$NVOS Merger May Prove Pivotal
Pioneering in remote medical care and virtual care, Novo Integrated Inc. (NASDAQ: NVOS) just secured $57 million in debt funding. NVOS is also awaiting two major catalysts in the next couple of months: its long-awaited merger with SwagCheck Inc. The merger that was supposed to be closed by January 10th could be on the horizon, and its Q1 and Q2 earnings are expected to be released within the next couple of weeks. So how could these events change the outlook for NVOS stock?
NVOS Fundamentals
The $16 million market cap company NVOS entered into an agreement with SwagCheck Inc. on December 23, 2022, to acquire 100% of its shares for $1. On the condition that NVOS will have received a financing commitment of at least $90 million. The deal was supposed to be completed by January 10, 2023, but there have not been any signs of it being closed.
That may change soon, as NVOS secured a $57 million injection in the form of 15-year non-dilutive debt at a fixed interest rate of 1.52%. The loan will help NVOS accelerate growth and will also help with its merger with SwagCheck. Robert Mattacchione, NVOS’ CEO and Chairman of the Board stated “This $57,000,000 cash infusion will provide the company with the foundational capital and repayment terms required to support and accelerate the further implementation and growth of NVOS’ three-pillar business model.”.
Getting a loan that is almost four times the market cap of the company with these terms in today’s market indicates that something big may be coming for NVOS. The loan also means that NVOS probably doesn’t need to further dilute its shares by announcing any more offerings in the near future after its last 4 million-share offering last October.
It is apparent that NVOS is going for more of a diverse business model with the multiple acquisitions it has made in the past few years. The acquisition of PRO-DIP was the first sign that NVOS was willing to branch out of its healthcare-focused business. That was followed shortly by NVOS’ acquisition of Acenzia, the medical research and manufacturing company. If the SwagCheck merger is a success that would be another step towards NVOS’ efforts to diversify its business.
NASDAQ informed NVOS earlier this year that it did not comply with Nasdaq’s listing requirements because it had not filed its Form 10-Q for the period ending November 30, 2022.
Based on Nasdaq’s further review, Nasdaq granted an exception to enable NVOS to regain compliance with the rule. The terms of the exception were that before May 29, 2023, NVOS must file its 2022 annual report and its Q1 2023 report. NVOS successfully filed its annual report, in which it announced an over 26% increase in revenue YoY, but is yet to release its Q1 2023 earnings.
Another deadline is quickly approaching for NVOS, as it will have to regain compliance with NASDAQ’s minimum bid price rule as NVOS stock is currently trading below the $1 threshold. NVOS stock will have to trade above $1 by May 22, 2023, by a reverse split or it could ask for a 180-day extension. If NVOS wants to ask for another 180-day extension it will have to sort out its 10-Q first – which could be why NVOS is expected to release its late Q1 earnings in the next couple of weeks.
Reddit investors believe that NVOS stock is currently undervalued and is prone to a short squeeze that can make the stock soar after it regains compliance with NASDAQ’s requirements. That, coupled with NVOS’s upcoming catalysts, makes NVOS stock an interesting buy option right now.
NVOS Financials
In its 2022 annual report, NVOS reported $5.7 million in assets including $1.07 million in cash and cash equivalents that marked a YoY decline in NVOS’s assets from $11 million including $8.29 million in cash and cash equivalents.
Revenue increased YoY from $9.3 million to $11.7 million, while the gross profit increased from $3.8 million to almost $4.8 million. Operating loss increased YoY from $4.3 million to $25 million and its net loss increased from $4.47 million to $33 million.
Technical Analysis
NVOS stock trend is bullish, with an upwards channel, the stock is trading above the 50 and 200 MAs which are bullish indications, and is testing the 21 MA which is a neutral indication. Meanwhile, the MACD is approaching a bullish cross. There’s a gap near the $0.11 point that may need to be filled in the future which is a bearish indicator.
NVOS stock just underwent two positive catalysts, in its $57 million debt funding, and its 2022 annual earnings release, with its Q1 2023 earnings release as an upcoming catalyst in the next couple of weeks. That coupled with people expecting a short squeeze happening soon, makes NVOS stock’s outlook bullish. With that in mind, a possible play could be going long on the retest of the lower trendline and taking profits at the upper trendline, with SL at $0.17 if it breaks the 21 MA.
NVOS Forecast
NVOS is in the middle of some of its most important catalysts. The $57 million non-dilutive debt funding means that there will probably be no more dilutions in the near future and the SwagCheck merger could be approaching. In addition, the anticipated release of NVOS’ Q1 and Q2 financials are strong catalysts that would determine whether the company will maintain its NASDAQ listing.
Considering the company’s troubles complying with the NASDAQ’s requirements, investors should be wary of the risks associated with NVOS. However, if the company is able to iron these problems out and complete its merger with SwagCheck, NVOS’ diverse business may put the company in a good position for the future once the hype settles.
NVOS Fundamentals
The $16 million market cap company NVOS entered into an agreement with SwagCheck Inc. on December 23, 2022, to acquire 100% of its shares for $1. On the condition that NVOS will have received a financing commitment of at least $90 million. The deal was supposed to be completed by January 10, 2023, but there have not been any signs of it being closed.
That may change soon, as NVOS secured a $57 million injection in the form of 15-year non-dilutive debt at a fixed interest rate of 1.52%. The loan will help NVOS accelerate growth and will also help with its merger with SwagCheck. Robert Mattacchione, NVOS’ CEO and Chairman of the Board stated “This $57,000,000 cash infusion will provide the company with the foundational capital and repayment terms required to support and accelerate the further implementation and growth of NVOS’ three-pillar business model.”.
Getting a loan that is almost four times the market cap of the company with these terms in today’s market indicates that something big may be coming for NVOS. The loan also means that NVOS probably doesn’t need to further dilute its shares by announcing any more offerings in the near future after its last 4 million-share offering last October.
It is apparent that NVOS is going for more of a diverse business model with the multiple acquisitions it has made in the past few years. The acquisition of PRO-DIP was the first sign that NVOS was willing to branch out of its healthcare-focused business. That was followed shortly by NVOS’ acquisition of Acenzia, the medical research and manufacturing company. If the SwagCheck merger is a success that would be another step towards NVOS’ efforts to diversify its business.
NASDAQ informed NVOS earlier this year that it did not comply with Nasdaq’s listing requirements because it had not filed its Form 10-Q for the period ending November 30, 2022.
Based on Nasdaq’s further review, Nasdaq granted an exception to enable NVOS to regain compliance with the rule. The terms of the exception were that before May 29, 2023, NVOS must file its 2022 annual report and its Q1 2023 report. NVOS successfully filed its annual report, in which it announced an over 26% increase in revenue YoY, but is yet to release its Q1 2023 earnings.
Another deadline is quickly approaching for NVOS, as it will have to regain compliance with NASDAQ’s minimum bid price rule as NVOS stock is currently trading below the $1 threshold. NVOS stock will have to trade above $1 by May 22, 2023, by a reverse split or it could ask for a 180-day extension. If NVOS wants to ask for another 180-day extension it will have to sort out its 10-Q first – which could be why NVOS is expected to release its late Q1 earnings in the next couple of weeks.
Reddit investors believe that NVOS stock is currently undervalued and is prone to a short squeeze that can make the stock soar after it regains compliance with NASDAQ’s requirements. That, coupled with NVOS’s upcoming catalysts, makes NVOS stock an interesting buy option right now.
NVOS Financials
In its 2022 annual report, NVOS reported $5.7 million in assets including $1.07 million in cash and cash equivalents that marked a YoY decline in NVOS’s assets from $11 million including $8.29 million in cash and cash equivalents.
Revenue increased YoY from $9.3 million to $11.7 million, while the gross profit increased from $3.8 million to almost $4.8 million. Operating loss increased YoY from $4.3 million to $25 million and its net loss increased from $4.47 million to $33 million.
Technical Analysis
NVOS stock trend is bullish, with an upwards channel, the stock is trading above the 50 and 200 MAs which are bullish indications, and is testing the 21 MA which is a neutral indication. Meanwhile, the MACD is approaching a bullish cross. There’s a gap near the $0.11 point that may need to be filled in the future which is a bearish indicator.
NVOS stock just underwent two positive catalysts, in its $57 million debt funding, and its 2022 annual earnings release, with its Q1 2023 earnings release as an upcoming catalyst in the next couple of weeks. That coupled with people expecting a short squeeze happening soon, makes NVOS stock’s outlook bullish. With that in mind, a possible play could be going long on the retest of the lower trendline and taking profits at the upper trendline, with SL at $0.17 if it breaks the 21 MA.
NVOS Forecast
NVOS is in the middle of some of its most important catalysts. The $57 million non-dilutive debt funding means that there will probably be no more dilutions in the near future and the SwagCheck merger could be approaching. In addition, the anticipated release of NVOS’ Q1 and Q2 financials are strong catalysts that would determine whether the company will maintain its NASDAQ listing.
Considering the company’s troubles complying with the NASDAQ’s requirements, investors should be wary of the risks associated with NVOS. However, if the company is able to iron these problems out and complete its merger with SwagCheck, NVOS’ diverse business may put the company in a good position for the future once the hype settles.