NLH Nova Leap Health Corp

NOVA LEAP HEALTH CORP. (TSXV: NLH) (“Nova Leap” or “the Company”), a growing home health care organization, is pleased to announce that it has executed a definitive agreement (the “Agreement”) to acquire all of the shares of two affiliated home care services companies (“the Targets”) with operations in Nova Scotia (the “Transaction”). The Targets reported aggregate unaudited revenue of approximately $2.56 million, unaudited net income of approximately $235,000 and Adjusted EBITDA of approximately $276,000 for the 2023 fiscal year. All amounts are in Canadian Dollars (“CAD”) unless otherwise specified.

Under the terms of the Agreement, the Transaction is to be made for total consideration of $1,380,000, on a cash-free, debt-free basis and subject to customary post-closing working capital adjustments, with the full amount payable in cash on closing. The $1,380,000 purchase price will be funded by way of a debt facility with the Company’s lender and is repayable over a five-year term.

“As mentioned in previous shareholder communications, we have been actively working on acquisition opportunities since re-engaging our M&A program,” said Dana Hatfield, Chair of the Board of Nova Leap. “This acquisition allows us to expand our geographical coverage within the province with the addition of two new territories.”

The Transaction is a Non-Arm’s Length transaction pursuant to TSX Venture Exchange (“TSXV”) policies, as the vendors are controlled by Chris Dobbin, a Director, CEO and significant shareholder of Nova Leap, and the Estate of Wayne Fulcher, a shareholder with more than 10% of the outstanding shares of Nova Leap. In addition, Jill Dobbin, an officer of certain subsidiaries of Nova Leap, is also an officer of the Targets. The Transaction is also a related party transaction pursuant to Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions (“MI 61-101”). However, Nova Leap is exempt from the valuation and minority approval requirements in MI 61-101 as the fair market value of the shares to be acquired by Nova Leap and the purchase price payable does not exceed 25% of its market capitalization.

Completion of the Transaction is subject to the satisfaction of certain conditions, including the approval of the TSXV and lender approval. The Transaction also requires the approval of disinterested shareholders of the Company, to be sought at a meeting of the shareholders which is expected to be held in December.

The Transaction is expected to be immediately accretive and there are no finder fees to be paid. Closing of the Transaction is expected to occur by the end of 2024.

Update on Florida Acquisition

As announced on October 15, 2024, the Company is completing the acquisition of certain assets from a home care services business based in Florida. Under the terms of the agreement, the acquisition is to be made for total consideration of USD$1,636,000, subject to closing adjustments, of which USD$1,316,000 is payable with cash on closing and USD$320,000 is by way of a promissory note repayable in equal annual installments of principal commencing on the 12-month anniversary of the closing date and continuing until paid in full and bearing interest at a rate of 3.0% per annum, which accrued interest shall be paid annually on the applicable note payment due date with the annual installments of principal. No liabilities will be assumed pursuant to the acquisition.

The acquisition is also a Non-Arm’s Length transaction pursuant to TSXV policies and requires disinterested shareholder approval. The Company intends to seek approval for the acquisition by written consent of shareholders as permitted by TSXV policies.

About Nova Leap

Nova Leap is an acquisitive home health care services company operating in one of the fastest-growing industries in the U.S. & Canada. The Company performs a vital role within the continuum of care with an individual and family centered focus, particularly those requiring dementia care. Nova Leap achieved the #42 ranking on the 2021 Report on Business ranking of Canada’s Top Growing Companies, the #2 ranking on the 2020 Report on Business ranking of Canada’s Top Growing Companies and the #10 Ranking in the 2019 TSX Venture 50™ in the Clean Technology & Life Sciences sector. The Company is geographically diversified with operations in 10 different U.S. states within the New England, Southeastern, South Central and Midwest regions as well as in Nova Scotia, Canada.

NON-IFRS MEASURES:

This release contains references to certain measures that do not have a standardized meaning under IFRS as prescribed by the International Accounting Standards Board (“IASB”) and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing a further understanding of operations from management’s perspective. Accordingly, non-IFRS financial measures should not be considered in isolation or as a substitute for analysis of financial information reported under IFRS. The Company presents non-IFRS financial measures, specifically Adjusted EBITDA (as such term is hereinafter defined), as well as supplementary financial measures such as annualized revenue and annualized adjusted EBITDA. The Company believes these non-IFRS financial measures are frequently used by lenders, securities analysts, investors and other interested parties as a measure of financial performance, and it is therefore helpful to provide supplemental measures of operating performance and thus highlight trends that may not otherwise be apparent when relying solely on IFRS financial measures.

Adjusted Earnings before interest, taxes, amortization and depreciation (“Adjusted EBITDA”), is calculated as income from operating activities plus amortization and depreciation and stock-based compensation expense. The most directly comparable IFRS measure is income from operating activities.

Annualized Adjusted EBITDA is calculated as actual Adjusted EBITDA for a specific period of time extrapolated over 365 days.

FORWARD LOOKING INFORMATION:

Certain information in this press release may contain forward-looking statements, such as statements regarding the closing of the acquisition (including timing) and its expected impact on the Company, financing of the acquisition, and plans regarding future acquisitions and business growth. This information is based on current expectations and assumptions, including assumptions described elsewhere in this release and those concerning general economic and market conditions, the satisfaction of conditions to closing the acquisition, availability of working capital necessary for conducting Nova Leap’s operations, availability of desirable acquisition targets and financing to fund such acquisitions, and Nova Leap’s ability to integrate its acquired businesses and maintain previously achieved service hour and revenue levels, that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. Risks that could cause results to differ from those stated in the forward-looking statements in this release include staff and supply shortages, regulatory changes affecting the home care industry or government programs utilized by the Company, other unexpected increases in operating costs and competition from other service providers. All forward-looking statements, including any financial outlook or future-oriented financial information, contained in this press release are made as of the date of this release and included for the purpose of providing information about management's current expectations and plans relating to the future, and these statements may not be appropriate for other purposes. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements unless and until required by securities laws applicable to the Company. Additional information identifying risks and uncertainties is contained in the Company's filings with the Canadian securities regulators, which filings are available at www.sedarplus.ca.

CAUTIONARY STATEMENT:

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information:

Chris LeBlanc, CPA
Chief Financial Officer & Corporate Secretary
Nova Leap Health Corp.
E:cleblanc@novaleaphealth.com