Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Feb. 29, 2020 | Apr. 18, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | Novo Integrated Sciences, Inc. | |
Entity Central Index Key | 0001138978 | |
Document Type | 10-Q | |
Document Period End Date | Feb. 29, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --08-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 233,011,454 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Feb. 29, 2020 | Aug. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 1,209,339 | $ 2,083,666 |
Accounts receivable, net | 1,472,349 | 1,463,529 |
Other receivables, current portion | 1,075,908 | 300,994 |
Prepaid expenses and other current assets | 356,238 | 250,398 |
Total current assets | 4,113,834 | 4,098,587 |
Property and equipment, net | 368,261 | 410,188 |
Intangible assets | 27,606,567 | 22,358,567 |
Right-of-use assets | 3,015,589 | 3,004,017 |
Other receivables, net of current portion | 279,600 | 1,062,241 |
Acquisition deposits | 636,985 | 716,688 |
Goodwill | 618,848 | 623,081 |
TOTAL ASSETS | 36,639,684 | 32,273,369 |
Current Liabilities: | ||
Accounts payable | 803,799 | 1,144,812 |
Accrued expenses | 200,031 | 205,784 |
Accrued interest (principally to related parties) | 338,214 | 248,582 |
Due to related parties | 775,708 | 920,083 |
Operating lease liability, current portion | 544,476 | 508,305 |
Total current liabilities | 2,662,228 | 3,027,566 |
Debentures, related parties | 1,193,428 | 1,201,591 |
Operating lease liability, net of current portion | 2,483,980 | 2,500,004 |
TOTAL LIABILITIES | 6,339,636 | 6,729,161 |
Commitments and contingencies | ||
Novo Integrated Sciences, Inc. | ||
Convertible preferred stock; $0.001 par value; 1,000,000 shares authorized; 0 and 0 shares issued and outstanding at February 29, 2020 and August 31, 2019 | ||
Common stock; $0.001 par value; 499,000,000 shares authorized; 232,045,876 and 223,691,507 shares issued and outstanding at February 29, 2020 and August 31, 2019 | 232,046 | 223,691 |
Additional paid-in capital | 41,166,247 | 35,813,203 |
Other comprehensive income | 1,127,845 | 1,138,919 |
Accumulated deficit | (12,184,577) | (11,591,973) |
Total Novo Integrated Sciences, Inc. stockholders' equity | 30,341,561 | 25,583,840 |
Noncontrolling interest | (41,513) | (39,632) |
Total stockholders' equity | 30,300,048 | 25,544,208 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 36,639,684 | $ 32,273,369 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Feb. 29, 2020 | Aug. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Convertible preferred stock, par value | $ 0.001 | $ 0.001 |
Convertible preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Convertible preferred stock, shares issued | 0 | 0 |
Convertible preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 499,000,000 | 499,000,000 |
Common stock, shares issued | 232,045,876 | 223,691,507 |
Common stock, shares outstanding | 232,045,876 | 223,691,507 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Income Statement [Abstract] | ||||
Revenues | $ 2,428,864 | $ 2,200,410 | $ 4,977,474 | $ 4,512,032 |
Cost of revenues | 1,585,860 | 1,320,740 | 3,218,801 | 2,748,823 |
Gross profit | 843,004 | 879,670 | 1,758,673 | 1,763,209 |
Operating expenses: | ||||
Selling expenses | 884 | 4,016 | 2,106 | 29,239 |
General and administrative expenses | 992,888 | 954,341 | 1,984,160 | 2,028,009 |
Total operating expenses | 993,772 | 958,357 | 1,986,266 | 2,057,248 |
Loss from operations | (150,768) | (78,687) | (227,593) | (294,039) |
Non operating income (expense) | ||||
Interest income | 27,177 | 4,294 | 55,372 | 9,383 |
Interest expense | (37,717) | (48,587) | (78,046) | (94,908) |
Write off of acquisition deposit | (344,521) | (344,521) | ||
Total other income (expense) | (355,061) | (44,293) | (367,195) | (85,525) |
Loss before income taxes | (505,829) | (122,980) | (594,788) | (379,564) |
Income tax expense | ||||
Net loss | (505,829) | (122,980) | (594,788) | (379,564) |
Net loss attributed to noncontrolling interest | (1,345) | (3,479) | (2,184) | (8,647) |
Net loss attributed to Novo Integrated Sciences, Inc. | (504,484) | (119,501) | (592,604) | (370,917) |
Comprehensive loss: | ||||
Net loss | (505,829) | (122,980) | (594,788) | (379,564) |
Foreign currency translation gain (loss) | (16,274) | 27,765 | (11,074) | 25,980 |
Comprehensive loss: | $ (522,103) | $ (95,215) | $ (605,862) | $ (353,584) |
Weighted average common shares outstanding - basic and diluted | 230,551,371 | 214,281,342 | 227,212,270 | 211,094,982 |
Net loss per common share - basic and diluted | $ 0 | $ 0 | $ 0 | $ 0 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Other Comprehensive Income [Member] | Accumulated Deficit [Member] | Total Novo Stockholders' Equity [Member] | Noncontrolling Interest [Member] | Total |
Balance at Aug. 31, 2018 | $ 207,882 | $ 10,053,683 | $ 1,139,815 | $ (11,199,989) | $ 201,391 | $ (28,621) | $ 172,770 |
Balance, shares at Aug. 31, 2018 | 207,881,743 | ||||||
Common stock issued for cash | $ 563 | 531,366 | 531,929 | 531,929 | |||
Common stock issued for cash, shares | 563,222 | ||||||
Fair value of vested stock options | 70,846 | 70,846 | 70,846 | ||||
Foreign currency translation loss | (1,785) | (1,785) | 530 | (1,255) | |||
Net loss | (251,416) | (251,416) | (5,168) | (256,584) | |||
Balance at Nov. 30, 2018 | $ 208,445 | 10,655,895 | 1,138,030 | (11,451,405) | 550,965 | (33,259) | 517,706 |
Balance, shares at Nov. 30, 2018 | 208,444,965 | ||||||
Balance at Aug. 31, 2018 | $ 207,882 | 10,053,683 | 1,139,815 | (11,199,989) | 201,391 | (28,621) | 172,770 |
Balance, shares at Aug. 31, 2018 | 207,881,743 | ||||||
Net loss | (379,564) | ||||||
Balance at Feb. 28, 2019 | $ 223,048 | 35,047,853 | 1,165,795 | (11,570,906) | 24,865,790 | (37,098) | 24,828,692 |
Balance, shares at Feb. 28, 2019 | 223,048,205 | ||||||
Balance at Nov. 30, 2018 | $ 208,445 | 10,655,895 | 1,138,030 | (11,451,405) | 550,965 | (33,259) | 517,706 |
Balance, shares at Nov. 30, 2018 | 208,444,965 | ||||||
Common stock issued for cash | $ 2,145 | 2,045,849 | 2,047,994 | 2,047,994 | |||
Common stock issued for cash, shares | 2,144,891 | ||||||
Foreign currency translation loss | 27,765 | 27,765 | (360) | 27,405 | |||
Common stock issued for interest in joint venture | $ 12,000 | 21,588,000 | 21,600,000 | 21,600,000 | |||
Common stock issued for interest in joint venture, shares | 12,000,000 | ||||||
Common stock issued for software license | $ 458 | 758,109 | 758,567 | 758,567 | |||
Common stock issued for software license, shares | 458,349 | ||||||
Net loss | (119,501) | (119,501) | (3,479) | (122,980) | |||
Balance at Feb. 28, 2019 | $ 223,048 | 35,047,853 | 1,165,795 | (11,570,906) | 24,865,790 | (37,098) | 24,828,692 |
Balance, shares at Feb. 28, 2019 | 223,048,205 | ||||||
Balance at Aug. 31, 2019 | $ 223,691 | 35,813,203 | 1,138,919 | (11,591,973) | 25,583,840 | (39,632) | 25,544,208 |
Balance, shares at Aug. 31, 2019 | 223,691,507 | ||||||
Common stock issued for cash | $ 355 | 113,044 | 113,399 | 113,399 | |||
Common stock issued for cash, shares | 354,369 | ||||||
Foreign currency translation loss | 5,200 | 5,200 | (123) | 5,077 | |||
Net loss | (88,120) | (88,120) | (839) | (88,959) | |||
Balance at Nov. 30, 2019 | $ 224,046 | 35,926,247 | 1,144,119 | (11,680,093) | 25,614,319 | (40,594) | 25,573,725 |
Balance, shares at Nov. 30, 2019 | 224,045,876 | ||||||
Balance at Aug. 31, 2019 | $ 223,691 | 35,813,203 | 1,138,919 | (11,591,973) | 25,583,840 | (39,632) | 25,544,208 |
Balance, shares at Aug. 31, 2019 | 223,691,507 | ||||||
Net loss | (594,788) | ||||||
Balance at Feb. 29, 2020 | $ 232,046 | 41,166,247 | 1,127,845 | (12,184,577) | 30,341,561 | (41,513) | 30,300,048 |
Balance, shares at Feb. 29, 2020 | 232,045,876 | ||||||
Balance at Nov. 30, 2019 | $ 224,046 | 35,926,247 | 1,144,119 | (11,680,093) | 25,614,319 | (40,594) | 25,573,725 |
Balance, shares at Nov. 30, 2019 | 224,045,876 | ||||||
Foreign currency translation loss | (16,274) | (16,274) | 426 | (15,848) | |||
Common stock issued for licensing agreement | $ 8,000 | 5,240,000 | 5,248,000 | 5,248,000 | |||
Common stock issued for licensing agreement, shares | 8,000,000 | ||||||
Net loss | (504,484) | (504,484) | (1,345) | (505,829) | |||
Balance at Feb. 29, 2020 | $ 232,046 | $ 41,166,247 | $ 1,127,845 | $ (12,184,577) | $ 30,341,561 | $ (41,513) | $ 30,300,048 |
Balance, shares at Feb. 29, 2020 | 232,045,876 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Feb. 29, 2020 | Feb. 28, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (594,788) | $ (379,564) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 40,968 | 46,474 |
Fair value of vested stock options | 70,846 | |
Operating lease expense | 262,301 | |
Write off of acquisition deposit | 344,521 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (19,067) | (50,152) |
Prepaid expenses and other current assets | (108,869) | (2,541) |
Accounts payable | (339,524) | (44,730) |
Accrued expenses | (4,006) | (126,470) |
Accrued interest | 92,802 | 26,597 |
Operating lease liability | (253,557) | |
Net cash used in operating activities | (579,219) | (459,540) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (1,192) | (75,947) |
Payment for acquisition deposit | (636,985) | |
Amounts loaned for other receivables | (225,924) | |
Return of acquisition deposit | 372,800 | |
Net cash used in investing activities | (265,377) | (301,871) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayments to related parties | (140,366) | (142,376) |
Proceeds from the sale of common stock | 113,399 | 2,579,923 |
Net cash provided by (used in) financing activities | (26,967) | 2,437,547 |
Effect of exchange rate changes on cash and cash equivalents | (2,764) | 22,095 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (874,327) | 1,698,231 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 2,083,666 | 675,705 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 1,209,339 | 2,373,936 |
CASH PAID FOR: | ||
Interest | 52,051 | 69,289 |
Income taxes | ||
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Common stock issued for intangible assets | $ 5,248,000 |
Organization and Basis of Prese
Organization and Basis of Presentation | 6 Months Ended |
Feb. 29, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Note 1 - Organization and Basis of Presentation Organization and Line of Business 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 delivers multi-disciplinary primary healthcare through our 16 corporate-owned clinics and a contracted network of 103 affiliate clinics and 226 eldercare centric homes located across Canada. Our team of practitioners and staff are trained for assessment, diagnosis, treatment, pain management, rehabilitation and primary prevention. Our specialized services and products include physiotherapy, chiropractic care, occupational therapy, eldercare, laser therapeutics, massage therapy, acupuncture, chiropody, neurological functions, kinesiology, concussion management and baseline testing, women’s pelvic health, sports medicine therapy, assistive devices and private personal training. We do not provide primary care medical services, none of our employees practice primary care medicine, and our services do not require a medical or nursing license. 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 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 167,797,406 restricted shares 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”). 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 $6,904. The unaudited condensed consolidated financial statements are prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information furnished herein reflects all adjustments, consisting only of normal recurring adjustments, which in the opinion of management, are necessary to fairly state the Company’s financial position, the results of its operations, and cash flows for the periods presented. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) were omitted pursuant to such rules and regulations. The results of operations for the six months ended February 29, 2020 are not necessarily indicative of the results for the year ending August 31, 2020. Basis of Presentation The accompanying unaudited condensed consolidated financial statements were prepared in conformity with U.S. GAAP for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and notes required by U.S. GAAP for complete financial statements. The financial information contained in this report should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended August 31, 2019, that we filed on November 20, 2019. The Company’s Canadian subsidiaries’ functional currency is the Canadian Dollar (“CAD”); however, the accompanying unaudited condensed consolidated financial statements were translated and presented in United States Dollars (“$” or “USD”). 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 Accounting Standards Codification (“ASC”) Topic 830 Foreign Currency Transaction Comprehensive Income February 29, 2020 February 28, 2019 August 31, 2019 Period end: CAD to USD exchange rate $ 0.7456 $ 0.7596 $ 0.7507 Average period: CAD to USD exchange rate $ 0.7577 $ 0.7578 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Feb. 29, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. 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 condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, NHL, Novo Healthnet Rehab Limited, Novo Assessments Inc., an 80% interest in Novo Healthnet Kemptville Centre, Inc., a Back on Track Physiotherapy and Health Centre clinic operated by NHL, and a 70% interest in Novo Earth Therapeutics Inc. (currently inactive), a joint venture with Harvest Gold Farms Inc. All of the Company’s subsidiaries are incorporated under the laws of the Province of Ontario or New Brunswick, Canada. All intercompany transactions have been eliminated. Noncontrolling Interest The Company follows Financial Accounting Standards Board (“FASB”) ASC Topic 810, Consolidation, The net income (loss) attributed to the NCI is separately designated in the accompanying condensed consolidated statements of operations and other comprehensive income (loss). Cash Equivalents For the purpose of the statement 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 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 February 29, 2020, and August 31, 2019, the allowance for uncollectible accounts receivable was $489,195 and $471,566, respectively. Property and Equipment Property and equipment are stated at cost. 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: Leasehold improvements 5 years Clinical equipment 5 years Computer equipment 3 years Office equipment 5 years Furniture and fixtures 5 years Long-Lived Assets The Company applies the provisions of ASC Topic 360, Property, Plant, and Equipment Intangible Assets The Company’s intangible assets consist of land use rights, a software license and intellectual property which will be amortized over 50, 7 and 7 years, respectively. Amortization will begin when the assets are fully placed in service. The Company performs a test for impairment annually. The land use rights, the software license and intellectual property intangible assets were acquired in January 2019, February 2019 and December 2019, respectively. Based on its reviews at August 31, 2019, the Company believes there was no impairment of its intangible assets. Right-of-use Assets The Company’s right-of-use assets consist of leased assets recognized in accordance with ASC 842, Leases, which 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. At February 29, 2020, the Company recorded goodwill of $186,400, $216,224 and $216,224, respectively, related to its acquisition of APKA Health, Inc. during the fiscal year ended August 31, 2017, Executive Fitness Leaders during the fiscal year ended August 31, 2018 and Action Plus Physiotherapy Rockland during the fiscal year ended August 31, 2019. Summary of changes in goodwill by acquired businesses is as follows: Apka EFL Rockland Total Balance, August 31, 2019 $ 187,675 $ 217,703 $ 217,703 $ 623,081 Foreign currency translation adjustment (1,275 ) (1,479 ) (1,479 ) (4,233 ) Balance, February 29, 2020 $ 186,400 $ 216,224 $ 216,224 $ 618,848 Acquisition Deposits The Company has signed letters of understanding with two potential acquisition candidates which includes refundable acquisition deposits totaling $636,985 and $716,688 at February 29, 2020 and August 31, 2019, respectively. During the six months ended February 29, 2020, the Company wrote off an acquisition deposit of $344,521 which is considered impaired since the acquiree has been dissolved and is no longer in business. Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash and equivalents, accounts receivable, notes receivables, accounts payable, accrued expenses and due to related parties, the carrying amounts approximate their fair values due to their short maturities. FASB ASC Topic 820, Fair Value Measurements and Disclosures Financial Instruments ● 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 Derivatives and Hedging As of February 29, 2020, and August 31, 2019, respectively, the Company did not identify any assets and liabilities required to be presented on the balance sheet at fair value. Fair Value Measurement on a Non-Recurring Basis The Company measures the fair value of certain assets on a non-recurring basis, generally quarterly, annually or when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. These assets include goodwill and intangible assets. Revenue Recognition Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers . Revenue Recognition Revenue from providing healthcare and healthcare related services are recognized under Topic 606 in a manner that reasonably reflects the delivery of its 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 of 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 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. Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes 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. Stock-Based Compensation The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation Basic and Diluted Earnings Per Share Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share 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 gains of $1,127,845 and $1,138,919 at February 29, 2020 and August 31, 2019, respectively, are classified as an item of other comprehensive income in the stockholders’ equity section of the balance sheet. Statement 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 statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets. Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Leases Leases In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes Income Taxes In June 2018, the Financial Accounting Standards Board (the “FASB”), issued an accounting pronouncement (FASB ASU 2018-07) to expand the scope of ASC Topic 718, Compensation-Stock Compensation Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Feb. 29, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 3 – Related Party Transactions Due to related parties Amounts loaned to the Company by stockholders and officers of the Company are payable upon demand. At February 29, 2020 and August 31, 2019, the amount due to related parties was $775,708 and $920,083, respectively. The Company leases office space from a related party on a month-to-month basis with monthly lease payments of $1,509. On January 31, 2018, a related party converted $813,125 of outstanding principal and accrued interest into 1,976,483 shares of the Company’s common stock. The per share price used for the conversion of this loan was $0.4114 which was determined based on the average price of the five (5) trading days immediately preceding the date of conversion with a 10% premium added to the calculated per share price. |
Accounts Receivables, Net
Accounts Receivables, Net | 6 Months Ended |
Feb. 29, 2020 | |
Receivables [Abstract] | |
Accounts Receivables, Net | Note 4 – Accounts Receivables, net Accounts receivables, net at February 29, 2020 and August 31, 2019 consisted of the following: February 29, August 31, 2020 2019 Trade receivables $ 1,647,750 $ 1,631,036 Amounts earned but not billed 313,794 304,059 1,961,544 1,935,095 Allowance for doubtful accounts (489,195 ) (471,566 ) Accounts receivable, net $ 1,472,349 $ 1,463,529 |
Other Receivables
Other Receivables | 6 Months Ended |
Feb. 29, 2020 | |
Receivables [Abstract] | |
Other Receivables | Note 5 – Other Receivables Other receivables at February 29, 2020 and August 31, 2019 consisted of the following: February 29, August 31, 2020 2019 Notes receivable dated April 1, 2015 and amended on May 23, 2017; accrued interest at 8% per annum; secured by certain assets; due March 1, 2019. (currently in default) $ 279,600 $ 281,513 Advance to corporation; non-interest bearing; unsecured; due not later than November 18, 2020 29,824 30,028 Advance to corporation; accrues interest at 12% per annum; unsecured; due December 31, 2020 74,560 75,070 Advance to corporation; accrues interest at 10% per annum after the first 60 days; unsecured; due February 7, 2021 225,924 225,924 Advance to corporation; accrues interest at 10% per annum; secured by property and other assets; due December 31, 2020 745,600 750,700 Total other receivables 1,355,508 1,363,235 Current portion (1,075,908 ) (300,994 ) Long-term portion $ 279,600 $ 1,062,241 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Feb. 29, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 6 – Property and Equipment Property and equipment at February 29, 2020 and August 31, 2019 consisted of the following: February 29, August 31, 2020 2019 Leasehold Improvements $ 450,152 $ 453,233 Clinical equipment 284,543 285,307 Computer equipment 22,976 23,133 Office equipment 28,399 28,593 Furniture and fixtures 38,631 38,895 824,701 829,161 Accumulated depreciation (456,440 ) (418,973 ) Total $ 368,261 $ 410,188 Depreciation expense for the six months ended February 29, 2020 and February 28, 2019 was $40,968 and $46,474, respectively. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Feb. 29, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 7 – Intangible Assets Intangible assets at February 29, 2020 and August 31, 2019 consisted of the following: February 29, August 31, 2020 2019 Land use rights $ 21,600,000 $ 21,600,000 Software license 758,567 758,567 Intellectual property 5,248,000 - 27,606,567 22,358,567 Accumulated amortization - - Total $ 27,606,567 $ 22,358,567 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 8,000,000 shares of restricted common stock of the Company valued at $5,248,000. There was no amortization expense during the six months ended February 29, 2020 and February 28, 2019 as the listed intangible assets have not been placed in service. |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Feb. 29, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Note 8 – Accrued Expenses Accrued expenses at February 29, 2020 and August 31, 2019 consisted of the following: February 29, August 31, 2020 2019 Accrued liabilities $ 43,901 $ 59,661 Accrued payroll 118,018 115,912 Other 38,112 30,211 $ 200,031 $ 205,784 |
Debentures, Related Parties
Debentures, Related Parties | 6 Months Ended |
Feb. 29, 2020 | |
Debt Disclosure [Abstract] | |
Debentures, Related Parties | Note 9 – Debentures, related parties On September 30, 2013, the Company issued five debentures totaling CAD$6,402,512 ($4,968,990 at November 30, 2017) in connection with the acquisition of certain business assets. The holders of the debentures are current stockholders, officers and/or affiliates of the Company. The debentures are secured by all the assets of the Company, accrue interest at 8% per annum and were originally due on September 30, 2016. On December 2, 2017, the debenture holders agreed to extend the due date to September 30, 2019. On September 27, 2019, the debenture holders agreed to extend the due date to September 30, 2021. On January 31, 2018, the debenture holders converted 75% of the debenture value of $3,894,809 plus accrued interest of $414,965 into 10,475,872 shares of the Company’s common stock. The per share price used for the conversion of each debenture was $0.4114 which was determined based on the average price of the five (5) trading days immediately preceding the date of conversion with a 10% premium added to the calculated per share price. At February 29, 2020, the amount of debentures outstanding was $1,193,428. |
Leases
Leases | 6 Months Ended |
Feb. 29, 2020 | |
Leases [Abstract] | |
Leases | Note 10 – Leases The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate. The Company leases its corporate office space and certain facilities under long-term operating leases expiring through fiscal year 2028. Effective March 1, 2019, the Company adopted the provision of ASC 842 Leases. The table below presents the lease related assets and liabilities recorded on the Company’s condensed consolidated balance sheets as of February 29, 2020: Classification on Balance Sheet February 29, 2020 Assets Operating lease assets Operating lease right of use assets $ 3,015,589 Total lease assets $ 3,015,589 Liabilities Current liabilities Operating lease liability Current operating lease liability $ 544,476 Noncurrent liabilities Operating lease liability Long-term operating lease liability 2,483,980 Total lease liability $ 3,028,456 Lease obligations at February 29, 2020 consisted of the following: Twelve Months Ending February 28, 2020 $ 790,892 2021 715,733 2022 611,189 2023 461,718 2024 347,032 2025 289,244 Thereafter 640,776 Total payments 3,856,584 Amount representing interest (828,128 ) Lease obligation, net 3,028,456 Less lease obligation, current portion (544,476 ) Lease obligation, long-term portion $ 2,483,980 The lease expense for the six months ended February 29, 2020 was $382,909. The cash paid under operating leases during the six months ended February 29, 2020 was $374,180. At February 29, 2020, the weighted average remaining lease terms were 6.31 years and the weighted average discount rate was 8%. |
Stockholders' Deficit
Stockholders' Deficit | 6 Months Ended |
Feb. 29, 2020 | |
Equity [Abstract] | |
Stockholders' Deficit | Note 11 – Stockholders’ Deficit Convertible preferred stock The Company has authorized 1,000,000 shares of $0.001 par value convertible preferred stock. At February 29, 2020 and August 31, 2019 there were 0 and 0 convertible preferred shares issued and outstanding, respectively. Common stock The Company has authorized 499,000,000 shares of $0.001 par value common stock. At February 29, 2020 and August 31, 2019 there were 232,045,876 and 223,691,507 common shares issued and outstanding, respectively. During the six months ended February 29, 2020, the Company issued: ● 354,369 restricted shares of common stock for cash proceeds of $113,399 ● 8,000,000 restricted shares of common stock as consideration for the Intellectual Property Asset Purchase Agreement with a value of $5,248,000 based on the closing share price of $0.656 on the execution date of the Agreement. During the six months ended February 28, 2019, the Company issued: ● 2,708,113 restricted shares of common stock for cash proceeds of $2,579,923 ● 12,000,000 restricted shares of common stock as consideration for the Assignment, to the Company, of a Joint Venture Agreement with a value of $21,600,000 based on the closing share price of $1.80 on the execution date of the Closing Certificate ● 458,349 restricted shares of common stock as consideration for a Licensing Agreement based on a per share price of $1.655 with a value of $758,567. Stock options/warrants On September 8, 2015, the Company adopted the 2015 Incentive Compensation Plan (the “2015 Plan”), which authorizes the issuance of up to 5,000,000 shares of common stock to employees, officers, directors or independent consultants of the Company, provided that no person can be granted shares under the 2015 Plan for services related to raising capital or promotional activities. As of February 29, 2020, 4,987,500 shares were available under the 2015 Plan for future grants, awards, options or share issuances. However, because the shares issuable under the 2015 Plan or issuable upon conversion of awards granted under the 2015 Plan are no longer registered under the Securities Exchange Act of 1934, as amended, the Company does not intend to issue any additional grants under the 2015 Plan. On January 16, 2018, the Company adopted the Novo Integrated Sciences, Inc. 2018 Incentive Plan (the “2018 Plan”). Under the 2018 Plan, 10,000,000 shares of common stock are authorized for issuance to employees, non-employees, directors and key consultants to the Company or its subsidiaries. The 2018 Plan authorizes equity-based and cash-based incentives for participants. There were 9,875,000 shares available for award at February 29, 2020 under the 2018 Plan. The following is a summary of stock option/warrant activity: Weighted Weighted Average Options/ Average Remaining Aggregate Warrants Exercise Contractual Intrinsic Outstanding Price Life Value Outstanding, August 31, 2019 10,095,000 0.30 3.58 $ 1,141,500 Granted - Forfeited - Exercised - Outstanding, February 29, 2020 10,095,000 0.30 3.08 $ 977,750 Exercisable, February 29, 2020 10,095,000 $ 0.30 3.08 $ 977,750 The exercise price for options/warrants outstanding at February 29, 2020: Outstanding and Exercisable Number of Options/ Exercise Warrants Price 5,500,000 $ 0.16 1,000,000 0.32 50,000 0.33 120,000 0.40 2,000,000 0.42 100,000 0.50 1,000,000 0.62 250,000 0.80 75,000 0.95 10,095,000 For options granted during the fiscal year ended August 31, 2019 where the exercise price equaled the stock price at the date of the grant, the weighted-average fair value of such options was $0.94 and the weighted-average exercise price of such options/warrants was $0.95. No options were granted during the fiscal year ended August 31, 2019 where the exercise price was less than the stock price at the date of grant or the exercise price was greater than the stock price at the date of grant. The fair value of the stock options is being amortized to stock option expense over the vesting period. The Company recorded stock option expense of $0 and $70,846 during the three months ended February 29, 2020 and 2019, respectively. At February 29, 2020, the unamortized stock option expense was $0. The assumptions used in calculating the fair value of options granted during the fiscal year ended August 31, 2019 using the Black-Scholes option-pricing model for options granted are as follows: Risk-free interest rate 2.78 % Expected life of the options 3.5 years Expected volatility 294 % Expected dividend yield 0 % |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Feb. 29, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13 – Subsequent Events The Company's management has evaluated subsequent events up to the date the interim condensed consolidated financial statements were issued, pursuant to the requirements of ASC 855 and has determined the following to be material subsequent events: First Amendment to Cloud DX Software License Agreement On February 26, 2019, Novo Integrated Sciences, Inc. (the “Company”) and Novo Healthnet Limited (“NHL”) entered into a Software License Agreement (the “Cloud DX License”) with Cloud DX Inc. (“Cloud DX”), pursuant to which Cloud DX agreed to sell, and NHL agreed to purchase, a fully paid up, perpetual license, with 5-year conditional exclusivity, for the Cloud DX Bundled Pulsewave PAD-1A USB Blood Pressure Device, up-to-date product releases and Licensed Software Products (the “Licensed Software”). Pursuant to the terms of the Cloud DX License, Cloud DX also agreed to sell, and NHL agreed to purchase, 4,000 fully functional Pulsewave PAD 1A USB blood pressure monitor devices bundled with the perpetual license discussed above (the “Bundled Devices”). The Cloud DX License granted to NHL and its majority-owned subsidiaries, holding companies, divisions and affiliates, other than physiotherapy clinics owned and operated by Closing The Gap Healthcare Inc., the right to use and sub-license the Licensed Software and re-sell the Bundled Devices pursuant to the terms of the Cloud DX License in the physical therapy clinic marketplace in North America in exchange for the purchase price as set forth below: ● Upon the closing, the Company issued 458,349 restricted shares of its common stock having a value (as calculated as set forth in the Cloud DX License) of CAD$1,000,000 (approximately $758,567 as of February 26, 2019), and ● Cloud DX agreed to invoice CAD$250,000 (approximately $189,642 as of February 26, 2019) to NHL based on the following deliverables, and paid on the following schedule: Cloud DX deliverable Novo payment (terms: Net 15) Heart Friendly Program launches in Clinic #1 CAD$50,000 (approximately $37,929 as of February 26, 2019) Novo-branded Android app delivered as APK file CAD$35,000 (approximately $26,550 as of February 26, 2019) Novo-branded Clinical portal website delivered CAD$35,000 (approximately $26,550 as of February 26, 2019) Pulsewave PAD-1A devices – 1st delivery CAD$20,000 (approximately $15,171 as of February 26, 2019) Marketing services / materials delivered CAD$25,000 (approximately $18,964 as of February 26, 2019) Cloud DX hires dedicated Novo support FTE CAD$85,000 (approximately $64,478 as of February 26, 2019) On March 9, 2020, the Company and NHL entered into that certain First Amendment to Cloud DX Perpetual Software License Agreement (the “Cloud DX Amendment”) with Cloud DX, effective March 6, 2020, pursuant to which the parties thereto agreed that the CAD$250,000 (approximately $186,231 as of March 6, 2020) that was to be paid by NHL based on the above deliverables would be paid as a one-time payment of 465,578 restricted shares of Company common stock. In addition, pursuant to the terms of the Cloud DX Amendment, the parties agreed to settle a $200,000 fee owed by NHL to Cloud DX through payment of 500,000 restricted shares of Company common stock. Except as set forth in the Cloud DX Amendment, the remaining terms and conditions of the Cloud DX License remain in full force and effect. Change in Independent Registered Accounting Firm On March 10, 2020, the Company’s Board of Directors terminated the engagement of NVS Professional Corporation (formerly NVS Chartered Accountants Professional Corporation) (“NVS”) as the Company’s independent registered accounting firm, and appointed SRCO Professional Corporation (“SRCO”) as the Company’s new independent registered accounting firm. Filing of Preliminary Offering Statement on Form 1-A with the SEC On April 2, 2020, the Company filed a preliminary offering statement on Form 1-A (the “Form 1-A”) with the SEC relating to the offering by the Company of up to 15,000,000 shares of its common stock, with an aggregate amount of $30,000,000, in a “Tier 2 Offering” under Regulation A (the “Offering”). The Company expects that the fixed initial public offering price per share will be from $1.00 to $3.00 per share upon qualification of the Form 1-A by the SEC. There is no minimum number of shares that needs to be sold in order for funds to be released to the Company and for the Offering to close. The Company expects to commence the sale of the shares as of the date on which the Form 1-A is declared qualified by the SEC. No sales will be made prior to the qualification of the Form 1-A by the SEC. There can be no assurance that the Form 1-A will be declared qualified by the SEC. Impact of COVID-19 The ultimate impact of the COVID-19 pandemic on the Company’s operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption, reduced patient traffic and reduced operations. Any resulting financial impact cannot be reasonably estimated at this time but is anticipated to have a material adverse impact on our business, financial condition and results of operations. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Feb. 29, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13 – Subsequent Events The Company's management has evaluated subsequent events up to the date the interim condensed consolidated financial statements were issued, pursuant to the requirements of ASC 855 and has determined the following to be material subsequent events: First Amendment to Cloud DX Software License Agreement On February 26, 2019, Novo Integrated Sciences, Inc. (the “Company”) and Novo Healthnet Limited (“NHL”) entered into a Software License Agreement (the “Cloud DX License”) with Cloud DX Inc. (“Cloud DX”), pursuant to which Cloud DX agreed to sell, and NHL agreed to purchase, a fully paid up, perpetual license, with 5-year conditional exclusivity, for the Cloud DX Bundled Pulsewave PAD-1A USB Blood Pressure Device, up-to-date product releases and Licensed Software Products (the “Licensed Software”). Pursuant to the terms of the Cloud DX License, Cloud DX also agreed to sell, and NHL agreed to purchase, 4,000 fully functional Pulsewave PAD 1A USB blood pressure monitor devices bundled with the perpetual license discussed above (the “Bundled Devices”). The Cloud DX License granted to NHL and its majority-owned subsidiaries, holding companies, divisions and affiliates, other than physiotherapy clinics owned and operated by Closing The Gap Healthcare Inc., the right to use and sub-license the Licensed Software and re-sell the Bundled Devices pursuant to the terms of the Cloud DX License in the physical therapy clinic marketplace in North America in exchange for the purchase price as set forth below: ● Upon the closing, the Company issued 458,349 restricted shares of its common stock having a value (as calculated as set forth in the Cloud DX License) of CAD$1,000,000 (approximately $758,567 as of February 26, 2019), and ● Cloud DX agreed to invoice CAD$250,000 (approximately $189,642 as of February 26, 2019) to NHL based on the following deliverables, and paid on the following schedule: Cloud DX deliverable Novo payment (terms: Net 15) Heart Friendly Program launches in Clinic #1 CAD$50,000 (approximately $37,929 as of February 26, 2019) Novo-branded Android app delivered as APK file CAD$35,000 (approximately $26,550 as of February 26, 2019) Novo-branded Clinical portal website delivered CAD$35,000 (approximately $26,550 as of February 26, 2019) Pulsewave PAD-1A devices – 1st delivery CAD$20,000 (approximately $15,171 as of February 26, 2019) Marketing services / materials delivered CAD$25,000 (approximately $18,964 as of February 26, 2019) Cloud DX hires dedicated Novo support FTE CAD$85,000 (approximately $64,478 as of February 26, 2019) On March 9, 2020, the Company and NHL entered into that certain First Amendment to Cloud DX Perpetual Software License Agreement (the “Cloud DX Amendment”) with Cloud DX, effective March 6, 2020, pursuant to which the parties thereto agreed that the CAD$250,000 (approximately $186,231 as of March 6, 2020) that was to be paid by NHL based on the above deliverables would be paid as a one-time payment of 465,578 restricted shares of Company common stock. In addition, pursuant to the terms of the Cloud DX Amendment, the parties agreed to settle a $200,000 fee owed by NHL to Cloud DX through payment of 500,000 restricted shares of Company common stock. Except as set forth in the Cloud DX Amendment, the remaining terms and conditions of the Cloud DX License remain in full force and effect. Change in Independent Registered Accounting Firm On March 10, 2020, the Company’s Board of Directors terminated the engagement of NVS Professional Corporation (formerly NVS Chartered Accountants Professional Corporation) (“NVS”) as the Company’s independent registered accounting firm, and appointed SRCO Professional Corporation (“SRCO”) as the Company’s new independent registered accounting firm. Filing of Preliminary Offering Statement on Form 1-A with the SEC On April 2, 2020, the Company filed a preliminary offering statement on Form 1-A (the “Form 1-A”) with the SEC relating to the offering by the Company of up to 15,000,000 shares of its common stock, with an aggregate amount of $30,000,000, in a “Tier 2 Offering” under Regulation A (the “Offering”). The Company expects that the fixed initial public offering price per share will be from $1.00 to $3.00 per share upon qualification of the Form 1-A by the SEC. There is no minimum number of shares that needs to be sold in order for funds to be released to the Company and for the Offering to close. The Company expects to commence the sale of the shares as of the date on which the Form 1-A is declared qualified by the SEC. No sales will be made prior to the qualification of the Form 1-A by the SEC. There can be no assurance that the Form 1-A will be declared qualified by the SEC. Impact of COVID-19 The ultimate impact of the COVID-19 pandemic on the Company’s operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption, reduced patient traffic and reduced operations. Any resulting financial impact cannot be reasonably estimated at this time but is anticipated to have a material adverse impact on our business, financial condition and results of operations. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Feb. 29, 2020 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. 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 | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, NHL, Novo Healthnet Rehab Limited, Novo Assessments Inc., an 80% interest in Novo Healthnet Kemptville Centre, Inc., a Back on Track Physiotherapy and Health Centre clinic operated by NHL, and a 70% interest in Novo Earth Therapeutics Inc. (currently inactive), a joint venture with Harvest Gold Farms Inc. All of the Company’s subsidiaries are incorporated under the laws of the Province of Ontario or New Brunswick, Canada. All intercompany transactions have been eliminated. |
Noncontrolling Interest | Noncontrolling Interest The Company follows Financial Accounting Standards Board (“FASB”) ASC Topic 810, Consolidation, The net income (loss) attributed to the NCI is separately designated in the accompanying condensed consolidated statements of operations and other comprehensive income (loss). |
Cash Equivalents | Cash Equivalents For the purpose of the statement 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 Accounts receivable are recorded, net of allowance for doubtful accounts and sales returns. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentration, customer credit worthiness, current economic trends and changes in customer payment patterns to determine if the allowance for doubtful accounts is adequate. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Delinquent account balances are written-off after management has determined that the likelihood of collection is not probable and known bad debts are written off against the allowance for doubtful accounts when identified. As of February 29, 2020, and August 31, 2019, the allowance for uncollectible accounts receivable was $489,195 and $471,566, respectively. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. 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: Leasehold improvements 5 years Clinical equipment 5 years Computer equipment 3 years Office equipment 5 years Furniture and fixtures 5 years |
Long-Lived Assets | Long-Lived Assets The Company applies the provisions of ASC Topic 360, Property, Plant, and Equipment |
Intangible Assets | Intangible Assets The Company’s intangible assets consist of land use rights, a software license and intellectual property which will be amortized over 50, 7 and 7 years, respectively. Amortization will begin when the assets are fully placed in service. The Company performs a test for impairment annually. The land use rights, the software license and intellectual property intangible assets were acquired in January 2019, February 2019 and December 2019, respectively. Based on its reviews at August 31, 2019, the Company believes there was no impairment of its intangible assets. |
Right-of-use Assets | Right-of-use Assets The Company’s right-of-use assets consist of leased assets recognized in accordance with ASC 842, Leases, which |
Goodwill | 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. At February 29, 2020, the Company recorded goodwill of $186,400, $216,224 and $216,224, respectively, related to its acquisition of APKA Health, Inc. during the fiscal year ended August 31, 2017, Executive Fitness Leaders during the fiscal year ended August 31, 2018 and Action Plus Physiotherapy Rockland during the fiscal year ended August 31, 2019. Summary of changes in goodwill by acquired businesses is as follows: Apka EFL Rockland Total Balance, August 31, 2019 $ 187,675 $ 217,703 $ 217,703 $ 623,081 Foreign currency translation adjustment (1,275 ) (1,479 ) (1,479 ) (4,233 ) Balance, February 29, 2020 $ 186,400 $ 216,224 $ 216,224 $ 618,848 |
Acquisition Deposits | Acquisition Deposits The Company has signed letters of understanding with two potential acquisition candidates which includes refundable acquisition deposits totaling $636,985 and $716,688 at February 29, 2020 and August 31, 2019, respectively. During the six months ended February 29, 2020, the Company wrote off an acquisition deposit of $344,521 which is considered impaired since the acquiree has been dissolved and is no longer in business. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash and equivalents, accounts receivable, notes receivables, accounts payable, accrued expenses and due to related parties, the carrying amounts approximate their fair values due to their short maturities. FASB ASC Topic 820, Fair Value Measurements and Disclosures Financial Instruments ● 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 Derivatives and Hedging As of February 29, 2020, and August 31, 2019, respectively, the Company did not identify any assets and liabilities required to be presented on the balance sheet at fair value. |
Fair Value Measurement on a Non-Recurring Basis | Fair Value Measurement on a Non-Recurring Basis The Company measures the fair value of certain assets on a non-recurring basis, generally quarterly, annually or when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. These assets include goodwill and intangible assets. |
Revenue Recognition | Revenue Recognition Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers . Revenue Recognition Revenue from providing healthcare and healthcare related services are recognized under Topic 606 in a manner that reasonably reflects the delivery of its 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 of 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 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. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes 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. |
Stock-Based Compensation | Stock-Based Compensation The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation |
Basic and Diluted Earnings Per Share | Basic and Diluted Earnings Per Share Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share |
Foreign Currency Transactions and Comprehensive Income | 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 gains of $1,127,845 and $1,138,919 at February 29, 2020 and August 31, 2019, respectively, are classified as an item of other comprehensive income in the stockholders’ equity section of the balance sheet. |
Statement of Cash Flows | Statement 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 statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Leases Leases In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes Income Taxes In June 2018, the Financial Accounting Standards Board (the “FASB”), issued an accounting pronouncement (FASB ASU 2018-07) to expand the scope of ASC Topic 718, Compensation-Stock Compensation Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Tables) | 6 Months Ended |
Feb. 29, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Foreign Currency Translation, Exchange Rate Used | The following table details the exchange rates used for the respective periods: February 29, 2020 February 28, 2019 August 31, 2019 Period end: CAD to USD exchange rate $ 0.7456 $ 0.7596 $ 0.7507 Average period: CAD to USD exchange rate $ 0.7577 $ 0.7578 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Feb. 29, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of Assets | Depreciation of property and equipment is provided using the declining balance method for substantially all assets with estimated lives as follows: Leasehold improvements 5 years Clinical equipment 5 years Computer equipment 3 years Office equipment 5 years Furniture and fixtures 5 years |
Schedule of Changes in Goodwill | Summary of changes in goodwill by acquired businesses is as follows: Apka EFL Rockland Total Balance, August 31, 2019 $ 187,675 $ 217,703 $ 217,703 $ 623,081 Foreign currency translation adjustment (1,275 ) (1,479 ) (1,479 ) (4,233 ) Balance, February 29, 2020 $ 186,400 $ 216,224 $ 216,224 $ 618,848 |
Accounts Receivables, Net (Tabl
Accounts Receivables, Net (Tables) | 6 Months Ended |
Feb. 29, 2020 | |
Receivables [Abstract] | |
Schedule of Accounts Receivables, Net | Accounts receivables, net at February 29, 2020 and August 31, 2019 consisted of the following: February 29, August 31, 2020 2019 Trade receivables $ 1,647,750 $ 1,631,036 Amounts earned but not billed 313,794 304,059 1,961,544 1,935,095 Allowance for doubtful accounts (489,195 ) (471,566 ) Accounts receivable, net $ 1,472,349 $ 1,463,529 |
Other Receivables (Tables)
Other Receivables (Tables) | 6 Months Ended |
Feb. 29, 2020 | |
Receivables [Abstract] | |
Schedule of Other Receivables | Other receivables at February 29, 2020 and August 31, 2019 consisted of the following: February 29, August 31, 2020 2019 Notes receivable dated April 1, 2015 and amended on May 23, 2017; accrued interest at 8% per annum; secured by certain assets; due March 1, 2019. (currently in default) $ 279,600 $ 281,513 Advance to corporation; non-interest bearing; unsecured; due not later than November 18, 2020 29,824 30,028 Advance to corporation; accrues interest at 12% per annum; unsecured; due December 31, 2020 74,560 75,070 Advance to corporation; accrues interest at 10% per annum after the first 60 days; unsecured; due February 7, 2021 225,924 225,924 Advance to corporation; accrues interest at 10% per annum; secured by property and other assets; due December 31, 2020 745,600 750,700 Total other receivables 1,355,508 1,363,235 Current portion (1,075,908 ) (300,994 ) Long-term portion $ 279,600 $ 1,062,241 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Feb. 29, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment at February 29, 2020 and August 31, 2019 consisted of the following: February 29, August 31, 2020 2019 Leasehold Improvements $ 450,152 $ 453,233 Clinical equipment 284,543 285,307 Computer equipment 22,976 23,133 Office equipment 28,399 28,593 Furniture and fixtures 38,631 38,895 824,701 829,161 Accumulated depreciation (456,440 ) (418,973 ) Total $ 368,261 $ 410,188 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Feb. 29, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets at February 29, 2020 and August 31, 2019 consisted of the following: February 29, August 31, 2020 2019 Land use rights $ 21,600,000 $ 21,600,000 Software license 758,567 758,567 Intellectual property 5,248,000 - 27,606,567 22,358,567 Accumulated amortization - - Total $ 27,606,567 $ 22,358,567 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Feb. 29, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses at February 29, 2020 and August 31, 2019 consisted of the following: February 29, August 31, 2020 2019 Accrued liabilities $ 43,901 $ 59,661 Accrued payroll 118,018 115,912 Other 38,112 30,211 $ 200,031 $ 205,784 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Feb. 29, 2020 | |
Leases [Abstract] | |
Schedule of Lease Related Assets and Liabilities | The table below presents the lease related assets and liabilities recorded on the Company’s condensed consolidated balance sheets as of February 29, 2020: Classification on Balance Sheet February 29, 2020 Assets Operating lease assets Operating lease right of use assets $ 3,015,589 Total lease assets $ 3,015,589 Liabilities Current liabilities Operating lease liability Current operating lease liability $ 544,476 Noncurrent liabilities Operating lease liability Long-term operating lease liability 2,483,980 Total lease liability $ 3,028,456 |
Schedule of Lease Obligations | Lease obligations at February 29, 2020 consisted of the following: Twelve Months Ending February 28, 2020 $ 790,892 2021 715,733 2022 611,189 2023 461,718 2024 347,032 2025 289,244 Thereafter 640,776 Total payments 3,856,584 Amount representing interest (828,128 ) Lease obligation, net 3,028,456 Less lease obligation, current portion (544,476 ) Lease obligation, long-term portion $ 2,483,980 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 6 Months Ended |
Feb. 29, 2020 | |
Equity [Abstract] | |
Schedule of Stock Option and Warrant Activity | The following is a summary of stock option/warrant activity: Weighted Weighted Average Options/ Average Remaining Aggregate Warrants Exercise Contractual Intrinsic Outstanding Price Life Value Outstanding, August 31, 2019 10,095,000 0.30 3.58 $ 1,141,500 Granted - Forfeited - Exercised - Outstanding, February 29, 2020 10,095,000 0.30 3.08 $ 977,750 Exercisable, February 29, 2020 10,095,000 $ 0.30 3.08 $ 977,750 |
Schedule of Options and Warrants Outstanding and Exercisable | The exercise price for options/warrants outstanding at February 29, 2020: Outstanding and Exercisable Number of Options/ Exercise Warrants Price 5,500,000 $ 0.16 1,000,000 0.32 50,000 0.33 120,000 0.40 2,000,000 0.42 100,000 0.50 1,000,000 0.62 250,000 0.80 75,000 0.95 10,095,000 |
Schedule of Fair Value of Options Granted by Using Valuation Assumptions | The assumptions used in calculating the fair value of options granted during the fiscal year ended August 31, 2019 using the Black-Scholes option-pricing model for options granted are as follows: Risk-free interest rate 2.78 % Expected life of the options 3.5 years Expected volatility 294 % Expected dividend yield 0 % |
Subsequent Events (Tables)
Subsequent Events (Tables) | 6 Months Ended |
Feb. 29, 2020 | |
Cloud DX Software License Agreement [Member] | |
Schedule of Software Deliverables and Payments | Cloud DX deliverable Novo payment (terms: Net 15) Heart Friendly Program launches in Clinic #1 CAD$50,000 (approximately $37,929 as of February 26, 2019) Novo-branded Android app delivered as APK file CAD$35,000 (approximately $26,550 as of February 26, 2019) Novo-branded Clinical portal website delivered CAD$35,000 (approximately $26,550 as of February 26, 2019) Pulsewave PAD-1A devices – 1st delivery CAD$20,000 (approximately $15,171 as of February 26, 2019) Marketing services / materials delivered CAD$25,000 (approximately $18,964 as of February 26, 2019) Cloud DX hires dedicated Novo support FTE CAD$85,000 (approximately $64,478 as of February 26, 2019) |
Organization and Basis of Pre_3
Organization and Basis of Presentation (Details Narrative) - USD ($) | Apr. 25, 2017 | Feb. 29, 2020 |
Parent Company [Member] | ||
Common stock issued in connection with reverse merger transaction | $ 6,904 | |
Turbine Truck Engines, Inc [Member] | ||
State country name | Delaware | |
Date of incorporation | Nov. 27, 2000 | |
Novo Healthnet Limited [Member] | Share Exchange Agreement [Member] | ||
Number of restricted shares of common stock | 167,797,406 | |
Percentage of common stock issued and outstanding | 85.00% |
Organization and Basis of Pre_4
Organization and Basis of Presentation - Schedule of Foreign Currency Translation, Exchange Rate Used (Details) - CAD [Member] | Feb. 29, 2020 | Aug. 31, 2019 | Feb. 28, 2019 |
Period End [Member] | |||
Foreign currency exchange rate | 0.7456 | 0.7507 | 0.7596 |
Average Period [Member] | |||
Foreign currency exchange rate | 0.7577 | 0.7578 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | Aug. 31, 2018 | Aug. 31, 2019 | Aug. 31, 2017 | |
Allowance for uncollectible accounts receivable | $ 489,195 | $ 489,195 | $ 471,566 | ||||
Impairment of its long-lived assets | |||||||
Lease term | 12 months | 12 months | |||||
Goodwill | $ 618,848 | $ 618,848 | 623,081 | ||||
Refundable acquisition deposits | 636,985 | 636,985 | 716,688 | ||||
Write off of acquisition deposit | 344,521 | $ 344,521 | |||||
Potentially dilutive common stock options and warrants outstanding, shares | 10,095,000 | ||||||
Translation gains | 1,127,845 | $ 1,127,845 | 1,138,919 | ||||
Right of use asset | 3,015,589 | 3,015,589 | 3,004,017 | ||||
Lease payable obligation | 3,028,456 | 3,028,456 | 3,008,309 | ||||
ASC 842 [Member] | |||||||
Right of use asset | 2,360,787 | 2,360,787 | |||||
Lease payable obligation | $ 2,360,787 | 2,360,787 | |||||
Cumulative effect on retained earnings | |||||||
APKA Health, Inc. [Member] | |||||||
Goodwill | $ 186,400 | ||||||
Executive Fitness Leaders [Member] | |||||||
Goodwill | $ 216,224 | ||||||
Action Plus Physiotherapy Rockland [Member] | |||||||
Goodwill | $ 216,224 | ||||||
Land Use Rights [Member] | |||||||
Intangible asset, useful life amortized over term | 50 years | ||||||
Software License [Member] | |||||||
Intangible asset, useful life amortized over term | 7 years | ||||||
Intellectual Property [Member] | |||||||
Intangible asset, useful life amortized over term | 7 years | ||||||
Novo Healthnet Kemptville Centre, Inc. [Member] | |||||||
Equity method investment, ownership percentage | 80.00% | 80.00% | |||||
Novo Earth Therapeutics Inc [Member] | |||||||
Equity method investment, ownership percentage | 70.00% | 70.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of Assets (Details) | 6 Months Ended |
Feb. 29, 2020 | |
Leasehold Improvements [Member] | |
Property and equipment, estimated lives | 5 years |
Clinical Equipment [Member] | |
Property and equipment, estimated lives | 5 years |
Computer Equipment [Member] | |
Property and equipment, estimated lives | 3 years |
Office Equipment [Member] | |
Property and equipment, estimated lives | 5 years |
Furniture and Fixtures [Member] | |
Property and equipment, estimated lives | 5 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Changes in Goodwill (Details) | 6 Months Ended |
Feb. 29, 2020USD ($) | |
Balance | $ 623,081 |
Foreign currency translation adjustment | (4,233) |
Balance | 618,848 |
Rockland [Member] | |
Balance | 217,703 |
Foreign currency translation adjustment | (1,479) |
Balance | 216,224 |
APKA [Member] | |
Balance | 187,675 |
Foreign currency translation adjustment | (1,275) |
Balance | 186,400 |
EFL [Member] | |
Balance | 217,703 |
Foreign currency translation adjustment | (1,479) |
Balance | $ 216,224 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jan. 31, 2018 | Feb. 29, 2020 | Aug. 31, 2019 |
Due to related parties | $ 775,708 | $ 920,083 | |
Monthly lease payments | 3,856,584 | ||
Related party debt, converted amount | $ 813,125 | ||
Debt converted, shares issued | 1,976,483 | ||
Debt conversion, description | The per share price used for the conversion of this loan was $0.4114 which was determined based on the average price of the five (5) trading days immediately preceding the date of conversion with a 10% premium added to the calculated per share price. | ||
Debt conversion price | $ 0.4114 | ||
Related Party [Member] | |||
Monthly lease payments | $ 1,509 |
Accounts Receivables, Net - Sch
Accounts Receivables, Net - Schedule of Accounts Receivables, Net (Details) - USD ($) | Feb. 29, 2020 | Aug. 31, 2019 |
Receivables [Abstract] | ||
Trade receivables | $ 1,647,750 | $ 1,631,036 |
Amounts earned but not billed | 313,794 | 304,059 |
Accounts receivable, gross | 1,961,544 | 1,935,095 |
Allowance for doubtful accounts | (489,195) | (471,566) |
Accounts receivable, net | $ 1,472,349 | $ 1,463,529 |
Other Receivables - Schedule of
Other Receivables - Schedule of Other Receivables (Details) - USD ($) | Feb. 29, 2020 | Aug. 31, 2019 |
Total other receivables | $ 1,355,508 | $ 1,363,235 |
Current portion | (1,075,908) | (300,994) |
Long-term portion | 279,600 | 1,062,241 |
Notes Receivable Dated April 1, 2015 and May 23, 2017 [Member] | ||
Total other receivables | 279,600 | 281,513 |
Advance to Corporation One [Member] | ||
Total other receivables | 29,824 | 30,028 |
Advance to Corporation Two [Member] | ||
Total other receivables | 74,560 | 75,070 |
Advance to Corporation Three [Member] | ||
Total other receivables | 225,924 | 225,924 |
Advance to Corporation Four [Member] | ||
Total other receivables | $ 745,600 | $ 750,700 |
Other Receivables - Schedule _2
Other Receivables - Schedule of Other Receivables (Details) (Parenthetical) | 6 Months Ended | 12 Months Ended |
Feb. 29, 2020 | Aug. 31, 2019 | |
Notes Receivable Dated April 1, 2015 and May 23, 2017 [Member] | ||
Percentage of interest accrued per annum | 8.00% | 8.00% |
Notes receivable due date | Mar. 1, 2019 | Mar. 1, 2019 |
Advance to Corporation One [Member] | ||
Notes receivable due date | Nov. 18, 2020 | Nov. 18, 2020 |
Advance to Corporation Two [Member] | ||
Percentage of interest accrued per annum | 12.00% | 12.00% |
Notes receivable due date | Dec. 31, 2020 | Dec. 31, 2020 |
Advance to Corporation Three [Member] | ||
Percentage of interest accrued per annum | 10.00% | 10.00% |
Notes receivable due date | Feb. 7, 2021 | Feb. 7, 2021 |
Advance to Corporation Four [Member] | ||
Percentage of interest accrued per annum | 10.00% | 10.00% |
Notes receivable due date | Dec. 31, 2020 | Dec. 31, 2020 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 6 Months Ended | |
Feb. 29, 2020 | Feb. 28, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 40,968 | $ 46,474 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Feb. 29, 2020 | Aug. 31, 2019 |
Property and equipment, gross | $ 824,701 | $ 829,161 |
Accumulated depreciation | (456,440) | (418,973) |
Total | 368,261 | 410,188 |
Leasehold Improvements [Member] | ||
Property and equipment, gross | 450,152 | 453,233 |
Clinical Equipment [Member] | ||
Property and equipment, gross | 284,543 | 285,307 |
Computer Equipment [Member] | ||
Property and equipment, gross | 22,976 | 23,133 |
Office Equipment [Member] | ||
Property and equipment, gross | 28,399 | 28,593 |
Furniture and Fixtures [Member] | ||
Property and equipment, gross | $ 38,631 | $ 38,895 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 6 Months Ended | |
Feb. 29, 2020 | Feb. 28, 2019 | |
Amortization expense | ||
Intellectual Property Asset Purchase Agreement [Member] | ||
Shares issued during period for intellectual property, shares | 8,000,000 | |
Shares issued during period for intellectual property | $ 5,248,000 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) | Feb. 29, 2020 | Aug. 31, 2019 |
Intangible assets, gross | $ 27,606,567 | $ 22,358,567 |
Accumulated amortization | ||
Total | 27,606,567 | 22,358,567 |
Land Use Rights [Member] | ||
Intangible assets, gross | 21,600,000 | 21,600,000 |
Software License [Member] | ||
Intangible assets, gross | 758,567 | 758,567 |
Intellectual Property [Member] | ||
Intangible assets, gross | $ 5,248,000 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) | Feb. 29, 2020 | Aug. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accrued liabilities | $ 43,901 | $ 59,661 |
Accrued payroll | 118,018 | 115,912 |
Other | 38,112 | 30,211 |
Accrued expenses | $ 200,031 | $ 205,784 |
Debentures, Related Parties (De
Debentures, Related Parties (Details Narrative) - USD ($) | Sep. 27, 2019 | Jan. 31, 2018 | Dec. 02, 2017 | Sep. 30, 2013 | Feb. 29, 2020 | Aug. 31, 2019 | Nov. 30, 2017 |
Debentures, outstanding | $ 1,193,428 | $ 1,201,591 | |||||
Accrued interest | $ 338,214 | $ 248,582 | |||||
Debt converted, shares issued | 1,976,483 | ||||||
Debt conversion price | $ 0.4114 | ||||||
Debt conversion, description | The per share price used for the conversion of this loan was $0.4114 which was determined based on the average price of the five (5) trading days immediately preceding the date of conversion with a 10% premium added to the calculated per share price. | ||||||
Five Debentures [Member] | |||||||
Debentures, outstanding | $ 4,968,990 | ||||||
Debt interest rate | 8.00% | ||||||
Debt due date | Sep. 30, 2016 | ||||||
Debt extended due date | Sep. 30, 2021 | Sep. 30, 2019 | |||||
Five Debentures [Member] | CAD [Member] | |||||||
Debentures, outstanding | $ 6,402,512 | ||||||
Debentures [Member] | |||||||
Debentures, outstanding | $ 3,894,809 | ||||||
Percentage of debt converted | 75.00% | ||||||
Accrued interest | $ 414,965 | ||||||
Debt converted, shares issued | 10,475,872 | ||||||
Debt conversion price | $ 0.4114 | ||||||
Debt conversion, description | The per share price used for the conversion of each debenture was $0.4114 which was determined based on the average price of the five (5) trading days immediately preceding the date of conversion with a 10% premium added to the calculated per share price. |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 6 Months Ended | |
Feb. 29, 2020 | Feb. 28, 2019 | |
Leases [Abstract] | ||
Operating leases expiration date | 2028 | |
Lease expense | $ 262,301 | |
Cash paid under operating leases | $ 374,180 | |
Weighted average remaining lease terms | 6 years 3 months 22 days | |
Weighted average discount rate | 8.00% |
Leases - Schedule of Lease Rela
Leases - Schedule of Lease Related Assets and Liabilities (Details) - USD ($) | Feb. 29, 2020 | Aug. 31, 2019 |
Leases [Abstract] | ||
Operating lease assets | $ 3,015,589 | $ 3,004,017 |
Total lease assets | 3,015,589 | |
Current liabilities- Operating lease liability | 544,476 | 508,305 |
Noncurrent liabilities - Operating lease liability | 2,483,980 | 2,500,004 |
Total lease liability | $ 3,028,456 | $ 3,008,309 |
Leases - Schedule of Lease Obli
Leases - Schedule of Lease Obligations (Details) - USD ($) | Feb. 29, 2020 | Aug. 31, 2019 |
Leases [Abstract] | ||
2020 | $ 790,892 | |
2021 | 715,733 | |
2022 | 611,189 | |
2023 | 461,718 | |
2024 | 347,032 | |
2025 | 289,244 | |
Thereafter | 640,776 | |
Total payments | 3,856,584 | |
Amount representing interest | (828,128) | |
Lease obligation, net | 3,028,456 | $ 3,008,309 |
Less lease obligation, current portion | (544,476) | (508,305) |
Lease obligation, long-term portion | $ 2,483,980 | $ 2,500,004 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Jan. 16, 2018 | Sep. 08, 2015 | Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | Aug. 31, 2019 |
Convertible preferred stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 | ||||
Convertible preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Convertible preferred stock, shares issued | 0 | 0 | 0 | ||||
Convertible preferred stock, shares outstanding | 0 | 0 | 0 | ||||
Common stock, shares authorized | 499,000,000 | 499,000,000 | 499,000,000 | ||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Common stock, shares issued | 232,045,876 | 232,045,876 | 223,691,507 | ||||
Common stock, shares outstanding | 232,045,876 | 232,045,876 | 223,691,507 | ||||
Number of restricted shares of common stock | 354,369 | 2,708,113 | |||||
Proceeds from issuance of shares | $ 113,399 | $ 2,579,923 | |||||
Stock options granted weighted-average grant date fair value | $ 0.94 | ||||||
Stock options/warrants weighted-average exercise price | $ 0.95 | ||||||
Stock option expense | $ 0 | $ 70,846 | |||||
Unamortized stock option expense | $ 0 | $ 0 | |||||
2015 Incentive Compensation Plan [Member] | |||||||
Number of shares available for future grant | 4,987,500 | 4,987,500 | |||||
2015 Incentive Compensation Plan [Member] | Maximum [Member] | |||||||
Number of common stock shares authorizes | 5,000,000 | ||||||
2018 Incentive Plan [Member] | |||||||
Number of common stock shares authorizes | 10,000,000 | ||||||
Number of shares available for future grant | 9,875,000 | 9,875,000 | |||||
Intellectual Property Asset Purchase Agreement [Member] | |||||||
Shares issued during period for intellectual property, shares | 8,000,000 | ||||||
Shares issued during period for intellectual property | $ 5,248,000 | ||||||
Closing price per share | $ 0.656 | $ 0.656 | |||||
Joint Venture Agreement [Member] | |||||||
Number of restricted shares of common stock | 12,000,000 | ||||||
Proceeds from issuance of shares | $ 21,600,000 | ||||||
Closing price per share | $ 1.80 | $ 1.80 | |||||
Licensing Agreement [Member] | |||||||
Number of restricted shares of common stock | 458,349 | ||||||
Proceeds from issuance of shares | $ 758,567 | ||||||
Closing price per share | $ 1.655 | $ 1.655 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Stock Option and Warrant Activity (Details) | 6 Months Ended |
Feb. 29, 2020USD ($)$ / sharesshares | |
Equity [Abstract] | |
Options/Warrants Outstanding, Beginning Balance | 10,095,000 |
Options/Warrants Outstanding, Granted | |
Options/Warrants Outstanding, Forfeited | |
Options/Warrants Outstanding, Exercised | |
Options/Warrants Outstanding, Ending Balance | 10,095,000 |
Options/Warrants Outstanding, Exercisable | 10,095,000 |
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ / shares | $ 0.30 |
Weighted Average Exercise Price, Outstanding, Ending Balance | $ / shares | 0.30 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 0.30 |
Weighted Average Remaining Contractual Life, Outstanding, Beginning Balance | 3 years 6 months 29 days |
Weighted Average Remaining Contractual Life, Outstanding, Ending Balance | 3 years 29 days |
Weighted Average Remaining Contractual Life, Exercisable | 3 years 29 days |
Aggregate Intrinsic Value, Outstanding, Beginning Balance | $ | $ 1,141,500 |
Aggregate Intrinsic Value, Outstanding, Ending Balance | $ | 977,750 |
Aggregate Intrinsic Value, Exercisable | $ | $ 977,750 |
Stockholders' Deficit - Sched_2
Stockholders' Deficit - Schedule of Options and Warrants Outstanding and Exercisable (Details) | Feb. 29, 2020$ / sharesshares |
Number of Options/Warrants, Outstanding | 10,095,000 |
Number of Options/Warrants, Exercisable | 10,095,000 |
Exercise Price Range One [Member] | |
Number of Options/Warrants, Outstanding | 5,500,000 |
Number of Options/Warrants, Outstanding, Exercise Price | $ / shares | $ 0.16 |
Number of Options/Warrants, Exercisable | 5,500,000 |
Number of Options/Warrants, Exercisable, Exercise Price | $ / shares | $ 0.16 |
Exercise Price Range Two [Member] | |
Number of Options/Warrants, Outstanding | 1,000,000 |
Number of Options/Warrants, Outstanding, Exercise Price | $ / shares | $ 0.32 |
Number of Options/Warrants, Exercisable | 1,000,000 |
Number of Options/Warrants, Exercisable, Exercise Price | $ / shares | $ 0.32 |
Exercise Price Range Three [Member] | |
Number of Options/Warrants, Outstanding | 50,000 |
Number of Options/Warrants, Outstanding, Exercise Price | $ / shares | $ 0.33 |
Number of Options/Warrants, Exercisable | 50,000 |
Number of Options/Warrants, Exercisable, Exercise Price | $ / shares | $ 0.33 |
Exercise Price Range Four [Member] | |
Number of Options/Warrants, Outstanding | 120,000 |
Number of Options/Warrants, Outstanding, Exercise Price | $ / shares | $ 0.40 |
Number of Options/Warrants, Exercisable | 120,000 |
Number of Options/Warrants, Exercisable, Exercise Price | $ / shares | $ 0.40 |
Exercise Price Range Five [Member] | |
Number of Options/Warrants, Outstanding | 2,000,000 |
Number of Options/Warrants, Outstanding, Exercise Price | $ / shares | $ 0.42 |
Number of Options/Warrants, Exercisable | 2,000,000 |
Number of Options/Warrants, Exercisable, Exercise Price | $ / shares | $ 0.42 |
Exercise Price Range Six [Member] | |
Number of Options/Warrants, Outstanding | 100,000 |
Number of Options/Warrants, Outstanding, Exercise Price | $ / shares | $ 0.50 |
Number of Options/Warrants, Exercisable | 100,000 |
Number of Options/Warrants, Exercisable, Exercise Price | $ / shares | $ 0.50 |
Exercise Price Range Seven [Member] | |
Number of Options/Warrants, Outstanding | 1,000,000 |
Number of Options/Warrants, Outstanding, Exercise Price | $ / shares | $ 0.62 |
Number of Options/Warrants, Exercisable | 1,000,000 |
Number of Options/Warrants, Exercisable, Exercise Price | $ / shares | $ 0.62 |
Exercise Price Range Eight [Member] | |
Number of Options/Warrants, Outstanding | 250,000 |
Number of Options/Warrants, Outstanding, Exercise Price | $ / shares | $ 0.80 |
Number of Options/Warrants, Exercisable | 250,000 |
Number of Options/Warrants, Exercisable, Exercise Price | $ / shares | $ 0.80 |
Exercise Price Range Nine [Member] | |
Number of Options/Warrants, Outstanding | 75,000 |
Number of Options/Warrants, Outstanding, Exercise Price | $ / shares | $ 0.95 |
Number of Options/Warrants, Exercisable | 75,000 |
Number of Options/Warrants, Exercisable, Exercise Price | $ / shares | $ 0.95 |
Stockholders' Deficit - Sched_3
Stockholders' Deficit - Schedule of Fair Value of Options Granted by Using Valuation Assumptions (Details) | 12 Months Ended |
Aug. 31, 2019 | |
Equity [Abstract] | |
Risk-free interest rate | 2.78% |
Expected life of the options | 3 years 6 months |
Expected volatility | 294.00% |
Expected dividend yield | 0.00% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Apr. 02, 2020 | Mar. 06, 2020 | Feb. 26, 2019 | Feb. 29, 2020 | Feb. 28, 2019 |
Proceeds from issuance of shares | $ 113,399 | $ 2,579,923 | |||
Subsequent Event [Member] | |||||
Number of shares issued on initial public offering | 15,000,000 | ||||
Proceeds from public offering | $ 30,000,000 | ||||
Subsequent Event [Member] | Minimum [Member] | |||||
Share issued, price per share | $ 1 | ||||
Subsequent Event [Member] | Maximum [Member] | |||||
Share issued, price per share | $ 3 | ||||
Software License Agreement [Member] | Cloud DX, Inc. [Member] | |||||
Number of restricted shares of common stock | 458,349 | ||||
Proceeds from issuance of shares | $ 758,567 | ||||
Payments to acquire software licence | 189,642 | ||||
Software License Agreement [Member] | Cloud DX, Inc. [Member] | CAD [Member] | |||||
Proceeds from issuance of shares | 1,000,000 | ||||
Payments to acquire software licence | $ 250,000 | ||||
Perpetual Software License Agreement [Member] | Cloud DX, Inc. [Member] | Subsequent Event [Member] | |||||
Number of restricted shares of common stock | 465,578 | ||||
Payments to acquire software licence | $ 186,231 | ||||
Perpetual Software License Agreement [Member] | Cloud DX, Inc. [Member] | CAD [Member] | Subsequent Event [Member] | |||||
Payments to acquire software licence | $ 250,000 | ||||
Cloud DX Amendment [Member] | Novo Healthnet Limited, Inc [Member] | Subsequent Event [Member] | |||||
Number of restricted shares of common stock | 500,000 | ||||
Payments to acquire software licence | $ 200,000 |
Subsequent Events - Schedule of
Subsequent Events - Schedule of Software Deliverables and Payments (Details) - Software License Agreement [Member] - Cloud DX, Inc. [Member] | Feb. 26, 2019USD ($) |
Payments to acquire software licence | $ 189,642 |
Heart Friendly Program Launches in Clinic [Member] | |
Payments to acquire software licence | 37,929 |
Novo-Branded Android App [Member] | |
Payments to acquire software licence | 26,550 |
Novo-Branded Clinical Portal Website [Member] | |
Payments to acquire software licence | 26,550 |
Pulsewave PAD-1A Devices [Member] | |
Payments to acquire software licence | 15,171 |
Marketing Services / Materials Delivered [Member] | |
Payments to acquire software licence | 18,964 |
Novo Support FTE [Member] | |
Payments to acquire software licence | 64,478 |
CAD [Member] | |
Payments to acquire software licence | 250,000 |
CAD [Member] | Heart Friendly Program Launches in Clinic [Member] | |
Payments to acquire software licence | 50,000 |
CAD [Member] | Novo-Branded Android App [Member] | |
Payments to acquire software licence | 35,000 |
CAD [Member] | Novo-Branded Clinical Portal Website [Member] | |
Payments to acquire software licence | 35,000 |
CAD [Member] | Pulsewave PAD-1A Devices [Member] | |
Payments to acquire software licence | 20,000 |
CAD [Member] | Marketing Services / Materials Delivered [Member] | |
Payments to acquire software licence | 25,000 |
CAD [Member] | Novo Support FTE [Member] | |
Payments to acquire software licence | $ 85,000 |