10-K: INVO Fertility Refocuses on Fertility Market, Plans Divestiture of NAYA Therapeutics

INVO Fertility, formerly NAYA Biosciences, will refocus on its fertility business and divest its NAYA Therapeutics subsidiary after failing to gain shareholder support for key transaction elements.

Summary

• INVO Fertility, formerly NAYA Biosciences, is primarily a healthcare services company focused on the fertility marketplace.
• The company's strategy involves building, acquiring, and operating fertility clinics, including INVO Centers and IVF clinics.
• As of the filing date, INVO Fertility has two operational INVO Centers and one IVF clinic in the United States.
• In October 2024, the company acquired NAYA Therapeutics, but plans to divest it to refocus on the fertility market.
• The company will retain a minority interest in NAYA Therapeutics.
• In August 2023, INVO Fertility acquired the Wisconsin Fertility Institute (WFI), which tripled annual revenue.
• The company plans to open additional wholly-owned INVO Centers.
• INVO Fertility's proprietary technology, INVOcell, allows fertilization and early embryo development to take place in vivo.
• The company changed its corporate name to INVO Fertility, Inc. on April 14, 2025, and expects to change its ticker symbol to IVF on April 28, 2025.
• A 1-for-12 reverse stock split was effectuated on March 18, 2025.
• The company completed a public offering on January 14, 2025, raising approximately $9.5 million in gross proceeds.
• The company intends to use the net proceeds from the January 2025 offering to fund the second installment of the WFI purchase price, redeem Series C-2 preferred stock, pay outstanding debt obligations, and for clinical trials, product development, marketing, and general corporate purposes.

Sentiment

Score: 4

Explanation: The document presents a mixed picture. While there are positive aspects such as revenue growth from the WFI acquisition and a recent public offering, the company faces significant financial challenges, including operating losses, debt, and a going concern qualification from its auditor. The planned divestiture of NAYA Therapeutics suggests a strategic shift to address these challenges, but the overall outlook remains uncertain.

Positives

• The acquisition of Wisconsin Fertility Institute (WFI) has tripled the company's annual revenue.
• The company is refocusing on its core fertility business, which may lead to improved operational efficiency.
• The company completed a public offering on January 14, 2025, raising approximately $9.5 million in gross proceeds.
• The company's proprietary technology, INVOcell, offers a more affordable and accessible option for fertility treatment.

Negatives

• The company has incurred significant operating losses and has a net capital deficiency.
• The company's independent auditor has expressed substantial doubt about its ability to continue as a going concern.
• The company failed to gain shareholder support for key elements of the NAYA Therapeutics transaction.
• The company is in negotiations to restructure the terms of the WFI acquisition, including payment terms.
• The company received a delisting notice from Nasdaq for failing to maintain a minimum bid price, although compliance has since been regained.
• The company received a notice from Nasdaq for failing to file its Annual Report on Form 10-K on a timely basis.

Risks

• The company's financial situation creates doubt about its ability to continue as a going concern.
• The company has substantial indebtedness outstanding.
• The company will need to raise additional funding, which may not be available on acceptable terms, or at all.
• The company may not be able to successfully manage Wisconsin Fertility Institute and to achieve the benefits expected to result from the acquisition.
• The company's fertility business is subject to significant competition.
• The company is subject to significant domestic and international governmental regulation.
• The company is subject to risks relating to federal and state healthcare fraud, waste, and abuse laws.
• The company is subject to the requirements of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
• The company may not be able to develop or continue its business if it fails to retain key personnel.
• The company is susceptible to cybersecurity breaches and cyber-related fraud.
• The company may be subject to risks related to changes in laws regarding abortion, which can affect how a fertility clinic must treat and handle embryos.

Future Outlook

The company plans to grow WFI, pursue additional IVF clinic acquisitions, and continue to work on expanding the distribution of the INVOcell to third-party fertility clinics. The company expects to complete the separation and divestiture of NAYA Therapeutics in the second quarter of 2025.

Industry Context

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.

Comparison to Industry Standards

• The global bispecific antibodies market is projected to witness over 40% compound annual growth rate and reach over $80 billion by 2030.
• The current market leader for multiple myeloma, CD38 targeting monoclonal antibody, is Johnson & Johnsons Darzalex (daratumumab) which reached $8 billion in global sales in 2022.
• The market size for liver cancer treatment was $2.44 billion in 2022 and is expected to grow a compounded annual growth rate of 20% to reach $10.48 billion in 2030.

Legal Proceedings

• Seline Miller, a former NTI employee, filed a complaint against NTI alleging entitlement to severance and other benefits.

Related Party Transactions

• The company issued a series of demand promissory notes to a related party, JAG, a company in which the Companys chief financial officer is a beneficiary.
• The company issued demand promissory notes to its chief executive officer and an entity controlled by its chief financial officer.

Stakeholder Impact

• Stockholders may be diluted through the company's efforts to obtain financing and from issuance of additional shares of common stock.
• The company's status as a former shell company could prevent it from raising additional funds to develop additional technological advancements, which could cause the value of its securities to decline in value.
• If the company cannot continue as a going concern, its stockholders would likely lose most or all of their investment in the company.

Next Steps

• The company plans to grow WFI and pursue additional IVF clinic acquisitions.
• The company expects to complete the separation and divestiture of NAYA Therapeutics in the second quarter of 2025.

Key Dates

Keywords

fertility, INVOcell, IVF, NAYA Therapeutics, acquisition, clinics, preferred stock, reverse stock split, public offering, financials