8-K: INVO Fertility Amends Loan, Interest Multiples Rise

INVO Fertility, Inc. entered into a restated third amendment to its revenue loan agreement, increasing minimum interest multiples due to unfulfilled equity investment conditions and adjusting repayment terms.

Summary

• INVO Fertility, Inc. (formerly NAYA Biosciences, Inc.) entered into a Restated Third Amendment to its Revenue Loan and Security Agreement with Decathlon Alpha V, L.P. on September 22, 2025, effective August 11, 2025.
• The original loan, dated September 29, 2023, was for a gross amount of $1,500,000.
• The company failed to receive an equity investment of at least $1,000,000 by November 30, 2024, as stipulated in the First Amendment.
• As a consequence, the Minimum Interest multiples under the loan agreement increased by 0.15 effective December 1, 2024.
• Monthly loan payments increased by $20,000 beginning in August 2025.
• The Lender consented to the company's name change to INVO Fertility, Inc.
• The Lender waived an event of default that would have resulted from a consent judgment related to the Pritts Settlement, which involved a payment exceeding $50,000.
• The company is required to reimburse the Lender approximately $17,488 for fees and expenses incurred in connection with the amendments and the Pritts Settlement.
• Previous amendments included an agreement to pay down the loan by at least $500,000 and increase monthly payments by up to $30,000 if a private offering closes, and to retain an investment banker if liquidity covenants are not met.

Sentiment

Score: 3

Explanation: The filing indicates increased financial pressure through higher debt costs and a failed equity raise, partially offset by a waiver of default, but overall points to a more challenging financial position for the company.

Positives

• The Lender consented to the company's name change to INVO Fertility, Inc., aligning its corporate identity with its business focus.
• The Lender waived an event of default resulting from the Pritts Settlement, preventing immediate negative consequences from a judgment for payment of money in excess of $50,000.

Negatives

• Minimum Interest multiples increased by 0.15 as of December 1, 2024, due to the company's failure to secure a $1,000,000 equity investment by November 30, 2024, increasing future interest costs.
• Monthly loan payments increased by $20,000 starting August 2025, leading to higher immediate cash outflows for debt servicing.
• The company incurred approximately $17,488 in additional fees and expenses payable to the Lender for the various amendments and the Pritts Settlement.
• The company entered into a settlement agreement (Pritts Settlement) involving a consent judgment for payment of money in excess of $50,000, indicating a financial liability.

Risks

• Increased debt servicing costs due to higher monthly payments and increased minimum interest multiples will strain cash flow.
• Failure to meet liquidity covenants could force the company to retain an investment banker to pursue further financing or a sale of the company.
• Ongoing reliance on debt financing and potential difficulty in raising equity capital, as evidenced by the failure to secure a $1,000,000 equity investment, poses a risk to long-term financial stability.
• Legal proceedings (Pritts Settlement) resulting in a judgment for payment of money in excess of $50,000 indicate potential legal liabilities and financial obligations.

Future Outlook

The company faces increased debt servicing costs due to higher monthly payments and increased minimum interest multiples. It has committed to retaining an investment banker to pursue financing or a sale if it fails to meet certain liquidity covenants, indicating potential future capital raising or strategic alternatives.

Management Comments

• The Company requested that Lender consent to an amendment to the Company's name to INVO Fertility, Inc. and consent to the entry by the Company into a settlement agreement with Dr. Elizabeth Pritts.
• The Company acknowledges and agrees that the Minimum Interest multiples on Schedule 11.3 to the Agreement increased by 0.15 as of December 1, 2024, due to the Company's failure to receive equity investments in the net amount of $1,000,000.

Industry Context

The fertility sector continues to see demand, but companies like INVO Fertility, Inc. may face challenges in securing capital, as evidenced by the failure to raise a $1 million equity investment. Increased debt costs could impact growth initiatives or operational flexibility, potentially putting it at a disadvantage compared to better-capitalized competitors or those with stronger cash flow generation.

Comparison to Industry Standards

• The increase in debt costs and the need for multiple loan amendments suggest financial strain, which is generally not indicative of a strong position compared to industry leaders who typically secure more favorable financing terms or rely less on debt.
• The failure to raise a $1 million equity investment by a specified deadline could signal investor apprehension or a challenging capital market environment for smaller fertility companies, contrasting with larger, more established players who might find it easier to attract capital.
• The requirement to retain an an investment banker for financing or sale if liquidity covenants are not met indicates a higher risk profile than industry peers with robust balance sheets and consistent profitability.

Corporate Governance

Legal Proceedings

• The company, INVO Centers LLC, Wisconsin Fertility and Reproductive Surgery Associates, S.C., and Wood Violet Fertility LLC entered into a settlement agreement with Dr. Elizabeth Pritts, which includes the entry of a consent judgment against them for payment of money in excess of $50,000.

Stakeholder Impact

• Shareholders face increased financial risk due to higher debt servicing costs and the company's inability to secure equity financing, potentially leading to dilution if future equity raises occur under unfavorable terms or a sale of the company.
• Creditors (Decathlon Alpha V LP) benefit from increased interest multiples and higher monthly payments, improving their return and security on the loan.
• Management faces pressure to improve liquidity and potentially pursue further financing or strategic alternatives.

Next Steps

• Continue making increased monthly loan payments of $20,000 starting August 2025.
• Potentially pursue a private offering of securities, which would trigger further loan paydown and increased monthly payments.
• Retain an investment banker to pursue financing or a sale if liquidity covenants are not met.

Key Dates

Recommendation

While the company secured a waiver for a default and the lender consented to the name change, the underlying financial health appears challenged. The failure to raise $1 million in equity, coupled with increased interest rates and monthly payments on existing debt, indicates ongoing liquidity pressures. The agreement to potentially seek an investment banker for financing or sale if liquidity covenants are not met suggests a precarious financial position. Investors should hold and monitor for signs of improved financial stability or successful capital raises, as the current situation presents both risks and potential for strategic shifts.

Keywords

INVO Fertility, Decathlon Alpha V, Revenue Loan, Loan Amendment, Equity Investment, Interest Multiples, SEC Filing, 8-K, Fertility, Biotechnology, Corporate Finance, Debt Financing