Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
May 31, 2020 | Jul. 10, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | Novo Integrated Sciences, Inc. | |
Entity Central Index Key | 0001138978 | |
Document Type | 10-Q | |
Document Period End Date | May 31, 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 | Q3 | |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 1,394,366 | $ 2,083,666 |
Accounts receivable, net | 1,117,072 | 1,463,529 |
Other receivables, current portion | 1,053,906 | 300,994 |
Prepaid expenses and other current assets | 364,154 | 250,398 |
Total current assets | 3,929,498 | 4,098,587 |
Property and equipment, net | 347,243 | 410,188 |
Intangible assets | 27,992,798 | 22,358,567 |
Right-of-use assets | 2,800,130 | 3,004,017 |
Other receivables, net of current portion | 272,363 | 1,062,241 |
Acquisition deposits | 627,335 | 716,688 |
Goodwill | 602,829 | 623,081 |
TOTAL ASSETS | 36,572,196 | 32,273,369 |
Current Liabilities: | ||
Accounts payable | 672,066 | 1,144,812 |
Accrued expenses | 156,265 | 205,784 |
Accrued interest (principally to related parties) | 343,425 | 248,582 |
Government loans and note payable | 80,004 | |
Due to related parties | 742,816 | 920,083 |
Operating lease liability, current portion | 535,358 | 508,305 |
Total current liabilities | 2,529,934 | 3,027,566 |
Debentures, related parties | 1,162,536 | 1,201,591 |
Operating lease liability, net of current portion | 2,281,174 | 2,500,004 |
TOTAL LIABILITIES | 5,973,644 | 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 May 31, 2020 and August 31, 2019 | ||
Common stock; $0.001 par value; 499,000,000 shares authorized; 233,011,454 and 223,691,507 shares issued and outstanding at May 31, 2020 and August 31, 2019 | 233,011 | 223,691 |
Additional paid-in capital | 41,614,335 | 35,813,203 |
Other comprehensive income | 1,077,221 | 1,138,919 |
Accumulated deficit | (12,282,872) | (11,591,973) |
Total Novo Integrated Sciences, Inc. stockholders' equity | 30,641,695 | 25,583,840 |
Noncontrolling interest | (43,143) | (39,632) |
Total stockholders' equity | 30,598,552 | 25,544,208 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 36,572,196 | $ 32,273,369 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | May 31, 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 | 233,011,454 | 223,691,507 |
Common stock, shares outstanding | 233,011,454 | 223,691,507 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Income Statement [Abstract] | ||||
Revenues | $ 1,038,226 | $ 2,489,575 | $ 6,015,700 | $ 7,001,607 |
Cost of revenues | 559,976 | 1,556,865 | 3,778,777 | 4,305,688 |
Gross profit | 478,250 | 932,710 | 2,236,923 | 2,695,919 |
Operating expenses: | ||||
Selling expenses | 2,389 | 3,846 | 4,495 | 33,085 |
General and administrative expenses | 554,412 | 991,992 | 2,538,572 | 3,020,001 |
Total operating expenses | 556,801 | 995,838 | 2,543,067 | 3,053,086 |
Loss from operations | (78,551) | (63,128) | (306,144) | (357,167) |
Non operating income (expense) | ||||
Interest income | 25,773 | 4,090 | 81,145 | 13,473 |
Interest expense | (48,245) | (41,735) | (126,291) | (136,643) |
Write off of acquisition deposit | (344,521) | |||
Total other income (expense) | (22,472) | (37,645) | (389,667) | (123,170) |
Loss before income taxes | (101,023) | (100,773) | (695,811) | (480,337) |
Income tax expense | ||||
Net loss | (101,023) | (100,773) | (695,811) | (480,337) |
Net loss attributed to noncontrolling interest | (2,728) | (1,515) | (4,912) | (10,162) |
Net loss attributed to Novo Integrated Sciences, Inc. | (98,295) | (99,258) | (690,899) | (470,175) |
Comprehensive loss: | ||||
Net loss | (101,023) | (100,773) | (695,811) | (480,337) |
Foreign currency translation gain (loss) | (50,624) | (63,607) | (61,698) | (37,627) |
Comprehensive loss: | $ (151,647) | $ (164,380) | $ (757,509) | $ (517,964) |
Weighted average common shares outstanding - basic and diluted | 232,948,482 | 223,258,368 | 229,138,297 | 215,193,998 |
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 | ||||||
Common stock issued for cash | $ 3,228,098 | ||||||
Common stock issued for cash, shares | 3,245,444 | ||||||
Net loss | $ (480,337) | ||||||
Balance at May. 31, 2019 | $ 223,585 | 35,695,491 | 1,102,188 | (11,670,164) | 25,351,100 | (37,645) | 25,313,455 |
Balance, shares at May. 31, 2019 | 223,585,536 | ||||||
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 | ||||||
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 | ||||||
Foreign currency translation loss | 27,765 | 27,765 | (360) | 27,405 | |||
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 | ||||||
Common stock issued for cash | $ 537 | 647,638 | 648,175 | 648,175 | |||
Common stock issued for cash, shares | 537,331 | ||||||
Foreign currency translation loss | (63,607) | (63,607) | 530 | (63,077) | |||
Net loss | (99,258) | (99,258) | (1,077) | (100,773) | |||
Balance at May. 31, 2019 | $ 223,585 | 35,695,491 | 1,102,188 | (11,670,164) | 25,351,100 | (37,645) | 25,313,455 |
Balance, shares at May. 31, 2019 | 223,585,536 | ||||||
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 | (695,811) | ||||||
Balance at May. 31, 2020 | $ 233,011 | 41,614,335 | 1,077,221 | (12,282,872) | 30,641,695 | (43,143) | 30,598,552 |
Balance, shares at May. 31, 2020 | 233,011,454 | ||||||
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 | ||||||
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 | ||||||
Foreign currency translation loss | (16,274) | (16,274) | 426 | (15,848) | |||
Net loss | (504,484) | (504,484) | (1,345) | (505,829) | |||
Balance at Feb. 09, 2020 | $ 232,046 | 41,166,247 | 1,127,845 | (12,184,577) | 30,341,561 | (41,513) | 30,300,048 |
Balance, shares at Feb. 09, 2020 | 232,045,876 | ||||||
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 | ||||||
Common stock issued for software license | $ 965 | 385,266 | 386,231 | 386,231 | |||
Common stock issued for software license, shares | 965,578 | ||||||
Fair value of modification of stock option terms | 62,822 | 62,822 | 62,822 | ||||
Foreign currency translation loss | (50,624) | (50,624) | 1,098 | (49,526) | |||
Net loss | (98,295) | (98,295) | (2,728) | (101,023) | |||
Balance at May. 31, 2020 | $ 233,011 | $ 41,614,335 | $ 1,077,221 | $ (12,282,872) | $ 30,641,695 | $ (43,143) | $ 30,598,552 |
Balance, shares at May. 31, 2020 | 233,011,454 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
May 31, 2020 | May 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (695,811) | $ (480,337) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 54,681 | 71,256 |
Fair value of vested stock options | 70,846 | |
Expense associated with modified stock option terms | 62,822 | |
Operating lease expense | 398,039 | 98,316 |
Write off of acquisition deposit | 344,521 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 305,966 | (91,318) |
Prepaid expenses and other current assets | (123,729) | 7,182 |
Accounts payable | (448,202) | 18,628 |
Accrued expenses | (44,280) | (167,126) |
Accrued interest | 105,359 | 38,076 |
Operating lease liability | (385,500) | (96,498) |
Net cash used in operating activities | (426,134) | (530,975) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (3,897) | (103,035) |
Payment for acquisition deposit | (636,985) | (377,000) |
Amounts loaned for other receivables | (225,924) | |
Return of acquisition deposit | 372,800 | |
Net cash used in investing activities | (268,082) | (705,959) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayments to related parties | (150,849) | (151,257) |
Proceeds from government loans and note payable | 81,380 | |
Proceeds from the sale of common stock | 113,399 | 3,228,098 |
Net cash provided by financing activities | 43,930 | 3,076,841 |
Effect of exchange rate changes on cash and cash equivalents | (39,014) | (37,309) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (689,300) | 1,802,598 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 2,083,666 | 675,705 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 1,394,366 | 2,478,303 |
CASH PAID FOR: | ||
Interest | 95,085 | 104,443 |
Income taxes | ||
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Common stock issued for intangible assets | $ 5,634,231 | $ 22,358,567 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
May 31, 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 220 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 $6,904. The unaudited condensed consolidated financial statements are prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information furnished herein reflects all adjustments, consisting only of normal recurring adjustments, which in the opinion of management, are necessary to fairly state the Company’s financial position, the results of its operations, and cash flows for the periods presented. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) were omitted pursuant to such rules and regulations. The results of operations for the nine months ended May 31, 2020 are not necessarily indicative of the results for the year ending August 31, 2020. Basis of Presentation The accompanying unaudited condensed consolidated financial statements were prepared in conformity with U.S. GAAP for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and notes required by U.S. GAAP for complete financial statements. The financial information contained in this report should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended August 31, 2019, that we filed on November 20, 2019. The Company’s Canadian subsidiaries’ functional currency is the Canadian Dollar (“CAD”); however, the accompanying unaudited condensed consolidated financial statements were translated and presented in United States Dollars (“$” 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 May 31, 2020 May 31, 2019 August 31, 2019 Period end: CAD to USD exchange rate $ 0.7263 $ 0.7395 $ 0.7507 Average period: CAD to USD exchange rate $ 0.7435 $ 0.7540 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
May 31, 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 comprehensive 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 May 31, 2020, and August 31, 2019, the allowance for uncollectible accounts receivable was $470,751 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 May 31, 2020, the Company recorded goodwill of $181,575, $210,627 and $210,627, 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 (6,100 ) (7,076 ) (7,076 ) (20,252 ) Balance, May 31, 2020 $ 181,575 $ 210,627 $ 210,627 $ 602,829 Acquisition Deposits The Company has signed letters of understanding with two potential acquisition candidates which includes refundable acquisition deposits totaling $627,335 and $716,688 at May 31, 2020 and August 31, 2019, respectively. During the nine months ended May 31, 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. See Financial Note 14 Subsequent Events for an acquisition deposit return note. Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash and cash 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 May 31, 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 $1,077,221 and $1,138,919 at May 31, 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 | 9 Months Ended |
May 31, 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 May 31, 2020 and August 31, 2019, the amount due to related parties was $742,816 and $920,083, respectively. The Company leases office space from a related party on a month-to-month basis with monthly lease payments of $1,641. 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 | 9 Months Ended |
May 31, 2020 | |
Receivables [Abstract] | |
Accounts Receivables, Net | Note 4 – Accounts Receivables, net Accounts receivables, net at May 31, 2020 and August 31, 2019 consisted of the following: May 31, 2020 August 31, 2019 Trade receivables $ 1,438,892 $ 1,631,036 Amounts earned but not billed 148,931 304,059 1,587,823 1,935,095 Allowance for doubtful accounts (470,751 ) (471,566 ) Accounts receivable, net $ 1,117,072 $ 1,463,529 |
Other Receivables
Other Receivables | 9 Months Ended |
May 31, 2020 | |
Receivables [Abstract] | |
Other Receivables | Note 5 – Other Receivables Other receivables at May 31, 2020 and August 31, 2019 consisted of the following: May 31, 2020 August 31, 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) $ 272,363 $ 281,513 Advance to corporation; non-interest bearing; unsecured; due not later than November 18, 2020 29,052 30,028 Advance to corporation; accrues interest at 12% per annum; unsecured; due December 31, 2020 72,630 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 726,300 750,700 Total other receivables 1,326,269 1,363,235 Current portion (1,053,906 ) (300,994 ) Long-term portion $ 272,363 $ 1,062,241 |
Property and Equipment
Property and Equipment | 9 Months Ended |
May 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 6 – Property and Equipment Property and equipment at May 31, 2020 and August 31, 2019 consisted of the following: May 31, 2020 August 31, 2019 Leasehold Improvements $ 440,905 $ 453,233 Clinical equipment 277,176 285,307 Computer equipment 22,640 23,133 Office equipment 27,664 28,593 Furniture and fixtures 37,631 38,895 806,016 829,161 Accumulated depreciation (458,773 ) (418,973 ) Total $ 347,243 $ 410,188 Depreciation expense for the nine months ended May 31, 2020 and May 31, 2019 was $54,681 and $71,256, respectively. |
Intangible Assets
Intangible Assets | 9 Months Ended |
May 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 7 – Intangible Assets Intangible assets at May 31, 2020 and August 31, 2019 consisted of the following: May 31, 2020 August 31, 2019 Land use rights $ 21,600,000 $ 21,600,000 Software license 1,144,798 758,567 Intellectual property 5,248,000 - 27,992,798 22,358,567 Accumulated amortization - - Total $ 27,992,798 $ 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. On February 26, 2019, the Company and 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. There was no amortization expense during the nine months ended May 31, 2020 and May 31, 2019 as the listed intangible assets have not been placed in service. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
May 31, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Note 8 – Accrued Expenses Accrued expenses at May 31, 2020 and August 31, 2019 consisted of the following: May 31, 2020 August 31, 2019 Accrued liabilities $ 57,737 $ 59,661 Accrued payroll 60,852 115,912 Other 37,676 30,211 $ 156,265 $ 205,784 |
Government Loans and Note Payab
Government Loans and Note Payable | 9 Months Ended |
May 31, 2020 | |
Government Loans And Note Payable | |
Government Loans and Note Payable | Note 9 – Government Loans and Note Payable Notes payable at May 31, 2020 consisted of the following: May 31, 2020 Note payable issued under the Paycheck Protection Program of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The loan has terms of 24 months and accrues interest at 1% per annum. The Company expects some or all of this loan to be forgiven as provided by in the CARES Act. $ 21,900 Government loans issued under the Government of Canada’s Canada Emergency Business Account (“CEBA”) program. 25% of the balance will be forgiven if paid on or before December 31, 2022. 58,104 $ 80,004 During the three months ended May 31, 2020, the Government of Canada announced the Canada Emergency Wage Subsidy (“CEWS”) for Canadian employers whose businesses were affected by the COVID-19 pandemic. The CEWS provides a subsidy of up to 75% of eligible employees’ employment insurable remuneration, subject to certain criteria. Accordingly, the Company applied for the CEWS to the extent it met the requirements to receive the subsidy and during the three months ended May 31, 2020, recorded a total of approximately $203,000 in government subsidies as a reduction to the associated wage costs recorded in cost of revenues and general and administrative expenses in the condensed consolidated statement of operations and comprehensive loss. |
Debentures, Related Parties
Debentures, Related Parties | 9 Months Ended |
May 31, 2020 | |
Debt Disclosure [Abstract] | |
Debentures, Related Parties | Note 10 – 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 May 31, 2020, the amount of debentures outstanding was $1,162,536. |
Leases
Leases | 9 Months Ended |
May 31, 2020 | |
Leases [Abstract] | |
Leases | Note 11 – 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 May 31, 2020: Classification on Balance Sheet May 31, 2020 Assets Operating lease assets Operating lease right of use assets $ 2,800,130 Total lease assets $ 2,800,130 Liabilities Current liabilities Operating lease liability Current operating lease liability $ 535,358 Noncurrent liabilities Operating lease liability Long-term operating lease liability 2,281,174 Total lease liability $ 2,816,532 Lease obligations at May 31, 2020 consisted of the following: Twelve Months Ending May 31, 2021 $ 768,822 2022 655,428 2023 594,278 2024 395,078 2025 315,992 2026 281,961 Thereafter 553,545 Total payments 3,565,104 Amount representing interest (748,572 ) Lease obligation, net 2,816,532 Less lease obligation, current portion (535,358 ) Lease obligation, long-term portion $ 2,281,174 The lease expense for the nine months ended May 31, 2020 was $576,528. The cash paid under operating leases during the nine months ended May 31, 2020 was $563,989. At May 31, 2020, the weighted average remaining lease terms were 6.14 years and the weighted average discount rate was 8%. |
Stockholders' Deficit
Stockholders' Deficit | 9 Months Ended |
May 31, 2020 | |
Equity [Abstract] | |
Stockholders' Deficit | Note 12 – Stockholders’ Deficit Convertible preferred stock The Company has authorized 1,000,000 shares of $0.001 par value convertible preferred stock. At May 31, 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 May 31, 2020 and August 31, 2019 there were 233,011,454 and 223,691,507 common shares issued and outstanding, respectively. During the nine months ended May 31, 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; and ● 965,578 restricted shares of common stock as consideration for the License Agreement Amendment No. 1 with a value of $386,231 based on the closing share price of $0.40 on the execution date of the Agreement Amendment No.1. During the nine months ended May 31, 2019, the Company issued: ● 3,245,444 restricted shares of common stock for cash proceeds of $3,228,098; ● 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, and ● 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 May 31, 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 May 31, 2020 under the 2018 Plan. The following is a summary of stock option/warrant activity: Options/ Warrants Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Outstanding, August 31, 2019 10,095,000 0.30 3.58 $ 1,141,500 Granted - Forfeited - Exercised - Outstanding, May 31, 2020 10,095,000 0.16 3.69 $ - Exercisable, May 31, 2020 10,095,000 $ 0.16 3.69 $ - The exercise price for options/warrants outstanding at May 31, 2020: Outstanding and Exercisable Number of Exercise 9,995,000 $ 0.16 100,000 0.50 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 May 31, 2020 and 2019, respectively. At May 31, 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 % During the nine months ended May 31, 2020, the Company re-priced the exercise price of 4,495,000 options to $0.16 and extended the expiration date of 4,370,000 options by two years. The change in fair value between the options using the original terms and the options using the new expiration dates and exercise prices was $62,823 which has been recorded as expense in the accompanying condensed consolidated statements of operations and comprehensive loss. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
May 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13 – Commitments and Contingencies Litigation The Company is party to certain legal proceedings from time to time incidental to the conduct of its business. These proceedings could result in fines, penalties, compensatory or treble damages or non-monetary relief. The nature of legal proceedings is such that the Company cannot assure the outcome of any particular matter, and an unfavorable ruling or development could have a materially adverse effect on our condensed consolidated financial position, results of operations and cash flows in the period in which a ruling or settlement occurs. However, based on information available to the Company’s management to date, the Company’s management does not expect that the outcome of any matter pending against the Company is likely to have a materially adverse effect on the Company’s condensed consolidated financial position as of May 31, 2020, results of operations, cash flows or liquidity of the Company. |
Subsequent Events
Subsequent Events | 9 Months Ended |
May 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14 – 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: Return of Acquisition Deposit On June 26, 2020, an acquisition deposit of $254,205 (CAD$350,000) was returned to the Company. Impact of COVID-19 In December 2019, a novel strain of coronavirus (COVID-19) emerged in Wuhan, Hubei Province, China. While initially the outbreak was largely concentrated in China and caused significant disruptions to its economy, it has now spread to several other countries and infections have been reported globally. On March 17, 2020, as a result of COVID-19 infections having been reported throughout both Canada and the United States, certain national, provincial, state and local governmental authorities issued proclamations and/or directives aimed at minimizing the spread of COVID-19. Accordingly, on March 17, 2020, the Company closed all corporate clinics for all in-clinic non-essential services to protect the health and safety of its employees, partners and patients. On March 20, 2020, the Company announced the precautionary measures taken as well as announcing the business impact related to the coronavirus (COVID-19) pandemic. Operating under COVID-19 related authorized governmental proclamations and directives, between March 17, 2020 and June 1, 2020, the Company provided in-clinic multi-disciplinary primary healthcare services and products solely to patients with emergency and essential need while also providing certain virtual based services related to physiotherapy. In light of most eldercare related services being deemed essential by national, provincial and local governmental authorities in Canada, NHL’s contracted eldercare services have been nominally impacted during the fiscal third quarter and we project the same for the fiscal fourth quarter. On May 26, 2020, the Ontario Ministry of Health announced updated guidance and directives stating that physiotherapists, chiropractors and other regulated health professionals, including all services and products provided by the Company, can gradually and carefully begin providing all services, including non-essential services, once the clinician and provider are satisfied all necessary precautions and protocols are in place to protect the patients, the clinician and the clinic staff. With all corporate clinics closed due to the COVID-19 pandemic, with the exception of providing certain limited essential and emergency services, the Company had furloughed 48 full-time employees and 35 part-time employees from its pre-closure levels of 81 full-time employees and 53 part-time employees. On June 2, 2020, the Company commenced opening its corporate clinics and providing non-essential services. As of June 9, 2020, the Company had opened all corporate clinics while following all mandated guidelines and protocols from Health Canada, the Ontario Ministry of Health, and the respective disciplines’ regulatory Colleges to ensure a safe treatment environment for our staff and clients. Certain of these guidelines and protocols include both active and passive screening for staff and clients, enhanced cleaning measures using only Health Canada approved disinfectants and sanitizers, personal protective equipment usage, appropriate signage and markers throughout the clinics, and layout changes to the clinics to reflect proper physical distancing measures. Additional, more restrictive proclamations and/or directives may be issued in the future. As of July 10, 2020, the Company had increased staffing to 51 full-time employees and 24 part-time employees. Now that our corporate clinics are re-opened under mandated guidelines and protocols, in-clinic patient flow for the month of June 2020 has met and exceeded our projection of 40% of pre-shutdown levels. The Company projects a steady week-over-week increase as (i) recommended guidelines for patient-clinician on-site interaction are eased, and (ii) more overall movement restrictions are reduced and people are more comfortable in public spaces. The ultimate impact of the COVID-19 pandemic on the Company’s operations remains unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption, reduced patient traffic and reduced operations. The full long-term 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. The measures taken to date will impact the Company’s business for the fiscal third quarter and potentially beyond. Management expects that all of its business segments, across all of its geographies, will be impacted to some degree, but the significance of the full impact of the COVID-19 outbreak on the Company’s business and the duration for which it may have an impact cannot be determined at this time. For more on the financial impact of COVID-19 on the Company’s fiscal third quarter, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Financial Impact of COVID-19” of this quarterly report on Form 10-Q. Regulation A+ Offering Beginning on June 29, 2020, in a “Tier 2 Offering,” pursuant to an Offering Circular on Form 1-A, as amended, pursuant to Regulation A, the Company offered, on a self-underwritten “best efforts” basis, up to 20,000,000 shares of its common stock, with an aggregate amount of $30,000,000. The initial public offering price per share of the Company’s common stock is $1.50 per share pursuant to the offering. 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 minimum investment amount per investor is $1,050 (700 shares of common stock), subject to waiver by the Company. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
May 31, 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 comprehensive 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 May 31, 2020, and August 31, 2019, the allowance for uncollectible accounts receivable was $470,751 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 May 31, 2020, the Company recorded goodwill of $181,575, $210,627 and $210,627, 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 (6,100 ) (7,076 ) (7,076 ) (20,252 ) Balance, May 31, 2020 $ 181,575 $ 210,627 $ 210,627 $ 602,829 |
Acquisition Deposits | Acquisition Deposits The Company has signed letters of understanding with two potential acquisition candidates which includes refundable acquisition deposits totaling $627,335 and $716,688 at May 31, 2020 and August 31, 2019, respectively. During the nine months ended May 31, 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. See Financial Note 14 Subsequent Events for an acquisition deposit return note. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash and cash 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 May 31, 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 $1,077,221 and $1,138,919 at May 31, 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) | 9 Months Ended |
May 31, 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: May 31, 2020 May 31, 2019 August 31, 2019 Period end: CAD to USD exchange rate $ 0.7263 $ 0.7395 $ 0.7507 Average period: CAD to USD exchange rate $ 0.7435 $ 0.7540 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
May 31, 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 (6,100 ) (7,076 ) (7,076 ) (20,252 ) Balance, May 31, 2020 $ 181,575 $ 210,627 $ 210,627 $ 602,829 |
Accounts Receivables, Net (Tabl
Accounts Receivables, Net (Tables) | 9 Months Ended |
May 31, 2020 | |
Receivables [Abstract] | |
Schedule of Accounts Receivables, Net | Accounts receivables, net at May 31, 2020 and August 31, 2019 consisted of the following: May 31, 2020 August 31, 2019 Trade receivables $ 1,438,892 $ 1,631,036 Amounts earned but not billed 148,931 304,059 1,587,823 1,935,095 Allowance for doubtful accounts (470,751 ) (471,566 ) Accounts receivable, net $ 1,117,072 $ 1,463,529 |
Other Receivables (Tables)
Other Receivables (Tables) | 9 Months Ended |
May 31, 2020 | |
Receivables [Abstract] | |
Schedule of Other Receivables | Other receivables at May 31, 2020 and August 31, 2019 consisted of the following: May 31, 2020 August 31, 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) $ 272,363 $ 281,513 Advance to corporation; non-interest bearing; unsecured; due not later than November 18, 2020 29,052 30,028 Advance to corporation; accrues interest at 12% per annum; unsecured; due December 31, 2020 72,630 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 726,300 750,700 Total other receivables 1,326,269 1,363,235 Current portion (1,053,906 ) (300,994 ) Long-term portion $ 272,363 $ 1,062,241 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
May 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment at May 31, 2020 and August 31, 2019 consisted of the following: May 31, 2020 August 31, 2019 Leasehold Improvements $ 440,905 $ 453,233 Clinical equipment 277,176 285,307 Computer equipment 22,640 23,133 Office equipment 27,664 28,593 Furniture and fixtures 37,631 38,895 806,016 829,161 Accumulated depreciation (458,773 ) (418,973 ) Total $ 347,243 $ 410,188 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
May 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets at May 31, 2020 and August 31, 2019 consisted of the following: May 31, 2020 August 31, 2019 Land use rights $ 21,600,000 $ 21,600,000 Software license 1,144,798 758,567 Intellectual property 5,248,000 - 27,992,798 22,358,567 Accumulated amortization - - Total $ 27,992,798 $ 22,358,567 |
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) |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
May 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses at May 31, 2020 and August 31, 2019 consisted of the following: May 31, 2020 August 31, 2019 Accrued liabilities $ 57,737 $ 59,661 Accrued payroll 60,852 115,912 Other 37,676 30,211 $ 156,265 $ 205,784 |
Government Loans and Note Pay_2
Government Loans and Note Payable (Tables) | 9 Months Ended |
May 31, 2020 | |
Government Loans And Note Payable | |
Schedule of Notes Payable | Notes payable at May 31, 2020 consisted of the following: May 31, 2020 Note payable issued under the Paycheck Protection Program of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The loan has terms of 24 months and accrues interest at 1% per annum. The Company expects some or all of this loan to be forgiven as provided by in the CARES Act. $ 21,900 Government loans issued under the Government of Canada’s Canada Emergency Business Account (“CEBA”) program. 25% of the balance will be forgiven if paid on or before December 31, 2022. 58,104 $ 80,004 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
May 31, 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 May 31, 2020: Classification on Balance Sheet May 31, 2020 Assets Operating lease assets Operating lease right of use assets $ 2,800,130 Total lease assets $ 2,800,130 Liabilities Current liabilities Operating lease liability Current operating lease liability $ 535,358 Noncurrent liabilities Operating lease liability Long-term operating lease liability 2,281,174 Total lease liability $ 2,816,532 |
Schedule of Lease Obligations | Lease obligations at May 31, 2020 consisted of the following: Twelve Months Ending May 31, 2021 $ 768,822 2022 655,428 2023 594,278 2024 395,078 2025 315,992 2026 281,961 Thereafter 553,545 Total payments 3,565,104 Amount representing interest (748,572 ) Lease obligation, net 2,816,532 Less lease obligation, current portion (535,358 ) Lease obligation, long-term portion $ 2,281,174 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 9 Months Ended |
May 31, 2020 | |
Equity [Abstract] | |
Schedule of Stock Option and Warrant Activity | The following is a summary of stock option/warrant activity: Options/ Warrants Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Outstanding, August 31, 2019 10,095,000 0.30 3.58 $ 1,141,500 Granted - Forfeited - Exercised - Outstanding, May 31, 2020 10,095,000 0.16 3.69 $ - Exercisable, May 31, 2020 10,095,000 $ 0.16 3.69 $ - |
Schedule of Options and Warrants Outstanding and Exercisable | The exercise price for options/warrants outstanding at May 31, 2020: Outstanding and Exercisable Number of Exercise 9,995,000 $ 0.16 100,000 0.50 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 % |
Organization and Basis of Pre_3
Organization and Basis of Presentation (Details Narrative) - USD ($) | Apr. 25, 2017 | May 31, 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] | May 31, 2020 | Aug. 31, 2019 | May 31, 2019 |
Period End [Member] | |||
Foreign currency exchange rate | 0.7263 | 0.7507 | 0.7395 |
Average Period [Member] | |||
Foreign currency exchange rate | 0.7435 | 0.7540 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | Aug. 31, 2019 | Aug. 31, 2018 | Aug. 31, 2017 | |
Allowance for uncollectible accounts receivable | $ 470,751 | $ 470,751 | $ 471,566 | ||||
Impairment of its long-lived assets | |||||||
Lease term | 12 months | 12 months | |||||
Goodwill | $ 602,829 | $ 602,829 | 623,081 | ||||
Refundable acquisition deposits | 627,335 | 627,335 | 716,688 | ||||
Write off of acquisition deposit | $ 344,521 | ||||||
Potentially dilutive common stock options and warrants outstanding, shares | 10,095,000 | ||||||
Translation gains | 1,077,221 | $ 1,077,221 | 1,138,919 | ||||
Right of use asset | 2,800,130 | 2,800,130 | 3,004,017 | ||||
Lease payable obligation | 2,816,532 | 2,816,532 | 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 | $ 181,575 | ||||||
Executive Fitness Leaders [Member] | |||||||
Goodwill | $ 210,627 | ||||||
Action Plus Physiotherapy Rockland [Member] | |||||||
Goodwill | $ 210,627 | ||||||
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) | 9 Months Ended |
May 31, 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) | 9 Months Ended |
May 31, 2020USD ($) | |
Balance | $ 623,081 |
Foreign currency translation adjustment | (20,252) |
Balance | 602,829 |
Rockland [Member] | |
Balance | 217,703 |
Foreign currency translation adjustment | (7,076) |
Balance | 210,627 |
APKA [Member] | |
Balance | 187,675 |
Foreign currency translation adjustment | (6,100) |
Balance | 181,575 |
EFL [Member] | |
Balance | 217,703 |
Foreign currency translation adjustment | (7,076) |
Balance | $ 210,627 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jan. 31, 2018 | May 31, 2020 | Aug. 31, 2019 |
Due to related parties | $ 742,816 | $ 920,083 | |
Monthly lease payments | 3,565,104 | ||
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 | $ 1,641 |
Accounts Receivables, Net - Sch
Accounts Receivables, Net - Schedule of Accounts Receivables, Net (Details) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Receivables [Abstract] | ||
Trade receivables | $ 1,438,892 | $ 1,631,036 |
Amounts earned but not billed | 148,931 | 304,059 |
Accounts receivable, gross | 1,587,823 | 1,935,095 |
Allowance for doubtful accounts | (470,751) | (471,566) |
Accounts receivable, net | $ 1,117,072 | $ 1,463,529 |
Other Receivables - Schedule of
Other Receivables - Schedule of Other Receivables (Details) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Total other receivables | $ 1,326,269 | $ 1,363,235 |
Current portion | (1,053,906) | (300,994) |
Long-term portion | 272,363 | 1,062,241 |
March 1, 2019 [Member] | ||
Total other receivables | 272,363 | 281,513 |
Advance to Corporation One [Member] | ||
Total other receivables | 29,052 | 30,028 |
Advance to Corporation Two [Member] | ||
Total other receivables | 72,630 | 75,070 |
Advance to Corporation Three [Member] | ||
Total other receivables | 225,924 | 225,924 |
Advance to Corporation Four [Member] | ||
Total other receivables | $ 726,300 | $ 750,700 |
Other Receivables - Schedule _2
Other Receivables - Schedule of Other Receivables (Details) (Parenthetical) | 9 Months Ended | 12 Months Ended |
May 31, 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 ($) | 9 Months Ended | |
May 31, 2020 | May 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 54,681 | $ 71,256 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Property and equipment, gross | $ 806,016 | $ 829,161 |
Accumulated depreciation | (458,773) | (418,973) |
Total | 347,243 | 410,188 |
Leasehold Improvements [Member] | ||
Property and equipment, gross | 440,905 | 453,233 |
Clinical Equipment [Member] | ||
Property and equipment, gross | 277,176 | 285,307 |
Computer Equipment [Member] | ||
Property and equipment, gross | 22,640 | 23,133 |
Office Equipment [Member] | ||
Property and equipment, gross | 27,664 | 28,593 |
Furniture and Fixtures [Member] | ||
Property and equipment, gross | $ 37,631 | $ 38,895 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | Mar. 06, 2020 | Feb. 26, 2019 | May 31, 2020 | May 31, 2019 |
Proceeds from issuance of shares | $ 113,399 | $ 3,228,098 | ||
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 | |||
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 license | 189,642 | |||
Software License Agreement [Member] | Cloud DX, Inc. [Member] | CAD [Member] | ||||
Proceeds from issuance of shares | 1,000,000 | |||
Payments to acquire software license | $ 250,000 | |||
Perpetual Software License Agreement [Member] | Cloud DX, Inc. [Member] | ||||
Number of restricted shares of common stock | 465,578 | |||
Payments to acquire software license | $ 186,231 | |||
Perpetual Software License Agreement [Member] | Cloud DX, Inc. [Member] | CAD [Member] | ||||
Payments to acquire software license | $ 250,000 | |||
Cloud DX Amendment [Member] | Novo Healthnet Limited, Inc [Member] | ||||
Number of restricted shares of common stock | 500,000 | |||
Payments to acquire software license | $ 200,000 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Intangible assets, gross | $ 27,992,798 | $ 22,358,567 |
Accumulated amortization | ||
Total | 27,992,798 | 22,358,567 |
Land Use Rights [Member] | ||
Intangible assets, gross | 21,600,000 | 21,600,000 |
Software License [Member] | ||
Intangible assets, gross | 1,144,798 | 758,567 |
Intellectual Property [Member] | ||
Intangible assets, gross | $ 5,248,000 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Software Deliverables and Payments (Details) - Feb. 26, 2019 - Software License Agreement [Member] - Cloud DX, Inc. [Member] | USD ($) | CAD ($) |
Payments to acquire software license | $ 189,642 | |
Heart Friendly Program Launches in Clinic [Member] | ||
Payments to acquire software license | 37,929 | |
Novo-Branded Android App [Member] | ||
Payments to acquire software license | 26,550 | |
Novo-Branded Clinical Portal Website [Member] | ||
Payments to acquire software license | 26,550 | |
Pulsewave PAD-1A Devices [Member] | ||
Payments to acquire software license | 15,171 | |
Marketing Services / Materials Delivered [Member] | ||
Payments to acquire software license | 18,964 | |
Novo Support FTE [Member] | ||
Payments to acquire software license | 64,478 | |
CAD [Member] | ||
Payments to acquire software license | $ 250,000 | |
CAD [Member] | Heart Friendly Program Launches in Clinic [Member] | ||
Payments to acquire software license | $ 50,000 | |
CAD [Member] | Novo-Branded Android App [Member] | ||
Payments to acquire software license | 35,000 | |
CAD [Member] | Novo-Branded Clinical Portal Website [Member] | ||
Payments to acquire software license | 35,000 | |
CAD [Member] | Pulsewave PAD-1A Devices [Member] | ||
Payments to acquire software license | 20,000 | |
CAD [Member] | Marketing Services / Materials Delivered [Member] | ||
Payments to acquire software license | 25,000 | |
CAD [Member] | Novo Support FTE [Member] | ||
Payments to acquire software license | $ 85,000 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accrued liabilities | $ 57,737 | $ 59,661 |
Accrued payroll | 60,852 | 115,912 |
Other | 37,676 | 30,211 |
Accrued expenses | $ 156,265 | $ 205,784 |
Government Loans and Note Pay_3
Government Loans and Note Payable (Details Narrative) | 3 Months Ended |
May 31, 2020USD ($) | |
Canada Emergency Wage Subsidy [Member] | Cost of Revenues and General and Administrative Expense [Member] | |
Government subsidies | $ 203,000 |
Government Loans and Note Pay_4
Government Loans and Note Payable - Schedule of Notes Payable (Details) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Government loans and note payable | $ 80,004 | |
Notes Payable [Member] | ||
Government loans and note payable | 21,900 | |
Notes Payable One [Member] | ||
Government loans and note payable | $ 58,104 |
Government Loans and Note Pay_5
Government Loans and Note Payable - Schedule of Notes Payable (Details) (Parenthetical) | 9 Months Ended |
May 31, 2020 | |
Notes Payable [Member] | |
Debt term | 24 months |
Debt interest rate | 1.00% |
Notes Payable One [Member] | |
Debt interest rate | 25.00% |
Debt due date | Dec. 31, 2022 |
Debentures, Related Parties (De
Debentures, Related Parties (Details Narrative) | Sep. 27, 2019 | Jan. 31, 2018USD ($)$ / sharesshares | Dec. 02, 2017 | Sep. 30, 2013CAD ($) | May 31, 2020USD ($) | Aug. 31, 2019USD ($) | Nov. 30, 2017USD ($) |
Debentures, outstanding | $ 1,162,536 | $ 1,201,591 | |||||
Accrued interest | $ 343,425 | $ 248,582 | |||||
Debt converted, shares issued | shares | 1,976,483 | ||||||
Debt conversion price | $ / shares | $ 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 | shares | 10,475,872 | ||||||
Debt conversion price | $ / shares | $ 0.4114 | ||||||
Debt conversion, description | The per share price used for the conversion of each debenture was $0.4114 which was determined based on the average price of the five (5) trading days immediately preceding the date of conversion with a 10% premium added to the calculated per share price. |
Leases (Details Narrative)
Leases (Details Narrative) | 9 Months Ended |
May 31, 2020USD ($) | |
Leases [Abstract] | |
Operating leases expiration date | 2028 |
Lease expense | $ 576,528 |
Cash paid under operating leases | $ 563,989 |
Weighted average remaining lease terms | 6 years 1 month 20 days |
Weighted average discount rate | 8.00% |
Leases - Schedule of Lease Rela
Leases - Schedule of Lease Related Assets and Liabilities (Details) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Leases [Abstract] | ||
Operating lease assets | $ 2,800,130 | $ 3,004,017 |
Total lease assets | 2,800,130 | |
Current liabilities- Operating lease liability | 535,358 | 508,305 |
Noncurrent liabilities - Operating lease liability | 2,281,174 | 2,500,004 |
Total lease liability | $ 2,816,532 | $ 3,008,309 |
Leases - Schedule of Lease Obli
Leases - Schedule of Lease Obligations (Details) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Leases [Abstract] | ||
2021 | $ 768,822 | |
2022 | 655,428 | |
2023 | 594,278 | |
2024 | 395,078 | |
2025 | 315,992 | |
2026 | 281,961 | |
Thereafter | 553,545 | |
Total payments | 3,565,104 | |
Amount representing interest | (748,572) | |
Lease obligation, net | 2,816,532 | $ 3,008,309 |
Less lease obligation, current portion | (535,358) | (508,305) |
Lease obligation, long-term portion | $ 2,281,174 | $ 2,500,004 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Jan. 16, 2018 | Sep. 08, 2015 | May 31, 2020 | Nov. 30, 2019 | May 31, 2019 | Feb. 28, 2019 | Nov. 30, 2018 | May 31, 2020 | May 31, 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 | 233,011,454 | 233,011,454 | 223,691,507 | |||||||
Common stock, shares outstanding | 233,011,454 | 233,011,454 | 223,691,507 | |||||||
Number of restricted stock, shares issued | 3,245,444 | |||||||||
Number of restricted stock, shares issued, value | $ 113,399 | $ 648,175 | $ 2,047,994 | $ 531,929 | $ 3,228,098 | |||||
Stock options granted weighted-average grant date fair value | $ 0.94 | |||||||||
Stock options/warrants weighted-average exercise price | $ 0.95 | |||||||||
Stock option expense | $ 0 | |||||||||
Unamortized stock option expense | $ 0 | $ 0 | ||||||||
Number of options granted | 10,095,000 | 10,095,000 | 10,095,000 | |||||||
Stock based compensation, expenses | $ 62,823 | |||||||||
Option 1 [Member] | ||||||||||
Number of options granted | 4,495,000 | 4,495,000 | ||||||||
Exercise price, re-priced | $ 0.16 | |||||||||
Option 2 [Member] | ||||||||||
Number of options granted | 4,370,000 | 4,370,000 | ||||||||
Option term | 2 years | |||||||||
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 | ||||||||
Licensing Agreement [Member] | ||||||||||
Shares issued during period for intellectual property, shares | 965,578 | 458,349 | ||||||||
Shares issued during period for intellectual property | $ 386,231 | $ 758,567 | ||||||||
Closing price per share | $ 0.40 | $ 1.655 | $ 0.40 | $ 1.655 | ||||||
Joint Venture Agreement [Member] | ||||||||||
Shares issued during period for intellectual property, shares | 12,000,000 | |||||||||
Shares issued during period for intellectual property | $ 21,600,000 | |||||||||
Closing price per share | $ 1.80 | $ 1.80 | ||||||||
Restricted Stock [Member] | ||||||||||
Number of restricted stock, shares issued | 354,369 | |||||||||
Number of restricted stock, shares issued, value | $ 113,399 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Stock Option and Warrant Activity (Details) | 9 Months Ended |
May 31, 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 | 0.16 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 0.16 |
Weighted Average Remaining Contractual Life, Outstanding, Beginning Balance | 3 years 6 months 29 days |
Weighted Average Remaining Contractual Life, Outstanding, Ending Balance | 3 years 8 months 9 days |
Weighted Average Remaining Contractual Life, Exercisable | 3 years 8 months 9 days |
Aggregate Intrinsic Value, Outstanding, Beginning Balance | $ | $ 1,141,500 |
Aggregate Intrinsic Value, Outstanding, Ending Balance | $ | |
Aggregate Intrinsic Value, Exercisable | $ |
Stockholders' Deficit - Sched_2
Stockholders' Deficit - Schedule of Options and Warrants Outstanding and Exercisable (Details) | May 31, 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 | 9,995,000 |
Number of Options/Warrants, Outstanding, Exercise Price | $ / shares | $ 0.16 |
Number of Options/Warrants, Exercisable | 9,995,000 |
Number of Options/Warrants, Exercisable, Exercise Price | $ / shares | $ 0.16 |
Exercise Price Range Two [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 |
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) | Jul. 10, 2020USD ($)$ / sharesshares | Jul. 10, 2020USD ($)$ / sharesshares | Jun. 26, 2020USD ($) | Jun. 26, 2020CAD ($) | Nov. 30, 2019USD ($) | May 31, 2019USD ($) | Feb. 28, 2019USD ($) | Nov. 30, 2018USD ($) | May 31, 2019USD ($)shares |
Number of shares issued | shares | 3,245,444 | ||||||||
Number of shares issued, value | $ 113,399 | $ 648,175 | $ 2,047,994 | $ 531,929 | $ 3,228,098 | ||||
Subsequent Event [Member] | |||||||||
Return of acquisition deposit | $ 254,205 | ||||||||
Subsequent Event [Member] | Tier 2 Offering [Member] | |||||||||
Share issued, price per share | $ / shares | $ 1.50 | $ 1.50 | |||||||
Minimum investment amount per investor | $ 1,050 | ||||||||
Minimum investment shares per investor | shares | 700 | ||||||||
Subsequent Event [Member] | Tier 2 Offering [Member] | |||||||||
Number of shares issued | shares | 20,000,000 | ||||||||
Number of shares issued, value | $ 30,000,000 | ||||||||
Subsequent Event [Member] | CAD [Member] | |||||||||
Return of acquisition deposit | $ 350,000 |