SEC Comment Letter for Novo Integrated Sciences, Inc. (NVOS) (CIK 0001138978) — Apr 29, 2020
Novo Integrated Sciences, Inc. (NVOS) (CIK 0001138978)
Date: April 29, 2020 · CIK: 0001138978 · Accession: 0000000000-20-003686
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File numbers found in text: 024-11186
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United States securities and exchange commission logo
April 29, 2020
Robert Mattacchione
Chief Executive Officer
Novo Integrated Sciences, Inc.
11120 NE 2nd Street, Suite 200
Bellevue, Washington 98004
Re:Novo Integrated Sciences, Inc.
Offering Statement on Form 1-A
Filed April 2, 2020
File No. 024-11186
Dear Mr. Mattacchione:
We have reviewed your offering statement and have the following comments. In some of
our comments, we may ask you to provide us with information so we may better understand your
disclosure.
Please respond to this letter by amending your offering statement and providing the
requested information. If you do not believe our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response. After reviewing any amendment to your offering statement and the information you
provide in response to these comments, we may have additional comments.
Form 1-A filed April 2, 2020
Summary, page 3
1.Disclosure indicates that Robert Mattacchione will continue to beneficially own over 50%
of your common stock after this offering. Please add disclosure here highlighting that Mr.
Mattacchione will continue to control corporate matters after this offering and add a risk
factor discussing any resulting risks to the company and its stockholders.
Item 6: Use of Proceeds to the Issuer, page 80
2.Clarify your disclosure to indicate whether your intended use of proceeds takes into
account the potential impacts of COVID-19 that you describe on page 36.
FirstName LastNameRobert Mattacchione
Comapany NameNovo Integrated Sciences, Inc.
April 29, 2020 Page 2
FirstName LastName
Robert Mattacchione
Novo Integrated Sciences, Inc.
April 29, 2020
Page 2
Business Growth Strategy, page 81
3.You disclose a number of planned business initiatives and opportunities in your business
growth strategy section. Please revise to disclose the current developmental status of
these initiatives and opportunities, such as the concrete steps you have taken to date,
anticipated costs to complete their development, the sources of funding for these
anticipated costs and other remaining actions you have to take before launch. For
example, you include a significant amount of disclosure about your planned CBD
platform and your telemedicine platform, but it is unclear what stage of development these
platforms are in and when the platforms are expected to launch.
Item 9: Management's Discussion and Analysis of Financial Condition and Results of Operations
, page 105
4.You disclose on page 36 that as a result of COVID-19 you have closed all corporate
clinics effective March 17, 2020. In addition, you are significantly reducing the
engagement of your multi-disciplinary primary healthcare services and products with your
client patients as provided through contracted services with eldercare facilities and your
affiliate clinics. Please disclose more specifically how this has impacted your operating
results as compared to the historical periods that you present. That is, clarify the extent to
which your revenue has been reduced as a result of the closures and reductions in service.
Further, clarify how this has impacted your overall liquidity position and outlook, and the
course of action you are taking to remedy any liquidity deficiency. Disclose your current
working capital position and clarify whether you expect collectability issues with your
accounts receivable. Lastly, clarify any potential impacts on impairment of long lived
assets, intangible assets and goodwill. For additional guidance, refer to the Division of
Corporation Finance Disclosure Guidance Topic No. 9 issued March 25, 2020 and Item
9(b) of Form 1-A.
5.Clarify your disclosure to describe the potential impact that COVID-19 has on your ability
to execute your license and joint venture agreements as planned, as well as the other
business growth initiatives that you disclose.
Where You Can Find More Information, page 133
6.You disclose here certain reporting requirements for issuers of Tier II offerings. We also
note that you appear to have an active reporting obligation pursuant to Section 15(d) of the
Exchange Act. Please revise this section to clarify whether you intend to continue to
provide reports pursuant to Section 15(d) and whether you will satisfy your Regulation A
reporting requirements with the filing of these reports. Consider Rule 257(b)(6) of
Regulation A.
FirstName LastNameRobert Mattacchione
Comapany NameNovo Integrated Sciences, Inc.
April 29, 2020 Page 3
FirstName LastName
Robert Mattacchione
Novo Integrated Sciences, Inc.
April 29, 2020
Page 3
General
7.Section 22(a) of your amended and restated articles of incorporation contains a forum
selection provision that designates a state or federal court located within the state of
Nevada as the exclusive forum for certain types of actions, including any "derivative"
action. Please revise to clearly and prominently describe the provision, including whether
it applies to claims arising under the U.S. federal securities laws. To the extent this
provision applies to claims arising under the Exchange Act, please be advised that Section
27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to
enforce any duty or liability created by the Exchange Act or the rules and regulations
thereunder. Additionally, please revise to describe any risks or impacts on investors and
any uncertainty about the enforceability of this provision.
We will consider qualifying your offering statement at your request. If a participant in
your offering is required to clear its compensation arrangements with FINRA, please have
FINRA advise us that it has no objections to the compensation arrangements prior to
qualification.
We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff. We also remind you that, following qualification of your Form 1-A, Rule 257
of Regulation A requires you to file periodic and current reports, including a Form 1-K which
will be due within 120 calendar days after the end of the fiscal year covered by the report.
You may contact Laura Veator, Staff Accountant, at (202) 551-3716 or Stephen
Krikorian, Accounting Branch Chief, at (202) 551-3488 if you have questions regarding
comments on the financial statements and related matters. Please contact Mitchell Austin, Staff
Attorney, at (202) 551-3574 or Kathleen Krebs, Special Counsel, at (202) 551-3350 with any
other questions.
Sincerely,
Division of Corporation Finance
Office of Technology
cc: Laura Anthony, Esq.