Convertible Notes Payable | Note 11 – Convertible Notes Payable Novo Integrated December 2021 Notes, SPA, and Warrants On December 14, 2021, Novo Integrated issued two convertible notes payable for a total of $ 16,666,666 8,333,333 5 June 14, 2023 20 In connection with the $16.66m+ convertible notes, the Company issued the note holders warrants to purchase a total of 583,334 20 December 14, 2025 7,680,156 ● Expected life of 4.0 ● Volatility of 275 ● Dividend yield of 0 ● Risk free interest rate of 1.23 The face amount of the $16.66m+ convertible notes of $ 16,666,666 11,409,200 5,257,466 5,257,466 1,666,666 1,140,000 8,064,132 On November 14, 2022, the $16.66m+ convertible notes were amended to provide the holders with conversion rights consisting of a conversion price to the first $ 1,000,000 (i) the conversion price in effect at such time and (ii) 82.0% of the lowest VWAP during the five (5) trading days immediately prior to a conversion date. The Company determined that the conversion features of these notes represented embedded derivatives since the notes are convertible into a variable number of shares upon conversion. derivative liability 1,390,380 ● Expected life of 0.58 ● Volatility of 148.20 ● Dividend yield of 0 ● Risk free interest rate of 4.55 The derivative was recorded as a discount on the convertible notes, but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the convertible notes. During the year ended August 31, 2023, an aggregate of $ 8,396,666 32,559 8,527,835 1,000,000 1,390,380 During the year ended August 31, 2023, the Company amortized $ 4,241,429 nil During the year ended August 31, 2023, the Company made cash payments in the aggregate amount of $ 3,001,442 2,833,888 167,554 nil Terragenx November 2021 Notes, SPA, and Warrants On November 17, 2021, Terragenx, a 91 1,875,000 937,500 1 May 17, 2022 33.50 In connection with the $1.875m convertible notes, the Company issued the note holders warrants to purchase a total of 22,388 33.50 November 17, 2024 351,240 ● Expected life of 3.0 ● Volatility of 300 ● Dividend yield of 0 ● Risk free interest rate of 0.85 The face amount of the $1.875m convertible notes of $ 1,875,000 1,579,176 295,824 295,824 375,000 90,000 760,824 On June 1, 2022, the Company paid the balance owed on one of two Terragenx $ 1.875 948,874 1.875 192,188 November 29, 2022 937,500 On June 1, 2022, the Company and one of the two Terragenx $ 1.875 186,719 Effective February 16, 2023, aside from the Liquidated Damages Charge, the Jefferson Note was paid in full. On August 21, 2023, Jefferson converted the additional Liquidated Damages Charge and the interest thereon. On August 21, 2023, as a result of the conversion, the Company issued 236,511 Novo Integrated – Mast Hill Fund, L.P. February 2023 Note, SPA, and Warrant On February 23, 2023, the Company entered into a securities purchase agreement (the “Mast Hill SPA”) with Mast Hill Fund, L.P. (“Mast Hill”), pursuant to which the Company issued an 12 February 23, 2024 573,000 100,000 12 57,300 515,700 1.75 Pursuant to the terms of the Mast Hill Note, the Company agreed to pay accrued interest monthly as well as the Mast Hill Principal Sum as follows: (i) $ 57,300 57,300 57,300 100,000 100,000 100,000 85 The Company may prepay the Mast Hill Note at any time prior to the date that an Event of Default (as defined in the Mast Hill Note) occurs at an amount equal to the Mast Hill Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $ 750 Upon the occurrence of any Event of Default, the Mast Hill Note shall become immediately due and payable and the Company shall pay to Mast Hill, in full satisfaction of its obligations hereunder, an amount equal to the Mast Hill Principal Sum then outstanding plus accrued interest multiplied by 125 16 The Mast Hill Warrant is exercisable for five years from February 23, 2023, at an exercise price of $ 2.50 86,327 ● Expected life of 5.0 ● Volatility of 252 ● Dividend yield of 0 ● Risk free interest rate of 4.09 As additional consideration for the purchase of the Mast Hill Note and pursuant to the terms of the Mast Hill SPA, on February 24, 2023, the Company issued 95,500 19.99 2,772,045 The principal amount of the $ 573,000 403,710 82,963 86,327 57,300 70,465 297,055 During the year ended August 31, 2023, the principal amount of $ 573,000 6,028 1,750 522,777 nil On September 18, 2023, Mast Hill fully exercised all warrants granted under the terms and conditions of the $ 573,000 53,567 Novo Integrated – FirstFire Global Opportunities Fund, LLC March 2023 Note, SPA, and Warrant On March 21, 2023, the Company entered into a securities purchase agreement (the “SPA”) with FirstFire Global Opportunities Fund, LLC (“FirstFire”) pursuant to which the Company issued an 12 March 21, 2024 573,000 100,000 12 57,300 515,700 1.75 Pursuant to the terms of the 2023 FirstFire Note, the Company agreed to pay accrued interest monthly as well as the Principal Sum as follows: (i) $ 57,300 57,300 57,300 100,000 100,000 100,000 85 The Company may prepay the 2023 FirstFire Note at any time prior to the date that an event of default (as provided in the 2023 FirstFire Note) occurs at an amount equal to the Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $ 750 Upon the occurrence of any event of default, the 2023 FirstFire Note shall become immediately due and payable and the Company shall pay to FirstFire, in full satisfaction of its obligations hereunder, an amount equal to the Principal Sum then outstanding plus accrued interest multiplied by 125 16 The 2023 FirstFire Warrant is exercisable for five years from March 21, 2023, at an exercise price of $ 2.50 93,811 ● Expected life of 5.0 ● Volatility of 251 ● Dividend yield of 0 ● Risk free interest rate of 3.73 As additional consideration for the purchase of the 2023 FirstFire Note and pursuant to the terms of the SPA, on March 22, 2023, the Company issued 95,500 1,000,000 The principal amount of the $ 573,000 389,057 90,132 93,811 57,300 35,628 The effective conversion price was determined to be $ 1.188 1.390 66,068 The combined total discount is $ 342,938 190,209 nil During the nine months ended May 31, 2024, the principal amount of $ 573,000 4,521 519,845 nil On October 12, 2023, FirstFire fully exercised all warrants granted under the terms and conditions of the $ 573,000 53,532 Novo Integrated – Mast Hill June 2023 $445,000 Note, SPA, and Warrant On June 20, 2023, the Company entered into a securities purchase agreement (the “MH $445,000 SPA”) with Mast Hill, pursuant to which the Company issued an 12 June 20, 2024 445,000 77,662 12 44,500 400,500 1.75 Pursuant to the terms of the MH $445,000 Note, the Company agreed to pay accrued interest monthly as well as the MH $445,000 Principal Sum as follows: (i) $ 44,500 44,500 44,500 77,661 77,661 77,661 85 The Company may prepay the MH $445,000 Note at any time prior to the date that an Event of Default (as defined in the Note) (each an “MH $445,000 Event of Default”) occurs at an amount equal to the MH $445,000 Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $ 750 Upon the occurrence of any MH $445,000 Event of Default, the MH $445,000 Note shall become immediately due and payable and the Company shall pay to Mast Hill, in full satisfaction of its obligations hereunder, an amount equal to the MH $445,000 Principal Sum then outstanding plus accrued interest multiplied by 125 The MH $445,000 Warrant is exercisable for five years from June 20, 2023, at an exercise price of $ 2.50 77,856 ● Expected life of 5.0 ● Volatility of 251 ● Dividend yield of 0 ● Risk free interest rate of 3.96 As additional consideration for the purchase of the MH $445,000 Note and pursuant to the terms of the MH $445,000 SPA, the Company issued 74,167 1,772,045 The principal amount of the MH $445,000 Note was proportionately allocated to the convertible note, common stock issued, and the warrants in the amount of $ 292,351 74,793 77,856 44,500 39,904 The effective conversion price was determined to be $ 1.150 1.535 97,978 The combined total discount is $ 335,031 105,523 Specific to the MH $445,000 Note, on July 20, 2023, the Company made a monthly interest payment of $ 4,243 4,535 4,535 4,389 On October 23, 2023, Mast Hill fully exercised all warrants granted under the terms and conditions of the $ 445,000 138,703 On December 21, 2023, the principal amount of $ 445,000 9,071 457,128 nil Novo Integrated - Mast Hill September 2023 Note and SPA On September 12, 2023, the Company entered into a securities purchase agreement (the “September 2023 Mast Hill SPA”) with Mast Hill Fund, L.P. (“Mast Hill”), pursuant to which the Company issued an 12 September 12, 2024 3,500,000 12 350,000 3,150,000 4.50 91.5 Pursuant to the terms of the September 2023 Mast Hill Note, the Company agreed to pay the principal sum and accrued interest as follows: (i) all accrued interest on December 12, 2023, (ii) $ 350,000 350,000 350,000 595,000 595,000 595,000 85 The Company may prepay the September 2023 Mast Hill Note at any time prior to the date that an Event of Default (as defined in the Note) occurs at an amount equal to the principal sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $ 750 Upon the occurrence of any Event of Default, the September 2023 Mast Hill Note shall become immediately due and payable and the Company will pay to Mast Hill an amount equal to the principal sum then outstanding plus accrued interest multiplied by 125 16 The September 2023 Mast Hill SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the common stock underlying the September 2023 Mast Hill Note. Further, pursuant to the September 2023 Mast Hill SPA, the Company agreed to transfer its rights to the charges/mortgages evidenced by Instrument Nos. CE925256 (in the amount of CDN$ 1,600,000 1,800,000 1,772,045 The Company’s subsidiary, Acenzia Inc. (“Acenzia”), entered into a guaranty with Mast Hill on September 12, 2023. Acenzia guaranteed the repayment of the September 2023 Mast Hill Note and granted Mast Hill a security interest in Acenzia’s assets, including but not limited to, the property located at 1580 Rossi Drive, Tecumseh, Ontario, Canada. The Company determined that the conversion features of these notes represented embedded derivatives since the notes are convertible into a variable number of shares upon conversion. On September 12, 2023, the Company recorded a derivative liability of $ 3,071,653 ● Expected life of 1 ● Volatility of 182.17 ● Dividend yield of 0 ● Risk free interest rate of 5.42 The derivative was recorded as a discount on the convertible notes, but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the convertible note. the fair value of the derivative liability was $ nil 4,046,797 ● Expected life of 0.48 0.44 ● Volatility of 189 186 ● Dividend yield of 0 ● Risk free interest rate of 5.01 5.00 The September 2023 Mast Hill Note contained a discount on note of $ 3,500,000 During the nine months ended May 31, 2024, the Company amortized the full balance of $ 3,500,000 nil Pursuant to the terms of the September 2023 Mast Hill Note, on December 12, 2023, the Company made an interest-only payment of $ 104,712 826,203 271,226 104,712 375,938 On April 9, 2024, the Company paid the full balance owed on the September 2023 Mast Hill Note in the principal amount of $ 3,228,774 30,571.28 nil Novo Integrated - FirstFire September 2023 Note and SPA On September 18, 2023, the Company entered into a securities purchase agreement (the “September 2023 FirstFire SPA”) with FirstFire Global Opportunities Fund, L.P. (“FirstFire”), pursuant to which the Company issued an 12 September 18, 2024 277,778 12 27,778 250,000 4.50 91.5 Pursuant to the terms of the September 2023 FirstFire Note, the Company agreed to pay the principal sum and accrued interest as follows: (i) all accrued interest on December 18, 2023, (ii) $ 27,778 27,778 27,778 47,222 47,222 47,222 85 The Company may prepay the September 2023 FirstFire Note at any time prior to the date that an event of default occurs at an amount equal to the principal sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $ 750 Upon the occurrence of any event of default, the September 2023 FirstFire Note shall become immediately due and payable and the Company shall pay to FirstFire, in full satisfaction of its obligations hereunder, an amount equal to the principal sum then outstanding plus accrued interest multiplied by 125 16 The September 2023 FirstFire SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, piggy-back registration rights with respect to the common stock underlying the September 2023 FirstFire Note. In addition to the beneficial ownership limitations provided in the September 2023 FirstFire Note, the sum of the number of shares of common stock that may be issued under the September 2023 FirstFire SPA and September 2023 FirstFire Note shall be limited to 480,156 Acenzia entered into a guaranty with FirstFire on September 18, 2023. Acenzia guaranteed the repayment of the September 2023 FirstFire Note and granted FirstFire a security interest in Acenzia’s assets, including but not limited to the property located at 1580 Rossi Drive, Tecumseh, Ontario, Canada, which is junior in priority to the security interest granted by Acenzia to FirstFire. The Company determined that the conversion features of these notes represented embedded derivatives since the notes are convertible into a variable number of shares upon conversion. On September 18, 2023, the Company recorded a derivative liability of $ 200,136 ● Expected life of 1 ● Volatility of 180.36 ● Dividend yield of 0 ● Risk free interest rate of 5.44 The derivative was recorded as a discount on the convertible notes, but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the convertible note. As at May 31, 2024, the fair value of the derivative liability was $ nil 200,135 ● Expected life of 0.46 ● Volatility of 186 ● Dividend yield of 0 ● Risk free interest rate of 5.00 The September 2023 FirstFire Note contained a discount on note of $ 235,414 During the nine months ended May 31, 2024, the Company amortized $ 235,414 nil Pursuant to the terms of the September 2023 FirstFire Note, on December 18, 2023, the Company made an interest-only payment of $ 8,333 480,000 195,016 8,333 203,349 On April 9, 2024, the Company paid the full balance owed on the September 2023 FirstFire Note in the principal amount of $ 82,761 1,552 nil Novo Integrated - Streeterville Capital, LLC April 2024 Note and SPA On April 5, 2024, the Company entered into a securities purchase agreement (the “Streeterville SPA”) with Streeterville Capital, LLC (“Streeterville”), pursuant to which the Company issued a secured convertible promissory note (the “Streeterville Note”) with a maturity date of April 8, 2025 6,210,000 10.9 660,000 50,000 5,500,000 3,500,000 277,777.77 Streeterville may convert the Streeterville Note into the Company’s common stock on any trading day (and the following trading day) that any intraday trade price of the common stock is 10% greater than the closing trade price on the previous trading day (each a “Voluntary Conversion”). With respect to any Voluntary Conversion, the conversion price is equal to 85 Beginning on October 8, 2024, Streeterville shall have the right to redeem up to $ 950,000 The Company may prepay the Note at any time prior to the date that an Event of Default (as defined in the Streeterville Note) (each an “Event of Default”) occurs at an amount equal to 105% of the Outstanding Balance (as defined below). “Outstanding Balance” means the Streeterville Principal Sum then outstanding plus accrued and unpaid interest. Upon the occurrence of any Event of Default, the Streeterville Note shall become immediately due and payable and the Company shall pay to Streeterville, in full satisfaction of its obligations hereunder, an amount equal to the Outstanding Balance plus the Trigger Effect (as defined herein). The “Trigger Effect” means 20% of the Outstanding Balance upon the occurrence of any Major Trigger Event (as defined in the Streeterville Note) and 5% of the Outstanding Balance upon the occurrence of any Minor Trigger Event (as defined in the Streeterville Note). The Trigger Effect for any Minor Trigger Event may occur up to three times. Upon the occurrence of an Event of Default, additional interest will accrue from the date of the Event of Default at the rate equal to the lower of 22% per annum or the highest rate permitted by law. In addition to the beneficial ownership limitations provided in the Streeterville Note, the sum of the number of shares of common stock that may be issued under the Streeterville SPA and Streeterville Note shall be limited to 19.99 The Streeterville SPA contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, registration rights with respect to the common stock underlying the Streeterville Note. The Streeterville SPA also requires the Company to file a registration statement covering Streeterville’s resale of the common stock underlying the Streeterville Note within 75 days of the closing date. In connection with the Streeterville Note and Streeterville SPA, the Company and Streeterville also entered into a security agreement (the “Streeterville Security Agreement”). Pursuant to the Streeterville Security Agreement, the Company granted Streeterville a security interest in all of the assets of the Company. Acenzia, a wholly owned subsidiary of the Company, entered into a guaranty with Streeterville on April 5, 2024 (the “Acenzia Guaranty”). Acenzia guaranteed the repayment of the Streeterville Note and granted Streeterville a security interest in the assets of Acenzia, including but not limited to the property located at 1580 Rossi Drive, Tecumseh, Ontario, Canada. Further, NHL, a wholly owned subsidiary of the Company, entered into a guaranty with Streeterville on April 5, 2024 (the “NHL Guaranty”). NHL guaranteed the repayment of the Streeterville Note and granted a security interest in the assets of NHL. The Company determined that the conversion features of these notes represented embedded derivatives since the notes are convertible into a variable number of shares upon conversion. On April 5, 2024, the Company recorded a derivative liability of $ 5,010,966 ● Expected life of 1 ● Volatility of 186 ● Dividend yield of 0 ● Risk free interest rate of 5.05 The derivative was recorded as a discount on the convertible notes, but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the convertible note. As at May 31, 2024, the fair value of the derivative liability was $ 14,048,576 9,037,610 ● Expected life of 0.85 ● Volatility of 206 ● Dividend yield of 0 ● Risk free interest rate of 5.18 The Streeterville Note contained a discount on note of $ 235,414 During the nine months ended May 31, 2024, the Company amortized $ 900,585 4,985,381 |