NVOS Novo Integrated Sciences Inc (PK)

INFORMATION STATEMENT

PURSUANT TO SECTION 14(C) OF THE SECURITIES EXCHANGE ACT

OF 1934, AS AMENDED

WE ARE NOT ASKING YOU FOR A PROXY

AND YOU ARE REQUESTED NOT TO SEND US A PROXY.

This Information Statement is being furnished to the stockholders of Novo Integrated Sciences, Inc., a Nevada corporation (the “Company” “we,” “our,” or “us”), as of January 5, 2022 (the “Record Date”), pursuant to Section 14(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations prescribed thereunder, to inform them that, with the unanimous approval of the Board of Directors of the Company (the “Board”) on December 14, 2021, on December 14, 2021, stockholders holding a majority of the issued and outstanding voting securities of the Company (collectively, the “Majority Stockholders”), approved, by written consent, a registered direct best efforts public offering as more fully described below (the “Offering”). Set forth below are the stockholders who comprise the Majority Stockholders, and their Company common stock ownership and voting power as of December 14, 2021:

Such approval and consent constitute the approval and consent of a majority of the total number of shares of the Company’s outstanding voting stock and is sufficient under the Nevada Revised Statutes, the Company’s Amended and Restated Articles of Incorporation, as amended, and the Company’s Bylaws to approve the Offering. Accordingly, approval of the Offering will not be submitted to the other stockholders of the Company for a vote, and this Information Statement is being furnished to such other stockholders to provide them with certain information concerning approval of the Offering in accordance with the requirements of the Exchange Act, and the regulations promulgated under the Exchange Act, including Regulation 14C.

Your consent is not required and is not being solicited in connection with approval of the Offering by the Majority Stockholders. This Information Statement is intended to provide our stockholders information required by the rules and regulations of the Exchange Act.

THE REGISTERED DIRECT OFFERING

On December 14, 2021, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with accredited institutional investors (the “Purchasers”) pursuant to which the Company agreed to issue to the Purchasers and the Purchasers agreed to purchase (the “Purchase”), in a registered direct offering, (i) $16,666,666 aggregate principal amount of the Company’s senior secured convertible notes, which notes are convertible into shares of the Company’s common stock, under certain conditions (the “Notes”); and (ii) warrants to purchase up to 5,833,334 shares of the Company’s common stock (the “Warrants”). The securities, including up to 68,557,248 shares of common stock issuable upon conversion under the Notes and up to 5,833,334 shares of common stock issuable upon exercise of the Warrants, are being offered by the Company pursuant to an effective shelf registration statement on Form S-3 (File No. 333-254278), which was declared effective by the SEC on March 22, 2021. The Purchase closed on December 14, 2021.

The Notes have an original issue discount of 10%, resulting in gross proceeds to the Company of $15,000,000. The Notes bear interest at 5% per annum and mature on June 14, 2023, unless earlier converted or redeemed, subject to the right of the Purchasers to extend the date under certain circumstances. The Company will make monthly payments on the first business day of each month commencing on the calendar month immediately following the sixth month anniversary of the issuance of the Notes through June 14, 2023, the maturity date, consisting of an amortizing portion of the principal of each Note equal to $1,388,888 and accrued and unpaid interest and late charges on the Notes. All amounts due under the Notes are convertible at any time, in whole or in part, at the holder’s option, into common stock at the initial conversion price of $2.00, which conversion price is subject to certain adjustments; provided, however, that the Notes have a 9.99% (or 4.99%, if elected by the holder prior to issuance) equity blocker. If an event of default occurs, the holder may convert all, or any part, of the principal amount of a Note and all accrued and unpaid interest and late charge at an alternate conversion price, as described in the Notes. Subject to certain conditions, the Company has the right to redeem all, but not less than all, of the remaining principal amount of the Notes and all accrued and unpaid interest and late charges in cash at a price equal to 135% of the amount being redeemed.

The Warrants are exercisable at an exercise price of $2.00 per share and expire on the fourth year anniversary of December 14, 2021, the initial issuance date of the Warrants. Subject to the satisfaction of customary equity conditions, including the equity blocker and the Forced Exercise Limitation (hereinafter defined), at the Company’s option, the Company may force the exercise of the Warrants at any time the closing bid price of the Company’s common stock exceeds $5.00 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events) for a period of 20 consecutive trading days. “Forced Exercise Limitation” means the lesser of (i) 35% of the quotient of (x) the sum of the aggregate trading volume (as reported on Bloomberg, LP) of shares of the Company’s common stock on the Nasdaq Capital Market over the three consecutive trading day period immediately prior to the applicable notice date, divided by (y) three or (ii) 20% of the aggregate trading volume (as reported on Bloomberg, LP) of shares of the Company’s common stock on the Nasdaq Capital Market as of the trading day immediately prior to the applicable notice date.

In connection with the Purchase, the Company and each of its direct and indirect U.S. subsidiaries (each, a “Grantor” and collectively, the “Grantors”) entered into a Security and Pledge Agreement (the “Security Agreement”) in favor of one of the Purchasers, as collateral agent. Pursuant to the terms of the Security Agreement, the Grantors granted to the collateral agent, for the ratable benefit of the collateral agent and the Note holders, a valid, enforceable, and perfected security interest in all personal property of each Grantor.

In addition, the Grantors entered into an Intellectual Property Security Agreement (the “Intellectual Property Security Agreement”) in favor of one of the Purchasers, as collateral agent. Pursuant to the terms of the Intellectual Property Security Agreement, the Grantors granted to the collateral agent, for the ratable benefit of the collateral agent and the Note holders, a lien on and security interest in, all of the Grantors’ rights, title and interest in, to and under certain intellectual property.

Maxim Group LLC acted as the sole placement agent (the “Placement Agent”) on a “commercially reasonable efforts” basis, in connection with the Registered Direct Offering, pursuant to a Placement Agency Agreement, dated as of December 10, 2021, and executed by the Company on December 14, 2021, by and between the Company and the Placement Agent (the “Placement Agency Agreement”). Pursuant to the Placement Agency Agreement, the Placement Agent will be entitled to a cash fee of 7% of the gross proceeds paid to Maxim Group LLC for the securities and reimbursement of certain out-of-pocket expenses up to $20,000.

The net proceeds of the offering have been, and are intended to be, used to reduce debt and for working capital purposes.

The foregoing summaries of the Offering, the securities to be issued in connection therewith, the Purchase Agreement, the Notes, the Warrants, the Security Agreement, the Intellectual Property Security Agreement and the Placement Agency Agreement do not purport to be complete and are qualified in their entirety by reference to the definitive transaction documents, which are attached to the Company’s Current Report on Form 8-K filed December 15, 2021, with the SEC as Exhibits 10.1, 10.2, 4.1, 10.3, 10.4 and 10.5 thereto, respectively, and are incorporated herein by reference.

STOCKHOLDER APPROVAL REQUIRED BY NASDAQ RULE 5635(d)

Stockholder approval of the Offering was required by Nasdaq Rule 5635(d), which requires stockholder approval prior to a 20% issuance of securities at a price that is less than the Minimum Price (as defined below) in a transaction other than a public offering. A 20% issuance is a transaction, other than a public offering, involving the sale, issuance or potential issuance by the company of common stock (or securities convertible into or exercisable for common stock), which alone or together with sales by officers, directors or substantial stockholders of the company, equals 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance. “Minimum Price” means a price that is the lower of: (i) the closing price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement; or (ii) the average closing price of the common stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement.

COST OF FURNISHING INFORMATION STATEMENT

The entire cost of furnishing this Information Statement will be borne by us. We will request brokerage houses, nominees, custodians, fiduciaries and other like parties to forward this Information Statement to the beneficial owners of our voting securities held of record by them and we will reimburse such persons for out-of-pocket expenses incurred in forwarding such material.

NO DISSENTER’S RIGHT OF APPRAISAL

Stockholders have no right under the Nevada Revised Statutes, the Company’s Amended and Restated Articles of Incorporation, as amended, and the Company’s Bylaws to dissent from any of the actions set forth above.