Business Context and Reporting Period
Company: NAYA Biosciences, Inc. (formerly INVO Bioscience, Inc.)
Filing Type: Form 10-Q (Unaudited)
Period Ended: September 30, 2024
Business Overview: A life science portfolio company operating in two divisions: NAYA Fertility (operating INVO Centers and acquiring IVF clinics) and NAYA Therapeutics (developing oncology and autoimmune therapeutics). The company recently consummated a merger with Legacy NAYA (NAYA Therapeutics, Inc.) on October 11, 2024, and changed its ticker symbol to "NAYA."
Key Financial Metrics
| Metric | Q3 2024 (3 Months) | Q3 2023 (3 Months) | YTD 2024 (9 Months) | YTD 2023 (9 Months) |
|---|---|---|---|---|
| Total Revenue | $1,433,151 | $974,894 | $4,846,034 | $1,638,821 |
| Net Loss | $(1,630,662) | $(1,248,440) | $(5,472,345) | $(6,039,830) |
| Loss Per Share (Basic/Diluted) | $(0.42) | $(0.70) | $(1.64) | $(5.76) |
| Cash and Equivalents (End of Period) | $471,591 (as of Sept 30, 2024) | |||
| Accumulated Deficit | ||||
| Total Liabilities | $17,042,805 | |||
| Stockholders' Equity | $(23,316) |
Revenue Composition (Q3 2024): Clinic revenue was $1,418,011; Product revenue was $15,140.
Operating Expenses (Q3 2024): Total operating expenses were $2,733,553, driven by Cost of Revenue ($988,465) and SG&A ($1,514,593).
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 47% in Q3 2024 and 196% YTD 2024 compared to the prior year periods. This growth is primarily attributed to the August 2023 acquisition of the Wisconsin Fertility Institute (WFI), which tripled annual revenues.
- Net Loss Reduction: While the company remains unprofitable, the YTD net loss decreased by approximately $0.57 million compared to the prior year, largely due to revenue growth and a reduction in cash burn.
- Equity Position: Stockholders' equity turned negative, moving from a positive $892,825 at year-end 2023 to a deficit of $(23,316) as of September 30, 2024.
- Asset Disposal: The company recorded a $511,663 loss on the disposal of fixed assets related to the termination of the Tampa Project lease, offset partially by a $94,551 gain on lease termination.
Guidance, Outlook, Risks, and Unusual Items
- Merger Completion: On October 11, 2024, the company consummated the merger with Legacy NAYA. Legacy NAYA stockholders received common stock and Series C-1 Preferred Stock. Certain Legacy NAYA debt was converted into common stock and Series C-2 Preferred Stock.
- Liquidity and Going Concern: The company has a history of operating losses and an accumulated deficit of $63.5 million. Management states that until positive cash flow from operations is achieved, the company will need to raise additional funding. The 2023 audit included a "going concern" qualification.
- Nasdaq Compliance: The company received notice of non-compliance with the minimum bid price requirement ($1.00) in September 2024. It has 180 days to regain compliance. The merger is expected to help meet equity listing standards.
- Debt Obligations: The company holds various notes payable, including related-party demand notes and convertible notes. A new 7.0% Senior Secured Convertible Debenture was issued in connection with the merger.
- Unusual Items: Significant non-cash expenses included stock-based compensation ($1.2 million YTD) and amortization of debt discounts. A $250,635 deemed dividend was recognized due to the repricing of August 2023 warrants.
Investor Verification Checklist
- Merger Integration: Verify the financial impact and integration progress of the Legacy NAYA merger consummated in October 2024.
- Liquidity Runway: Assess the sufficiency of current cash ($471k) against operating burn rates and the timeline for securing additional debt or equity financing.
- Nasdaq Status: Monitor the company's progress in regaining compliance with the $1.00 minimum bid price requirement by May 2025.
- Debt Structure: Review the terms of the new 7.0% Senior Secured Convertible Debenture and existing related-party notes for potential dilution or repayment triggers.
- Revenue Sustainability: Confirm that the revenue growth driven by the WFI acquisition is sustainable and not offset by increased operational costs or regulatory changes affecting fertility clinics.