INVO Bioscience, Inc. - Form 8-K Summary
Business Context and Reporting Period
This Current Report (Form 8-K) covers events occurring between July 7, 2023, and July 13, 2023, for INVO Bioscience, Inc. (Nasdaq: INVO). The filing details the execution of closing agreements for pending acquisitions, a new related-party financing arrangement, and a regulatory notice regarding Nasdaq listing compliance.
Key Financial Metrics and Obligations
- Acquisition Closing Fees: The Company paid $10,000 to the Seller Parties of the Asset Purchase Agreement and $40,000 to the Sellers of the Membership Interest Purchase Agreement on July 10, 2023, totaling $50,000 in immediate cash outflows for legal and closing fees.
- New Debt Obligation: Entered into a demand promissory note for $100,000 with JAG Multi Investments LLC (a related party to the CFO).
- Existing Debt Extension: Extended the demand date for existing promissory notes totaling $500,000 owed to JAG Multi Investments LLC to September 30, 2023.
- Equity Issuance: Issued a warrant to purchase 150,000 shares of common stock at a strike price of $0.189 per share.
- Financial Performance: The filing does not provide revenue, profit, cash flow, or margin data for the period.
Material Changes and Agreements
- Acquisition Deadlines: Closing agreements for the acquisition of Wisconsin Fertility Institute assets and Fertility Labs of Wisconsin membership interests were signed. Both transactions must close by July 31, 2023, or they will automatically terminate unless extended by mutual agreement.
- Debt Terms: The new $100,000 note is interest-free if repaid by August 31, 2023. If outstanding past that date, it accrues 10% annual interest. A financing fee of 5% applies if repaid by August 9, 2023, increasing to 10% thereafter.
- Warrant Reset: Strike prices for the new warrant and a prior warrant (350,000 shares) may be reset to the price of a pending public offering if that price is lower than current strike prices.
Outlook, Risks, and Contingencies
- Nasdaq Delisting Risk: On July 11, 2023, the Company received notice from Nasdaq regarding non-compliance with the minimum bid price requirement (Rule 5550(a)(2)) as of July 10, 2023. The Company failed to regain compliance within its 180-day grace period.
- Listing Hearing: A Nasdaq Hearing Panel will consider the Company's continued listing. Management plans to submit a confirmation of its plan to regain compliance.
- Transaction Termination: The pending acquisitions face an automatic termination contingency if not closed by July 31, 2023.
Investor Verification Checklist
- Verify the status of the Wisconsin Fertility Institute and Fertility Labs of Wisconsin acquisitions to confirm if the July 31, 2023, closing deadline was met.
- Monitor the outcome of the Nasdaq Hearing Panel regarding the minimum bid price non-compliance and potential delisting.
- Review the terms of the related-party loan from JAG Multi Investments LLC, specifically the interest accrual triggers and financing fees.
- Check for updates on the Company's pending public offering, which could impact the strike price of outstanding warrants.