[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) INVO Fertility achieved record Q2 2025 revenue of $1.86 million, alongside increased net and Adjusted EBITDA losses, while also expanding services and securing a new patent [Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) INVO Fertility reported a 1% increase in total revenue to $1.86 million in Q2 2025, setting a new quarterly record. However, the company experienced an increased net loss from continuing operations of $(3.2) million and a higher Adjusted EBITDA loss of $(587,230) compared to the prior year Q2 2025 Key Financial Highlights (YoY) | Metric | Q2 2025 | Q2 2024 | Change | | :--------------------------------- | :------------ | :------------ | :------- | | Total Revenue | $1,863,654 | $1,836,597 | +1% | | Consolidated clinic revenue | $1,832,094 | $1,807,921 | +1% | | Revenue from all clinics (incl. equity method) | $2,188,893 | $2,141,229 | +2% | | Net loss from continuing operations | $(3.2) million | $(2.2) million | -45.5% | | Adjusted EBITDA | $(587,230) | $(509,623) | -15.2% | [Operational and Other Highlights](index=1&type=section&id=Operational%20and%20other%20Highlights) During Q2 2025, INVO Fertility achieved several operational milestones, including recognition for its Wisconsin clinic, expansion of patient services with telehealth and PRP therapy, and securing a new patent for its INVOcell device. The company also completed the divestiture of NAYA Therapeutics - Wisconsin Fertility Institute was recognized on Newsweek's List of America's Best Fertility Clinics for 2025[5](index=5&type=chunk) - Launched telehealth capabilities and added Platelet-Rich Plasma (PRP) therapy at the Wisconsin clinic to expand geographic reach and service offerings[5](index=5&type=chunk) - Received a notice of allowance on a new patent for a modified INVOcell device, extending intellectual property protection through 2040[5](index=5&type=chunk) - Expanded clinical and embryology training support and improved pricing for its INVOcell technology[5](index=5&type=chunk) - Completed the divestiture of NAYA Therapeutics, Inc[5](index=5&type=chunk) [Strategic Direction & Management Commentary](index=2&type=section&id=Strategic%20Direction%20%26%20Management%20Commentary) The company divested NAYA Therapeutics to refocus on core fertility operations, with management emphasizing service expansion, INVOcell support, and operational efficiency [Return to Focus on Fertility Operations](index=2&type=section&id=Return%20to%20Focus%20on%20Fertility%20Operations) INVO Fertility completed the divestiture of a majority stake in NAYA Therapeutics, Inc. on June 2, 2025, retaining a minority position. This strategic move allows the company to refocus exclusively on its fertility operations, with a dedicated management team and board - Completed the divestiture of a majority stake in NAYA Therapeutics, Inc. on June 2, 2025[6](index=6&type=chunk) - Retained a minority position in NAYA, offering potential benefits from its ongoing clinical development[6](index=6&type=chunk) - The revised corporate structure enables both businesses to focus on their respective opportunities and operations[6](index=6&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) CEO Steve Shum highlighted the company's progress in driving growth and innovation in existing fertility operations. He emphasized expanding service offerings, enhancing INVOcell technology support, and maintaining an efficient, scalable operating structure while seeking accretive revenue opportunities - CEO Steve Shum noted progress in driving growth and innovation in existing fertility operations following the decision to refocus[7](index=7&type=chunk) - Expanded service offerings to include new telehealth options and PRP therapy, demonstrating commitment to patient-centered care[7](index=7&type=chunk) - Ramped up training support for INVOcell® technology with clinicians and embryologists[7](index=7&type=chunk) - Committed to maintaining a highly efficient and scalable operating structure while layering in complementary and accretive revenue-generating businesses and technologies[7](index=7&type=chunk) [Company Information & Disclosures](index=2&type=section&id=Company%20Information%20%26%20Disclosures) This section details the company's non-GAAP Adjusted EBITDA metric, its mission in assisted reproductive technology, forward-looking statement disclaimers, and contact information [Use of Non-GAAP Measure (Adjusted EBITDA)](index=2&type=section&id=Use%20of%20Non-GAAP%20Measure) The company uses Adjusted EBITDA as a non-GAAP measure, which excludes the loss from NAYA and merger-related costs. Management believes this metric provides valuable insight into operating performance and liquidity, supplementing GAAP figures - Adjusted EBITDA is a non-GAAP measure that does not include the loss from NAYA or corresponding merger-related costs[8](index=8&type=chunk) - Management believes Adjusted EBITDA provides meaningful information related to operating performance and liquidity, enhancing understanding of financial results and trends[9](index=9&type=chunk) - A reconciliation of Adjusted EBITDA to the nearest GAAP measure is included in the press release and the Company's Form 10-Q[8](index=8&type=chunk)[9](index=9&type=chunk) [About INVO Fertility](index=3&type=section&id=About%20INVO%20Fertility) INVO Fertility is a healthcare services company focused on expanding access to assisted reproductive technology (ART) care. Its strategy involves building, acquiring, and operating fertility clinics, including 'INVO Centers' utilizing the proprietary INVOcell® device for intravaginal culture (IVC), and profitable in vitro fertilization (IVF) clinics - INVO Fertility is a healthcare services fertility company dedicated to expanding access to assisted reproductive technology (ART) care[10](index=10&type=chunk) - The principal commercial strategy is focused on building, acquiring, and operating fertility clinics, including 'INVO Centers' offering the intravaginal culture (IVC) procedure enabled by the INVOcell® medical device, and US-based, profitable in vitro fertilization (IVF) clinics[10](index=10&type=chunk) - INVOcell is a proprietary medical device allowing fertilization and early embryo development in vivo within the woman's body, offering a more connected, intimate, and affordable experience with comparable results to traditional IVF[10](index=10&type=chunk) [Safe Harbor Statement](index=3&type=section&id=Safe%20Harbor%20Statement) This section serves as a legal disclaimer, indicating that the release contains forward-looking statements subject to risks, uncertainties, and contingencies that may cause actual results to differ materially. The company disclaims any obligation to update these statements - The release includes forward-looking statements under the Private Securities Litigation Reform Act of 1995[11](index=11&type=chunk) - All forward-looking statements involve risks, uncertainties, and contingencies that may cause actual results to differ materially from anticipated results[11](index=11&type=chunk) - The company is under no obligation to update or alter its forward-looking statements[11](index=11&type=chunk) [Contact Information](index=3&type=section&id=For%20more%20information%2C%20please%20contact%3A) Contact details are provided for INVO Fertility, Inc. (CEO Steve Shum) and Investor Relations (Lytham Partners, LLC) - Contact information for INVO Fertility, Inc. CEO Steve Shum (sshum@invobio.com, 978-878-9505) and Investor Contact Robert Blum of Lytham Partners, LLC (INVO@lythampartners.com, 602-889-9700) is provided[12](index=12&type=chunk) [Financial Statements & Reconciliations](index=4&type=section&id=Financial%20Statements%20%26%20Reconciliations) Detailed financial statements reveal a 1.5% revenue increase for Q2 2025, alongside higher operating expenses and net losses, with a reconciliation of Adjusted EBITDA [Consolidated Statements of Operations](index=4&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The consolidated statements of operations show a 1.5% increase in total revenue for Q2 2025 compared to Q2 2024. However, operating expenses significantly increased by 31.5%, primarily due to a $1.4 million impairment loss, leading to a substantial rise in net loss from continuing operations and total net loss Consolidated Statements of Operations (Three Months Ended June 30) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--------------------------------- | :------------ | :------------ | :----------- | | Clinic revenue | $1,832,094 | $1,807,921 | +1.3% | | Product revenue | $31,560 | $28,676 | +10.0% | | **Total revenue** | **$1,863,654** | **$1,836,597** | **+1.5%** | | Cost of revenue | $1,093,603 | $861,648 | +26.9% | | Selling, general and administrative expenses | $2,193,049 | $2,647,524 | -17.2% | | Impairment loss | $1,397,353 | $- | N/A | | **Total operating expenses** | **$4,853,742** | **$3,689,510** | **+31.5%** | | **Loss from operations** | **$(2,990,088)** | **$(1,852,913)** | **-61.4%** | | **Net loss from continuing operations** | **$(3,209,094)** | **$(2,245,170)** | **-43.0%** | | Loss on disposition of NTI | $(1,534,517) | $- | N/A | | Loss from discontinued operations of NTI | $(541,247) | $- | N/A | | **Net loss** | **$(5,284,858)** | **$(2,245,170)** | **-135.4%** | | Net loss per common share (Basic) | $(13.30) | $(22.39) | +40.6% | | Weighted average number of common shares outstanding (Basic) | 397,440 | 100,276 | +296.3% | [Adjusted EBITDA Reconciliation](index=5&type=section&id=Adjusted%20EBITDA) The Adjusted EBITDA reconciliation for Q2 2025 shows a loss of $(587,230), an increase from $(509,623) in Q2 2024. Key adjustments include a significant impairment loss of $1.4 million and merger-related costs of $130,000 in 2025, partially offset by a gain on settlement of liability Adjusted EBITDA Reconciliation (Three Months Ended June 30) | Metric | Q2 2025 | Q2 2024 | | :--------------------------------- | :------------ | :------------ | | Net loss from continuing operations | $(3,209,094) | $(2,245,170) | | Interest expense | $177,472 | $118,640 | | Amortization of debt discount | $43,853 | $250,972 | | Stock-based compensation | $668,805 | $1,031,071 | | Loss from debt extinguishment | $692,270 | $40,491 | | Gain on settlement of liability | $(714,500) | $- | | Impairment loss | $1,397,353 | $- | | Merger-related costs | $130,000 | $- | | Depreciation and amortization | $169,736 | $230,338 | | **Adjusted EBITDA** | **$(587,230)** | **$(509,623)** |

Core Viewpoint - INVO Fertility, Inc. reported its second quarter 2025 financial results, highlighting a focus on expanding fertility operations and innovative service offerings while navigating a net loss from continuing operations. Financial Highlights - Revenue for Q2 2025 was $1,863,654, marking a 1% increase from $1,836,597 in Q2 2024, setting a new quarterly record for the company [7] - Consolidated clinic revenue increased by 1% to $1,832,094 compared to $1,807,921 in the previous year [7] - Total revenue from all clinics, including consolidated and equity method clinics, rose by 2% to $2,188,893 from $2,141,229 [7] - Net loss from continuing operations was $(3.2) million, compared to $(2.2) million in the prior year [7] - Adjusted EBITDA was $(587,230), a decline from $(509,623) in Q2 2024 [7][15] Operational Highlights - The company completed the divestiture of a majority stake in NAYA on June 2, 2025, allowing both INVO Fertility and NAYA to focus on their respective operations [4] - INVO Fertility expanded its service offerings to include telehealth options and Platelet-Rich Plasma (PRP) therapy at its Wisconsin clinic, enhancing patient-centered care [5][7] - The Wisconsin Fertility Institute was recognized on Newsweek's List of America's Best Fertility Clinics for 2025 [7] - A new patent for a modified version of the INVOcell device was allowed, extending intellectual property protection through 2040 [7] Management Commentary - The CEO emphasized the commitment to growth and innovation in fertility operations, highlighting the expansion of services and training support for INVOcell technology [5] - The company aims to maintain an efficient and scalable operating structure while integrating complementary revenue-generating businesses and technologies [5]

Cautionary Note Regarding Forward-Looking Statements and Industry Data This section provides important disclaimers regarding forward-looking statements and the reliability of industry data included in the report [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section highlights that the Form 10-Q contains forward-looking statements, which are subject to substantial risks and uncertainties - Forward-looking statements are identified by terms like 'may,' 'should,' 'expects,' 'intends,' 'plans,' 'anticipates,' 'believes,' 'estimates,' 'predicts,' 'potential,' 'continue,' or their negatives[8](index=8&type=chunk) - Actual results or events could differ materially from disclosed plans, intentions, and expectations due to substantial known and unknown risks and uncertainties[8](index=8&type=chunk) - The company does not undertake to update or revise any forward-looking statements to reflect actual results or changes in circumstances, except as required by law[9](index=9&type=chunk) [Industry Data](index=3&type=section&id=Industry%20Data) The report includes market and industry data obtained from various sources, believed reliable but not independently verified for accuracy - Market and industry data are sourced from internal surveys, market research, consultant surveys, public information, governmental agencies, and industry publications[10](index=10&type=chunk) - While believed to be reliable, the accuracy and completeness of third-party market and industry data are not guaranteed and have not been independently verified by the company[10](index=10&type=chunk) PART I. FINANCIAL INFORMATION This section presents the unaudited consolidated financial statements and management's discussion and analysis of the company's financial performance and condition [Financial Statements (Unaudited)](index=4&type=section&id=1.%20Financial%20Statements%20(Unaudited):) This section presents INVO Fertility, Inc.'s unaudited consolidated financial statements, including Balance Sheets, Statements of Operations, Stockholders' Equity, and Cash Flows [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheet%20as%20of%20June%2030,%202025%20(Unaudited)%20and%20December%2031,%202024) This statement provides a snapshot of the company's financial position, detailing assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | **Assets** | | | | Total current assets | $1,399,353 | $1,318,331 | | Property and equipment, net | $428,746 | $466,684 | | Intangible assets, net | $1,535,845 | $3,275,931 | | Goodwill | $5,878,986 | $5,878,986 | | Total assets | $19,319,239 | $46,449,182 | | **Liabilities & Equity** | | | | Total current liabilities | $12,463,211 | $17,926,441 | | Total liabilities | $16,687,766 | $26,244,709 | | Total stockholders' equity | $2,631,473 | $12,747,473 | - Total assets decreased significantly from **$46.4 million** at December 31, 2024, to **$19.3 million** at June 30, 2025, primarily due to the divestiture of NAYA Therapeutics and related reclassifications[13](index=13&type=chunk)[24](index=24&type=chunk)[32](index=32&type=chunk) - Total liabilities decreased from **$26.2 million** to **$16.7 million**, and total stockholders' equity decreased from **$12.7 million** to **$2.6 million** over the same period[13](index=13&type=chunk) [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20for%20the%20three%20and%20six%20months%20ended%20June%2030,%202025%20and%202024%20(Unaudited)) This statement presents the company's revenues, expenses, and net loss for the three and six months ended June 30, 2025, and 2024 | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $1,863,654 | $1,836,597 | $3,500,839 | $3,412,883 | | Total operating expenses | $4,853,742 | $3,689,510 | $7,690,455 | $6,773,833 | | Loss from operations | $(2,990,088) | $(1,852,913) | $(4,189,616) | $(3,360,950) | | Net loss from continuing operations | $(3,209,094) | $(2,245,170) | $(4,701,365) | $(3,841,683) | | Loss on discontinued operations | $(2,075,764) | $- | $(16,987,079) | $- | | Net loss | $(5,284,858) | $(2,245,170) | $(22,688,444) | $(3,841,683) | | Basic Loss per common share | $(13.30) | $(22.39) | $(75.85) | $(45.01) | - Net loss significantly increased for the six months ended June 30, 2025, to **$22.7 million** from **$3.8 million** in the prior year, primarily driven by a **$17.0 million** loss from discontinued operations related to NTI[16](index=16&type=chunk)[288](index=288&type=chunk) - Total revenue for the six months ended June 30, 2025, increased slightly to **$3.5 million** from **$3.4 million** in the prior year, with clinic revenue being the primary driver[16](index=16&type=chunk)[281](index=281&type=chunk) [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity%20for%20the%20six%20months%20ended%20June%2030,%202025%20and%202024%20(Unaudited)) This statement details changes in the company's equity accounts for the six months ended June 30, 2025, and 2024 - Total stockholders' equity decreased from **$12,747,473** as of December 31, 2024, to **$2,631,473** as of June 30, 2025, primarily due to a net loss of **$22,688,444** and preferred stock redemption of **$4,000,000**, partially offset by common stock issuances and additional paid-in capital[19](index=19&type=chunk)[289](index=289&type=chunk) - The company underwent two reverse stock splits: 1-for-12 in March 2025 and 1-for-3 in July 2025, which are reflected as if they occurred at the earliest period presented[123](index=123&type=chunk)[124](index=124&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20six%20months%20ended%20June%2030,%202025%20and%202024%20(Unaudited)) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(5,263,155) | $(1,716,214) | | Net cash used in investing activities | $(30,096) | $(29,239) | | Net cash provided by financing activities | $5,101,036 | $2,455,963 | | Increase (decrease) in cash and cash equivalents | $(192,215) | $710,510 | | Cash and cash equivalents at end of period | $549,181 | $942,934 | - Net cash used in operating activities increased significantly to **$5.3 million** for the six months ended June 30, 2025, from **$1.7 million** in the prior year, primarily due to the increased net loss from the consolidation of NTI[21](index=21&type=chunk)[293](index=293&type=chunk) - Cash provided by financing activities was **$5.1 million** in 2025, mainly from **$8.7 million** in public offering proceeds, partially offset by a **$4 million** preferred stock redemption and **$1.1 million** debt repayment[21](index=21&type=chunk)[295](index=295&type=chunk) [Notes to the Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed disclosures and explanations for the figures presented in the consolidated financial statements, covering significant accounting policies, business operations, liquidity, debt, equity, and recent events [Note 1 – Summary of Significant Accounting Policies](index=8&type=section&id=Note%201%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's business operations, strategic focus on fertility, and key accounting policies for revenue recognition and consolidation - INVO Fertility, Inc. is a healthcare services and technology company focused on the fertility marketplace, aiming to expand access to assisted reproductive technology (ART) care[24](index=24&type=chunk) - The company's strategy involves building, acquiring, and operating fertility clinics, including 'INVO Centers' utilizing its INVOcell medical device and US-based profitable in vitro fertilization (IVF) clinics[24](index=24&type=chunk) - The company divested **80.1%** of NAYA Therapeutics, Inc. (NTI) in Q2 2025 to focus exclusively on the fertility marketplace, retaining a **19.9%** ownership[24](index=24&type=chunk)[32](index=32&type=chunk) - Revenue from INVOcell sales is recognized upon shipment, while clinic and lab services revenue is recognized when services are performed[47](index=47&type=chunk) [Note 2 – Liquidity](index=11&type=section&id=Note%202%20%E2%80%93%20Liquidity) This note discusses the company's liquidity position, historical reliance on financing, and the independent auditor's going concern qualification | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(22,688,444) | $(3,841,683) | | Accumulated deficit (as of June 30, 2025) | $(90,203,241) | N/A | | Cash (as of June 30) | $549,181 | $942,934 | | Net cash used in operating activities | $(5,263,155) | $(1,716,214) | - The company has historically relied on debt and equity financings to fund operations and investing activities, and will need additional funding to meet liquidity needs and execute its business strategy[52](index=52&type=chunk)[54](index=54&type=chunk) - The independent auditor's report for December 31, 2024, included a going concern qualification, expressing substantial doubt about the company's ability to continue as a going concern due to significant operating losses[55](index=55&type=chunk) [Note 3 – Business Combinations](index=12&type=section&id=Note%203%20%E2%80%93%20Business%20Combinations) This note details the acquisition of NAYA Therapeutics, Inc. (NTI) and its subsequent divestiture, including the financial impact of these transactions - On October 11, 2024, the company acquired NAYA Therapeutics, Inc. (NTI) through a merger, issuing common stock, pre-funded warrants, Series C-1 and C-2 Preferred Stock, and a Convertible Debenture as consideration[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) - On June 2, 2025, the company divested an **80.1%** ownership stake in NTI, redeeming all Series C-1 Preferred Stock and retaining a **19.9%** interest, along with a secured convertible promissory note from NTI for **$4,803,175**[61](index=61&type=chunk) | Metric | Amount | | :--------------------------------- | :------------ | | Loss on disposition of 80.1% NTI ownership | $1,534,517 | | Loss on discontinued operations (6 months ended June 30, 2025) | $16,452,562 | | - Impairment loss (NTI goodwill) | $14,645,069 | [Note 4 – Variable Interest Entities](index=14&type=section&id=Note%204%20%E2%80%93%20Variable%20Interest%20Entities) This note explains the company's accounting treatment for its joint ventures, consolidating Bloom INVO, LLC as a VIE and using the equity method for HRCFG INVO, LLC - The company consolidates Bloom INVO, LLC (Georgia JV) as a Variable Interest Entity (VIE) because it is the primary beneficiary, controlling activities and absorbing significant losses[65](index=65&type=chunk)[69](index=69&type=chunk) - The company accounts for HRCFG INVO, LLC (Alabama JV) as an unconsolidated VIE using the equity method, as there is no primary beneficiary[70](index=70&type=chunk)[71](index=71&type=chunk) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Investment in unconsolidated VIEs (HRCFG INVO, LLC) | $645,944 | $740,759 | | Earnings (loss) from unconsolidated VIEs (6 months ended June 30, 2025) | $(4,815) | $17,950 | | Net profit (loss) of unconsolidated VIEs (6 months ended June 30, 2025) | $1,273 | $35,900 | [Note 5 – Agreements and Transactions with VIE's](index=15&type=section&id=Note%205%20%E2%80%93%20Agreements%20and%20Transactions%20with%20VIE's) This note details the company's revenue and outstanding balances from transactions with its Variable Interest Entities | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | INVOcell revenue from Bloom INVO, LLC | $9,000 | $13,500 | $15,000 | | INVOcell revenue from Unconsolidated VIEs | $- | $3,000 | $7,500 | | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Accounts receivable from Bloom INVO, LLC | $37,500 | $37,500 | | Notes payable to Bloom INVO, LLC | $504,573 | $497,321 | | Accounts receivable from Unconsolidated VIEs | $25,500 | $22,500 | [Note 6 – Inventory](index=16&type=section&id=Note%206%20%E2%80%93%20Inventory) This note provides a breakdown of the company's inventory components as of June 30, 2025, and December 31, 2024 | Inventory Component | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Raw materials | $51,501 | $53,537 | | Finished goods | $161,110 | $166,227 | | Total inventory | $212,611 | $219,764 | [Note 7 – Property and Equipment](index=16&type=section&id=Note%207%20%E2%80%93%20Property%20and%20Equipment) This note details the company's property and equipment, net of accumulated depreciation, and related depreciation expenses | Property and Equipment, Net | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Manufacturing equipment | $132,513 | $132,513 | | Medical equipment | $506,672 | $483,145 | | Office equipment | $89,904 | $89,904 | | Leasehold improvements | $96,817 | $96,817 | | Less: accumulated depreciation | $(397,160) | $(335,695) | | Total equipment, net | $428,746 | $466,684 | - Depreciation expense for the six months ended June 30, 2025, was **$61,465**, compared to **$25,963** for the same period in 2024[77](index=77&type=chunk) - The company recognized no loss on disposal of fixed assets for the six months ended June 30, 2025, compared to **$511,663** in the prior year[78](index=78&type=chunk) [Note 8 – Intangible Assets and Goodwill](index=16&type=section&id=Note%208%20%E2%80%93%20Intangible%20Assets%20and%20Goodwill) This note provides a breakdown of intangible assets and goodwill, including impairment losses and amortization expenses | Intangible Asset Component | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Tradename | $253,000 | $510,000 | | Noncompetition agreement | $1,980,500 | $3,961,000 | | Goodwill | $5,878,986 | $5,878,986 | | Less: accumulated amortization | $(697,655) | $(938,069) | | Total intangible assets | $7,414,831 | $9,411,917 | - An impairment loss of **$1,397,353** was recognized on the Wisconsin Fertility Institute's noncompetition agreement due to the release of Dr. Pritts from her agreement as part of a settlement[79](index=79&type=chunk)[181](index=181&type=chunk) - Goodwill of NTI was impaired by **$14,645,069** as of March 31, 2025, due to a decline in the company's stock price, and these assets were derecognized upon NTI's disposition[81](index=81&type=chunk)[82](index=82&type=chunk) - Amortization expenses for intangible assets were **$342,733** for the six months ended June 30, 2025, compared to **$204,375** in the prior year[81](index=81&type=chunk) [Note 9 – Leases](index=17&type=section&id=Note%209%20%E2%80%93%20Leases) This note details the company's operating lease assets and liabilities, including future minimum lease payments and weighted average lease terms | Lease Component | June 30, 2025 | | :--------------------------------- | :------------ | | ROU assets – operating lease | $2,160,380 | | Current operating lease liability | $256,620 | | Long-term operating lease liability | $2,058,063 | | Total lease liabilities | $2,314,683 | | Future Minimum Lease Payments | Amount | | :--------------------------------- | :------------ | | 2025 | $255,902 | | 2026 | $518,972 | | 2027 | $489,807 | | 2028 | $379,172 | | 2029 and beyond | $1,950,150 | | Total future minimum lease payments | $3,594,003 | | Less: Interest | $(1,279,320) | | Total operating lease liabilities | $2,314,683 | - The weighted average remaining lease term for operating leases was **91 months**, and the weighted average discount rate was **12.2%** for the six months ended June 30, 2025[84](index=84&type=chunk) [Note 10 – Notes Payable](index=18&type=section&id=Note%2010%20%E2%80%93%20Notes%20Payable) This note provides a detailed breakdown of the company's notes payable, including related party notes, convertible notes, and debentures | Notes Payable Component | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Related party demand notes | $880,000 | $880,000 | | Convertible notes payable | $50,000 | $235,000 | | Cash advance agreement | $6,106 | $258,202 | | Note payable (35%-115% cumulative interest) | $1,131,579 | $1,280,986 | | Convertible debenture payable (7% annual interest) | $2,753,175 | $4,434,146 | | Less debt discount and financing costs | $(10,421) | $(141,328) | | Total, net of discount | $4,810,439 | $7,466,784 | | Less current portion | $3,768,947 | $6,338,071 | | Long-term portion of notes payable | $1,041,492 | $1,128,713 | - The company's notes payable decreased from **$7.47 million** at December 31, 2024, to **$4.81 million** at June 30, 2025, primarily due to repayments and conversions[87](index=87&type=chunk) - The **7.0%** Senior Secured Convertible Debenture was exchanged for an Amended and Restated Debenture on May 23, 2025, with a principal of **$4,803,175** and a maturity date of February 11, 2026[105](index=105&type=chunk)[111](index=111&type=chunk) [Note 11 – Related Party Transactions](index=20&type=section&id=Note%2011%20%E2%80%93%20Related%20Party%20Transactions) This note discloses outstanding demand promissory notes and accrued compensation with related parties, including entities controlled by the CEO and CFO - The company has outstanding demand promissory notes totaling **$880,000** with related parties, including JAG Multi Investments LLC and entities controlled by its CEO and CFO, accruing **10%** annual interest[118](index=118&type=chunk)[120](index=120&type=chunk) - Interest incurred on these demand notes for the six months ended June 30, 2025, was **$40,222**, with a total outstanding balance of **$1,085,010** including principal and accrued interest[121](index=121&type=chunk) - As of June 30, 2025, accrued compensation owed was **$365,694**, primarily for accrued paid time off[122](index=122&type=chunk) [Note 12 – Stockholders' Equity](index=21&type=section&id=Note%2012%20%E2%80%93%20Stockholders'%20Equity) This note details changes in stockholders' equity, including reverse stock splits, preferred stock redemptions, and public offerings - The company executed two reverse stock splits: 1-for-12 effective March 18, 2025, and 1-for-3 effective July 21, 2025, and increased authorized common stock to **50,000,000** shares on July 23, 2025[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) - Series C-1 Preferred Stock was redeemed on June 2, 2025, at a redemption price of **113.855837742504** shares of NTI Class A Common Stock per share[132](index=132&type=chunk) - Series C-2 Preferred Stock, initially classified as mezzanine equity due to redemption triggers, was reclassified to permanent equity after an amendment on June 27, 2025, removed 'Bankruptcy Triggering Event' and 'Change of Control' redemption rights[137](index=137&type=chunk)[141](index=141&type=chunk) - The company completed a public offering in January 2025, raising **$8.7 million** in net proceeds, which were partially used to redeem **$4 million** of Series C-2 Preferred Stock and repay debt[147](index=147&type=chunk)[149](index=149&type=chunk) [Note 13 – Equity-Based Compensation](index=23&type=section&id=Note%2013%20%E2%80%93%20Equity-Based%20Compensation) This note provides information on the company's stock incentive plan, stock option activity, and related compensation expenses - The 2019 Stock Incentive Plan was amended on June 25, 2025, to increase the number of shares available for issuance to **400,000**[155](index=155&type=chunk) | Stock Options Activity | Number of Shares | Weighted Average Exercise Price | | :--------------------------------- | :--------------- | :------------------------------ | | Outstanding as of December 31, 2024 | 2,749 | $548.05 | | Canceled | (677) | $2,313.11 | | Balance as of June 30, 2025 | 2,072 | $515.34 | | Exercisable as of June 30, 2025 | 1,940 | $1,724.51 | - For the six months ended June 30, 2025, the company incurred **$82,530** in expense related to the vesting of options[156](index=156&type=chunk) [Note 14 – Unit Purchase Options and Warrants](index=24&type=section&id=Note%2014%20%E2%80%93%20Unit%20Purchase%20Options%20and%20Warrants) This note details the company's warrant activity, including grants, exercises, and proceeds from warrant exercises | Warrants Activity | Number of Warrants | Weighted Average Exercise Price | | :--------------------------------- | :----------------- | :------------------------------ | | Outstanding as of December 31, 2024 | 127,422 | $68.50 | | Granted | 937,508 | $3.85 | | Exercised | (536,732) | $2.42 | | Balance as of June 30, 2025 | 528,198 | $27.30 | - In January 2025, the company issued **378,199** units in a public offering, each including a warrant exercisable at **$25.20** per share, expiring in five years[162](index=162&type=chunk) - In April 2025, an institutional investor exercised existing warrants for cash at **$4.83** per share, resulting in gross proceeds of approximately **$927,102**, and received new unregistered warrants[164](index=164&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk) [Note 15 – Segment Reporting](index=25&type=section&id=Note%2015%20%E2%80%93%20Segment%20Reporting) This note provides financial information by segment, including revenue and profit (loss) for Fertility Clinic Services, INVOcell Device, and Therapeutics - The company operates in three segments: Clinic Services (WFI, Atlanta Clinic), INVOcell Device (manufacture and sales of INVOcell), and Therapeutics (NTI, divested **80.1%** in Q2 2025)[169](index=169&type=chunk)[170](index=170&type=chunk) | Metric (Six months ended June 30, 2025) | Fertility Clinic Services | INVOcell Device | Therapeutics | Total | | :--------------------------------- | :------------------------ | :-------------- | :----------- | :---------- | | Revenue from external customers | $3,453,647 | $47,192 | $- | $3,500,839 | | Intersegment revenues | $- | $13,500 | $- | $13,500 | | Segment profit (loss) | $(1,137,084) | $48,782 | $(16,452,562) | $(17,554,365) | | Metric (Six months ended June 30, 2024) | Fertility Clinic Services | INVOcell Device | Therapeutics | Total | | :--------------------------------- | :------------------------ | :-------------- | :----------- | :---------- | | Revenue from external customers | $3,345,120 | $67,763 | $- | $3,412,883 | | Intersegment revenues | $- | $15,000 | $- | $15,000 | | Segment profit (loss) | $572,690 | $69,177 | $- | $626,867 | [Note 16 – Income Taxes](index=26&type=section&id=Note%2016%20%E2%80%93%20Income%20Taxes) This note describes the company's accounting for income taxes, including deferred tax assets, valuation allowances, and effective tax rates - The company uses the asset and liability method for income taxes, recognizing deferred tax assets and liabilities for temporary differences[173](index=173&type=chunk) - A valuation allowance is established for all deferred tax assets and carryforwards due to uncertainty regarding their recoverability[173](index=173&type=chunk) - Income tax expense was **$0** for the six months ended June 30, 2025, compared to **$1,836** for the same period in 2024, with a **0%** effective income tax rate for 2025[174](index=174&type=chunk) [Note 17 – Commitments and Contingencies](index=26&type=section&id=Note%2017%20%E2%80%93%20Commitments%20and%20Contingencies) This note outlines the company's legal proceedings and commitments, including a significant settlement related to the WFI acquisition - The company is not subject to any material legal proceedings as of June 30, 2025, but may face claims in the ordinary course of business[177](index=177&type=chunk) - A binding term sheet was entered into on May 14, 2025, to settle disputes with Dr. Pritts and the Pritts Trust regarding the WFI acquisition, involving a **$5,000,000** settlement payment schedule[180](index=180&type=chunk) - The settlement resulted in a gain on settlement of **$714,500** and an impairment loss of **$1,397,353** due to the release of Dr. Pritts from her non-compete agreement[181](index=181&type=chunk) [Note 18 – Subsequent Events](index=27&type=section&id=Note%2018%20%E2%80%93%20Subsequent%20Events) This note details significant events that occurred after June 30, 2025, including equity transactions, stock authorizations, and amendments to loan agreements - Subsequent to June 30, 2025, an institutional investor exercised its Additional Investment Right multiple times, acquiring Series C-2 Preferred shares for cash, leading to adjustments in the conversion price[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) - The company's authorized common stock was increased to **50,000,000** shares on July 23, 2025[187](index=187&type=chunk) - Since June 30, 2025, the company issued **3,534,906** shares of common stock upon conversion of **5,784** shares of Series C-2 Preferred, without receiving cash proceeds[188](index=188&type=chunk) - On August 13, 2025, the Loan Agreement with Decathlon Alpha V LP was amended, increasing monthly payments and waiving a default event related to the Pritts settlement[189](index=189&type=chunk) - On August 13, 2025, the JAG Notes were amended, extending the maturity date, outlining repayment acceleration terms based on future funding, and allowing conversion into common stock at **$2.00** per share, along with a warrant issuance[190](index=190&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=2.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, and cash flows, highlighting key business strategies, recent developments, and critical accounting policies [Overview](index=28&type=section&id=Overview) This overview describes INVO Fertility, Inc.'s business model, strategic shift to focus on fertility, and the market opportunity for its INVOcell device - INVO Fertility, Inc. is a healthcare services and technology company focused on expanding access to assisted reproductive technology (ART) care, primarily through operating fertility clinics and its INVOcell medical device[193](index=193&type=chunk) - The company acquired NAYA Therapeutics in October 2024 but divested an **80.1%** ownership interest in May 2025 to refocus exclusively on the fertility marketplace, changing its name and ticker symbol to 'INVO Fertility, Inc.' and 'IVF'[194](index=194&type=chunk)[201](index=201&type=chunk) - The INVOcell device enables intravaginal culture (IVC) procedures, offering a natural, intimate, and affordable alternative to traditional IVF with comparable pregnancy success rates[197](index=197&type=chunk)[198](index=198&type=chunk)[215](index=215&type=chunk) - The global ART market is large and growing, with significant unmet patient needs due to capacity constraints and cost barriers, which the company aims to address through its strategy of acquiring profitable IVF clinics and opening new INVO Centers[209](index=209&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk) [Recent Developments](index=31&type=section&id=Recent%20Developments) This section highlights key corporate actions and financial events, including stock splits, the NTI divestiture, and litigation settlements - The company's authorized common stock was increased to **50,000,000** shares on July 23, 2025, following stockholder approval[221](index=221&type=chunk) - A 1-for-3 reverse stock split was approved on June 30, 2025, and became effective on July 21, 2025, following a previous 1-for-12 reverse split in March 2025[222](index=222&type=chunk)[248](index=248&type=chunk) - The majority stake in NTI was divested on June 2, 2025, with the company retaining a **19.9%** interest and receiving a secured convertible promissory note[224](index=224&type=chunk) - An Additional Investment Right agreement with FNL allows FNL to purchase up to **$10,000,000** of Series C-2 Preferred Shares for cash or in exchange for portions of the Amended and Restated Debenture[225](index=225&type=chunk)[227](index=227&type=chunk) - The company settled litigation with Dr. Pritts and the Pritts Trust related to the WFI acquisition, agreeing to a **$5,000,000** payment schedule[241](index=241&type=chunk) - A public offering in January 2025 raised approximately **$9.5 million** gross proceeds, used partly for WFI acquisition, Series C-2 Preferred stock redemption, and debt obligations[258](index=258&type=chunk)[259](index=259&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenue, expenses, and net loss, for the three and six months ended June 30, 2025, and 2024 - Fertility revenue grew modestly in the first half of 2025, and the company expects further operational progress, actively pursuing acquisitions of profitable IVF clinics[265](index=265&type=chunk)[266](index=266&type=chunk) - The company re-focused exclusively on its fertility business in April 2025 after insufficient shareholder support for NAYA Therapeutics transaction elements, divesting a majority interest in NTI[270](index=270&type=chunk) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------- | | Revenue | $1.9 million | $1.8 million | +$0.1 million | | Cost of Revenue | $1.1 million | $0.9 million | +$0.2 million | | Selling, General, and Administrative Expenses | $2.2 million | $2.6 million | -$0.4 million | | Impairment Loss | $1.4 million | $- | +$1.4 million | | Loss from debt extinguishment | $0.7 million | $- | +$0.7 million | | Gain on settlement | $0.7 million | $- | +$0.7 million | | Interest Expense and Financing Fees | $0.2 million | $0.4 million | -$0.2 million | | Loss on Discontinued Operations | $2.1 million | $- | +$2.1 million | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (YoY) | | :--------------------------------- | :----------------------------- | :----------------------------- | :----------- | | Revenue | $3.5 million | $3.3 million | +$0.2 million | | Cost of Revenue | $2.1 million | $1.7 million | +$0.4 million | | Selling, General, and Administrative Expenses | $3.8 million | $4.1 million | -$0.3 million | | Impairment Loss | $1.4 million | $- | +$1.4 million | | Loss from debt extinguishment | $0.7 million | $- | +$0.7 million | | Gain on settlement | $0.7 million | $- | +$0.7 million | | Interest Expense and Financing Fees | $0.5 million | $0.6 million | -$0.1 million | | Loss on Discontinued Operations | $18.0 million | $- | +$18.0 million | [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, working capital, and reliance on external financing to fund operations and strategic initiatives | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Net loss (6 months ended June 30, 2025) | $(22.7) million | N/A | | Accumulated deficit (as of June 30, 2025) | $(90.2) million | N/A | | Negative working capital | $(6.3) million | $(5.6) million | | Stockholder's equity | $2.5 million | $12.7 million | - The company relies on debt and equity financings to meet cash needs and will require additional funding to achieve positive cash flow from operations and execute its business strategy[290](index=290&type=chunk) - The independent auditor's report for December 31, 2024, included a going concern qualification, indicating substantial doubt about the company's ability to continue operations[291](index=291&type=chunk) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Operating activities | $(5,263,155) | $(1,716,214) | | Investing activities | $(30,096) | $(29,239) | | Financing activities | $5,101,036 | $2,455,963 | [Critical Accounting Policies and Estimates](index=38&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section outlines the significant accounting policies and estimates that are crucial to understanding the company's financial statements, including those for business combinations, discontinued operations, and revenue recognition - The company's financial statements are prepared in accordance with GAAP, requiring management to make estimates and assumptions that affect reported amounts[296](index=296&type=chunk) - Key accounting policies include business acquisitions (fair value, expensing acquisition costs), discontinued operations (ASC 205 for NTI divestiture), variable interest entities (consolidation under ASC 810), and equity method investments[298](index=298&type=chunk)[299](index=299&type=chunk)[301](index=301&type=chunk)[302](index=302&type=chunk) - Revenue recognition follows ASC 606, with a five-step approach, recognizing INVOcell sales upon shipment and clinic/lab services when performed[312](index=312&type=chunk)[313](index=313&type=chunk)[315](index=315&type=chunk) [Quantitative and Qualitative Disclosures about Market Risks](index=41&type=section&id=3.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risks) As a smaller reporting company, INVO Fertility, Inc. is exempt from providing quantitative and qualitative disclosures about market risks - The company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide information on market risks[317](index=317&type=chunk) [Controls and Procedures](index=41&type=section&id=4.%20Controls%20and%20Procedures) This section details the company's evaluation of its disclosure controls and procedures and internal control over financial reporting, identifying material weaknesses and ongoing remediation efforts [Evaluation of Disclosure Controls and Procedures](index=41&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section reports the CEO and CFO's conclusion on the effectiveness of disclosure controls and procedures, noting identified material weaknesses - The CEO and CFO concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to material weaknesses[320](index=320&type=chunk) - A material weakness was previously identified in internal control over financial reporting due to accounting treatment errors for right-of-use assets and lease liabilities, leading to financial statement restatements[319](index=319&type=chunk) [Management's Report on Internal Control over Financial Reporting](index=41&type=section&id=Management's%20Report%20on%20Internal%20Control%20over%20Financial%20Reporting) This section presents management's conclusion on the effectiveness of internal control over financial reporting, detailing identified material weaknesses and remediation efforts - Management concluded that internal control over financial reporting was not effective as of June 30, 2025, due to material weaknesses[321](index=321&type=chunk) - Identified material weaknesses include limited segregation of duties due to lack of formal control documentation, limited resources, and a small number of employees, as well as a lack of adequate accounting resources for complex transactions[321](index=321&type=chunk) - Remediation efforts include adding accounting resources, improving formal control documentation, increasing supervision and training, and increasing the frequency of internal financial statement review[322](index=322&type=chunk) [Limitations on Effectiveness of Controls and Procedures](index=41&type=section&id=Limitations%20on%20Effectiveness%20of%20Controls%20and%20Procedures) This section acknowledges that control systems provide reasonable, but not absolute, assurance and can be subject to circumvention - Control systems provide only reasonable, not absolute, assurance and can be circumvented by individual acts, collusion, or management override[323](index=323&type=chunk) [Changes in Internal Control over Financial Reporting](index=41&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section confirms that no material changes to internal control over financial reporting occurred during the reporting period - There were no changes to internal control over financial reporting during the period that materially affected, or are reasonably likely to materially affect, the controls[325](index=325&type=chunk) PART II. OTHER INFORMATION This section covers additional information not included in Part I, such as legal proceedings, equity sales, and exhibits [Legal Proceedings](index=42&type=section&id=1.%20Legal%20Proceedings) This section outlines the company's legal matters, including a general statement on potential litigation and specific details regarding the settlement of the Dr. Pritts litigation - The company is not currently subject to any material legal proceedings, but may face claims in the ordinary course of business[326](index=326&type=chunk) - A binding term sheet was entered into on May 14, 2025, to settle disputes with Dr. Elizabeth Pritts and the Pritts Trust related to the Wisconsin Fertility Institute acquisition, involving a **$5,000,000** payment schedule[327](index=327&type=chunk)[328](index=328&type=chunk) [Risk Factors](index=42&type=section&id=1A.%20Risk%20Factors) As a smaller reporting company, INVO Fertility, Inc. is not required to provide a detailed discussion of risk factors in this quarterly report - Smaller reporting companies are exempt from providing the information required by this item[329](index=329&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=2.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's unregistered sales of equity securities, primarily through the exercise of Series C-2 Preferred Stock and conversion of debt into common stock - Subsequent to June 30, 2025, an institutional investor exercised rights to acquire Series C-2 Preferred shares for cash, with conversion prices adjusting accordingly[330](index=330&type=chunk)[331](index=331&type=chunk) - During Q2 2025, **87,719** shares of common stock were issued upon conversion of **$250,000** of the Amended and Restated Debenture, relying on Section 3(a)(9) of the Securities Act[331](index=331&type=chunk) - Since June 30, 2025, **3,534,906** shares of common stock were issued upon conversion of **5,784** shares of Series C-2 Preferred, also under Section 3(a)(9) exemption[333](index=333&type=chunk) [Defaults Upon Senior Securities](index=42&type=section&id=3.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - There were no defaults upon senior securities[334](index=334&type=chunk) [Mine Safety Disclosure](index=42&type=section&id=4.%20Mine%20Safety%20Disclosure) This item is not applicable to the company - This item is not applicable[335](index=335&type=chunk) [Other Information](index=42&type=section&id=5.%20Other%20Information) This section confirms that no directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025 - No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025[335](index=335&type=chunk) [Exhibits](index=43&type=section&id=6.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amendments to agreements, certifications, and XBRL-related documents - Exhibits include the Third Amendment to the RSLA, Demand Note Amendment Letter, Certifications of Principal Executive and Financial Officers, and Inline XBRL documents[337](index=337&type=chunk) Signatures This section contains the official signatures of the company's executive and financial officers, certifying the accuracy of the report [Signatures](index=44&type=section&id=Signatures) The report is duly signed on behalf of INVO Fertility, Inc. by its Chief Executive Officer, Steven Shum, and Chief Financial Officer, Andrea Goren, on August 14, 2025 - The report was signed by Steven Shum, Chief Executive Officer, and Andrea Goren, Chief Financial Officer, on August 14, 2025[341](index=341&type=chunk)

Core Insights - INVO Fertility, Inc. is enhancing its fertility services through expanded clinical and embryology training support and improved pricing for its INVOcell technology, aiming to provide patient-centered care while expanding clinic operations [1][3][4] Company Overview - INVO Fertility focuses on the fertility market, operating two INVO Centers and one IVF clinic in the U.S., and aims to build, acquire, and operate more fertility clinics [6] - The company offers the INVOcell, the first FDA-cleared intravaginal culture system, which allows fertilization and early embryo development to occur within a woman's body, providing a more natural alternative to traditional IVF [2][6] Product and Technology - INVOcell delivers comparable pregnancy rates to conventional IVF while offering a more intimate and affordable experience for patients [2][8] - The company has secured a notice of allowance for a new patent from the U.S. Patent and Trademark Office, reinforcing its position as a technology innovator [4] Training and Support - INVO Fertility provides hands-on training and clinical support for embryologists and physicians to integrate the INVOcell solution into their practices [3] - The company is launching targeted educational campaigns to raise awareness of patient success rates with INVOcell, which are similar to those of conventional IVF [3] Market Positioning - INVOcell is positioned as an inclusive option for diverse family structures, including same-sex couples and single parents, and offers a streamlined lab workflow for clinics [8]

Core Viewpoint - INVO Fertility, Inc. has received a notice of allowance for a new patent on a modified version of its proprietary INVOcell device, extending intellectual property protection through 2040, which reflects feedback from embryologists to simplify the device's use [1][2][5] Company Overview - INVO Fertility is a healthcare company focused on the fertility sector, dedicated to expanding assisted reproductive technology (ART) care [6] - The company operates two INVO Centers and one IVF clinic in the United States, and engages in the sale and distribution of the INVOcell technology to third-party fertility clinics [6] Product Details - The INVOcell device is the world's first FDA-cleared intravaginal culture (IVC) system, allowing fertilization and early embryo development to occur within a woman's body, providing a more natural alternative to traditional IVF [3][4] - The device was originally granted FDA clearance in 2015 and received an update in 2023 to extend the incubation period from 3 days to 5 days [4] - The modified design of the INVOcell device was based on embryologists' feedback, transitioning from a dual-chamber to a singular main chamber [4] Market Position - The INVOcell procedure offers comparable pregnancy rates to traditional IVF while providing a more patient-centered and affordable experience [5][6] - The company believes that the IVC procedure can deliver similar results at a lower cost compared to traditional IVF and is more effective than intrauterine insemination (IUI) [6]

Company Overview - NAYA Biosciences is developing a competitive bifunctional antibody pipeline, targeting multiple clinical milestones between 2025 and 2027[3, 6, 8] - The company utilizes a validated hub & spoke model for acquiring, developing, and partnering high-potential assets[7, 115, 125] Therapeutic Portfolio & Target Indications - The company's therapeutic portfolio includes candidates targeting hepatocellular carcinoma (HCC), multiple myeloma, prostate cancer, and autoimmune diseases[8, 10, 126] - NY-303 (GPC3 x NKp46) is being developed as a second-line monotherapy in HCC for patients not responding to first-line checkpoint inhibitors, with Phase I/IIa clinical trials planned to start in H1 2025 and data expected by H1 2026[10, 69, 79, 120] - NY-500 (PD1 x VEGF) is an AI-optimized bifunctional antibody being developed as a monotherapy for first-line HCC, with clinical data expected in 2026[10, 40, 80, 120] - NY-338 (CD38 x NKp46) is a bifunctional antibody with potential differentiation from Darzalex and T-cell engagers in multiple myeloma and autoimmune diseases[10, 91, 92, 93, 120] - NY-600 (PSMA x NKp46) is a bifunctional antibody targeting metastatic castration-resistant prostate cancer (mCRPC), with potential differentiation from T-cell engagers, antibody-drug conjugates, and radioimmunotherapeutics[10, 120] Market Opportunity & Competitive Landscape - The market for PD(L)1 antibodies is forecasted to reach $58 billion in 2025, with Keytruda generating $272 billion in sales in 2024[81] - Glypican 3 (GPC3) is expressed on 80% of HCC cells and 30-50% of other solid tumors, making it a promising target[43] - The multiple myeloma market is projected to grow from $23 billion in 2023 to $33 billion in 2030, with Darzalex sales expected to increase from $97 billion to $147 billion during the same period[91]

Core Viewpoint - INVO Fertility, Inc. is expanding its telehealth capabilities at the Wisconsin Fertility Institute to enhance access to fertility care for prospective parents, particularly in underserved areas [1][5]. Group 1: Telehealth Expansion - The telehealth platform allows patients to connect with fertility specialists from home, providing personalized assessments and treatment planning through secure virtual consultations [3][4]. - This initiative aims to break down geographic barriers, making expert fertility care more accessible and convenient for individuals and couples [4][5]. Group 2: Service Reach and Accessibility - The expansion is expected to significantly broaden the reach of Wisconsin Fertility Institute, especially for those in rural areas facing challenges in accessing specialized fertility care [5]. - The integration of telehealth with in-clinic procedures is designed to help families navigate the complexities of fertility treatment with greater confidence and ease [5]. Group 3: Company Overview - INVO Fertility focuses on expanding assisted reproductive technology (ART) care through the establishment and operation of fertility clinics, including the innovative INVOcell medical device [7]. - The company operates two INVO Centers and one IVF clinic in the U.S., and continues to distribute its INVOcell technology to third-party clinics [7].

Core Insights - INVO Fertility, Inc. has announced that its Wisconsin Fertility Institute clinic has been recognized as one of America's Best Fertility Clinics for 2025 by Newsweek [1][2] - The ranking was developed in partnership with Statista and evaluated clinics based on criteria set by the CDC [2][5] - The CEO of INVO Fertility expressed pride in the recognition, attributing it to the dedication of the team in providing high-quality fertility care [2] Company Overview - INVO Fertility is focused on expanding access to assisted reproductive technology (ART) through the establishment, acquisition, and operation of fertility clinics [3] - The company operates two INVO Centers and one IVF clinic in the United States, and is engaged in the sale and distribution of its proprietary INVOcell technology [3] - The INVOcell device allows fertilization and early embryo development to occur in vivo, offering a more natural and affordable alternative to traditional IVF [3] Evaluation Criteria - The evaluation for the Best Fertility Clinics included quality metrics from ART, a nationwide survey of medical professionals, accreditation data from recognized bodies, and patient satisfaction based on Google reviews [5]

Financial Performance - INVO Fertility reported record revenue of $6.5 million for 2024, representing a 116% increase compared to $3.0 million in 2023[4] - Consolidated clinic revenue increased by 125% to $6.45 million in 2024, up from $2.86 million in 2023[5] - Revenue from all clinics, including consolidated and equity method clinics, rose by 78% to $7.73 million in 2024, compared to $4.35 million in 2023[5] - Adjusted EBITDA for the fourth quarter of 2024 improved to $(450,908), a significant enhancement from $(1.0) million in the prior year[5] - Adjusted EBITDA for the fertility business was $(450,908) for Q4 2024, compared to $(1,020,499) in Q4 2023[14] Loss and Costs - The net loss for 2024 increased to $(9.1) million, compared to $(8.0) million in 2023, primarily due to the addition of NAYA Therapeutics and related merger costs[5] Market Expansion - The company is actively pursuing expansion into additional markets, leveraging the success of its existing fertility centers in Wisconsin, Georgia, and Alabama[4] - The company aims to expand access to fertility care in response to declining U.S. fertility rates and rising public demand for solutions[4] Strategic Divestment - INVO Fertility plans to divest a majority stake in NAYA TX to refocus on its core fertility operations, with the final separation subject to necessary approvals[6] Market Trends - The global fertility services market is projected to grow, driven by rising infertility rates and increasing acceptance of assisted reproductive technologies (ART)[7]

Revenue and Growth - Total revenue for the three months ended March 31, 2025, was $1,637,185, representing an increase of 3.9% compared to $1,576,286 for the same period in 2024[17] - Clinic revenue increased to $1,621,553, up from $1,537,199, reflecting a growth of 5.5% year-over-year[17] - For the three months ended March 31, 2025, total consolidated revenue was $1,637,185, with external customer revenue from Clinic Services at $1,621,553[149] Expenses and Losses - Operating expenses surged to $18,744,597, a significant increase from $3,084,323 in the prior year, primarily due to an impairment loss of $14,645,069[17] - The net loss for the first quarter of 2025 was $17,403,586, compared to a net loss of $1,596,513 in the same quarter of 2024, indicating a substantial decline in profitability[17] - Basic and diluted net loss per common share was $(12.53) for the three months ended March 31, 2025, compared to $(7.55) for the same period in 2024[17] - Approximately $14.8 million of the net loss for the three months ended March 31, 2025, was related to non-cash expenses, compared to $1.0 million for the same period in 2024[51] Cash Flow and Assets - Cash used in operating activities for the three months ended March 31, 2025, was $3,545,534, compared to $260,557 for the same period in 2024, reflecting a substantial increase in cash outflows[22] - Cash and cash equivalents increased to $840,407 as of March 31, 2025, compared to $741,396 at the end of 2024, showing a growth of 13.3%[14] - Total current assets increased to $1,569,122 as of March 31, 2025, compared to $1,318,331 at the end of 2024, marking a growth of 19%[14] Liabilities and Equity - Total liabilities decreased to $24,429,823 as of March 31, 2025, down from $26,244,709 at the end of 2024, reflecting a reduction of approximately 6.9%[14] - The company’s total stockholders' equity as of March 31, 2025, was $3,335,365, compared to a deficit of $84,873,449[22] - Stockholders' equity decreased to $3,335,365 from $12,747,473, reflecting a decline of 73.8%[14] Investments and Acquisitions - The company has plans for future acquisitions and product introductions, although specific details were not disclosed in the report[12] - The company is in the process of divesting a majority stake in NAYA Therapeutics, Inc. to focus exclusively on the fertility marketplace[25] - The Company completed the acquisition of NAYA Therapeutics on October 11, 2024, with a total consideration of approximately $29.6 million allocated to various assets and liabilities acquired[54][58] Operational Highlights - The company has two operational INVO Centers and one IVF clinic in the United States, focusing on expanding access to assisted reproductive technology[25] - The proprietary INVOcell technology allows fertilization and early embryo development to occur in vivo, representing a significant advancement in assisted reproductive technology[25] - The Company has identified three operating segments: Clinic Services, INVOcell Device, and Therapeutics[148] Legal and Compliance - The company is subject to potential legal proceedings, although none were material as of March 31, 2025[155] - A legal settlement was reached with Dr. Pritts, where the company agreed to pay $5 million, with scheduled payments including $475,000 due June 30, 2025, and $2 million due June 30, 2026[173] - The company regained compliance with Nasdaq's Timely Filing Rule on May 8, 2025, after filing its Annual Report on Form 10-K[161] Future Outlook - The company has expressed substantial doubt about its ability to continue as a going concern due to significant operating losses and expected future losses[53] - The Company will need to raise additional funding to meet its liquidity needs and execute its business strategy until it can generate positive cash from operations[52] - The company anticipates future acquisitions and the introduction of new products as part of its growth strategy[12]