary ~~health~~healthcare ~~care~~ clinicians and other staff of the acquired clinic; ● Inability to establish uniform standards, controls, systems, procedures and policies; ● Inability to retain the patients of the acquired clinic; ● Exposure to legal claims for activities of the acquired clinic prior to acquisition; and ● Incurrence of additional expenses in connection with the integration process.

If the acquired clinic is not successfully integrated into our Company, our business, financial condition and results of operations could be materially adversely affected, as well as our reputation. Furthermore, if we are unable to successfully integrate the acquired clinic or if there are delays in combining the businesses, the anticipated benefits of the acquisition may not be realized fully or at all or may take longer to realize than expected.

Growing our business through acquisitions will require additional personnel. There can be no assurance that these demands will not have a material adverse effect on our business, financial condition, and results of operations, nor can there be any assurance that we will be able to attract or retain competent personnel and improve our operational systems sufficiently to support the expansion of our operations.

Also important to our success will be our ability to achieve additional economies of scale in order to improve operating margins. There can be no assurance that we will be able to achieve such economies of scale, and the failure to do so could have a material adverse effect on our business, financial condition, and results of operations.

Clinics we open in new markets may take longer to reach expected revenue and profit levels on a consistent basis. The cost of opening and operating new clinics may exceed our budget, thereby affecting our overall profitability. New markets may have competitive conditions, consumer preferences, and ~~health~~healthcare ~~care~~ spending patterns that are more difficult to predict, identify or satisfy than our existing markets. We ~~may~~ may need to make greater investments than we originally planned in advertising and promotional activity in new markets and after closing acquisitions to build brand awareness. We may find it more difficult in new markets to hire, and we may not be able to retain and motivate qualified multidisciplinary primary ~~health~~healthcare ~~care~~ clinicians and other personnel. We may need to augment our labor model to meet regulatory requirements and the overall cost of labor may increase or be higher than anticipated.

As a result, any new or acquired clinics may be less successful and may not achieve target profit margins at the same rate or at all. If any steps taken to expand our existing business model into new markets are unsuccessful, we may not be able to achieve our growth objectives and our business, financial condition and results of operations could be adversely affected.

We will require additional capital to fund our operating and expansion costs, and our inability to obtain such capital will likely harm our business.

Although we currently operate 1614 corporate owned multidisciplinary primary ~~health~~healthcare ~~care~~ clinics, our administrative, corporate, and general organizational infrastructure is designed to support numerous additional clinics. Consequently, we expect that our monthly expenses will continue to exceed our monthly cash receipts until we significantly increase the number of our multidisciplinary primary ~~health~~healthcare ~~care~~ clinics. Depending on the results of our operations, we may need to raise additional capital to cover our operating and expansion costs.

To support our expansion strategy, we must have sufficient capital to continue making investments in new and existing clinics. Current funding sources and cash generated by our operations ~~may~~are not be sufficient to allow us to sustain our expansion efforts. If this is the case, we we may need additional equity or debt financing to provide the funds required to operate and expand our business. If such financing is ~~not~~ not available on satisfactory terms or at all, we may be unable to expand our business or acquire new clinics at our projected rate and ~~our~~ our operating results may suffer. Debt financing increases expenses and must be repaid regardless of operating results and may impose ~~restrictions~~ restrictions on the manner in which we operate our business. Equity financing, or debt financing that is convertible into equity, could result in additional dilution to our existing stockholders. Furthermore, if we are unable to obtain adequate capital, whether in the form of equity or debt, to fund our business and growth strategies we may be required to delay, scale back or eliminate some or all of our expansion plans, which may have a material adverse effect on our business, operating results, financial condition, or prospects.

The clinics that we intend to acquire or open may not meet our expectations.

In general, our business growth initiatives involve the acquisition and opening of strategically located clinics. Clinics that we intend to acquire and open may not meet our revenue or profit targets or may take longer than anticipated to doachieve soour expected revenue and profit targets. If our acquired or new clinics do not perform as planned, our business and future prospects could be harmed. If we are unable to manage successfully the potential difficulties associated with acquiring and opening new clinics, we may not be able to capture the efficiencies and opportunities that we expect from our expansion strategy. Our inability to capture expected efficiencies of scale, maintain patient volumes, improve our systems and equipment, continue our cost discipline, and retain appropriate physician and overall labor levels, could have a material adverse effect on our business, financial condition and results of operations.

If we open new clinics in existing markets, revenue at our existing clinics may be affected negatively.

The catchment area of our clinics varies by location and depends on a number of factors, including population density, other available convenient medical or multidimensional primary ~~health~~healthcare ~~care~~ services, area demographics and geography. As a result, the opening of a new clinic in or near markets in which we already have clinics could adversely affect the revenues of those existing clinics. Existing clinics could also make it more difficult to build our patient base for a new clinic in the same market. We may selectively open new clinics in and around areas of existing clinics that are operating at or near capacity to serve effectively our patients, but revenue cannibalization between our clinics may become significant in the future as competition increases and as we continue to expand our operations. This could adversely affect our revenue growth, which could, in turn, adversely affect our business, financial condition, or results of operations.

We may be required to make capital expenditures in connection with our acquisitions to implement our growth strategy.

In order to maintain brand consistency across our multidimensional primary ~~health~~healthcare ~~care~~ clinics, we may need to make significant capital ~~expenditures~~ expenditures to the interior and exterior of our clinics. This may include making real property improvements and upgrading our medical equipment to serve our patients and remain competitive. Changing competitive conditions or the emergence of significant advances in medical ~~technology~~ technology could require us to invest significant capital in additional equipment or capacity in order to remain competitive. Along these lines, if the systems and technology of our target clinics differ from those we have chosen to utilize, we may be required to invest ~~significant~~ significant capital to either convert, terminate, or integrate the varying medical technology platforms. If we are unable to fund any such investment or otherwise fail to make the necessary capital expenditures, our business, financial condition, or results of operations could be materially and adversely affected.

Damage to our reputation or our brand in existing or new markets could negatively impact our business, financial condition and results of operations.

We must grow the value of our brand to be successful. We intend to further develop our reputation and brand of providing patients with high quality effective multidisciplinary primary ~~health~~healthcare ~~care~~ services, and related products, delivered by respected clinicians and well-trained operational staff. Additionally, we place high- value on building and maintaining a patient-centered culture. If we do not make investments in areas such as marketing and advertising, as well as the day-to-day investments required for clinic operations, equipment upgrades, and personnel training, the value of our brand may not increase or may be diminished. Any incident, real or perceived, regardless of merit or outcome, that adversely affects our brand, such as, but not limited to, patient disability or death due to malpractice or allegations of malpractice, failure to comply with federal, provincial or local regulations, including allegations or perceptions of non-compliance or failure to comply with ethical and operational standards, could significantly reduce the value of our brand, expose us to negative publicity and damage our overall business and reputation.

Our marketing activities may not be successful.

We incur costs and expend other resources in our marketing efforts to attract and retain patients. Our marketing activities are principally focused on increasing brand awareness in the communities in which we provide services. As we open and acquire new clinics, we expect to undertake aggressive marketing campaigns to increase community awareness about our presence and our service capabilities. We plan to conduct our targeted marketing efforts in neighborhoods through channels such as direct mail, billboards, radio advertisements, physician open houses, community sponsorships and various social media. If we are not successful in these efforts, we will have incurred expenses without materially increasing revenue.

44The multidisciplinary primary healthcare market is highly competitive, including competition for patients, strategic relationships, and commercial payor contracts, each of which could adversely affect our contract and revenue base.

The market for providing multidisciplinary primary ~~health~~healthcare ~~care~~services, ~~market~~and related products, is highly competitive, ~~including~~and all of our clinics and staffing opportunities face and will face competition, ~~for~~in varying degrees, from existing multidisciplinary primary healthcare providers. Walk-in clinics, hospital emergency rooms, private doctors’ offices, freestanding emergency clinics, independent laboratories, hospital- and payor-supported urgent care facilities, and occupational medicine clinics. We compete with national, regional, and local enterprises, some of which have greater financial and other resources available to them, greater access to clinicians, medically licensed physicians and other medical professionals or greater access to potential patients. Our clinics and staffing compete on the basis of accessibility, ~~strategic~~including ~~relationships~~evening and weekend hours, walk-in care, as well as varying appointment opportunities. We also compete on the basis of our multi-provinces, regional footprint, which we believe will be of value to both employers and third-party payors. As a result ~~commercial~~of ~~payor~~the ~~contracts~~differing competitive factors within the markets in which we operate and will operate, ~~each~~the individual results of our clinics may be volatile. If we are unable to compete effectively with any of these entities or groups, we may be unable to implement our business strategies successfully, which could ~~adversely~~have ~~affect~~a material adverse effect on our ~~contract~~business, prospects, results of operations and ~~revenue~~financial ~~base~~condition.

~~The~~We ~~market~~may ~~for~~not ~~providing~~be ~~multidisciplinary~~able ~~primary~~to ~~health~~recruit ~~care services,~~ and ~~related~~retain ~~products,~~qualified ismultidisciplinary ~~highly~~primary ~~competitive,~~healthcare ~~and~~clinicians ~~all~~for of our ~~clinics and staffing opportunities face and will face competition, in varying degrees, from existing~~ multidisciplinary primary ~~health care providers.~~healthcare ~~Walk-in~~ clinics, ~~hospital emergency rooms, private doctors’ offices, freestanding emergency clinics, independent laboratories, hospital-~~ and ~~payor-supported~~staffing ~~urgent care facilities, and occupational medicine clinics. We compete with national, regional, and local enterprises, some~~ of ~~which~~affiliate ~~have greater financial and other resources available to them, greater access to clinicians, medically licensed physicians and other medical professionals or greater access to potential patients. Our~~ clinics and ~~staffing~~eldercare ~~compete~~centric ~~on the basis of accessibility, including evening and weekend hours, walk-in care, as well as varying appointment opportunities~~homes. We also compete on the basis of our multi-provinces, regional footprint, which we believe will be of value to both employers and third-party payors. As a result of the differing competitive factors within the markets in which we operate and will operate, the individual results of our clinics may be volatile. If we are unable to compete effectively with any of these entities or groups, we may be unable to implement our business strategies successfully, which could have a material adverse effect on our business, prospects, results of operations and financial condition.

WeOur ~~may~~success ~~not~~depends beupon ~~able~~our ability to recruit and retain qualified multidisciplinary primary ~~health~~healthcare ~~care~~ clinicians ~~for~~and ~~our~~other staff. There is currently a national shortage in Canada and United States of certain of these healthcare professionals. To the extent a significant number of multidisciplinary primary ~~health~~healthcare clinicians within an individual community or market decide to partner with competing multidisciplinary ~~care~~primary ~~clinics~~healthcare providers or hospitals and ~~staffing~~not ofwith ~~affiliate~~us, we may not be able to operate our clinics in such community. We face competition for such personnel from existing operators, hospital systems, entrepreneurial start-ups, and ~~eldercare~~other ~~centric~~organizations. ~~homes~~This competition may require us to enhance wages and benefits to recruit and retain qualified personnel. Our inability to recruit and retain these professionals could have a material adverse effect on our ability to grow or be profitable.

~~Our~~We ~~success~~may ~~depends~~not ~~upon~~be ~~our~~able ~~ability~~ to ~~recruit~~prohibit ~~and~~or ~~retain~~limit ~~qualified~~our multidisciplinary primary ~~health~~healthcare ~~care~~ clinicians ~~and~~from other staff. There is currently a national shortage in Canada and United States of certain of these health care professionals. To the extent a significant number of multidisciplinary primary health care clinicians within an individual community or market decide to partner with competing ~~multidisciplinary~~ ~~primary health care providers or hospitals and not~~ with us, ~~we may not be able to operate our clinics~~ in such community. We face competition for such personnel from existing operators, hospital systems, entrepreneurial start-ups, and other organizations. This competition may require us to enhance wages and benefits to recruit and retain qualified personnel. Our inability to recruit and retain these professionals could have a material adverse effect on our ~~ability~~local ~~to grow or be profitable~~markets.

WeIn certain provinces in Canada in which we operate or intend to operate and states in the United States in which we intend to operate, non-compete, non-solicitation, and other negative covenants applicable to employment or ownership are judicially or statutorily limited in their effectiveness or are entirely unenforceable against multidisciplinary primary healthcare professionals. As a result, we may not be able to ~~prohibit~~protect our operational processes, procedures, and general trade secrets or limit ~~our~~insiders ~~multidisciplinary~~from ~~primary~~using ~~health~~competitive ~~care~~information ~~clinicians~~against ~~from~~us ~~competing~~or competing with us, inwhich could have a material adverse effect on our ~~local~~ability ~~markets~~to remain competitive.

In certain provinces in Canada in which we operate or intend to operate and states in the United States in which we intend to operate, non-compete, non-solicitation, and other negative covenants applicable to employment or ownership are judicially or statutorily limited in their effectiveness or are entirely unenforceable against multidisciplinary primary health care professionals. As a result, we may not be able to protect our operational processes, procedures, and general trade secrets or limit insiders from using competitive information against us or competing with us, which could have a material adverse effect on our ability to remain competitive.52

With respect to our operations in Canada, we may be unable to enter into or maintain contracts for our affiliate multidisciplinary primary ~~health~~healthcare ~~care~~ clinics and eldercare focused facilities or services on favorable terms with commercial payors.

In Canada, a significant portion of our net patient service revenue is derived from nongovernmental, extended health insurers which provide reimbursement based on a pre-allocated amount disbursed as a cash payment for services, and related products, provided to the patient.

With respect to our anticipated expansion of our operations into the United States, we may be unable to enter into or maintain contracts for our multidisciplinary primary ~~health~~healthcare ~~care~~ clinics and services on favorable terms with commercial payors in the United States.

With respect to our anticipated expansion of our operations into the United States, we anticipate that a significant portion of our net patient service revenue will be derived from nongovernmental, third-party payors, or commercial payors, such as managed care organizations, commercial insurance providers and employer-sponsored ~~health~~healthcare ~~care~~ plans. These commercial payors use a variety of methods for reimbursement depending on the arrangement involved. These arrangements include fee-for-service, PPOs and health maintenance organizations, as well as prepaid and discounted medical service packages and capitated, or fixed fee, contracts. Rates for health maintenance organization benefit plans are typically lower than those for PPOs or other benefit plans that offer broader provider access.

Frequently, commercial payors classify or may reclassify our multidisciplinary primary ~~health~~healthcare ~~care~~ services differently. Such distinctions may result in different payment and reimbursement structure. Such differences may affect costs to the patient through increased copayments, deductibles and other cost-sharing mechanisms and, accordingly, patient choice of provider.

45There is often pressure to renegotiate reimbursement levels, particularly in connection with changes to Medicare. Typically, commercial payors reimburse us based upon contracted discounts to our established base rates. If managed care organizations and other commercial payors reduce their rates or we were to experience a significant shift in our revenue mix toward Medicare or Medicaid reimbursements, then our revenue and profitability would be adversely affected and our operating margins would be reduced. Commercial payors often demand discounted fee structures, and the trend toward consolidation among commercial payors tends to increase their bargaining power over fee structures. Because some commercial payors rely on all or portions of Medicare fee schedules to determine payment rates, changes to government healthcare programs that reduce payments under these schedules may negatively impact payments from commercial payors. Other healthcare providers may impact our ability to negotiate increases and other favorable terms in our reimbursement arrangements with commercial payors. For example, some of our competitors may negotiate exclusivity provisions with commercial payors or otherwise restrict the ability of commercial payors to contract with us. We may be excluded from participating in commercial payor networks, making it more expensive for certain patients to receive treatment at our clinics. Our results of operations will depend, in part, on our ability to retain and renew managed care contracts as well as enter into new managed care contracts on terms favorable to us. Our inability to maintain suitable financial arrangements with commercial payors could have a material adverse impact on our business.

There is often pressure to renegotiate reimbursement levels, particularly in connection with changes to Medicare. Typically, commercial payors reimburse us based upon contracted discounts to our established base rates. If managed care organizations and other commercial payors reduce their rates or we were to experience a significant shift in our revenue mix toward Medicare or Medicaid reimbursements, then our revenue and profitability would be adversely affected and our operating margins would be reduced. Commercial payors often demand discounted fee structures, and the trend toward consolidation among commercial payors tends to increase their bargaining power over fee structures. Because some commercial payors rely on all or portions of Medicare fee schedules to determine payment rates, changes to government health care programs that reduce payments under these schedules may negatively impact payments from commercial payors. Other health care providers may impact our ability to negotiate increases and other favorable terms in our reimbursement arrangements with commercial payors. For example, some of our competitors may negotiate exclusivity provisions with commercial payors or otherwise restrict the ability of commercial payors to contract with us. We may be excluded from participating in commercial payor networks, making it more expensive for certain patients to receive treatment at our clinics. Our results of operations will depend, in part, on our ability to retain and renew managed care contracts as well as enter into new managed care contracts on terms favorable to us. Our inability to maintain suitable financial arrangements with commercial payors could have a material adverse impact on our business.

As various provisions of the Patient Protection and Affordable Care Act, or the ACA, are implemented, commercial payors may increasingly demand fee reductions. In addition, there is a growing trend for commercial payors to take steps to shift the primary cost of care to the plan participant by increasing co-payments, co-insurance and deductibles, and these actions could discourage such patients from seeking treatment at our clinics. Patient volumes could be negatively impacted if we are unable to enter into or maintain acceptable contracts with such commercial payors, which could have a material adverse effect on our business, prospects, results of operations and financial condition.

Government ~~health~~healthcare ~~care~~ programs may reduce reimbursement rates.

In recent years, in the United States, new legislation has been proposed and adopted at both the federal and state level that is effecting major changes in the health care system. Any change in the laws, regulations, or policies governing the health care system could adversely affect reimbursement rates and our operations and financial condition. Enacted in March 2010, the ACA seeks to expand health care coverage, while increasing quality and limiting costs. The ACA substantially changes the way health care is financed by both governmental and commercial payors. As a result of the ACA or the adoption of additional federal and state health care reforms measures there could be limits to the amounts that federal and state governments will pay for health care services, which could result in reduced demand or profitability of our services.53

~~Furthermore~~In recent years, in the United States, new legislation has been proposed and adopted at both the federal and state level that is effecting ifmajor ~~due~~changes toin anthe ~~allegation~~healthcare ofsystem. ~~fraud~~Any orchange ~~any~~in ~~other~~the ~~reason~~laws, ~~one~~regulations, or ~~more~~policies ofgoverning the healthcare system could adversely affect reimbursement rates and our ~~multidisciplinary~~operations ~~primary~~and ~~health~~financial ~~care~~condition. ~~clinicians~~Enacted orin ~~practitioners is~~March no2010, ~~longer~~the ~~entitled~~ACA seeks to ~~bill~~expand healthcare coverage, while increasing quality and ~~receive~~limiting ~~payment~~costs. ~~for~~The ~~services~~ACA ~~rendered~~substantially tochanges ~~patients~~the ~~whose~~way ~~treatment~~healthcare is ~~paid~~financed inby ~~whole~~both orgovernmental inand ~~part~~commercial payors. byAs a ~~governmental~~ ~~payor,~~result ~~our~~of ~~revenue~~the ~~may~~ACA beor ~~negatively~~the ~~impacted,~~adoption ~~which~~of ~~could~~additional ~~have~~federal aand ~~material~~state ~~adverse~~healthcare ~~effect~~reforms onmeasures ~~our~~there ~~business,~~could ~~prospects,~~be ~~results~~limits to the ofamounts ~~operations~~that federal and ~~financial~~state ~~condition~~governments will pay for healthcare services, which could result in reduced demand or profitability of our services.

46Furthermore, if due to an allegation of fraud or any other reason one or more of our multidisciplinary primary healthcare clinicians or practitioners is no longer entitled to bill and receive payment for services rendered to patients whose treatment is paid in whole or in part by a governmental payor, our revenue may be negatively impacted, which could have a material adverse effect on our business, prospects, results of operations and financial condition.

If payments from commercial or governmental payors are significantly delayed, are reduced or eliminated, our business, prospects, results of operations and financial condition could be adversely affected.

We depend upon compensation from third-party payors for the services provided to patients by our multidisciplinary primary ~~health~~healthcare ~~care~~ clinicians and practitioners in our clinics, affiliate clinics and eldercare centric homes serviced by our clinicians. The amount that we receive through our clinics in payment for their services may be adversely affected by factors we do not control, including federal, provincial, or local regulatory changes, cost-containment decisions, and changes in reimbursement schedules of third-party payors and legislative changes. Any reduction or elimination of these payments could have a material adverse effect on our business, prospects, results of operations and financial condition.

Additionally, the reimbursement process is complex and can involve lengthy delays. Although we recognize revenue when multidisciplinary primary ~~health~~healthcare ~~care~~ services are provided, there can be delays before we receive payment. In addition, third-party payors may disallow, in whole or in part, requests for reimbursement based on determinations that certain amounts are not reimbursable under plan coverage, that services ~~provided~~ provided were not medically necessary, or that additional supporting documentation is necessary. Retroactive adjustments by third-party ~~payors~~ payors may be difficult or cost prohibitive to appeal, and such changes could materially reduce the actual amount we receive from those payors. Delays and uncertainties in the reimbursement process may be out of our control and may adversely affect us.

Significant changes in our payor mix resulting from fluctuations in the types of patients seen at our clinics could have a material adverse effect on our business, prospects, results of operations and financial condition.

Our results may change from period to period due to fluctuations in payor mix or other factors relating to the type of treatment performed by clinicians at our clinics. Payor mix refers to the relative amounts we receive from the mix of persons or entities that pay or reimburse us for ~~health~~healthcare ~~care~~ services. Because we generally receive relatively higher payment rates from commercial payors than from governmental payors or self-pay patients, a significant shift in our payor mix toward a higher percentage of self-pay or patients whose treatment is paid in whole or part by a governmental payor, which could occur for reasons beyond our control, could have a material adverse effect on our business, prospects, results of operations and financial condition.

Failure to bill timely or accurately for our services could have a negative impact on our net revenues, bad debt expense and cash flow.

Billing for our services is often complex and time -consuming. The practice of providing multidisciplinary primary ~~health~~healthcare ~~care~~ services, and related products, in advance of payment or prior to assessing a patient’s ability to pay for such services may have a significant negative impact on our patient service revenue, bad debt expense and cash flow. We bill numerous and varied payors, including self-pay patients, various forms of commercial payors, government payors and insurance payors. Billing requirements that must be met prior to receiving payment for services rendered often vary by payor. Self-pay patients and third-party payors may fail to pay for services even if they have been properly billed. Reimbursement is typically dependent on our providing the proper procedure and diagnosis codes.

Additional factors that could affect our collections for the services we render include:

	●	disputes among payors as to which party is responsible for payment;
	●	variations in coverage among various payors for similar services;
	●	the difficulty of adherence to specific compliance requirements, coding and various other procedures mandated by responsible parties;
	●	the institution of new coding standards; and
	●	failure to properly credential our providers to enable them to bill various payors.

The complexity associated with billing for our services causes many delays in our cash collections, resulting in increased carrying costs associated with the aging of our accounts receivable as well as the increased potential for bad debt expense.

We are dependent on our third-party revenue cycle managers for billing and collection of our claims.

We submit our claims for services rendered to commercial payors and governmental payors electronically through our third-party revenue cycle managers. We are dependent on our revenue cycle managers for the timely billing and collections of our claims. Any delay by or failure of our revenue cycle managers to timely bill and collect our claims could have a material adverse effect on our business, results of operations and financial condition.

We may incur costs resulting from security risks in connection with the electronic data processing by our partner banks.

Because we accept electronic payment cards for payments at our facilities, we may incur costs resulting from related security risks in connection with the electronic processing of confidential information by our partner banks. Recently, several of the large national banks have experienced potential or actual breaches in which similar data has been or may have been stolen. Such occurrences could cause patient dissatisfaction resulting in decreased visits or could also distract our management team from the management of the day-to-day operations.

With respect to our Canadian operations and our anticipated expansion of our operations into the United States, a successful challenge by tax authorities to our treatment of certain multidisciplinary primary ~~health~~healthcare ~~care~~ clinicians and practitioners as independent contractors or the elimination of an existing safe harbor could materially increase our costs relating to these multidimensional primary ~~health care~~healthcare clinicians and practitioners.

With respect to our Canadian operations and our anticipated expansion of our operations into the United States, certain of our multidisciplinary primary ~~health~~healthcare ~~care~~ clinicians and practitioners may be engaged as independent contractors by our state-level operating subsidiaries. If these personnel are treated as independent contractors rather than as employees, our state-level operating subsidiaries will not (i) withhold federal, state or local or state income or other employment related taxes from their compensation, (ii) make federal, provincial, state or local federal or state unemployment tax or Federal Insurance Contributions Act payments with respect to them, (iii) provide workers compensation insurance with respect to them (except in states where they are required to do so for independent contractors), or (iv) allow them to participate in benefits and retirement programs available to employees. Although we will have contracts with these licensed multidisciplinary primary ~~health~~healthcare ~~care~~ clinicians obligating them to pay these taxes and other costs, if a challenge to our treatment of these licensed multidisciplinary primary ~~health~~healthcare ~~care~~ clinicians and practitioners as independent contractors by federal, state, or local authorities were successful and they were treated as employees instead of independent contractors, we could be liable for taxes, penalties, and interest. In addition, there are currently, and have been in the past, proposals made to eliminate an existing safe harbor that would potentially protect us from the imposition of taxes in these circumstances, and similar proposals could be made in the future. If such a challenge were successful or if the safe harbor were eliminated, this could cause a material increase in our costs relating to these personnel and, have a material adverse effect on our business, financial condition, and results of operations.

Currently, our corporate owned clinics and affiliate clinics are located in the Canadian provinces of Ontario, Alberta, Nova Scotia and Newfoundland making us particularly sensitive to regulatory, economic, and other conditions in those states.55

Our clinics and affiliate clinics are located in the Canadian provinces of Ontario, Alberta, Nova Scotia and Newfoundland. If there were an adverse regulatory, economic, or other development in any of those states, our patient volume could decline, our ability to operate our clinics under our existing business model could be impacted, or there could be other unanticipated adverse impacts on our business that could have a material adverse effect on our business, financial condition, and results of operations.

Our business is seasonal, which may impact results of operations.

Our clinics’ patient and staffing volumes are sensitive to seasonal fluctuations. Typically, winter months see a higher occurrence of motor vehicle and winter weather related accidents, such as falling, however; the timing and severity of these can vary dramatically. Additionally, in the United States as consumers shift toward high deductible insurance plans, they are responsible for a greater percentage of their bill, particularly in the early months of the year before other ~~health~~healthcare ~~care~~ spending has occurred, which may lead to lower than expected patient volume or an increase in bad debt expense during that period. Our quarterly operating results may fluctuate significantly in the future depending on these and other factors.

We could be subject to lawsuits for which we are not fully insured.

Medical professionals, including multidisciplinary primary ~~health~~healthcare ~~care~~ clinicians and practitioners, have become subject to an increasing number of lawsuits alleging medical malpractice and related legal theories such as negligent hiring, supervision and credentialing. In Canada, our clinicians and practitioners, whether an employee or independent contractor, are responsible for their own professional liability insurance coverage. As provided in Canadian rules and regulations, our liability insurance coverage is not required to cover our clinicians and practitioners. As we expand in the United States, we anticipate procuring insurance coverage for our affiliated multidimensional primary ~~health~~healthcare ~~care~~ clinicians, practitioners, and corporate entities. In addition, as we expand our menu of services and related products through our various Medical Technology Platforms or possible acquisition of a medical licensed primary care practice, we will be subject to lawsuits alleging medical malpractice and related legal theories such as negligent hiring, supervision, and credentialing.

We are currently insured under policies in amounts management deems appropriate, based upon the nature and risk of our business. Nevertheless, there are exclusions and exceptions to coverage under each insurance policy that may make coverage for any claim unavailable, future claims could exceed the limits of available insurance coverage, existing insurers could become insolvent and fail to meet their obligations to provide coverage for such claims, and such coverage may not always be available with sufficient limits and at reasonable cost to insure us adequately and economically in the future. One or more successful claims against us not covered by, or exceeding the coverage of, our insurance could have a material adverse effect on our business, prospects, results of operations and financial condition. Moreover, in the normal course of our business, we may be involved in other types of lawsuits, claims, audits and investigations, including those arising out of our billing and marketing practices, employment disputes, contractual claims and other business disputes for which we may have no insurance coverage. The outcome of these matters could have a material adverse effect on our financial position, results of operations, and cash flows.

Some of these lawsuits may involve large claim amounts and substantial defense costs.

Insurance coverage for some of our losses may be inadequate and may be subject to the credit risk of commercial insurance providers.

We maintain insurance coverage for specific liability for our clinic facilities through various third-party insurers. To the extent we hold policies to cover certain groups of claims or rely on insurance coverage obtained by third parties to cover such claims, we may be responsible for those losses if the insurance coverage is inadequate or the insurer rejects our claim for payment. Furthermore, for our losses that are insured or reinsured through commercial insurance providers, we are subject to the financial viability of those insurance companies. Although we believe our commercial insurance providers are currently creditworthy, they may not remain so in the future.

~~Risks Related to Health Care Regulation~~56

~~The~~Risks ~~health~~Related ~~care industry is heavily regulated, and if we fail~~ to ~~comply~~Healthcare ~~with these laws and government regulations, we could incur penalties or be required to make significant changes to our operations.~~Regulation

The ~~health~~healthcare ~~care~~ industry is heavily regulated ~~and closely scrutinized by federal~~, ~~state, provincial~~ and ~~local~~if ~~governments. Comprehensive statutes and regulations govern the manner in which~~ we ~~provide and bill for services and products, our contractual relationships with our clinicians, vendors, patients and our marketing activities and other aspects of our operations. If we~~ fail to comply with these laws and government regulations, we could beincur ~~exposed to civil and criminal~~ penalties ~~such as fines, damages, overpayment recoupment, loss of enrollment~~ ~~status and exclusion from government health care programs. Any action against us for violation of these laws~~ or ~~regulations,~~be ~~even~~required ~~if successfully defended, could cause us~~ to ~~incur~~make significant ~~legal~~changes ~~expenses~~to ~~and divert~~ our ~~management’s attention from the operation of our business~~operations. ~~Our clinicians and practitioners are also subject to ethical guidelines and operating standards of professional and private accreditation agencies.~~

The ~~laws~~healthcare industry is heavily regulated and closely scrutinized by federal, ~~regulations~~state, provincial and ~~standards~~local ~~governing~~governments. Comprehensive statutes and regulations govern the ~~provision~~manner ofin ~~health~~which ~~care~~we ~~service,~~provide and ~~related~~bill for services and products, ~~may~~our ~~change~~contractual ~~significantly~~relationships inwith ~~the~~our clinicians, ~~future~~vendors, patients and ~~these~~our ~~changes~~marketing ~~may~~activities ~~materially~~ and ~~adversely~~other ~~affect~~aspects of our ~~business~~operations. ~~Furthermore~~If we fail to comply with these laws and regulations, we acould ~~review~~be exposed to civil and criminal penalties such as fines, damages, overpayment recoupment, loss of ~~our~~enrollment ~~business~~status byand ~~regulatory~~exclusion from government healthcare programs. Any action against us for violation of these laws or ~~accreditation authorities~~regulations, even if successfully defended, could ~~result~~cause inus ~~determinations~~to ~~that~~incur ~~could~~significant ~~adversely~~legal ~~affect~~expenses and divert our ~~operations~~management’s attention from the operation of our business. Our clinicians and practitioners are also subject to ethical guidelines and operating standards of professional and private accreditation agencies.

49The laws, regulations and standards governing the provision of healthcare services, and related products, may change significantly in the future, and these changes may materially and adversely affect our business. Furthermore, a review of our business by regulatory or accreditation authorities could result in determinations that could adversely affect our operations.

Our Canadian clinics are and will be subject to numerous statutes and regulations. Additionally, given our intention to expand and begin operations in the United States, we will be subject to numerous U.S. statutes and regulations. Failure to comply with these laws and regulations could result in civil or criminal sanctions.

The operation of our clinics in Canada subjects us, and will subject us, to many provincial laws and regulations, following the projected expansion of our Company’s operations to the United States, federal and state laws in the United States. In general, whether directly or through boards, agencies, or other delegated authorities, regulating the ownership and dispensing of controlled substances, the retention and storage of medical records, patient privacy and protection of health information, the licensure of multidisciplinary primary ~~health~~healthcare ~~care~~ providers, including clinicians, and the clinical supervision, by physicians, of nurse practitioners and physician assistants, among other aspects of our operations are regulated. All such laws and regulations, and the applicable interpretations of such laws and regulations, are subject to change.

Additional regulation of clinics such as ours has been proposed in several Canadian provinces and the United States. The adoption of any such regulations in the provinces in Canada, or states in the United States in which we operate or intend to operate, could force us to change our operational or transactional approach or lead to a finding by regulators that our primary care clinics and clinics do not meet legal requirements. We may be subject to criminal prosecution, regulatory fines, penalties, or other sanctions if our operations or clinics are found to not comply with applicable laws and regulations. In addition, we may be required to refund all funds received from patients and third-party payors during the period of noncompliance.

With respect to our anticipated expansion of our operations into the United States, state regulation of the expansion of multidisciplinary primary ~~health~~healthcare ~~care~~ clinics could prevent us from reaching our expansion objectives.

In the United States, many states have certificate of need programs that require some level of prior approval for the development, acquisition, or expansion of ~~health~~healthcare ~~care~~ sector related facilities. With respect to our anticipated expansion of our operations into the United States, in the event we choose to acquire or open clinics in a state that does require such approval, we may be required to obtain a certificate of need before the acquisition or opening occurs. If we are unable to obtain such approvals, we may not be able to move forward with the planned activity.

Only a few states currently require the licensure of multidisciplinary primary ~~health~~healthcare ~~care~~ clinics such as ours. The lack of a specific licensure process for our clinics in the vast majority of states may lead state legislators or regulators to regulate aggressively the growth of our industry, potentially seeking to treat our industry in a manner similar to hospitals or freestanding emergency departments. Further, the growing number of urgent care clinics and freestanding emergency departments may lead to legislation or regulations requiring us to change substantially our operations or cease our operations in that state entirely. Any such requirements could have a material adverse effect on our prospects and growth strategy.

Our services, and related products, are subject to comprehensive laws and regulations that govern the manner in which we bill and are paid for our services by third-party payors, and the failure to comply with these requirements can result in civil or criminal sanctions, including exclusion from federal and state health care programs.57

A substantial portion of our services, and related products, are paid for by commercial payors and governmental payors. These third-party payors typically have differing and complex billing and documentation requirements. If we fail to meet these requirements, we may not be paid for our services or payment may be substantially delayed or reduced.

Numerous federal, provincial and local laws also apply to our claims for payment, including but not limited to (i) “coordination of benefits” rules that dictate which payor must be billed first when a patient has coverage from multiple payors, (ii) requirements that overpayments be refunded within a specified period of time, (iii) “reassignment” rules governing the ability to bill and collect professional fees on behalf of other providers, (iv) requirements that electronic claims for payment be submitted using certain standardized transaction codes and formats, and (v) laws requiring all health and financial information of patients in a manner that complies with applicable security and privacy standards.

Third-party payors carefully monitor compliance with these and other applicable rules. Our failure to comply with these rules could result in our obligation to refund amounts previously paid for such services or non-payment for our services.

If we are found to have violated any of these or any of the other laws or regulations which govern our activities, the resulting penalties, damages, fines or other sanctions could adversely affect our ability to operate our business and our financial results.

Changes in coverage and the rates or methods of third-party reimbursements may adversely affect our revenue and operations.

A substantial portion of our revenue is derived from direct billings to patients and third-party payors. As a result, any changes in the rates or methods of reimbursement for the services and products we provide could have a material adverse effect on our revenue and financial results. Reimbursement rates can vary depending on whether our clinic is an in-network or out-of-network provider. Each of our clinics may be out-of-network for some patients. When acting as an out-of-network provider, reimbursement rates may be lower, co-payments and deductibles may be higher and we may have difficulties complying with the billing requirements of certain third-party payors.

Past and future legislation related to the ~~health~~healthcare ~~care~~ industry and other changes in the ~~health~~healthcare ~~care~~ industry could adversely affect our business, financial condition, and results of operations.

The ~~health~~healthcare ~~care~~ industry is subject to legislative and regulatory changes, as well as changes from other influences. The government may continue reviewing and assessing ~~health~~healthcare ~~care~~ delivery and payment systems and may in the future adopt legislation making additional fundamental changes in the ~~health~~healthcare ~~care~~ system. There is no assurance that such changes will not have a material adverse effect on our business, financial condition, or results of operations. Continued efforts to shift ~~health~~healthcare ~~care~~ costs to the patient (through co-payments, deductibles, and other mechanisms) could adversely affect our business, financial condition, and results of operations.

We are subject to the Canada Health Act, Canada’s National Health Insurance Program and Food and Drugs Act and analogous provisions of applicable state laws and could face substantial penalties if we fail to comply with such laws.

In Canada, some ~~health~~healthcare ~~care~~ services are public, some are private with a number of different entities involved in regulating and providing their delivery. While there is a perception that all ~~health~~healthcare ~~care~~ in Canada is publicly funded, the publicly funded system is generally restricted to “medically necessary” hospital and physician services, and provincial or territorial drug plans that provide access to prescription drugs to residents over the age of 65 or those residents who rely on social assistance programs. Publicly funded services are delivered through a combination of public and private providers and funding comes from the Canadian federal government, which sets national standards, and the provincial and territorial governments, which regulates the delivery of services and determines those services that are deemed “medically necessary” (i.e., publicly funded) within the context of their own unique fiscal and political environment. In addition, there are a wide array of health products and services that are not subject to coverage under the public health insurance plans that are provided on a private payer basis.

Federal/Provincial Government Division of Power in Canada

The federal government is responsible for regulating important aspects of various health industries or sectors including the regulation of selling, importing, distributing, and marketing drugs and medical devices and it maintains significant influence over health policy and national objectives through the use of its spending power.

However, many health industry sectors are subject to at least some degree of regulation or oversight by both levels of government.

Canada’s National Health Insurance Program

The Canada Health Act

Notably, these requirements relate only to funding and administration and establishing broad principles rather than a prescriptive code. In addition, the Canada Health Act is silent with respect to the delivery of health services and does not prohibit or discourage the delivery of insured health services by the private sector. As a result, there is significant variation in the funding and administration of health insurance plans from one jurisdiction to another. However, most provinces permit the delivery of a broad range of publicly funded health services through a combination of both public and private providers. Indeed, many publicly funded services in Canada are privately delivered.

The products and services available to Canadians through the publicly funded health insurance system are supplemented by a wide array of health products and services that are not, as a general matter, subject to coverage under the public health insurance plans. For example, prescription drug coverage, dental services and vision care are generally provided on a private payer basis. However, many jurisdictions provide coverage for these types of services to seniors and those who face financial or other barriers to privately funded ~~health care~~healthcare. There are also a growing number of providers that offer ancillary healthcare services. Examples include elective surgical or cosmetic procedures.

Regulation of Health Professionals and Health Facilities

Health Professionals

Health Facilities

Operating a regulated health facility can be challenging and often involves a degree of regulatory risk.

Regulation of Drugs

The process of obtaining marketing authorizations and approvals of prescription drugs is administered by Health Canada’s Therapeutic Products Directorate (TPD).

The Patented Medicines Prices Review Board

The Patented Medicines Prices Review Board (PMPRB) is an independent quasi-judicial body created in 1987 under amendments to the Patent Act. The PMPRB is responsible for regulating the prices that patentees charge for prescription and non-prescription patented drugs sold in Canada. Based on a review of the information required to be filed by a patentee, the PMPRB considers whether the price of a medicine appears excessive based on certain factors including: (i) the prices that the patented medicine is sold in the Canadian market; (ii) the prices at which other medicines in the same therapeutic class are sold in the Canadian market; and (iii) the prices at which the medicine and other medicines in the same therapeutic class have been sold in other countries other than Canada. If the PMPRB considers the price of a medicine appears excessive, revised pricing is the usual outcome.

Public Market Access

The scope and enforcement of each of these laws is uncertain and subject to constant change. Federal and provincial enforcement entities have significantly increased their scrutiny of ~~health~~healthcare ~~care~~ companies and providers which has led to investigations, prosecutions, convictions and large settlements. Although we conduct our business in compliance with all applicable federal and provincial fraud and abuse laws, many of these laws are broadly worded and may be interpreted or applied in ways that cannot be predicted with any certainty. Therefore, we cannot assure you that our arrangements or business practices will not be subject to government scrutiny or will be found to be in compliance with applicable fraud and abuse laws. Further, responding to investigations can be time consuming and result in significant legal fees and can potentially divert management’s attention from the Company.

We are subject to the data privacy and security laws of Canada, and the failure to comply with these rules, or allegations that we have failed to do so, could result in civil or criminal sanctions.

Following the intended acquisition, or opening, of one or more clinics or staffing primary healthcare practitioners in the United States, our centers may participate in the federal Medicare program and, as a result, we will need to comply with a number of additional federal regulatory requirements.

CMS is required to limit the growth in spending under the physician fee schedule by a predetermined sustained growth rate, or SGR. If implemented as mandated, the SGR would result in significant payment reductions under the physician fee schedule. Every year since 2003, Congress has delayed application of the SGR, but we cannot predict with certainty whether it will continue to do so. Congress most recently delayed application of the SGR in the Protecting Access to Medicare Act of 2014, or PAMA, which became effective on April 1, 2014. In March of 2014 (prior to the passage of PAMA), CMS announced that the estimated physician fee schedule update for 2014 would be reduced by 20.9% due to the SGR formula. PAMA provides for the continuation of the 0.5% reimbursement increase to the physician payment schedule through December 31, 2014 (originally provided under the Pathway for SGR Reform Act of 2013), and it also provides for no change to the physician fee schedule through March 31, 2015. Although several recent legislative proposals have sought to impose permanent or semi-permanent solutions to the SGR reductions, we cannot predict with certainty whether the SGR will be repealed or if another formula would be substituted and what form that might take. Repeal of the SGR could be offset by further reductions in Medicare payments, and any such reductions could have a material adverse effect on our business.

Furthermore, the ACA reduces annual payment updates for certain providers and reduces Medicare payments for certain procedures, and the Budget Control Act of 2011, or BCA, requires automatic spending reductions for each fiscal year through 2021. As a result of the BCA and subsequent activity in Congress, a $1.2 trillion sequester (across-the-board spending cuts) in discretionary programs took effect in 2013. In particular, a 2% reduction in Medicare payments took effect on April 1, 2013 which has recently been extended for an additional two years beyond the original expiration date of 2021.

Following the intended acquisition, or opening, of one or more clinics or staffing primary healthcare practitioners in the United States, we will be subject to CMS’ RAC program.

The Medicare Prescription Drug, Improvement and Modernization Act of 2003, or MMA, introduced on a trial basis the use of RACs for the purpose of identifying and recouping Medicare overpayments and underpayments. Any overpayment received from Medicare is considered a debt owed to the federal government. In October 2008, CMS made the RAC program permanent. RACs review Medicare claims to determine whether such claims were appropriately reimbursed by Medicare. RACs engage in an automated review and in a complex review of claims. Automated reviews are conducted when a review of the medical record is not required and there is certainty that the service is not covered or is coded incorrectly. Complex reviews involve the review of all underlying medical records supporting the claim; and are generally conducted where there is a high likelihood, but not certainty, that an overpayment has occurred. RACs are paid a contingency fee based on overpayments identified and collected.

Following the intended acquisition, or opening, of one or more clinics or staffing primary healthcare practitioners in the United States, any such reviews under the RAC program or denials by the MAC could have a material adverse effect on our results of operations.

Following the intended acquisition, or opening, of one or more clinics or staffing primary healthcare practitioners in the United States, we will be subject to the Anti-Kickback Statute, FCA, Civil Monetary Penalties statute and analogous provisions of applicable state laws and could face substantial penalties if we fail to comply with such laws.

Anti-Kickback Statute

Following the intended acquisition, or opening, of one or more clinics or staffing primary healthcare practitioners in the United States, if we are participants in the Medicare program, we will be subject to the Anti-kickback Statute. The Anti-Kickback Statute prohibits the knowing and willful offer, payment, solicitation or receipt of remuneration, directly or indirectly, in return for the referral of patients or arranging for the referral of patients, or in return for the recommendation, arrangement, purchase, lease or order of items or services that are covered, in whole or in part, by a federal healthcare program such as Medicare or Medicaid. The term “remuneration” has been broadly interpreted to include anything of value such as gifts, discounts, rebates, waiver of payments or providing anything at less than its fair market value. The ACA amended the intent requirement of the Anti-Kickback Statute such that a person or entity can be found guilty of violating the statute without actual knowledge of the statute or specific intent to violation the statute. Further, the ACA now provides that claims submitted in violation of the Anti-Kickback Statute constitute false or fraudulent claims for purposes of the civil False Claims Act, or FCA, including the failure to timely return an overpayment. Many states have adopted similar prohibitions against kickbacks and other practices that are intended to influence the purchase, lease or ordering of healthcare items and services reimbursed by a governmental health program or state Medicaid program. Some of these state prohibitions apply to remuneration for referrals of healthcare items or services reimbursed by any third-party payor, including commercial payors.

Following the intended acquisition, or opening, of one or more clinics or staffing primary healthcare practitioners in the United States, if we accept funds from governmental health programs, we will be subject to the Anti-Kickback Statute. Violations of the Anti-Kickback Statute can result in exclusion from Medicare, Medicaid or other governmental programs as well as civil and criminal penalties, such as $25,000 per violation and up to three times the remuneration involved. If in violation, we may be required to enter into settlement agreements with the government to avoid such sanctions. Typically, such settlement agreements require substantial payments to the government in exchange for the government to release its claims, and may also require entry into a corporate integrity agreement, or CIA. Any such sanctions or obligations contained in a CIA could have a material adverse effect on our business, financial condition and results of operations.

False Claims Act

The federal civil FCA prohibits providers from, among other things, (1) knowingly presenting or causing to be presented, claims for payments from the Medicare, Medicaid or other federal healthcare programs that are false or fraudulent; (2) knowingly making, using or causing to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the federal government; or (3) knowingly making, using or causing to be made or used, a false record or statement to avoid, decrease or conceal an obligation to pay money to the federal government. The “qui tam” or “whistleblower” provisions of the FCA allow private individuals to bring actions under the FCA on behalf of the government. These private parties are entitled to share in any amounts recovered by the government, and, as a result, the number of “whistleblower” lawsuits that have been filed against providers has increased significantly in recent years. Defendants found to be liable under the FCA may be required to pay three times the actual damages sustained by the government, plus mandatory civil penalties ranging between $5,500 and $11,000 for each separate false claim.

There are many potential bases for liability under the FCA. The government has used the FCA to prosecute Medicare and other government healthcare program fraud such as coding errors, billing for services not provided, and providing care that is not medically necessary or that is substandard in quality. The ACA also provides that claims submitted in connection with patient referrals that results from violations of the Anti-Kickback Statute constitute false claims for the purpose of the FCA, and some courts have held that a violation of the Stark law can result in FCA liability, as well. In addition, a number of states have adopted their own false claims and whistleblower provisions whereby a private party may file a civil lawsuit in state court. Following the acquisition of one or more clinics or staffing primary healthcare practitioners in the United States, we will be required to provide information to our employees and certain contractors about state and federal false claims laws and whistleblower provisions and protections.

Civil Monetary Penalties Statute

The scope and enforcement of each of these laws is uncertain and subject to constant change. Federal and state enforcement entities have significantly increased their scrutiny of healthcare companies and providers which has led to investigations, prosecutions, convictions and large settlements. Following the acquisition of one or more clinics or staffing primary healthcare practitioners in the United States, although we intend to conduct our business in compliance with all applicable United States federal and state fraud and abuse laws, many of these laws are broadly worded and may be interpreted or applied in ways that cannot be predicted with any certainty. Therefore, we cannot assure you that our arrangements or business practices will not be subject to government scrutiny or will be found to be in compliance with applicable fraud and abuse laws. Further, responding to investigations can be time consuming and result in significant legal fees and can potentially divert management’s attention from the Company.

Following the intended acquisition, or opening, of one or more clinics or staffing primary healthcare practitioners in the United States, we will be subject to the data privacy, security and breach notification requirements of HIPAA, HITECH and other data privacy and security laws, and the failure to comply with these rules, or allegations that we have failed to do so, could result in civil or criminal sanctions.

Following the intended acquisition, or opening, of one or more multidisciplinary primary healthcare clinics or the staffing of multidisciplinary primary healthcare clinics, affiliate clinics or eldercare centric homes with clinicians and practitioners in the United States, numerous federal and state laws and regulations, including HIPAA and HITECH, will govern the collection, dissemination, security, use and confidentiality of patient-identifiable health information. As required by HIPAA, HHS has adopted standards to protect the privacy and security of this health-related information. The HIPAA privacy regulations contain detailed requirements concerning the use and disclosure of individually identifiable health information and the grant of certain rights to patients with respect to such information by “covered entities.” The Company and each of our clinics is considered a covered entity under HIPAA. We will take actions to comply with the HIPAA privacy regulations including the creation and implementation of policies and procedures, staff training, execution of HIPAA-compliant contractual arrangements with certain service providers and various other measures. Although we believe we will be in substantial compliance, ongoing implementation and oversight of these measures involves significant time, effort and expense.

In addition to the privacy requirements, HIPAA covered entities must implement certain administrative, physical, and technical security standards to protect the integrity, confidentiality and availability of certain electronic health-related information received, maintained, or transmitted by covered entities or their business associates. Although, we will take actions in an effort to be in compliance with these security regulations, a security incident that bypasses our information security systems causing an information security breach, loss of PHI or other data subject to privacy laws or a material disruption of our operational systems could have a material adverse effect on our business, along with fines. Furthermore, ongoing implementation and oversight of these security measures involves significant time, effort and expense.

Further, HITECH, as implemented in part by an omnibus final rule published in the Federal Register on January 25, 2013, further requires that patients be notified of any unauthorized acquisition, access, use, or disclosure of their unsecured PHI that compromises the privacy or security of such information. HHS has established the presumption that all unauthorized uses or disclosures of unsecured PHI constitute breaches unless the covered entity or business associate establishes that there is a low probability the information has been compromised. HITECH and implementing regulations specify that such notifications must be made without unreasonable delay and in no case later than 60 calendar days after discovery of the breach. Breaches affecting 500 patients or more must be reported immediately to HHS, which will post the name of the breaching entity on its public website. Furthermore, breaches affecting 500 patients or more in the same state or jurisdiction must also be reported to the local media. If a breach involves fewer than 500 people, the covered entity must record it in a log and notify HHS of such breaches at least annually. These breach notification requirements apply not only to unauthorized disclosures of unsecured PHI to outside third parties but also to unauthorized internal access to or use of such PHI.

State laws may impose more protective privacy restrictions related to health information and may afford individuals a private right of action with respect to the violation of such laws. Both state and federal laws are subject to modification or enhancement of privacy protection at any time. We are subject to any federal or state privacy-related laws that are more restrictive than the privacy regulations issued under HIPAA. These statutes vary and could impose additional requirements on us and more severe penalties for disclosures of health information. If we fail to comply with HIPAA, similar state laws or any new laws, including laws addressing data confidentiality, security or breach notification, we could incur substantial monetary penalties and substantial damage to our reputation.

States may also impose restrictions related to the confidentiality of personal information that is not considered PHI under HIPAA, including certain identifying information and financial information of our patients. Theses state laws may impose additional notification requirements in the event of a breach of such personal information. Failure to comply with such data confidentiality, security and breach notification laws may result in substantial monetary penalties.

HIPAA and HITECH also include standards for common healthcare electronic transactions and code sets, such as claims information, plan eligibility and payment information. Covered entities such as the Company and each of our centers will be required to conform to such transaction set standards.

Following the intended acquisition, or opening, of one or more clinics or staffing primary healthcare practitioners in the United States, we will convert certain of our clinical and patient accounting information system applications to newer versions of existing applications or altogether new applications. In connection with our implementation and conversions, we will likely incur capitalized costs and additional training and implementation expenses.

If we fail to comply with laws and regulations related to the protection of the environment and human health and safety, we could incur substantial penalties and fines.

Risks Related to our Telemedicine Medical Technology Platform, ~~Remote~~RPM ~~Patient Monitoring~~ Medical Technology Platform and Novo Connect Medical Technology Platform

We may be unsuccessful in the development, usage, application and commercialization of each or all of our Medical Technology Platforms.

Our Telemedicine Medical Technology Platform, which is currently operating with limited usage and remains primarily under development, is intended to provide patients with real-time access to third-party primary care medically licensed physicians and specialists in various disciplines as well as multidisciplinary ~~health~~healthcare ~~care~~ clinicians. Telemedicine is transforming traditional approaches to all components of the health industry by providing ease of access and reduced costs for patients, particularly in areas with limited access to primary care licensed physicians, nurses, nurse practitioners, specialists and multidisciplinary primary care clinicians. Our advanced Telemedicine Medical Technology Platform intends to integrate certain medical devices, such as a blood pressure reading device, a derma scope and an ophthalmoscope otoscope, each of which can provide the doctor with real-time diagnostic data, greatly enhancing the doctor’s ability to provide the patient with an accurate diagnosis. Our Telemedicine Medical Technology Platform is intended to allow any type of ~~health~~healthcare ~~care~~ clinic or location to install and utilize our Telemedicine Medical Technology Platform at a relatively low-cost point of of entry.

Our ~~Remote~~RPM ~~Patient Monitoring~~ Medical Technology Platform, which is currently operating with limited usage and remains primarily under development, is intended to empower a patient with real-time vital sign information while maintaining a direct technology link from patient to clinician or medical practitioner. The transfer of vital information from home to clinic or patient to clinician allows for the delivery of high quality, non-redundant diagnostic based proactive healthcare. We intend to expand our RPM Platform to not only our Canadian clinics and ~~affiliate~~ affiliate clinics but to clinics and medically licensed providers throughout Canada and the United States.

Our Novo Connect Medical Technology Platform is currently in development and limited commercialization. Novo Connect is intended to be a cloud-based app designed as a secure patient-centered portal which will allow the integration of numerous source systems for patient interface by facilitating communication between the patient and the patient’s provider. The Novo Connect app will be developed for Web, iOS and Android application to optimize communication between source systems. Novo Connect is being designed to allow patients to have direct control of their overall healthcare and wellness by providing a suite of secure, reliable engagement features

58The success of our Medical Technology Platforms will be highly dependent upon our ability to develop relationships with both Canadian based and United States based medically licensed primary care providers and specialist in addition to multidisciplinary primary healthcare clinicians.

~~The~~Our success ~~of our Medical Technology Platforms~~ will ~~highly~~ be highly dependent upon our ability to develop relationships with ~~both~~our ~~Canadian~~patients, ~~based and~~primary ~~United~~care ~~States based~~ medically licensed ~~primary~~physicians, nurse ~~care~~practitioners, ~~providers~~ and ~~specialist~~specialists in addition to multidisciplinary primary ~~health~~healthcare ~~care~~ clinicians and practitioners. If we cannot generate relationships with these medical professionals to translate into service contracts or licensing agreements for our Medical Technology Platforms, we may need to cease the development and commercialization of each or all Medical Technology Platform.

Our success will highly be dependent upon our ability to develop relationship with our patients, primary care medically licensed physicians, nurse practitioners, and specialists in addition to multidisciplinary primary health care clinicians and practitioners. If we cannot generate relationships with these medical professionals to translate into service contracts or licensing agreements for our Medical Technology Platforms, we may need to cease the development and commercialization of each or all Medical Technology Platform.66

Our Medical Technology Platforms may not be accepted in the Canadian and United States marketplace.

Uncertainty exists as to whether our Medical Technology Platforms will be accepted by potential users; including, but not limited to third-party Canadian based and United States based primary care medically licensed physicians and specialists in various medical disciplines, multidisciplinary primary care clinicians and practitioners; as well as patients. A number of factors may limit the market acceptance of our Medical Technology Platforms including the price relative to other product offerings. There is a risk that primary care medically licensed physicians and specialists, multidisciplinary primary ~~health~~healthcare ~~care~~ clinicians or patient acceptance will be encouraged to continue to use other products and/or methods instead of ours. We are assuming that, notwithstanding the fact that our Medical Technology Platforms will be new in the market, primary care medically licensed physicians and specialists, multidisciplinary ~~health~~healthcare ~~care~~ clinicians, or patient acceptance will elect not to use each or all of our Medical Technology Platforms simply because it will provide ease of access and reduced costs for patients.

Primary care medically licensed physicians and specialists, multidisciplinary ~~health~~healthcare ~~care~~ clinicians and patients need to be persuaded that our Medical Technology Platform services are justified for the anticipated benefit, but there is no assurance that sufficient numbers of patients will be convinced to enable a successful market to develop for each or all of our Medical Technology Platforms.

In the event that we are not able to market and significantly increase the number of primary care medically licensed physicians and specialists, multidisciplinary ~~health~~healthcare ~~care~~ clinicians, or patients that use our Medical Technology Platforms, or if we are unable to charge the necessary prices, we may need to cease operating each or all of our Medical Technology Platforms.

Defects or malfunctions in our Medical Technology Platforms could hurt our reputation, sales and profitability.

The acceptance of our Medical Technology Platforms will depend upon their effectiveness and reliability. Each of our Medical Technology Platforms will be complex and will be continually modified and improved, and as such may contain undetected defects or errors when first introduced or as new versions are released. To the extent that defects or errors cause each or all of our Medical Technology Platforms to malfunction and our customers’ use of our Medical Technology Platforms is interrupted, our reputation could suffer, and our potential revenues could decline or be delayed while such defects are remedied. We may also be subject to liability for the defects and malfunctions.

There can be no assurance that, despite our testing, errors will not be found in each or all of our Medical Technology Platforms or new releases, resulting in loss of future revenues or delay in market acceptance, diversion of development resources, damage to our reputation, adverse litigation, or increased service, any of which would have a material adverse effect upon our business, operating results and financial condition.

Software failures, breakdowns in the operations of our servers and communications systems or the failure to implement system enhancements could harm our business.

The operational success of our Medical Technology Platforms will depend on the efficient and uninterrupted operation of our servers and communications systems. A failure of our network or data gathering procedures could impede services and could result in the loss of primary care medically licensed ~~physician~~physicians and specialists, multidisciplinary primary care clinicians or patients. While all our operations will have disaster recovery plans in place, they might not adequately protect us. Despite any precautions we take, damage from fire, floods, hurricanes, power loss, telecommunications failures, computer viruses, break-ins and similar events at our computer facilities could result in interruptions in the flow of data to our servers and from our servers to our clients. In addition, any failure by our computer environment to provide our required data communications capacity could result in interruptions in our service. In the event of a server failure, we could be required to transfer our client data collection operations to an alternative provider of server hosting services. Such a transfer could result in delays in our ability to deliver our products and services to our clients.

59Additionally, significant delays in the planned delivery of system enhancements, improvements, and inadequate performance of the systems once they are completed could damage our reputation and harm our business. Long-term disruptions in the infrastructure caused by events such as natural disasters, the outbreak of war, the escalation of hostilities and acts of terrorism, particularly involving cities in which we have offices, could adversely affect our businesses. Although we currently carry, and intend to continue to carry property and business interruption insurance for our business operations, our coverage might not be adequate to compensate us for all losses that may occur.

Additionally, significant delays in the planned delivery of system enhancements, improvements, and inadequate performance of the systems once they are completed could damage our reputation and harm our business. Long-term disruptions in the infrastructure caused by events such as natural disasters, the outbreak of war, the escalation of hostilities and acts of terrorism, particularly involving cities in which we have offices, could adversely affect our businesses. Although, we plan to carry property and business interruption insurance for our business operations, our coverage might not be adequate to compensate us for all losses that may occur.67

We face risks related to the storage of customers’ and their end users’ confidential and proprietary information.

Our Medical Technology Platforms are ~~being~~and will continue to be designed to maintain the confidentiality and security of our patients’ confidential and proprietary data stored on our server systems, which may include sensitive personal data. However, any accidental or willful security breaches or other unauthorized access to these data could expose us to liability for the loss of such information, time-consuming ~~and~~ and expensive litigation and other possible liabilities as well as negative publicity. Techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are difficult to recognize and react to. We may be unable to anticipate these ~~techniques~~ techniques or implement adequate preventative or reactionary measures.

We might incur substantial expense to further develop each or all of our Medical Technology Platforms which may never become sufficiently successful.

Our business growth initiatives include the successful development, launch and operations of each and all of our Medical Technology Platforms. Although management will take every precaution to ensure that our Medical Technology Platforms will, with a high degree of likelihood, achieve commercial success, there can be no assurance that this will be the case. The causes for failure of each or all of our Medical Technology Platforms, once commercialized, can be numerous, including:

	●	market demand for each or all of our Medical Technology Platforms proves to be smaller than we expect;

	●	further each or all of our Medical Technology Platform’s development (i) turns out to be costlier than anticipated or takes longer; (ii) requires significant adjustment post commercialization, rendering the each or all of our Medical Technology Platforms uneconomic or extending considerably the likely investment return period; (iii) additional regulatory requirements may increase the overall costs of the development; patent conflicts or unenforceable intellectual property rights; and (iv) primary care medically licensed physicians and specialists and clients may be unwilling to adopt and/or use each or all of our Medical Technology Platforms.

	●	Compliance with changing regulations concerning corporate governance and public disclosure may result in additional expenses.

We ~~cannot~~will be ~~certain~~applying ~~that~~to weobtain trademark and copyright protection, and possibly patent protection as applicable, but cannot guarantee we will obtain ~~patents~~these applications and protections for each or all of our Medical Technology Platforms ~~or that such patent will protect us from competitors~~.

We believe that our success and competitive position will depend in part on our ability to submit for, obtain, and maintain ~~patents~~copyright, trademark, and possibly patent protection for each or all of our Medical Technology Platforms~~, which is both costly and time-consuming~~. We are still in the process of evaluating the patent ~~potential~~ potential of each and all of our Medical Technology Platforms given the various applications are open source. The Patent Office typically requires 12-24 months or more to process a patent application with the entire patent process being both costly and time-consuming. If ~~There~~the Company pursues copyright, trademark and/or patent application and protection, there can be no assurance that any of our potential patent applications will be approved. ~~There~~Also, there can be no assurance that any copyright, trademark or potential ~~patent~~ patents issued or licensed to us will provide ~~us with~~ protection against competitive products, protect us against changes in industry trends which we have may not have anticipated or otherwise protect the commercial viability of each or all of our Medical Technology ~~Platforms,~~ ~~or that challenges will not be instituted against the validity or enforceability of any of our future patents or, if instituted, that such challenges will not be successful~~Platforms. The cost of litigation to uphold the validity of a copyright, trademark, and/or patent and enforce it against infringement can be substantial. Even issued patents may later be modified or revoked by the Patent and Trademark Office or in legal proceedings. Patent applications in the United States and Canada are maintained in secrecy until the patent issues and, since publication of patents tends to lag actual discoveries, we cannot be certain that if we obtain patents for our product, we were the first creator of the inventions covered by a pending -patent applications or the first to file patent applications on such inventions. As of August 31, 2024, the Company has not filed any trademark, copyright or patent applications related to our Medical Technology Platforms.

Government regulation of the Internet and e-commerce is evolving, and unfavorable changes could substantially harm our business and results of operations.

We are subject to general business regulations and laws as well as federal, state and provincial regulations and laws specifically governing the internet and e-commerce. Existing and future laws and regulations may impede the growth of the use of the internet, availability of economic broadband access, or other online services, and increase the cost of providing our digital delivery of content and services. These regulations and laws may cover taxation, tariffs, user privacy, data protection, pricing, content, copyrights, distribution, electronic contracts and other communications, consumer protection, broadband internet access and the characteristics and quality of services. It is not clear how existing laws governing issues such as property ownership, sales, use and other taxes, libel and personal privacy apply to the internet and e-commerce. Unfavorable resolution of these issues may harm our business and results of operations.

Risks Related to the United States Regulatory System as to Medicinal CBD Products

Possible yet unanticipated changes in U.S. federal and state law could cause any products that we ~~intend~~may to launch, containing hemp-derived CBD oil, to be illegal, or could otherwise prohibit, limit or restrict any of our prospective products containing CBD.

Until 2014, when 7 U.S. Code §5940 became federal law as part of the Agricultural Act of 2014 (the “2014 Farm Act”), products containing oils derived from hemp, notwithstanding a minimal or non-existing THC content, were classified as Schedule I illegal drugs. The 2014 Farm Act expired on September 30, 2018, and was thereafter replaced by the Agricultural Improvement Act of 2018 on December 20, 2018 (the “2018 Farm Act “), which amended various sections of the U.S. Code, thereby removing hemp, defined as cannabis with less than 0.3% of THC, from Schedule 1 status under the Controlled Substances Act (“CSA”), and legalizing the cultivation and sale of hemp at the federal level, subject to compliance with certain federal requirements and state law, amongst other things. THC is the psychoactive component of plants in the cannabis family generally identified as marihuana or marijuana. We anticipate our prospective medical CBD products will be federally legal in the United States in that they will contain less than 0.3% of THC in compliance with the 2018 Farm Bill guidelines and will have no psychoactive effects on our patients and customers bodies. Notwithstanding, there is no assurance that the 2018 Farm Act will not be repealed or amended such that our products containing hemp-derived CBD would once again be deemed illegal under federal law.

The 2018 Farm Bill also shifted regulatory authority from the Drug Enforcement Administration to the Department of Agriculture. The 2018 Farm Bill did not change the United States Food and Drug Administration’s (“FDA”) oversight authority over CBD products. The 2018 Farm Act delegated the authority to the states to regulate and limit the production of hemp and hemp derived products within their territories. Although many states have adopted laws and regulations that allow for the production and sale of hemp and hemp derived products under certain circumstances, no assurance can be given that such state laws may not be repealed or amended such that our intended products containing hemp-derived CBD would once again be deemed illegal under the laws of one or more states now permitting such products, which in turn would render such intended products illegal in those states under federal law even if the federal law is unchanged. In the event of either repeal of federal or of state laws and regulations, or of amendments thereto that are adverse to our prospective medicinal CBD products, we may be restricted or limited with respect to those products that we may sell or distribute, which could adversely impact our intended business plan with respect to such intended products.

Additionally, the FDA has indicated its view that certain types of products containing CBD may not be permissible under the United States Federal Food, Drug and Cosmetic Act (“FDCA”). The FDA’s position is related to its approval of Epidiolex, a marijuana-derived prescription medicine to be available in the United States. The active ingredient in Epidiolex is CBD. On December 20, 2018, after the passage of the 2018 Farm Bill, FDA Commissioner Scott Gottlieb issued a statement in which he reiterated the FDA’s position that, among other things, the FDA requires a cannabis product (hemp-derived or otherwise) that is marketed with a claim of therapeutic benefit, or with any other disease claim, to be approved by the FDA for its intended use before it may be introduced into interstate commerce and that the FDCA prohibits introducing into interstate commerce food products containing added CBD, and marketing products containing CBD as a dietary supplement, regardless of whether the substances are hemp-derived. Although our prospective medicinal CBD product offerings will comply with applicable federal and state laws and regulations, legal proceedings alleging violations of such laws could have a material adverse effect on our business, financial condition and results of operations.

6169

FDA regulation could negatively affect the hemp industry, which would directly affect our financial condition.

The FDA may seek expanded regulation of hemp under the FDCA. Additionally, the FDA may issue rules and regulations, including certified good manufacturing practices, or cGMP’s, related to the growth, cultivation, harvesting and processing of hemp. Clinical trials may be needed to verify efficacy and safety. It is also possible that the FDA would require that facilities where hemp is grown register with the FDA and comply with certain federally prescribed regulations. In the event some or all of these regulations are imposed, we do not know what the impact would be on the hemp industry, including what costs, requirements and possible prohibitions may be enforced. If we or our partners are unable to comply with the regulations or registration as prescribed by the FDA, we and or our partners ~~(including C2M)~~ may be unable to continue to operate their and our business in its current or planned form or at all.

Sources of hemp-derived CBD depend upon legality of cultivation, processing, marketing and sales of products derived from those plants under state law of the United States.

Hemp-derived CBD can only be legally produced in states that have laws and regulations that allow for such production and that comply with the 2018 Farm Act, apart from state laws legalizing and regulating medical and recreational cannabis or marijuana, which remains illegal under federal law and regulations. Initially, we intend to use hemp-derived CBD from growers and processors in Canada where such production is legal to produce our prospective medicinal CBD products. Although hemp and hemp seeds may legally be imported into the United States, the importation of products containing THC, including CBD products, into the United States may be illegal if the CBD products cause THC to enter the human body. In that case, we will be required to purchase all our hemp-derived prospective medicinal CBD products from licensed growers and processors in states in the United States where such production is legal. In addition, as described in the preceding risk factor, in the event of repeal or amendment of laws and regulations which are now favorable to the cannabis/hemp industry in such states, we would be required to locate new suppliers in states with laws and regulations that qualify under the 2018 Farm Act. If we were to be unsuccessful in arranging new sources of supply of our raw ingredients, or if our raw ingredients were to become legally unavailable, our intended business plan with respect to such products could be adversely impacted.

Because our distributors may only sell and ship our products containing hemp-derived CBD in states that have adopted laws and regulations qualifying under the 2018 Farm Act, a reduction in the number of states having such qualifying laws and regulations could limit, restrict or otherwise preclude the sale of intended products containing hemp-derived CBD.

The interstate shipment of hemp-derived CBD from one state to another is legal only where both states have laws and regulations that allow for the production and sale of such products and that qualify under the 2018 Farm Act. Therefore, the marketing and sale of our intended products containing hemp-derived CBD is limited by such factors and is restricted to such states. Although we believe we may lawfully sell any of our finished products, including those containing CBD, in a majority of states, a repeal or adverse amendment of laws and regulations that are now favorable to the distribution, marketing and sale of finished products we intend to sell could significantly limit, restrict or prevent us from generating revenue related to our products that contain hemp-derived CBD. Any such repeal or adverse amendment of now favorable laws and regulations could have an adverse impact on our business plan with respect to such products.

Due to projected expansion into the CBD industry, we may have a difficult time obtaining the various insurances that are desired to operate our business, which may expose us to additional risk and financial liability.

Insurance that is otherwise readily available, such as general liability, and directors and officer’s insurance, may become more difficult for us to find, and more expensive, due to our intended launch of certain medically related products containing hemp-derived CBD. There are no guarantees that we will be able to find such insurances in the future, or that the cost will be affordable to us. If we are forced to go without such insurances, it may prevent us from entering into certain business sectors, may inhibit our growth, and may expose us to additional risk and financial liabilities.

6270

Our products may not meet health and safety standards or could become contaminated.

We have adopted various quality, environmental, health and safety standards. We do not have control over all the third parties involved in the manufacturing of our products and their compliance with government health and safety standards. Even if our products meet these standards, they could otherwise become contaminated. A failure to meet these standards or contamination could occur in our operations or those of our manufacturers, distributors, or suppliers. This could result in expensive production interruptions, recalls and liability claims. Moreover, negative publicity could be generated from false, unfounded, or nominal liability claims or limited recalls. Any of these failures or occurrences could negatively affect our business and financial performance.

The sale of our products involves product liability and related risks that could expose us to significant insurance and loss expenses.

We face an inherent risk of exposure to product liability claims if the use of our products results in, or is believed to have resulted in, illness or injury. Our products contain combinations of ingredients, and there is little long-term experience with the effect of these combinations. In addition, interactions of these products with other products, prescription medicines and over-the-counter drugs have not been fully explored or understood and may have unintended consequences. While our third-party manufacturers perform tests in connection with the formulations of our products, these tests are not designed to evaluate the inherent safety of our products.

Any product liability claim may increase our costs and adversely affect our revenue and operating income. Moreover, liability claims arising from a serious adverse event may increase our costs through higher insurance premiums and deductibles and may make it more difficult to secure adequate insurance coverage in the future. In addition, our product liability insurance may fail to cover future product liability claims, which, if adversely determined, could subject us to substantial monetary damages.

Confusion between legal CBD and illegal ~~Cannabis~~cannabis.

There is the risk that confusion or uncertainty surrounding products that are offered with regulated cannabis could occur on the state or federal level and impact us. We may have difficulty with establishing banking relationships, working with investment banks and brokers who would be willing to offer and sell our securities or accept deposits from shareholders, and auditors willing to certify our financial statements if we are confused with businesses that are in the cannabis business. Any of these additional factors, should they occur, could also affect our business, prospects, assets or results of operation could have a material adverse effect on the business, prospects, results of operations or financial condition of the Company.

Risks Related to our Common Stock and our Status as a Public Company

AsTrading aon ~~result~~the ofOTC ~~being~~Markets ais ~~public~~volatile ~~company~~and sporadic, wewhich ~~are~~could ~~subject~~depress tothe ~~additional~~market ~~reporting~~price ~~and~~of ~~corporate~~our ~~governance~~common ~~requirements~~stock ~~that~~and ~~will~~make ~~require~~it ~~additional~~difficult for our security ~~management~~holders ~~time,~~to ~~resources,~~resell ~~and~~their ~~expense~~common stock.

AsOur acommon ~~public~~stock ~~company~~currently wetrades ~~are~~on ~~obligated~~the toOTC ~~file~~Pink ~~with~~tier of OTC Market Group LLC’s Marketplace under the ~~SEC~~symbol ~~annual~~“NVOS.” ~~and~~The OTC ~~quarterly~~Market ~~information~~is a network of security dealers who buy and ~~other~~sell ~~reports~~stock. ~~that~~The dealers are ~~specified~~connected inby ~~the~~a ~~Securities~~computer network that provides information ~~Exchange~~on ~~Act~~current of“bids” ~~1934~~and “asks,” as ~~amended~~well ~~(the~~as ~~“Exchange~~volume ~~Act”)~~information. WeTrading ~~are~~in ~~also~~securities ~~subject~~quoted toon ~~other~~the ~~reporting~~OTC Markets is often thin and ~~corporate~~characterized ~~governance~~by ~~requirements~~wide fluctuations in trading prices, due to many factors, some of which may have little to do with ~~under~~our operations or business prospects. This volatility could depress the ~~Sarbanes-Oxley~~market ~~Act~~price of ~~2002~~our common stock for reasons unrelated to operating performance. Moreover, asthe ~~amended~~OTC Markets is not a stock exchange, and trading of securities on the ~~rules~~OTC ~~and~~Markets ~~regulations~~is ~~promulgated~~often ~~thereunder,~~more ~~all~~sporadic than the trading of ~~which~~securities ~~impose~~listed ~~significant compliance~~on ~~and~~a ~~reporting~~national ~~obligations~~securities ~~upon~~exchange uslike ~~and~~The ~~require~~Nasdaq usStock toMarket ~~incur~~or ~~additional~~the ~~expense~~New York Stock Exchange. These factors may result in ~~order~~investors tohaving ~~fulfill~~difficulty ~~such~~reselling ~~obligations~~any shares of our common stock.

Our stock price is likely to be highly volatile because of several factors, including a limited public float.

The market price of our common stock has been volatile in the past and the market price of our common stock is likely to be highly volatile in the future. You may not be able to sell shares of our common stock following periods of volatility because of the market’s adverse reaction to volatility.

Other factors that could cause such volatility may include, among other things:

● actual or anticipated fluctuations in our operating results; ● the absence of securities analysts covering us and distributing research and recommendations about us; ● we may have a low trading volume; ● overall market fluctuations; ● announcements concerning our business or those of our competitors; ● actual or perceived limitations on our ability to raise capital when we require it, and to raise such capital on favorable terms; ● conditions or trends in the industry; ● litigation; ● changes in market valuations of other similar companies; ● future sales of common stock; ● departure of key personnel or failure to hire key personnel; and ● general market conditions.

● we may have a low trading volume for a number of reasons, including that a large portion of our stock is closely held; ● overall stock market fluctuations; ● announcements concerning our business or those of our competitors; ● actual or perceived limitations on our ability to raise capital when we require it, and to raise such capital on favorable terms; ● conditions or trends in the industry; ● litigation; ● changes in market valuations of other similar companies; ● future sales of common stock; ● departure of key personnel or failure to hire key personnel; and ● general market conditions.

Any of these factors could have a significant and adverse impact on the market price of our common stock and/or warrants. In addition, the stock market in general has at times experienced extreme volatility and rapid decline that has often been unrelated or disproportionate to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock and/or warrants, regardless of our actual operating performance.

Our common stock is a “penny stock” under SEC rules. It may be more difficult to sell securities classified as “penny stock.”

Our common stock is a “penny stock” under applicable SEC rules (generally defined as non-exchange traded stock with a per-share price below $5.00). Unless we successfully list our common stock on a national securities exchange, or maintain a per-share price above $5.00, these rules impose additional sales practice requirements on broker-dealers that recommend the purchase or sale of penny stocks to persons other than those who qualify as “established customers” or “accredited investors.” For example, broker-dealers must determine the appropriateness for non-qualifying persons of investments in penny stocks. Broker-dealers must also provide, prior to a transaction in a penny stock not otherwise exempt from the rules, a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, disclose the compensation of the broker-dealer and its salesperson in the transaction, furnish monthly account statements showing the market value of each penny stock held in the customer’s account, provide a special written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser’s written agreement to the transaction.

Legal remedies available to an investor in “penny stocks” may include the following:

	●	If a “penny stock” is sold to the investor in violation of the requirements listed above, or other federal or states securities laws, the investor may be able to cancel the purchase and receive a refund of the investment.
	●	If a “penny stock” is sold to the investor in a fraudulent manner, the investor may be able to sue the persons and firms that committed the fraud for damages.

These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our common stock and may affect your ability to sell our common stock.

Many brokerage firms will discourage or refrain from recommending investments in penny stocks. Most institutional investors will not invest in penny stocks. In addition, many individual investors will not invest in penny stocks due, among other reasons, to the increased financial risk generally associated with these investments.

For these reasons, penny stocks may have a limited market and, consequently, limited liquidity. We can give no assurance at what time, if ever, our common stock will not be classified as a “penny stock” in the future.

If we fail to maintain effective internal control over financial reporting, the price of our securities may be adversely affected.

Our internal control over financial reporting may have weaknesses and conditions that could require correction or remediation, the disclosure of which may have an adverse impact on the price of our common stock. We are required to establish and maintain appropriate internal control over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely affect our public disclosures regarding our business, prospects, financial condition or results of operations. In addition, management’s assessment of internal control over financial reporting may identify weaknesses and conditions that need to be addressed in our internal control over financial reporting or other matters that may raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting or disclosure of management’s assessment of our internal control over financial reporting may have an adverse impact on the price of our common stock.

As a result of being a public company, we are subject to additional reporting and corporate governance requirements that will require additional management time, resources, and expense.

As a public company we are obligated to file with the SEC annual and quarterly information and other reports that are specified in the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We are also subject to other reporting and corporate governance requirements under the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated thereunder, all of which impose significant compliance and reporting obligations upon us and require us to incur additional expense in order to fulfill such obligations.

We are required to comply with certain provisions of Section 404 of the Sarbanes-Oxley Act and if we fail to continue to comply, our business could be harmed and the price of our securities could decline.

Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act require an annual assessment of internal control over financial reporting, and for certain issuers an attestation of this assessment by the issuer’s independent registered public accounting firm. The standards that must be met for management to assess the internal control over financial reporting as effective are evolving and complex, and require significant documentation, testing, and possible remediation to meet the detailed standards. We expect to incur significant expenses and to devote resources to Section 404 compliance on an ongoing basis. It is difficult for us to predict how long it will take or costly it will be to complete the assessment of the effectiveness of our internal control over financial reporting for each year and to remediate any deficiencies in our internal control over financial reporting. As a result, we may not be able to complete the assessment and remediation process on a timely basis. In the event that our Chief Executive Officer or Principal Financial Officer determines that our internal control over financial reporting is not effective as defined under Section 404, we cannot predict how regulators will react or how the market prices of our securities will be affected; however, we believe that there is a risk that investor confidence and the market value of our securities may be negatively affected.

Shares eligible for future sale may adversely affect the market.

From time to time, certain of our stockholders may be eligible to sell all or some of their shares of common stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144 promulgated under the Securities Act, subject to certain limitations. In general, pursuant to Rule 144, non-affiliate stockholders may sell freely after six months, subject only to the current public information requirement. Affiliates may sell after six months, subject to the Rule 144 volume, manner of sale (for equity securities), current public information, and notice requirements. Of the approximately 1719,~~291~~730,~~192~~247 shares of our common stock outstanding as of December 1417, ~~2023~~2024, approximately 1418,~~653~~101,~~019~~244 shares are tradable without restriction. Given the limited trading of our common stock, ~~resale~~re-sale of even a small number of ~~shares~~ shares of our common stock pursuant to Rule 144 or an effective registration statement may adversely affect the market price of our common stock.

Substantial future sales of shares of our common stock could cause the market price of our common stock to decline.

The market price of shares of our common stock could decline as a result of substantial sales of our common stock, particularly sales by our directors, executive officers and significant stockholders, a large number of shares of our common stock becoming available for sale or the perception in the market that holders of a large number of shares intend to sell their shares.

Provisions of our amended and restated articles of incorporation and bylaws may delay or prevent a takeover which may not be in the best interests of our stockholders.

Provisions of our amended and restated articles of incorporation and our bylaws, as amended, may be deemed to have anti-takeover effects, which include when and by whom special meetings of our stockholders may be called, and may delay, defer or prevent a takeover attempt. Further, our amended and restated articles of incorporation authorize the issuance of up to 1,000,000 shares of preferred stock with such rights and preferences as may be determined from time to time by our board of directors in their sole discretion. Our board of directors may, without stockholder approval, issue series of preferred stock with dividends, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of our common stock.

We do not expect to pay dividends in the foreseeable future.

We do not intend to declare dividends for the foreseeable future, as we anticipate that we will reinvest any future earnings in the development and growth of our business. Therefore, investors will not receive any funds unless they sell their common stock, and stockholders may be unable to sell their shares on favorable terms. We cannot assure you of a positive return on investment or that you will not lose the entire amount of your investment in our common stock.

Risk Factors Related to Product Manufacturing

We may be unable to obtain raw materials for our current and planned products due to unexpected shortages, lack of availability, increased costs and price fluctuations, which could limit our ability to manufacture any products and could adversely affect our sales and results of operations.

We currently manufacture nutraceutical products that we sell to private label customers, and we also plan to begin manufacturing and selling our own branded nutraceutical products. The principal raw materials used in the manufacturing process in the Company’s current and planned nutraceutical business include vitamins and minerals both of natural and synthetic source, herbal ingredients and vegetable/fruit powders/extracts either natural or certified organic, other nutritional supplements such as soft-gel, capsules and tablets in bulk form, powdered proteins either regular, plant or certified organic, powdered amino acid and energy/muscle building ingredients, vegetable and gelatin capsules, processing excipients, coating materials, and the necessary components for packaging the finished products.

The raw materials are available from numerous sources within the United States, Canada and abroad as are the vegetable and gelatin capsules, coating materials and packaging materials. However, the availability of such raw materials is subject to change. For example an unexpected interruption of supply or a significant increase in the cost of raw materials we need, for any reason, such as regulatory requirements, changes in governmental trade and agricultural programs, increased global competition for resources and consumer demand, import restrictions, loss of certifications or licenses, disruption of distribution channels as a result of weather, terrorism or acts of war, fire, earthquake, or other natural or man-made disaster, a work stoppage or other labor-related disruption, failure in supply or other logistical channels, electrical outages, or other events, could result in significant cost increases and/or shortages of our current and planned products. Additionally, the prices of packaging materials and freight are subject to fluctuations which would cause the Company’s costs to increase and would also cause the Company to increase our prices. If our competitors do not also increase their prices, customers and consumers may choose to purchase competing products or may shift purchases to lower-priced private label or other value offerings which may adversely affect the Company’s results of operations. Further, we currently use, as well as plan to use pouches which are prepared by third parties in the manufacturing of our current and planned products, and such pouches may either become unavailable or may become damaged by the third parties that prepare them. Our inability to obtain adequate supplies of raw materials in a timely manner or a material increase in the price of the raw materials used in our products due to any of the foregoing, could limit our ability to manufacture any products and could have a material adverse effect on our business, financial condition and results of operations.

Our planned acquisition of raw materials from international sources subjects us to risk from currency fluctuations.

We plan in part to acquire raw materials from international sources, which subjects us to risks from currency fluctuations, such as changes in foreign exchange rates. For example, if the value of a foreign currency used to purchase from an international supplier were to increase compared to the value of the U.S. dollar, we could receive less value for purchases of raw materials when purchasing in such other country, which could force us to increase our prices, or settle for lower margins on our product sales. If either of these outcomes occur, our results of operations may be harmed.

Our business is subject to inherent risks relating to product liability and personal injury claims, our quality control processes may fail to detect issues in the ingredients we use to make our products and our product liability insurance may be insufficient to cover possible claims against us which would adversely affect our operating results.

Our Company, like other manufacturers, wholesalers and distributors of nutraceutical products, faces an inherent risk of exposure to product liability and personal injury claims if, among other things, the use or ingestion of our products, results in sickness or injury. Our current products consist of tablets, powdered beverages, dietary supplements, pain creams, liquids, gels, minerals, herbs and other ingredients that are classified as foods or dietary supplements. If the materials that we use to create these current products or our planned products are contaminated and if our quality control processes fail to detect issues in these materials, we may be obligated to recall affected products, and if we are found liable for product liability or personal injury claims, we could be required to pay substantial monetary damages. Further, even if we successfully defend ourselves against this type of claim, we could be required to spend significant management, financial and other resources, which could disrupt our business and harm our reputation. We currently maintain a product liability insurance policy that provides up to CAD$5,000,000 in product liability coverage. However, there can be no assurance that our existing or future insurance coverage will be sufficient to cover any possible product liability risks or that such insurance will continue to be available to us on economically feasible terms. In the event that any of the foregoing occurs, we risk the loss of net revenues, increased administrative costs and will likely suffer an adverse effect on our operating results.

We do not have any long-term contracts with our suppliers or with our customers, and we do not have many written contracts with our customers, and if we can’t maintain these relationships or if we or our suppliers experience manufacturing problems or delays, our financial results will be negatively affected.

We do not have any long-term contracts with our suppliers or with our customers for our current or planned products. We also do not have many written contracts with our customers. There can be no assurance that these suppliers will continue to sell to us on prior or current terms, or at all and likewise there can also be no assurance that our customers will continue to purchase from us or that we can obtain customers to purchase our planned products. We may not be able to maintain our relationships with our suppliers and customers, or we may be unable to find alternate suppliers or customers in a timely fashion. Should this occur, our revenues and results of operations will be negatively affected. Additionally, we or our suppliers may encounter unforeseen delays or shortfalls in manufacturing, and our suppliers’ production processes may have to change to accommodate any significant future expansion of our manufacturing capacity, which may increase our or our suppliers’ manufacturing costs, delay production of our current and planned products, reduce our product gross margin and adversely impact our business. If we are unable to keep up with demand for our current and planned products by maintaining our relationships with our suppliers or successfully manufacturing and shipping our products in a timely manner, our revenue could be impaired, market acceptance for our current and planned products could be adversely affected and our customers might instead purchase our competitors’ products. In addition, developing manufacturing procedures for new products may require developing specific production processes for those products. Developing such processes could be time -consuming and any unexpected difficulty in doing so can delay the introduction of a product.

~~Our revenues are highly dependent upon two private label distributor customers.~~75

Our revenues are ~~concentrated and~~ highly dependent onupon ~~two~~ private -label distributor customers ~~which comprise most of our revenues from our current manufacturing operations~~. All sales made under a private label relationship are made on a purchase order basis and there are no long-term contracts with respect to any private label relationships. There can be no assurance that our existing private label relationships will continue in the future or that we will be able to obtain new private label relationships on an ongoing basis, if at all. Our private label customers can reduce the products they order from us or cease ordering products from us at any time without notice. There can be no assurance that these private label customers will continue to place orders with us, that orders by such customers will continue at their previous levels or that we can replace any such lost business. Should this occur, our revenues and results of operations will be negatively affected.

67Our revenues are highly dependent on private-label distributor customers which comprise most of our revenues from our current manufacturing operations. All sales made under a private label relationship are made on a purchase order basis and there are no long-term contracts. There can be no assurance that our existing private label relationships will continue in the future or that we will be able to obtain new private label relationships on an ongoing basis, if at all. Our private label customers can reduce the products they order from us or cease ordering products from us at any time without notice. There can be no assurance that these private label customers will continue to place orders with us, that orders by such customers will continue at their previous levels or that we can replace any such lost business. Should this occur, our revenues and results of operations will be negatively affected.

Our business is subject to numerous laws and regulations and compliance with existing, as well as new laws and regulations, could increase our costs significantly and adversely affect our financial results.

The processing, formulation, manufacturing, packaging, labeling, advertising, sale and distribution of our current and planned nutraceutical products are subject to regulation by several U.S. federal agencies, including the Food and Drug Administration (“FDA”), the Federal Trade Commission (“FTC”), the Consumer Product Safety Commission, the Department of Agriculture and the Environmental Protection Agency, as well as various state, local and international laws and agencies of the localities in which our current and planned products are, and will be, manufactured and sold. For example, the FDA regulates our products to ensure that the products are not adulterated or misbranded. Failure to comply with FDA requirements may result in, among other things, injunctions, product withdrawals, recalls, product seizures, fines and criminal prosecutions. Additionally, once we begin direct sales and marketing of our planned Company branded products, our advertising will be subject to regulation by the FTC. In recent years, the FTC has initiated numerous investigations of dietary and nutrition supplement products and companies. Further some states also permit advertising and labeling laws to be enforced by attorney generals, who may seek relief for consumers, seek class action certifications, seek class wide damages and product recalls of products sold by us. Compliance with these government regulations may prevent or delay the introduction, or require the reformulation, of our current and planned products, and additionally these governmental authorities may commence regulatory or legal proceedings against us which could restrict the permissible scope of our current or planned product or the ability to sell our products in the future. Additionally, any such government actions would result in costs to us, including lost revenues from any additional products that we are required to remove from the market, which additional costs could be material. Any such government actions also could lead to liability and reduced growth prospects. Moreover, there can be no assurance that new laws or regulations imposing more stringent regulatory requirements on the nutraceutical industry will not be enacted which could require reformulation of certain products to meet new standards, recalls or discontinuance of certain products that cannot be reformulated, additional record-keeping requirements, increased documentation of the properties of certain products, additional or different labeling, additional scientific substantiation, adverse event reporting or other new requirements. If our operations are found to be in violation of any laws or any other governmental regulations that apply to us, or if we are unable to keep up with changing laws and regulations, we may be subject to penalties, including, without limitation, civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our financial results.

We may be involved in lawsuits or proceedings to protect or enforce our intellectual property rights or to defend against infringement claims, which could be expensive and time consuming. Additionally, our inability to protect our intellectual property rights could reduce the value or our current and planned products.

Our business is dependent in part upon our ability to use intellectual property rights to protect our current and planned products from competition and on our products not infringing on the patents and proprietary rights of other parties. To protect our current and planned products, we rely, and intend to rely on a combination of trade secrets, patent and other intellectual property laws, employment, confidentiality and invention assignment agreements with our employees and contractors, and confidentiality agreements and protective contractual provisions with our partners, licensors and other third parties. These methods, however, afford us only limited protection against competition from other products. Also, we cannot ensure that our formulas and proprietary information, are not leaked to other parties by anyone that obtains access to same. To date, none of our current or planned formulas are patented, although we maintain manufacturing trade secrets, we believe that most competent manufacturers have the skillset necessary to replicate such formulas. As such, third parties could copy our products or sell similar products to our distributors and/or customers. Our competitors may have or develop equivalent or superior manufacturing and design skills and may develop an enhancement to our formulations that will be patentable or otherwise protected from duplication by others. We may also infringe on the patents of other parties. Litigation may be necessary to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of the proprietary rights of others. Litigation or interference proceedings could result in substantial costs and diversion of resources and management attention. In addition, in an infringement proceeding, a court may decide that a patent of ours, if we obtain any patents in the future, is not valid or is unenforceable or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology. An adverse determination of any litigation or defense proceedings could put one or more of our patents, if we acquire any in the future, at risk of being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing. In addition, we may be enjoined from marketing one or more of our current or planned products if a court finds that such products infringe the intellectual property rights of a third party. Further, we may be unable or unwilling to strictly enforce our intellectual property rights, including our trademarks, from infringement. Our inability to obtain and/or failure to enforce our intellectual property rights could diminish the value of our current and planned product offerings and have a material adverse effect on our business, prospects, results of operations, and financial condition.

The commercial success of our planned products is dependent, in part, on factors outside our control.

We currently manufacture nutraceutical products that we sell to private label customers, and we also plan to begin manufacturing and selling our own branded nutraceutical products. The commercial success of our planned products is dependent upon unpredictable and volatile factors beyond our control, such as the success of our competitors’ products. Our failure to attract market acceptance and a sustainable competitive advantage over our competitors would materially harm our business.

If we fail to increase our brand recognition, we may face difficulty in obtaining customers for our planned products.

Because we have not yet started selling our own branded products, we currently do not have strong brand identity or brand loyalty. We believe that establishing and maintaining brand identity and brand loyalty is critical to attracting customers once we have commercially viable branded products. Maintaining and enhancing our brand recognition in a cost-effective manner is critical to achieving widespread acceptance of future products and is an important element in our effort to obtain and increase our customer base. Successful promotion of our brand will depend largely on our ability to maintain a sizeable and active customer base, our marketing efforts and our ability to provide reliable and useful products at competitive prices. Brand promotion activities may not yield increased revenue, and even if they do, any increased revenue may not offset the expenses we will incur in building our brand. If we fail to successfully promote and maintain our brand, or if we incur substantial expenses in an unsuccessful attempt to promote and maintain our brand, we may fail to attract enough new customers or retain our existing customers to the extent necessary to realize a sufficient return on our brand-building efforts, in which case our business, operating results and financial condition, would be materially adversely affected.

If our products do not have the healthful effects intended, or if there is adverse publicity or consumer perception of our products and any similar products distributed by others, our reputation could be harmed and our business may suffer.

Many of our current and planned products contain innovative ingredients or combinations of ingredients. There is little long-term experience with human or other animal consumption of certain of these ingredients or combinations thereof in concentrated form. Our current and planned products could have certain side effects if not taken as directed or if taken by a consumer that has certain medical conditions. Furthermore, there can be no assurance that any of the products, even when used as directed, will have the effects intended or will not have harmful side effects. Should our current or planned products cause unwanted side effects or not have the results intended, it could have a material adverse effect on our business, financial condition, and results of operations. Additionally, we believe we are, and will be, highly dependent upon positive consumer perceptions of the safety and quality of our current and planned products as well as similar products distributed by other nutraceutical companies. Consumer perception of nutraceutical and our current and planned products, as well as the products sold by our private label customers, in particular, can be substantially influenced by scientific research or findings, national media attention and other publicity about product use. Adverse publicity from these sources regarding the safety, quality or efficacy of nutraceuticals could have a negative effect on us. The mere publication of news articles or reports asserting that such products may be harmful or questioning their efficacy could have a material adverse effect on our business, financial condition and results of operations, regardless of whether such news articles or reports are scientifically supported or whether the claimed harmful effects would be present at the dosages recommended for such products.

The nutraceuticals industry is highly competitive, and our failure to compete effectively could adversely affect our market share, financial condition, and future growth.

The industry of nutraceutical and wellness-related supplements and products we produce as well as intend to produce is highly competitive with respect to price, brand and product recognition and new product introductions. Several of our competitors are larger, more established and possess greater financial, personnel, distribution and other resources. We face competition (a) from large nationally known manufacturers, private label brands and many smaller manufacturers of dietary and nutrition supplements; and (b) in the mass-market distribution channel from manufacturers, major private label manufacturers and others. Private label brands at mass-market chains represent substantial sources of income for these merchants and the mass-market merchants often support their own labels at the expense of other brands. As such, the growth of our current and planned products within the nutraceutical industry are highly competitive and uncertain. If we cannot compete effectively, we may not be profitable.

The purchase of many of our planned and current products are discretionary and may be negatively impacted by adverse trends in the general economy and make it more difficult for us to generate revenues.

Our business is affected by general economic conditions since our current and planned products are discretionary and we depend, to a significant extent, upon a number of factors relating to discretionary consumer spending. These factors include economic conditions and perceptions of such conditions by consumers, employment rates, the level of consumers’ disposable income, business conditions, interest rates, consumer debt levels and availability of credit. Consumer spending on our current and planned products may be adversely affected by changes in general economic conditions. Our operating results are impacted by the health of the North American economies. Our business and financial performance may be adversely affected by current and future economic conditions, such as a reduction in the availability of credit, financial market volatility or recession. Additionally, we may experience difficulties in scaling our operations to react to economic pressures in the United States.

We may not be able to anticipate consumer preferences and trends within the nutraceutical industry, which could negatively affect acceptance of our planned and current products by retailers and consumers and result in a significant decrease in our revenues.

We currently manufacture nutraceutical products that we sell to private label customers, and we also plan to begin manufacturing and selling our own branded nutraceutical products. Our planned and current products must appeal to a broad range of consumers, whose preferences cannot be predicted with certainty and are subject to rapid change. Our products will need to successfully meet constantly changing consumer demands. If our products are not successfully received by our customers, our business, financial condition, results of operations and prospects may be harmed.

We may experience greater than expected product returns, which might adversely affect our sales and results of operations.

We currently manufacture nutraceutical products that we sell to private label customers, and we also plan to begin manufacturing and selling our own branded nutraceutical products. Once we start selling our own branded products, such products may be returned for various reasons, including expiration dates. Any increase in product returns could reduce our results of operations.

An unexpected interruption in our warehousing facilities or if there is a lack of capacity at our warehousing facilities, it could reduce our sales and margins.

We store products in our warehouses that we then ship to other retailers and serve as fulfilling distribution hubs to other retailers. If we run out of capacity, we won’t be able to store as many products and may not be able to maintain all products in an efficient manner. Additionally, if there is any unexpected interruption to our warehousing facilities, for any reason, such as loss of certifications or licenses, as a result of weather, terrorism or acts of war, fire, earthquake, or other national disaster, a work stoppage or other labor-related disruption, electrical outages, or other events, it could result in significant reductions to our sales and margins and could have a material adverse effect on our business, financial condition or results of operations.

Any interruption to our distribution channels for our planned products could adversely affect our sales and results of operations.

We currently manufacture nutraceutical products that we sell to private label customers, we also intend to manufacture and sell our own branded products and distribute those products through various distribution channels. Any interruption to our distribution channels for our planned products for any reason, such as disruption of distribution channels as a result of weather, terrorism or acts of war, fire, earthquake, or other national disaster, a work stoppage or other labor-related disruption, could adversely affect our sales and results of operations.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. CYBERSECURITY

We recognize the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard our information systems and protect the confidentiality, integrity, and availability of our data. We have strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture of cybersecurity risk management. This integration ensures that cybersecurity considerations are an integral part of our decision-making processes at every level. Our risk management team works closely with our IT team to continuously evaluate and address cybersecurity risks in alignment with our business objectives and operational needs.

We have not encountered cybersecurity challenges that have materially impaired our operations or financial standing.

The Company is acutely aware of the critical nature of managing risks associated with cybersecurity threats. The Company has established robust oversight mechanisms to ensure effective governance in managing risks associated with cybersecurity threats because we recognize the significance of these threats to our operational integrity and stakeholder confidence,

Primary responsibility for assessing, monitoring and managing our cybersecurity risks rests with our Chief Executive Officer. Working in close coordination with the Board of Directors, the CEO oversees our governance programs, including testing our compliance standards, remediating known risks, and has ongoing direct interaction with our IT department and periodic interaction with external cybersecurity experts, as needed.

The Chief Executive Officer is continually informed about the latest developments in cybersecurity, including potential threats and innovative risk management techniques. This ongoing knowledge is crucial for the effective prevention, detection, mitigation, and remediation of cybersecurity incidents. The Chief Executive Officer, with the assistance from of both our IT department and external consultants, as needed, implements and oversees processes for the regular monitoring of our information systems. This includes the deployment of advanced security measures and regular system checks to identify potential vulnerabilities. In the event of a cybersecurity incident, the Chief Executive Officer is well prepared to initiate immediate actions to mitigate the impact and initiate long-term strategies for remediation and prevention of future incidents.

The Chief Executive Officer regularly communicates with senior management and the Board of Directors on cybersecurity risks and incidents. This ensures that the highest levels of management are kept abreast of the cybersecurity posture and potential risks facing the Company. Furthermore, significant cybersecurity matters, and strategic risk management decisions are escalated to the Board of Directors, ensuring that they are engaged in comprehensive oversight and can provide guidance on critical cybersecurity issues on a broad range of topics, including:

	●	Current cybersecurity landscape and emerging threats;
	●	Status of ongoing cybersecurity initiatives and strategies;
	●	Incident reports and learnings from any cybersecurity events; and
	●	Compliance with regulatory requirements and industry standards.

ITEM 2. PROPERTIES

We currently maintain a corporate address at 11120 NE 2nd Street, Suite 100, Bellevue, Washington 98004. Our telephone number there is (206) 617-9797. We pay no rent or other fees for the use of the Company’s corporate address.

Our wholly owned subsidiary, Novo Healthnet Limited, has corporate offices located at 3905 Major MacKenzie Drive, Suite 115, Vaughan Ontario Canada L4H 4J9. This location is approximately 1,160 square feet. The lease ~~expired~~expires on June 30, ~~2023, and it is subject to a 1-year renewal provided the landlord receives notice from the tenant no later than 3-months prior to the lease expiration date~~2027. Terms of the lease provide ~~for~~ for a base rent payment of CAD$23,~~030~~059 (including HST) (approximately $2,~~657~~248 as of August 31, ~~2023~~2024) per month.

70Novo Healthnet Limited currently operates our 14 corporate-owned clinics through standard tenancy agreements out of leased properties located at:

Novo Healthnet Limited currently operates our 17 corporate-owned clinics through standard tenancy agreements out of leased properties located at:

(1)	Novo Healthnet Limited (Niagara Falls)
	4056 Dorchester Rd., Suites 104 & 105, Niagara Falls, Ontario L2E 6M9, Canada;

(2)	Novo Healthnet Limited (Windsor)
	250 Tecumseh Rd. E., Building 100, Unit 150, Windsor, Ontario N8X 2R3, Canada;

(3)	Back on Track Physio & Health Centres (Scarborough)
	8 Glen Watford Drive, Unit G3-G5, Scarborough, Ontario M1S 2C1, Canada;

(4)	Back On Track Physio & Health Centres (Antares)
	6 Antares Drive Ph 1, Unit 3, Nepean, Ontario K2E 8A9, Canada;

(5)	Back On Track Physio & Health Centres (Richmond Oaks)
	6265 Perth St, Richmond, Ontario K0A 2Z0, Canada;

(6)	Back On Track Physio & Health Centres (Hunt Club)
	380 Hunt Club Rd. Suite 107, Ottawa, Ontario K1V 1C1, Canada;

(7)	Back On Track Physio & Health Centres (Findlay Creek)
	4744 Bank Street, Unit 2, Gloucester, Ontario K1T 0K8, Canada;

(8)	Back On Track Physio & Health Centres (Bells Corners)
	2006 Robertson Rd., Unit 2, Nepean, Ontario K2H 1A5, Canada;

(1)	Novo Healthnet Limited (Niagara Falls)
(9)	Back On Track Physio & Health Centres (Manotick)
	4056 Dorchester Rd., Suites 104 & 105, Niagara Falls, Ontario L2E 6M9, Canada;
	5230B Mitch Owens Road, Manotick, Ontario K4M 1B2, Canada;
(2)	Novo Healthnet Limited (Richmond Hill)
(10)	Back On Track Physio & Health Centres (Carleton Place)
	9665 Bayview Ave., Suite 10, Richmond Hill, Ontario L4C 9V4, Canada;
	515 McNeely Drive, Unit 3, Carleton Place, Ontario K7C 0A8, Canada;
(3)	Novo Healthnet Limited (Windsor)
(11)	Back On Track Physio & Health Centres (Kemptville)
	250 Tecumseh Rd. E., Building 100, Unit 150, Windsor, Ontario N8X 2R3, Canada;
	301 Rideau Street, Kemptville, Ontario K0G 1J0, Canada;
(4)	Back on Track Physio & Health Centres (Scarborough)
(12)	Back On Track Physio & Health Centres (Perth)
	8 Glen Watford Drive, Unit G3-G5, Scarborough, Ontario M1S 2C1, Canada;
	9 Eric Devlin Lane. Unit 100, Perth, Ontario K7H 0C4, Canada;
(5)	Back On Track Physio & Health Centres (Antares)
(13)	Back On Track Physio & Health Centres (Rockland)
	6 Antares Drive Ph 1, Unit 3, Nepean, Ontario K2E 8A9, Canada;
	2741 Chamberland St., Unit 208 Rockland, Ontario K4K 0B8 Canada.
(6)	Back On Track Physio & Health Centres (Richmond)
(14)	Fairway Physiotherapy – NovaCare
	6265 Perth St, Richmond, Ontario K0A 2Z0, Canada;
	1600 Dease St. Thunder Bay, Ontario P7C 5H4 Canada
(7)	Back On Track Physio & Health Centres (Hunt Club)
	380 Hunt Club Rd. Suite 107, Ottawa, Ontario K1V 1C1, Canada;
(8)	Back On Track Physio & Health Centres (Findlay Creek)
	4744 Bank Street, Unit 2, Gloucester, Ontario K1T 0K8, Canada;
(9)	Back On Track Physio & Health Centres (Bells Corners)
	2006 Robertson Rd., Unit 2, Nepean, Ontario K2H 1A5, Canada;

(10)	Back On Track Physio & Health Centres (Manotick)
	5230B Mitch Owens Road, Manotick, Ontario K4M 1B2, Canada;
(11)	Back On Track Physio & Health Centres (Carleton Place)
	515 McNeely Drive, Unit 3, Carleton Place, Ontario K7C 0A8, Canada;
(12)	Back On Track Physio & Health Centres (Kemptville)
	301 Rideau Street, Kemptville, Ontario K0G 1J0, Canada;
(13)	Back On Track Physio & Health Centres (Perth)
	9 Eric Devlin Lane. Unit 100, Perth, Ontario K7H 0C4, Canada;
(14)	Back On Track Physio & Health Centres (Rockland)
	2741 Chamberland St., Unit 208 Rockland, Ontario K4K 0B8 Canada.
(15)	Fairway Physiotherapy & Sports Injury – Mountdale
	620 Arthur St W Unit #4, Thunder Bay, Ontario P7E 5R8 Canada
(16)	Fairway Physiotherapy – NovaCare
	1600 Dease St. Thunder Bay, Ontario P7C 5H4 Canada

NHL leases premises for the foregoing 14 corporate-owned clinics, ranging in terms of 0 to 8 years with monthly lease rates ranging from CAD$904 (approximately $665 as of August 31, 2024 to CAD$11,065 (approximately $8,132 as of August 31, 2024). The aggregate monthly rent for the corporate-owned clinic properties is CAD$103,650 (approximately $76,172 as of August 31, 2024). Two of the leases are month-to-month with 30-days’ notice for either party and the remaining 12 corporate-owned clinic leases have expiration dates between 2027 and 2031.

NHL leases premises for the foregoing 16 corporate-owned clinics, ranging in terms of 0 to 10 years, with monthly lease rates ranging from CAD$904 (approximately $904.00 as of August 31, 2023) to CAD$11,822.78 (approximately $11,822.78 as of August 31, 2023). The aggregate monthly rent for the corporate-owned clinic properties is CAD$103,650.11 (approximately $103,650.011 as of August 31, 2023). These leases have expiration dates between 2023 and 2031.

We believe that these facilities are suitable and adequate for our current operations.

7180

ITEM 3. LEGAL PROCEEDINGS

As of the filing date of this Annual Report on Form 10-K, 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.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is ~~traded~~quoted on the ~~Nasdaq~~OTC ~~Capital~~Markets ~~Market~~Pink Current Information tier under the symbol, “NVOS”.” Prior to ~~February~~November 236, ~~2021~~2024, our common stock was ~~quoted~~listed on the ~~OTC~~Nasdaq ~~Markets~~Capital ~~under the symbol, “NVOS~~Market.” The OTC Market is a computer network that provides information on current “bids” and “asks,” as well as volume information.

On ~~December~~November 136, 2023, the ~~closing~~Company ~~price~~effectuated a 1-for-10 reverse stock split (the “Reverse Stock Split”) effective immediately after the close of ~~our~~trading on the Nasdaq Capital Market and the Company’s common stock asbegan ~~reported~~trading on the Nasdaq Capital ~~Markets~~Market on ~~was~~a $1Reverse Stock Split-adjusted basis on November 7, 2023.18 ~~and~~As ~~there~~a ~~were~~result ~~approximately~~of the Reverse Stock Split, every 10 pre-split shares of common ~~527~~stock ~~shareholders~~outstanding became one share of ~~record~~common stock, with fractional shares rounded up to the next higher whole share. The Reverse Stock Split did not affect the number of ~~record~~authorized ~~holders~~shares ~~does~~of ~~not~~common ~~include~~stock, ~~beneficial~~the ~~owners~~par value of the common stock, ~~whose~~or ~~shares~~modify ~~are~~any ~~held~~rights inor preferences of shares of the ~~names~~Company’s common stock. Proportionate adjustments will be made to the exercise prices and the number of ~~banks,~~shares underlying ~~brokers,~~the ~~nominees~~Company’s oroutstanding ~~other~~equity ~~fiduciaries~~awards and warrants, as applicable.

For the fiscal years ended August 31, 2024 and 2023, the following table sets forth the high and low sale prices for our common stock as reported by The Nasdaq Stock Market (“Nasdaq”). For the fiscal year ending August 31, 2023 through December 17, 2024, the following table sets forth the range of high and low closing bid quotations for our common stock as reported by the OTC Markets Group. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

	High		Low
Fiscal Year Ended August 31, 2023

First Quarter (September 1, 2022 through November 30, 2022)	$	16.9000	$	2.1100
Second Quarter (December 1, 2022 through February 28, 2023)	$	3.3000	$	1.0100
Third Quarter (March 1, 2023 through May 31, 2023)	$	2.4200	$	1.0000
Fourth Quarter (June 1, 2023 through August 31, 2023)	$	2.5000	$	0.6900

Fiscal Year Ended August 31, 2024

First Quarter (September 1, 2023 through November 30, 2023)	$	5.3800	$	1.0000
Second Quarter (December 1, 2023 through February 29, 2024)	$	1.5200	$	0.5500
Third Quarter (March 1, 2024 through May 31, 2024)	$	1.4100	$	0.4160
Fourth Quarter (June 1, 2024 through August 31, 2024)	$	1.2400	$	0.2950

Fiscal Year Ending August 31, 2025

First Quarter (September 1, 2024 through November 30, 2024)	$	0.3490	$	0.0270
Second Quarter (December 1, 2024 through December 17, 2024)	$	0.0580	$	0.0300

On December 17, 2024, the closing price of our common stock as reported on the OTC Markets Pink Current Information tier was $0.0300 and there were approximately 550 active shareholders of record. The number of record holders does not include beneficial owners of common stock whose shares are held in the names of banks, brokers, nominees or other fiduciaries.

Dividends, Common Stock and Unregistered Stock Issuances

We have not paid any cash dividends on our common or preferred stock and do not anticipate paying any such cash dividends in the foreseeable future. We intend to retain future earnings, if any, for reinvestment in the development and expansion of our business.

During the fiscal year ended August 31, ~~2023~~2024, the Company ~~engaged~~effectuated in the following stock issuances that were not registered under the Securities Act:

● On ~~October~~September 26, 2022, the Company issued 3,623 restricted shares of common stock issued for NHL Exchangeable Shares under the terms and conditions of a Share Exchange Agreement which closed on June 24, 2021. ● On January 5, 2023, ~~the Company issued 115~~75,~~935~~000 ~~shares of common stock pursuant to exchange for shares of common stock underlying certain warrants. ● On January 25, 2023, the Company issued 320,202~~ restricted shares of common stock ~~issued~~were ~~for NHL Exchangeable Shares under the terms and conditions of a Share Exchange Agreement which closed on June 24, 2021. ● On February 24, 2023, the Company~~ issued 95,500 restricted shares of common stock pursuant to a Securities Purchase Agreement, dated February 23, 2023. ● On March 22, 2023, the Company issued 95,500 restricted shares of common stock pursuant to a Securities Purchase Agreement, dated March 21, 2023. ● On June 1, 2023, the Company issued 75,000 restricted shares of common stock as consideration ~~for a Consulting Agreement. ● On June 20, 2023, the Company issued 74,167 restricted shares of common stock~~ pursuant to a ~~Securities~~consulting ~~Purchase Agreement, dated June 20, 2023~~agreement.

72● On September 18, 2023, 53,567 restricted 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. ● On September 18, 2023, 75,000 restricted shares of common stock were issued as consideration pursuant to a consulting agreement. ● On September 21, 2023, 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. ● On October 3, 2023, 75,000 restricted shares of common stock were issued as consideration pursuant to a consulting agreement. ● On October 9, 2023, 73,767 restricted shares of common stock were issued in exchange for certain non-voting special shares of Novo Healthnet Limited (“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 17, 2021. ● On October 12, 2023, 53,532 restricted shares of common stock 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 warrant agreement between the Company and Mast Hill in connection with the $573,000 promissory note issued by the Company to FirstFire, on March 21, 2023. ● On October 18, 2023, 75,000 restricted shares of common stock were issued as consideration pursuant to a consulting agreement. ● On October 23, 2023, 138,703 restricted shares of common stock 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. ● On November 8, 2023, 75,000 restricted shares of common stock were issued as consideration pursuant to a consulting agreement. ● On November 21, 2023, 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. ● On November 21, 2023, 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.

● On ~~June~~December 2821, 2023, ~~the Company issued 33~~457,~~500~~128 restricted shares of common stock were issued to Mast Hill upon conversion of outstanding debt pursuant to athe ~~Separation~~terms ~~and~~of ~~General~~the ~~Release~~securities purchase agreement, ~~dated~~between ~~June~~Mast ~~28,~~Hill ~~2023~~and the Company. ● OnBetween ~~July~~March 314, ~~2023,~~2024 ~~the~~and ~~Company~~April ~~issued~~4, 752024,~~000~~ 826,203 restricted shares of common stock aswere ~~consideration~~issued ~~for~~to aMast ~~Consulting~~Hill ~~Agreement.~~upon ●conversion Onof ~~August~~outstanding 1debt pursuant to the terms of the securities purchase agreement, dated September 12, 2023, between Mast Hill and the Company. ~~issued~~● 75On April 4, 2024, 480,000 restricted shares of common stock aswere ~~consideration~~issued ~~for~~to aFirstFire ~~Consulting~~upon ~~Agreement~~conversion of outstanding debt pursuant to the terms of the securities purchase agreement, dated September 18, 2023, between FirstFire and the Company.

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

ITEM 6. RESERVED

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the financial condition and results of operations of Novo Integrated Sciences, Inc. and its ~~subsidiaries~~consolidated subsidiaries (collectively, the “Company,” or “Novo Integrated,”) “we,” “us” or “our”) should be read in conjunction with our consolidated financial statements and the accompanying notes thereto included elsewhere in this Annual Report on Form 10-K. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us,” “we,” “our,” and similar terms refer to the Company. This Annual Report on Form 10-K includes forward-looking statements, as that term is defined in the federal securities laws, based upon current expectations that involve risks and uncertainties, such as plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. Words such as “anticipate,” “estimate,” “plan,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions are used to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are based. Reference is made to “Risk Factors”, which are included elsewhere in this Annual Report on Form 10-K.

Business Overview

Novo Integrated Sciences, Inc. (“Novo Integrated” or the “Company”) 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’s decentralized healthcare business model is centered on three primary pillars to best support the transformation of non-catastrophic healthcare delivery to patients and consumers:

●

First Pillar – Service Networks: Deliver multidisciplinary primary care services through (i) an affiliate network of clinic facilities, (ii) small and micro footprint sized clinic facilities primarily located within the footprint of box-store commercial enterprises, (iii) clinic facilities operated through a franchise relationship with the Company, and (iv) corporate operated clinic facilities.

	●	Second Pillar – Technology: Develop, deploy, and integrate sophisticated interconnected technology, interfacing the patient to the healthcare practitioner thus expanding the reach and availability of the Company’s services, beyond the traditional clinic location, to geographic areas not readily providing advanced, peripheral based healthcare services, including the patient’s home.

	●	Third Pillar – Products: Develop and distribute effective, personalized health and wellness product solutions allowing for the customization of patient preventative care remedies and ultimately a healthier population. The Company’s science-first approach to product innovation further emphasizes our mandate to create and provide over-the-counter preventative and maintenance care solutions.

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

First Pillar – Service Networks for Hands-on Patient Care

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~~specialists, 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 1614 corporate-owned clinics, a contracted network of affiliate clinics, and eldercare related long-term care homes, retirement homes, and community-based locations in Canada.

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.

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~~launched ~~the launch of~~ MiTelemed+, Inc. (“MiTelemed”), a joint venture with EK-Tech Solutions Inc. (“EK-Tech”). MiTelemed ~~will operate~~operates, ~~support~~supports and ~~expand~~expands access and functionality of iTelemed, EK-Tech’s enhanced proprietary telehealth platform. MiTelemed+, through the iTelemed platform, ~~will~~allows ~~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~~is be dramatically elevated.

Third Pillar – Health and Wellness Products

~~The~~As the Company’s ~~product~~patient ~~offering~~base ~~ecosystem~~grows ~~is being built~~ through ~~strategic~~the ~~acquisitions~~expansion ~~and engaging in licensing agreements with partners that share our vision to provide a portfolio~~ of ~~products~~its ~~that~~corporate ~~offer~~owned anclinics, ~~essential~~its ~~and~~affiliate ~~differentiated~~network, ~~solution~~its ~~to health and wellness globally.~~micro-clinic ~~Our~~facility ~~2021~~openings, ~~acquisitions~~its ofinterconnected ~~Acenzia,~~technology ~~PRO-DIP~~platforms, ~~LLC (“PRO-DIP”)~~ and ~~Terragenx~~other ~~Inc.~~growth ~~(“Terragenx”) support this Third Pillar. The Company owns a 91% controlling interest in Terragenx. On March 15~~initiatives, ~~2022,~~we ~~PRO-DIP~~believe ~~was issued U.S. Patent No. 11,273,965 by~~ the ~~U.S.~~development ~~Patent~~ and ~~Trademark~~distribution of ~~Office~~high-quality onwellness ~~March~~product ~~15,~~solutions ~~2022.~~is ~~The~~integral ~~‘965~~to ~~patent~~(i) ~~relates~~offering toeffective ~~PRO-DIP’s~~product ~~novel~~solutions ~~technology~~allowing for ~~manufacturing its~~the ~~oral~~customization ~~supplement~~of patient ~~pouches.~~preventative Oncare ~~April~~remedies 4,and ~~2022,~~ultimately ~~NHL was granted~~ a ~~Natural~~healthier ~~Product~~population, ~~Number~~and (~~NPN~~ii) bymaintaining ~~Health~~an ~~Canada~~on-going ~~for~~relationship ~~IoNovo~~with GOour ~~Iodine which~~patients isthrough the ~~Company’s~~customization ~~forth~~of ~~iodine~~patient ~~related~~preventative ~~product to recently be granted a NPN by Health Canada following IoNovo Pure Iodine, IoNovo Iodide,~~ and ~~IoNovo~~maintenance ~~for~~care ~~Kids pure iodine oral spray~~solutions.

WeThe ~~have~~Company’s ~~two~~product ~~reportable~~offering ~~segments:~~ecosystem ~~healthcare~~has ~~services~~been built through strategic acquisitions and ~~product~~engaging ~~sales.~~in ~~For~~licensing ~~fiscal~~agreements ~~year~~with ~~2023,~~partners that ~~revenues~~share ~~from~~our ~~healthcare~~vision ~~services~~to provide a portfolio of products that offer an essential and ~~product~~differentiated solution to health and wellness globally. ~~sales~~Our ~~were~~2021 ~~65%~~acquisitions of Acenzia, PRO-DIP, LLC (“PRO-DIP”) and 34Terragenx Inc. (“Terragenx”) support this Third Pillar. The Company owns a 91% controlling interest in Terragenx. On March 15, ~~respectively~~2022, ofPRO-DIP was issued U.S. Patent No. 11,273,965 by the ~~Company~~U.S. Patent and Trademark Office. The ‘965 patent relates to PRO-DIP’s ~~total~~novel ~~revenues~~technology for ~~the~~manufacturing ~~year~~its oral supplement pouches. WeOn ~~expect~~April ~~the~~4, ~~percentage~~2022, ofNHL ~~revenues~~was ~~generated from~~granted a Natural Product Number (NPN) by Health Canada for IoNovo GO Iodine which is the ~~product~~Company’s forth ~~sales~~iodine ~~segment~~related product to ~~continue~~recently asbe granted a ~~greater~~NPN ~~percentage~~by ~~compared~~Health toCanada ~~the~~following ~~revenue~~IoNovo ~~generated~~Pure ~~from~~Iodine, ~~healthcare~~IoNovo ~~services~~Iodide, ~~over~~and ~~the~~IoNovo for ~~coming~~Kids ~~quarters~~pure iodine oral spray.

75We have two reportable segments: healthcare services and product sales. For fiscal year 2024, revenues from healthcare services and product sales were 62% and 37%, respectively, of the Company’s total revenues for the year. We expect the percentage of revenues generated from the product sales segment to continue as a greater percentage compared to the revenue generated from healthcare services over the coming quarters.

Recent Developments

September 2023 Mast Hill SPA

76Pursuant to the terms of the September 2023 Mast Hill Note, on December 12, 2023, the Company made an interest-only payment of $104,712 to Mast Hill. Between March 14, 2024 and April 4, 2024, the Company issued 826,203 shares of common stock to Mast Hill upon conversion of outstanding debt which consisted of a principal amount of $271,226 and an interest amount of $104,712, for a total amount of $375,938.

September 2023 FirstFire SPA & Note

Bylaws Amendment

Blacksheep Master (Asset Transfer) Agreement

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

The Master Agreement contains customary representations, warranties, and covenants of the Company and Blacksheep.

2023 Equity Incentive Plan

On September 29, 2023, stockholders of the Company approved the 2023 Equity Incentive Plan.

Reverse Stock Split

Purchase and Sale Agreement – Ophir Collection

Within two business days following the Company’s execution of the Ophir Agreement, the Company was required to, and did, deposit $25,000 with the Successor Receiver. In addition, to extend and maintain exclusivity related to the Ophir Agreement, (i) during the ~~“Deposit”~~three month period ended February 2024, the Company paid additional deposits, totaling $75,000, to the Successor Receiver; (ii) ~~with~~during the three-month period ended May 2024, the Company paid additional deposits, totaling $100,000, to the Successor Receiver; and (iii) subsequent to the period ended May 31, 2024, the Company paid an additional deposit, totaling $30,000, to the Successor Receiver for an aggregate deposit amount of $230,000. These amounts are non-refundable.

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. asOn ~~follows:~~October 17, 2024, the Ophir Agreement was terminated. On such date, the Successor Receiver filed notice with the Court that the Successor Receiver canceled, without objection by the Company, the Ophir Agreement.

(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. (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.

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.

Nasdaq Notification – Compliance of Minimum Bid Price Requirement

As previously disclosed, on November 21, 2022, Nasdaq notified the Company that its common stock failed to maintain a minimum bid price of $1.00over the previous 30 consecutive business days as required by the Nasdaq listing rules. As previously disclosed on May 25, 2023, Nasdaq notified the Company that it had until November 20, 2023, to regain compliance by maintaining a minimum closing bid price of $1.00 or more for a minimum of 10 consecutive trading days. The Nasdaq notice states that Nasdaq has determined that for the last 11 consecutive business days, from November 7,2023 to November 21, 2023, the closing bid price of the Company’s common stock has been at $1.00 per share or greater. Accordingly, Nasdaq has confirmed that the Company has regained compliance with Listing Rule 5550(a)(2) and this matter is now closed.

Clawback Policy

~~Stock Issuance in Exchange for Certain NHL Non-Voting Special Shares~~88

~~Subsequent~~Officer toOption the fiscal year ended August 31, 2023, the Company issued 737,642 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.Grant

~~Stock~~On ~~Issuances~~January in16, ~~Connection~~2024, ~~with~~the ~~S-1~~Board ~~Warrant~~of ~~Exercises~~Directors granted to Christopher David, the Company’s Chief Operating Officer and a 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.

~~Subsequent~~Nasdaq to the fiscal year ended August 31, 2023, the Company issued 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”).Delisting

~~Stock~~On ~~Issuance~~February –9, ~~Consulting~~2024, ~~Agreements~~the Company received a letter from Nasdaq’s Listing Qualifications Staff indicating that, based upon the closing bid price of the Company’s common stock for the last 30 consecutive business days, the Company was not in compliance with the requirement to maintain a minimum bid price of $1.00 per share (the “Minimum Bid Price Requirement”) for continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Original Notice”). At that time, the Company was provided a compliance period of 180 calendar days from the date of the Original Notice, or until August 7, 2024, to regain compliance with the Minimum Bid Price Requirement, pursuant to Nasdaq Listing Rule 5810(c)(3)(A).

~~Subsequent~~As tothe Company did not regain compliance with the ~~fiscal~~Minimum ~~year~~Bid ~~ended~~Price Requirement by August 317, ~~2023~~2024, and it was determined by the Nasdaq Staff that the Company ~~issued~~should ~~375~~not be eligible for another 180 calendar-day extension,~~000~~ ~~restricted~~the ~~shares~~Company ofreceived ~~common~~a ~~stock~~delisting asdetermination ~~consideration~~letter on ~~for~~August ~~consulting~~9, 2024. The Company timely requested a hearing before a Nasdaq Hearing Panel (“Panel”) and provided the Panel ~~services~~with a plan to regain compliance. The hearing request automatically stayed any suspension or delisting action pending the hearing and the expiration of any additional extension period granted by the Panel following the hearing.

~~Stock~~On ~~Issuance~~November –4, ~~Mast~~2024, ~~Hill~~the ~~Cashless~~Company ~~Warrant~~received ~~Exercise~~a letter from Nasdaq indicating that the Company’s common stock would be delisted from Nasdaq and trading in the Company’s common stock would be suspended at the open of trading on November 6, 2024. Beginning at the open of trading on November 6, 2024, trading of the Company’s common stock continued on the OTC Market’s Pink Current Information tier under the symbol “NVOS.”

OnDeparture ~~September 18, 2023, Mast Hill fully exercised all warrants granted under the terms and conditions~~ of ~~the~~Christopher ~~$573,000~~David ~~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.President

On ~~October~~February 2315, ~~2023~~2024, ~~Mast~~Mr. ~~Hill~~David, ~~fully~~the ~~exercised~~Company’s ~~all~~then-President, ~~warrants~~Chief ~~granted~~Operating ~~under~~Officer ~~the terms~~ and ~~conditions~~member of the ~~$445,000~~Company’s ~~Mast~~Board ~~Hill~~of Directors ~~Warrant~~informed ~~Agreement, dated~~the ~~June~~Company ~~20,~~of ~~2023.~~his ~~Under~~decision ~~certain~~to ~~cashless~~voluntarily ~~exercise~~resign ~~provisions~~from ashis ~~well~~position as ~~price~~the ~~protection~~Company’s ~~provisions~~President ~~providing~~effective ~~for adjustment~~ as of ~~the number~~February of15, ~~shares~~2024. ofMr. ~~the~~David ~~Company’s~~did ~~common~~not ~~stock~~resign ~~issuable~~as ~~upon~~a ~~exercise~~result of ~~the~~any ~~Mast~~disagreement ~~Hill~~with ~~Warrant,~~ the Company ~~issued~~on ~~138,703~~any ~~restricted shares~~matter ofrelating to the Company’s operations, ~~common~~policies ~~stock~~or practices.

80Appointment of Robert Oliva as President

~~Stock~~Pursuant ~~Issuance~~to –Mr. ~~FirstFire~~David’s ~~Cashless~~departure ~~Warrant~~as ~~Exercise~~President, the Board of Directors of the Company appointed Robert Oliva as President, effective February 15, 2024. Mr. Oliva previously served the Company between January 26, 2021 and June 30, 2022 in the role of Director. During his time as Director, Mr. Oliva has also served the Company as a member of the Compensation Committee and Nominating and Corporate Governance Committees. On June 30, 2022, Mr. Oliva resigned from the Board of Directors. See “—Resignation of Robert Oliva.”

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.89

~~For~~Streeterville ~~the fiscal year ended August 31~~Capital, ~~2023~~LLC ~~compared~~April to2024 ~~the~~Note ~~fiscal~~and ~~year ended August 31, 2022~~SPA

~~Revenues~~On ~~for~~April 5, 2024, the ~~year~~Company ~~ended~~entered ~~August~~into ~~31,~~a ~~2023~~securities ~~were~~purchase ~~$12~~agreement (the “SPA”) with Streeterville,~~572,019,~~ ~~representing~~pursuant anto ~~increase~~which the Company issued a secured convertible promissory note (the “Note”) with a maturity date of ~~$834~~April 8,~~082,~~ or2025 7%(the “Maturity Date”), ~~from~~in the principal sum of $116,~~737~~210,~~937~~000 ~~for~~(the “Principal Sum”). Pursuant to the ~~same~~terms ~~period~~of inthe ~~2022.~~Note, ~~The~~the ~~increase~~Company inagreed to ~~revenue~~pay isthe ~~principally~~Principal ~~due~~Sum to anStreeterville ~~increase~~and into ~~product~~pay interest on the principal balance at the rate of 10.9% per annum. The Note carries ~~sales~~an original issue discount (“OID”) of $660,000. ~~Acenzia’s~~In ~~and~~addition, ~~Terragenx’s~~$50,000 ~~revenue~~was ~~for~~withheld from the ~~year~~Principal ~~ended~~Sum ~~August~~to 31cover Streeterville’s transaction costs. Accordingly, ~~2023~~on ~~was~~April $38,~~817~~ 2024,~~346~~ ~~and~~Streeterville paid the purchase price of $535,~~751~~500,000 ~~respectively~~in exchange for the Note. ~~Revenue~~Upon ~~from~~receipt ~~our~~of ~~healthcare~~the ~~services~~Purchase ~~decreased~~Price, bythe ~~2%,~~Company ~~when~~repaid ~~comparing~~in full the ~~revenue~~remaining ~~for~~outstanding balances under that certain promissory note in the original ~~year~~principal ~~ended~~amount ~~August~~of 31$3,500,000 issued on September 12, 2023, toas ~~the~~well ~~same~~as ~~period~~that certain promissory note in ~~2022~~the original principal amount of $277,777.77 issued on September 18, 2023.

~~Cost~~Streeterville ofmay ~~revenues~~convert ~~for~~the Note into the ~~year~~Company’s ~~ended~~common ~~August~~stock ~~31,~~on ~~2023~~any ~~were~~trading ~~$7,619,304,~~day ~~representing a~~(and ~~decrease~~the following trading day) that any intraday trade price of ~~$680,605~~the orcommon stock is 10%, ~~from~~greater ~~$6,938,699~~than ~~for~~the closing trade price on the ~~same~~previous ~~period~~trading inday ~~2022~~(each a “Voluntary Conversion”). With ~~Cost~~respect ofto ~~revenues~~any asVoluntary aConversion, ~~percentage~~the ofconversion ~~revenue~~price ~~was~~is 61equal to 85% ~~for~~of the ~~year~~ ~~ended~~lowest ~~August~~daily ~~31,~~volume ~~2023~~weighted ~~and~~average ~~59%~~price ~~for~~of ~~same~~the common ~~period~~stock inon ~~2022.~~any ~~The~~trading ~~increase~~day induring ~~cost~~the offive ~~revenues~~trading asday aperiod ~~percentage~~prior ofto ~~revenue~~the ~~was~~respective ~~principally~~conversion date (the “Conversion Price”), ~~due~~subject to ~~the~~adjustment ~~increase~~as provided in ~~product~~the ~~costs~~Note as well as beneficial ownership limitations.

~~Operating~~Beginning ~~costs~~on ~~for~~October ~~the year ended August 31~~8, ~~2023 were $13~~2024,~~505,877,~~ ~~representing a~~Streeterville ~~decrease~~had ofthe ~~$16,320,038,~~right orto ~~55%,~~redeem ~~from~~up to $29950,~~825,915~~000 ~~for~~of the ~~same~~Note ~~period~~per incalendar ~~2022~~month. The ~~decrease~~Company ~~in operating costs~~ is ~~principally~~required ~~due~~ to pay ~~(i)~~such ~~the~~redemption ~~decrease~~amounts in ~~overhead~~cash, ~~expenses~~provided, ~~associated~~however, ~~with~~that ~~the~~if ~~operations~~certain ofequity ~~Acenzia,~~conditions ~~PRO-DIP~~are satisfied, ~~and~~then ~~Terragenx,~~the ~~and~~Company ~~(ii)~~may nopay ~~further~~all ~~impairment~~or any portion of ~~intangible~~such ~~assets~~applicable ~~and~~redemption ~~goodwill~~amount ~~being~~by ~~recognized~~issuing inshares of common stock at the ~~year~~applicable ~~ended~~Conversion ~~August~~Price ~~31,~~at ~~2023~~such time.

~~Other~~The ~~expense~~Company ~~for~~may prepay the ~~year~~Note ~~ended~~at ~~August~~any ~~31,~~time ~~2023~~prior ~~was~~to ~~$4,716,282,~~the ~~representing~~date athat ~~decrease~~an Event of ~~$3,324,521,~~Default or(as ~~41%,~~defined ~~from~~in ~~other~~the ~~expense~~Note) (each an “Event of ~~$8,040,803~~Default”) ~~for~~occurs at an amount equal to 105% of the ~~same~~Outstanding ~~period~~Balance in(as ~~2022~~defined below). ~~The~~“Outstanding ~~decrease~~Balance” ismeans the ~~due~~Principal toSum ~~the~~then ~~other~~outstanding ~~income~~plus ~~earned~~accrued and ~~decrease~~unpaid in interest. ~~expense~~The ~~and amortization~~Note contains customary events of ~~debt~~default ~~discount~~relating ~~associated~~to, ~~with~~among other ~~the~~things, ~~convertible~~payment ~~notes~~defaults, asbreach ~~compared~~of torepresentations and warranties, and breach of covenants in the ~~previous~~Note ~~year~~or SPA.

~~Net~~Upon ~~loss~~the ~~attributed~~occurrence toof ~~Novo~~any ~~Integrated~~Event ~~Sciences~~of ~~for~~Default, the ~~year~~Note ~~ended~~shall ~~August~~become ~~31,~~immediately ~~2023~~due ~~was~~and ~~$13,214,552,~~payable ~~representing~~and athe ~~decrease~~Company ofshall ~~$19~~pay to Streeterville,~~634,663,~~ orin ~~60%,~~full ~~from~~satisfaction ~~$32~~of its obligations hereunder,~~849,215~~ ~~for~~an amount equal to the ~~same~~Outstanding ~~period~~Balance inplus ~~2022.~~the Trigger Effect (as defined herein). The ~~decrease~~“Trigger inEffect” ~~net~~means ~~loss~~20% ~~was~~of ~~principally~~the ~~due~~Outstanding toBalance upon the occurrence of any Major Trigger Event (ias defined in the Note) aand ~~decrease~~5% inof ~~overhead~~the ~~expenses associated~~Outstanding ~~with~~Balance upon the ~~operations~~occurrence of ~~Acenzia,~~any ~~PRO-DIP,~~Minor ~~and~~Trigger ~~Terragenx~~Event ~~which~~(as ~~was~~defined ~~approximately~~in ~~$4,902,925~~the Note). The Trigger Effect for any Minor Trigger Event may occur up to three times. Upon the ~~year~~occurrence ~~ended~~of ~~August~~an ~~31,~~Event ~~2023~~of Default, additional interest will accrue from ~~(ii)~~the adate ~~decrease~~of inthe ~~interest~~Event ~~expenses,~~of ~~and~~Default ~~(iii)~~at nothe ~~further~~rate ~~impairment~~equal ofto ~~intangible~~the ~~assets~~lower ~~and~~of ~~goodwill~~22% ~~being~~per ~~recognized~~annum inor the ~~year ended~~highest ~~August~~rate ~~31,~~permitted ~~2023~~by law.

RC Consulting Consortium Group LLC Amendment

Robert Mattacchione Executive Agreement Amendment

Christopher David Executive Agreement Amendment

On June 18, 2021, the Company entered into an executive agreement (the “June 2021 David Agreement”) with Christopher David. Mr. David serves as the Company’s Chief Operating Officer.

Streeterville Capital LLC SPA Amendment No. 1

Resale Registration Statement on Form S-1

Mast Hill Fund, L.P.

FirstFire Global Opportunities Fund, LLC

Mast Hill Fund, L.P. $445,000 Note, SPA, and Warrant

Registration Statement on Form S-8

On September 23, 2024, the Company filed a registration statement on Form S-8 (File No. 333-282277) registering 2,500,000 shares of common stock issuable pursuant to the 2023 Equity Incentive Plan.

Resignation of Robert Oliva

Resignation of Robert Mattacchione as Chief Executive Officer

Approval of Reverse Stock Split

For the fiscal year ended August 31, 2024 compared to the fiscal year ended August 31, 2023

Revenues for the year ended August 31, 2024 were $13,294,357, representing an increase of $722,338, or 6%, from $12,572,019 for the same period in 2023. The increase in revenue is principally due to an increase in product sales. Acenzia’s and Terragenx’s revenue for the year ended August 31, 2024 was $4,713,940 and $122,154, respectively. Revenue from our healthcare services increased by 1%, when comparing the revenue for the year ended August 31, 2024 to the same period in 2023.

Cost of revenues for the year ended August 31, 2024 were $7,551,853, representing a decrease of $67,451 or 1%, from $7,619,304 for the same period in 2023. Cost of revenues as a percentage of revenue was 57% for the year ended August 31, 2024 and 61% for same period in 2023.

Operating costs for the year ended August 31, 2024 were $15,818,802, representing an increase of $2,312,925, or 17%, from $13,505,877 for the same period in 2023. The increase in operating costs is principally due to (i) impairment of intangible assets and goodwill being recognized in the year ended August 31, 2024 (ii) further due to increase in overhead expenses associated with the operations.

Other expense for the year ended August 31, 2024 was $6,052,272, representing an increase of $1,335,989, or 28%, from other expense of $4,716,282 for the same period in 2023. The increase is due to change in fair value of derivative, amortization of debt discount associated with the convertible notes, foreign currency exchange loss arising as a result of intercompany balance reconciliation and inventory write down as compared to the previous year.

Net loss attributed to Novo Integrated Sciences for the year ended August 31, 2024 was $16,166,744, representing an increase of $2,952,192, or 22%, from $13,214,552 for the same period in 2023. The increase in net loss was principally due to (i) impairment of intangible assets and goodwill being recognized in the year ended August 31, 2024 (ii) foreign currency exchange loss arising as a result of intercompany balance reconciliation (iii) amortization of debt discount as compared to the previous year.

Liquidity and Capital Resources

As shown in the accompanying consolidated financial statements, for the fiscal years ended August 31, ~~2023~~2024 and ~~2022~~2023, the Company has had net losses of $1316,~~269~~128,~~444~~570 and $3313,~~045~~269,~~178~~444 , respectively.

During the year ended August 31, ~~2023~~2024, the Company used cash in operating activities of $25,~~243~~069,~~315~~840 compared to $52,~~884~~243,~~145~~315 for the same period in ~~2022~~2023. The principal reason for the ~~decrease~~increase in cash used in operating activities is changes in noncash expenses and changes in operating asset and liability accounts.

During the year ended August 31, ~~2023~~2024, the Company’s cash used in investing activities was $495,~~224~~034 compared to cash provided by investing activities of $~~163~~49,~~459~~224 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 year ended August 31,~~ 2023 ~~compared to the same period in 2022~~. During the year ended August 31, ~~2023~~2024, the Company purchased property and equipment for $495,~~224~~034.

During the year ended August 31, ~~2023~~2024, the Company had cash provided from financing activities of $~~763~~4,~~860~~990,942 compared to ~~cash used in financing activities of~~ $~~427~~763,~~117~~860 for the same period in ~~2022~~2023. The primary reason for the change is the receipt of $18,~~285~~649,~~903~~153 in cash from the issuance of convertible notes, net of issuance costs, ~~$1,795,000~~and ~~in cash from the sale of common stock, net of offering costs,~~ $~~222~~240,~~780~~400 of cash received from ~~notes payables, $532,600 of cash received from~~ warrant exercises, ~~and $7,206 received from related parties,~~ offset by the repayments of $3,~~033~~311,~~888~~536 for convertible notes, $37396,~~130~~418 repayment to related parties, $183,725 for notes payable, and $87,~~611~~334 for finance leases.

Financial Impact of COVID-19

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 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 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 August 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 August 31, 2023. Accordingly, the Company has decided to delay commencing the projects until the 2024 grow season. These joint ventures relate to the development, management, and arrangement of medicinal farming projects involving industrial hemp for medicinal cannabidiol (CBD) applications.

For the fiscal year period ended August 31, 2023, the Company’s total revenue from all clinic and eldercare related contracted services was $8,226,674, representing a 2.0% decrease of $171,183 compared to $8,397,857 during the fiscal year period in 2022.

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.

Off-Balance Sheet Arrangements

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.

Critical Accounting Policies and Estimates

The preparation of 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 consolidated 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 preparation of our consolidated financial statements.

Use of Estimates

The preparation of 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 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 accounts, allowance for slow moving and obsolete inventory, valuation of share-based compensation and warrants, 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.

8297

Property and Equipment

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:

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

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 $172,547, 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 $115,031.

Intangible Assets

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

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

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 $~~501~~496,~~656~~003, and an increase in the estimated useful lives of intangible assets of 20% would result in an annual decrease to amortization expense of approximately $~~334~~330,~~437~~668.

Long-Lived Assets

The Company applies the provisions of 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.

Right-of-use Assets

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 consolidated balance sheet and are expensed on a straight-line basis over the lease term in the consolidated statements of operations and comprehensive loss. The Company determines the lease term by agreement with 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.

8398

Goodwill

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 12858461 Canada Corp. (“1285”), 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~~As onof ~~its review at~~ August 31, ~~2023~~2024, the Company ~~believes~~performed ~~there~~the required impairment reviews and determined that an impairment charge of $1,001,333 related to the goodwill for Acenzia was nonecessary. ~~additional~~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 ~~its~~the ~~goodwill~~underlying business.

Accounts Receivable

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 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.

Inventory

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 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.

Income Taxes

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. The Company has not changed it methodology for estimating the valuation allowance. A change in valuation allowance affect earnings in the period the adjustments are made and could be significant due to the large valuation allowance currently established.

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.

Derivative Financial Instruments

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.

Revenue Recognition

The Company’s revenue recognition reflects the updated accounting policies as per the requirements of 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:

	●	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.

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

	●	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

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.

Stock-Based Compensation

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 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.

85100

Basic and Diluted Earnings Per Share

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.

Foreign Currency Transactions and Comprehensive Income

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 consolidated 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 is the United States. dollar. Translation gains (losses) are classified as an item of other comprehensive (loss) income in the stockholders’ equity section of the consolidated balance sheet.

New Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 was issued to improve financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope. The new standard represents significant changes to accounting for credit losses. Full lifetime expected credit losses will be recognized upon initial recognition of an asset in scope. The current incurred loss impairment model that recognizes losses when a probable threshold is met will be replaced with the expected credit loss impairment method without recognition threshold. The expected credit losses estimate will be based upon historical information, current conditions, and reasonable and supportable forecasts. This ASU as amended by ASU 2019-10, is effective for fiscal years beginning after December 15, ~~2023~~2022. The Company ishas ~~currently~~evaluated ~~evaluating~~ the effect of this ASU on the Company’s consolidated financial statements and related disclosures.

In March 2020, the FASB issued ASU No. 2020-04 providing optional expedients and exceptions to account for the effects of reference rate reform to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued. The optional guidance, which became effective on March 12, 2020, could be applied through December 31, 2022. In December 2022, the FASB issued No 2022-06 extending the sunset date of the relief provided under ASU No. 2020-04 to December 31, 2024. The ASU has not impacted these consolidated financial statements. The Company has various contracts that reference LIBOR and is assessing how this standard may be applied to specific contract modifications through December 31, 2024.

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which is intended to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The guidance allows for either full retrospective adoption or modified retrospective adoption. The ASU is effective for the fiscal years beginning after December 15, 2023 and early adoption is permitted. The Company is currently evaluating the effect of this ASU on the Company’s consolidated financial statements and related disclosures.

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

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 consolidated financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

86101

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

NOVO INTEGRATED SCIENCES, INC.

Consolidated Financial Statements

Contents

	Page
Financial Statements:
Report of Independent Registered Public Accounting Firm (PCAOB Firm ID 5525)	F-1
Consolidated Balance Sheets as of August 31, 2023 and 2022	F-3
Consolidated Balance Sheets as of August 31, 2024 and 2023	F-3
Consolidated Statements of Operations and Comprehensive Loss for the Years Ended August 31, 2023 and 2022	F-4
Consolidated Statements of Operations and Comprehensive Loss for the Years Ended August 31, 2024 and 2023	F-4
Consolidated Statement of Stockholders’ Equity for the Years Ended August 31, 2023 and 2022	F-5
Consolidated Statement of Stockholders’ Equity for the Years Ended August 31, 2024 and 2023	F-5
Consolidated Statements of Cash Flows for the Years Ended August 31, 2023 and 2022	F-6
Consolidated Statements of Cash Flows for the Years Ended August 31, 2024 and 2023	F-6
Notes to Consolidated Financial Statements	F-7

87102

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Novo Integrated ~~sciences~~Sciences, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Novo Integrated Sciences, Inc. (“the Company”) as of August 31, ~~2023,~~2024 and ~~2022~~2023, and the related consolidated statements of operations and comprehensive loss, ~~changes in~~ stockholders’ equity, and cash flows for each of the years in the two-year period ended August 31, ~~2023~~2024, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of August 31, ~~2023~~2024 and ~~2022~~2023 and the results of its operations and its cash flows for each of the years in the two-year period ended August 31, ~~2023~~2024, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has ~~incurred~~ recurring losses from operations, has negative cash flows from operating activities, ~~and~~ and has an accumulated deficit ~~as of August 31, 2023~~. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

F-1

Valuation of Goodwill & Long-Lived Intangible Assets

Description of the Critical Audit Matter

As reflected in the Company’s consolidated financial statements, at August 31, ~~2023~~2024, the Company’s goodwill was $76.5855 million and net long-lived intangible assets were $1613.2237 million. As discussed in Note 2 and 8 to the financial statements, the Company, at least annually, assesses goodwill and intangible assets for impairment. The company periodically reviews its intangible assets if any impairment indicators arise.

Auditing management’s tests for impairment of goodwill and intangible assets involves significant complexity and high judgement due to management’s significant estimations required to determine the fair value of goodwill, intangible assets and any related impairment. In particular, the fair value estimate was sensitive to significant assumptions and were sensitive to changes in assumptions such as the Company’s financial forecast, discount rates, and historical and future operating costs, which are all impacted by expectations about future market and economic conditions.

How the Critical Audit Matter was Addressed in the Audit

Our principal audit procedures to evaluate management’s evaluation of goodwill and intangibles included, among other procedures, the following:

	●	We obtained an understanding of the Company’s process for evaluating its annual impairment assessment process.

	●	We assessed the relevance and reliability of data utilized by a third-party valuation specialist in assessing fair value.

	●	We analyzed the significant estimates which included assessment of methodologies and tested the significant assumptions and underlying data used by the Company in its analysis.

~~Valuation of~~Allowance ~~Other~~for ~~Receivables~~Doubtful Accounts

Description of the Critical Audit Matter

AsThe ~~reflected~~Company inhas material accounts receivable for which assessing the ~~Company’s~~potential ~~consolidated~~collectability ~~financial~~of ~~statements,~~accounts atmay ~~August~~include ~~31,~~subjective ~~2023~~and potentially complex considerations from management, as well as requiring high degrees of auditor judgment to assess the ~~Company’s~~appropriateness ~~other~~of ~~receivable~~the ~~balance~~audit ~~was~~evidence ~~$1.05~~to ~~million~~support the Company’s assessment. As discussed in Note 2 and 65 to the financial statements, the Company periodically assesses the collectability of the outstanding balances and ~~writes~~records ~~off~~an ~~the~~allowance ~~portion~~for ~~deemed~~expected ~~uncollectible~~credit losses. Auditing management’s assessment of collectability of receivables requires subjective auditor judgment and estimation by management.

How the Critical Audit Matter was Address in the Audit

Our principal audit procedures to evaluate management’s evaluation receivables (allowance) included, among other procedures, the following:

● WeObtained ~~obtained~~ an understanding of ~~the Company’~~management's ~~process~~processes and assumptions for ~~evaluating~~developing ~~collectability~~the onallowance for uncollectible accounts receivable and traced significant consideration through to the Company's disclosure of its ~~outstanding~~related ~~receivables~~accounting policy. ● ~~Among~~Tested ~~other~~the ~~procedures,~~accuracy weand ~~obtained~~completeness ~~independent~~of ~~confirmations~~the ~~from~~accounts ~~loan~~receivable ~~holders~~aging ~~and~~schedules ~~evaluated~~which management’s ~~estimate~~utilized ofin ~~likelihood~~performing analysis of collectability of related balances. ● Tested subsequent collections for a selection of accounts receivable balances, including ~~analysis~~both ofmaterial ~~pledged~~and ~~assets~~immaterial account balances at year end.

Fruci & Associates II, PLLC – PCAOB ID #05525

We have served as the Company’s auditor since 2022.

Spokane, Washington

December 1418, ~~2023~~2024

F-2

NOVO INTEGRATED SCIENCES, INC.

CONSOLIDATED BALANCE SHEETS

As of August 31, ~~2023~~2024 and ~~2022~~2023

	August 31,			August 31,
	2023			2022
	2024			2023
ASSETS
Current Assets:
Cash and cash equivalents	$	~~416~~844,~~323~~584		$	2416,~~178,687~~323
Accounts receivable, net		1,~~467~~916,~~028~~819			1,~~017~~467,~~405~~028
Inventory, net		1,~~106~~000,~~983~~742			~~879~~1,~~033~~106,983
Other receivables		1,~~051~~235,~~584~~423			1,~~085~~051,~~335~~584
Prepaid expenses and other current assets		~~346~~417,~~171~~282			~~571~~346,~~335~~171
Total current assets		45,~~388~~414,~~089~~850			54,~~731~~388,~~795~~089
Property and equipment, net		5,~~390~~110,~~038~~776			5,~~800~~390,~~648~~038
Intangible assets, net		1613,~~218~~369,~~539~~868			1816,~~840~~218,~~619~~539
Right-of-use assets, net		1,~~983~~691,~~898~~309			21,~~673~~983,~~934~~898
Goodwill		76,~~582~~554,~~483~~473			7,~~825~~582,~~844~~483
TOTAL ASSETS	$	3532,~~563~~141,~~047~~276		$	4035,~~872~~563,~~840~~047
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	3,~~513~~235,~~842~~800		$	13,~~800~~513,~~268~~842
Accrued expenses		1,~~233~~592,~~549~~288			1,~~116~~233,~~125~~549
Accrued interest (including amounts to related parties)		~~382~~624,~~666~~287			~~454~~382,~~189~~666
Government loans and notes payable, current portion		~~277~~45,~~405~~681			-277,405
Convertible notes payable, net of discount of $459,332		558,668			9,099,654
Convertible notes payable, net of discount of $3,505,849		2,704,151			558,668
Contingent liability		61,767			534,595
Derivative liability		4,685,198			-
Debentures, related parties, current portion		916,824			-
Contingent liability		13,836			61,767
Due to related parties		533,001			478,897
Debentures, related parties, current portion		913,598			916,824
Finance lease liability, current portion		11,744			8,890
Due to related parties		356,928			533,001
Operating lease liability, current portion		415,392			582,088
Finance lease liability, current portion		4,354			11,744
Total current liabilities		7,904,858			14,074,706
Operating lease liability, current portion		403,291			415,392
Debentures, related parties, net of current portion		-			946,250
Total current liabilities		14,579,412			7,904,858
Government loans and notes payable, net of current portion		65112,~~038~~001			~~161~~65,~~460~~038
Finance lease liability, net of current portion		-			12,076
Operating lease liability, net of current portion		1,440,367			1,693,577
Operating lease liability, net of current portion		1,693,577			2,185,329
Deferred tax liability		1,395,571			1,400,499
Deferred tax liability		1,400,499			1,445,448
TOTAL LIABILITIES		17,527,351			11,063,972
TOTAL LIABILITIES		11,063,972			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 August 31, 2023 and August 31, 2022, respectively		-			-
Convertible preferred stock; $0.001 par value; 1,000,000 shares authorized; Nil shares issued and outstanding at August 31, 2024 and August 31, 2023		-			-
Common stock; $0.001 par value; 499,000,000 shares authorized; 15,759,325 and 3,118,063 shares issued and outstanding at August 31, 2023 and August 31, 2022, respectively		15,760			3,118
Common stock; $0.001 par value; 499,000,000 shares authorized; 19,054,523 and 15,759,325 shares issued and outstanding at August 31, 2024 and August 31, 2023, respectively		19,055			15,760
Additional paid-in capital		9096,~~973~~660,~~316~~607			6690,~~084~~973,~~887~~316
Common stock to be issued (91,138 and 414,965 shares at August 31, 2023 and August 31, 2022)		1,217,293			9,474,807
Common stock to be issued (1,700 and 91,138 shares at August 31, 2024 and August 31, 2023)		25,500			1,217,293
Other comprehensive (loss) income		~~(357~~1,~~383~~387,244	)		~~560~~(357,~~836~~383	)
Accumulated deficit		(6783,~~033~~199,~~041~~785	)		(5367,~~818~~033,~~489~~041	)
Total Novo Integrated Sciences, Inc. stockholders’ equity		2414,~~815~~892,~~945~~621			2224,~~305~~815,~~159~~945
Noncontrolling interest		(~~316~~278,~~870~~696	)		(~~257~~316,~~588~~870	)
Total stockholders’ equity		2414,~~499~~613,~~075~~925			2224,~~047~~499,~~571~~075
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3532,~~563~~141,~~047~~276		$	4035,~~872~~563,~~840~~047

* The consolidated balance sheets’ common stock 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 consolidated financial statements.

F-3

NOVO INTEGRATED SCIENCES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Years Ended August 31, ~~2023~~2024 and ~~2022~~2023

	2023			2022
	2024			2023
	Years Ended
	August 31,			August 31,
	2023			2022
	2024			2023
Revenues	$	1213,~~572~~294,~~019~~357		$	1112,~~737~~572,~~937~~019
Cost of revenues		7,~~619~~551,~~304~~853			67,~~938~~619,~~699~~304
Gross profit		45,~~952~~742,~~715~~504			4,~~799~~952,~~238~~715
Operating expenses:
Selling expenses		1517,~~149~~137			2015,~~702~~149
General and administrative expenses		1314,~~490~~039,~~728~~265			1413,~~364~~490,~~639~~728
Impairment of assets		-761,067			~~14,083,531~~-
Goodwill impairment		-1,001,333			~~1,357,043~~-
Total operating expenses		1315,~~505~~818,~~877~~802			2913,~~825~~505,~~915~~877
Loss from operations		(810,~~553~~076,~~162~~298	)		(258,~~026~~553,~~677~~162	)
Non-operating income (expense)
Interest income		9202,~~027~~525			~~169~~9,~~088~~027
Interest expense		(~~360~~652,~~571~~398	)		(1360,~~594,275~~571	)
Other income		607,589			-
Other (expense) income		(1,032,620	)		607,589
Amortization of debt discount		(4,757,121	)		(5,973,973	)
Change in fair value of derivative liability		3,594,171			-
Foreign currency transaction losses		(215,206	)		(641,643	)
Amortization of debt discount		(6,574,862	)		(4,757,121	)
Total other income (expense)		(4,716,282	)		(8,040,803	)
Foreign currency transaction losses		(1,589,088	)		(215,206	)
Loss before income taxes		(13,269,444	)		(33,067,480	)
Total other income (expense)		(6,052,272	)		(4,716,282	)
Income tax expense (recovery)		-			(22,302	)
Loss before income taxes		(16,128,570	)		(13,269,444	)
Net loss	$	(13,269,444	)	$	(33,045,178	)
Income tax expense (recovery)		-			-
Net loss attributed to noncontrolling interest		(54,892	)		(195,963	)
Net loss	$	(16,128,570	)	$	(13,269,444	)
Net loss attributed to Novo Integrated Sciences, Inc.	$	(13,214,552	)	$	(32,849,215	)
Net loss attributed to noncontrolling interest		38,174			(54,892	)
Net loss attributed to Novo Integrated Sciences, Inc.	$	(16,166,744	)	$	(13,214,552	)
Comprehensive loss:
Net loss		(1316,~~269~~128,~~444~~570	)		(3313,~~045~~269,~~178~~444	)
Foreign currency translation loss		(~~922~~1,~~609~~744,627	)		(~~431~~922,~~605~~609	)
Comprehensive loss:	$	(1417,~~192~~873,~~053~~197	)	$	(3314,~~476~~192,~~783~~053	)
Weighted average common shares outstanding - basic and diluted		1018,~~165~~032,~~548~~015			210,~~913~~165,~~263~~548
Net loss per common share - basic and diluted	$	(10.3089	)	$	(111.2830	)

* The 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 consolidated financial statements.

F-4

NOVO INTEGRATED SCIENCES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Years Ended August 31, ~~2023~~2024 and ~~2022~~2023

	Shares		Amount		Capital			Be Issued			Income			Deficit			Equity			Interest			~~Total~~ Equity
	Common Stock				Additional Paid-in			Common Stock To			Other Comprehensive			Accumulated			Total Novo Stockholders’			Noncontrolling			Total
	Shares		Amount		Capital			Be Issued			Income			Deficit			Equity			Interest			~~Total~~ Equity
Balance, August 31, 2021		2,661,014	$	2,661	$	54,603,345		$	9,236,607		$	991,077		$	(20,969,274	)	$	43,864,416		$	(60,261	)	$	43,804,155
Common stock for services		75,000		75		1,329,675			-			-			-			1,329,750			-			1,329,750
Common stock issued as collateral and held in escrow		200,000		200		(200	)		-			-			-			-			-			-
Common stock for conversion of convertible notes		63,653		64		1,272,930			-			-			-			1,272,994			-			1,272,994
Common stock issued for acquisitions		80,000		80		1,703,920			-			-			-			1,704,000			-			1,704,000
Common stock to be issued for acquisitions		-		-		-			1,433,475			-			-			1,433,475			-			1,433,475
Value of warrants issued with convertible notes		-		-		5,553,290			-			-			-			5,553,290			-			5,553,290
Issuance of common stock to be issued		38,396		38		1,195,237			(1,195,275	)		-			-			-			-			-
Fair value of stock options		-		-		426,690			-			-			-			426,690			-			426,690
Foreign currency translation loss		-		-		-			-			(430,241	)		-			(430,241	)		(1,364	)		(431,605	)
Net loss		-		-		-			-			-			(32,849,215	)		(32,849,215	)		(195,963	)		(33,045,178	)
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
Units issued for cash, net of offering costs		400,000		400		1,794,600			-			-			-			1,795,000			-			1,795,000
Cashless exercise of warrants		583,334		583		1,421,000			-			-			-			1,421,583			-			1,421,583
Share issuance for convertible debt settlement		10,177,834		10,178		9,957,962			-			-			-			9,968,140			-			9,968,140
Exercise of warrants for cash		532,600		533		532,067			-			-			-			532,600			-			532,600
Shares issued with convertible notes		265,167		265		247,622			-			-			-			247,887			-			247,887
Value of warrants issued with convertible notes		-		-		257,994			-			-			-			257,994			-			257,994
Beneficial conversion feature upon issuance on convertible debt		-		-		164,046			-			-			-			164,046			-			164,046
Extinguishment of derivative liability due to conversion		-		-		1,390,380			-			-			-			1,390,380			-			1,390,380
Common stock for services		358,500		359		480,233			-			-			-			480,592			-			480,592
Issuance of common stock to be issued		323,827		324		8,257,190			(8,257,514	)		-			-			-			-			-
Fair value of stock options		-		-		385,335			-			-			-			385,335			-			385,335
Foreign currency translation loss		-		-		-			-			(918,219	)		-			(918,219	)		(4,390	)		(922,609	)
Net loss		-		-		-			-			-			(13,214,552	)		(13,214,552	)		(54,892	)		(13,269,444	)
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
Balance		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
Shares issued for convertible debt settlement		2,283,176		2,283		1,608,600			-			-			-			1,610,883			-			1,610,883
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
Reverse stock split share rounding		27,973		28		(28	)		-			-			-			-			-			-
Fair value of stock options		-		-		147,655			-			-			-			147,655			-			147,655
Cancellation of agreement		-		-		-			(18,943	)		-			-			(18,943	)		-			(18,943	)
Foreign currency translation loss		-		-		-			-			1,744,627			-			1,744,627			-			1,744,627
Net loss		-		-		-			-			-			(16,166,744	)		(16,166,744	)		38,174			(16,128,570	)
Balance, August 31, 2024		19,054,523	$	19,055	$	96,660,607		$	25,500		$	1,387,244		$	(83,199,785	)	$	14,892,621		$	(278,696	)	$	14,613,925
Balance		19,054,523	$	19,055	$	96,660,607		$	25,500		$	1,387,244		$	(83,199,785	)	$	14,892,621		$	(278,696	)	$	14,613,925

* The consolidated statements of stockholder’s 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 consolidated financial statements.

F-5

NOVO INTEGRATED SCIENCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended August 31, ~~2023~~2024 and ~~2022~~2023

	2023			2022
	August 31,			August 31,
	Years Ended
	August 31,			August 31,
	2023			2022
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1316,~~269~~128,~~444~~570	)	$	(3313,~~045~~269,~~178~~444	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,~~302~~261,~~754~~519			32,~~019~~302,~~253~~754
Fair value of vested stock options		~~385~~147,~~335~~656			~~426~~385,~~690~~335
Financing costs for debt extension		~~1,421,583~~-			-1,421,583
Default payment and interest paid through common share issuance		205,349			-
Change in fair value of derivative liability		(3,594,171	)		-
Common stock issued for services		480,592			1,329,750
Default payment and interest paid through common share issuance		-			205,349
Operating lease expense		797,515			852,580
Cashless exercise of warrants		1,323,398			-
Amortization of debt discount		4,757,121			5,973,973
Common stock issued for services		1,195,400			480,592
Foreign currency transaction losses		215,206			641,643
Operating lease expense		616,799			797,515
Impairment of assets		-			14,083,531
Cancellation of shares to be issued		62,130			-
Other receivables write-off		-			299,672
Amortization of debt discount		6,574,862			4,757,121
Goodwill impairment		-			1,357,043
Foreign currency transaction losses		1,589,088			215,206
Impairment of assets		761,067			-
Assets write off		321,872			-
Goodwill impairment		1,001,333			-
Changes in operating assets and liabilities:
Accounts receivable		(~~597~~453,~~191~~252	)		~~457~~(597,~~006~~191	)
Inventory		(~~255~~210,~~781~~883	)		(~~527~~255,~~397~~781	)
Prepaid expenses and other current assets		~~210~~(259,~~382~~972	)		~~(369~~210,~~647~~382	)
Accounts payable		1(267,~~770,589~~211	)		~~283~~1,~~234~~770,589
Accrued expenses		~~153~~330,~~598~~276			38153,~~743~~598
Accrued interest		~~(58~~275,~~066~~618	)		~~101~~(58,~~353~~066	)
Operating lease liability		(~~762~~616,~~852~~799	)		(~~806~~762,~~394~~852	)
Net cash used in operating activities		(25,~~243~~069,~~315~~840	)		(52,~~884~~243,~~145~~315	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(495,~~224~~034	)		(~~190~~49,~~168~~224	)
Cash acquired with acquisition		-			57,489
Net cash (used in) provided by investing activities		(5,034	)		(49,224	)
Collection of other receivable		-			296,138
Net cash (used in) provided by investing activities		(49,224	)		163,459
CASH FLOWS FROM FINANCING ACTIVITIES:
Receipts from related parties		7,206			16,600
(Repayments to) receipt from related parties		(396,418	)		7,206
Proceeds from notes payable		~~222,780~~402			-222,780
Repayments of notes payable		(37183,~~130~~725	)		(1037,~~591,115~~130	)
Repayments of finance leases		(87,~~611~~334	)		(188,~~435~~611	)
Proceeds from issuance of convertible notes		18,~~285~~649,~~903~~153			151,~~270~~285,~~000~~903
Repayment of convertible notes		(3,~~033~~311,~~888~~536	)		(53,~~104~~033,~~167~~888	)
Proceeds from the sale of common stock, net of offering costs		~~1,795,000~~-			-1,795,000
Proceeds from exercise of warrants		~~532~~240,~~600~~400			-532,600
Net cash provided by (used in) financing activities		763,860			(427,117	)
Net cash provided by financing activities		4,990,942			763,860
Effect of exchange rate changes on cash and cash equivalents		~~(233~~512,~~685~~193	)		33(233,~~328~~685	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(1,762,364	)		(6,114,475	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		428,261			(1,762,364	)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		2416,~~178,687~~323			82,~~293~~178,~~162~~687
CASH AND CASH EQUIVALENTS, END OF YEAR	$	~~416~~844,~~323~~584		$	2416,~~178,687~~323
CASH PAID FOR:
Interest	$	~~432~~190,~~094~~491		$	1432,~~502,819~~094
Income taxes	$	-		$	-
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued for convertible debt	$	91,~~968~~610,~~140~~883		$	19,~~272~~968,~~994~~140
Common stock issued for acquisition	$	-		$	~~1,704,000~~-
Warrants issued with convertible notes	$	~~257,994~~-		$	5257,~~553,290~~994
Beneficial conversion feature upon issuance of convertible notes	$	~~164,046~~-		$	-164,046
Debt discount recognized on derivative liability	$	~~1,390,380~~-		$	-1,390,380
Extinguishment of derivative liability due to conversion	$	~~1,390,380~~-		$	-1,390,380
Debt discount recognized on convertible note	$	~~975,024~~-		$	-975,024
Common stock issued with convertible notes	$	~~247,887~~-		$	-247,887
Common stock issued for services	$	1,195,400		$	-
Cashless exercise of warrants	$	1,323,398		$	-

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

F-6

NOVO INTEGRATED SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended August 31, ~~2023~~2024 and ~~2022~~2023

Note 1 - Organization and Basis of Presentation

Organization and Line of Business

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

	●	First Pillar – Service Networks: Deliver multidisciplinary primary care services through (i) an affiliate network of clinic facilities, (ii) small and micro footprint sized clinic facilities primarily located within the footprint of box-store commercial enterprises, (iii) clinic facilities operated through a franchise relationship with the Company, and (iv) corporate operated clinic facilities.

	●	Second Pillar – Technology: Develop, deploy, and integrate sophisticated interconnected technology, interfacing the patient to the healthcare practitioner thus expanding the reach and availability of the Company’s services, beyond the traditional clinic location, to geographic areas not readily providing advanced, peripheral based healthcare services, including the patient’s home.

	●	Third Pillar – Products: Develop and distribute effective, personalized health and wellness product solutions allowing for the customization of patient preventative care remedies and ultimately a healthier population. The Company’s science-first approach to product innovation further emphasizes our mandate to create and provide over-the-counter preventative and maintenance care solutions.

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 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 subject to a then-current Regulation S offering that was undertaken by Novo Integrated (the “Exchange”).

F-7

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, 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 Integrated Sciences, Inc., were $6,904.

F-7

Reverse Stock Split

On November 7, 2023, the Company effected a 1-for-10 reverse stock split of our common stock. 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 the next higher whole share. Unless otherwise noted, the share and per share information in this report have been retroactively adjusted to give effect to the 1-for-10 reverse stock split.

Basis of Presentation

The accompanying consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

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 consolidated financial statements were translated and presented in USD.

Going Concern

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 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 of August 31, ~~2023~~2024. 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 consolidated financial statements are issued.

To alleviate these conditions, the Company is currently in the process of raising funds through debt financing and a subsequent public offering in the United States. As the Company’s funding activities are ongoing, there can be no assurances that the Company will be able to secure funding on terms that are acceptable to the Company. 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 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 consolidated financial statements that substantial doubt exists as those plans are not completely within the control of management. These 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.

Foreign Currency Translation

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 consolidated statement of operations and comprehensive loss. The following table details the exchange rates used for the respective periods:

	August 31, 2023		August 31, 2022
	August 31, 2024		August 31, 2023
Period end: CAD to USD exchange rate	$	0.~~7390~~7364	$	0.~~7627~~7390
Average period: CAD to USD exchange rate	$	0.~~7426~~7349	$	0.~~7864~~7426

F-8

Note 2 – Summary of Significant Accounting Policies

Use of Estimates

The preparation of 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 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, 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.

Principles of Consolidation

The accompanying 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).

All intercompany transactions have been eliminated.

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 OCI are attributed to the shareholders of the Company and to the noncontrolling interests. Total comprehensive 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.

Noncontrolling Interest

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 consolidated statements of operations and comprehensive loss.

F-9

Cash Equivalents

For the purpose of the 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

Accounts receivable are recorded, net of allowance for doubtful accounts and sales returns. Management reviews the composition of accounts ~~receivable~~ 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 August 31, ~~2023~~2024 and ~~2022~~2023, the allowance for uncollectible accounts receivable was $1,273,596 and $864,215, respectively. ~~and~~As ~~$992~~of August 31,~~329~~ 2024, ~~respectively~~10% (2023: nil%) of the Company’s trade receivables balance is owed from one customer.

Inventory

Inventories are valued at the lower of cost (determined by the first in, first out method) and net realizable value. Management compares the ~~cost~~ 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 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 August 31, ~~2023~~2024 and ~~2022~~2023, the Company’s allowance for slow moving or obsolete inventory was $nil and $1nil,~~027,670,~~ respectively. During the year ended August 31, 2023, the Company had disposed of its slow moving and obsolete inventory as management had determined to be unsellable.

Other Receivables

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 years ended August 31, ~~2023~~2024 and ~~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

Schedule of Estimated Useful ~~lives~~Lives of Assets

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

F-10

Leases

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.

F-10

Long-Lived Assets

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 August 31, ~~2023~~2024 and ~~2022~~2023, the Company believes there was no impairment of its long-lived assets.

Intangible Assets

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

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

The intangible assets with finite useful lives are reviewed for impairment when indicators of impairment are present and the ~~undiscounted~~ 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. Based on its reviews at August 31, 2024 ~~2023~~ and ~~2022~~2023, the Company believes there was $~~nil~~ 1,726,776 and $~~14,083,531~~ nil of impairment of its intangible assets, respectively, recognized in the consolidated statements of operations and comprehensive loss as impairment of assets. The impairment was determined based on an analysis performed on the fair value of the underlying intangible assets, which was estimated based on a discounted cash flow valuation model and the projected future cash flows of the underlying business.

Right-of-use Assets

Goodwill

Goodwill represents the excess of purchase price over the underlying net assets of businesses acquired. Under U.S. GAAP, goodwill is not ~~amortized~~ 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~~2024, the Company performed the required impairment reviews and determined that an impairment charge of $1742,~~357,043~~120 related to the goodwill for Acenzia and an impairment charge of $259,213 related to NHL (APKA, EFL and Rockland) 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 August 31, 2023, the Company believes there was no additional impairment of its goodwill.~~

F-11

Summary of changes in goodwill by acquired businesses is as follows:

Schedule of Changes in Goodwill

	APKA			EFL			Rockland			Acenzia			1285 Canada			Total
Balance, August 31, 2021	$	197,925		$	129,839		$	229,593		$	8,931,491		$	-		$	9,488,848
Balance, August 31, 2022		190,678			125,088			221,188			7,288,307			583			7,825,844
Goodwill acquired with purchase of business		-			-			-			-			602			602
Impairment of goodwill		-			-			-			(1,357,043	)		-			(1,357,043	)
Foreign currency translation adjustment		(7,247	)		(4,751	)		(8,405	)		(286,141	)		(19	)		(306,563	)
Balance, August 31, 2022	$	190,678		$	125,088		$	221,188		$	7,288,307		$	583		$	7,825,844
Beginning balance	$	190,678		$	125,088		$	221,188		$	7,288,307		$	583		$	7,825,844
Foreign currency translation adjustment		(5,928	)		(3,892	)		(6,878	)		(226,645	)		(18	)		(243,361	)
Balance, August 31, 2023	$	184,750		$	121,196		$	214,310		$	7,061,662		$	565		$	7,582,483
Ending balance	$	184,750		$	121,196		$	214,310		$	7,061,662		$	565		$	7,582,483
Beginning balance		184,750			121,196			214,310			7,061,662			565			7,582,483
Impairment of goodwill		(92,375	)		(60,598	)		(106,240	)		(742,120	)		-			(1,001,333	)
Foreign currency translation adjustment		(2,461	)		(1,614	)		(2,830	)		(19,770	)		(2	)		(26,677	)
Balance, August 31, 2024		89,914			58,984			105,240			6,299,772			563			6,554,473
Ending balance		89,914			58,984			105,240			6,299,772			563			6,554,473

Fair Value of Financial Instruments

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 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:

	●	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.

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 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, 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 August 31, ~~2023~~2024 and ~~2022~~2023, respectively, the Company did not identify any financial assets and liabilities required to be presented on the consolidated balance sheet at fair value, except for contingent liability which is carried at fair value using Level 1 inputs and derivative liability which is carried at fair value using Level 3 inputs.

F-12

Derivative Financial Instruments

F-12

Revenue Recognition

The Company’s revenue recognition reflects the updated accounting policies as per the requirements of 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.

	●	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.

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

	●	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

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 consolidated balance sheets.

Sales returns and allowances were insignificant for the years ended August 31, ~~2023~~2024 and ~~2022~~2023. The Company does not provide unconditional right of return, price protection or any other concessions to its customers.

F-13

Income Taxes

F-13

Stock-Based Compensation

Basic and Diluted Earnings Per Share

Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share. The calculations within these consolidated financial statements have been retroactively adjusted to reflect the effects of the 1-for-10 reverse stock split that took place 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 1826,~~777,678~~616 and 1,~~060~~777,~~950~~678 options/warrants outstanding at August 31, ~~2023~~2024 and ~~2022~~2023, respectively. In addition, at August 31, ~~2023~~2024, there were outstanding convertible notes that could convert into ~~581~~24,~~715~~608,975 shares of common stock and there were 911,~~138~~700 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.

Foreign Currency Transactions and Comprehensive Income

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. Translation ~~losses~~gain of $~~922~~1,~~609~~744,627 and translation loss $~~431~~922,~~605~~609 for the years ended August 31, ~~2023~~2024 and ~~2022~~2023, respectively, are classified as an item of other comprehensive (loss) income in the stockholders’ equity section of the consolidated balance sheet.

Consolidated Statements of Cash Flows

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 consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets.

F-14

Segment Reporting

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. See Note 18.

Reclassifications

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 shareholders’ equity.

F-14

Recent Accounting Pronouncements

InFrom ~~June~~time ~~2016,~~to ~~the FASB issued ASU 2016-13~~time, ~~Financial~~new ~~Instruments—Credit~~accounting ~~Losses~~pronouncements ~~(Topic~~are ~~326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 was~~ issued ~~to improve financial reporting~~ by ~~requiring~~FASB ~~earlier~~or ~~recognition of credit losses on financing receivables and~~ other ~~financial assets in scope. The new~~ standard ~~represents~~setting ~~significant~~bodies ~~changes to accounting for credit losses. Full lifetime expected credit losses will be recognized upon initial recognition of an asset in scope. The current incurred loss impairment model~~ that ~~recognizes~~are ~~losses~~adopted ~~when~~by ~~a probable threshold is met will be replaced with~~ the ~~expected~~Company credit loss impairment method without recognition threshold. The expected credit losses estimate will be based upon historical information, current conditions, and reasonable and supportable forecasts. This ASU as ~~amended by ASU 2019-10, is effective for fiscal years beginning after December 15, 2023. The Company~~of ~~is currently evaluating~~ the ~~effect~~specified ofeffective ~~this ASU on the Company’s consolidated financial statements and related disclosures~~date.

In December 2021, the FASB issued an update to ASU No. 2016-13 the Current Expected Credit Lo

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