false
--12-31
Q2
0001417926
0001417926
2024-01-01
2024-06-30
0001417926
2024-08-14
0001417926
2024-06-30
0001417926
2023-12-31
0001417926
us-gaap:NonrelatedPartyMember
2024-06-30
0001417926
us-gaap:NonrelatedPartyMember
2023-12-31
0001417926
us-gaap:RelatedPartyMember
2024-06-30
0001417926
us-gaap:RelatedPartyMember
2023-12-31
0001417926
us-gaap:SeriesAPreferredStockMember
2024-06-30
0001417926
us-gaap:SeriesAPreferredStockMember
2023-12-31
0001417926
us-gaap:SeriesBPreferredStockMember
2024-06-30
0001417926
us-gaap:SeriesBPreferredStockMember
2023-12-31
0001417926
2024-04-01
2024-06-30
0001417926
2023-04-01
2023-06-30
0001417926
2023-01-01
2023-06-30
0001417926
INVO:ClinicRevenueMember
2024-04-01
2024-06-30
0001417926
INVO:ClinicRevenueMember
2023-04-01
2023-06-30
0001417926
INVO:ClinicRevenueMember
2024-01-01
2024-06-30
0001417926
INVO:ClinicRevenueMember
2023-01-01
2023-06-30
0001417926
us-gaap:ProductMember
2024-04-01
2024-06-30
0001417926
us-gaap:ProductMember
2023-04-01
2023-06-30
0001417926
us-gaap:ProductMember
2024-01-01
2024-06-30
0001417926
us-gaap:ProductMember
2023-01-01
2023-06-30
0001417926
us-gaap:CommonStockMember
2022-12-31
0001417926
us-gaap:PreferredStockMember
us-gaap:SeriesAPreferredStockMember
2022-12-31
0001417926
us-gaap:PreferredStockMember
us-gaap:SeriesBPreferredStockMember
2022-12-31
0001417926
us-gaap:AdditionalPaidInCapitalMember
2022-12-31
0001417926
us-gaap:RetainedEarningsMember
2022-12-31
0001417926
2022-12-31
0001417926
us-gaap:CommonStockMember
2023-03-31
0001417926
us-gaap:PreferredStockMember
us-gaap:SeriesAPreferredStockMember
2023-03-31
0001417926
us-gaap:PreferredStockMember
us-gaap:SeriesBPreferredStockMember
2023-03-31
0001417926
us-gaap:AdditionalPaidInCapitalMember
2023-03-31
0001417926
us-gaap:RetainedEarningsMember
2023-03-31
0001417926
2023-03-31
0001417926
us-gaap:CommonStockMember
2023-12-31
0001417926
us-gaap:PreferredStockMember
us-gaap:SeriesAPreferredStockMember
2023-12-31
0001417926
us-gaap:PreferredStockMember
us-gaap:SeriesBPreferredStockMember
2023-12-31
0001417926
us-gaap:AdditionalPaidInCapitalMember
2023-12-31
0001417926
us-gaap:RetainedEarningsMember
2023-12-31
0001417926
us-gaap:CommonStockMember
2024-03-31
0001417926
us-gaap:PreferredStockMember
us-gaap:SeriesAPreferredStockMember
2024-03-31
0001417926
us-gaap:PreferredStockMember
us-gaap:SeriesBPreferredStockMember
2024-03-31
0001417926
us-gaap:AdditionalPaidInCapitalMember
2024-03-31
0001417926
us-gaap:RetainedEarningsMember
2024-03-31
0001417926
2024-03-31
0001417926
us-gaap:CommonStockMember
2023-01-01
2023-03-31
0001417926
us-gaap:PreferredStockMember
us-gaap:SeriesAPreferredStockMember
2023-01-01
2023-03-31
0001417926
us-gaap:PreferredStockMember
us-gaap:SeriesBPreferredStockMember
2023-01-01
2023-03-31
0001417926
us-gaap:AdditionalPaidInCapitalMember
2023-01-01
2023-03-31
0001417926
us-gaap:RetainedEarningsMember
2023-01-01
2023-03-31
0001417926
2023-01-01
2023-03-31
0001417926
us-gaap:CommonStockMember
2023-04-01
2023-06-30
0001417926
us-gaap:PreferredStockMember
us-gaap:SeriesAPreferredStockMember
2023-04-01
2023-06-30
0001417926
us-gaap:PreferredStockMember
us-gaap:SeriesBPreferredStockMember
2023-04-01
2023-06-30
0001417926
us-gaap:AdditionalPaidInCapitalMember
2023-04-01
2023-06-30
0001417926
us-gaap:RetainedEarningsMember
2023-04-01
2023-06-30
0001417926
us-gaap:CommonStockMember
2024-01-01
2024-03-31
0001417926
us-gaap:PreferredStockMember
us-gaap:SeriesAPreferredStockMember
2024-01-01
2024-03-31
0001417926
us-gaap:PreferredStockMember
us-gaap:SeriesBPreferredStockMember
2024-01-01
2024-03-31
0001417926
us-gaap:AdditionalPaidInCapitalMember
2024-01-01
2024-03-31
0001417926
us-gaap:RetainedEarningsMember
2024-01-01
2024-03-31
0001417926
2024-01-01
2024-03-31
0001417926
us-gaap:CommonStockMember
2024-04-01
2024-06-30
0001417926
us-gaap:PreferredStockMember
us-gaap:SeriesAPreferredStockMember
2024-04-01
2024-06-30
0001417926
us-gaap:PreferredStockMember
us-gaap:SeriesBPreferredStockMember
2024-04-01
2024-06-30
0001417926
us-gaap:AdditionalPaidInCapitalMember
2024-04-01
2024-06-30
0001417926
us-gaap:RetainedEarningsMember
2024-04-01
2024-06-30
0001417926
us-gaap:CommonStockMember
2023-06-30
0001417926
us-gaap:PreferredStockMember
us-gaap:SeriesAPreferredStockMember
2023-06-30
0001417926
us-gaap:PreferredStockMember
us-gaap:SeriesBPreferredStockMember
2023-06-30
0001417926
us-gaap:AdditionalPaidInCapitalMember
2023-06-30
0001417926
us-gaap:RetainedEarningsMember
2023-06-30
0001417926
2023-06-30
0001417926
us-gaap:CommonStockMember
2024-06-30
0001417926
us-gaap:PreferredStockMember
us-gaap:SeriesAPreferredStockMember
2024-06-30
0001417926
us-gaap:PreferredStockMember
us-gaap:SeriesBPreferredStockMember
2024-06-30
0001417926
us-gaap:AdditionalPaidInCapitalMember
2024-06-30
0001417926
us-gaap:RetainedEarningsMember
2024-06-30
0001417926
srt:MinimumMember
2024-06-30
0001417926
srt:MaximumMember
2024-06-30
0001417926
us-gaap:EmployeeStockOptionMember
2024-01-01
2024-06-30
0001417926
us-gaap:EmployeeStockOptionMember
2023-01-01
2023-06-30
0001417926
INVO:ConvertibleNotesAndInterestMember
2024-01-01
2024-06-30
0001417926
INVO:ConvertibleNotesAndInterestMember
2023-01-01
2023-06-30
0001417926
us-gaap:PreferredStockMember
2024-01-01
2024-06-30
0001417926
us-gaap:PreferredStockMember
2023-01-01
2023-06-30
0001417926
INVO:WarrantsAndUnitPurchaseOptionsMember
2024-01-01
2024-06-30
0001417926
INVO:WarrantsAndUnitPurchaseOptionsMember
2023-01-01
2023-06-30
0001417926
us-gaap:PreferredStockMember
2024-01-01
2024-06-30
0001417926
us-gaap:WarrantMember
2024-01-01
2024-06-30
0001417926
us-gaap:CommonStockMember
2024-01-01
2024-06-30
0001417926
INVO:WisconsinFertilityInstituteAcquisitionMember
2023-08-10
2023-08-10
0001417926
INVO:WisconsinFertilityInstituteAcquisitionMember
INVO:SecondInstallmentsMember
2023-08-10
0001417926
INVO:WisconsinFertilityInstituteAcquisitionMember
INVO:ThirdInstallmentsMember
2023-08-10
0001417926
INVO:WisconsinFertilityInstituteAcquisitionMember
INVO:FinalInstallmentsMember
2023-08-10
0001417926
INVO:WisconsinFertilityInstituteAcquisitionMember
2023-08-10
0001417926
INVO:WisconsinFertilityInstituteAcquisitionMember
us-gaap:TradeNamesMember
2023-08-10
0001417926
INVO:WisconsinFertilityInstituteAcquisitionMember
us-gaap:NoncompeteAgreementsMember
2023-08-10
0001417926
INVO:BloomInvoLLCMember
INVO:BloomAgreementMember
2021-06-28
2021-06-28
0001417926
INVO:BloomInvoLLCMember
2021-06-28
2021-06-28
0001417926
2021-06-28
2021-06-28
0001417926
INVO:GeorgiaJVMember
2024-06-30
0001417926
INVO:GeorgiaJVMember
2024-01-01
2024-06-30
0001417926
INVO:GeorgiaJVMember
2023-01-01
2023-06-30
0001417926
INVO:AlabamaJvMember
2021-03-10
2021-03-10
0001417926
INVO:AlabamaJvMember
2024-06-30
0001417926
INVO:AlabamaJvMember
2024-01-01
2024-06-30
0001417926
INVO:AlabamaJvMember
2023-01-01
2023-06-30
0001417926
INVO:MexicoJVMember
2023-01-01
2023-12-31
0001417926
INVO:MexicoJVMember
2024-06-30
0001417926
INVO:HRCFGINVOLLCMember
2024-06-30
0001417926
INVO:HRCFGINVOLLCMember
2024-01-01
2024-06-30
0001417926
INVO:HRCFGINVOLLCMember
2023-01-01
2023-12-31
0001417926
INVO:PositibFertilitySAdeCVMember
2024-06-30
0001417926
INVO:PositibFertilitySAdeCVMember
2024-01-01
2024-06-30
0001417926
INVO:PositibFertilitySAdeCVMember
2023-01-01
2023-12-31
0001417926
2023-01-01
2023-12-31
0001417926
INVO:HRCFGINVOLLCMember
2024-04-01
2024-06-30
0001417926
INVO:HRCFGINVOLLCMember
2023-04-01
2023-06-30
0001417926
INVO:HRCFGINVOLLCMember
2024-01-01
2024-06-30
0001417926
INVO:HRCFGINVOLLCMember
2023-01-01
2023-06-30
0001417926
INVO:PositibFertilitySAdeCVMember
2024-04-01
2024-06-30
0001417926
INVO:PositibFertilitySAdeCVMember
2023-04-01
2023-06-30
0001417926
INVO:PositibFertilitySAdeCVMember
2024-01-01
2024-06-30
0001417926
INVO:PositibFertilitySAdeCVMember
2023-01-01
2023-06-30
0001417926
us-gaap:VariableInterestEntityPrimaryBeneficiaryMember
2024-04-01
2024-06-30
0001417926
us-gaap:VariableInterestEntityPrimaryBeneficiaryMember
2023-04-01
2023-06-30
0001417926
us-gaap:VariableInterestEntityPrimaryBeneficiaryMember
2024-01-01
2024-06-30
0001417926
us-gaap:VariableInterestEntityPrimaryBeneficiaryMember
2023-01-01
2023-06-30
0001417926
us-gaap:VariableInterestEntityPrimaryBeneficiaryMember
2024-06-30
0001417926
us-gaap:VariableInterestEntityPrimaryBeneficiaryMember
2023-12-31
0001417926
INVO:BloomInvoLLCMember
2024-04-01
2024-06-30
0001417926
INVO:BloomInvoLLCMember
2023-04-01
2023-06-30
0001417926
INVO:BloomInvoLLCMember
2024-01-01
2024-06-30
0001417926
INVO:BloomInvoLLCMember
2023-01-01
2023-06-30
0001417926
us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember
2024-04-01
2024-06-30
0001417926
us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember
2023-04-01
2023-06-30
0001417926
us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember
2024-01-01
2024-06-30
0001417926
us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember
2023-01-01
2023-06-30
0001417926
INVO:BloomInvoLLCMember
2024-06-30
0001417926
INVO:BloomInvoLLCMember
2023-12-31
0001417926
us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember
2024-06-30
0001417926
us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember
2023-12-31
0001417926
srt:MinimumMember
INVO:ManufacturingEquipmentMember
2024-06-30
0001417926
srt:MaximumMember
INVO:ManufacturingEquipmentMember
2024-06-30
0001417926
INVO:MedicalEquipmentMember
srt:MinimumMember
2024-06-30
0001417926
INVO:MedicalEquipmentMember
srt:MaximumMember
2024-06-30
0001417926
srt:MinimumMember
us-gaap:OfficeEquipmentMember
2024-06-30
0001417926
srt:MaximumMember
us-gaap:OfficeEquipmentMember
2024-06-30
0001417926
INVO:ManufacturingEquipmentMember
2024-06-30
0001417926
INVO:ManufacturingEquipmentMember
2023-12-31
0001417926
INVO:MedicalEquipmentMember
2024-06-30
0001417926
INVO:MedicalEquipmentMember
2023-12-31
0001417926
us-gaap:OfficeEquipmentMember
2024-06-30
0001417926
us-gaap:OfficeEquipmentMember
2023-12-31
0001417926
us-gaap:LeaseholdImprovementsMember
2024-06-30
0001417926
us-gaap:LeaseholdImprovementsMember
2023-12-31
0001417926
2023-08-10
0001417926
us-gaap:TradeNamesMember
2023-08-10
0001417926
us-gaap:NoncompeteAgreementsMember
2023-08-10
0001417926
INVO:NotePayableMember
2024-06-30
0001417926
INVO:NotePayableMember
2023-12-31
0001417926
INVO:RelatedPartyDemandNotesMember
2024-06-30
0001417926
INVO:RelatedPartyDemandNotesMember
2023-12-31
0001417926
INVO:ConvertibleNotesMember
2024-06-30
0001417926
INVO:ConvertibleNotesMember
2023-12-31
0001417926
INVO:ConvertibleNoteOneMember
2024-06-30
0001417926
INVO:ConvertibleNoteOneMember
2023-12-31
0001417926
INVO:CashAdvanceAgreementMember
2024-06-30
0001417926
INVO:CashAdvanceAgreementMember
2023-12-31
0001417926
INVO:NotePayableMember
srt:MinimumMember
2024-01-01
2024-06-30
0001417926
INVO:NotePayableMember
srt:MaximumMember
2024-01-01
2024-06-30
0001417926
INVO:NotePayableMember
2024-01-01
2024-06-30
0001417926
INVO:JAGMultiInvestmentsLLCMember
2022-10-01
2022-12-31
0001417926
INVO:JAGMultiInvestmentsLLCMember
2023-07-10
2023-07-10
0001417926
INVO:JAGMultiInvestmentsLLCMember
2022-12-29
2022-12-29
0001417926
2022-12-29
0001417926
INVO:JAGMultiInvestmentsLLCMember
2022-12-31
0001417926
INVO:JAGMultiInvestmentsLLCMember
2022-12-29
0001417926
2022-10-01
2022-12-31
0001417926
srt:ChiefExecutiveOfficerMember
2022-10-01
2022-12-31
0001417926
srt:ChiefExecutiveOfficerMember
2022-11-28
2022-11-29
0001417926
srt:ChiefExecutiveOfficerMember
2022-12-01
2022-12-02
0001417926
srt:ChiefExecutiveOfficerMember
2022-12-12
2022-12-13
0001417926
srt:ChiefFinancialOfficerMember
2022-10-01
2022-12-31
0001417926
srt:ChiefFinancialOfficerMember
2022-11-28
2022-11-29
0001417926
srt:ChiefFinancialOfficerMember
2022-12-12
2022-12-13
0001417926
srt:ChiefFinancialOfficerMember
2024-01-01
2024-06-30
0001417926
2023-01-01
2023-01-31
0001417926
2023-03-01
2023-03-31
0001417926
us-gaap:CommonStockMember
2022-10-01
2022-12-31
0001417926
us-gaap:CommonStockMember
2023-01-31
0001417926
us-gaap:CommonStockMember
2023-01-01
2023-01-31
0001417926
us-gaap:CommonStockMember
2023-03-01
2023-03-31
0001417926
INVO:NoteWarrantsMember
2023-03-31
0001417926
INVO:JanAndMarchTwoThousandtwentyTwentyThreeConvertibleNotesMember
2024-01-01
2024-06-30
0001417926
us-gaap:ConvertibleDebtMember
2024-01-01
2024-06-30
0001417926
us-gaap:ConvertibleDebtMember
2023-12-27
0001417926
us-gaap:ConvertibleDebtMember
2023-12-27
2023-12-27
0001417926
us-gaap:ConvertibleDebtMember
2024-06-28
0001417926
us-gaap:ConvertibleDebtMember
2024-06-28
2024-06-28
0001417926
2024-06-28
2024-06-28
0001417926
2024-06-28
0001417926
us-gaap:ConvertibleDebtMember
2024-06-30
0001417926
us-gaap:ConvertibleDebtMember
2024-04-01
2024-06-30
0001417926
INVO:FebruaryPurchaseAgreementMember
INVO:FebruaryDebenturesMember
2023-02-17
0001417926
INVO:FebruaryPurchaseAgreementMember
INVO:FebruaryDebenturesMember
2023-02-03
0001417926
INVO:FebruaryPurchaseAgreementMember
2023-02-17
0001417926
INVO:FebruaryPurchaseAgreementMember
2023-02-03
0001417926
INVO:FebruaryWarrantMember
2023-02-03
0001417926
INVO:FebruaryWarrantMember
2023-02-17
0001417926
us-gaap:CommonStockMember
2023-02-17
0001417926
us-gaap:CommonStockMember
2023-02-03
0001417926
INVO:FebruaryCommitmentSharesMember
2023-02-17
0001417926
INVO:FebruaryCommitmentSharesMember
2023-02-03
0001417926
INVO:FebruaryTwoThousandtwentyTwentyThreeConvertibleNotesMember
2024-01-01
2024-06-30
0001417926
2023-02-03
0001417926
2023-02-17
0001417926
INVO:FebruaryDebenturesMember
2024-01-01
2024-06-30
0001417926
INVO:FebruaryDebenturesMember
2023-02-03
0001417926
INVO:FebruaryDebenturesMember
2023-02-17
0001417926
INVO:FebruaryPurchaseAgreementMember
2023-02-03
2023-02-03
0001417926
INVO:FebruaryPurchaseAgreementMember
2023-02-17
2023-02-17
0001417926
2023-02-03
2023-02-03
0001417926
2023-02-17
2023-02-17
0001417926
INVO:RegisteredDirectOfferingMember
2023-04-01
2023-04-30
0001417926
INVO:FebruaryDebenturesMember
2023-08-08
0001417926
INVO:AugustWarrantMember
2023-08-08
0001417926
INVO:FebruaryInvestorsMember
2023-02-03
0001417926
INVO:FebruaryInvestorsMember
2023-02-17
0001417926
INVO:FebruaryInvestorsMember
2023-08-08
2023-08-08
0001417926
INVO:FebruaryInvestorsMember
2023-08-21
2023-08-21
0001417926
INVO:StandardMerchantCashAdvanceAgreementMember
INVO:CedarMember
2023-07-20
0001417926
INVO:StandardMerchantCashAdvanceAgreementMember
INVO:CedarMember
2023-07-20
2023-07-20
0001417926
INVO:StandardMerchantCashAdvanceAgreementMember
INVO:CedarMember
2024-06-30
0001417926
INVO:StandardMerchantCashAdvanceAgreementMember
INVO:CedarMember
2023-08-31
0001417926
INVO:StandardMerchantCashAdvanceAgreementMember
INVO:CedarMember
2023-08-31
2023-08-31
0001417926
srt:MinimumMember
INVO:CedarMember
INVO:StandardMerchantCashAdvanceAgreementMember
2023-08-31
2023-08-31
0001417926
INVO:StandardMerchantCashAdvanceAgreementMember
INVO:CedarMember
srt:MaximumMember
2023-08-31
2023-08-31
0001417926
INVO:RevenueLoanAndSecurityAgreementMember
2023-09-29
2023-09-29
0001417926
INVO:CashAdvanceAgreementMember
2024-01-01
2024-06-30
0001417926
INVO:RevenueLoanAndSecurityAgreementMember
2023-09-29
2023-09-29
0001417926
INVO:RevenueLoanAndSecurityAgreementMember
srt:MinimumMember
2023-09-29
0001417926
INVO:RevenueLoanAndSecurityAgreementMember
srt:MaximumMember
2023-09-29
0001417926
INVO:RevenueLoanAndSecurityAgreementMember
2024-01-01
2024-06-30
0001417926
INVO:RevenueLoanAndSecurityAgreementMember
2024-06-30
0001417926
INVO:FutureReceiptsAgreementMember
2024-02-26
2024-02-26
0001417926
INVO:FutureReceiptsAgreementMember
2024-06-30
0001417926
INVO:FutureReceiptsAgreementMember
2024-01-01
2024-06-30
0001417926
INVO:FirstFirePurchaseAgreementMember
2024-04-05
0001417926
INVO:FirstWarrantMember
INVO:FirstFirePurchaseAgreementMember
2024-04-05
0001417926
INVO:SecondWarrantMember
INVO:FirstFirePurchaseAgreementMember
2024-04-05
0001417926
INVO:FirstFirePurchaseAgreementMember
2024-04-05
2024-04-05
0001417926
2024-04-05
2024-04-05
0001417926
INVO:FirstFirePurchaseAgreementMember
2024-01-01
2024-06-30
0001417926
INVO:JAGMultiInvestmentsLLCMember
INVO:RelatedPartyDemandNotesMember
2022-10-01
2022-12-31
0001417926
INVO:JACMultiInvestmentsLLCMember
2022-12-31
0001417926
INVO:JAGMultiInvestmentsLLCMember
2023-07-10
0001417926
INVO:JAGMultiInvestmentsLLCMember
2022-10-01
2022-12-31
0001417926
INVO:BoardOfDirectorsMember
2023-06-28
0001417926
INVO:BoardOfDirectorsMember
2023-06-27
0001417926
INVO:BoardOfDirectorsMember
2023-07-26
2023-07-26
0001417926
2023-10-12
0001417926
2023-10-13
0001417926
us-gaap:SeriesAPreferredStockMember
2023-11-20
2023-11-20
0001417926
us-gaap:SeriesAPreferredStockMember
2023-11-20
0001417926
us-gaap:SeriesAPreferredStockMember
INVO:SecuritiesPurchaseAgreementMember
2023-12-29
2023-12-29
0001417926
us-gaap:SeriesAPreferredStockMember
INVO:SecuritiesPurchaseAgreementMember
2023-12-29
0001417926
us-gaap:SeriesAPreferredStockMember
INVO:SecuritiesPurchaseAgreementMember
us-gaap:ShareBasedCompensationAwardTrancheOneMember
2023-12-29
2023-12-29
0001417926
us-gaap:SeriesAPreferredStockMember
INVO:SecuritiesPurchaseAgreementMember
us-gaap:ShareBasedCompensationAwardTrancheTwoMember
2024-01-19
2024-01-19
0001417926
us-gaap:SeriesAPreferredStockMember
INVO:SecuritiesPurchaseAgreementMember
us-gaap:ShareBasedCompensationAwardTrancheThreeMember
2024-02-02
2024-02-02
0001417926
us-gaap:SeriesAPreferredStockMember
INVO:SecuritiesPurchaseAgreementMember
INVO:ShareBasedCompensationAwardTrancheFourMember
2024-02-16
2024-02-16
0001417926
us-gaap:SeriesAPreferredStockMember
INVO:SecuritiesPurchaseAgreementMember
2024-01-04
2024-01-04
0001417926
us-gaap:SeriesAPreferredStockMember
INVO:SecuritiesPurchaseAgreementMember
INVO:NAYABiosciencesMergerMember
2024-05-01
2024-05-01
0001417926
us-gaap:SeriesAPreferredStockMember
INVO:SecuritiesPurchaseAgreementMember
INVO:NAYABiosciencesMergerMember
2024-05-01
0001417926
us-gaap:SeriesAPreferredStockMember
INVO:SecuritiesPurchaseAgreementMember
2024-04-01
2024-06-30
0001417926
us-gaap:SeriesBPreferredStockMember
INVO:SecuritiesPurchaseAgreementMember
2023-11-20
2023-11-20
0001417926
us-gaap:SeriesBPreferredStockMember
INVO:SecuritiesPurchaseAgreementMember
2023-11-20
0001417926
us-gaap:SeriesBPreferredStockMember
INVO:SecuritiesPurchaseAgreementMember
us-gaap:OtherInvesteesMember
2023-11-20
0001417926
INVO:ShareExchangeAgreementMember
2023-11-19
2023-11-19
0001417926
us-gaap:SeriesBPreferredStockMember
INVO:ShareExchangeAgreementMember
2023-11-19
2023-11-19
0001417926
us-gaap:SeriesBPreferredStockMember
INVO:ShareExchangeAgreementMember
us-gaap:OtherInvesteesMember
2023-11-20
0001417926
INVO:EquityPurchaseAgreementMember
2023-02-03
2023-02-03
0001417926
INVO:FebruaryInvestorsMember
2023-02-03
2023-02-03
0001417926
INVO:MarchPurchaseAgreementMember
2023-03-23
2023-03-23
0001417926
INVO:MarchPurchaseAgreementMember
2023-03-23
0001417926
INVO:MarchPurchaseAgreementMember
2023-03-27
2023-03-27
0001417926
INVO:FebruaryDebenturesMember
2023-02-03
2023-02-03
0001417926
INVO:PurchaseAgreementsMember
INVO:PublicOfferingMember
2023-08-04
2023-08-04
0001417926
INVO:PurchaseAgreementsMember
INVO:PublicOfferingMember
2023-08-04
0001417926
INVO:PurchaseAgreementsMember
INVO:PublicOfferingMember
2023-08-08
2023-08-08
0001417926
INVO:PurchaseAgreementsMember
INVO:PublicOfferingMember
2023-08-10
2023-08-10
0001417926
INVO:FebruaryDebenturesMember
2023-08-08
2023-08-08
0001417926
INVO:FebruaryDebenturesMember
2023-08-08
0001417926
INVO:MaximGroupLLCMember
INVO:PlacementAgencyAgreementMember
2023-08-04
2023-08-04
0001417926
INVO:MaximGroupLLCMember
INVO:PlacementAgencyAgreementMember
2023-08-04
0001417926
INVO:SecuritiesPurchaseAgreementsMember
2023-08-01
2023-08-31
0001417926
INVO:SecuritiesPurchaseAgreementsMember
2023-08-31
0001417926
INVO:TritonPurchaseAgreementMember
srt:MaximumMember
2024-03-27
2024-03-27
0001417926
INVO:TritonPurchaseAgreementMember
2024-03-27
0001417926
INVO:TritonPurchaseAgreementMember
2024-03-27
2024-03-27
0001417926
INVO:TritonPurchaseAgreementMember
2024-04-05
2024-04-05
0001417926
us-gaap:CommonStockMember
INVO:TritonPurchaseAgreementMember
2024-04-16
2024-04-16
0001417926
INVO:ConsultantMember
2024-01-01
2024-06-30
0001417926
INVO:SecuritiesPurchaseAgreementMember
2024-01-31
2024-01-31
0001417926
INVO:SecuritiesPurchaseAgreementMember
2024-04-15
2024-04-15
0001417926
INVO:SecuritiesPurchaseAgreementMember
2024-06-30
2024-06-30
0001417926
INVO:TritonPurchaseAgreementMember
2024-04-01
2024-04-30
0001417926
INVO:TritonPurchaseAgreementMember
INVO:AugustTwoThousandTwentyThreeWarrantsMember
2024-04-01
2024-04-30
0001417926
INVO:NAYABiosciencesMergerMember
INVO:SecuritiesPurchaseAgreementMember
2024-05-10
2024-05-10
0001417926
INVO:NAYABiosciencesMergerMember
INVO:SecuritiesPurchaseAgreementMember
2024-05-10
0001417926
INVO:NAYABiosciencesMergerMember
INVO:SecuritiesPurchaseAgreementMember
2024-05-17
2024-05-17
0001417926
INVO:NAYABiosciencesMergerMember
INVO:SecuritiesPurchaseAgreementMember
2024-05-17
0001417926
INVO:NAYABiosciencesMergerMember
INVO:SecuritiesPurchaseAgreementMember
2024-05-24
2024-05-24
0001417926
INVO:NAYABiosciencesMergerMember
INVO:SecuritiesPurchaseAgreementMember
2024-05-24
0001417926
INVO:NAYABiosciencesMergerMember
INVO:SecuritiesPurchaseAgreementMember
2024-05-31
2024-05-31
0001417926
INVO:NAYABiosciencesMergerMember
INVO:SecuritiesPurchaseAgreementMember
2024-05-31
0001417926
INVO:NAYABiosciencesMergerMember
INVO:SecuritiesPurchaseAgreementMember
2024-06-07
2024-06-07
0001417926
INVO:NAYABiosciencesMergerMember
INVO:SecuritiesPurchaseAgreementMember
2024-06-07
0001417926
INVO:NAYABiosciencesMergerMember
INVO:SecuritiesPurchaseAgreementMember
2024-06-14
2024-06-14
0001417926
INVO:NAYABiosciencesMergerMember
INVO:SecuritiesPurchaseAgreementMember
2024-06-14
0001417926
INVO:NAYABiosciencesMergerMember
INVO:SecuritiesPurchaseAgreementMember
2024-06-21
2024-06-21
0001417926
INVO:NAYABiosciencesMergerMember
INVO:SecuritiesPurchaseAgreementMember
2024-06-21
0001417926
INVO:NAYABiosciencesMergerMember
INVO:SecuritiesPurchaseAgreementMember
2024-06-28
2024-06-28
0001417926
INVO:NAYABiosciencesMergerMember
INVO:SecuritiesPurchaseAgreementMember
2024-06-28
0001417926
INVO:NAYABiosciencesMergerMember
INVO:SecuritiesPurchaseAgreementMember
2024-07-05
2024-07-05
0001417926
INVO:NAYABiosciencesMergerMember
INVO:SecuritiesPurchaseAgreementMember
2024-07-05
0001417926
INVO:NAYABiosciencesMergerMember
INVO:SecuritiesPurchaseAgreementMember
2024-01-01
2024-06-30
0001417926
INVO:NAYABiosciencesMergerMember
INVO:SecuritiesPurchaseAgreementMember
2024-06-30
0001417926
INVO:TwoThousandNineteenStockIncentivePlanMember
2019-10-31
0001417926
INVO:TwoThousandNineteenStockIncentivePlanMember
2024-01-01
2024-06-30
0001417926
INVO:TwoThousandNineteenStockIncentivePlanMember
2024-01-31
0001417926
INVO:TwoThousandNineteenStockIncentivePlanMember
srt:MinimumMember
2024-01-01
2024-06-30
0001417926
INVO:TwoThousandNineteenStockIncentivePlanMember
srt:MaximumMember
2024-01-01
2024-06-30
0001417926
us-gaap:StockCompensationPlanMember
2024-01-01
2024-06-30
0001417926
us-gaap:RestrictedStockMember
INVO:EmployeesDirectorsAndConsultantsMember
2024-01-01
2024-06-30
0001417926
srt:MinimumMember
2023-01-01
2023-06-30
0001417926
srt:MaximumMember
2023-01-01
2023-06-30
0001417926
us-gaap:RestrictedStockMember
INVO:TwoThousandNineteenStockIncentivePlanMember
2023-12-31
0001417926
us-gaap:RestrictedStockMember
INVO:TwoThousandNineteenStockIncentivePlanMember
2024-01-01
2024-06-30
0001417926
us-gaap:RestrictedStockMember
INVO:TwoThousandNineteenStockIncentivePlanMember
2024-06-30
0001417926
INVO:UnitPurchaseOptionsMember
2023-12-31
0001417926
INVO:UnitPurchaseOptionsMember
2024-01-01
2024-06-30
0001417926
INVO:UnitPurchaseOptionsMember
2024-06-30
0001417926
INVO:ConvertibleNotesMember
2023-01-31
0001417926
INVO:ConvertibleNotesMember
2023-03-31
0001417926
INVO:ConvertibleNotesMember
2023-12-27
2023-12-27
0001417926
INVO:ConvertibleNotesMember
2024-01-01
2024-06-30
0001417926
INVO:ConvertibleDebenturesMember
2023-02-03
0001417926
INVO:ConvertibleDebenturesMember
2023-02-17
0001417926
INVO:ConvertibleDebenturesMember
INVO:FebruaryWarrantsMember
2023-02-03
0001417926
INVO:ConvertibleDebenturesMember
INVO:FebruaryWarrantsMember
2023-02-17
0001417926
INVO:ConvertibleDebenturesMember
2023-08-08
2023-08-08
0001417926
INVO:ConvertibleDebenturesMember
2023-08-21
2023-08-21
0001417926
INVO:SecuritiesPurchaseAgreementMember
2023-03-23
2023-03-23
0001417926
INVO:SecuritiesPurchaseAgreementMember
2023-03-23
0001417926
INVO:SecuritiesPurchaseAgreementMember
2023-07-07
2023-07-07
0001417926
INVO:SecuritiesPurchaseAgreementMember
2023-07-07
0001417926
INVO:SecuritiesPurchaseAgreementMember
INVO:PublicOfferingMember
2023-08-04
2023-08-04
0001417926
INVO:SecuritiesPurchaseAgreementMember
INVO:PublicOfferingMember
2023-08-04
0001417926
INVO:ConvertibleNotesMember
2024-04-16
0001417926
2024-04-17
0001417926
INVO:ConvertibleNotesMember
2024-04-17
2024-04-17
0001417926
INVO:ConvertibleNotesMember
2024-04-01
2024-04-30
0001417926
us-gaap:WarrantMember
INVO:TritonPurchaseAgreementMember
2024-03-27
0001417926
us-gaap:WarrantMember
INVO:TritonPurchaseAgreementMember
2024-03-27
2024-03-27
0001417926
INVO:NAYABiosciencesMergerMember
us-gaap:CommonClassAMember
2023-10-22
0001417926
INVO:NAYABiosciencesMergerMember
2023-10-22
2023-10-22
0001417926
INVO:NAYABiosciencesMergerMember
2023-10-22
0001417926
INVO:NAYABiosciencesMergerMember
us-gaap:CommonClassBMember
2023-10-22
2023-10-22
0001417926
INVO:NAYABiosciencesMergerMember
srt:MaximumMember
2023-10-22
0001417926
INVO:NAYABiosciencesMergerMember
INVO:MergerAgreementMember
2023-10-22
2023-10-22
0001417926
INVO:NAYABiosciencesMergerMember
2023-12-27
0001417926
INVO:NAYABiosciencesMergerMember
2023-12-27
2023-12-27
0001417926
us-gaap:CommonStockMember
us-gaap:SubsequentEventMember
INVO:ConsultantsMember
2024-08-01
2024-08-31
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
xbrli:pure
INVO:Segment
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended June 30, 2024
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from ________________ to ________________
Commission
File Number: 001-39701
INVO
Bioscience, Inc.
(Exact
Name of Registrant as Specified in its Charter)
Nevada |
|
20-4036208 |
(State
or other jurisdiction
of
incorporation or organization) |
|
(I.R.S.
Employer
Identification
No.) |
5582
Broadcast Court |
|
|
Sarasota,
FL |
|
34240 |
(Address
of principal executive offices) |
|
(Zip
Code) |
(978)
878-9505
(Registrant’s
telephone number, including area code)
Not
applicable
(Former
name, former address and former fiscal year, if changed since last report)
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
symbol(s) |
|
Name
of each exchange on which registered |
Common
Stock, $0.0001 par value per share |
|
INVO |
|
The
Nasdaq Stock Market LLC |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes ☒ No ☐
Indicate
by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer ☐ |
|
Accelerated
filer ☐ |
|
|
Non-accelerated
filer ☒ |
|
Smaller
reporting company ☒ |
|
Emerging
growth company ☐ |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As
of August 14, 2024, the Registrant had 3,906,072 shares of common stock outstanding.
INVO
BIOSCIENCE, INC.
FORM
10-Q
FOR
THE QUARTERLY PERIOD ENDED June 30, 2024
TABLE
OF CONTENTS
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA
This
Quarterly Report on Form 10-Q contains forward-looking statements which are made pursuant to the safe harbor provisions of Section
27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of
1934, as amended (the “Exchange Act”). These statements may be identified by such forward-looking terminology as
“may,” “should,” “expects,” “intends,” “plans,”
“anticipates,” “believes,” “estimates,” “predicts,” “potential,”
“continue,” or the negative of these terms or other comparable terminology. Our forward-looking statements are based on
a series of expectations, assumptions, estimates, and projections about our company, are not guarantees of future results or
performance, and involve substantial risks and uncertainty. We may not actually achieve the plans, intentions, or expectations
disclosed in these forward-looking statements. Actual results or events could differ materially from the plans, intentions, and
expectations disclosed in these forward-looking statements. Our business and our forward-looking statements involve substantial
known and unknown risks and uncertainties, including the risks and uncertainties inherent in our statements regarding the following:
● |
our
business strategies; |
|
|
● |
the
timing of regulatory submissions; |
|
|
● |
our
ability to obtain and maintain regulatory approval of our existing product candidates and any other product candidates we may develop,
and the labeling under any approval we may obtain; |
|
|
● |
risks
relating to the timing and costs of clinical trials and the timing and costs of other expenses; |
|
|
● |
risks
related to market acceptance of products; |
|
|
● |
the
ultimate impact of a health epidemic on our business, our clinical trials, our research
programs, healthcare systems or the global economy as a whole; |
|
|
● |
intellectual
property risks; |
|
|
● |
risks
associated with our reliance on third-party organizations; |
|
|
● |
our
competitive position; |
|
|
● |
our
industry environment; |
|
|
● |
our
anticipated financial and operating results, including anticipated sources of revenues; |
|
|
● |
assumptions
regarding the size of the available market, benefits of our products, product pricing and timing of product launches; |
|
|
● |
management’s
expectation with respect to future acquisitions, including, without limitation, the proposed merger with NAYA Biosciences,
Inc.; |
|
|
● |
statements
regarding our goals, intentions, plans, and expectations, including the introduction of new products and markets; and |
|
|
● |
our
cash needs and financing plans. |
All
of our forward-looking statements are as of the date of this Quarterly Report on Form 10-Q only. In each case, actual results may differ
materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will
prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties
referred to in this Quarterly Report on Form 10-Q or included in our other public disclosures or our other periodic reports or other
documents or filings filed with or furnished to the U.S. Securities and Exchange Commission (the “SEC”) could materially
and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake
or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates, or
projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report on Form
10-Q, even if such results, changes, or circumstances make it clear that any forward-looking information will not be realized. Any public
statements or disclosures by us following this Quarterly Report on Form 10-Q that modify or impact any of the forward-looking statements
contained in this Quarterly Report on Form 10-Q will be deemed to modify or supersede such statements in this Quarterly Report on Form
10-Q.
This
Quarterly Report on Form 10-Q may include market data and certain industry data and forecasts, which we may obtain from internal company
surveys, market research, consultant surveys, publicly available information, reports of governmental agencies, and industry publications,
articles, and surveys. Industry surveys, publications, consultant surveys, and forecasts generally state that the information contained
therein has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed.
While we believe that such studies and publications are reliable, we have not independently verified market and industry data from third-party
sources.
PART
I. FINANCIAL INFORMATION
Item
1. Financial Statements
INVO
BIOSCIENCE, INC.
CONSOLIDATED
BALANCE SHEETS
(UNAUDITED)
| |
June 30, | | |
December 31, | |
| |
2024 | | |
2023 | |
| |
| | | |
| (audited) | |
ASSETS | |
| | | |
| | |
Current assets | |
| | | |
| | |
Cash | |
$ | 942,934 | | |
$ | 232,424 | |
Accounts receivable | |
| 257,210 | | |
| 140,550 | |
Inventory | |
| 250,066 | | |
| 264,507 | |
Prepaid expenses and other current assets | |
| 945,853 | | |
| 622,294 | |
Total current assets | |
| 2,396,063 | | |
| 1,259,775 | |
Property and equipment, net | |
| 441,365 | | |
| 826,418 | |
Lease right of use | |
| 2,614,466 | | |
| 5,740,929 | |
Intangible assets, net | |
| 3,684,681 | | |
| 4,093,431 | |
Goodwill | |
| 5,878,986 | | |
| 5,878,986 | |
Equity investments | |
| 844,198 | | |
| 916,248 | |
Investment in NAYA | |
| 2,172,000 | | |
| 2,172,000 | |
Total assets | |
$ | 18,031,759 | | |
$ | 20,887,787 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
Current liabilities | |
| | | |
| | |
Accounts payable and accrued liabilities | |
$ | 2,378,099 | | |
$ | 2,330,381 | |
Accrued compensation | |
| 646,838 | | |
| 722,251 | |
Notes payable – current portion, net | |
| 580,086 | | |
| 629,920 | |
Notes payable – related parties, net | |
| 880,000 | | |
| 880,000 | |
Deferred revenue | |
| 416,745 | | |
| 408,769 | |
Lease liability, current portion | |
| 237,030 | | |
| 397,554 | |
Additional payments for acquisition, current portion | |
| 2,500,000 | | |
| 2,500,000 | |
Other current liabilities | |
| 350,000 | | |
| 350,000 | |
Total current liabilities | |
| 7,988,798 | | |
| 8,218,875 | |
Notes payable, net of current portion | |
| 1,172,902 | | |
| 1,253,997 | |
Lease liability, net of current portion | |
| 2,506,543 | | |
| 5,522,090 | |
Additional payments for acquisition, net of current portion | |
| 5,000,000 | | |
| 5,000,000 | |
Total liabilities | |
| 16,668,243 | | |
| 19,994,962 | |
| |
| | | |
| | |
Stockholders’ equity | |
| | | |
| | |
Series A Preferred Stock, $5.00 par value; 1,000,000 shares authorized; 301,280 and 0 issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | |
| 1,506,404 | | |
| - | |
Series B Preferred Stock, $5.00 par value; 1,200,000 shares authorized; 1,200,000 and 1,200,000 issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | |
| 6,000,000 | | |
| 6,000,000 | |
Preferred Stock, value | |
| 6,000,000 | | |
| 6,000,000 | |
Common Stock, $.0001 par value; 50,000,000 shares authorized; 3,864,072 and 2,492,531 issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | |
| 386 | | |
| 249 | |
Additional paid-in capital | |
| 55,767,189 | | |
| 52,710,721 | |
Accumulated deficit | |
| (61,910,463 | ) | |
| (57,818,145 | ) |
Total stockholders’ equity | |
| 1,363,516 | | |
| 892,825 | |
Total liabilities and stockholders’ equity | |
$ | 18,031,759 | | |
$ | 20,887,787 | |
The
accompanying notes are an integral part of these consolidated financial statements.
INVO
BIOSCIENCE, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
(UNAUDITED)
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| |
For
the Three Months | | |
For the Six Months | |
| |
Ended June 30, | | |
Ended June 30, | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| |
| | |
| | |
| | |
| |
Revenue: | |
| | | |
| | | |
| | | |
| | |
Clinic revenue | |
$ | 1,807,921 | | |
$ | 254,364 | | |
$ | 3,345,120 | | |
$ | 551,745 | |
Product revenue | |
| 28,676 | | |
| 61,538 | | |
| 67,763 | | |
| 112,182 | |
Total revenue | |
| 1,836,597 | | |
| 315,902 | | |
| 3,412,883 | | |
| 663,927 | |
Operating expenses | |
| | | |
| | | |
| | | |
| | |
Cost of revenue | |
| 861,648 | | |
| 235,714 | | |
| 1,711,882 | | |
| 466,719 | |
Selling, general and administrative expenses | |
| 2,647,524 | | |
| 2,042,609 | | |
| 4,088,110 | | |
| 4,373,443 | |
Research and development expenses | |
| - | | |
| 83,850 | | |
| 4,880 | | |
| 157,370 | |
Depreciation and amortization | |
| 230,338 | | |
| 19,705 | | |
| 457,298 | | |
| 38,792 | |
Total operating expenses | |
| 3,739,510 | | |
| 2,381,879 | | |
| 6,262,170 | | |
| 5,036,324 | |
Loss from operations | |
| (1,902,913 | ) | |
| (2,065,977 | ) | |
| (2,849,287 | ) | |
| (4,372,397 | ) |
Other income (expense): | |
| | | |
| | | |
| | | |
| | |
Gain (loss) from equity method joint ventures | |
| 17,846 | | |
| 3,788 | | |
| 17,950 | | |
| (23,947 | ) |
Gain (loss) on disposal of fixed assets | |
| 50,000 | | |
| - | | |
| (511,663 | ) | |
| - | |
Gain on lease termination | |
| - | | |
| - | | |
| 94,551 | | |
| - | |
Loss on debt extinguishment | |
| (40,491 | ) | |
| - | | |
| (40,491 | ) | |
| - | |
Interest expense | |
| (369,612 | ) | |
| (175,192 | ) | |
| (550,907 | ) | |
| (391,781 | ) |
Foreign currency exchange loss | |
| - | | |
| (265 | ) | |
| - | | |
| (400 | ) |
Total other income (expense) | |
| (342,257 | ) | |
| (171,669 | ) | |
| (990,560 | ) | |
| (416,128 | ) |
Income taxes | |
| - | | |
| 2,865 | | |
| 1,836 | | |
| 2,865 | |
Net loss | |
$ | (2,245,170 | ) | |
$ | (2,240,511 | ) | |
$ | (3,841,683 | ) | |
$ | (4,791,390 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net loss per common share: | |
| | | |
| | | |
| | | |
| | |
Basic | |
$ | (0.62 | ) | |
$ | (3.06 | ) | |
$ | (1.25 | ) | |
$ | (7.07 | ) |
Diluted | |
$ | (0.62 | ) | |
$ | (3.06 | ) | |
$ | (1.25 | ) | |
$ | (7.07 | ) |
Weighted average number of common shares outstanding: | |
| | | |
| | | |
| | | |
| | |
Basic | |
| 3,609,812 | | |
| 732,255 | | |
| 3,072,877 | | |
| 677,684 | |
Diluted | |
| 3,609,812 | | |
| 732,255 | | |
| 3,072,877 | | |
| 677,684 | |
The
accompanying notes are an integral part of these consolidated financial statements.
INVO
BIOSCIENCE, INC.
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(UNAUDITED)
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Total | |
| |
Common Stock | | |
Series A
Preferred Stock | | |
Series B
Preferred Stock | | |
Additional Paid-in | | |
Accumulated | | |
| |
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Total | |
Balances, December 31, 2022 | |
| 608,611 | | |
$ | 61 | | |
| - | | |
$ | - | | |
| - | | |
$ | - | | |
$ | 48,805,860 | | |
$ | (49,783,533 | ) | |
$ | (977,612 | ) |
Common stock issued to directors and employees | |
| 3,490 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 46,503 | | |
| - | | |
| 46,503 | |
Common stock issued for services | |
| 13,000 | | |
| 1 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 149,899 | | |
| - | | |
| 149,900 | |
Proceeds from the sale of common stock, net of fees and expenses | |
| 69,000 | | |
| 7 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 2,708,635 | | |
| - | | |
| 2,708,642 | |
Common stock issued with notes payable | |
| 4,167 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 56,313 | | |
| - | | |
| 56,313 | |
Options exercised for cash | |
| 297 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 2,376 | | |
| - | | |
| 2,376 | |
Stock options issued to directors and employees as compensation | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 325,834 | | |
| - | | |
| 325,834 | |
Warrants issued with notes payable | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 327,389 | | |
| - | | |
| 327,389 | |
Net Loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (2,550,879 | ) | |
| (2,550,879 | ) |
Balances, March 31, 2023 | |
| 698,565 | | |
$ | 69 | | |
| - | | |
$ | - | | |
| - | | |
$ | - | | |
$ | 52,422,809 | | |
$ | (52,334,412 | ) | |
$ | 88,466 | |
Common stock issued to directors and employees | |
| 504 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 5,062 | | |
| - | | |
| 5,062 | |
Common stock issued for services | |
| 12,817 | | |
| 2 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 94,274 | | |
| - | | |
| 94,276 | |
Proceeds from the sale of common stock, net of fees and expenses | |
| 115,000 | | |
| 12 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 20,285 | | |
| - | | |
| 20,297 | |
Stock options issued to directors and employees | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 326,916 | | |
| - | | |
| 326,916 | |
Net Loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (2,240,511 | ) | |
| (2,240,511 | ) |
Balances, June 30, 2023 | |
| 826,886 | | |
$ | 83 | | |
| - | | |
$ | - | | |
| - | | |
$ | - | | |
$ | 52,869,346 | | |
$ | (54,574,923 | ) | |
$ | (1,705,494 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balances, December 31, 2023 | |
| 2,492,531 | | |
$ | 249 | | |
| - | | |
$ | - | | |
| 1,200,000 | | |
$ | 6,000,000 | | |
$ | 52,710,721 | | |
$ | (57,818,145 | ) | |
$ | 892,825 | |
Common stock issued to directors and/or employees | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 92 | | |
| - | | |
| 92 | |
Common stock issued for services | |
| 125,500 | | |
| 13 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 142,437 | | |
| - | | |
| 142,450 | |
Preferred stock issued | |
| - | | |
| - | | |
| 100,000 | | |
| 500,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 500,000 | |
Stock options issued to directors and employees as compensation | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 71,301 | | |
| - | | |
| 71,301 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (1,596,513 | ) | |
| (1,596,513 | ) |
Balances, March 31 2024 | |
| 2,618,031 | | |
$ | 262 | | |
| 100,000 | | |
$ | 500,000 | | |
| 1,200,000 | | |
$ | 6,000,000 | | |
$ | 52,924,551 | | |
$ | (59,414,658 | ) | |
$ | 10,155 | |
Balance | |
| 2,618,031 | | |
$ | 262 | | |
| 100,000 | | |
$ | 500,000 | | |
| 1,200,000 | | |
$ | 6,000,000 | | |
$ | 52,924,551 | | |
$ | (59,414,658 | ) | |
$ | 10,155 | |
Common stock issued to directors and/or employees | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 61 | | |
| - | | |
| 61 | |
Common stock issued for services | |
| 69,155 | | |
| 6 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 59,992 | | |
| - | | |
| 59,998 | |
Preferred stock issued | |
| - | | |
| - | | |
| 201,280 | | |
| 1,006,404 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 1,006,404 | |
Proceeds from the sale of common stock, net of fees and expenses | |
| 260,000 | | |
| 26 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 165,105 | | |
| - | | |
| 165,131 | |
Warrants issued with notes payable | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 188,755 | | |
| - | | |
| 188,755 | |
Convertible note modification/extinguishment | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 40,491 | | |
| - | | |
| 40,491 | |
Warrants issued for services | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 971,012 | | |
| | | |
| 971,012 | |
Debt conversion | |
| 109,886 | | |
| 11 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 197,022 | | |
| - | | |
| 197,033 | |
Warrant exercise | |
| 807,000 | | |
| 81 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 900,530 | | |
| - | | |
| 900,611 | |
Stock options issued to directors and employees as compensation | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 69,035 | | |
| - | | |
| 69,035 | |
Deemed dividend | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 250,635 | | |
| (250,635 | ) | |
| - | |
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (2,245,170 | ) | |
| (2,245,170 | ) |
Balances, June 30, 2024 | |
| 3,864,072 | | |
$ | 386 | | |
| 301,280 | | |
$ | 1,506,404 | | |
| 1,200,000 | | |
$ | 6,000,000 | | |
$ | 55,767,189 | | |
$ | (61,910,463 | ) | |
$ | 1,363,516 | |
Balance | |
| 3,864,072 | | |
$ | 386 | | |
| 301,280 | | |
$ | 1,506,404 | | |
| 1,200,000 | | |
$ | 6,000,000 | | |
$ | 55,767,189 | | |
$ | (61,910,463 | ) | |
$ | 1,363,516 | |
The
accompanying notes are an integral part of these consolidated financial statements.
INVO
BIOSCIENCE, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
| |
2024 | | |
2023 | |
| |
For the Six Months Ended | |
| |
June 30, | |
| |
2024 | | |
2023 | |
Cash flows from operating activities: | |
| | | |
| | |
Net loss | |
$ | (3,841,683 | ) | |
$ | (4,791,390 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
Stock compensation issued for services | |
| 1,173,460 | | |
| 244,176 | |
Stock compensation issued to directors and employees | |
| 153 | | |
| 51,565 | |
Fair value of stock options issued to employees | |
| 140,336 | | |
| 652,750 | |
Non-cash compensation for services | |
| 90,000 | | |
| 90,000 | |
Amortization of discount on notes payable | |
| 349,010 | | |
| 301,098 | |
Loss (gain) from equity method investment | |
| (17,950 | ) | |
| 23,947 | |
Loss from debt extinguishment | |
| 40,491 | | |
| - | |
Loss from disposal of assets | |
| 511,663 | | |
| - | |
Gain on lease termination | |
| (94,551 | ) | |
| - | |
Depreciation and amortization | |
| 457,298 | | |
| 38,792 | |
Changes in assets and liabilities: | |
| | | |
| | |
Accounts receivable | |
| (116,660 | ) | |
| 2,241 | |
Inventory | |
| 14,441 | | |
| (16,416 | ) |
Prepaid expenses and other current assets | |
| (469,479 | ) | |
| (184,513 | ) |
Accounts payable and accrued expenses | |
| 35,435 | | |
| 432,654 | |
Accrued compensation | |
| (75,413 | ) | |
| 256,158 | |
Deferred revenue | |
| 7,976 | | |
| 41,311 | |
Leasehold liability | |
| 10,080 | | |
| 1,829 | |
Accrued interest | |
| 69,179 | | |
| 62,938 | |
Net cash used in operating activities | |
| (1,716,214 | ) | |
| (2,792,860 | ) |
Cash from investing activities: | |
| | | |
| | |
Payments to acquire property, plant, and equipment | |
| (104,829 | ) | |
| (261,505 | ) |
Proceeds from sale of fixed assets | |
| 75,590 | | |
| - | |
Investment in joint ventures | |
| - | | |
| (8,447 | ) |
Net cash used in investing activities | |
| (29,239 | ) | |
| (269,952 | ) |
Cash from financing activities: | |
| | | |
| | |
Proceeds from the sale of notes payable | |
| 442,500 | | |
| 714,000 | |
Proceeds from the sale of common stock, net of offering costs | |
| 165,131 | | |
| 2,728,938 | |
Proceeds from sale of preferred stock | |
| 1,506,404 | | |
| - | |
Proceeds from warrant exercise | |
| 900,611 | | |
| - | |
Proceeds from option exercise | |
| - | | |
| 2,375 | |
Principal payments on note payable | |
| (558,683 | ) | |
| (360,151 | ) |
Net cash provided by financing activities | |
| 2,455,963 | | |
| 3,085,162 | |
| |
| | | |
| | |
Increase (decrease) in cash and cash equivalents | |
| 710,510 | | |
| 22,350 | |
Cash and cash equivalents at beginning of period | |
| 232,424 | | |
| 90,135 | |
Cash and cash equivalents at end of period | |
$ | 942,934 | | |
$ | 112,485 | |
Supplemental disclosure of cash flow information: | |
| | | |
| | |
Cash paid during the period for: | |
| | | |
| | |
Interest | |
$ | 108,513 | | |
$ | 5,720 | |
Noncash activities: | |
| | | |
| | |
Common stock issued upon conversion notes payable and accrued interest | |
$ | 197,033 | | |
$ | - | |
Fair value of warrants issued with debt | |
| 188,755 | | |
| 327,390 | |
Deemed dividend | |
| 250,635 | | |
| - | |
Fair value of shares issued upon the conversion of debt | |
| - | | |
| 197,033 | |
Initial ROU asset and lease liability | |
| - | | |
| 2,312,892 | |
The
accompanying notes are an integral part of these consolidated financial statements.
INVO
BIOSCIENCE, INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
June
30, 2024
(UNAUDITED)
Note
1 – Summary of Significant Accounting Policies
Description
of Business
INVO
Bioscience, Inc. (“INVO” or the “Company”) is a healthcare services company dedicated to expanding access to
fertility care around the world. The Company’s commercial strategy is primarily focused on operating fertility-focused
clinics, which include the opening of “INVO Centers” dedicated primarily to offering the intravaginal culture
(“IVC”) procedure enabled by its INVOcell® medical device (“INVOcell”) and the acquisition of US-based,
profitable in vitro fertilization (“IVF”) clinics. The Company has two operational INVO Centers in the United States and
completed its first IVF clinic acquisition in August 2023. The Company also continues to engage in the sale and distribution of its
INVOcell technology solution into existing independently owned and operated fertility clinics.
Basis
of Presentation
The
accompanying consolidated financial statements present on a consolidated basis the accounts of the Company and its wholly owned subsidiaries
and controlled affiliates. The Company presents noncontrolling interest within the equity section of its consolidated balance sheets
and the amount of consolidated net income (loss) that is attributable to the Company and to the noncontrolling interest in its consolidated
statement of operations. All significant intercompany accounts and transactions have been eliminated in consolidation.
The
Company uses the equity method of accounting when it owns an interest in an entity whereby it can exert significant influence over but
cannot control the entity’s operations.
The
preparation of the Company’s consolidated financial statements requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during the reporting periods.
The
Company considers events or transactions that have occurred after the consolidated balance sheet date of June 30, 2024, but prior to
the filing of the consolidated financial statements with the SEC in this Quarterly Report on Form 10-Q, to provide additional evidence
relative to certain estimates or to identify matters that require additional disclosure, as applicable. Subsequent events have been evaluated
through the date of the filing of this Quarterly Report on Form 10-Q.
Reclassifications
Certain
amounts in the consolidated financial statements for the prior year have been reclassified to conform to the current year presentation.
These reclassifications had no impact on net earnings, financial position, or cash flows.
Business
Segments
The
Company operates in one segment and therefore segment information is not presented.
Business
Acquisitions
The
Company accounts for all business acquisitions at fair value and expenses acquisition costs as they are incurred. Any identifiable assets
acquired and liabilities assumed are recognized and measured at their respective fair values on the acquisition date. If information
about facts and circumstances existing as of the acquisition date is incomplete at the end of the reporting period in which a business
acquisition occurs, the Company will report provisional amounts for the items for which the accounting is incomplete. The measurement
period ends once the Company receives sufficient information to finalize the fair values; however, the period will not exceed one year
from the acquisition date. Any adjustments to provisional amounts that are identified during the measurement period are recognized in
the reporting period in which the adjustment amounts are determined.
Variable
Interest Entities
The
Company’s consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and variable interest
entities (“VIE”), where the Company is the primary beneficiary under the provisions of ASC 810, Consolidation (“ASC
810”). A VIE must be consolidated by its primary beneficiary when, along with its affiliates and agents, the primary beneficiary
has both (i) the power to direct the activities that most significantly impact the VIE’s economic performance, and (ii) the obligation
to absorb losses or the right to receive the benefits of the VIE that could potentially be significant to the VIE. The Company reconsiders
whether an entity is still a VIE only upon certain triggering events and continually assesses its consolidated VIEs to determine if it
continues to be the primary beneficiary. See “Note 3 – Variable Interest Entities” for additional information on the
Company’s VIEs.
Equity
Method Investments
Investments
in unconsolidated affiliates, over which the Company exerts significant influence but does not control or otherwise consolidate, are
accounted for using the equity method. Equity method investments are initially recorded at cost. These investments are included in investment
in joint ventures in the accompanying consolidated balance sheets. The Company’s share of the profits and losses from these investments
is reported in loss from equity method joint venture in the accompanying consolidated statements of operations. The Company monitors
its investments for other-than-temporary impairment by considering factors such as current economic and market conditions and the operating
performance of the investees and records reductions in carrying values when necessary.
Use
of Estimates
In
preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates
and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at
the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.
Cash
and Cash Equivalents
For
financial statement presentation purposes, the Company considers time deposits, certificates of deposit, and all highly liquid investments
with original maturities of three months or less to be cash and cash equivalents. At times, cash and cash equivalents balances exceed
amounts insured by the Federal Deposit Insurance Corporation.
Inventory
Inventories
consist of raw materials, work in process and finished goods and are stated at the lower of cost or net realizable value, using the first-in,
first-out method as a cost flow method.
Property
and Equipment
The
Company records property and equipment at cost. Property and equipment are depreciated using the straight-line method over the estimated
economic lives of the assets, which are from 3 to 10 years. The Company capitalizes the expenditures for major renewals and improvements
that extend the useful lives of property and equipment. Expenditures for maintenance and repairs are charged to expense as incurred.
The Company reviews the carrying value of long-lived assets for impairment at least annually or whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. The recoverability of long-lived assets is measured by a comparison
of their carrying amounts to the undiscounted cash flows that the asset or asset group is expected to generate. If such assets are considered
impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the property, if any, exceeds its
fair market value.
Long-
Lived Assets
Long-lived
assets and certain identifiable assets related to those assets are periodically reviewed for impairment whenever circumstances and situations
change such that there is an indication that the carrying amounts may not be recoverable. If the non-discounted future cash flows of
the asset are less than their carrying amount, their carrying amounts are reduced to fair value and an impairment loss recognized. There
was no impairment recorded during the six months ended June 30, 2024, and 2023.
Fair
Value of Financial Instruments
ASC
825-10-50, “Disclosures about Fair Value of Financial Instruments,” requires disclosure of the fair value of certain financial
instruments. The carrying value of cash and cash equivalents, accounts payable and borrowings, as reflected in the balance sheets, approximate
fair value because of the short-term maturity of these instruments.
Effective
January 1, 2008, the Company adopted ASC 820-10, “Fair Value Measurements”, which provides a framework for measuring fair
value under GAAP. ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability
(an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants
on the measurement date. ASC 820-10 requires that valuation techniques maximize the use of observable inputs and minimize the use of
unobservable inputs.
Income
Taxes
The
Company is subject to income taxes in the United States and its domestic tax liabilities are subject to the allocation of expenses in
multiple state jurisdictions. The Company uses the asset and liability method to account for income taxes. Under this method, deferred
income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered
or settled. The recoverability of deferred tax assets is evaluated by assessing the adequacy of future expected taxable income from all
sources, including taxable income in prior carryback years, reversal of taxable temporary differences, forecasted operating earnings,
and available tax planning strategies. To the extent the Company does not consider it more-likely-than-not that a deferred tax asset
will be recovered, a valuation allowance is established.
Concentration
of Credit Risk
Cash
includes amounts deposited in financial institutions in excess of insurable Federal Deposit Insurance Corporation (“FDIC”)
limits. As of June 30, 2024, the Company had cash balances in excess of FDIC limits.
Revenue
Recognition
The
Company recognizes revenue on arrangements in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”).
The core principle of ASC 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that
reflects the consideration to which an entity expects to be entitled for those goods or services ASC 606 requires companies to assess
their contracts to determine the timing and amount of revenue to recognize under the new revenue standard. The model has a five-step
approach:
1. |
Identify
the contract with the customer. |
|
|
2. |
Identify
the performance obligations in the contract. |
|
|
3. |
Determine
the total transaction price. |
|
|
4. |
Allocate
the total transaction price to each performance obligation in the contract. |
|
|
5. |
Recognize
as revenue when (or as) each performance obligation is satisfied. |
Revenue
generated from the sale of INVOcell is typically recognized at the time the product is shipped, at which time the title passes to the
customer, and there are no further performance obligations.
Revenue
generated from clinical and lab services related at the Company’s affiliated INVO Centers is typically recognized at the time the
service is performed.
Stock
Based Compensation
The
Company accounts for stock-based compensation under the provisions of Accounting Standards Codification (“ASC”) subtopic
718-10, Compensation (“ASC 718-10”). This statement requires the Company to measure the cost of employee services received
in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized over the period
in which the employee is required to provide service or based on performance goals in exchange for the award, which is usually the vesting
period.
Loss
Per Share
Basic
loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding. Diluted earnings per share
are computed similarly to basic earnings per share except that the denominator is increased to include potentially dilutive securities.
The Company’s diluted loss per share is the same as the basic loss per share for the three months ended June 30, 2024, and 2023,
as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.
Schedule of Earnings Per Share Basic and Diluted
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| |
Three
Months Ended June 30, | | |
Six Months Ended June 30, | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
Net loss (numerator) | |
$ | (2,245,170 | ) | |
| (2,240,511 | ) | |
| (3,841,683 | ) | |
| (4,791,390 | ) |
Basic and diluted weighted-average number of common shares outstanding (denominator) | |
| 3,609,812 | | |
| 732,255 | | |
| 3,072,877 | | |
| 677,684 | |
Basic and diluted net loss per common share | |
| (0.62 | ) | |
| (3.06 | ) | |
| (1.25 | ) | |
| (7.07 | ) |
The
Company has excluded the following dilutive securities from the calculation of fully diluted shares outstanding because the result would
have been anti-dilutive:
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share
| |
2024 | | |
2023 | |
| |
As of June 30, | |
| |
2024 | | |
2023 | |
Options | |
| 97,992 | | |
| 121,255 | |
Convertible notes and interest | |
| 532,289 | | |
| 55,120 | |
Preferred stock | |
| 1,884,727 | | |
| - | |
Warrants and unit purchase options | |
| 4,131,081 | | |
| 348,151 | |
Total | |
| 6,646,089 | | |
| 524,526 | |
Recently
Adopted Accounting Pronouncements
The
Company has reviewed all recently issued, but not yet effective, accounting pronouncements, and does not believe the future adoption
of any such pronouncements will have a material impact on its financial condition or the results of its operations.
Note
2 – Liquidity
Historically,
the Company has funded its cash and liquidity needs primarily through revenue collection and debt and equity financings. For the six
months ended June 30, 2024, and 2023, the Company incurred a net loss of approximately $3.8 million and $4.8 million, respectively, and
has an accumulated deficit of approximately $61.9 million as of June 30, 2024. Approximately $2.6 million of the net loss was related
to non-cash expenses for the six months ended June 30, 2024, compared to $1.4 million for the six months ended June 30, 2023.
The
Company has been dependent on raising capital from debt and equity financings to meet its needs for cash used in operating and
investing activities. During the first six months of 2024, the Company received $1.5 million
from the sale of preferred stock, $0.9 million
from the exercise of warrants, $0.4 million in net proceeds from the sale of notes, and $0.2
million in net proceeds from the sale of common stock. Over the next 12 months, the Company’s plan includes growing the
Wisconsin Fertility Institute and pursuing additional IVF clinic acquisitions. Until the Company can generate positive cash from
operations, it will need to raise additional funding to meet its liquidity needs and to execute its business strategy. As in the
past, the Company will seek debt and/or equity funding, which may not be available on reasonable terms, if at all.
Although
the Company’s audited consolidated financial statements for the year ended December 31, 2023 were prepared under the assumption
that it would continue operations as a going concern, the report of the Company’s independent registered public accounting firm
that accompanies the Company’s financial statements for the year ended December 31, 2023 contains a going concern qualification
in which such firm expressed substantial doubt about the Company’s ability to continue as a going concern, based on the financial
statements at that time. Specifically, as noted above, the Company has incurred significant operating losses, and the Company expects
to continue to incur significant expenses and operating losses as it continues to ramp up the commercialization of INVOcell and develop
new INVO Centers. These prior losses and expected future losses have had, and will continue to have, an adverse effect on the Company’s
financial condition. If the Company cannot continue as a going concern, its stockholders would likely lose most or all of their investment
in the Company.
Note
3 – Business Combinations
Wisconsin
Fertility Institute
On
August 10, 2023, INVO, through Wood Violet Fertility LLC, a Delaware limited liability company (“Wood Violet”) and wholly owned
subsidiary of INVO Centers LLC (“INVO CTR”), a Delaware company wholly-owned by INVO, consummated its acquisition of the
Wisconsin Fertility Institute (“WFI”) for a combined purchase price of $10,000,000, of which $2,500,000 was paid on the closing
date (net cash paid was $2,150,000 after a $350,000 holdback) plus assumption of the inter-company loan owed by WFRSA (as defined below)
in the amount of $528,756. The remaining three installments of $2,500,000 each will be within ninety (90) days of the subsequent three anniversaries of
closing. The sellers have the option to take all or a portion of the final three installments in shares of INVO common stock at a per
share value of $125.00, $181.80, and $285.80, for the second, third, and final installments, respectively.
WFI
was comprised of (a) a medical practice, Wisconsin Fertility and Reproductive Surgery Associates, S.C., a Wisconsin professional service
corporation d/b/a Wisconsin Fertility Institute (“WFRSA”), and (b) a laboratory services company, Fertility Labs of Wisconsin,
LLC, a Wisconsin limited liability company (“FLOW”). WFRSA owned, operated, and managed WFI’s fertility practice that
provided direct treatment to patients focused on fertility, gynecology, and obstetrics care and surgical procedures, and employed physicians
and other healthcare providers to deliver such services and procedures. FLOW provided WFRSA with related laboratory services.
INVO purchased the non-medical assets of WFRSA and one hundred percent
of FLOW’s membership interests through Wood Violet. Concurrently, Wood Violet and WFRSA entered into a management services agreement
pursuant to which WFRSA outsourced all its non-medical activities to Wood Violet. As a result, post-closing, WFI is comprised of (a) WFRSA,
which only employs physicians to provide medical services, and (b) Wood Violet, which employs all other clinic personnel and provides all
non-medical services, including laboratory services. FLOW is no longer operational as its operations were absorbed by Wood Violet.
The
Company’s consolidated financial statements for the six months ended June 30, 2024 include WFI’s results of operations. The
Company’s condensed consolidated financial statements reflect the final purchase accounting adjustments in accordance with ASC
805 “Business Combinations”, whereby the purchase price was allocated to the assets acquired and liabilities assumed based
upon their estimated fair values on the acquisition date.
The
following allocation of the purchase price is as follows:
Schedule
of Allocation of Purchase Price
| |
| |
Consideration given: | |
| |
Cash | |
| 2,150,000 | |
Holdback | |
| 350,000 | |
Additional payments | |
| 7,500,000 | |
Business acquisition cost | |
| 10,000,000 | |
| |
| | |
Assets and liabilities acquired: | |
| | |
FLOW intercompany receivable | |
| 528,756 | |
Accounts receivable | |
| 214,972 | |
Property and equipment, net | |
| 25,292 | |
Other current assets | |
| 56,274 | |
Tradename | |
| 253,000 | |
Noncompetition agreement | |
| 3,961,000 | |
Goodwill | |
| 5,878,986 | |
Deferred revenue | |
| (389,524 | ) |
WFRSA intercompany note | |
| (528,756 | ) |
Total assets and liabilities acquired | |
| 10,000,000 | |
Note
4 – Variable Interest Entities
Consolidated
VIEs
Bloom
INVO, LLC
On
June 28, 2021, INVO CTR entered into a limited liability company agreement (the “Bloom Agreement”) with Bloom Fertility,
LLC (“Bloom”) to establish a joint venture entity, formed as “Bloom INVO LLC” (the “Georgia
JV”), for the purposes of commercializing INVOcell, and the related IVC procedure, through the establishment of an INVO Center
in the Atlanta, Georgia metropolitan area (the “Atlanta Clinic”).
In
consideration for INVO’s commitment to contribute up to $800,000 within the 24-month period following the execution of the Bloom
Agreement to support the start-up operations of the Georgia JV, the Georgia JV issued 800 of its units to INVO CTR and in consideration
for Bloom’s commitment to contribute physician services having an anticipated value of up to $1,200,000 over the course of a 24-month
vesting period, the Georgia JV issued 1,200 of its units to Bloom.
The
responsibilities of Bloom include providing all medical services required for the operation of the Atlanta Clinic. The responsibilities
of INVO CTR include providing certain funding to the Georgia JV, lab services quality management, and providing access to and being the
exclusive provider of the INVOcell to the Georgia JV. INVO CTR also performs all required, industry specific compliance and accreditation
functions, and product documentation for product registration.
The
Bloom Agreement provides Bloom with a “profits interest” in the Georgia JV and, in connection with such profits interest,
states that profits and losses be allocated to its members based on a hypothetical liquidation of the Georgia JV. In such a scenario,
liquidation proceeds would be distributed in the following order: (a) to INVO CTR until the difference between its capital contributions
and distributions equals $0; (b) to Bloom until its distributions equal 150% of the liquidation amounts distributed to INVO CTR (a “catch-up”
to rebalance the distributions between members); and (c) thereafter on a pro rata basis. The Georgia JV had no assets or liabilities
at the time the units were issued, and, as of June 30, 2024, INVO CTR had made capital contributions greater than the net loss of the
Georgia JV. As such, the entire net loss was allocated to INVO CTR, and no loss was allocated to the noncontrolling interest of Bloom.
The
Atlanta Clinic opened to patients on September 7, 2021.
The
Company determined the Georgia JV is a VIE, and that the Company is its primary beneficiary because the Company has an obligation to
absorb losses that are potentially significant and the Company controls the majority of the activities that impact the Georgia JV’s
economic performance, specifically control of the INVOcell and lab services quality management. As a result, the Company consolidated
the Georgia JV’s results with its own. As of June 30, 2024, the Company invested $0.9 million in the Georgia JV in the form of
capital contributions as well as $0.5 million in the form of a note. For the six months ended June 30, 2024 and 2023, the Georgia JV
recorded net losses of $47 thousand and $0.1 million respectively. Noncontrolling interest in the Georgia JV was $0.
Unconsolidated
VIEs
HRCFG
INVO, LLC
On
March 10, 2021, INVO CTR entered into a limited liability company agreement with HRCFG, LLC (“HRCFG”) to establish a
joint venture, formed as HRCFG INVO, LLC (the “Alabama JV”), for the purpose of commercializing INVOcell, and the
related IVC procedure, through the establishment of an INVO Center in Birmingham, Alabama (the “Birmingham Clinic”). The Company also provides certain
funding to the Alabama JV. INVO CTR and HRSCGF party owns 50%
of the Alabama JV.
The
Birmingham clinic opened to patients on August 9, 2021.
The
Company determined the Alabama JV is a VIE, and that there is no primary beneficiary. As a result, the Company uses the equity method
to account for its interest in the Alabama JV. As of June 30, 2024, the Company invested $1.3 million in the Alabama JV in the form of
a note. For the six months ended June 30, 2024, the Alabama JV recorded net income of $36 thousand, of which the Company recognized
a gain from equity method investments of $18 thousand. For the six months ended June 30, 2023, the Alabama JV recorded a net income
of $2 thousand, of which the Company recognized a gain from equity method investments of $805.
Positib
Fertility, S.A. de C.V.
On
September 24, 2020, INVO CTR entered into a Pre-Incorporation and Shareholders Agreement with Francisco Arredondo, MD PLLC
(“Arredondo”) and Security Health LLC, a Texas limited liability company (“Ramirez”, and together with INVO
CTR and Arredondo, the “Shareholders”) to establish a joint venture, formed as Positib Fertility, S.A. de C.V. (the
“Mexico JV”), under which the Shareholders sought to commercialize INVOcell and the related IVC procedure and to offer
related medical treatments in Mexico through the establishment of an INVO Center in Monterrey, Mexico (the “Monterrey Clinic”). Each Shareholder owns one-third of the Mexico JV.
The
Monterrey Clinic opened to patients on November 1, 2021.
The
Company determined the Mexico JV is a VIE, and that there is no primary beneficiary. As a result, the Company uses the equity method
to account for its interest in the Mexico JV. During the fourth quarter of 2023, our Mexico JV partner informed the Company that the
primary physician onsite had resigned. The Company elected to impair the investment at year end 2023 in this JV due to the uncertainty
and possibility that the Mexico JV may offer reduced services or suspend operations. The total impairment for 2023 was approximately
$0.09 million. As of June 30, 2024, INVO investment in the Mexico JV was $0.
The
following table summarizes our investments in unconsolidated VIEs:
Schedule of Investments in Unconsolidated Variable Interest Entities
| |
| |
Carrying Value as of | |
| |
Location | |
Percentage Ownership | | |
June 30, 2024 | | |
December 31, 2023 | |
HRCFG INVO, LLC | |
Alabama, United States | |
| 50 | % | |
$ | 844,198 | | |
| 916,248 | |
Positib Fertility, S.A. de C.V. | |
Mexico | |
| 33 | % | |
| - | | |
| - | |
Total investment in unconsolidated VIEs | |
| |
| | | |
$ | 844,198 | | |
| 916,248 | |
Earnings
from investments in unconsolidated VIEs were as follows:
Schedule of Earnings from Investments in Unconsolidated Variable Interest Entities
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| |
Three
Months Ended
June 30, | | |
Six Months Ended
June 30, | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
HRCFG INVO, LLC | |
$ | 17,846 | | |
$ | 19,474 | | |
$ | 17,950 | | |
$ | 805 | |
Positib Fertility, S.A. de C.V. | |
| - | | |
| (15,686 | ) | |
| - | | |
| (24,752 | ) |
Total earnings (loss) from unconsolidated VIEs | |
| 17,846 | | |
| 3,788 | | |
| 17,950 | | |
| (23,947 | ) |
The
following tables summarize the combined unaudited financial information of our unconsolidated VIEs:
Schedule of Financial Information of Investments in Unconsolidated Variable Interest Entities
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| |
Three
Months Ended
June 30, | | |
Six Months Ended
June 30, | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
Statements of operations: | |
| | |
| | |
| | |
| |
Operating revenue | |
$ | 333,308 | | |
$ | 458,069 | | |
$ | 665,622 | | |
$ | 807,396 | |
Operating expenses | |
| (297,616 | ) | |
| (466,184 | ) | |
| (629,722 | ) | |
| (880,050 | ) |
Net profit (loss) | |
| 35,692 | | |
| (8,115 | ) | |
| 35,900 | | |
| (72,654 | ) |
| |
June 30, 2024 | | |
December
31, 2023 | |
Balance sheets: | |
| | | |
| | |
Current assets | |
$ | 286,582 | | |
| 288,369 | |
Long-term assets | |
| 991,387 | | |
| 1,026,873 | |
Current liabilities | |
| (517,415 | ) | |
| (510,091 | ) |
Long-term liabilities | |
| (123,060 | ) | |
| (123,060 | ) |
Net assets | |
$ | 637,494 | | |
| 682,091 | |
Note
5 – Agreements and Transactions with VIE’s
The
Company sells INVOcells to its consolidated and unconsolidated VIEs and anticipates continuing to do so in the ordinary course of
business. All intercompany transactions with consolidated entities are eliminated in the Company’s consolidated financial statements.
Pursuant to ASC 323-10-35-8, the Company eliminates any sales to an unconsolidated VIE for INVOcell inventory that the VIE still has remaining
on the books at period end.
The
following table summarizes the Company’s transactions with VIEs:
Summary of Transaction with Variable Interest Entities
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| |
Three
Months Ended
June 30, | | |
Six Months Ended
June 30, | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
Bloom INVO, LLC | |
| | | |
| | | |
| | | |
| | |
INVOcell revenue | |
$ | 15,000 | | |
$ | 6,000 | | |
$ | 25,500 | | |
$ | 10,500 | |
Unconsolidated VIEs | |
| | | |
| | | |
| | | |
| | |
INVOcell revenue | |
$ | - | | |
$ | 6,750 | | |
$ | 7,500 | | |
$ | 9,750 | |
The
Company had balances with VIEs as follows:
Summary of Balances with Variable Interest Entities
| |
June
30, 2024 | | |
December
31, 2023 | |
Bloom INVO, LLC | |
| | | |
| | |
Accounts receivable | |
$ | 28,500 | | |
| 31,500 | |
Notes payable | |
| 489,948 | | |
| 482,656 | |
Unconsolidated VIEs | |
| | | |
| | |
Accounts receivable | |
$ | 22,500 | | |
| 15,000 | |
Note
6 – Inventory
Components
of inventory are as follows:
Schedule
of Inventory
| |
June 30, 2024 | | |
December
31, 2023 | |
Raw materials | |
$ | 53,480 | | |
$ | 53,479 | |
Finished goods | |
| 196,586 | | |
| 211,028 | |
Total inventory | |
$ | 250,066 | | |
$ | 264,507 | |
Note
7 – Property and Equipment
The
estimated useful lives and accumulated depreciation for equipment are as follows as of June 30, 2024, and December 31, 2023:
Schedule of Estimated Useful Lives of Property and Equipment
| |
| Estimated Useful Life | |
Manufacturing equipment | |
| 6 to 10 years | |
Medical equipment | |
| 7 to 10 years | |
Office equipment | |
| 3 to 7 years | |
Schedule
of Property and Equipment
| |
June 30, 2024 | | |
December 31, 2023 | |
Manufacturing equipment | |
$ | 132,513 | | |
$ | 132,513 | |
Medical equipment | |
| 404,272 | | |
| 303,943 | |
Office equipment | |
| 89,904 | | |
| 85,404 | |
Leasehold improvements | |
| 96,817 | | |
| 538,151 | |
Property, plant and equipment, gross | |
| 96,817 | | |
| 538,151 | |
Less: accumulated depreciation | |
| (282,141 | ) | |
| (233,593 | ) |
Total equipment, net | |
$ | 441,365 | | |
$ | 826,418 | |
During
the three months ended June 30, 2024, and 2023, the Company recorded depreciation expense of $25,963 and $19,705, respectively.
During
the six months ended June 30, 2024, and 2023, the Company recorded depreciation expense of $48,548 and $38,792, respectively.
For
the three months ended June 30, 2024, the Company recognized a gain on disposal of fixed assets of $50,000 related to the termination
of its Tampa, Florida INVO Center project (the “Tampa Project”).
For
the six months ended June 30, 2024, the Company recognized a loss on disposal of fixed assets of $511,663 related to the termination
of the Tampa Project.
Note
8 – Intangible Assets & Goodwill
Components
of intangible assets are as follows:
Schedule of Finite-Lived Intangible Assets
| |
June 30, 2024 | | |
December 31, 2023 | |
Tradename | |
$ | 253,000 | | |
$ | 253,000 | |
Noncompetition agreement | |
| 3,961,000 | | |
| 3,961,000 | |
Goodwill | |
| 5,878,986 | | |
| 5,878,986 | |
Less: accumulated amortization | |
| (529,319 | ) | |
| (120,569 | ) |
Total intangible assets | |
$ | 9,563,667 | | |
$ | 9,972,417 | |
As
part of the WFI acquisition, that closed on August 10, 2023, the Company acquired a tradename valued
at $253,000,
noncompetition agreements valued at $3,961,000
and goodwill of $5,878,986
which includes assembled workforce valued at $34,000.
The tradename was deemed to have a useful life of 10
years. The noncompetition agreements were deemed to have a useful life of 15
years.
During
the three months ended June 30, 2024, and 2023, the Company recorded amortization expenses related to intangible assets of $204,375 and
$0, respectively.
During
the six months ended June 30, 2024, and 2023, the Company recorded amortization expenses related to intangible assets of $408,750 and
$0, respectively.
Goodwill
has an indefinite useful life and is therefore not amortized. The Company reviewed and found no indicators for impairment of the intangible
assets related to the acquisition of WFI as of June 30, 2024.
Note
9 – Leases
The
Company has various operating lease agreements in place for its office and joint ventures. Per FASB’s ASU 2016-02, Leases Topic
842 (“ASU 2016-02”), effective January 1, 2019, the Company is required to report a right-of-use asset and corresponding
liability to report the present value of the total lease payments, with appropriate interest calculation. The rate implicit in the lease
was not readily determinable. Historically, the Company historically utilized the applicable federal rate as of the commencement of the
lease; however, the Company has determined that utilization of the applicable federal rate was not its comparable incremental borrowing
rate. The Company has since calculated the incremental borrowing rate for each lease by developing a synthetic credit rating for the
Company as of the commencement date of each lease, adjusting the synthetic credit rating to reflect the collateralized nature of the
incremental borrowing rate, and based on the adjusted synthetic rating and the various terms of the leases, selected the incremental
borrowing rate based on the commencement date, duration of the lease, and a corresponding weight-adjusted corporate yield curve. The
Company then completed a sensitivity analysis on all of its current leases and determined there was no material difference between using
the applicable federal rate and the applicable incremental borrowing rate. Lease renewal options included in any lease are considered
in the lease term if it is reasonably certain the Company will exercise the option to renew. The Company’s operating lease agreements
do not contain any material restrictive covenants.
As
of June 30, 2024, the Company’s lease components included in the consolidated balance sheet were as follows:
Schedule of Lease Components
Lease component | |
Balance sheet classification | |
June 30, 2024 | |
Assets | |
| |
| | |
ROU assets – operating lease | |
Other assets | |
$ | 2,614,466 | |
Total ROU assets | |
| |
$ | 2,614,466 | |
| |
| |
| | |
Liabilities | |
| |
| | |
Current operating lease liability | |
Current liabilities | |
$ | 237,030 | |
Long-term operating lease liability | |
Other liabilities | |
| 2,506,543 | |
Total lease liabilities | |
| |
$ | 2,743,573 | |
Future
minimum lease payments as of June 30, 2024 were as follows:
Schedule of Future Minimum Lease Payments
| | |
| | |
2024 | | |
| 235,757 | |
2025 | | |
| 477,947 | |
2026 | | |
| 490,122 | |
2027 | | |
| 480,096 | |
2028 and beyond | | |
| 2,329,321 | |
Total future minimum lease payments | | |
$ | 4,013,243 | |
Less: Interest | | |
| (1,269,670 | ) |
Total operating lease liabilities | | |
$ | 2,743,573 | |
For
the six months ended June 30, 2024, the weighted average remaining lease term for operating leases was 102 months. For the six months
ended June 30, 2024, the weighted average discount rate for operating leases was 9.0%. The Company paid approximately $0.2 million in
cash for operating lease amounts included in the measurement of lease liabilities for the six months ended June 30, 2024. The Company
did not have any finance leases as of June 30, 2024.
For
the six months ended June 30, 2024, the Company recognized a gain on lease termination of $94,551 related to the termination of the lease
associated with the Tampa Project.
Note
10 – Notes Payable
Notes
payables consisted of the following:
Schedule of Notes Payable
| |
June 30, 2024 | | |
December
31, 2023 | |
Note payable. 35% - 100 % cumulative interest. Matures on June 29, 2028 | |
$ | 1,349,757 | | |
$ | 1,451,245 | |
Note payable. 35% - 100 % cumulative interest. Matures on June 29, 2028 | |
$ | 1,349,757 | | |
$ | 1,451,245 | |
Related party demand notes with a 10% financing fee. 10% annual interest from issuance. As of June 30, 2024, all these notes are callable. | |
| 880,000 | | |
| 880,000 | |
Convertible notes. 10% annual interest. Conversion price of $1.20 | |
| 235,000 | | |
| 410,000 | |
Convertible note. 12% annual interest. Conversion price of $1.00 | |
| 275,000 | | |
| - | |
Cash advance agreement | |
| 175,332 | | |
| 287,604 | |
Less debt discount and financing costs | |
| (282,101 | ) | |
| (264,932 | ) |
Total, net of discount | |
$ | 2,632,988 | | |
$ | 2,763,917 | |
Related
Party Demand Notes
In
the fourth quarter of 2022, the Company received $500,000 through the issuance of five demand notes (the “JAG Notes”) from
a related party, JAG Multi Investments LLC (“JAG”). The Company’s Chief Financial Officer is a beneficiary of JAG but does not have any
control over JAG’s investment decisions with respect to the Company. The JAG Notes accrue 10% annual interest from their respective
dates of issuance. At maturity, the Company agreed to pay outstanding principal, a 10% financing fee and accrued interest. On July 10, 2023, the Company received an additional $100,000 from JAG through the issuance of an additional demand note.
In
consideration for subscribing to the JAG Note for $100,000 dated December 29, 2022, and for agreeing to extend the date on which the
other JAG Notes are callable to March 31, 2023, the Company issued JAG a warrant to purchase 17,500 shares of common stock. The warrant
may be exercised for a period of five (5) years from issuance at a price of $10.00 per share. The financing fees for said JAG Note and
the fair value of the warrant issued were capped at the total proceeds. The relative fair value of the warrant was recorded as a debt
discount and, as of June 30, 2024, the Company had fully amortized the discount. On July 10, 2023, JAG agreed to extend the date on which
the JAG Notes are callable to September 30, 2023.
In
the fourth quarter of 2022, the Company received $200,000 through the issuance of demand promissory notes of which (1) $100,000 was received
from its Chief Executive Officer ($60,000 on November 29, 2022, $15,000 on December 2, 2022, and $25,000 on December 13, 2022) and (2)
$100,000 was received from an entity controlled by its Chief Financial Officer ($75,000 on November 29, 2022 and $25,000 on December
13, 2022). These notes accrue 10% annual interest accrues from the date of issuance. These notes are callable with 10 days prior written
notice. At maturity, the Company agreed to pay outstanding principal, a 10% financing fee, and accrued interest.
The
financing fees for all demand notes were recorded as a debt discount and, as of June 30, 2024, the Company had fully amortized the discount.
For
the six months ended June 30, 2024, the Company incurred $40,444 in interest related to these demand notes.
January
and March 2023 Convertible Notes
In
January and March 2023, the Company issued $410,000 of convertible notes (“Q1 23 Convertible Notes”) for $310,000 in cash
and the conversion of $100,000 of demand notes from the fourth quarter of 2022. These convertible notes were issued with fixed conversion
prices of $10.00 (for the $275,000 issued in January 2023) and $12.00 (for the $135,000 issued in March 2023) and with 5-year warrants
to purchase 19,375 shares of the common stock at an exercise price of $20.00.
The
cumulative fair value of the warrants at issuance was $132,183. This was recognized as a debt discount and will to be amortized on a
straight-line basis over the life of the respective notes. As of June 30, 2024, the debt discount was fully amortized.
Interest
on these notes accrues at a rate of ten percent (10%) per annum and is payable at the holder’s option either in cash or in shares
of common stock at the conversion price set forth in the notes on December 31, 2023, unless converted earlier. For the six months ended
June 30, 2024, the Company incurred $17,766 in interest related to these convertible notes.
All
amounts due under these notes are convertible at any time after the issuance date, in whole or in part (subject to rounding for fractional
shares), at the option of the holders into the common stock at a fixed conversion price for the notes as described above.
As
of December 27, 2023, the Company secured written consent by the note holders of the Q1 23 Convertible Notes for the maturity date
to be extended to June 30, 2024. As an incentive for the Q1 23 Convertible Note holders to approve the extension, the Company agreed
to lower both the Q1 23 Convertible Notes fixed conversion price and the related warrant exercise price to $2.25.
The maturity date extension and the conversion and exercise price reduction applies to all Q1 23 Convertible Notes. As the terms for
the note were deemed to be substantially different, the Company recognized a $163,278
loss from debt extinguishment related to the change in terms.
As
of June 28, 2024, the Company secured written consent by the note holders for the Q1 23 Convertible Notes for the maturity date to
be extended to December 31, 2024. As an incentive for the note holders to approve the extension, the Company agreed (a) to lower
both the Q1 23 Convertible Notes fixed conversion price and the related warrant exercise price to $1.20,
(b) to provide the Q1 23 Convertible Notes holders the right to demand early repayment at the closing of the proposed merger with
NAYA Biosciences, Inc. (“NAYA”) or if the Company raises more than $3
million dollars in a single equity raise, and (c) to increase the number of shares of common stock available under the related
warrants to a total of 124,421.
The maturity date extension, the conversion reduction, and the early repayment right applies to all Q1 23 Convertible Notes, and the
exercise price reduction and additional warrant coverage applies to all related warrants. As the terms for the note were deemed to
be substantially different, the Company recognized a $40,491
loss from debt extinguishment related to the change in term and immediately recognized $78,443
of debt discount.
During
the second quarter of 2024, $175,000 of notes and $22,033 of interest were converted to 109,886 shares of common stock.
February
2023 Convertible Debentures
On
February 3 and February 17, 2023, the Company entered into securities purchase agreements (the “February Purchase Agreements”)
with accredited investors (the “February Investors”) for the purchase of (i) convertible debentures of the Company in the
aggregate original principal amount of $500,000 (the “February Debentures”) for a purchase price of $450,000, (ii) warrants
(the “February Warrants”) to purchase 12,500 shares (the “February Warrant Shares”) of common stock at an exercise
price of $15.00 per share, and (iii) 4,167 shares of common stock issued as an inducement for issuing the February Debentures. The proceeds,
net of placement agent and legal fees, were used for working capital and general corporate purposes.
The
cumulative fair value of the warrants at issuance was $291,207. This was recognized as a debt discount and will be amortized on a straight-line
basis over the life of the respective notes. As of June 30, 2024, the Company had fully amortized the discount.
Pursuant
to the February Debentures, interest on the February Debentures accrued at a rate of eight percent (8%) per annum payable at maturity,
one year from the date of the February Debentures. For the six months ended June 30, 2024, the Company incurred $0 in interest on the
February Debentures.
All
amounts due under the February Debentures were convertible at any time after the issuance date, in whole or in part, at the option of
the February Investors into common stock at an initial price of $10.40 per share. This conversion price was subject to adjustment for
stock splits, combinations or similar events and anti-dilution provisions, among other adjustments and is subject to a floor price.
The
Company could prepay the February Debentures at any time in whole or in part by paying a sum of money equal to 105% of the principal
amount to be redeemed, together with accrued and unpaid interest.
While
any portion of each February Debenture remained outstanding, if the Company received cash proceeds of more than $2,000,000 (the “Minimum
Threshold”) in the aggregate from any source or series of related or unrelated sources, the February Investors had the right in
their sole discretion to require the Company to immediately apply up to 50% of all proceeds received by the Company above the Minimum
Threshold to repay the outstanding amounts owed under the February Debentures. In April 2023, the Company used $360,151 in proceeds from
the RD Offering (as described in Note 11 below) to repay a portion of the February Debentures. On August 8, 2023, the Company repaid
the remaining balance of $139,849 with proceeds from the August 2023 Offering (as described in Note 12 below).
The
February Warrants included anti-dilution protection whereby a subsequent offering priced below the February Warrants’ strike price
then in effect would entitle the February Investors to a reduction of such strike price to the price of such subsequent offering and
an increase in the February Warrant Shares determined by dividing the dollar amount for which the February Warrants are exercisable by
such lower strike price. As a result of the $2.85 unit purchase price of the August 2023 Offering (as described in Note 12 below), following
consummation of the August 2023 Offering, the February Warrants now entitle the February Investors to purchase a total 65,790 at an exercise
price of $2.85 per February Warrant Share. On August 8, 2023, the Company issued 26,391 shares of common stock upon exercise of one of
the February Warrants on a net-exercise basis and, on August 21, 2023, the Company issued 17,594 shares of common stock upon exercise
of the other February Warrant on a net-exercise basis. Following these exercises, there were no February Warrants outstanding.
Standard
Merchant Cash Advance
On
July 20, 2023, the Company entered into a Standard Merchant Cash Advance Agreement (the “Cash Advance Agreement”) with Cedar
Advance LLC (“Cedar”) under which Cedar purchased $543,750 of the Company’s receivables for a gross purchase price
of $375,000 (the “Initial Advance”). The Company received cash proceeds of $356,250, net of a financing fee. Until the purchase
price is repaid, the Company agreed to pay Cedar $19,419.64 per week. Since, through the refinancing described below, the Company repaid
Cedar within 30 days, the amount payable under the Initial Advance was reduced from $543,750 to $465,000.
On
August 31, 2023, the Company refinanced the Initial Advance through the purchase by Cedar of $746,750
of the Company’s receivables for a gross purchase price of $515,000
(the “Refinanced Advance”). The Company received net cash proceeds of $134,018
after applying $390,892
towards the repayment of the Initial Advance. The new Cash Advance Agreement provides that if the Company repays the Refinanced
Advance within 30 days then the amount payable to Cedar shall be reduced to $643,750,
and if the Refinanced Advance is repaid on days 31 to 60 then the amount payable to Cedar shall be reduced to $674,650.
Until the purchase price is repaid, the Company agreed to pay Cedar $16,594
per week. On September 29, 2023, the Company repaid $0.3
million of the Cash Advance Agreement with proceeds from the RLSA Loan (as defined below). As a result of such payment, the weekly
payment was reduced to $9,277. As of June 30, 2024, the remaining balance on the Cash Advance Agreement was $64,956.
The
financing fees were recorded as a debt discount. For the six months ending June 30, 2024, the Company amortized $139,678 of the debt discount
and, as of June 30, 2024, had a remaining debt discount balance of $111,044.
Revenue
Loan and Security Agreement
On
September 29, 2023, the Company, its Chief Executive Officer, as a Key Person, and the Company’s wholly-owned subsidiaries Bio X Cell, Inc, INVO
CTR, Wood Violet Fertility LLC, FLOW and Orange Blossom Fertility LLC as guarantors (the “Guarantors”), entered into a Revenue
Loan and Security Agreement (the “Loan Agreement”) with Decathlon Alpha V LP (the “Lender”) under which the Lender
advanced a gross amount of $1,500,000 to the Company (the “RSLA Loan”). The RSLA Loan has a maturity date of June 29, 2028,
is payable in fixed monthly installments, as set forth in the Loan Agreement, and may be prepaid without penalty at any time. The installments
include an interest factor that varies based on when the RSLA Loan is fully repaid and is based on a minimum amount that increases from
thirty five percent (35%) of the RSLA Loan principal, if fully repaid in the first six months, to 100% of the RSLA Loan principal, if
fully repaid after 30 months from the RSLA Loan’s effective date.
The
financing fees for the RSLA Loan were recorded as a debt discount. For the six months ending June 30, 2024, the Company amortized $1,579
of the debt discount and as of June 30, 2024 had a remaining debt discount balance of $12,632. For the six months ended June 30, 2024,
the Company incurred $108,513 in interest related to the RSLA Loan.
Future
Receipts Agreement
On
February 26, 2024, the Company finalized an Agreement for the Purchase and Sale of Future Receipts (the “Future Receipts Agreement”)
with a buyer (the “Buyer”) under which the Buyer purchased $344,925 of our future sales for a gross purchase price of $236,250.
The Company received net proceeds of $225,000. Until the purchase price has been repaid, the Company agreed to pay the Buyer $13,797
per week. As of June 30, 2024, the remaining balance on the Future Receipts Agreement was $110,376.
The
financing fees were recorded as a debt discount. For the six months ending June 30, 2024, the Company amortized $89,772 of the debt discount
and, as of June 30, 2024, had a remaining debt discount balance of $30,152.
FirstFire
Convertible Note
On
April 5, 2024, the Company entered into a purchase agreement with FirstFire Global Opportunities Fund, LLC (“FirstFire”),
pursuant to which FirstFire agreed to purchase, and the Company agreed to issue and sell, (i) a promissory note with an aggregate principal
amount of $275,000, which is convertible into shares of the Company’s common stock, according to the terms, conditions, and
limitations outlined in the note (the “FirstFire Note”), (ii) a warrant to purchase 229,167 shares of the Company’s
common stock at an exercise price of $1.20 per share, (iii) a warrant to purchase 500,000 shares of common stock at an exercise price
of $0.01 issued to FirstFire, and (iv) 50,000 shares of common stock, for a purchase price of $250,000. Carter, Terry, & Company,
Inc. acted as placement agent for the transaction, for which it received a cash fee of $25,000 and 11,655 restricted shares of the Company’s
common stock.
The
FirstFire Note carries an interest rate of twelve percent (12%) per annum, with the first twelve months of interest, amounting to $33,000,
guaranteed, and fully earned as of the issue date. The maturity date of the FirstFire Note is twelve (12) months from the issue date,
at which point the Principal Amount, together with any accrued and unpaid interest and other fees, shall be due and payable to the holder
of the FirstFire Note.
The
financing fees for the FirstFire Note were recorded as a debt discount. For the six months ending June 30, 2024, the Company amortized
$39,539 of the debt discount and, as of June 30, 2024, had a remaining debt discount balance of $128,273. For the six months ended June
30, 2024, the Company incurred $33,000 in interest related to the FirstFire Note.
Note
11 – Related Party Transactions
In
the fourth quarter of 2022, the Company issued a series of demand promissory notes in the aggregate principal amount of $550,000
to a related party, JAG, a company in which the
Company’s Chief Financial Officer is a beneficiary but does not have any control over its investment decisions with respect to
the Company, for an aggregate purchase price of $500,000.
The JAG Notes accrue 10% annual interest from their respective dates of issuance. At maturity, the Company agreed to pay outstanding
principal, a 10% financing fee and accrued interest. On July 10, 2023, the Company issued an additional demand promissory note in the
principal amount of $110,000
to JAG for a purchase price of $100,000.
In
consideration for subscribing to the JAG Note for $100,000 dated December 29, 2022, and for agreeing to extend the date on which the
other JAG Notes are callable to March 31, 2023, the Company issued JAG a warrant to purchase 17,500 shares of common stock. The warrant
may be exercised for a period of five (5) years from issuance at a price of $10.00 per share. On July 10, 2023, JAG agreed to extend the
date on which the JAG Notes are callable to September 30, 2023.
In
the fourth quarter of 2022, the Company issued demand promissory notes in the aggregate principal amount of $220,000 for an aggregate
purchase price of $200,000, of which (1) $100,000 was received from its Chief Executive Officer ($60,000 on November 29, 2022, $15,000
on December 2, 2022, and $25,000 on December 13, 2022) and (2) $100,000 was received from an entity controlled by its Chief Financial
Officer ($75,000 on November 29, 2022 and $25,000 on December 13, 2022). These notes accrue 10% annual interest accrues from the date
of issuance. These notes are callable with 10 days prior written notice. At maturity, the Company agreed to pay outstanding principal,
a 10% financing fee, and accrued interest.
For
the six months ended June 30, 2024, the Company incurred $40,444
in interest related to these demand notes and as of June 30, 2024 the total outstanding balance, including principal and accrued interest, was $1,003,897.
As
of June 30, 2024, the Company owed accounts payable to related parties totaling $227,321, primarily related to unpaid employee expense
reimbursements and unpaid board fees, and accrued compensation of $375,422, primarily related to deferred wages and accrued paid time
off.
Note
12 – Stockholders’ Equity
Reverse
Stock Split
On
June 28, 2023, the Company’s board of directors approved a reverse stock split of the Company’s common stock at a ratio of
1-for-20 and also approved a proportionate decrease in its authorized common stock to 6,250,000 shares from 125,000,000. On July 26,
2023, the Company filed a certificate of change (with an effective date of July 28, 2023) with the Nevada Secretary of State pursuant
to Nevada Revised Statutes 78.209 to effectuate a 1-for-20 reverse stock split of its outstanding common stock. On July 27, 2023, the
Company received notice from Nasdaq that the reverse split would take effect at the open of business on July 28, 2023, and the reverse
stock split took effect on that date. All share information included in this Form 10-Q has been reflected as if the reverse stock split
occurred as of the earliest period presented.
Increase
in Authorized Common Stock
On
October 13, 2023, stockholders of the Company approved an increase to the number of authorized shares of the Company’s common stock
from 6,250,000 shares to 50,000,000 shares as set forth below. On October 13, 2023, the Company filed a Certificate of Amendment to its
Articles of Incorporation to increase its authorized shares of common stock from 6,250,000 shares to 50,000,000 shares.
Series
A Preferred Stock
On
November 20, 2023, the Company filed with the Nevada Secretary of State a Certificate of Designation of Series A Convertible
Preferred Stock (the “Series A Certificate of Designation”) which sets forth the rights, preferences, and privileges of
the Company’s Series A Preferred Stock (the “Series A Preferred”). One million (1,000,000)
shares of Series A Preferred with a stated value of $5.00
per share were authorized under the Series A Certificate of Designation.
Each
share of Series A Preferred has a stated value of $5.00
and is convertible into shares of the Company’s
common stock at a fixed conversion price equal to $2.20
per share, subject to adjustment. The
Company may not effect the conversion of any shares of Series A Preferred if, after giving effect to the conversion or issuance, the
holder, together with its affiliates, would beneficially own more than 9.99% of the Company’s outstanding common stock. Moreover,
the Company may not effect the conversion of any shares of Series A Preferred if, after giving effect to the conversion or issuance,
the holder, together with its affiliates, would beneficially own more than 19.99% of the Company’s outstanding common stock unless
and until the Company receives the approval required by the applicable rules and regulations of The Nasdaq Stock Market LLC (or any subsequent
trading market).
Each
share of Series A Preferred stock shall automatically convert into common stock upon the closing of a merger (the “Merger”)
of INVO Merger Sub Inc., a wholly owned subsidiary of the Company (“Merger Sub”), with and into
NAYA pursuant to an Agreement and Plan of Merger, as amended, by and among
the Company, Merger Sub, and NAYA (the “Merger Agreement”).
The
holders of Series A Preferred shall be entitled to receive a pro-rata portion, on an as-if converted basis, of any dividends payable
on common stock.
In
the event of any voluntary or involuntary liquidation, dissolution, or winding up, or sale of the Company (other than the Merger), each
holder of Series A Preferred shall be entitled to receive its pro rata portion of an aggregate payment equal to (i) $5.00, multiplied
by (ii) the total number of shares of Series A Preferred Stock issued under the Series A Certificate of Designation.
Other
than those rights provided by law, the holders of Series A Preferred shall not have any voting rights.
Since
the conversion of the Series A Preferred Stock is contingent on the closing of the Merger, it is not considered a mandatorily redeemable
financial instrument until the closing of the Merger and therefore is not considered a liability under ASC 480. Additionally, since the
Series A Preferred Stock is redeemable for the Company’s common stock upon an event within the Company’s control, it is classified
as permanent equity.
On
December 29, 2023, the Company entered into securities purchase agreement (the “Preferred Series A SPA”) with NAYA for the
purchase of 1,000,000 shares of the Company’s Series A Preferred Stock at a purchase price of $5.00 per share. The parties agreed
that NAYA’s purchases would be made in tranches in accordance with the following schedule: (1) $500,000 no later than December 29, 2023;
(2) $500,000 no later than January 19, 2024; (3) $500,000 no later than February 2, 2024; (4) $500,000 no later than February 16, 2024;
and (5) an additional amount as may be required prior to closing of the Merger, and to be determined in good faith by the parties to adequately support the Company’s fertility business activities
per an agreed forecast, as well as for a period of twelve (12) months post-closing including a catch-up on the Company’s past due
accrued payables still outstanding. The Preferred Series A SPA contains customary representations, warranties, and covenants of the Company
and NAYA.
On
January 4, 2024, the Company and NAYA closed on 100,000 shares of Series A Preferred Stock in the first tranche of this private offering
for gross proceeds of $500,000.
Effective as of May 1, 2024, the Company entered into
an Amendment (the “SPA Amendment”) to the Series A Preferred SPA. Pursuant to the SPA Amendment, the parties agreed to the
following closing schedule for NAYA’s purchases of the remaining 838,800 shares of the Company’s Series A Preferred
Stock at a purchase price of $5.00 per share:
Schedule
of Closing Price for NAYA's Purchases of Remaining Shares
Closing Date | |
Shares | | |
Aggregate Purchase Price | |
May 10, 2024 | |
| 20,000 | | |
$ | |