Business Context and Reporting Period
This Form 8-K, filed on October 11, 2024, reports the consummation of a merger between INVO Bioscience, Inc. (the "Company") and NAYA Biosciences, Inc. ("NAYA"). The transaction closed on October 11, 2024, resulting in NAYA becoming a wholly-owned subsidiary of the Company. Concurrently, the Company changed its corporate name to NAYA Biosciences, Inc., effective October 15, 2024, and intends to trade under the new ticker symbol "NAYA" on the Nasdaq Capital Market.
Key Financial Metrics and Capital Structure
The filing details significant changes to the Company's capital structure rather than providing standard operating financial metrics (revenue, profit, cash flow) for a reporting period.
- Stockholders' Equity: The merger resulted in an increase in stockholders' equity of approximately $16,000,000, intended to satisfy Nasdaq listing criteria.
- Debt Conversion: $8,575,833 of NAYA's outstanding debt was converted into equity (669,508 shares of common stock and 8,576 shares of Series C-2 Preferred Stock).
- New Debt Instrument: The remaining $3,934,146 of debt was exchanged for a new 7.0% Senior Secured Convertible Debenture due December 11, 2025.
- Preferred Stock Issuance:
- Series C-1: 30,375 shares issued (stated value $1,000/share), convertible at $1.02913/share, with a 2% annual dividend.
- Series C-2: 8,576 shares issued (stated value $1,000/share), convertible at $0.6893/share, with a 10% annual dividend.
- Common Stock Issuance: 118,148 shares issued to NAYA shareholders and 669,508 shares issued to debt holders.
Material Changes Versus Prior Period
The primary material change is the acquisition of NAYA and the subsequent restructuring of the Company's equity and debt obligations.
- Corporate Identity: The Company's name changed from INVO Bioscience, Inc. to NAYA Biosciences, Inc.
- Leadership Changes: Dr. Daniel Teper (former NAYA CEO) was appointed President of the Company and joined the Board of Directors. Lyn Falconio was also appointed to the Board.
- Debt Restructuring: Existing NAYA debt obligations were largely converted to equity or restructured into a new senior secured debenture with specific redemption and conversion terms.
- Equity Dilution: The transaction involves the issuance of significant new common stock and convertible preferred stock, subject to stockholder approval for final conversion.
Guidance, Outlook, Risks, and Contingencies
Outlook and Strategy: The combined entity aims to accelerate the development of therapies in oncology, fertility, and regenerative medicine through a portfolio approach. Management intends to pursue a reverse stock split (ratio between 1-for-2 and 1-for-20) and increase authorized common stock to 100,000,000 shares, pending stockholder approval.
Nasdaq Compliance Risks:
- Stockholder Equity: The Company believes the $16 million equity increase satisfies the $2.5 million minimum requirement but awaits formal Nasdaq determination.
- Minimum Bid Price: The Company is currently non-compliant with the $1.00 minimum bid price requirement. It has an initial 180-day period (until May 17, 2025) to regain compliance. Failure to do so may result in delisting unless a reverse stock split is approved.
Contingencies: Conversion of Series C-1 and C-2 Preferred Stock and the issuance of common stock upon exercise of options are contingent upon stockholder approval. The Debenture includes mandatory redemption triggers based on future financing proceeds.
Investor Verification Checklist
- Verify the status of the stockholder meeting required to ratify the merger, approve the reverse stock split, and authorize the conversion of preferred stock.
- Confirm the Company's formal compliance status with Nasdaq Listing Rule 5550(b)(1) regarding stockholder equity.
- Monitor the Company's stock price to assess the likelihood of regaining compliance with the $1.00 minimum bid price requirement by May 17, 2025.
- Review the terms of the 7.0% Senior Secured Convertible Debenture, specifically the monthly redemption schedule commencing March 14, 2025, and mandatory redemption triggers.
- Assess the potential dilution impact from the conversion of Series C-1 and C-2 Preferred Stock and the Debenture once stockholder approval is obtained.