[10-Q] NAYA Biosciences, Inc. Quarterly Earnings Report
NAYA Biosciences presents condensed results and material transactions for the period ended June 30, 2025. Consolidated revenue is reported at $3,500,839. The filing shows significant losses and non‑cash charges, including impairment charges of $1,397,353 and $14,645,069 and reported net loss amounts shown as $(5,284,858) and $(22,688,444) in the disclosed tables. The company records goodwill of $5,878,986 and finite‑lived intangible assets including tradenames and noncompetition agreements.
Liquidity and financing activity are highlighted: the company reports liquidity figures of $22.7 million and $3.8 million (as presented), an accumulated deficit of approximately $90.2 million, and net cash used in operating activities of approximately $5.3 million for the six months ended June 30, 2025 (versus $1.7 million for the prior period). Financing proceeds included approximately $8.7 million from a public offering, warrant exercises and preferred issuances; the company states it will require additional funding to meet cash needs over the next 12 months. Material business combinations and dispositions (NTI transaction and related note receivable of $4,803,175) and settlement obligations (scheduled payments totaling $5,000,000 under a term sheet) are disclosed.
NAYA Biosciences presenta risultati condensati e operazioni materiali per il periodo chiuso al 30 giugno 2025. I ricavi consolidati sono pari a $3.500.839. Il documento evidenzia perdite significative e oneri non monetari, tra cui svalutazioni per $1.397.353 e $14.645.069, con perdite nette riportate nelle tabelle per $(5.284.858) e $(22.688.444). La società rileva avviamento per $5.878.986 e attività immateriali a vita definita, incluse marche e accordi di non concorrenza.
Viene messa in luce la liquidità e l’attività di finanziamento: la società dichiara disponibilità di $22,7 milioni e $3,8 milioni (come presentato), un deficit accumulato di circa $90,2 milioni e un flusso di cassa netto utilizzato nelle attività operative di circa $5,3 milioni per i sei mesi chiusi al 30 giugno 2025 (contro $1,7 milioni del periodo precedente). I proventi da finanziamento includono circa $8,7 milioni da offerta pubblica, esercizio di warrant e emissioni privilegiate; la società afferma che serviranno ulteriori finanziamenti per coprire le esigenze di cassa nei prossimi 12 mesi. Sono inoltre riportate operazioni aziendali significative e dismissioni (transazione NTI e relativo credito di $4.803.175) e obblighi di risoluzione (pagamenti programmati per un totale di $5.000.000 ai sensi di un term sheet).
NAYA Biosciences presenta resultados condensados y transacciones materiales para el periodo concluido el 30 de junio de 2025. Los ingresos consolidados se reportan en $3.500.839. El informe muestra pérdidas significativas y cargos no monetarios, incluidas deterioros por $1.397.353 y $14.645.069, con pérdidas netas informadas de $(5.284.858) y $(22.688.444) en las tablas divulgadas. La compañía registra plusvalía por $5.878.986 y activos intangibles de vida finita, incluyendo nombres comerciales y acuerdos de no competencia.
Se destacan la liquidez y la actividad de financiamiento: la compañía reporta cifras de liquidez de $22,7 millones y $3,8 millones (según presentación), un déficit acumulado de aproximadamente $90,2 millones y un flujo de efectivo neto usado en actividades operativas de aproximadamente $5,3 millones para los seis meses terminados el 30 de junio de 2025 (frente a $1,7 millones en el periodo anterior). Los ingresos por financiamiento incluyeron aproximadamente $8,7 millones de una oferta pública, ejercicios de warrants y emisiones preferentes; la compañía indica que necesitará fondos adicionales para cubrir las necesidades de efectivo durante los próximos 12 meses. Se divulgan además combinaciones y disposiciones empresariales materiales (transacción NTI y documento por cobrar relacionado de $4.803.175) y obligaciones de liquidación (pagos programados por un total de $5.000.000 bajo un term sheet).
NAYA Biosciences는 2025년 6월 30일로 종료된 기간의 요약 실적 및 주요 거래를 공시합니다. 연결 매출은 $3,500,839로 보고되었습니다. 공시서에는 유의미한 손실 및 비현금성 비용이 포함되어 있으며, 손상차손 $1,397,353 및 $14,645,069와 공시표에 표시된 순손실 $(5,284,858) 및 $(22,688,444)이 기재되어 있습니다. 회사는 영업권 $5,878,986 및 상표권, 경쟁금지계약 등 유한수명 무형자산을 계상하고 있습니다.
유동성 및 자금조달 활동이 강조됩니다: 회사는 유동성 수치로 $2,270만 및 $380만(표시 기준), 누적적자 약 $90.2백만, 2025년 6월 30일로 끝나는 6개월 동안 영업활동으로 인한 순현금유출 약 $5.3백만(전기 $1.7백만 대비)을 보고했습니다. 자금조달 수익에는 공개모집, 워런트 행사 및 우선주 발행으로 약 $8.7백만이 포함되며, 회사는 향후 12개월 동안 현금 필요를 충족하기 위해 추가 자금이 필요할 것이라고 명시하고 있습니다. 주요 기업결합 및 처분(NTI 거래 및 관련 미수금 $4,803,175) 및 합의 의무(조건서에 따른 총 $5,000,000의 예정 지급)도 공개되어 있습니다.
NAYA Biosciences présente des résultats condensés et des opérations matérielles pour la période close le 30 juin 2025. Le chiffre d’affaires consolidé s’élève à 3 500 839 $. Le dépôt fait état de pertes significatives et de charges non monétaires, notamment des dépréciations de 1 397 353 $ et 14 645 069 $, ainsi que des pertes nettes indiquées de (5 284 858 $) et (22 688 444 $) dans les tableaux divulgués. La société comptabilise un goodwill de 5 878 986 $ et des actifs incorporels à durée déterminée, incluant des enseignes et des accords de non‑concurrence.
La liquidité et les opérations de financement sont mises en évidence : la société déclare des disponibilités de 22,7 M$ et 3,8 M$ (telles que présentées), un déficit accumulé d’environ 90,2 M$ et des flux de trésorerie nets utilisés par les activités opérationnelles d’environ 5,3 M$ pour les six mois clos le 30 juin 2025 (contre 1,7 M$ sur la période précédente). Les recettes de financement comprennent environ 8,7 M$ provenant d’une offre publique, de l’exercice de bons et d’émissions de actions privilégiées ; la société indique qu’elle aura besoin de financements supplémentaires pour couvrir ses besoins de trésorerie au cours des 12 prochains mois. Sont également divulguées des opérations de regroupement et de cession significatives (transaction NTI et créance associée de 4 803 175 $) ainsi que des obligations de règlement (paiements programmés totalisant 5 000 000 $ au titre d’un term sheet).
NAYA Biosciences legt komprimierte Ergebnisse und wesentliche Transaktionen für den zum 30. Juni 2025 endenden Zeitraum vor. Der konsolidierte Umsatz wird mit $3.500.839 ausgewiesen. Die Einreichung zeigt erhebliche Verluste und nicht zahlungswirksame Aufwendungen, darunter Wertminderungen in Höhe von $1.397.353 und $14.645.069, sowie ausgewiesene Nettoverluste in den Tabellen von $(5.284.858) und $(22.688.444). Das Unternehmen bilanziert einen Geschäfts- oder Firmenwert von $5.878.986 sowie immaterielle Vermögenswerte mit begrenzter Nutzungsdauer, darunter Marken und Wettbewerbsverbotsvereinbarungen.
Liquidität und Finanzierungsaktivitäten werden hervorgehoben: Das Unternehmen meldet Liquiditätspositionen von $22,7 Mio. und $3,8 Mio. (wie dargestellt), einen kumulierten Fehlbetrag von rund $90,2 Mio. sowie einen Netto-Cashabfluss aus laufender Geschäftstätigkeit von rund $5,3 Mio. für die sechs Monate zum 30. Juni 2025 (gegenüber $1,7 Mio. im Vorjahreszeitraum). Finanzierungseinnahmen umfassten etwa $8,7 Mio. aus einer öffentlichen Platzierung, Warrant-Ausübungen und Vorzugsaktienemissionen; das Unternehmen gibt an, weitere Mittel zu benötigen, um den Cash-Bedarf in den nächsten 12 Monaten zu decken. Wesentliche Unternehmenszusammenschlüsse und Veräußerungen (NTI-Transaktion und zugehörige Forderung in Höhe von $4.803.175) sowie Vergleichsverpflichtungen (geplante Zahlungen insgesamt $5.000.000 im Rahmen eines Term Sheets) werden offengelegt.
- Successful capital raises: net proceeds of approximately $8.7M from a public offering and additional proceeds from warrant exercises and preferred issuances
- Significant financing flexibility: multiple convertible debentures and preferred instruments that provided cash and noncash consideration (including an NTI Note Receivable of $4,803,175)
- Completed corporate actions: business combination/divestiture activity executed (NTI transaction) which crystallized in‑process R&D and tradename considerations
- Material losses and impairments: reported net loss figures including $(5,284,858) and $(22,688,444) and impairment charges of $1,397,353 and $14,645,069
- Operating cash burn: net cash used in operating activities of approximately $5.3M for the six months ended June 30, 2025 (vs $1.7M prior year)
- Liquidity and going‑concern risk: accumulated deficit of approximately $90.2M and stated need to raise additional funding to meet liquidity needs over the next 12 months
- Complex capital structure: multiple series of preferred stock, convertible debentures, warrants and conversion limits that may cause dilution and constrain future financings
Insights
TL;DR: Significant losses, large impairments, and positive financing activity leave liquidity constrained and performance under pressure.
The filing shows modest revenue of $3.5M against heavy non‑cash and cash charges. Reported impairments ($1.4M and $14.6M) and sizable net loss figures materially reduce earnings and equity. Operating cash burn was ~ $5.3M for the first half of 2025, increasing near‑term financing needs despite $8.7M of public offering proceeds. Balance sheet items include $5.9M of goodwill and $1.5M+ of finite‑lived intangibles; accumulated deficit of ~$90.2M indicates multiyear losses. Interest and convertible debt activity (multiple debentures and notes) present dilution and cash‑service risk. Overall near‑term financial risk is elevated.
TL;DR: Active dealmaking with NTI divestiture and acquisitions produced sizeable noncash results and complex consideration structures.
The filing discloses a business combination and disposition related to NTI with consideration components including Series C‑1 and C‑2 preferred, pre‑funded warrants, and an NTI Note Receivable of $4,803,175. Consideration paid or reclassified aggregates ($29.6M and $11.15M figures are reported in acquisition/divestiture schedules) and a recorded loss on disposition of $1,534,517. Goodwill and IP valuations (in‑process R&D of $14.57M derecognized on disposition) drive large impairment entries. These transactions materially alter reported assets and introduce conversion, preferential dividend, and ownership limits in preferred instruments—complex capital structure consequences for investors and potential dilution upon conversions and warrant exercises.
NAYA Biosciences presenta risultati condensati e operazioni materiali per il periodo chiuso al 30 giugno 2025. I ricavi consolidati sono pari a $3.500.839. Il documento evidenzia perdite significative e oneri non monetari, tra cui svalutazioni per $1.397.353 e $14.645.069, con perdite nette riportate nelle tabelle per $(5.284.858) e $(22.688.444). La società rileva avviamento per $5.878.986 e attività immateriali a vita definita, incluse marche e accordi di non concorrenza.
Viene messa in luce la liquidità e l’attività di finanziamento: la società dichiara disponibilità di $22,7 milioni e $3,8 milioni (come presentato), un deficit accumulato di circa $90,2 milioni e un flusso di cassa netto utilizzato nelle attività operative di circa $5,3 milioni per i sei mesi chiusi al 30 giugno 2025 (contro $1,7 milioni del periodo precedente). I proventi da finanziamento includono circa $8,7 milioni da offerta pubblica, esercizio di warrant e emissioni privilegiate; la società afferma che serviranno ulteriori finanziamenti per coprire le esigenze di cassa nei prossimi 12 mesi. Sono inoltre riportate operazioni aziendali significative e dismissioni (transazione NTI e relativo credito di $4.803.175) e obblighi di risoluzione (pagamenti programmati per un totale di $5.000.000 ai sensi di un term sheet).
NAYA Biosciences presenta resultados condensados y transacciones materiales para el periodo concluido el 30 de junio de 2025. Los ingresos consolidados se reportan en $3.500.839. El informe muestra pérdidas significativas y cargos no monetarios, incluidas deterioros por $1.397.353 y $14.645.069, con pérdidas netas informadas de $(5.284.858) y $(22.688.444) en las tablas divulgadas. La compañía registra plusvalía por $5.878.986 y activos intangibles de vida finita, incluyendo nombres comerciales y acuerdos de no competencia.
Se destacan la liquidez y la actividad de financiamiento: la compañía reporta cifras de liquidez de $22,7 millones y $3,8 millones (según presentación), un déficit acumulado de aproximadamente $90,2 millones y un flujo de efectivo neto usado en actividades operativas de aproximadamente $5,3 millones para los seis meses terminados el 30 de junio de 2025 (frente a $1,7 millones en el periodo anterior). Los ingresos por financiamiento incluyeron aproximadamente $8,7 millones de una oferta pública, ejercicios de warrants y emisiones preferentes; la compañía indica que necesitará fondos adicionales para cubrir las necesidades de efectivo durante los próximos 12 meses. Se divulgan además combinaciones y disposiciones empresariales materiales (transacción NTI y documento por cobrar relacionado de $4.803.175) y obligaciones de liquidación (pagos programados por un total de $5.000.000 bajo un term sheet).
NAYA Biosciences는 2025년 6월 30일로 종료된 기간의 요약 실적 및 주요 거래를 공시합니다. 연결 매출은 $3,500,839로 보고되었습니다. 공시서에는 유의미한 손실 및 비현금성 비용이 포함되어 있으며, 손상차손 $1,397,353 및 $14,645,069와 공시표에 표시된 순손실 $(5,284,858) 및 $(22,688,444)이 기재되어 있습니다. 회사는 영업권 $5,878,986 및 상표권, 경쟁금지계약 등 유한수명 무형자산을 계상하고 있습니다.
유동성 및 자금조달 활동이 강조됩니다: 회사는 유동성 수치로 $2,270만 및 $380만(표시 기준), 누적적자 약 $90.2백만, 2025년 6월 30일로 끝나는 6개월 동안 영업활동으로 인한 순현금유출 약 $5.3백만(전기 $1.7백만 대비)을 보고했습니다. 자금조달 수익에는 공개모집, 워런트 행사 및 우선주 발행으로 약 $8.7백만이 포함되며, 회사는 향후 12개월 동안 현금 필요를 충족하기 위해 추가 자금이 필요할 것이라고 명시하고 있습니다. 주요 기업결합 및 처분(NTI 거래 및 관련 미수금 $4,803,175) 및 합의 의무(조건서에 따른 총 $5,000,000의 예정 지급)도 공개되어 있습니다.
NAYA Biosciences présente des résultats condensés et des opérations matérielles pour la période close le 30 juin 2025. Le chiffre d’affaires consolidé s’élève à 3 500 839 $. Le dépôt fait état de pertes significatives et de charges non monétaires, notamment des dépréciations de 1 397 353 $ et 14 645 069 $, ainsi que des pertes nettes indiquées de (5 284 858 $) et (22 688 444 $) dans les tableaux divulgués. La société comptabilise un goodwill de 5 878 986 $ et des actifs incorporels à durée déterminée, incluant des enseignes et des accords de non‑concurrence.
La liquidité et les opérations de financement sont mises en évidence : la société déclare des disponibilités de 22,7 M$ et 3,8 M$ (telles que présentées), un déficit accumulé d’environ 90,2 M$ et des flux de trésorerie nets utilisés par les activités opérationnelles d’environ 5,3 M$ pour les six mois clos le 30 juin 2025 (contre 1,7 M$ sur la période précédente). Les recettes de financement comprennent environ 8,7 M$ provenant d’une offre publique, de l’exercice de bons et d’émissions de actions privilégiées ; la société indique qu’elle aura besoin de financements supplémentaires pour couvrir ses besoins de trésorerie au cours des 12 prochains mois. Sont également divulguées des opérations de regroupement et de cession significatives (transaction NTI et créance associée de 4 803 175 $) ainsi que des obligations de règlement (paiements programmés totalisant 5 000 000 $ au titre d’un term sheet).
NAYA Biosciences legt komprimierte Ergebnisse und wesentliche Transaktionen für den zum 30. Juni 2025 endenden Zeitraum vor. Der konsolidierte Umsatz wird mit $3.500.839 ausgewiesen. Die Einreichung zeigt erhebliche Verluste und nicht zahlungswirksame Aufwendungen, darunter Wertminderungen in Höhe von $1.397.353 und $14.645.069, sowie ausgewiesene Nettoverluste in den Tabellen von $(5.284.858) und $(22.688.444). Das Unternehmen bilanziert einen Geschäfts- oder Firmenwert von $5.878.986 sowie immaterielle Vermögenswerte mit begrenzter Nutzungsdauer, darunter Marken und Wettbewerbsverbotsvereinbarungen.
Liquidität und Finanzierungsaktivitäten werden hervorgehoben: Das Unternehmen meldet Liquiditätspositionen von $22,7 Mio. und $3,8 Mio. (wie dargestellt), einen kumulierten Fehlbetrag von rund $90,2 Mio. sowie einen Netto-Cashabfluss aus laufender Geschäftstätigkeit von rund $5,3 Mio. für die sechs Monate zum 30. Juni 2025 (gegenüber $1,7 Mio. im Vorjahreszeitraum). Finanzierungseinnahmen umfassten etwa $8,7 Mio. aus einer öffentlichen Platzierung, Warrant-Ausübungen und Vorzugsaktienemissionen; das Unternehmen gibt an, weitere Mittel zu benötigen, um den Cash-Bedarf in den nächsten 12 Monaten zu decken. Wesentliche Unternehmenszusammenschlüsse und Veräußerungen (NTI-Transaktion und zugehörige Forderung in Höhe von $4.803.175) sowie Vergleichsverpflichtungen (geplante Zahlungen insgesamt $5.000.000 im Rahmen eines Term Sheets) werden offengelegt.
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INVO FERTILITY, INC. FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025
TABLE OF CONTENTS
| Item | Page Number | |
| PART I. FINANCIAL INFORMATION | ||
| 1. | Financial Statements (Unaudited): | 4 |
| Consolidated Balance Sheet as of June 30, 2025 (Unaudited) and December 31, 2024 | 4 | |
| Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024 (Unaudited) | 5 | |
| Consolidated Statements of Stockholders’ Equity for the six months ended June 30, 2025 and 2024 (Unaudited) | 6 | |
| Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024 (Unaudited) | 7 | |
| Notes to the Consolidated Financial Statements | 8 | |
| 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 28 |
| 3. | Quantitative and Qualitative Disclosures about Market Risks | 41 |
| 4. | Controls and Procedures | 41 |
| PART II. OTHER INFORMATION | ||
| 1. | Legal Proceedings | 42 |
| 1A. | Risk Factors | 42 |
| 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 42 |
| 3. | Defaults Upon Senior Securities | 42 |
| 4. | Mine Safety Disclosure | 42 |
| 5. | Other Information | 42 |
| 6. | Exhibits | 43 |
| Signatures | 44 | |
| 2 |
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; |
| ● | 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.
| 3 |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
INVO FERTILITY, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (audited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Inventory | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Current assets held for sale | - | |||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Lease right of use | ||||||||
| Intangible assets, net | ||||||||
| Goodwill | ||||||||
| Equity investments | ||||||||
| Note receivable | - | |||||||
| Investment in NAYA | - | |||||||
| Noncurrent assets held for sale | - | |||||||
| Total assets | $ | $ | ||||||
| LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Accrued compensation | ||||||||
| Convertible notes payable – current portion, net | ||||||||
| Notes payable – related parties, net | ||||||||
| Deferred revenue | ||||||||
| Lease liability, current portion | ||||||||
| Additional payments for acquisition, current portion | ||||||||
| Other current liabilities | ||||||||
| Current liabilities held for sale | - | |||||||
| Total current liabilities | ||||||||
| Notes payable, net of current portion | ||||||||
| Lease liability, net of current portion | ||||||||
| Additional payments for acquisition, net of current portion | ||||||||
| Total liabilities | ||||||||
| Mezzanine equity | ||||||||
| Series C-2 Preferred Stock $ |
- | |||||||
| Stockholders’ equity | ||||||||
| Series C-1 Preferred
Stock, $ | - | |||||||
| Series C-2 Preferred Stock
$ | - | |||||||
| Preferred stock value | - | |||||||
| Common Stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities, mezzanine equity, and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 4 |
INVO FERTILITY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue: | ||||||||||||||||
| Clinic revenue | $ | $ | $ | $ | ||||||||||||
| Product revenue | ||||||||||||||||
| Total revenue | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| Cost of revenue | ||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||
| Research and development expenses | - | - | - | |||||||||||||
| Impairment loss | - | - | ||||||||||||||
| (Gain) loss on disposal of fixed assets | - | ( | ) | - | ||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Gain (loss) from equity method joint ventures | ( | ) | ( | ) | ||||||||||||
| Gain on lease termination | - | - | - | |||||||||||||
| Loss on debt extinguishment | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gain on settlement (Note 17) | - | - | ||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss from continuing operations before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income taxes | - | - | - | |||||||||||||
Net loss from continuing operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Discontinued operations (Note 3) | ||||||||||||||||
| Loss on disposal of NTI | ( | ) | - | ( | ) | - | ||||||||||
| Loss on discontinued operations of NTI | ( | ) | - | ( | ) | - | ||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss from continuing operations per share | ||||||||||||||||
| Basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Loss from discontinued operations per common share | ||||||||||||||||
| Basic | $ | ( | ) | $ | - | $ | ( | ) | $ | - | ||||||
| Diluted | $ | ( | ) | $ | - | $ | ( | ) | $ | - | ||||||
| Loss per common share: | ||||||||||||||||
| Basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 5 |
INVO FERTILITY, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Total | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
| Stockholders’ Equity | Mezzanine Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Series A Preferred Stock | Series B Preferred Stock | Series C-1 Preferred Stock | Additional Paid-in | Accumulated | Series C-2 Preferred Stock | ||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Total | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
| Balances, December 31, 2023 | $ | - | $ | - | $ | - | $ | - | $ | $ | ( | ) | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||
| Common stock issued to directors and employees | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Common stock issued for services | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Preferred stock issued | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Stock options issued to directors and employees as compensation | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Net Loss | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | - | - | |||||||||||||||||||||||||||||||||||||
| Balances, March 31, 2024 | $ | $ | $ | - | - | $ | $ | ( | ) | $ | - | - | ||||||||||||||||||||||||||||||||||||||||
| Common stock issued to directors and employees | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Common stock issued to service providers | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Preferred stock issued | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Stock issued for cash | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||
| Warrants issued with notes payable | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Convertible note modification/extinguishment | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Warrants issued | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Debt conversion | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Warrant exercise | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||
| Stock options issued to directors and employees | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Deemed dividend | - | - | - | - | - | - | - | - | ( | ) | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Net loss attributable to INVO Fertility, Inc | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | - | - | |||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | - | - | ( | ) | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
| Balances, December 31, 2024 | $ | - | $ | - | - | $ | - | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||||
| Common stock issued, net of fees and expenses | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||
| Preferred stock redemption | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Warrant exercise - cashless | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Warrant exercise - prefunded | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||
| Stock options issued to directors and employees as compensation | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Accrued dividend on preferred stock | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | - | - | |||||||||||||||||||||||||||||||||||||
| Rounding for reverse split | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | - | - | |||||||||||||||||||||||||||||||||||||
| Balances, March 31 2025 | $ | - | $ | - | - | $ | - | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Total | |||||||||||||||||||||||||||||||||||||||
| Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Series A Preferred Stock | Series B Preferred Stock | Series C-1 Preferred Stock | Series C-2 Preferred Stock | Additional Paid-In | Accumulated | |||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Total | |||||||||||||||||||||||||||||||||||||||
| Balances, March 31 2025 | $ | - | $ | - | - | $ | - | - | - | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||||||
| Balances | $ | - | $ | - | - | $ | - | - | - | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||||||
| Reclassification of Series C-2 Preferred stock from mezzanine equity | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Common stock issued, net of fees and expenses | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Debt conversion | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Warrant exercise - cashless | - | - | - | - | - | - | - | - | ( | ) | - | - | |||||||||||||||||||||||||||||||||||||||
| Warrant exercise - prefunded | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Warrant exercise | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| C-1 to C-2 exchange | - | - | - | - | - | - | ( | ) | ( | ) | ( | ) | - | ||||||||||||||||||||||||||||||||||||||
| Divesture of NAYA | - | - | - | - | - | - | ( | ) | ( | ) | - | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||
| Preferred stock issued | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Dividends on preferred stock | - | - | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Stock options issued to directors and employees as compensation | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Balances, June 30, 2025 | $ | - | $ | - | - | $ | - | - | - | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||||||
| Balances | $ | - | $ | - | - | $ | - | - | - | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 6 |
INVO FERTILITY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| 2025 | 2024 | |||||||
| For the Six Months Ended | ||||||||
| June 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows used in operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock compensation issued for services | ||||||||
| Stock compensation issued to directors and employees | - | |||||||
| Fair value of stock options issued to employees | ||||||||
| Non-cash compensation for services | ||||||||
| Amortization of discount on notes payable | ||||||||
| Loss (gain) from equity method investment | ( | ) | ||||||
| Loss from debt extinguishment | ||||||||
| Impairment loss | - | |||||||
| Loss from disposal of assets | - | |||||||
| Loss on disposition | - | |||||||
| Gain on settlement | ( | ) | - | |||||
| Gain on lease termination | - | ( | ) | |||||
| Depreciation and amortization | ||||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Inventory | ||||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Accrued compensation | ( | ) | ||||||
| Deferred revenue | ||||||||
| Other current liabilities | ( | ) | - | |||||
| Leasehold liability | ||||||||
| Accrued interest | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash used in investing activities: | ||||||||
| Payments to acquire property, plant, and equipment | ( | ) | ( | ) | ||||
| Proceeds from sale of fixed assets | - | |||||||
| Divesture of NAYA | ( | ) | - | |||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash from financing activities: | ||||||||
| Proceeds from the sale of notes payable | - | |||||||
| Proceeds from the sale of common stock, net of offering costs | ||||||||
| Proceeds from sale of preferred stock | ||||||||
| Proceeds from warrant exercise | ||||||||
| Preferred stock redemption | ( | ) | - | |||||
| Principal payments on notes payable | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| Increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | $ | ||||||
| Noncash activities: | ||||||||
| Preferred stock redemption adjustment | - | |||||||
| Common and preferred stock issued upon conversion notes payable and accrued interest | ||||||||
| Preferred stock exchange | - | |||||||
| Fair value of warrants issued with debt | - | |||||||
| Deemed dividend | - | |||||||
| Common stock issued for accounts payable | - | |||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 7 |
INVO FERTILITY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2025
(UNAUDITED)
Note 1 – Summary of Significant Accounting Policies
Description of Business
INVO Fertility, Inc., (“INVO” or the “Company”) is a healthcare services and technology company focused on the fertility marketplace and dedicated to expanding access to assisted reproductive technology (“ART”) care for patients in need. The Company’s principal commercialization strategy is focused on building, acquiring and operating fertility clinics, including “INVO Centers” dedicated primarily to offering the intravaginal culture (“IVC”) procedure enabled by its INVOcell medical device (“INVOcell”) and US-based, profitable in vitro fertilization (“IVF”) clinics. As of the date of this filing, the Company has two operational INVO Centers and one IVF clinic in the United States. The Company also continues to engage in the sale and distribution of its INVOcell technology solution into third-party owned and operated fertility clinics. The Company’s proprietary technology, INVOcell, is a revolutionary medical device that allows fertilization and early embryo development to take place in vivo within the woman’s body. This treatment solution is the world’s first IVC technique for the incubation of oocytes and sperm during fertilization and early embryo development. The Company intends to seek out additional, innovative fertility-focused technologies, to license or acquire in order to utilize within its operating clinics. In addition, the Company owns 19.9% of NAYA Therapeutics, Inc. (“NTI”), a clinical-stage oncology and autoimmune technology business, after divesting the remaining 80.1% in the second quarter of 2025 to focus exclusively on the fertility marketplace.
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, 2025, 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
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.
Discontinued Operations
The Company accounted for the divesture of its NAYA Therapeutics (“NTI”) subsidiary in accordance with ASC 205 Discontinued Operations (“ASC 205”). ASC 205 requires that a component of an entity that has been disposed of or is classified as held for sale, has operations and cash flows that can be clearly distinguished from the rest of the entity, and represents a strategic shift that has (or will have) a major effect on the reporting entity’s financial results must be reported as discontinued operations. The divesture of NTI met the held-for-sale criteria as defined in ASC 205.
In the period a component of an entity is classified as a discontinued operation, the results of operations for the periods presented are reclassified into separate line items in the unaudited condensed consolidated statements of operations and the assets and liabilities of the discontinued operation are also reclassified into separate line items on the related condensed consolidated balance sheets. Prior period amounts are also adjusted to reflect discontinued operations presentation. All amounts included in the notes to the unaudited condensed consolidated financial statements relate to continuing operations unless otherwise noted.
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.
| 8 |
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
| 9 |
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.
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.
Derivatives
The Company reviews the conversion features of all liability and equity instruments based on the requirements of ASC 815, “Derivatives and Hedging” to determine if the conversion feature represents an embedded derivative. The Company determined there were no embedded derivatives as of June 30, 2025.
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, 2025, 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. |
| 10 |
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 fertility clinics is typically recognized at the time the service is performed.
The Company’s Therapeutics segment did not generate revenue. This segment was divested during the second quarter of 2025.
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 six months ended June 30, 2025, and 2024, 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
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Net loss (numerator) | $ | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Basic and diluted weighted-average number of common shares outstanding (denominator) | ||||||||||||||||
| Basic and diluted net loss per common share | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
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
| 2025 | 2024 | |||||||
| As of June 30, | ||||||||
| 2025 | 2024 | |||||||
| Options | ||||||||
| Convertible notes and interest | ||||||||
| Preferred stock | ||||||||
| Warrants and unit purchase options | ||||||||
| Total | ||||||||
Recently Adopted Accounting Pronouncements
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures, or ASU 2023-07, which requires an enhanced disclosure of segments on an annual and interim basis, including the title of the chief operating decision maker, significant segment expenses, and the composition of other segment items for each segment’s reported profit. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted, and adoption of ASU 2023-07 should be applied retrospectively to all prior periods presented in the financial statements. The Company adopted this standard during the year ended December 31, 2024.
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, 2025, and 2024, the Company incurred a net loss of approximately $
As of June 30, 2025, we had approximately $
| 11 |
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 2025, we received $
Although the Company’s audited consolidated financial statements for the year ended December 31, 2024 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 consolidated financial statements for the year ended December 31, 2024 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 consolidated 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
NAYA Therapeutics
On October 11, 2024 (the “Effective Time”), the Company, a wholly owned subsidiary (“Merger Sub”), and NTI entered into an Amended and Restated Agreement and Plan of Merger (the “A&R Merger Agreement”) and consummated the transactions contemplated thereby (the “Merger”). Upon the terms and subject to the conditions set forth in the A&R Merger Agreement, Merger Sub merged with and into NTI, with NTI continuing as the surviving corporation and a wholly owned subsidiary of the Company.
At the Effective Time and as a result of the consummation of the Merger:
●
Each share of Class A common stock, par value $
●
Certain outstanding debt obligations of NTI, including a portion of an amended and restated senior secured convertible debenture issued
to Five Narrow Lane LP (“FNL”), with a combined principal balance of $
●
The remaining balance of the amended and restated senior secured convertible debenture issued to FNL in the amount of $
The allocation of the purchase price is as follows:
Schedule of Allocation of Purchase Price
| Consideration given: | ||||
| Common Stock | $ | |||
| NAYA Acquisition Pre-funded Warrants | ||||
| Series C-1 Preferred | ||||
| Series C-2 Preferred | ||||
| Convertible Debenture | ||||
| Business acquisition cost | ||||
| Assets and liabilities acquired: | ||||
| Cash | ||||
| Other current assets | ||||
| Tradename | ||||
| In process R&D | ||||
| Goodwill | ||||
| AP & accrued liabilities | ( | ) | ||
| Debt | ( | ) | ||
| Total assets and liabilities acquired |
| 12 |
On
June 2, 2025, the Company divested a majority stake in NTI. The Company elected to redeem all outstanding shares of Series C-1
Preferred at a redemption price of
The Company recognized a loss of $
Schedule of Allocation of Purchase Price
| Consideration received: | ||||
| Series C-1 Preferred | ||||
| NTI Note Receivable | ||||
| NTI Series A Preferred | ||||
| Business acquisition cost | $ | |||
| Assets and liabilities divested: | ||||
| Cash | ||||
| Other current assets | ||||
| Tradename | ||||
| In process R&D | ||||
| Goodwill | ||||
| AP & accrued liabilities | ( | ) | ||
| Debt | ( | ) | ||
| Net assets | $ | |||
| Loss on disposition | $ | |||
The Company’s consolidated financial statements for the six months ended June 30, 2025, include NTI’s results of operations through June 2, 2025. The Company’s consolidated financial statements reflect the 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 as well as deconsolidation adjustments in accordance with ASC 810 “Consolidation”, whereby the loss upon disposition was recognized.
The carrying amounts of major classes of assets and liabilities held for sale are as follows:
Schedule of Assets and Liabilities Held for Sale
| December 31, 2024 | ||||
| ASSETS | ||||
| Cash | ||||
| Prepaid expenses and other current assets | ||||
| Intangible assets, net | ||||
| Goodwill | ||||
| Total assets held for sale | $ | |||
| LIABILITIES | ||||
| Accounts payable and accrued liabilities | ||||
| Notes payable, net | ||||
| Total liabilities held for sale | $ | |||
The major classes of line items constituting loss from discontinued operations are as follows:
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue | - | - | - | - | ||||||||||||
| Cost of revenue | - | - | - | - | ||||||||||||
| Selling, general and administrative expenses | - | - | ||||||||||||||
| Research and development expenses | - | - | ||||||||||||||
| Impairment loss | - | - | - | |||||||||||||
| Depreciation and amortization | - | - | - | - | ||||||||||||
| Interest expense | - | - | ||||||||||||||
| Loss on discontinued operations | $ | $ | - | $ | $ | - | ||||||||||
There were no depreciation, amortization, capital expenditures, or significant operating and investing noncash items related to the discontinued operations
| 13 |
Note 4 – Variable Interest Entities
Consolidated VIEs
Bloom INVO, LLC
On June 28, 2021, INVO Centers LLC (“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 the Company’s commitment to contribute up to $
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 $
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, 2025, the Company invested $
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 HRCFG party owns
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, 2025, the Company invested $
| 14 |
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, 2025 | December 31, 2024 | |||||||||||
| HRCFG INVO, LLC | Alabama, United States | % | $ | |||||||||||
| Total investment in unconsolidated VIEs | $ | |||||||||||||
Earnings from investments in unconsolidated VIEs were as follows:
Schedule of Earnings from Investments in Unconsolidated Variable Interest Entities
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| HRCFG INVO, LLC | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| Total earnings (loss) from unconsolidated VIEs | ( | ) | ( | ) | ||||||||||||
The following tables summarize the combined unaudited financial information of our unconsolidated VIEs:
Schedule of Financial Information of Investments in Unconsolidated Variable Interest Entities
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Statements of operations: | ||||||||||||||||
| Operating revenue | $ | $ | $ | $ | ||||||||||||
| Operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net profit (loss) | ( | ) | ||||||||||||||
June 30, 2025 | December 31, 2024 | |||||||
| Balance sheets: | ||||||||
| Current assets | $ | |||||||
| Long-term assets | ||||||||
| Current liabilities | ( | ) | ( | ) | ||||
| Net assets | $ | |||||||
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
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Bloom INVO, LLC | ||||||||||||||||
| INVOcell revenue | $ | $ | $ | $ | ||||||||||||
| Unconsolidated VIEs | ||||||||||||||||
| INVOcell revenue | $ | - | $ | - | $ | $ | ||||||||||
The Company had balances with VIEs as follows:
Summary of Balances with Variable Interest Entities
June 30, 2025 | December 31, 2024 | |||||||
| Bloom INVO, LLC | ||||||||
| Accounts receivable | $ | |||||||
| Notes payable | ||||||||
| Unconsolidated VIEs | ||||||||
| Accounts receivable | $ | |||||||
| 15 |
Note 6 – Inventory
Components of inventory are as follows:
Schedule of Inventory
June 30, 2025 | December 31, 2024 | |||||||
| Raw materials | $ | $ | ||||||
| Finished goods | ||||||||
| Total inventory | $ | $ | ||||||
Note 7 – Property and Equipment
The estimated useful lives and accumulated depreciation for equipment are as follows as of June 30, 2025, and December 31, 2024:
Schedule of Estimated Useful Lives of Property and Equipment
Estimated Useful Life | ||
| Manufacturing equipment | ||
| Medical equipment | ||
| Office equipment |
Schedule of Property and Equipment
June 30, 2025 | December 31, 2024 | |||||||
| Manufacturing equipment | $ | $ | ||||||
| Medical equipment | ||||||||
| Office equipment | ||||||||
| Leasehold improvements | ||||||||
| Property, plant and equipment, gross | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total equipment, net | $ | $ | ||||||
During
the six months ended June 30, 2025, and 2024, the Company recorded depreciation expense of $
For
the six months ended June 30, 2025, and 2024, the Company recognized a loss on disposal of fixed assets of $
Note 8 – Intangible Assets and Goodwill
Components of intangible assets are as follows:
Schedule of Finite-Lived Intangible Assets
June 30, 2025 | December
31, 2024 | |||||||
| Tradename | $ | $ | ||||||
| Noncompetition agreement | ||||||||
| Goodwill | ||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Total intangible assets | $ | $ | ||||||
As
part of the Wisconsin Fertility Institute (“WFI”) acquisition, that closed on August 10, 2023, the Company acquired a tradename
valued at $
As
part of the NTI acquisition, that closed on October 11, 2024, the Company acquired a tradename valued at $
During
the six months ended June 30, 2025, and 2024, the Company recorded amortization expenses related to intangible assets of $
Goodwill
has an indefinite useful life and is therefore not amortized. The Company performed an impairment analysis as of March 31, 2025, and determined
the goodwill of NTI was impaired by $
The
Company determined an impairment analysis was needed for the NTI goodwill due to an overall decline in the Company’s stock price
as of March 31, 2025. The Company engaged an independent third-party valuation specialist to complete the impairment analysis. The valuation
specialist used a discounted cash flow method to determine the fair value of NTI was less than the carrying value and therefore goodwill
was impaired by $
| 16 |
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 (“ROU”) asset and corresponding liability to report the present value of the total lease payments, with appropriate interest calculation. The Company utilizes 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, the Company’s borrowing rate under other debt facilities, and the market spread between secured and unsecured borrowings, 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. 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, 2025, 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, 2025 | ||||
| Assets | ||||||
| ROU assets – operating lease | Other assets | $ | ||||
| Total ROU assets | $ | |||||
| Liabilities | ||||||
| Current operating lease liability | Current liabilities | $ | ||||
| Long-term operating lease liability | Other liabilities | |||||
| Total lease liabilities | $ | |||||
Future minimum lease payments as of June 30, 2025, were as follows:
Schedule of Future Minimum Lease Payments
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 and beyond | ||||
| Total future minimum lease payments | $ | |||
| Less: Interest | ( | ) | ||
| Total operating lease liabilities | $ |
For
the six months ended June 30, 2025, the weighted average remaining lease term for operating leases was
For
the six months ended June 30, 2025, and 2024, the Company recognized a gain on lease termination of $0 and $
| 17 |
Note 10 – Notes Payable
Notes payables consisted of the following:
Schedule of Notes Payable
June 30, 2025 | December 31, 2024 | |||||||
| Related party demand notes with
a | $ | $ | ||||||
| Convertible notes payable. | ||||||||
| Convertible note payable. | - | |||||||
| Cash advance agreement | ||||||||
| Note payable. | ||||||||
| Convertible debenture payable. | ||||||||
| Note payable. | - | |||||||
| Other debt | - | |||||||
| Long term debt gross | - | |||||||
| Less debt discount and financing costs | ( | ) | ( | ) | ||||
| Total, net of discount | ||||||||
Less current portion | ||||||||
Long-term portion of notes payable | $ | $ | ||||||
Related Party Demand Notes
In
the fourth quarter of 2022, the Company received $
In
consideration for subscribing to the JAG Note for $
In
the fourth quarter of 2022, the Company received $
The financing fees for all demand notes were recorded as a debt discount and, as of June 30, 2025, the Company had fully amortized the discount.
For
the six months ended June 30, 2025, the Company incurred $
| 18 |
Standard Merchant Cash Advance
On
September 25, 2024, the Company entered into a Standard Merchant Cash Advance Agreement (the “Sept 24 Cash Advance Agreement”)
with Cedar under which Cedar purchased $
The
financing fees were recorded as a debt discount. For the six months ended June 30, 2025, the Company amortized $
Revenue Loan and Security Agreement
On
September 29, 2023, the Company, Steven Shum, as a Key Person, and the Company’s wholly-owned subsidiaries Bio X Cell, Inc,
INVO CTR, Wood Violet Fertility LLC (“Wood Violet”), 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 $
The
financing fees for the RSLA Loan were recorded as a debt discount. For the six months ended June 30, 2025, the Company amortized $
On
September 24, 2024, the Company, the Lender, Steven Shum and the Guarantors entered into an amendment to the Loan Agreement, pursuant
to which the Lender approved the Sept 24 Cash Advance Agreement and the Company agreed to increase the “Minimum Interest”
(as defined in the Loan Agreement) by 0.15x effective as of December 1, 2024, if the Company did not receive equity investment of at
least $
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 $
The financing fees were recorded as a debt discount. As of June 30, 2025, the debt discount was fully amortized.
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 $
The
FirstFire Note carried an interest rate of twelve percent (
The
financing fees for the FirstFire Note were recorded as a debt discount. For the six months ended June 30, 2025, the Company amortized
$
On
October 14, 2024, $
| 19 |
7.0% Senior Secured Convertible Debenture
In
connection with the NTI Merger, on October 11, 2024, the Company issued the Convertible Debenture to FNL in an exchange of an
outstanding note of NTI held by FNL. The Convertible Debenture carried an interest rate of seven percent (
Conversion.
At any time after the Company’s stockholders approve the issuance of any Company common stock upon conversion of the
Convertible Debenture, the holder of the Convertible Debenture would be entitled to convert any portion of the outstanding and
unpaid principal amount and accrued interest into shares of Company common stock. The initial conversion price of the Convertible
Debenture was $
Prepayment. The Company could not prepay the Convertible Debenture without the prior written consent of FNL.
Monthly
Redemption. Commencing March 14, 2025, and on the 14th of each month thereafter until the Maturity Date, the Company could redeem
$
Mandatory
Redemption. While any portion of the Convertible Debenture was outstanding, if the Company received gross proceeds of more than
$
The
Convertible Debenture contained events representations, warranties, covenants, and events of default that were customary for similar transactions.
Upon an event of default, the Convertible Debenture became immediately due and payable, and the Borrower was subject to a default rate
of interest of
In
November 2024, the Company received an additional $
Amended and Restated Debenture
On
May 23, 2025, the Company agreed to exchange the Convertible Debenture for an amended and restated debenture (the “Amended and
Restated Debenture”). The Amended and Restated Debenture carries an interest rate of seven percent (
Following
the Company’s stockholders approval of the issuance of any Company common stock upon conversion of the Amended and Restated
Debenture on June 25, 2025, the holder of the Amended and Restated Debenture became entitled to convert any portion of the outstanding and unpaid
principal amount and accrued interest into shares of Company common stock at an initial conversion price of $
The Company may not prepay the Amended and Restated Debenture without the prior written consent of FNL.
Commencing
August 15, 2025, and on the 15th of each month thereafter until the maturity date, the Company will be required to redeem
$
While
any portion of the Amended and Restated Debenture is outstanding, if the Company receives gross proceeds of more than $
The Amended and Restated Debenture contains events representations, warranties, covenants, and events of default that are customary for similar transactions. Upon an event of default, the Amended and Restated Debenture becomes immediately due and payable, and the Company is subject to a default rate of interest of 15% per annum and a default sum as stipulated.
On
June 30, 2025, the Company entered into an inducement letter agreement (the “AIR Exercise and Reload Agreement”) with FNL,
pursuant to which FNL agreed to exercise its Additional Investment Right to acquire
For
the six months ended June 30, 2025, the Company incurred $
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 $
In
consideration for subscribing to the JAG Note for $
| 20 |
In
the fourth quarter of 2022, the Company issued demand promissory notes in the aggregate principal amount of $
For
the six months ended June 30, 2025, the Company incurred $
As
of June 30, 2025, the Company owed accrued compensation of $
Note 12 – Stockholders’ Equity
Reverse Stock Split (March 2025)
On
February 24, 2025, the Company’s board of directors approved a reverse stock split of the Company’s common stock at a ratio
of 1-for-12 and also approved a proportionate decrease in its authorized common stock to
Reverse Stock Split (July 2025)
On
June 30, 2025, the Company’s board of directors approved a reverse stock split of the Company’s common stock at a ratio of
1-for-3 and also approved a proportionate decrease in its authorized common stock to
Increase in Authorized Common Stock
On
July 23, 2025, the stockholders of the Company approved an amendment to the Company’s Amended and Restated Articles of
Incorporation to increase its number of authorized shares of common stock from
Series C-1 Preferred Stock
On
October 14, 2024, the Company filed with the Nevada Secretary of State a Certificate of Designation (the “Series C-1 Certificate
of Designation”) of Series C-1 Convertible Preferred Stock (the “Series C-1 Preferred”) which sets forth the rights,
preferences, and privileges of the Series C-1 Preferred.
Each
share of Series C-1 Preferred had a stated value of $
| 21 |
Commencing
on the ninety-first (91st) day after the first issuance of any Series C-1 Preferred, the holders of Series C-1 Preferred became entitled
to receive dividends on the stated value at the rate of two percent (
The Series C-1 Preferred ranked senior to the Company’s common stock and junior to the Series C-2 Preferred (as defined below). Subject to the rights of the holders of any senior securities, in the event of any voluntary or involuntary liquidation, dissolution, or winding up, or sale of the Company, each holder of Series C-1 Preferred was entitled to receive its pro rata portion of an aggregate payment equal to the amount as would be paid on the Company’s common stock issuable upon conversion of the Series C-1 Preferred, determined on an as-converted basis, without regard to any beneficial ownership limitation.
Other than those rights provided by law, the Series C-1 Preferred had no voting rights. Prior to the filing of the certificate of amendment to the Series C-1 Certificate of Designation (described below), the Series C-1 Preferred were not redeemable.
On May 28, 2025, the Company filed
with the Nevada Secretary of State a certificate of amendment to the Series C-1 Certificate of Designation pursuant to which, the
Company was entitled to redeem the Series C-1 Preferred, at the Company’s option, at any time or from time to time upon not
less than 2 calendar days written notice to the holders prior to the date fixed for redemption thereof, at a redemption price of
On May 28, 2025, the Company
gave notice to the holders of the Series C-1 Preferred that the Company elected to redeem, and would redeem, on May 31, 2025, all of the
issued and outstanding shares of its Series C-1 Preferred (including any accrued but unpaid dividends) at a redemption price of
Series C-2 Preferred Stock
On
October 14, 2024, the Company filed with the Nevada Secretary of State a Certificate of Designation (the “Series C-2 Certificate
of Designation”) of Series C-2 Convertible Preferred Stock (the “Series C-2 Preferred”) which sets forth the rights,
preferences, and privileges of the Series C-2 Preferred.
Each
share of Series C-2 Preferred has a stated value of $
Commencing
on the ninety-first (91st) day after the first issuance of any Series C-2 Preferred, the holders of Series C-2 Preferred were entitled
to receive dividends on the stated value at the rate of ten percent (
The
Series C-2 Preferred ranks senior to the Company’s common stock and to the Series C-1 Preferred. Subject to the rights of the holders
of any senior securities, in the event of any voluntary or involuntary liquidation, dissolution, or winding up, or sale of the Company,
each holder of Series C-2 Preferred shall be entitled to receive its pro rata portion of an aggregate payment equal to the greater of
(a)
Other than those rights provided by law, the Series C-2 Preferred has no voting rights. The Series C-2 Preferred was only redeemable upon a “Bankruptcy Triggering Event” or a “Change of Control” that may have occurred after May 9, 2025. Due to the Series C-2 Preferred being redeemable under these triggering events it was classified as mezzanine equity until it was amended on June 27, 2025, to remove the triggering event redemption (as noted below). The Series C-2 Preferred is now classified as permanent equity due to these changes.
On May 23, 2025, the Company filed with the Nevada Secretary of State the Certificate of Amendment to the Series C-2 Certificate of Designation pursuant to which, among other things, holders of Series C-2 Preferred are entitled to receive dividends payable in Series C-2 Preferred, subject to meeting certain conditions (the “Equity Conditions”).
In addition, upon issuance of AIR Preferred Shares (as defined below), the conversion price of the Series C-2 Preferred shall be deemed to be the lowest of (i) the conversion price as in effect on the date that the Holder exercises its Additional Investment Right (as defined above), and (ii) the greater of (x) the Floor Price (as defined in the Certificate of Amendment to the Series C-2 Certificate of Designations) and (y) 85% of the arithmetic average of the three (3) lowest VWAPs during the ten (10) trading days prior to the date of the exercise of the Additional Investment Right.
On
June 27, 2025, the Company filed with the Nevada Secretary of State a Certificate of Amendment to Certificate of Designation of the Series
C-2 Non-Voting Convertible Preferred Stock of the Company (the “2nd Certificate of Amendment”), which amends
and restates the rights, preferences, and privileges of the Series C-2 Preferred. Twenty thousand (20,000) shares of Series C-2 Preferred
with a stated value of $
The 2nd Certificate of Amendment removed the “Bankruptcy Triggering Event” and “Change of Control” redemption rights.
| 22 |
Additional Investment Right
Effective
as of May 23, 2025, the Company and FNL entered into an agreement to amend that certain Securities Purchase Agreement, dated as of January
3, 2024, between FNL and NTI (the “Securities Purchase Agreement”) to provide that, for so long as the Amended and Restated
Debenture or shares of Series C-2 Preferred are outstanding, FNL shall have the right (the “Additional Investment Right”),
exercisable at any time and from time to time, beginning on or after May 23, 2025, to purchase up to $
On June 26, 2025, FNL exercised
its Additional Investment Right to acquire
On
June 30, 2025, the Company and FNL entered to an Amendment to Securities Purchase Agreement (the “Amendment”) to allow FNL
to elect, under the Additional Investment Right, to purchase the AIR Preferred Shares for cash (an “AIR Purchase”) or to
exchange the AIR Preferred Shares for all or a portion of the Amended and Restated Debenture, with the aggregate stated value of such
AIR Preferred Shares received in such exchange equal to the principal amount of the Amended and Restated Debenture so exchanged, plus
any accrued and unpaid interest thereon (an “AIR Exchange”). Any Additional Investment Right may only be exercised in a minimum
amount of $
On
June 30, 2025, the Company entered into an inducement letter agreement (the “AIR Exercise and Reload Agreement”) with FNL,
pursuant to which FNL agreed to exercise its Additional Investment Right to acquire
Pursuant
to the AIR Exercise and Reload Agreement, FNL agreed to exercise its Additional Investment Right in consideration for the Company’s
agreement to issue
Jan 2025 Public Offering
On
January 14, 2025, the Company, consummated a public offering (the “Jan 2025 Offering”) of
Also
in connection with the Jan 2025 Offering, on January 13, 2025, the Company entered into a placement agency agreement with Maxim Group
LLC (the “Placement Agent”), pursuant to which
The
Company received net proceeds of $
In
connection with the Jan 2025 Offering, the Company entered into a Preferred Stock Redemption Agreement with a holder of the Company’s
Series C-2 Convertible Preferred Stock pursuant to which the Company agreed to purchase and acquire from the holder
Six months ended June 30, 2025
In
January 2025, the Company issued
In
January 2025, the Company issued
During
the first six months of 2025, the Company issued
In May 2025, the Company issued
In
May 2025, the Company issued
In May 2025, the Company issued 12,756 shares of common stock upon the cashless exercise of the NAYA Acquisition Prefunded Warrants. These shares were issued pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended. The Company did not receive any cash proceeds from this issuance.
In
June 2025, the Company issued
Note 13 – Equity-Based Compensation
Equity Incentive Plans
In
October 2019, the Company adopted the 2019 Plan. Under the 2019 Plan, the Company’s board of directors is authorized to grant
stock options to purchase common stock, restricted stock units, and restricted shares of common stock to its employees, directors,
and consultants. The 2019 Plan initially provided for the issuance of
Options
granted under the 2019 Plan generally have a life of
| 23 |
The following table sets forth the activity of the options to purchase common stock under the 2019 Plan.
Schedule of Stock Options Activity
Number of Shares | Weighted Average Exercise Price | Aggregate Intrinsic Value | |||||||||||
| Outstanding as of December 31, 2024 | $ | $ | - | ||||||||||
| Granted | - | - | - | ||||||||||
| Exercised | - | - | - | ||||||||||
| Canceled | ( | ) | - | ||||||||||
| Balance as of June 30, 2025 | $ | $ | - | ||||||||||
| Exercisable as of June 30, 2025 | $ | $ | - | ||||||||||
The fair value of each option granted is estimated as of the grant date using the Black-Scholes option pricing model with the following assumptions:
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions
Six months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Risk-free interest rate range | - | % | % | |||||
| Expected life of option-years | - | |||||||
| Expected stock price volatility | - | % | % | |||||
| Expected dividend yield | - | % | - | % | ||||
The risk-free interest rate is based on U.S. Treasury interest rates, the terms of which are consistent with the expected life of the stock options. Expected volatility is based upon the average historical volatility of the common stock over the period commensurate with the expected term of the related instrument. The expected life and estimated post-employment termination behavior is based upon historical experience of homogeneous groups, executives and non-executives, within the Company. The Company does not currently pay dividends on its common stock, nor does it expect to do so in the foreseeable future.
Schedule of Share Based Payments Arrangements Options Exercised and Options Vested
Total Intrinsic Value of Options Exercised | Total Fair Value of Vested | |||||||
| Year ended December 31, 2024 | $ | - | $ | |||||
| Six months ended June 30, 2025 | $ | - | $ | |||||
For
the six months ended June 30, 2025, there were no options granted. The Company estimates the fair value of options at the grant date
using the Black-Scholes model. For all stock options granted through June 30, 2025, the weighted average remaining service period is
Restricted Stock and Restricted Stock Units
In the six months ended June 30, 2025, the Company did not grant any restricted stock units or shares of restricted stock to employees, directors, or consultants under the 2019 Plan. Restricted stock issued to employees, directors, and consultants generally vest either at grant or vest over a period of one year from the date of grant.
Note 14 – Unit Purchase Options and Warrants
The following table sets forth the activity of unit purchase options:
Schedule of Unit Purchase Option Activity
Number of Unit Purchase Options | Weighted Average Exercise Price | Aggregate Intrinsic Value | ||||||||||
| Outstanding as of December 31, 2024 | $ | $ | $ | - | ||||||||
| Granted | - | - | - | |||||||||
| Exercised | - | - | - | |||||||||
| Canceled | - | - | - | |||||||||
| Balance as of June 30, 2025 | $ | $ | $ | - | ||||||||
The following table sets forth the activity of warrants:
Schedule of Warrants Activity
Number of Warrants | Weighted Average Exercise Price | Aggregate Intrinsic Value | ||||||||||
| Outstanding as of December 31, 2024 | $ | $ | - | |||||||||
| Granted | - | |||||||||||
| Exercised | ( | ) | - | |||||||||
| Canceled | - | - | - | |||||||||
| Balance as of June 30, 2025 | $ | $ | - | |||||||||
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Jan 2025 Offering Warrants
On
January 14, 2025, the Company, consummated the Jan 2025 Offering, consisting of
Also
in connection with the Jan 2025 Offering, on January 13, 2025, the Company entered into a placement agency agreement with the
Placement Agent, pursuant to which (i)
the Placement Agent agreed to act as lead placement agent on a “best efforts” basis in connection with the Jan 2025
Offering, and (ii) the Company agreed to pay the Placement Agent an aggregate fee equal to 6.5% of the gross proceeds raised in the
Jan 2025 Offering (or 5.0% in the case of certain investors) and the Jan 2025 Placement Agent Warrants to purchase up to
Warrant Inducement
On
April 30, 2025, the Company entered into an inducement letter agreement (the “Inducement Letter Agreement”) with an institutional
investor and existing holder (the “Holder”) of certain existing warrants (the “Existing Warrants”) to purchase
up to
The issuance of the shares of Common Stock upon exercise of the Existing Warrants was registered pursuant to a registration statement on Form S-1 (File No. 333-283872), which was declared effective by the SEC on January 13, 2025.
Pursuant to the Inducement Letter Agreement, the
Holder agreed to exercise the Existing Warrants for cash at the exercise price of $
On
May 1, 2025, the Company issued
Note 15 – Segment Reporting
The Company’s Chief Operating Decision Maker (“CODM”) as defined under GAAP is the Company’s chief executive officer.
The Company defines its segments on the basis of the way in which internally reported financial information is regularly reviewed by the CODM to analyze financial performance, make decisions, and allocate resources. The Company has analyzed its operations per ASC 280 and identified three operating segments: Clinic Services, INVOcell Device, and Therapeutics. The three segments align with the Company’s distinct product and service lines. For the six months ended June 30, 2025, the Company did not have any sales or operations outside of the United States.
The Clinics Services operating segment consists of financial information for WFI and the Atlanta Clinic. The INVOcell Device operating segment consists of financial information relating to the Company’s manufacture and sales of the INVOcell. The Therapeutics segment consists of financial information relating to the Company’s recently acquired subsidiary, NTI. The Company divested 80.1% of NTI during the second quarter of 2025 and as such the Therapeutics segment consults of the results of NTI through June 2, 2025.
The tables below provide information about the Company’s segments and include a reconciliation to income before taxes:
Schedule of Company’s Segments Including a Reconciliation to Income Before Taxes
Six months ended June 30, 2025 | Fertility Clinic Services | INVOcell Device | Therapeutics | Total | ||||||||||||
| Revenue from external customers | - | |||||||||||||||
| Intersegment revenues | - | - | ||||||||||||||
| Total revenue | - | |||||||||||||||
| Reconciliation of revenue | ||||||||||||||||
| Elimination of intersegment revenue | - | - | - | ( | ) | |||||||||||
| Total consolidated revenue | ||||||||||||||||
| Less: | ||||||||||||||||
| Cost of revenue | - | |||||||||||||||
| Sales and marketing | - | - | ||||||||||||||
| General and administrative | - | |||||||||||||||
| Research and development | - | - | ||||||||||||||
| Impairment loss | - | |||||||||||||||
| Depreciation and amortization | - | |||||||||||||||
| Segment profit (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Reconciliation of net loss | ||||||||||||||||
| Other income (loss) | ||||||||||||||||
| Interest expense | ( | ) | ||||||||||||||
Loss on disposition | ( | ) | ( | ) | ||||||||||||
| Unallocated amounts: | ||||||||||||||||
| Other corporate expenses | ( | ) | ||||||||||||||
| Loss before taxes | ( | ) | ||||||||||||||
| Assets | - | |||||||||||||||
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| Six months ended June 30, 2024 | Fertility Clinic Services | INVOcell Device | Therapeutics | Total | ||||||||||||
| Revenue from external customers | - | |||||||||||||||
| Intersegment revenues | - | - | ||||||||||||||
| Total revenue | - | |||||||||||||||
| Reconciliation of revenue | ||||||||||||||||
| Elimination of intersegment revenue | - | - | - | ( | ) | |||||||||||
| Total consolidated revenue | ||||||||||||||||
| Less: | ||||||||||||||||
| Cost of revenue | - | |||||||||||||||
| Sales and marketing | - | - | ||||||||||||||
| General and administrative | - | - | ||||||||||||||
| Research and development | - | - | - | - | ||||||||||||
| Depreciation and amortization | - | |||||||||||||||
| Segment profit (loss) | - | |||||||||||||||
| Reconciliation of net loss | ||||||||||||||||
| Other income (loss) | ||||||||||||||||
| Interest expense | ( | ) | ||||||||||||||
| Unallocated amounts: | ||||||||||||||||
| Other corporate expenses | ( | ) | ||||||||||||||
| Loss before taxes | ( | ) | ||||||||||||||
| Assets | - | |||||||||||||||
No
single customer comprised
Note 16 – Income Taxes
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 effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. If a carryforward exists, the Company decides as to whether the carryforward will be utilized in the future. Currently, a valuation allowance is established for all deferred tax assets and carryforwards as their recoverability is deemed to be uncertain. If the Company’s expectations for future operating results at the federal or at the state jurisdiction level vary from actual results due to changes in healthcare regulations, general economic conditions, or other factors, it may need to adjust the valuation allowance, for all or a portion of the Company’s deferred tax assets. The Company’s income tax expense in future periods will be reduced or increased to the extent of offsetting decreases or increases, respectively, in the Company’s valuation allowance in the period when the change in circumstances occurs. These changes could have a significant impact on the Company’s future earnings.
Income
tax expense was $0 for the six months ended June 30, 2025, compared to $
Note 17 – Commitments and Contingencies
Insurance
The Company’s insurance coverage is carried with third-party insurers and includes (i) general liability insurance covering third-party exposures, (ii) statutory workers’ compensation insurance, (iii) excess liability insurance above the established primary limits for general liability and automobile liability insurance, (iv) property insurance, which covers the replacement value of real and personal property and includes business interruption, and (v) insurance covering our directors and officers for acts related to our business activities. All coverage is subject to certain limits and deductibles, the terms and conditions of which are common for companies with similar types of operations.
| 26 |
Legal Matters
As of June 30, 2025, the Company was not subject to any material legal proceedings; however, it could be subject to legal proceedings and claims from time to time in the ordinary course of its business, or legal proceedings it considered immaterial may in the future become material. Regardless of the outcome, litigation can, among other things, be time consuming and expensive to resolve, and can divert management resources.
WFI Negotiations
In
June 2024, Wood Violet, pursuant to its rights under the WFI acquisition transaction documents (the “WFI Documents”), transferred
ownership of Wisconsin Fertility and Reproductive Surgery Associates, S.C. (“WFRSA”) from Dr. Elizabeth Pritts MD (“Dr. Pritts”) to a new medical doctor. Upon completion of such transfer,
WFRSA terminated Dr. Pritts’ employment. Since then, various disputes among the parties have arisen under the WFI Documents, including,
without limitation, Wood Violet’s non-payment of the second installment of the purchase consideration of $
On May 7, 2025, Dr. Pritts and the Pritts Trust filed a complaint in the Circuit Court of the State of Wisconsin, Dane County, against the Company and its subsidiaries INVO CTR, WFRSA, and Wood Violet. Dr. Pritts and the Pritts Trust have asserted causes of action arising out of the WFI Documents for breach of contract, breach of the implied covenant of good faith and fair dealing, tortious interference with contract (or, in the alternative, veil piercing), and unjust enrichment.
On
May 14, 2025, the Company, Dr. Pritts, the Pritts Trust, and certain of their respective affiliates entered into a binding term
sheet (the “Term Sheet”) to settle all disputes between the parties pursuant to the terms set forth in the Term Sheet
(the “Terms”). The parties agreed to cooperate in good faith to prepare and enter into a final settlement agreement (the
“Settlement Agreement”) based on the terms set forth in the Term Sheet; provided, however, that unless and until the
Settlement Agreement is executed, the Terms are binding on the parties. Under the Terms, Wood Violet agreed to pay Dr. Pritts $
The Company recognized a gain on settlement of
$
Note 18 – Subsequent Events
Additional AIR Investment
On
July 17, 2025, an institutional investor and existing holder (“the Holder”) of Series C-2 Preferred exercised its Additional
Investment Right to acquire
On
July 28, 2025, the Holder exercised its right to an additional acquire
On
August 4, 2025, the Holder exercised its right to an additional acquire
On August 14, 2025, the Holder
exercised its right to an additional acquire
The Series C-2 Preferred issued pursuant to these exercises were sold and issued, and the shares of common stock issuable thereunder will be sold and issued, without registration under the Securities Act, in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act and/or Rule 506 promulgated thereunder as transactions not involving a public offering.
Increase in Authorized Common Stock
On
July 23, 2025, the stockholders of the Company approved an amendment to the Company’s Amended and Restated Articles of Incorporation
to increase its number of authorized shares of common stock from
Common Stock Issuances
Since June 30, 2025, the Company issued
Decathlon Amendment
On August 13, 2025, the Company, the Lender, Steven
Shum and the Guarantors entered into a third amendment to the Loan Agreement,
JAG Amendment
On August 13, 2025, the Company and JAG entered into a letter agreement
| 27 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 as may be amended, supplemented, or superseded from time to time by other reports we file with the SEC. All amounts in this report are in U.S. dollars, unless otherwise noted.
Throughout this Quarterly Report on Form 10-Q, references to “we,” “our,” “us,” the “Company,” “INVO,” or “INVO Fertility, Inc.” refer to INVO Fertility, Inc.
Overview
We are a healthcare services and technology company focused on the fertility marketplace and dedicated to expanding access to assisted reproductive technology (“ART”) care for patients in need. Our principal commercial strategy is focused on building, acquiring and operating fertility clinics, including “INVO Centers” dedicated primarily to offering the intravaginal culture (“IVC”) procedure enabled by our INVOcell® medical device (“INVOcell”) and US-based, profitable in vitro fertilization (“IVF”) clinics. We have two operational INVO Centers and one IVF clinic in the United States. We also continue to engage in the sale and distribution of our INVOcell technology solution into third-party owned and operated fertility clinics. We also intend to seek out additional, innovative fertility-focused technologies, to license or acquire in order to utilize within our clinics.
In October 2024, we acquired a 100% interest in Naya Therapeutics, Inc. (“NAYA Therapeutics” or “NTI”), a clinical-stage oncology and autoimmune technology company. In May 2025, we divested an 80.1% ownership interest in NTI, returning to an exclusive focus on the fertility marketplace, and changing our name and ticker symbol to “INVO Fertility, Inc.” and “IVF”, respectively.
Fertility Clinics
On August 10, 2023, we consummated the first acquisition of an existing IVF clinic, the Wisconsin Fertility Institute (“WFI”). As an established and profitable clinic, the closing of the WFI acquisition more than tripled our annual revenue and became a major part of our clinic-based operations. The acquisition accelerated our transformation from a medical device company to a healthcare services company and immediately added scale and a significant source of positive cash flow to our operations. The acquisition of profitable IVF clinics complements our efforts to build new INVO Centers, and we expect to continue this strategy to accelerate overall growth.
On March 10 and June 28, 2021, we established joint ventures to open INVO Centers in Birmingham, Alabama, and Atlanta, Georgia, respectively. We established these clinics to increase use of the INVOcell, to accelerate the growth and awareness of the IVC procedure and to expand the availability of statistical data supporting its use. These clinics also enabled us to expand our revenue per fertility cycle from hundreds of dollars (from the sale of each INVOcell device) to thousands of dollars, and to significantly advance our path to profitability. We believe a dedicated INVO Centers requires less investment than a traditional IVF clinic and are operationally efficient, making them ideal for underserved secondary markets. We plan on opening additional, wholly owned INVO Centers in the coming years.
INVOcell Device
Our proprietary technology, INVOcell®, is an innovative medical device that allows fertilization and early embryo development to take place in vivo within the woman’s body. This treatment solution is the world’s first intravaginal culture technique for the incubation of oocytes and sperm during fertilization and early embryo development and provides patients with a natural, intimate, and affordable experience. As reflected in available data, we believe the IVC procedure can deliver comparable results at a lower cost than traditional IVF and is a significantly more effective treatment than intrauterine insemination (“IUI”).
Unlike IVF, where the oocytes and sperm develop into embryos in an expensive laboratory incubator, the INVOcell allows fertilization and early embryo development to take place in the woman’s body. The IVC procedure can provide many benefits, including the following:
| ● | May reduce lab procedures, helping clinics and doctors to increase patient capacity, lower costs and offer an affordable advanced fertility treatment option; | |
| ● | Provide a natural, stable incubation environment; | |
| ● | Offer a more personal, intimate experience in creating a baby; and | |
| ● | Reduce the risk of errors and wrong embryo transfers. |
In both current utilization of the INVOcell, and in clinical studies, the IVC procedure has demonstrated equivalent pregnancy success and live birth rates as IVF.
While INVOcell remains part of our efforts, our commercial and corporate development strategy within the fertility market has expanded to focus more broadly on providing ART services through our emphasis on operating clinics. However, we will continue to provide INVOcell as well as seek out additional, innovative technologies, we can utilize to benefit patients and enhance our clinic operations.
| 28 |
NAYA Therapeutics
On October 11, 2024, we acquired NAYA Therapeutics with the intent to expand our business activities beyond fertility and to create a healthcare portfolio company initially focused on a commercial-stage fertility business combined with a unique clinical-stage oncology and autoimmune technology business.
In April 2025, not having received sufficient shareholder support for key elements of the NAYA Therapeutics transaction at a shareholder meeting scheduled for March 10, 2025 (further detail available below under Recent Developments – 2024 Annual Meeting), upon advice of counsel and of our proxy solicitation firm, as well as general feedback from stakeholders, we elected to re-focus exclusively on our fertility business. As such, we changed our name to “INVO Fertility, Inc.” and our ticker symbol to “IVF”, and, on June 2, 2025, we divested a majority of our holdings in NAYA Therapeutics.
We remain enthusiastic about its prospects and will retain a minority stake in NAYA Therapeutics, which we hope to monetize in the future through value appreciation that could be generated from the clinical development of its bifunctional antibodies. We retain this minority stake in NTI as an asset on our balance sheet.
NAYA Therapeutics is advancing a portfolio of highly-competitive clinical candidates including NY-303, a first-in-class GPC3 x NKp46 bifunctional antibody for the treatment of hepatocellular carcinoma (HCC) with a unique mode of action targeting non-responders to the current immunotherapy standard of care (approximately 70% of the current treatable market) cleared to enroll patients in a Phase 1/2a monotherapy trial in 2025, NY-500, an AI-Optimized bifunctional antibody aiming to be the first PD1 x VEGF therapeutic to market in HCC, and NY-338, a CD38 x NKp46 bifunctional antibody for the treatment of multiple myeloma with a differentiated safety and efficacy profile.
Operations
Our critical management and leadership functions are carried out by our management team. In the Fertility Clinic segment, each clinic is separately staffed with the people necessary to manage daily activities, while most administrative tasks are centralized and handled by the INVO corporate staff. With respect to the INVOcell Device segment, we have contracted out the manufacturing, assembly, packaging, and labeling to a medical manufacturing company, sterilization of the device to a sterilization specialist, and storage and shipping to a third part logistics company. In the Therapeutics Segment, we have a separate staff dedicated to the development of our intellectual property.
Wisconsin Fertility Institute
On August 10, 2023, we consummated the first acquisition of an existing IVF clinic, WFI. As an established and profitable clinic, WFI has a full staff, including a reproductive endocrinology and infertility medical doctor (“REI”), an OBGYN trained to provide fertility treatment and full complement of medical, laboratory and administration staff. In June 2024, we replaced WFI’s REI with an REI that had previously worked at the clinic and was well acquainted with its staff and procedures. WFI’s staff manages most day-to-day activities, which, except for medical matters, is overseen by our VP operations. Upon closing the acquisition, our corporate staff assumed finance, accounting, human resources and other overhead responsibilities.
Alabama JV
On March 10, 2021, our wholly owned subsidiary, INVO Centers, LLC (“INVO CTR”) formed a joint venture with HRCFG, LLC (“HRCFG”) to establish an INVO Center in Birmingham, Alabama. The name of the joint venture is HRCFG INVO, LLC (the “Alabama JV”). The responsibilities of HRCFG’s principals include providing clinical practice expertise, performing recruitment functions, providing all necessary training, and providing day-to-day management of the INVO Center. Our responsibilities include providing funding to the Alabama JV and being the exclusive provider of the INVOcell. We also perform all required, industry-specific compliance and accreditation functions, and product documentation for product registration. The Birmingham INVO Center opened to patients on August 9, 2021.
Georgia JV Agreement
On June 28, 2021, INVO CTR formed a joint venture with Bloom Fertility, LLC (“Bloom”) to establish an INVO Center in Atlanta, Georgia. The name of the joint venture is Bloom INVO LLC (the “Georgia JV”). The responsibilities of Bloom include providing all medical services required for the operation of the INVO Center. Our responsibilities include providing funding to the Georgia JV, lab services, quality management, and being the exclusive provider of the INVOcell. We also perform all required, industry specific compliance and accreditation functions, and product documentation for product registration. The Atlanta INVO Center opened to patients on September 7, 2021.
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INVOcell
To date, we have completed a series of important steps in the successful development and manufacturing of the INVOcell:
| ● | Manufacturing: We are ISO 13485:2016 certified and manage all aspects of production and manufacturing with qualified suppliers. Our key suppliers, which include NextPhase Medical Devices, R.E.C. Manufacturing Corporation, and Casco Bay Molding, have been steadfast partners since our company first began and can provide us with virtually an unlimited capability to support our growth objectives, with all manufacturing performed in the New England region of the U.S. |
| ● | Raw Materials: All raw materials utilized for the INVOcell are medical grade and commonly used in medical devices (e.g., medical grade silicone, medical grade plastic). Our principal molded component suppliers, Casco Bay Molding and R.E.C. Manufacturing Corporation, are well-established companies in the molding industry and are either ISO 13485 or ISO 9001 certified. The molded components are supplied to our contract manufacturer for assembly and packaging of the INVOcell system. The contract manufacturer is ISO 13485 certified, and U.S. Food & Drug Administration (“FDA”) registered. |
| ● | US Marketing Clearance: The safety and efficacy of the INVOcell have been demonstrated and cleared for marketing and use by the FDA in November 2015. |
| ● | Clinical: In June 2023, we received FDA 510(k) clearance to expand the labeling on the INVOcell device and its indication for use to provide for a 5-day incubation period. The data supporting the expanded 5-day incubation clearance demonstrated improved patient outcomes. |
Market Opportunity
Fertility Clinics and INVOcell Device
The global ART marketplace is a large and growing, multi-billion-dollar industry across the world as increased infertility rates, greater patient awareness and improving financial incentives, such as insurance and governmental assistance, continue to drive demand. According to the European Society for Human Reproduction 2024 ART Fact Sheet, one in six couples worldwide experience fertility challenges. Additionally, the worldwide market remains vastly underserved as a high percentage of patients in need of care continue to go untreated each year for many reasons, but key among them are capacity constraints and cost barriers. There have been large increases in the use of IVF, with current estimates of approximately 4 million ART cycles performed globally each year, producing around 1 million babies. Regrettably, this only amounts to less than 5% of the infertile couples worldwide being treated and less than 2% of such couples having a child though IVF. The industry remains capacity constrained which creates challenges in providing access to care for the volume of patients in need. A survey by “Resolve: The National Infertility Association,” indicates the two main reasons couples do not use IVF is cost and geographical availability (and/or capacity).
In the United States, infertility affects an estimated 10%-15% of the couples of childbearing-age, according to the American Society of Reproductive Medicine (2017). According to the Centers for Disease Control (“CDC”), there are approximately 6.7 million women with impaired fertility. Based on 2022 data from the CDC’s National ART Surveillance System, approximately 435,000 IVF cycles were performed across ~500 IVF centers, leaving the U.S. with a large, underserved patient population, similar to most markets around the world.
Our corporate development strategy is aimed at taking advantage of the fertility market’s imbalance between supply and demand. We have identified a number of locations in the United States with attractive demographics and fertility service levels that would be ideal for the opening of new INVO Centers. Similarly, we have identified several profitable US-based IVF practices suitable for acquisition.
Competitive Advantages
INVOcell Device and INVO Centers
Over the past several years, the principal focus of our commercial efforts has shifted from the distribution of our INVOcell device to the provision of fertility clinic services through our INVO Centers and IVF clinic acquisition, with acquisitions of existing operations a near-term focus. For the most part, our activities have been focused on secondary markets where there is a greater imbalance between the need for ART treatment and the number of cycles available. Combined with our ability to offer a wider range of advanced fertility care, including IVC, IVF and IUI, at multiple price points, our clinics have the opportunity for differentiation from our competitors. As with our INVOcell technology, we continuously look for new solutions that can create greater efficiency and effectiveness in the provision of fertility cycles and support our efforts to democratize fertility care.
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While a smaller part of our current business, we continue to believe that our INVOcell device, and the IVC procedure it enables, can play a key role in making advanced fertility care more affordable and accessible. We continue to engage with sympathetic third-party clinics that share our same vision and that use our one-of-a-kind INVOcell device.
Unlike IVF, where the oocytes and sperm develop into embryos in a laboratory incubator, the INVOcell allows fertilization and early embryo development to take place in the woman’s body. We believe that the IVC procedure can provide the following benefits:
| ● | May reduce lab procedures, helping clinics and doctors to increase patient capacity, lower costs and offer a more affordable advanced fertility treatment option; | |
| ● | A natural and stable incubation environment; | |
| ● | A more personal, intimate experience in creating a baby; and | |
| ● | A reduced risk of errors and wrong embryo transfers. |
In both current utilization of the INVOcell, and in clinical studies, the IVC procedure has demonstrated equivalent pregnancy success and live birth rates as IVF and generally may be offered at a significant discount to IVF cycles.
We will also continue seek out additional, innovative technologies, that we can utilize to further benefit patients and enhance our clinic operations.
Sales and Marketing
Fertility Clinics
Our two INVO Centers and WFI clinic employ various strategies to build awareness for their services and/or to maintain and grow patient flow and fertility cycle volume. The principal source of patient flow comes through OBGYN referrals and patient word of mouth. Our clinical staff maintain relationships with the local OBGYN community and organize virtual and in person events to showcase our centers’ services, fertility treatment effectiveness statistics and quality of our clinical personnel. We also conduct regular social and other media campaigns to attract new patients and to build awareness.
At the corporate level, we seek to build general awareness for our clinical activities and IVC procedure results with a view to drive patients to our centers and to grow demand for our INVOcell device. These efforts also support our ongoing work to open new INVO Centers and to acquire additional IVF clinics.
The acquisition of existing IVF clinics requires less sales and marketing effort compared to opening new INVO Centers, as they have established patient flows that can be built upon. When entering a new market with an INVO Center, we leverage the experience developed in establishing our Alabama and Georgia joint ventures. We employ fine-tuned strategies to secure patient flow levels that can enable new INVO Centers to become profitable and contribute economically to our overall business as soon as possible. Primarily, our INVO Centers seek to employ local, reputable physicians with strong ties to the OBGYN community.
INVOcell Device
Historically, our approach to marketing INVOcell was focused on identifying partners within targeted geographic regions that we believe could best support our efforts to expand access to advanced fertility treatment using the INVOcell and IVC procedure for the large number of underserved infertile people around the world. Those efforts resulted in the execution of a series of distribution agreements with partners across the globe. More recently, as we shifted our focus to opening INVO Centers and acquiring IVF clinics, which activities have been centered in the US, and as a result of the limited traction experienced in international markets, proactive marketing efforts for the INVOcell have been limited to the United States. In our domestic market, we distribute the INVOcell directly to a number of third-party IVF clinics and we remain open to pursuing foreign markets that present a realistic opportunity for incremental revenue on a profitable basis.
Recent Developments
Increase in Authorized Common Stock
On July 23, 2025, our stockholders approved an amendment to our Amended and Restated Articles of Incorporation to increase its number of authorized shares of common stock from 1,388,888 to 50,000,000. On July 23, 2025, we filed a Certificate of Amendment to its Articles of Incorporation to increase our authorized shares of common stock from 1,388,888 shares to 50,000,000 shares.
Reverse Stock Split (July 2025)
On June 30, 2025, our board of directors approved a reverse stock split of our common stock at a ratio of 1-for-3 and also approved a proportionate decrease in its authorized common stock to 4,166,667 shares from 1,388,888. On July 18, 2025, we filed a certificate of change (with an effective date of July 21, 2025) with the Nevada Secretary of State pursuant to Nevada Revised Statutes 78.209 to effectuate a 1-for-3 reverse stock split of its outstanding common stock. On July 11, 2025, we received notice from Nasdaq that the reverse split would take effect at the open of business on July 21, 2025, 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.
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NTI Divesture
On June 2, 2025, we divested a majority stake in NTI. We elected to redeem all outstanding shares of Series C-1 Preferred at a redemption price of 113.855837742504 shares of Class A Common Stock of NTI for each share of C-1 Preferred being redeemed. Immediately, prior to the redemption, we were the holder of 3,227,813 shares of Class A Common Stock of NTI, representing all outstanding common shares of NTI. We retained 6,300 shares of Series A Preferred Stock of NTI, which represents 19.9% of the outstanding common stock on an as-if converted basis. In addition, on May 28, 2025, NTI issued a secured convertible promissory note in the principal amount of $4,803,175 to us.
Additional Investment Right
Effective as of May 23, 2025, INVO and FNL entered into an agreement to amend that certain Securities Purchase Agreement, dated as of January 3, 2024, between FNL and NTI (the “Securities Purchase Agreement”) to provide that, for so long as the Amended and Restated Debenture or shares of Series C-2 Preferred are outstanding, FNL shall have the right (the “Additional Investment Right”), exercisable at any time and from time to time, beginning on or after May 23, 2025, to purchase up to $10,000,000 of aggregate stated value of additional shares of Series C-2 Preferred (the “AIR Preferred Shares”), provided that any Additional Investment Right may only be exercised in a minimum amount of $500,000 of AIR Preferred Shares. The AIR Preferred Shares shall have the same terms as the Series C-2 Preferred then outstanding, provided that, upon issuance of AIR Preferred Shares, the conversion price in the AIR Preferred Shares and Series C-2 Preferred shall be deemed to be the lowest of (i) the conversion price as in effect on the date that the Holder exercises such Additional Investment Right, and (ii) the greater of (x) the Floor Price (as defined in the Certificate of Amendment to the Series C-2 Certificate of Designation) and (y) 85% of the arithmetic average of the three (3) lowest VWAPs during the ten (10) trading days prior to the date FNL Purchaser exercises its Additional Investment Right. In consideration of the foregoing, we agreed to issue an additional 1,029 shares of Series C-2 Preferred to FNL.
On June 26, 2025, FNL exercised its Additional Investment Right to acquire 500 shares of Series C-2 Preferred, with an aggregate stated value of $500,000, for $500,000 in cash. As a result of the exercise, the conversion price on the Series C-2 Preferred adjusted to $2.85.
On June 30, 2025, INVO and FNL entered to an Amendment to Securities Purchase Agreement (the “Amendment”) to allow FNL to elect, under the Additional Investment Right, to purchase the AIR Preferred Shares for cash (an “AIR Purchase”) or to exchange the AIR Preferred Shares for all or a portion of the Amended and Restated Debenture, with the aggregate stated value of such AIR Preferred Shares received in such exchange equal to the principal amount of the Amended and Restated Debenture so exchanged, plus any accrued and unpaid interest thereon (an “AIR Exchange”). Any Additional Investment Right may only be exercised in a minimum amount of $200,000 of AIR Preferred Shares.
On June 30, 2025, we entered into an inducement letter agreement (the “AIR Exercise and Reload Agreement”) with FNL, pursuant to which FNL agreed to exercise its Additional Investment Right to acquire 1,800 shares of Series C-2 Preferred, with an aggregate stated value of $1,800,000, in exchange for $1,800,000 in principal amount, plus accrued and unpaid interest thereon of the Amended and Restated Debenture.
Pursuant to the AIR Exercise and Reload Agreement, FNL agreed to exercise its Additional Investment Right in consideration for our agreement to issue 630 shares of new unregistered Series C-2 Preferred to FNL.
On July 17, 2025, FNL exercised its Additional Investment Right to acquire 200 shares of Series C-2 Preferred, with an aggregate stated value of $200,000, for $200,000 in cash. As a result of the exercise, the conversion price on the Series C-2 Preferred adjusted to $1.9953.
On July 28, 2025, FNL exercised its right to an additional acquire 200 shares of Series C-2 Preferred, with an aggregate stated value of $200,000, for $200,000 in cash. As a result of the exercise, the conversion price on the Series C-2 Preferred adjusted to $1.8909 per share.
On August 4, 2025, FNL exercised its right to an additional acquire 200 shares of Series C-2 Preferred, with an aggregate stated value of $200,000, for $200,000 in cash. As a result of the exercise, the conversion price on the Series C-2 Preferred adjusted to $1.5340 per share.
On August 14, 2025, FNL exercised its right to an additional acquire 250 shares of Series C-2 Preferred, with an aggregate stated value of $250,000, for $250,000 in cash. As a result of the exercise, the conversion price on the Series C-2 Preferred adjusted to $1.4765 per share.
The Series C-2 Preferred issued pursuant to these exercises were sold and issued, and the shares of common stock issuable thereunder will be sold and issued, without registration under the Securities Act, in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act and/or Rule 506 promulgated thereunder as transactions not involving a public offering.
Series C-2 Preferred Amendment
On May 23, 2025, we filed with the Nevada Secretary of State the Certificate of Amendment to the Series C-2 Certificate of Designation pursuant to which, among other things, holders of Series C-2 Preferred are be entitled to receive dividends payable in Series C-2 Preferred, subject to meeting certain conditions (the “Equity Conditions”).
In addition, upon issuance of AIR Preferred Shares (as defined below), the conversion price of the Series C-2 Preferred shall be deemed to be the lowest of (i) the conversion price as in effect on the date that the Holder exercises its Additional Investment Right (as defined above), and (ii) the greater of (x) the Floor Price (as defined in the Certificate of Amendment to the Series C-2 Certificate of Designations) and (y) 85% of the arithmetic average of the three (3) lowest VWAPs during the ten (10) trading days prior to the date of the exercise of the Additional Investment Right.
On June 27, 2025, we filed with the Nevada Secretary of State a Certificate of Amendment to Certificate of Designation of the Series C-2 Non-Voting Convertible Preferred Stock of INVO (the “2nd Certificate of Amendment”), which amends and restates the rights, preferences, and privileges of the Series C-2 Preferred. Twenty thousand (20,000) shares of Series C-2 Preferred with a stated value of $1,000.00 per share were authorized under the 2nd Certificate of Amendment.
The 2nd Certificate of Amendment removed the “Bankruptcy Triggering Event” and “Change of Control” redemption rights.
Series C-1 Preferred Amendment
On May 28, 2025, we filed with the Nevada Secretary of State a certificate of amendment to the Series C-1 Certificate of Designation pursuant to which, we are entitled to redeem at our option at any time or from time to time upon not less than 2 calendar days written notice to the holders prior to the date fixed for redemption thereof, at a redemption price of 113.855837742504 shares of Class A Common Stock of NTI for each share of Series C-1 Preferred being redeemed.
FNL Amendment and Exchange Agreement
Effective as of May 23, 2025, INVO and FNL entered into an agreement (the “FNL Amendment and Exchange Agreement”) pursuant to which the parties agreed concurrently to (a) exchange outstanding shares of Series C-1 Preferred held by FNL for shares of Series C-2 Preferred, (b) amend the Series C-2 Certificate of Designation pursuant to a certificate of amendment (the “Certificate of Amendment to the Series C-2 Certificate of Designation”), (c) exchange a 7.0% Senior Secured Convertible Debenture in the principal balance of $3,934,146 due December 11, 2025 issued to FNL (the “Debenture”) for an Amended and Restated Senior Secured Convertible Debenture Due February 11, 2026 (the “Amended and Restated Debenture”) and (d), amend that certain Securities Purchase Agreement, dated as of January 3, 2024, between FNL and NTI (the “Securities Purchase Agreement”) to provide that, for so long as the Amended and Restated Debenture or shares of Series C-2 Preferred are outstanding, FNL shall have the right (the “Additional Investment Right”), exercisable at any time and from time to time, beginning on or after May 23, 2025, to purchase up to $10,000,000 of aggregate stated value of additional shares of Series C-2 Preferred (the “AIR Preferred Shares”), provided that any Additional Investment Right may only be exercised in a minimum amount of $500,000 of AIR Preferred Shares. The AIR Preferred Shares shall have the same terms as the Series C-2 Preferred then outstanding, provided that, upon issuance of AIR Preferred Shares, the conversion price in the AIR Preferred Shares and Series C-2 Preferred shall be deemed to be the lowest of (i) the conversion price as in effect on the date that the Holder exercises such Additional Investment Right, and (ii) the greater of (x) the Floor Price (as defined in the Certificate of Amendment to the Series C-2 Certificate of Designation) and (y) 85% of the arithmetic average of the three (3) lowest VWAPs during the ten (10) trading days prior to the date FNL Purchaser exercises its Additional Investment Right. In consideration of the foregoing, we agreed to issue an additional 1,029 shares of Series C-2 Preferred to FNL.
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Pritts Litigation and Binding Settlement Term Sheet
On May 7, 2025, Dr. Elizabeth Pritts (“Dr. Pritts”) and the Elizabeth Pritts Revocable Living Trust (the “Pritts Trust”) filed a complaint in the Circuit Court of the State of Wisconsin, Dane County, against us and our subsidiaries INVO CTR, Wisconsin Fertility and Reproductive Surgery Associates, S.C., and Wood Violet Fertility LLC (“Wood Violet”). Dr. Pritts and the Pritts Trust have asserted causes of action arising out of the WFI acquisition documents (the “WFI Documents”) for breach of contract, breach of the implied covenant of good faith and fair dealing, tortious interference with contract (or, in the alternative, veil piercing), and unjust enrichment.
On May 14, 2025, INVO, Dr. Pritts, the Pritts Trust, and certain of their respective affiliates entered into binding term sheet (the “Term Sheet”) to settle all disputes between the parties pursuant to the terms set forth in the Term Sheet (the “Terms”). The parties agreed to cooperate in good faith to prepare and enter into a final settlement agreement (the “Settlement Agreement”) based on the terms set forth in the Term Sheet; provided, however, that unless and until the Settlement Agreement is executed, the Terms are binding on the parties. Under the Terms, Wood Violet agreed to pay Dr. Pritts $5,000,000 in full and final settlement and satisfaction of all obligations to Dr. Pritts and her affiliates under the WFI Documents, of which $525,000 was paid concurrently with the execution of the Term Sheet, and the remainder of which is payable as follows: $475,000 due June 30, 2025, $750,000 due September 30, 2025, $750,000 due December 31, 2025, $1,000,000 due March 31, 2026, $2,000,000 due June 30, 2026, and $500,000 due December 31, 2026. INVO shall provide Wood Violet with use of 25% of all gross funding proceeds above $2,000,000 raised within any six-month period to accelerate the payment of scheduled settlement payments in chronological order. The parties will enter into a consent judgment to resolve the complaint that would come into effect upon any breach of the Settlement Agreement. The parties agreed to settle all disputes, including those related to employment, acquisition, tax, and related matters, the termination of all employment, consulting, and similar agreements with Dr Pritts, and other customary terms, including, without limitation, indemnification and release of claims. We are seeking to finalize and execute the Settlement Agreement and related documentation in the third quarter of 2025; however, there can be no assurance that the Settlement Agreement will be finalized and executed in the third quarter of 2025, if at all.
Warrant Inducement
On April 30, 2025, we entered into an inducement letter agreement (the “Inducement Letter Agreement”) with an institutional investor and existing holder (the “Holder”) of certain existing warrants (the “Existing Warrants”) to purchase up to 155,280 shares of our common stock. The Existing Warrants were originally issued on January 14, 2025, with an exercise price of $25.20 per share.
The issuance of the shares of common stock upon exercise of the Existing Warrants is registered pursuant to a registration statement on Form S-3 (File No. 333-283872), which was declared effective by the Securities and Exchange Commission (the “SEC”) on January 14, 2025.
Pursuant to the Inducement Letter Agreement, the Holder agreed to exercise the Existing Warrants for cash at the exercise price of $4.83 per share in consideration for our agreement to issue new unregistered warrants to purchase up to an aggregate of 232,920 shares of common stock at an exercise price of $4.83 per share (the “New Warrant”). The New Warrants will be exercisable upon receipt of such approval as may be required by the applicable rules and regulations of the Nasdaq Capital Market (or any successor entity) from the stockholders of INVO with respect to issuance of all of the New Warrants and the shares of common stock upon the exercise thereof (Stockholder Approval, and such date, the “Stockholder Approval Date”) and have a term of five years from the Stockholder Approval Date.
The aggregate gross proceeds to us from the exercise of the Existing Warrants was approximately $750,000, before deducting offering expenses payable by us.
Name Change
On April 14, 2025, we changed our corporate name to INVO Fertility, Inc., pursuant to an Amendment to Articles of Incorporation filed with the Nevada Secretary of State on April 14, 2025 (the “Name Change”). Pursuant to Nevada law, a stockholder vote was not necessary to effectuate the Name Change.
On April 28, 2025, our common stock ceased trading under the ticker symbol “NAYA” and began trading under our new ticker symbol, “IVF”, on the Nasdaq Capital Market.
Reverse Stock Split (March 2025)
On February 24, 2025, our board of directors approved a reverse stock split of our common stock at a ratio of 1-for-12 and also approved a proportionate decrease in its authorized common stock to 12,500,000 shares from 4,166,667. On March 18, 2025, we filed a certificate of change (with an effective date of March 18, 2025) with the Nevada Secretary of State pursuant to Nevada Revised Statutes 78.209 to effectuate a 1-for-12 reverse stock split of its outstanding common stock. On March 17, 2025, we received notice from Nasdaq that the reverse split would take effect at the open of business on March 18, 2025, 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.
2024 Annual Meeting
On February 11, 2025, we filed a definitive proxy statement (the “February Proxy”) in connection with our annual meeting of stockholders (the “2024 ASM”). The 2024 ASM was scheduled for March 10, 2025, at 12 pm Eastern Time, and had a record date of January 24, 2025.
The February Proxy included standard proposals (the “Standard Proposals”) for stockholders (i) to elect five new directors (the “New Board Slate”) to our board of directors (the “Board”) and (i) to ratify the appointment of M&K CPAS, PLLC as our independent registered public accounting firm for the fiscal year ended December 31, 2024. The Standard Proposals customarily would have been voted on at a stockholder meeting in calendar year 2024. We opted to delay holding our 2024 annual stockholder meeting until 2025 to hold a single meeting that would cover both the Standard Proposals and a number of special proposals (the “Special Proposals”) requesting that the stockholders approve (i) the issuance, in accordance with Nasdaq Listing Rule 5635(a), of Common Stock, upon conversion of our outstanding Series C-1 and C-2 Non-Voting Convertible Preferred Stock, upon conversion of an outstanding 7.0% Senior Secured Convertible Debenture in the principal balance of $3,934,146 due December 11, 2025 (the “Debenture”), and upon settlement of restricted stock units and exercise of stock options issued in exchange for restricted stock units and stock options that were previously granted to certain directors, employees, and consultants of the NAYA Therapeutics, (ii) an amendment to our Second Amended and Restated 2019 Stock Incentive Plan to increase the number of shares of Common Stock available for issuance thereunder to an amount of 8,200,000 (pre-reverse split), equal to approximately 15% of the total of the total issued and outstanding stock, including shares issued upon conversion of our Series C-1 and C-2 Non-Voting Convertible Preferred Stock, and (iii) an amendment to our Amended and Restated Articles of Incorporation to increase the number of authorized shares of Common Stock from 50,000,000 to 100,000,000 after a reverse split of our Common Stock approved by the Board at a ratio ranging from any whole number between 1-for-2 and 1-for-20, as determined by the Board in its discretion, subject to the Board’s authority to abandon such reverse stock split.
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While Standard Proposals received sufficient votes for approval, several Special Proposals did not garner the necessary votes required for approval. Upon advice of counsel and our proxy solicitation firm, the Board approved the postponement of the 2024 ASM to April 9, 2025, the fixing of a new record date on March 10, 2025, and the filing of a new definitive proxy statement (the “March Proxy”).
As a result of this postponement and of the new record date, all votes cast by stockholders with respect to the proposals included in the February Proxy became null and void. The March Proxy was delivered with a new proxy card pursuant to which stockholders were asked to vote again on the Standard Proposals.
The 2024 ASM was held solely to cover the Standard Proposals and to regain compliance under Nasdaq Rules 5620(a) and 5801(s)(2)(G) that require companies listed on Nasdaq to hold an annual meeting of stockholders within twelve months of the fiscal year’s end (the “ASM Rule”). Pursuant to the previously disclosed notice received from the staff (the “Staff”) of The Nasdaq Stock Market LLC, we had until February 25, 2025, to submit a plan to regain compliance under the ASM Rule. We submitted a plan to the Staff in a timely fashion and, on February 28, 2025, the Staff notified us that we were granted an extension until June 30, 2025, to regain compliance with the ASM Rule. On April 15, 2025, the Staff notified us that we were in compliance with the ASM Rule and the matter is now closed.
The Standard Proposals in the March Proxy included (a) the re-election of existing directors to the Board (as would have been submitted for approval had the 2024 ASM been held in calendar year 2024, and in lieu of the New Board Slate included in the February Proxy), and (b) ratification of M&K CPAs LLC as our independent registered public accounting firm for the fiscal year ending December 31, 2024.
At the 2024 ASM, the stockholders approved the Standard Proposals in the March Proxy.
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Public Offering
On January 14, 2025, we consummated a public offering (the “January 2025 Offering”) of 378,199 units (“Units”), each consisting of either one share of Common Stock, or one pre-funded warrant to purchase one share of Common Stock (the “January 2025 PFWs”) in lieu thereof, and one warrant to purchase one share of Common Stock at an offering price of $25.20 per Unit (the “January 2025 Warrants”). The January 2025 Warrants are exercisable from and after the date of their issuance and expire on the five-year anniversary of such date, at an exercise price of $25.20 per share of Common Stock. Each January 2025 PFW is immediately exercisable at an exercise price of $0.0036 per share and may be exercised at any time until all of the January 2025 PFWs are exercised in full. In connection with the January 2025 Offering, we entered into a securities purchase agreement (the “January 2025 SPA”) with certain institutional investors who purchased Units in this January 2025 Offering.
The securities issued in the January 2025 Offering were offered pursuant to our registration statement on Form S-1, as amended (File No. 333-283872) (the “January 2025 S-1”), initially filed by us with the SEC under the Securities Act of 1933, as amended (the “Securities Act”), on December 17, 2024 and declared effective on January 13, 2025.
We closed the January 2025 Offering on January 14, 2015, raising gross proceeds of approximately $9.5 million before deducting placement agent fees and other offering expenses payable.
The stated intention for net proceed utilization included (i) up to $2,500,000 to fund the second installment of the purchase price for the WFI; (ii) $4,000,000 to redeem 4,000 shares of our Series C-2 preferred stock with a stated value of $4,000,000; (iii) up to $1,950,000 towards outstanding debt obligations that were payable prior to or upon completion of the January 2025 Offering and that we did not otherwise restructure or refinance, and (iv) the balance for clinical trials, product development, marketing, strengthening the corporate management team, working capital, and general corporate purposes.
Also in connection with the January 2025 Offering, on January 13, 2025, we entered into a placement agency agreement (the “January 2025 PAA”) with Maxim Group LLC (“Maxim”), pursuant to which (i) Maxim agreed to act as lead placement agent on a “best efforts” basis in connection with the January 2025 Offering, and (ii) we agreed to pay Maxim an aggregate fee equal to 6.5% of the gross proceeds raised in the January 2025 Offering (or 5.0% in the case of certain investors) and warrants to purchase up to 62,197 shares of Common Stock at an exercise price of $10.50 per share (the “Maxim January 2025 Warrants”). The Maxim January 2025 Warrants are exercisable at any time after the six-month anniversary of the closing date, from time to time, in whole or in part, until five (5) years from the commencement of sales of the securities in the January 2025 Offering. Additionally, we reimbursed Maxim for certain expenses and legal fees up to $90,000.
The January 2025 PAA and the January 2025 SPA contain customary representations, warranties and agreements made by us, customary conditions to closing, indemnification obligations by us, Maxim or the investors, as the case may be and other obligations of the parties.
Pursuant to the terms of the January 2025 SPAs and January 2025 PAA, we agreed that for a period of up to ninety (90) days from the closing of the January 2025 Offering, that neither we nor any subsidiary may (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock equivalents or (ii) file any registration statement or prospectus, or any amendment or supplement thereto, in each case, subject to certain exceptions. We also agreed not to effect or enter into an agreement to effect any issuance of Common Stock or Common Stock equivalents involving a Variable Rate Transaction, as defined in the January 2025 SPA, for a period of up to twelve (12) months following the closing of the January 2025 Offering, subject to certain exceptions.
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On January 14, 2025, we entered into a warrant agency agreement (the “January 2025 WAA”), with Transfer Online, Inc. appointing Transfer Online, Inc. as warrant agent for the January 2025 Warrants.
In connection with the January 2025 Offering, on January 13, 2025, we entered into a Class C-2 Preferred Stock Redemption Agreement (the “FNL C-2 Redemption Agreement”) with Five Narrow Lane, LP (“FNL”), pursuant to which we agreed to purchase and acquire from FNL 4,000 shares of our Series C-2 Convertible Preferred Stock (the “C-2 Preferred Stock”) for $4,000,000. Accrued dividends, plus any other accrued payments under the Certificate of Designations for the C-2 Preferred Stock, remain outstanding.
Results of Operations
During the first half of 2025, our fertility revenue grew modestly compared to last year despite undergoing some planned downtime in the period.
Looking ahead to the rest of 2025, we expect our fertility operations to make further operational progress. As previously highlighted, our Wisconsin clinic, which we acquired in 2023 and represented our first acquisition of an existing, profitable clinic, serves as a solid foundation for our business. We have resumed active pursuit of additional acquisitions of established and profitable IVF clinics with a view to accelerate our growth and drive our overall business to beyond cash flow break even and to profitability.
Although we anticipate our clinic operations will dominate our commercial efforts and revenue, we also will continue to work on growing INVOcell, both within our own clinics as well as to third party fertility clinics. We also intend to seek out additional, innovative technologies, which we can utilize to benefit patients and enhance our clinic operations.
From a macro perspective, we believe we will benefit from the ongoing growth in the ART market, which continues to experience positive trends, including (1) an under-served patient population, (2) increasing infertility rates around the world, (3) growing awareness and education of fertility treatment options, (4) a growing acceptance of fertility treatment, (5) improvements in procedure techniques and hence improvements in pregnancy success rates, and (6) generally improving insurance (private and public) reimbursement trends.
As previously described, we completed the acquisition of NAYA Therapeutics in October of 2024. The original goal behind this transaction was to expand our business activities beyond fertility and to create a healthcare portfolio company initially focused on a commercial-stage fertility business combined with a unique clinical-stage oncology and autoimmune technology business.
In April 2025, not having received sufficient shareholder support for key elements of the NAYA Therapeutics transaction at a shareholder meeting scheduled for March 10, 2025 (further detail available above under Recent Developments – 2024 Annual Meeting), upon advice of counsel and of our proxy solicitation firm, as well as general feedback from stakeholders, we elected to re-focus exclusively on our fertility business. As such, we changed our name and ticker symbol to “INVO Fertility, Inc.” and “IVF”, respectively, and, in May 2025, divested a majority interest in NAYA Therapeutics.
We remain enthusiastic about NTI’s prospects and will retain a minority stake, which we hope to monetize in the future through value appreciation that could be generated from the clinical development of its bifunctional antibodies.
Our revised corporate structure is intended to enable both businesses to focus on their respective opportunities and operations, with the existing management team and our board of directors continuing to lead the public company and its focus on the fertility marketplace. NAYA Therapeutics returned to being a privately held biotechnology company led by its team and a separate board.
Comparison of the Three Months Ended June 30, 2025, and 2024
Revenue
Revenue for the three months ended June 30, 2025, was approximately $1.9 million, compared to approximately $1.8 million for the three months ended June 30, 2024.
Cost of Revenue
Cost of revenue for the three months ended June 30, 2025, was approximately $1.1 million, compared to approximately $0.9 million for the three months ended June 30, 2024. The increase in cost of revenue was primarily related to increased labor costs in the Wisconsin clinic.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses for the three months ended June 30, 2025, were approximately $2.2 million, compared to approximately $2.6 million for the three months ended June 30, 2024. The decrease of approximately $0.4 million was primarily related to decreased wages and professional services expenses. Non-cash, stock-based compensation expense was $0.7 million in the period, compared to $1.2 million for the same period in the prior year.
Impairment Loss
Impairment loss for the three months ended June 30, 2025, was approximately $1.4 million compared to nil for the three months ended June 30, 2024. The increase of approximately $1.4 million is noncash and is related to an impairment on the Wisconsin clinic’s noncompetition agreement related to the agreement to release Dr. Pritts from her noncompetition commitment under the Settlement Agreement.
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Loss from debt extinguishment
Loss from debt extinguishment for the three months ended June 30, 2025, was approximately $0.7 million, compared to nil for the three months ended June 30, 2024. This debt extinguishment expense is primarily related to the Amended and Restated Debenture.
Gain on settlement
Gain on settlement for the three months ended June 30, 2025, was approximately $0.7 million, compared to nil for the three months ended June 30, 2024. This gain is due to the Settlement Agreement with Dr. Pritts.
Interest Expense and Financing Fees
Interest expense and financing fees were approximately $0.2 million for the three months ended June 30, 2025, compared to approximately $0.4 million for the three months ended June 30, 2024.
Loss on Discontinued Operations
Loss on discontinued operations was approximately $2.1 million for the three months ended June 30 ,2025, compared to nil for the three months ended June 30 ,2024. The loss consists of approximately $0.5 million from the loss from operations of NTI and approximately $1.5 million from the loss on disposal of NTI.
Comparison of the Six Months Ended June 30, 2025, and 2024
Revenue
Revenue for the six months ended June 30, 2025, was approximately $3.5 million, compared to approximately $3.3 million for the six months ended June 30, 2024.
Cost of Revenue
Cost of revenue for the six months ended June 30, 2025, was approximately $2.1 million, compared to approximately $1.7 million for the six months ended June 30, 2024. The increase in cost of revenue was primarily related to increased labor costs in the Wisconsin clinic.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses for the six months ended June 30, 2025, were approximately $3.8 million, compared to approximately $4.1 million for the six months ended June 30, 2024. The decrease of approximately $0.3 million was primarily related to decreased wages and professional services expenses. Non-cash, stock-based compensation expense was $0.8 million in the period, compared to $1.4 million for the same period in the prior year.
Impairment Loss
Impairment loss for the six months ended June 30, 2025, was approximately $1.4 million compared to nil for the six months ended June 30, 2024. The increase of approximately $1.4 million is noncash and is related to an impairment on the Wisconsin clinic’s noncompetition agreement related to the agreement to release Dr. Pritts from her noncompetition commitment under the Settlement Agreement.
Loss from debt extinguishment
Loss from debt extinguishment for the six months ended June 30, 2025, was approximately $0.7 million, compared to nil for the six months ended June 30, 2024. This debt extinguishment expense is primarily related to the Amended and Restated Debenture.
Gain on settlement
Gain on settlement for the six months ended June 30, 2025, was approximately $0.7 million, compared to nil for the six months ended June 30, 2024. This gain is due to the Settlement Agreement with Dr. Pritts.
Interest Expense and Financing Fees
Interest expense and financing fees were approximately $0.5 million for the six months ended June 30, 2025, compared to approximately $0.6 million for the six months ended June 30, 2024.
Loss on Discontinued Operations
Loss on discontinued operations was approximately $18.0 million for the six months ended June 30 ,2025, compared to nil for the six months ended June 30 ,2024. The loss consists of approximately $16.5 million from the loss from operations of NTI, including a goodwill impairment of approximately $14.6 million and approximately $1.5 million from the loss on disposal of NTI.
Liquidity and Capital Resources
For the six months ended June 30, 2025, and 2024, we had net losses of approximately $22.7 million and $3.8 million, respectively, and an accumulated deficit of approximately $90.2 million as of June 30, 2025. Approximately $19.0 million of the net loss was related to non-cash expenses for the six months ended June 30, 2025, compared to $2.6 million for the six months ended June 30, 2024. We had negative working capital of approximately $6.3 million as of June 30, 2025, compared to negative working capital of approximately $5.6 million as of December 31, 2024. As of June 30, 2025, we had stockholder’s equity of approximately $2.5 million compared to stockholder’s equity of approximately $12.7 million as of December 31, 2024.
We have been dependent on raising capital from debt and equity financings to meet our needs for cash required to fund our operating expenses and investing activities. During the first six months of 2025, we received $0.5 million for the sale of our preferred stock, $1.0 million from the exercise of warrants, and $8.7 million in net proceeds for a public offering, which was partially used to redeem $4 million of preferred stock and repay approximately $1.1 million in debt. During the first six months of 2024, we received net proceeds of approximately $1.5 million for the sale of our preferred stock, $0.9 million from the exercise of warrants, $0.4 million in proceeds from the sale of notes payable, and $0.2 million in net proceeds for the sale of our common stock. Until we can generate positive cash from operations, we will need to raise additional funding to meet our liquidity needs and to execute our business strategy. As in the past, we will seek debt and/or equity financing, which may not be available on reasonable terms, if at all.
Although our audited consolidated financial statements for the year ended December 31, 2024 were prepared under the assumption that we would continue operations as a going concern, the report of our independent registered public accounting firm that accompanies our consolidated financial statements for the year ended December 31, 2024 contains a going concern qualification in which such firm expressed substantial doubt about our ability to continue as a going concern, based on the consolidated financial statements at that time. Specifically, as noted above, we have incurred significant operating losses and we expect to continue to incur significant expenses and operating losses as we continue to acquire existing IVF clinics, develop the commercialization of our INVOcell solution and proceed with clinical trials of our newly acquired therapeutics. Prior losses and expected future losses have had, and will continue to have, an adverse effect on our financial condition. If we cannot continue as a going concern, our stockholders would likely lose most or all of their investment in us.
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Cash Flows
The following table shows a summary of our cash flows for the three months ended June 30, 2025 and 2024:
| 2025 | 2024 | |||||||
| Cash (used in) provided by: | ||||||||
| Operating activities | (5,263,155 | ) | (1,716,214 | ) | ||||
| Investing activities | (30,096 | ) | (29,239 | ) | ||||
| Financing activities | 5,101,036 | 2,455,963 | ||||||
Cash Flows from Operating Activities
As of June 30, 2025, we had approximately $0.5 million in cash, compared to approximately $0.9 million as of June 30, 2024. Net cash used in operating activities for the first six months of 2025 was approximately $5.3 million, compared to approximately $1.7 million for the same period in 2024. The increase in net cash used in operating activities was primarily due to the increase in net loss related to the consolidation of NTI.
Cash Flows from Investing Activities
During the six months ended June 30, 2025, cash used in investing activities of $30 thousand was primarily related to the purchase of equipment for WFI. During the three months ended June 30, 2024, cash used in investing activities of $29 thousand was primarily related to the purchase of equipment for WFI.
Cash Flows from Financing Activities
During the six months ended June 30, 2025, cash provided by financing activities of approximately $5.1 million was primarily related to approximately $8.7 million of net proceeds from a public offering which was partially offset by a $4 million redemption of the C-2 Preferred Stock, approximately $1.1 million of debt repayment, and warrant exercises. During the six months ended June 30, 2024, cash provided by financing activities of approximately $2.5 million was primarily related to the sale of preferred stock, warrant exercises, and notes payable.
Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition presented in this section is based upon our audited consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. During the preparation of the financial statements, we are required to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate, based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, our results, which allows us to form a basis for making judgments on the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates based on variance with our assumptions and conditions. A summary of significant accounting policies is included below. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition.
See Note 1 of the Notes to Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q for a summary of significant accounting policies and the effect on our financial statements.
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.
Discontinued Operations
The Company accounted for the divesture of its NAYA Therapeutics (“NTI”) subsidiary in accordance with ASC 205 Discontinued Operations (“ASC 205”). ASC 205 requires that a component of an entity that has been disposed of or is classified as held for sale, has operations and cash flows that can be clearly distinguished from the rest of the entity, and represents a strategic shift that has (or will have) a major effect on the reporting entity’s financial results must be reported as discontinued operations. The divesture of NTI met the held-for-sale criteria as defined in ASC 205.
In the period a component of an entity is classified as a discontinued operation, the results of operations for the periods presented are reclassified into separate line items in the unaudited condensed consolidated statements of operations and the assets and liabilities of the discontinued operation are also reclassified into separate line items on the related condensed consolidated balance sheets. Prior period amounts are also adjusted to reflect discontinued operations presentation. All amounts included in the notes to the unaudited condensed consolidated financial statements relate to continuing operations unless otherwise noted.
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.
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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.
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.
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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, 2025, 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 fertility clinics is typically recognized at the time the service is performed.
The Company’s Therapeutics segment does not currently generate revenue. This segment was divested during the second quarter of 2025.
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.
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Recently Issued Accounting Standards Not Yet Effective or Adopted
Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying condensed consolidated financial statements.
Item 3. Quantitative and Qualitative Disclosures about Market Risks
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and are not required to provide the information required under this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act), that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.
Our chief executive officer and chief financial officer previously concluded that our disclosure controls and procedures were not effective as of December 31, 2023, due solely to the events that led to the restatements of our financial statements for the periods ending June 30, 2021, through June 30, 2024. Our management determined a material weakness in our internal control over financial reporting existed due to the accounting treatment of our right-of-use asset and corresponding lease liability for our operating leases on our balance sheet. Management’s review was insufficient to identify an error in the incremental borrowing rate that led to our restatement of our financial statements for the periods.
Our management, including the chief executive officer and chief financial officer, has since carried out an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as amended, as of the end of the period covered by this report. These disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures were not effective as of June 30, 2025, due to the material weaknesses described below.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting of the Company. Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (1992 Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the evaluation of our internal control over financial reporting, management has concluded that, as of June 30, 2025, our internal control over financial reporting was not effective due to material weaknesses related to (1) a limited segregation of duties due to our lack of formal control documentation, limited resources, and the small number of employees, and (2) a lack of adequate accounting resources to properly account for complex accounting transactions. Management has determined that these control deficiencies constitute material weaknesses, which could result in material misstatements of significant accounts and disclosures that could result in a material misstatement to our interim or annual financial statements that would not be prevented or detected.
We are in the process of improving our internal control over financial reporting in an effort to remediate these deficiencies. We have added additional accounting resources to properly account for complex accounting transactions. In addition, we are also seeking to improve our formal control documentation, increase our resources, and additional accounting personnel to further segregate duties, improve supervision and increase training of our accounting staff with respect to generally accepted accounting principles, provide additional training to our management regarding use of estimates in accordance with generally accepted accounting principles, increase the use of contract accounting assistance, and increase the frequency of internal financial statement review. We will continue to take additional steps necessary to remediate the material weaknesses described above.
Limitations on Effectiveness of Controls and Procedures
Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.
The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Changes in Internal Control over Financial Reporting
There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
We are not currently subject to any material legal proceedings other than as described below; however, we could be subject to legal proceedings and claims from time to time in the ordinary course of our business, or legal proceedings we considered immaterial may in the future become material. Regardless of the outcome, litigation can, among other things, be time consuming and expensive to resolve, and can divert management resources.
Elizabeth Pritts and the Elizabeth Pritts Revocable Living Trust
On May 7, 2025, Dr. Elizabeth Pritts (“Dr. Pritts”) and the Elizabeth Pritts Revocable Living Trust (the “Pritts Trust”) filed a complaint in the Circuit Court of the State of Wisconsin, Dane County, against the Company and its subsidiaries INVO Centers LLC, Wisconsin Fertility and Reproductive Surgery Associates, S.C., and Wood Violet Fertility LLC (“Wood Violet”). Dr. Pritts and the Pritts Trust have asserted causes of action arising out of alleged breach of contract under the acquisition documents (the “WFI Documents”) for the Company’s acquisition of Wisconsin Fertility Institute (“WFI”), breach of the implied covenant of good faith and fair dealing, tortious interference with contract (or, in the alternative, veil piercing), and unjust enrichment.
On May 14, 2025, the Company, Dr. Pritts, the Pritts Trust, and certain of their respective affiliates entered into binding term sheet (the “Term Sheet”) to settle all disputes between the parties pursuant to the terms set forth in the Term Sheet (the “Terms”). The parties agreed to cooperate in good faith to prepare and enter into a final settlement agreement (the “Settlement Agreement”) based on the terms set forth in the Term Sheet; provided, however, that unless and until the Settlement Agreement is executed, the Terms are binding on the parties. Under the Terms, Wood Violet agreed to pay Dr. Pritts $5,000,000 in full and final settlement and satisfaction of all obligations to Dr. Pritts and her affiliates under the WFI Documents, of which $525,000 was paid concurrently with the execution of the Term Sheet, and the remainder of which is payable as follows: $475,000 due June 30, 2025, $750,000 due September 30, 2025, $750,000 due December 31, 2025, $1,000,000 due March 31, 2026, $2,000,000 due June 30, 2026, and $500,000 due December 31, 2026. The Company shall provide Wood Violet with use of 25% of all gross funding proceeds above $2,000,000 raised within any six-month period to accelerate the payment of scheduled settlement payments in chronological order. The parties will enter into a consent judgment to resolve the complaint that would come into effect upon any breach of the Settlement Agreement. The parties agreed to settle all disputes, including those related to employment, acquisition, tax, and related matters, the termination of all employment, consulting, and similar agreements with Dr Pritts, and (8) other customary terms, including, without limitation, indemnification and release of claims. The Company seeks to finalize and execute the Settlement Agreement and related documentation in the third quarter of 2025; however, there can be no assurance that the Settlement Agreement will be finalized and executed in the third quarter of 2025, if at all.
Item 1A. Risk Factors
Smaller reporting companies are not required to provide the information required by this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On August 4, 2025, an institutional investor and existing holder exercised its right to acquire 200 shares of Series C-2 Preferred, with an aggregate stated value of $200,000, for $200,000 in cash. As a result of the exercise, the conversion price on the Series C-2 Preferred adjusted to $1.5340 per share. The Series C-2 Preferred issued pursuant to this exercise were sold and issued, and the shares of common stock issuable thereunder will be sold and issued, without registration under the Securities Act, in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act and/or Rule 506 promulgated thereunder as transactions not involving a public offering.
On August 14, 2025, an institutional investor and existing holder exercised its right to acquire 250 shares of Series C-2 Preferred, with an aggregate stated value of $250,000, for $250,000 in cash. As a result of the exercise, the conversion price on the Series C-2 Preferred adjusted to $1.4765 per share. The Series C-2 Preferred issued pursuant to this exercise were sold and issued, and the shares of common stock issuable thereunder will be sold and issued, without registration under the Securities Act, in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act and/or Rule 506 promulgated thereunder as transactions not involving a public offering
During the second quarter of 2025, we issued an aggregate of 87,719 shares of our common stock upon conversion of $250,000 in principal amount due under an amended and restated 7.0% debenture (the “Amended and Restated Debenture”). The shares were issued without registration under the Securities Act, in reliance on the exemption provided by Section 3(a)(9) of the Securities Act.
Since June 30, 2025, we issued 135,000 shares of our common stock upon conversion of $312,100 in principal amount due under the Amended and Restated Debenture. The shares were issued without registration under the Securities Act, in reliance on the exemption provided by Section 3(a)(9) of the Securities Act.
Since June 30, 2025, we issued 3,534,906 shares of our common stock upon conversion of 5,784 shares of Series C-2 Preferred. The shares were issued without registration under the Securities Act, in reliance on the exemption provided by Section 3(a)(9) of the Securities Act.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable
Item 5. Other Information
| (a) | None. |
| (b) | None. |
| (c) | Insider Adoption or Termination of Trading Arrangements |
During
the fiscal quarter ended June 30, 2025, none of our directors or officers informed us of the
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Item 6. Exhibits
| Exhibit No. |
Description | |
| 10.1* | Third Amendment to the RSLA between the Registrant and Decathlon Alpha V, L.P., | |
10.2* |
Demand Note Amendment Letter between the Registrant and JAG Multi Investments LLC. | |
| 31.1* | Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2* | Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1** | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS* | Inline XBRL Instance Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104* | Cover Page Interactive Data File - the cover page from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, is formatted in Inline XBRL |
| * Filed herewith. | ||
| ** Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on August 14, 2025.
| INVO Fertility, Inc. | ||
| Date: August 14, 2025 | By: | /s/ Steven Shum |
| Steven Shum, Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: August 14, 2025 | By: | /s/ Andrea Goren |
| Andrea Goren, Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
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FAQ
What revenue did NAYA (NAYA) report for the period?
How much cash did NAYA use in operations for the first six months of 2025?
What significant non‑cash charges are disclosed?
What liquidity and deficit figures are reported?
What material transactions involving NTI are disclosed?
