INVO Bioscience, Inc., a medical device company specializing in fertility treatment, received a notification from Nasdaq on September 18, 2024, regarding non-compliance with the minimum bid price requirement. The company’s stock, traded under the symbol “INVO,” has closed below the $1.00 minimum bid price for 34 consecutive business days, violating Nasdaq Listing Rule 5550(a)(2).
Despite the warning, INVO Bioscience’s stock continues to be listed on The Nasdaq Capital Market. The company has until May 17, 2025, to rectify the bid price shortfall.
Compliance can be achieved if the stock’s closing bid price reaches or exceeds $1.00 per share for at least 10 consecutive business days before the deadline. If necessary, a second 180-day period may be granted to meet the requirements, potentially involving a reverse stock split.
In a separate but related issue, INVO Bioscience announced that its previously issued financial statements should not be relied upon. This determination came after an internal review prompted by SEC comments. The review revealed an error in calculating the discount rates for the company’s operating leases, affecting the valuation of right-of-use assets and corresponding lease liabilities.
However, this error did not impact the company’s revenue, operations, earnings per share, or net equity. Amended financial statements will be filed to correct the valuation of these assets and liabilities.
In other recent news, INVO Bioscience, a medical device company, has amended its merger agreement with NAYA Biosciences, extending the deadline to October 14, 2024. The amendment includes the purchase of 27,500 shares of Series A Preferred Stock by NAYA for $137,500 as part of a larger arrangement contingent on the merger’s completion.
The merger consideration will consist of a combination of INVO common stock and a newly created Series C Convertible Preferred Stock, with NAYA set to transfer the majority of the common stock payment shares to its secured lender, Five Narrow Lane LP.
INVO Bioscience has committed to seeking shareholder approval for the issuance of common stock upon conversion of the Series C Preferred Stock. The company has also been granted an extension by The Nasdaq Stock Market to regain compliance with listing requirements after facing potential delisting due to insufficient stockholders’ equity.
InvestingPro Insights
In light of INVO Bioscience’s challenges with Nasdaq’s minimum bid price requirement, it’s crucial to consider the company’s financial health and market performance. InvestingPro data shows a staggering 390.03% revenue growth in the last twelve months as of Q2 2024, indicating a significant increase in sales. However, the company’s operating income margin during the same period is deeply negative at -90.89%, reflecting substantial operating losses. With a current market capitalization of 2.73M USD, the company’s valuation is under scrutiny, especially given the recent notification from Nasdaq.
InvestingPro Tips suggest that while analysts expect sales growth in the current year, they do not anticipate INVO Bioscience will be profitable this year. Moreover, the company is quickly burning through cash, and its short-term obligations exceed its liquid assets, indicating potential liquidity issues. These factors, coupled with a stock that has fared poorly over the last month, with a price total return of -15.63%, paint a cautionary picture for investors. It’s also worth noting that INVO Bioscience does not pay a dividend, which could be a factor for income-focused investors.
For those considering an investment in INVO Bioscience, or current shareholders looking to reassess their positions, additional InvestingPro Tips are available that could provide further insights into the company’s prospects. There are a total of 9 InvestingPro Tips listed, which can be explored for a more comprehensive analysis.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.