INVO Fertility, Inc 10-Q for FY2026 Q1
INVO Fertility, Inc. (IVF)
About this 10-Q
INVO Fertility, Inc filed this 10-Q on June 22, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).
Headline figures
Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $2.02M
- up 23.1% from $1.64M a year earlier
- Net loss
- $5.54M
- compared with a net loss of $17.4M a year earlier
- Diluted EPS
- -$3.38
- compared with -$3,473.93 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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For
the quarterly period ended
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As of June 22, 2026, the Registrant had shares of common stock outstanding.
INVO FERTILITY, INC. FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026
TABLE OF CONTENTS
| 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 financial condition and need for additional capital; | |
| ● | Our limited operating history and a history of net operating losses, and we depend on continued access to capital and clinic revenue growth to fund our operations; | |
| ● | The competitiveness of the fertility and ART services industry; | |
| ● | The dependence of our growth strategy on identifying and successfully completing and integrating fertility clinic acquisition; | |
| ● | Our dependence on key executives, physicians, embryologists, and clinical personnel; | |
| ● | Risks associated with operating certain of our fertility clinics as joint ventures; | |
| ● | Reliance on a single third-party manufacturer for INVOcell production; | |
| ● | Intellectual property risks; | |
| ● | Evolving state and federal laws on abortion and embryo personhood; | |
| ● | Federal and state regulation as both a fertility clinic operator and a medical device manufacturer; | |
| ● | The FDA clearance process for the INVOcell and any future device modifications; | |
| ● | Payor consolidation and managed care trends; | |
| ● | Cybersecurity threats or data breaches involving sensitive patient health information; | |
| ● | Material weaknesses in our internal control over financial reporting; | |
| ● | Risks related to our common stock and capital structure; and | |
| ● | Risks related to market and macroeconomic conditions. |
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)
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net of allowances of
$ | ||||||||
| Inventory | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Lease right of use | ||||||||
| Intangible assets, net | ||||||||
| Goodwill | ||||||||
| Investment in NAYA Therapeutics | ||||||||
| Note receivable – NAYA Therapeutics | ||||||||
| Note receivable – HRCFG | ||||||||
| Note receivable | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIESAND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Accrued compensation | ||||||||
| Notes payable - current portion, net | ||||||||
| Notes payable - related party, net | ||||||||
| Notes payable | ||||||||
| Deferred revenue | ||||||||
| Lease liability, current portion | ||||||||
| Additional payments for acquisition, current portion | ||||||||
| Warrant liability | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Lease liability, net of current portion | ||||||||
| Liability for excess losses of equity method investee | ||||||||
| Notes payable – net of current portion | ||||||||
| Other liabilities, net of current portion | ||||||||
| Additional payments for acquisition, net of current portion | ||||||||
| Total liabilities | $ | $ | ||||||
| Stockholders’ equity | ||||||||
| Series C-2 Preferred Stock, $ par value; shares authorized; and issued and outstanding as of March 31, 2026 and December 31, 2025, respectively | $ | $ | ||||||
| Series D Preferred Stock, $ par value, share authorized; and issued and outstanding as of March 31, 2026 and December 31, 2025, respectively | ||||||||
| Preferred stock, value | ||||||||
| Common Stock, $ par value; shares authorized; and issued and outstanding as of March 31, 2026 and December 31, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 4 |
INVO FERTILITY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| 2026 | 2025 | |||||||
| For the Three Months | ||||||||
| Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenue: | ||||||||
| Clinic revenue | $ | $ | ||||||
| Product revenue | ||||||||
| Total revenue | ||||||||
| Operating expenses | ||||||||
| Cost of services | ||||||||
| Cost of goods sold | ||||||||
| Selling, general and administrative expenses | ||||||||
| Depreciation and amortization | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Gain from equity method investment | ||||||||
| Loss on changes in fair value on warrant liability | ( |
) | ||||||
| Interest expense | ( | ) | ( | ) | ||||
| Total other income (expense) | ( | ) | ( | ) | ||||
| Net loss from continuing operations | ( | ) | ( | ) | ||||
| Loss from discontinued operations | ( | ) | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Net loss from continuing operations per common share: | ||||||||
| Basic | $ | ( | ) | $ | ( | ) | ||
| Diluted | $ | ( | ) | $ | ( | ) | ||
| Net loss from discontinued operations per common share: | ||||||||
| Basic | $ | $ | ( | ) | ||||
| Diluted | $ | $ | ( | ) | ||||
| Net 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 | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Series
C-1 Preferred Stock | Series
C-2 Preferred Stock (Equity) | Series
D Preferred Stock | Additional Paid-in | Accumulated | Total | Series
C-1 Preferred Stock (Mezzanine) | Series
C-2 Preferred Stock (Mezzanine) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds from the sale of common stock, net of fees and expenses | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock redemption | - | - | - | - | ( | ) | ( | ) | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Reclass of C-1 Preferred Stock | - | ( | ) | ( | ) | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Warrant exercise - cashless | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Warrant exercise - prefunded | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock options vested | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends on preferred stock | - | - | - | ( |
) | ( | ) | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Rounding for reverse split | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss attributable to Invo Bioscience, Inc | - | - | - | - | ( |
) | ( | ) | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued to service providers | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock conversion | - | ( | ) | ( | ) | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Warrant exercise, net of issuance costs of $ | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Warrant exercise - cashless | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Warrant exercise - prefunded | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock options vested | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends on preferred stock | - | - | - | ( |
) | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Consideration in acquisition | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rounding for reverse split | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( |
) | ( | ) | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | $ | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 6 |
INVO FERTILITY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| 2026 | 2025 | |||||||
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows used in operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Non-cash stock compensation issued for services | ||||||||
| Fair value of vested stock options | ||||||||
| Amortization of discount on notes payable | ||||||||
| Gain from equity method investment | ( | ) | ( | ) | ||||
| Changes in fair value on warrant liability | ||||||||
| Impairment loss | ||||||||
| 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 | ||||||||
| Leasehold liability | ||||||||
| Accrued interest | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash used in investing activities: | ||||||||
| Payments to acquire property, plant, and equipment | ( | ) | ||||||
| Payment for acquisitions | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash from financing activities: | ||||||||
| Proceeds from the sale of common stock, net of offering costs | ||||||||
| Proceeds from warrant exercise, net | ||||||||
| Payment deferred acquisition consideration | ( | ) | ||||||
| Preferred stock redemption | ( | ) | ||||||
| Principal payments on notes payable | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| Increase 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: | ||||||||
| Accrued dividends on preferred stock | $ | $ | ||||||
| Preferred stock redemption adjustment | $ | $ | ||||||
| Preferred stock issued for acquisition | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 7 |
INVO FERTILITY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(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 four fertility clinics 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 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 have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for the fair presentation of the Company’s financial statements for the periods presented.
The accompanying consolidated financial statements present on a consolidated basis the accounts of the Company and its wholly owned subsidiaries and controlled affiliates. 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 Company considers events or transactions that have occurred after the consolidated balance sheet date of March 31, 2026, 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.
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 NTI subsidiary in accordance with Accounting Standards Codification (“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. As of June 30, 2025 the divesture of NTI met the held-for-sale criteria as defined in ASC 205 and was disposed of in the same period. See Note 6 – Discontinued Operations for additional information on the discontinued operations treatment of NTI.
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 consolidated statements of operations and the assets and liabilities of the discontinued operation are also reclassified into separate line items on the related consolidated balance sheets. Prior period amounts are also adjusted to reflect discontinued operations presentation. All amounts included in the notes to the unaudited 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 4 – Variable Interest Entities for additional information on the Company’s consolidated 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. See Note 4 – Variable Interest Entities for additional information on the Company’s equity method VIE’s.
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.
Accounts Receivable, net
The Company estimates an allowance for doubtful accounts based upon an evaluation of the current status of receivables, historical experience, and other factors as necessary. It is reasonably possible that the Company’s estimate of the allowance for doubtful accounts will change.
The following table presents the changes in the Company’s allowance for doubtful accounts:
Schedule of Accounts Receivable
| Balance as of December 31, 2025 | $ | |||
| Provision | ||||
| Write-offs | ||||
| Recoveries | ||||
| Balance as of March 31, 2026 | $ |
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
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
The Company’s financial instruments consist primarily of cash, accounts receivable, accounts payable, notes payable, convertible preferred stock, and warrants. The carrying value of cash, accounts receivable, accounts payable and notes payable, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments.
ASC 820 establishes a three-level hierarchy for fair value measurements based on the observability of inputs used in valuation techniques:
| ● | Level 1 — Quoted prices in active markets for identical assets or liabilities. | |
| ● | Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar instruments, interest rates, yield curves, and market-corroborated inputs. | |
| ● | Level 3 — Unobservable inputs reflecting the Company’s assumptions about the assumptions market participants would use. |
| 9 |
The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets that are measured at fair value on a recurring basis as of March 31, 2026:
Schedule of Fair Value on Recurring Basis
| Quoted
Prices in Active Markets (Level 1) | Significant
Other Observable Inputs (Level 2) | Significant
Other Unobservable Inputs (Level 3) | ||||||||||
| Assets: | ||||||||||||
| Note receivable | $ | $ | $ | |||||||||
The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2025:
| Quoted
Prices in Active Markets (Level 1) | Significant
Other Observable Inputs (Level 2) | Significant
Other Unobservable Inputs (Level 3) | ||||||||||
| Assets: | ||||||||||||
| Note receivable | $ | $ | $ | |||||||||
| Liabilities: | ||||||||||||
| Warrant liability | $ | $ | $ | |||||||||
The following table presents the changes is the fair value of the Level 3 assets and liabilities:
Schedule of Changes in Fair Value
| Note receivable | Warrant liability | |||||||
| Fair value as of December 31, 2025 | $ | $ | ||||||
| Change in valuation | ||||||||
| Reclassification to equity | ( |
) | ||||||
| Balance as of March 31, 2026 | $ | $ | ||||||
The
Company used a scenario-based discounted cash flow (income approach) to estimate the fair value of the NAYA Therapeutics convertible
note receivable as of March 31, 2026. Under this method, management identified four discrete payoff scenarios based on the
note’s contractual terms, then probability-weighted the present value of expected cash flows under each scenario. The
calibrated discount rate was
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 had no derivatives as of March, 31, 2026.
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.
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.
Deferred Revenue
The Company records deferred revenue when cash payments are received or become due in advance of the Company’s performance under the applicable revenue arrangement. Deferred revenue primarily consists of advance payments for clinical services not yet rendered. Such amounts are recognized as revenue as services are provided in accordance with ASC 606.
The following table presents the changes in the Company’s deferred revenue:
Schedule of Deferred Revenue
| Balance as of December 31, 2025 | $ | |||
| Additions to deferred revenue | ||||
| Revenue recognized from deferred revenue | ( | ) | ||
| Balance as of March 31, 2026 | $ |
The Company accounts for stock-based compensation under the provisions of ASC 718-10, Compensation. 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. The Company recognizes forfeitures as they occur.
Basic loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding. Diluted earnings per share are computed similarly to basic earnings per share except that the denominator is increased to include potentially dilutive securities. The Company’s diluted loss per share is the same as the basic loss per share for the three months ended March 31, 2026, and 2025, as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.
| 2026 | 2025 | |||||||
Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net loss (numerator) | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted weighted-average number of common shares outstanding (denominator) | ||||||||
| Basic and diluted net loss per common share | $ | ) | $ | ) | ||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share
| 2026 | 2025 | |||||||
| As of March 31, | ||||||||
| 2026 | 2025 | |||||||
| Options | ||||||||
| Convertible notes and interest | ||||||||
| Convertible preferred stock | ||||||||
| Warrants | ||||||||
| Total | ||||||||
Recently Adopted Accounting Pronouncements
In July 2025, the FASB issued ASU 2025-05 Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”) which allows public business entities a practical expedient. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025 and interim reporting periods within those annual reporting periods. The Company adopted ASU 2025-05 for the period-ended March 31, 2026 and concluded it did not have a material impact to its condensed consolidated financial statements.
Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03 Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). The ASU aims to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. In January 2025, the ASU was subsequently amended by ASU 2025-01 to clarify the effective date by which all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of ASU 2024-03 is permitted. The Company is currently evaluating the impact of this guidance on its financial statements.
Note 2 – Liquidity
Historically,
the Company has funded its cash and liquidity needs through revenue collection, equity financings, debt, and convertible debt. For
the three months ended March 31, 2026 and 2025, the Company incurred a net loss from continuing operations of approximately $
The
Company has been dependent on raising capital through debt and equity financings to meet its needs for cash used in operating and investing
activities. During the first three months of 2026, the Company received net proceeds of $
| 11 |
These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date the accompanying financial statements are issued. If the Company is unable to raise additional funding to meet its working capital needs in the future, it will be forced to delay or reduce the scope of its growth and acquisition plans and/or limit or cease its operations. If the Company cannot continue as a going concern, its stockholders would likely lose most or all of their investment in the Company. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Note 3 – Business Combinations
On
February 18, 2026, the Company, consummated its acquisition of Family Beginnings P.C. (the “Indiana Clinic”) for a combined
purchase price of $
The Indiana Clinic is a fertility practice that provides direct treatment to patients focused on fertility care, and employs a physician and other healthcare providers to deliver such services and procedures.
The Company’s wholly owned subsidiary, Wood Violet Fertility, LLC (“Wood Violet”) purchased the Indiana Clinic’s non-medical assets, and Fertility, P.A., a Florida professional corporation, purchased the Indiana Clinic’s medical assets.
On February 18, 2026, in conjunction with the Indiana Clinic acquisition, Wood Violet entered into a Management Services Agreement (the “Indiana MSA”) with Fertility, P.A., pursuant to which Wood Violet provides management, administrative, laboratory, and other operational support services to the medical practice.
The Company’s consolidated financial statements for the three months ended March 31, 2026 include the Indiana Clinic’s results of operations from the acquisition date of February 18, 2026 through March 31, 2026. The Company’s consolidated financial statements reflect the preliminary purchase accounting adjustments in accordance with ASC 805, “Business Combinations”, whereby the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values on the acquisition date. The Company assigned no value to tangible assets, liabilities, or other intangible assets for which estimated fair value was determined to be insignificant as of the acquisition date.
Schedule of Allocation of Purchase Price
| Consideration given: | ||||
| Consideration given: | ||||
| Cash | $ | |||
| Holdback | ||||
| Series D Preferred | ||||
| Business Acquisition Cost | $ | |||
| Assets and liabilities acquired: | ||||
| Tradename | $ | |||
| Goodwill | ||||
| $ | ||||
Pro Forma Financial Information
The following unaudited pro forma consolidated results of operations for the three months ended March 31, 2026 and 2025 assume the acquisition was completed on January 1, 2025:
Schedule of Pro Forma Consolidated Results of Operations
| 2026 | 2025 | |||||||
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Pro forma revenue | $ | $ | ||||||
| Pro forma net loss | $ | ( | ) | $ | ( | ) | ||
Pro forma data does not purport to be indicative of the results that would have been obtained had these events actually occurred at the beginning of the periods presented and is not intended to be a projection of future results. The share and per share data have been retroactively reflected for the acquisition.
Note 4 – Variable Interest Entities
Consolidated VIEs
Bloom INVO, LLC
On June 28, 2021, INVO Centers LLC, a Delaware company wholly owned by the Company, (“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
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 March 31, 2026, 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 form a joint venture
for the purpose of establishing an INVO Center in Birmingham, Alabama. The name of the joint venture entity is HRCFG INVO, LLC (the “Alabama
JV”). The Company also provides certain funding to the Alabama JV. Each party owns
The Company determined that the Alabama JV is a VIE for which no party is the primary beneficiary. Although the Company has potentially significant economic exposure as the Alabama JV’s primary funding source, it does not have unilateral power to direct the activities that most significantly impact the Alabama JV’s economic performance, as such power is shared between the parties under the Alabama JV’s operating agreement. Accordingly, the Company accounts for its interest in the Alabama JV under the equity method.
| 12 |
The
Company funded the Alabama JV in the form of a $
The
Company co-signed a lease with HRCFG to provide facilities for the Alabama JV’s clinical operations. The Alabama JV is responsible
for the lease payments and controls the use of the leased premises. The Company is obligated to satisfy the lease payments only in the
event the Alabama JV is unable to do so. The remaining lease payments as of March 31, 2026 and 2025 were $
For
the quarters ended March 31, 2026 and 2025, the Alabama JV recorded net income of $
The following table summarizes our investments in unconsolidated VIEs:
Schedule of Investments in Unconsolidated Variable Interest Entities
| Carrying Value as of | ||||||||||||||
| Location | Percentage
Ownership | March
31, 2026 | December 31, 2025 | |||||||||||
| 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
| 2026 |
2025 | |||||||
Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| HRCFG INVO, LLC | $ | $ | ||||||
| Total earnings 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
| 2026 | 2025 | |||||||
Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Statements of operations: | ||||||||
| Operating revenue | $ | $ | ||||||
| Operating expenses | ( | ) | ( | ) | ||||
| Net profit (loss) | $ | $ | ||||||
March 31, 2026 | December 31, 2025 | |||||||
| 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
| 2026 | 2025 | |||||||
Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Bloom INVO, LLC | ||||||||
| INVOcell revenue | $ | $ | ||||||
| Unconsolidated VIEs | ||||||||
| INVOcell revenue | $ | $ | ||||||
The Company had balances with VIEs as follows:
Summary of Balances with Variable Interest Entities
March 31, 2026 | December 31, 2025 | |||||||
| Bloom INVO, LLC | ||||||||
| Accounts receivable | $ | $ | ||||||
| Notes payable and accrued interest | ||||||||
| Unconsolidated VIEs | ||||||||
| Accounts receivable | $ | $ | ||||||
| 13 |
Note 6 – Discontinued Operations
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 113.8558 shares of Class A Common Stock of NTI for each share of C-1 Preferred being redeemed. Immediately,
prior to the redemption, the Company was the holder of shares of Class A Common Stock of NTI, representing all outstanding
common shares of NTI. The Company retained 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 (“NTI
Note Receivable”) in the principal amount of $
In the second quarter of 2025, 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 major classes of line items constituting loss from discontinued operations are as follows:
Schedule of Constituting Loss from Discontinued Operations
| March 31, 2025 | ||||
| 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.
| 14 |
Note 7 – Inventory
Components of inventory are as follows:
Schedule of Inventory
March 31, 2026 | December 31, 2025 | |||||||
| Raw materials | $ | $ | ||||||
| Finished goods | ||||||||
| Total inventory | $ | $ | ||||||
Note 8 – Property and Equipment
The estimated useful lives and accumulated depreciation for equipment are as follows as of March 31, 2026, and December 31, 2025:
Schedule of Estimated Useful Lives of Property and Equipment
Estimated Useful Life | ||
| Manufacturing equipment | ||
| Medical equipment | ||
| Office equipment |
| March
31, 2026 | December 31, 2025 | |||||||
| Manufacturing equipment | $ | $ | ||||||
| Medical equipment | ||||||||
| Office equipment | ||||||||
| Leasehold improvements | ||||||||
| Property, plant and equipment, gross | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total equipment, net | $ | $ | ||||||
During
the three months ended March 31, 2026, and 2025, the Company recorded depreciation expense of $
Note 9 – Intangible Assets and Goodwill
Components of intangible assets are as follows:
Schedule of Finite-Lived Intangible Assets
| March
31, 2026 | December
31, 2025 | |||||||
| Tradename | $ | $ | ||||||
| Noncompetition agreement | ||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Total intangible assets | $ | $ | ||||||
The changes in the carrying amount of goodwill are as follows:
Schedule of Carrying Amount of Goodwill
| Fertility Clinic Services | Total | |||||||
| Balance as of December 31, 2025 | ||||||||
| Goodwill | $ | $ | ||||||
| Accumulated impairment losses | ||||||||
| Goodwill, net | ||||||||
| Impairment losses | ||||||||
| Goodwill written off related to divesture | ||||||||
| Goodwill acquired | ||||||||
| Balance as of March 31, 2026 | ||||||||
| Goodwill | ||||||||
| Accumulated impairment losses | ||||||||
| Goodwill, net | $ | $ | ||||||
As
part of the Wisconsin Fertility Institute (“WFI”) acquisition, which closed on August 10, 2023, the Company acquired a tradename
valued at $
| 15 |
During
the three months ended March 31, 2026, and 2025, the Company recorded amortization expenses related to intangible assets of $
Goodwill has an indefinite useful life and is therefore not amortized.
The following table presents estimated future amortization expense:
Schedule of Estimated Future Amortization Expense
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 and beyond | ||||
| Total | $ |
Note 10 – Leases
The Company has various operating lease agreements in place for its office and joint ventures. Per FASB’s ASU 2016-02, Leases Topic 842 (“ASU 2016-02”), effective January 1, 2019, the Company is required to report a right-of-use asset and corresponding liability to report the present value of the total lease payments, with appropriate interest calculation. The 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 March 31, 2026, the Company’s lease components included in the consolidated balance sheet were as follows:
Schedule of Lease Components
| Lease component | Balance sheet classification | March 31, 2026 | ||||
| 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 March 31, 2026 were as follows:
Schedule of Future Minimum Lease Payments
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 and beyond | ||||
| Total future minimum lease payments | ||||
| Less: Interest | ( | ) | ||
| Total operating lease liabilities | $ |
For
the three months ended March 31, 2026 and 2025, the weighted average remaining lease term for operating leases was
| 16 |
Note 11 – Notes Payable
Notes payables consisted of the following:
Schedule of Notes Payable
| March 31, 2026 | December 31, 2025 | |||||||
| Related party demand notes with
a | $ | $ | ||||||
| Related party convertible notes with a | ||||||||
| Convertible notes payable. | ||||||||
| Note payable. | ||||||||
| Note payable, gross | ||||||||
| Total, net of discount | ||||||||
| Less current portion | ||||||||
| Long-term portion of notes payable | $ | $ | ||||||
Related Party Demand Notes
JAG Note
In
the fourth quarter of 2022, the Company received $
On January 21, 2025, the Company received a demand notice from JAG.
On
August 13, 2025, the Company and JAG entered into a letter agreement (the “JAG August Letter”)
As
the JAG August Letter added a conversion feature to the JAG Notes, the modification was accounted for as an extinguishment. The Company
recognized a loss of $
On
November 13, 2025, the Company and JAG entered into a letter agreement (the “JAG Nov Letter”) pursuant to which (i) the maturity
date of the JAG Notes was extended until December 31, 2025, if the Company paid $
For
the periods ended March 31, 2026 and 2025, the Company incurred $
Executive Notes
In
the fourth quarter of 2022, the Company received $
For
the periods ended March 31, 2026 and 2025, the Company incurred $
| 17 |
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, 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 $
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 $
On
August 13, 2025, the Company, the Lender, Steven Shum, and the Guarantors entered into a third amendment to the Loan Agreement,
pursuant to which (i) the Lender consented to the change of the Company’s name to INVO Fertility, Inc., (ii) the Lender waived
the event of default that would result from the entry of judgment pursuant to a term sheet with Dr. Pritts and the Pritts Trust,
(iii) the parties agreed to an adjusted repayment schedule whereby the monthly payment under the Loan Agreement increased by $
The
financing fees for the RSLA Loan were recorded as a debt discount. As of March 31, 2026 the debt discount had been fully amortized and
in March 31, 2025, the Company amortized $
| 18 |
Note 12 – Related Party Transactions
JAG Note Payable and Warrant
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 $
On
August 13, 2025, the Company and JAG entered into the JAG August Letter
On
November 13, 2025, the Company and JAG entered into the JAG Nov Letter pursuant to which (i) the maturity date of the JAG Notes was extended
until December 31, 2025, if the Company paid $
For
the periods ended March 31, 2026 and 2025, the Company incurred $
Executive Notes Payable
In
the fourth quarter of 2022, the Company issued demand promissory notes in the aggregate principal amount of $
For
the quarters ended March 31, 2026 and 2025, the Company incurred $
| 19 |
Note 13 – Stockholders’ Equity
Reverse Stock Split (Mar 2026)
On
March 25, 2026, the Company’s board of directors approved a reverse stock split of the Company’s common stock at a ratio
of 1-for-5 and also approved a proportionate increase in its authorized common stock from
shares to .
The
Increase in Authorized Common Stock (Jan 2026)
On January 22, 2026, the Company’s stockholders approved an amendment to our Amended and Restated Articles of Incorporation to increase our number of authorized shares of common stock from to and the Company filed a Certificate of Amendment to its Articles of Incorporation to increase its authorized shares of common stock for the same.
Reverse Stock Split (Nov 2025)
On
November 26, 2025, the Company’s board of directors approved a reverse stock split of the Company’s common stock at a ratio
of 1-for-8 and also approved a proportionate decrease in its authorized common stock to shares from . The
Increase in Authorized Common Stock (July 2025)
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 to . On July 23, 2025, the Company filed a Certificate of Amendment to its Articles of Incorporation to increase its authorized shares of common stock from shares to shares.
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 1,388,888 shares from 4,166,667. The reverse stock split took effect on July 21, 2025. 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.
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 shares from . The
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. shares of Series C-2 Preferred with a stated value of $ per share were authorized under the Series C-2 Certificate of Designation.
Each
share of Series C-2 Preferred has a stated value of $, which, along with any additional amounts accrued thereon pursuant to the
terms of the Series C-2 Certificate of Designation (collectively, the “Conversion Amount”) is convertible into shares of
the Company’s common stock at an initial conversion price equal to $
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 (
| 20 |
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). As the Company did not have sufficient authorized but unissued common stock, the Series C-2 Preferred remained classified as mezzanine equity. Following shareholder ratification of the increase in authorized shares on July 23, 2025, the Series C-2 Preferred was reclassified as permanent equity.
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 () shares of Series C-2 Preferred with a stated value of $ 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 D Preferred Stock
On February 18, 2026, the Company authorized shares of Series D Non-Voting Convertible Preferred Stock (the “Series D Preferred”) with a stated value of $ per share.
The
Series D Preferred is convertible into shares of the Company’s common stock at an initial conversion price of $
Each
share of Series D Preferred is convertible into the Company’s common stock at the option of the holder, except if, after giving
effect to the conversion or issuance, such holder, together with its affiliates, would beneficially own in excess of
The Series D Preferred ranks senior to the Company’s common stock. 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 our company, each holder of Series D Preferred shall be entitled to receive its pro rata portion of an aggregate payment equal to the amount as would be paid on our common stock issuable upon conversion of the Series D Preferred, determined on an as-converted basis, without regard to any beneficial ownership limitation.
Pursuant to the Series D Certificate of Designation, a holder of Series D Preferred is entitled to receive dividends on an as-converted basis (without regard to applicable beneficial ownership limitations) equal to, and in the same form and manner as, dividends paid on the Company’s common stock, other than dividends payable solely in shares of common stock. Notwithstanding the foregoing, the Series D Preferred has no voting rights and has no other rights other than those rights provided by law.
The Company may, at its option, redeem, all outstanding shares of Series D Preferred in whole, or in part, upon not less than five (5) calendar days written notice to the holder prior to the date fixed for redemption thereof, at a redemption price per share of the stated value plus all declared but unpaid dividends thereon.
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 $
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On
June 26, 2025, FNL exercised its Additional Investment Right to acquire shares of Series C-2 Preferred, with an aggregate stated
value of $
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
shares of Series C-2 Preferred, with an aggregate stated value
of $
During
the third quarter of 2025, FNL exercised its Additional Investment Right to acquire shares of Series C-2 Preferred, with an aggregate
stated value of $
On
August 21, 2025, the Company and FNL agreed to reduce the outstanding principal amount of the Second Amended and Restated Debenture by
$
On
September 29, 2025, the Company and FNL entered into an exchange agreement pursuant to which FNL agreed to exchange the Second Amended
and Restated Debenture held by FNL for receipt of shares of Series C-2 Preferred with an aggregated stated value of $
During
the fourth quarter of 2025, FNL exercised its Additional Investment Right to acquire
shares of Series C-2 Preferred, with an aggregate stated value
of $
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January 2025 Public Offering
On
January 14, 2025, the Company, consummated a public offering (the “Jan 2025 Offering”) of units, each consisting of
either one share of common stock, or one pre-funded warrant to purchase one share of common stock (“Jan 2025 PFW”) in lieu
thereof, and one warrant to purchase one share of common stock at an offering price of $ per unit. The 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 $
Also
in connection with the Jan 2025 Offering, on January 13, 2025, the Company entered into a placement agency agreement with Maxim Group
LLC (“Maxim”), 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 shares of C-2
Preferred Stock for $
December 2025 Private Placement
On
December 2, 2025, the Company, entered into a securities purchase agreement (the “Dec 2025 Securities Purchase Agreement”)
with an institutional investor (the “Purchaser”), pursuant to which the Company agreed to issue and sell securities of the
Company, in the aggregate amount of approximately $
The
gross proceeds from the Dec 2025 Private Placement before deducting expenses were approximately $
Also
in connection with the Dec 2025 Private Placement, on December 2, 2025, the Company entered into a placement agency agreement (the “Dec
2025 Placement Agency Agreement”) with Maxim, pursuant to which
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Three Months Ended March 31, 2026
In January 2026, the Company issued shares of common stock upon the exercise of pre-funded warrants.
In
January 2026, the Company issued
In
the first three months of 2026, the Company issued
shares of common stock upon the exercise of warrants in a warrant inducement. The Company received net proceeds of approximately $
During the first three months of 2026, the Company issued shares of common stock upon the conversion of shares of Series C-2 Preferred.
During the first three months of 2026, the Company issued shares of common stock to consultants in consideration of services rendered. The shares were issued under the Company’s 2019 Stock Incentive Plan (the “2019 Plan”).
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. On June 25, 2025, stockholders approved a third amendment and restatement of the Company’s 2019 Stock Incentive Plan to increase the number of shares of common stock available for issuance thereunder to a total amount of .
Options to Purchase Common Stock
Options granted under the 2019 Plan generally have a life of to years and exercise prices equal to or greater than the fair market value of the common stock as determined by the Company’s board of directors. Vesting typically occurs over a one to three-year period.
Schedule of Stock Options Activity
Number of Shares | Weighted Average Exercise Price | |||||||
| Outstanding as of December 31, 2025 | $ | |||||||
| Granted | ||||||||
| Exercised | ||||||||
| Canceled | ||||||||
| Balance as of March 31, 2026 | $ | |||||||
| Exercisable as of March 31, 2026 | $ | |||||||
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Total Intrinsic Value of Options Exercised | Total Fair Value
of Vested | |||||||
| Year ended December 31, 2025 | $ | $ | ||||||
| Three months ended March 31, 2026 | $ | $ | ||||||
For the three months ended March 31, 2026, there were 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 March 31, 2026, the weighted average remaining service period is year.
Restricted Stock and Restricted Stock Units
In the three months ended March 31, 2026, the Company granted shares of restricted stock to consultants under the 2019 Plan that vested immediately.
Note 15 –Warrants
The following table sets forth the activity of warrants:
Schedule of Warrants Activity
Number of Warrants | Weighted Average Exercise Price | |||||||
| Outstanding as of December 31, 2025 | $ | |||||||
| Granted | ||||||||
| Exercised | ( | ) | ||||||
| Canceled | ||||||||
| Balance as of March 31, 2026 | $ | |||||||
The following table sets forth the activity of pre-funded warrants:
Schedule of Pre-funded Warrants Activity
Number of Pre-funded Warrants | Weighted Average Exercise Price | |||||||
| Balance as of December 31, 2025 | $ | |||||||
| Issued | ||||||||
| Exercised | ( | ) | ||||||
Canceled | ||||||||
| Balance as of March 31, 2026 | $ | |||||||
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Jan 2025 Offering Warrants
On
January 14, 2025, the Company consummated the Jan 2025 Offering, consisting of units at an offering price of $ per unit.
The 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 $
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 (April 2025)
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 the Jan 2025 Offering Warrants to purchase up to
shares of the Company’s common stock. The Jan 2025 Offering Warrants were originally issued on January 14, 2025, with an
exercise price of $
Pursuant
to the Inducement Letter Agreement, the Holder agreed to exercise the Jan 2025 Offering Warrants for cash at the exercise price of $
The
April 2025 Warrants included a Share Combination Event Adjustment provision, which provides that if the lowest volume-weighted
average price (“VWAP”) during the five consecutive trading days following a Share Combination Event (as defined in the
April 2025 Warrants) is below the then-current exercise price, the exercise price will be reduced and the number of warrants will be
proportionately increased. Due to this provision, the April 2025 Warrants were classified as a derivative liability. The Company
determined the fair value of the warrants at issuance to be $
JAG Warrant
On
August 13, 2025, pursuant to the JAG August Letter, the Company issued JAG a warrant to purchase up to
December 2025 Private Placement Warrants
On
December 2, 2025, the Company issued pre-funded warrants to purchase shares of common stock at an exercise price of $
The December 2025 Warrants included a provision that prohibited the holder from exercising the warrants until the Company obtained stockholder approval to increase its authorized shares to a level sufficient to cover the underlying shares issuable upon exercise. Because the Company did not have sufficient authorized shares available at issuance, the December 2025 Warrants were classified as a liability.
The
Company determined the fair value of the December 2025 Warrants at issuance to be $
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The
fair value of the warrants was subsequently remeasured at each reporting period. As of December 31, 2025, the fair value was $
On
January 22, 2026, the Company’s shareholders approved an increase in the Company’s authorized stock and as such the December
2025 Warrants were reclassified as equity. The Company recognized a loss of $
The
warrants were exercised in full as part of the January 2026 Warrant Inducement described below.
On
December 2, 2025, the Company issued warrants to purchase up to
See Note 13 – Stockholders’ Equity for additional information on the Dec 2025 Private Placement.
Warrant Inducement (January 2026)
On January 28, 2026, the Company entered into an inducement letter agreement (the “January 2026 Inducement Letter Agreement”) with the holder of the December 2025 Warrants.
Pursuant
to the January 2026 Inducement Letter Agreement, the holder agreed to exercise the December 2025 Warrants for cash at the exercise price of
$
Note 16 – 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
The Clinics Services operating segment consists of financial information for WFI, the Atlanta Clinic, and the Indiana Clinic. The INVOcell Device operating segment consists of financial information relating to the Company’s manufacture and sales of the INVOcell. The Therapeutics segment was divested in May 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
| Three Months Ended March 31, 2026 | Fertility Clinic Services | INVOcell Device | 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 | ||||||||||||
| Depreciation and amortization | ||||||||||||
| Segment profit | $ | $ | ||||||||||
| Reconciliation of net loss | ||||||||||||
| Other income (loss) | ||||||||||||
| Interest expense | ( | ) | ||||||||||
| Unallocated amounts: | ||||||||||||
| Other corporate expenses | ( | ) | ||||||||||
| Loss before taxes | $ | ( | ) | |||||||||
| Assets | $ | $ | ||||||||||
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| Three Months Ended March 31, 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 | ( | ) | ||||||||||||||
| Unallocated amounts: | ||||||||||||||||
| Other corporate expenses | ( | ) | ||||||||||||||
| Loss before taxes | $ | ( | ) | |||||||||||||
| Assets | $ | $ | $ | |||||||||||||
No
single customer comprised
Note 17 – 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.
The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of the provision for income taxes.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBA”) was enacted into law. The OBBA contains several key tax law changes, including extensions and modifications of the Tax Cuts and Jobs Act. In accordance with ASC 740, Income Taxes, the Company is required to recognize the effect of the tax law changes in the period of enactment. The Company is in the process of assessing the impacts from the tax law changes in the OBBA but does not expect a material impact to the Company’s Consolidated Financial Statements.
Income
tax expense was $
Note 18 – 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.
Legal Matters
As of March 31, 2026, 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 that 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.
Note 19 – Subsequent Events
On
May 27, 2025, the Company and JAG entered into a letter agreement (the “JAG May 2026 Letter”) pursuant to which
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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, 2025, 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 to patients in need. Our principal commercial strategy is focused on acquiring, establishing, and operating fertility clinics and related businesses and technologies. Our acquisition strategy focuses on US-based, profitable fertility clinics. Our clinics offer a variety of fertility services including in vitro fertilization (“IVF”) and the intravaginal culture (“IVC”) procedure enabled by its INVOcell® medical device (“INVOcell”) procedure enabled by INVOcell. As of the date of this filing, we have four fertility clinics 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.
Fertility Clinics
On February 18, 2026, we completed our acquisition of Family Beginnings, P.C., an Indiana based fertility clinic that offers both IVF and IVC (“Family Beginnings” or the “Indiana Clinic”).
On August 10, 2023, we consummated the first acquisition of an existing fertility 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 and clinical data supporting its use. These clinics also represent our initial entry into clinic-based fertility operations and 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 building greater scale in our overall operations and to reaching profitability.
INVOcell Device
Our proprietary INVOcell® device enables fertilization and early embryo development to occur in vivo within the woman’s body - the world’s first IVC technique of its kind. Unlike IVF, which relies on expensive laboratory incubators, the INVOcell allows fertilization and early embryo development to take place in the woman’s body and has demonstrated equivalent pregnancy success and live birth rates as IVF.
While INVOcell remains part of our efforts, our strategy has expanded to focus more broadly on providing ART services through clinic operations.
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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.
Wisconsin Fertility Institute and Family Beginnings
As established and profitable clinics, WFI and Family Beginnings have full staffs, including REI’s, an OBGYN trained to provide fertility treatment and full complement of medical, laboratory and administration staff. The day to day clinical operations are handled by on site staff. Our corporate staff manages finance, billing, accounting, human resources and other overhead responsibilities.
Alabama JV
We established HRCFG INVO, LLC (the “Alabama JV”) with HRCFG, LLC (“HRCFG”). 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 Alabama JV. Our responsibilities include providing funding to the Alabama JV and being the exclusive provider of the INVOcell.
Georgia JV
We formed a joint venture with Bloom Fertility, LLC (“Bloom”) to establish a joint venture entity, formed as “Bloom INVO LLC” (the “Georgia JV”). The responsibilities of Bloom include providing all medical services required for the operation of the Georgia JV. Our responsibilities include providing funding to the Georgia JV, lab services, quality management, and being the exclusive provider of the INVOcell.
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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, which includes acquiring established existing practices, building new clinics, and expanding our INVOcell device, is designed to take advantage of the attractive fertility market dynamics of supply and demand.
Competitive Advantages
INVOcell Device and Fertility Clinics
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 network of clinics. For the most part, our clinical 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 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; and | |
| ● | A more personal, intimate experience in creating a baby. |
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 fertility clinics 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 acquire additional IVF clinics in the near term and open new fertility clinics longer term.
The acquisition of existing IVF clinics requires less sales and marketing effort compared to opening new fertility clinics as they have established patient flows that can be built upon. When entering a new market with a fertility clinic, we leverage the experience developed in establishing our Alabama and Georgia joint ventures. We employ strategies to secure patient flow levels that can enable new fertility clinics to become profitable and contribute economically to our overall business as soon as possible. Primarily, our fertility clinics seek to employ local, reputable physicians with strong ties to the OBGYN community.
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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 acquiring and operating fertility 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
JAG Amendment
On May 27, 2026, we entered into a letter agreement (the “JAG May 2026 Letter”) with JAG Multi Investments LLC (“JAG”) pursuant to which (i) the maturity date of certain previously issued convertible notes with a principal balance of $660,000 (the “JAG Notes”) was extended until December 31, 2026, (ii) we agreed to repay the JAG Notes in monthly installments of $50,000 starting in April 2026 with a balloon payment at the end of December 2026, (iii) confirmation that if we raise more than $3,000,000 after the date of the JAG May 2026 Letter, we shall pay ten percent (10%) of any proceeds in excess of $3,000,000 to accelerate repayment of the JAG Notes, (iv) the conversion price of the JAG Notes was reset to $1.60, (v) we agreed to issue to JAG a new warrant (the “JAG May 2026 Warrant”) to purchase up to 150,000 shares of our common stock at an exercise price of $1.60 per share, exercisable for five years from the date of issuance, and (vi) we agreed to the reset of the conversion and exercise prices of the JAG Notes and JAG May 2026 Warrant, respectively, to equal the price of any future financing based on a share price that is lower than the conversion and exercise prices then in effect.
Nasdaq
On April 23, 2026, we received a letter (the “10-K Letter”) from the Listing Qualifications staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that we failed to file our Annual Report on Form 10-K for the year ended December 31, 2025 (the “10- K Filing”), on a timely basis and, as such, no longer satisfies Nasdaq Listing Rule 5250(c)(1) (the “Timely Filing Rule”).
On May 27, 2026, we received an additional letter (the “10-Q Letter”) from the Staff indicating that we failed to file our Quarterly Report on Form 10-Q for the period ended March 31, 2026 (the “10-Q Filing”), on a timely basis.
Both letters also stated that, in accordance with Nasdaq rules, we have 60 calendar days from the date of the 10-K Letter to submit a plan to regain compliance with the Timely Filing Rule. Should the Staff accept such plan, it could grant an exception of up to 180 calendar days from the 10-K Filing’s due date, or until October 13, 2026, to regain compliance.
Our 10-K Filing was filed with the SEC on June 2, 2026. We received an additional letter from the Staff on June 9, 2026 indicating we were no longer noncompliant on our 10-K Filing but as the 10-Q Filing had not been completed, we were still noncompliant with the Timely Filing Rule.
None of the above letters from the Staff had an immediate effect on the listing of our common stock.
Reverse Stock Split (March 2026)
On March 25, 2026, we filed a certificate of change with the Secretary of State of Nevada to effectuate a reverse split of our common stock at a ratio of 1-for-5, and our authorized common stock was proportionately reduced to 50,000,000 shares from 250,000,000 shares. The reverse stock split took effect on March 27, 2026. All share information included in this Form 10-K has been reflected as if the reverse stock split occurred as of the earliest period presented
Closing of Family Beginnings Acquisition
On February 18, 2026, we completed the acquisition of Family Beginnings. The transaction was executed through our wholly owned subsidiary Wood Violet Fertility, LLC (“Wood Violet”). The total purchase price was approximately $760,000, consisting of $360,000 in cash, of which $210,000 was paid at closing, $150,000 is a holdback to be released six months from the closing date, and $400,000 in Series D Preferred Stock.
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As part of the acquisition structure, we acquired the clinic’s non-medical business assets through Wood Violet, while the clinic’s medical assets were acquired by Fertility, P.A., which entered into a long-term Management Services Agreement with Wood Violet. Under this agreement, Wood Violet will provide management, administrative, laboratory, and operational support services to the clinic for an initial 10-year term, renewable for additional five-year periods. Fertility, P.A. agreed to reimburse Wood Violet for costs incurred in providing such services plus twenty percent (20%).
In connection with the acquisition, we also entered into a lease for approximately 4,387 square feet of clinic and office space in Indianapolis, effective March 1, 2026, with an initial term through July 31, 2033.
Founded more than a decade ago, Family Beginnings has built a strong reputation for delivering comprehensive fertility services with a highly personalized, patient-first approach. The clinic offers a full suite of reproductive services, including in vitro fertilization, intravaginal culture (as an early adopter of our INVOcell solution), ovulation induction, intrauterine insemination, fertility preservation, and diagnostic testing, supported by an experienced clinical and embryology team. The acquisition expands INVO’s clinical footprint and is expected to support continued growth of our fertility services platform.
Warrant Inducement (January 2026)
On January 28, 2026, we entered into an inducement letter agreement (the “January 2026 Inducement Letter Agreement”) with an institutional investor and existing holder (the “Holder”) of the Common Warrants (as defined below).
The issuance of the shares of common stock upon exercise of such the Common Warrants was registered pursuant to a registration statement on Form S-1 (File No. 333-292206), which was declared effective by the SEC on December 29, 2025.
Pursuant to the January 2026 Inducement Letter Agreement, the Holder agreed to exercise the Common Warrants for cash at the exercise price of $7.95 per share in consideration for our agreement to issue new unregistered warrants to purchase up to an aggregate of 1,893,492 shares of common stock at an exercise price of $7.95 per share. Such new warrants will become 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 such new warrants and the shares of common stock upon the exercise thereof and have a term of five and one-half years from the date stockholder approval is obtained.
We registered the resale of the shares underlying such new warrants pursuant to a registration statement on Form S-1 (File No. 333-293135), which was declared effective by the SEC on February 12, 2026, and we agreed to observe customary limitations on additional issuances of common stock and variable-rate financing arrangements for a limited period following the warrant inducement transaction.
The aggregate gross proceeds to us from the exercise of such existing warrants was approximately $7.5 million, before deducting offering expenses payable by us.
Maxim Group LLC (“Maxim”) acted as our financial advisor in connection with the inducement transaction.
Increase in Authorized Common Stock (Jan 2026)
On January 22, 2026, our stockholders approved an amendment to our Amended and Restated Articles of Incorporation to increase our number of authorized shares of common stock from 6,250,000 to 250,000,000, and we filed a Certificate of Amendment to our Articles of Incorporation to increase our authorized shares of common stock for the same.
Private Placement (December 2025)
On December 2, 2025, we entered into a securities purchase agreement with an institutional investor for a private placement of approximately $4.0 million in securities, comprised of 47,000 shares of Common Stock, pre-funded warrants to purchase 426,373 shares of Common Stock (the “Pre-Funded Warrants”), and common warrants to purchase 946,746 shares of Common Stock (the “Common Warrants”). The Common Warrants became exercisable on January 22, 2026 upon receipt of approval from the stockholders of INVO to increase the number of authorized shares of common stock available for issuance thereunder and as required by the applicable rules and regulations of the Nasdaq Capital Market (or any successor entity) with respect to issuance of all of such new warrants and the shares of common stock upon the exercise thereof, expired five years thereafter, and carried an exercise price of $8.45 per share. The Pre-Funded Warrants were immediately exercisable at $0.0005 per share until exercised in full.
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In connection with the foregoing private placement, we entered into a placement agency agreement with Maxim on a reasonable best efforts basis, pursuant to which we agreed to pay the Placement Agent a fee equal to 8.0% of gross proceeds, warrants to purchase 23,669 shares of Common Stock at $10.5625 per share, and reimbursement of expenses up to $50,000.
Net proceeds from the private placement are being used to support our growth and liquidity needs, including funding a portion of the Family Beginnings P.C. acquisition, paying certain outstanding debt obligations, and providing additional working capital.
Results of Operations
Our focus has been on building the business, strengthening our balance sheet, and seeking out additional acquisition opportunities and in the early part of 2026 we made substantial progress toward each of these goals. In January 2026, we raised net proceeds of $7.1 million through a warrant inducement offering, which we used in part to satisfy $2.2 million in deferred consideration obligations related to the WFI acquisition. Also in January 2026, all outstanding shares of our Series C-2 Convertible Preferred Stock were converted into common stock, further simplifying our capital structure. Building on this balance sheet momentum, we closed on the acquisition of Family Beginnings in Indiana during February 2026 (see Recent Developments for additional information), and we now have a robust pipeline of additional acquisition opportunities.
Looking ahead, we expect our fertility operations to expand further, both through organic growth of our existing clinics and through the acquisition of additional, profitable fertility clinics. Our active pursuit of additional acquisitions is aimed at accelerating our growth, building scale in our operations, and driving our overall business to cash flow break even and beyond 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 that 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, (6) generally improving insurance (private and public) reimbursement trends, and (7) an administration that supports increased access to fertility treatments.
Comparison of the Three Months Ended March 31, 2026, and 2025
Revenue
Revenue for the three months ended March 31, 2026 was approximately $2.0 million, compared to approximately $1.6 million for the three months ended March 31, 2025. The increase of approximately $0.4 million, or 23%, was primarily attributable to increased revenue of $0.3 million from growth initiatives at the Georgia JV and $ 0.1 million the addition of Family Beginnings.
Cost of Services
Cost of services for the three months ended March 31, 2026 was approximately $1.3 million, compared to approximately $1.0 million for the three months ended March 31, 2025. The increase of approximately $0.3 million or 23% directly correlates to the increase in clinic revenue.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses for the three months ended March 31, 2026 were approximately $2.2 million, compared to approximately $1.6 million for the three months ended March 31, 2025. The increase of approximately $0.6 million, or approximately 40%, of which, $0.3 million was related to increased professional fees, $0.1 million was related to increased personnel costs, and $0.1 million was related to increased general administrative operating expenses. Non-cash, stock-based compensation expense was $0.2 million in the period, compared to $0.1 million for the same period in the prior year.
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Loss on Changes in Fair Value
Loss on change in fair value of warrants was approximately $3.8 million for the three months ended March 31, 2026, compared to none for the three months ended March 31, 2025. The 2026 loss reflects the remeasurement of liability classified warrants to fair value immediately prior to their reclassification to equity during the quarter.
Interest Expense and Financing Fees
Interest expense and financing fees were approximately $0.2 million for the three months ended March 31, 2026, compared to approximately $0.3 million for the three months ended March 31, 2025.
Loss from Discontinued Operations
Loss from discontinued operations for the three months ended March 31, 2026 and 2025 were none and $15.9 million, respectively. The loss in 2025 was directly related to the divesture of NAYA Therapeutics.
Liquidity and Capital Resources
For the three months ended March 31, 2026, and 2025, we had net losses of approximately $5.5 million and $17.4 million, respectively, and an accumulated deficit of approximately $96.9 million as of March 31, 2026. Approximately $4.1 million of the net loss was related to non-cash expenses for the three months ended March 31, 2026, compared to $14.8 million for the three months ended March 31, 2025. We had negative working capital of approximately $0.6 million as of March 31, 2026, compared to negative working capital of approximately $7.5 million as of December 31, 2025. As of March 31, 2026, we had stockholder’s equity of approximately $15.0 million compared to stockholder’s equity of approximately $7.2 million as of December 31, 2025.
We have been dependent on raising capital through debt and equity financing to secure the cash required to fund our operating expenses and investing activities. During the first three months of 2026, we received net proceeds of approximately $7.1 million from the exercise of warrants, which was partially used to repay approximately $0.1 million in debt.
Over the next twelve months, our plan includes growing our clinic revenue organically and pursuing additional profitable fertility clinic acquisitions. Until we can generate a sufficient amount of 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.
These factors, among others, raise substantial doubt about our ability to continue as a going concern. If we are unable to raise additional funding to meet our working capital needs in the future, we will be forced to delay or reduce the scope of our growth and acquisition plans and/or limit or cease our operations. If we cannot continue as a going concern, our stockholders would likely lose most or all of their investment in INVO. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Cash Flows
The following table shows a summary of our cash flows for the three months ended March 31, 2026 and 2025:
| 2026 | 2025 | |||||||
| Cash (used in) provided by: | ||||||||
| Operating activities | (1,886,329 | ) | (3,545,534 | ) | ||||
| Investing activities | (240,246 | ) | (14,650 | ) | ||||
| Financing activities | 4,953,188 | 3,659,195 | ||||||
Cash Flows from Operating Activities
As of March 31, 2026, we had approximately $4.9 million in cash, compared to approximately $0.8 million as of March 31, 2025. Net cash used in operating activities for the first three months of 2026 was approximately $1.9 million, compared to approximately $3.5 million for the same period in 2025. The decrease in net cash used in operating activities was primarily due to changes in the business from the divesture of NAYA Therapeutics.
Cash Flows from Investing Activities
During the three months ended March 31, 2026, cash used in investing activities of approximately $0.2 million was primarily related to the acquisition of Family Beginnings. During the three months ended March 31, 2025, cash used in investing activities of $14 thousand was primarily related to the purchase of equipment for WFI.
Cash Flows from Financing Activities
During the three months ended March 31, 2026, cash provided by financing activities of approximately $5.0 million was primarily related to approximately $7.1 million of net proceeds from warrant exercises which was partially offset by approximately $2.0 million for deferred consideration payments for WFI and approximately $0.1 million of debt repayment. During the three months ended March 31, 2025, cash provided by financing activities of approximately $3.7 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 and approximately $1.1 million in debt repayment.
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Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition presented in this section is based upon our unaudited 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 consolidated 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.
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 4 – Variable Interest Entities for additional information on the Company’s consolidated VIEs.
Equity Method Investments
Investments in unconsolidated affiliates, over which the Company exerts significant influence but does not control or otherwise consolidate, are accounted for using the equity method. Equity method investments are initially recorded at cost. These investments are included in investment in joint ventures in the accompanying consolidated balance sheets. The Company’s share of the profits and losses from these investments is reported in loss from equity method joint venture in the accompanying consolidated statements of operations. The Company monitors its investments for other-than-temporary impairment by considering factors such as current economic and market conditions and the operating performance of the investees and records reductions in carrying values when necessary. See Note 4 – Variable Interest Entities for additional information on the Company’s equity method VIE’s.
Fair Value of Financial Instruments
The Company’s financial instruments consist primarily of cash, accounts receivable, accounts payable, notes payable, convertible preferred stock, and warrants. The carrying value of cash, accounts receivable, accounts payable and notes payable, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. The Company measures the fair value of its liability-classified warrants at the end of each reporting period using a Black-Scholes option pricing model, and changes in fair value are recognized in the consolidated statements of operations.
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.
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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 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 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 management, including the Chief Executive Officer and the 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 Securities Exchange Act of 1934, 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 March 31, 2026 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 March 31, 2026, 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
Except as described above, 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; 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.
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
None.
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 March 31, 2026, none of our directors or officers informed us of the
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Item 6. Exhibits
| Exhibit No. | Description | |
| 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 March 31, 2026 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 June 22, 2026.
| INVO Fertility, Inc. | ||
| Date: June 22, 2026 | By: | /s/ Steven Shum |
| Steven Shum, Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: June 22, 2026 | By: | /s/ Terah Krigsvold |
| Terah Krigsvold, Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) |
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Exhibit 31.1
Certification of Principal Executive Officer of INVO Fertility, Inc.
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Steven Shum, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of INVO Fertility, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the unaudited consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| INVO Fertility, Inc. | ||
| Date: June 22, 2026 | By: | /s/ Steven Shum |
| Steven Shum | ||
| (Principal Executive Officer) | ||
Exhibit 31.2
Certification of Principal Financial Officer of INVO Fertility, Inc.
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Terah Krigsvold, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of INVO Fertility, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the unaudited consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| INVO Fertility, Inc. | ||
| Date: June 22, 2026 | By: | /s/ Terah Krigsvold |
| Terah Krigsvold | ||
Chief Financial Officer (Principal Financial and Accounting Officer) | ||
Exhibit 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
In connection with the Quarterly Report on Form 10-Q of INVO Fertility, Inc. (the “Company”) for the period ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Steven Shum, Chief Executive Officer of the Company, and Andrea Goren, Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| INVO Fertility, Inc. | ||
| Date: June 22, 2026 | By: | /s/ Steven Shum |
| Steven Shum | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| INVO Fertility, Inc. | ||
| Date: June 22, 2026 | By: | /s/ Terah Krigsvold |
| Terah Krigsvold | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||