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SARASOTA, FL – INVO Bioscience, Inc. (NASDAQ:INVO), a medical device company specializing in fertility treatment, has entered into a financial agreement that provides an immediate cash injection to bolster its working capital and support general corporate functions. On September 25, 2024, the company secured a Merchant Cash Advance of $265,000, in exchange for $384,250 of its future sales.
Under the terms of the Standard Merchant Cash Advance Agreement, INVO Bioscience will repay the advance by remitting $9,606 weekly until the obligation is fulfilled. The net proceeds received by the company amount to $251,750, after accounting for transaction costs and fees.
The agreement was made possible with the consent of Decathlon Alpha V, L.P., INVO Bioscience's senior secured lender. Decathlon granted approval through an Amended and Restated First Amendment to the existing Revenue Loan and Security Agreement dated September 29, 2023. As part of the amendment, Decathlon stipulated that the minimum interest multiples in the Revenue Loan and Security Agreement would increase by 0.15x as of December 1, 2024, should INVO Bioscience fail to secure a net equity investment of $1,000,000 by November 30, 2024.
This strategic move by INVO Bioscience reflects its ongoing efforts to maintain liquidity and continue operations amidst the competitive landscape of the medical instruments and apparatus industry. The company's choice to pursue a Merchant Cash Advance indicates a proactive approach to financial management, aimed at ensuring steady cash flow for the company's immediate needs.
In other recent news, INVO Bioscience, a medical device company, has been facing challenges with Nasdaq's minimum bid price requirement. The company has been given until May 17, 2025, to rectify this issue, with the possibility of a second 180-day period if necessary. In addition, INVO Bioscience identified an error in its financial statements related to the valuation of assets and liabilities, which did not impact its revenue, operations, earnings per share, or net equity.
The company also announced amendments to its merger agreement with NAYA Biosciences, extending the deadline to October 14, 2024. This arrangement includes NAYA's purchase of 27,500 shares of Series A Preferred Stock for $137,500, contingent on the merger's completion. The merger will comprise a combination of INVO common stock and newly created Series C Convertible Preferred Stock, with NAYA set to transfer the majority of common stock payment shares to its secured lender, Five Narrow Lane LP.
These recent developments come as INVO Bioscience continues to navigate regulatory requirements and seeks to regain compliance with Nasdaq's listing rules. The company has committed to seeking shareholder approval for the issuance of common stock upon conversion of the Series C Preferred Stock.
Meanwhile, INVO Bioscience has received an extension from The Nasdaq Stock Market to regain compliance with listing requirements, following potential delisting due to insufficient stockholders' equity.
InvestingPro Insights
INVO Bioscience's recent financial maneuver aligns with several key insights from InvestingPro. The company's decision to secure a Merchant Cash Advance of $265,000 reflects its urgent need for working capital, which is consistent with the InvestingPro Tip indicating that INVO is "quickly burning through cash." This cash infusion is crucial, especially considering that "short term obligations exceed liquid assets," another InvestingPro Tip that underscores the company's financial pressures.
Despite these challenges, INVO Bioscience has shown remarkable revenue growth. InvestingPro Data reveals a staggering revenue growth of 390.03% over the last twelve months as of Q2 2024, with quarterly revenue growth reaching 481.38% in Q2 2024. This explosive growth may explain why "analysts anticipate sales growth in the current year," as noted in another InvestingPro Tip.
However, investors should approach with caution. The company's market capitalization stands at just $2.71 million, and it's "not profitable over the last twelve months," according to InvestingPro Tips. The operating income margin of -90.89% further illustrates the company's profitability challenges.
For a more comprehensive analysis, InvestingPro offers 5 additional tips that could provide valuable insights into INVO Bioscience's financial health and market position.
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