IVF 10-K & 10-Q changes, risk factors and insider trading

Summary of Risk Factors

Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows, and prospects. These risks are discussed more fully below and include, but are not limited to, risks related to the following:

Risks Related to Our Financial Condition and Need for Additional Capital

Risks Related to Our Business and Operations

Risks Related to Our Industry and Regulation

Risks Related to Our Common Stock and Capital Structure

Risks Related to Market and Macroeconomic Conditions

General Risk Factors

The fertility industry is highly competitive and characterized by well entrenched and long-standing practices as well as technological improvements and advancements. New ART services, devices and techniques may be developed that may render the INVOcell obsolete. Competition in the areas of fertility and ART services is largely based on pregnancy rates and other patient outcomes. Accordingly, the ability of our business to compete is largely dependent on our ability to achieve adequate pregnancy rates and patient satisfaction levels. Our business operates in highly competitive areas that are subject to change. New health care providers and medical technology companies entering the market may reduce our and our fertility clinics market share, patient volume and growth rates, and could force us to alter our planned pricing and fertility clinic service offerings. Additionally, increased competitive pressures may require us to commit more resources to our and our fertility clinic marketing efforts, thereby increasing our cost structure and affecting our ability to achieve, or the timing of achieving, profitability. There can be no assurance that we will not be able to compete effectively, nor can there be any assurance that additional competitors will not enter the market. Such competition may make it more difficult for us to enter into additional contracts with third party fertility clinics or maintain the profitability of our own fertility clinics.

In order to maximize potential growth in our current and potential markets, we may need to expand the scope of our services in the healthcare industry. As a result, we plan to continue to improve our clinic operations, marketing, and management information systems. We will also need to effectively train, motivate and manage our employees. Our failure to manage our growth could disrupt our operations and ultimately prevent us from generating revenues at the levels we expect.

Many factors including, but not limited to, increased competition from similar businesses, unexpected costs, costs associated with marketing efforts and maintaining a strong patient and client base may interfere with our ability to expand successfully. Our inability to implement our internal strategy successfully may have a negative impact on our growth, future financial condition, results of operations and/or cash flows.

We may not be successful at pursuing our acquisition strategy.

Our current strategy includes acquiring profitable fertility clinics in the United States to accelerate our growth. We have acquired Wisconsin Fertility Institute and Family Beginnings, and while we believe that there are in excess of 80 other clinics in the United States that may be suitable acquisition targets, we may not have any further success in identifying or pursuing additional acquisition candidates. If suitable acquisition targets are identified, we may not be able to negotiate terms of acquisition or obtain financing to fund such acquisitions.

We may not be able to successfully manage current and future acquisitions and to achieve the benefits expected to result from the acquisitions.

Current and future acquisitions may present challenges to management, including the integration of our operations and personnel and that of the acquisition, continued management of the clinic and special risks, including possible unanticipated liabilities, unanticipated integration costs and diversion of management attention.

We cannot assure you that we will successfully integrate or profitably manage an acquisition’s business. Even if we are able to integrate and profitably manage an acquisition’s business, we cannot assure you that our business will achieve sales levels, profitability, efficiencies or synergies that justify the acquisition or that the acquisition will result in increased earnings for us in any future period.

Some of our existing fertility clinics were established as joint ventures with medical partners. These joint ventures are important to our business. If we are unable to maintain any of these joint ventures, or if they are not successful, our business could be adversely affected.

We have established, and may enter into additional, joint ventures for the operation of our INVO Centers. Our existing and any future joint ventures may have a number of risks, including that our joint venture partners:

Additionally, if one of our joint venture partners seeks to terminate its agreement with us, we may find it difficult to attract new joint venture partners, and the perception of our INVO Centers in the business and financial communities could be adversely affected.

We may be subject to significant liabilities arising from claims brought against our fertility clinics, affiliated physicians, and related service providers.

We face the risk of litigation associated with our clinical and laboratory services, including claims by patients or others alleging medical malpractice, errors in handling reproductive materials, product liability, or other causes of action commonly encountered in the healthcare sector. Providers in our industry have also faced class-action lawsuits related to billing practices, record management, informed-consent procedures, and the classification of services for reimbursement purposes. These types of claims can involve substantial monetary demands and high defense costs.

Although certain jurisdictions limit recoverable damages, plaintiffs may pursue alternative legal theories or claims that fall outside those caps. We maintain professional liability and general liability insurance in amounts we believe to be appropriate; however, some claims may exceed our coverage limits, and certain categories of damages—such as punitive damages—may not be covered or may later be denied by insurers. In addition, the rising cost and fluctuating availability of malpractice insurance for physicians who provide services at our clinics increases the risk that we could be held vicariously liable when uninsured or underinsured practitioners are named alongside us in legal actions.

We cannot guarantee that we will be able to obtain continued insurance coverage on acceptable terms, or at all. To the extent we are self-insured or required to fund claims that exceed or fall outside our insurance coverage, we may be required to use operating cash flow to satisfy such liabilities. Any of these events could materially adversely affect our financial condition, results of operations, and liquidity.

The provision of medical devices entails the substantial risk of potential tort injury claims. We currently utilize product liability insurance to provide coverage against potential tort injury claims, as well as customary insurance protection, such as professional liability insurance, for our fertility clinics. However, there can be no assurance such coverage will provide adequate protection against any potential claims. Furthermore, any claim asserted against us could generate costly legal fees, consume management’s time and resources, and adversely affect our reputation and business, regardless of the merit or eventual outcome of such claim.

If we fail to maintain adequate quality standards for our services and products, our reputation and business may be adversely affected and harmed.

Our customers are expecting that our products and services will perform as marketed and in accordance with industry standards. For our INVOcell device, we rely on third-party manufacturing companies and their packaging processes in connection with the production of our products. Our key suppliers, which are located in the U.S. and include NextPhase Medical Devices and Casco Bay Molding, and have been steadfast partners since our company first began and can provide us with virtually an unlimited capability to support our growth objectives, with all manufacturing performed in the New England region of the U.S. However, a failure to maintain product quality standards in accordance with our customers’ expectations could result in the loss of demand for our products. Additionally, delays or quality lapses in our production lines could result in substantial economic losses to us. Although we believe that our current quality control procedures adequately address these risks, there can be no assurance that we will not experience occasional or systemic quality lapses in our manufacturing and service operations. Currently, we have limited manufacturing capabilities as we rely on a single manufacturing provider regarding our production process. In the event our manufacturer is unable to produce an adequate supply of products at appropriate quality levels, our growth could be limited, and our business may be harmed. If we experience significant or prolonged disturbance in our quality standards, our business and reputation may be harmed, which may result in the loss of customers, our inability to participate in future customer product opportunities and reduced revenue and earnings.

While we currently own a U.S. patent, this patent may be challenged, invalidated or circumvented, and will ultimately expire. In addition, the rights granted under this patent may not provide the competitive advantages we currently anticipate. Certain countries, including the United States and in Europe, could place restrictions on the patentability of various medical devices which may materially affect our business and competitive position. Additionally, the laws of some foreign countries, in particular China and India, do not protect our proprietary rights to the same extent or in the same manner as U.S. laws, and we may encounter significant problems in protecting and defending our proprietary rights in these countries. In addition to relying on patent, copyright and trademark laws, we also utilize a combination of trade secrets, confidentiality policies, non-disclosure and other contractual arrangements to protect our intellectual property rights. However, these measures may not be adequate to prevent or deter infringement or other misappropriation. Further, our intellectual property rights may be found to infringe on intellectual property rights of third parties. Moreover, we may not be able to detect unauthorized use or take appropriate and timely steps to establish and enforce our proprietary rights. Existing laws of some countries in which we conduct business offer only limited protection of our intellectual property rights, if at all. As the number of market entrants as well as the complexity of technology in the fertility marketplace increases, the possibility of functional overlap and inadvertent infringement of intellectual property rights also increases.

Third parties may in the future assert claims against us alleging infringement on their intellectual property rights. Defending such claims may be expensive, time consuming and divert the efforts of our management and/or technical personnel. Because of litigation, we could be required to pay damages and other compensation, develop non-infringing products or enter into royalty and/or licensing agreements. However, we cannot be certain that any such licenses will be made available to us on commercially reasonable terms.

We regard our trade secrets, patents and similar intellectual property as critical to our successful operations. To protect our proprietary rights, we rely on intellectual property and trade secret laws, as well as confidentiality and license agreements with certain employees, customers and third parties. No assurance can be given that our intellectual property will not be challenged, invalidated, infringed or circumvented. If necessary, we intend to defend our intellectual property rights from infringement through legal action, which could be very costly and could adversely affect our ability to achieve and maintain profitability. Our limited capital resources could put us at a disadvantage if we are required to take legal action to enforce our intellectual property rights.

On February 18, 2026, we completed our acquisition of Family Beginnings, an Indiana based fertility clinic that offers both IVF and IVC. (See Item 1 for additional information on the acquisition of Family Beginnings).

Our proprietary INVOcell® device enables fertilization and early embryo development to occur in vivo within the woman’s body - the world’s first IVC technique of its kind. Unlike IVF, which relies on expensive laboratory incubators, the INVOcell allows fertilization and early embryo development to take place in the woman’s body and has demonstrated equivalent pregnancy success and live birth rates as IVF.

Our corporate development strategy, which includes acquiring established existing practices, building new clinics, and expanding our INVOcell device, is designed to take advantage of the attractive fertility market dynamics of supply and demand.

JAG Amendment

On May 27, 2026, we entered into a letter agreement (the “JAG May 2026 Letter”) with JAG Multi Investments LLC (“JAG”) pursuant to which (i) the maturity date of certain previously issued convertible notes with a principal balance of $660,000 (the “JAG Notes”) was extended until December 31, 2026, (ii) we agreed to repay the JAG Notes in monthly installments of $50,000 starting in April 2026 with a balloon payment at the end of December 2026, (iii) confirmation that if we raise more than $3,000,000 after the date of the JAG May 2026 Letter, we shall pay ten percent (10%) of any proceeds in excess of $3,000,000 to accelerate repayment of the JAG Notes, (iv) the conversion price of the JAG Notes was reset to $1.60, (v) we agreed to issue to JAG a new warrant (the “JAG May 2026 Warrant”) to purchase up to 150,000 shares of our common stock at an exercise price of $1.60 per share, exercisable for five years from the date of issuance, and (vi) we agreed to the reset of the conversion and exercise prices of the JAG Notes and JAG May 2026 Warrant, respectively, to equal the price of any future financing based on a share price that is lower than the conversion and exercise prices then in effect.

On April 23, 2026, we received a letter (the “10-K Letter”) from the Listing Qualifications staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that we failed to file our Annual Report on Form 10-K for the year ended December 31, 2025 (the “10- K Filing”), on a timely basis and, as such, no longer satisfies Nasdaq Listing Rule 5250(c)(1) (the “Timely Filing Rule”) On May 27, 2026 we receive an additional letter (the “10-Q Letter”) from the Staff indicating that we failed to file our Quarterly Report on Form 10-Q for the period ended March 31, 2026 (the “10-Q Filing”), on a timely basis.

Neither letter had an immediate effect on the listing of our common stock.

Both letters also stated that, in accordance with Nasdaq rules, we have 60 calendar days from the date of the 10-K Letter to submit a plan to regain compliance with the Timely Filing Rule. Should the Staff accept such plan, it could grant an exception of up to 180 calendar days from the 10-K Filing’s due date, or until October 13, 2026, to regain compliance.

Reverse Stock Split (March 2026)

On March 25, 2026, we filed a certificate of change with the Secretary of State of Nevada to effectuate a reverse split of our common stock at a ratio of 1-for-5, and our authorized common stock was proportionately reduced to 50,000,000 shares from 250,000,000 shares. The reverse stock split took effect on March 27, 2026. All share information included in this Form 10-K has been reflected as if the reverse stock split occurred as of the earliest period presented.

Closing of Family Beginnings Acquisition

On February 18, 2026, we completed the acquisition of Family Beginnings P.C., a fertility clinic located in Indianapolis, Indiana. The transaction was executed through our wholly owned subsidiary Wood Violet. The total purchase price was approximately $760,000, consisting of $360,000 in cash (net of a holdback) and $400,000 in Series D Preferred Stock.

As part of the acquisition structure, we acquired the clinic’s non-medical business assets through Wood Violet, while the clinic’s medical assets were acquired by Fertility, P.A., which entered into a long-term Management Services Agreement with Wood Violet. Under this agreement, Wood Violet will provide management, administrative, laboratory, and operational support services to the clinic for an initial 10-year term, renewable for additional five-year periods.

In connection with the acquisition, we also entered into a lease for approximately 4,387 square feet of clinic and office space in Indianapolis, effective March 1, 2026, with an initial term through July 31, 2033.

Founded more than a decade ago, Family Beginnings has built a strong reputation for delivering comprehensive fertility services with a highly personalized, patient-first approach. The clinic offers a full suite of reproductive services, including in vitro fertilization, intravaginal culture (as an early adopter of our INVOcell solution), ovulation induction, intrauterine insemination, fertility preservation, and diagnostic testing, supported by an experienced clinical and embryology team. The acquisition expands INVO’s clinical footprint and is expected to support continued growth of our fertility services platform.

Warrant Inducement (January 2026)

On January 28, 2026, we entered into the January 2026 Inducement Letter Agreement with an institutional investor and the Holder of the Common Warrants.

The issuance of the shares of common stock upon exercise of such the Common Warrants was registered pursuant to a registration statement on Form S-1 (File No. 333-292206), which was declared effective by the SEC on December 29, 2025.

Pursuant to the January 2026 Inducement Letter Agreement, the Holder agreed to exercise the Common Warrants for cash at the exercise price of $7.95 per share in consideration for our agreement to issue new unregistered warrants to purchase up to an aggregate of 1,893,492 shares of common stock at an exercise price of $7.95 per share. Such new warrants will become exercisable upon receipt of such approval as may be required by the applicable rules and regulations of the Nasdaq Capital Market (or any successor entity) from the stockholders of INVO with respect to issuance of all of such new warrants and the shares of common stock upon the exercise thereof and have a term of five and one-half years from the date stockholder approval is obtained.

We registered the resale of the shares underlying such new warrants pursuant to a registration statement on Form S-1 (File No. 333-293135), which was declared effective by the SEC on February 12, 2026, and we agreed to observe customary limitations on additional issuances of common stock and variable-rate financing arrangements for a limited period following the warrant inducement transaction.

The aggregate gross proceeds to us from the exercise of such existing warrants was approximately $7.5 million, before deducting offering expenses payable by us.

Maxim acted as our financial advisor in connection with the inducement transaction.

Increase in Authorized Common Stock (Jan 2026)

On January 22, 2026, our stockholders approved an amendment to our Amended and Restated Articles of Incorporation to increase our number of authorized shares of common stock from 6,250,000 to 250,000,000 and we filed a Certificate of Amendment to our Articles of Incorporation to increase our authorized shares of common stock for the same.

HRCFG INVO, LLC (the “Alabama JV”) was originally established as a partnership with HRCFG, LLC (“HRCFG”). On June 24, 2026, we acquired HRCFG and the Alabama JV became a wholly owned subsidiary. The day to day clinical operations are handled by on site staff. Our corporate staff manages finance, billing, accounting, human resources and other overhead responsibilities.

Any Market Purchase Agreement

On July 24, 2026, we entered into an Any Market Purchase Agreement (the “AMPA”) with Alumni Capital LP (“Alumni”), pursuant to which we have the right, but not the obligation, to sell to Alumni up to $15 million of shares of our common stock (the “Commitment Amount”), which may be increased to up to $50 million by mutual written agreement of the parties. Sales under the AMPA, and their timing, are solely at our discretion, and we intend to use the proceeds to support our expansion efforts, which are primarily focused on acquiring additional established, profitable fertility clinics, as well as for general corporate purposes.

Our right to require purchases was conditioned on the effectiveness of a registration statement on Form S-1 covering the underlying shares. We filed the registration statement with the SEC on July 24, 2026, and the SEC declared it effective on August 4, 2026 (the “Effectiveness Date”), satisfying this condition. Following the Effectiveness Date, we may deliver purchase notices electing among three pricing mechanisms: (i) 94% of the lowest daily VWAP over the preceding five business days, (ii) 97% of the lowest traded price over the preceding business day, or (iii) 85% of the lowest traded price over the preceding five business days if the common stock is not trading on an Eligible Market. Closings occur one to five business days after a purchase notice, depending on the pricing option elected.

Issuances under the AMPA are subject to a Nasdaq exchange cap of 19.99% of shares outstanding immediately prior to signing, unless stockholder approval is obtained or an exception applies; our stockholders approved issuances in excess of this cap on July 23, 2026. Alumni’s beneficial ownership is separately capped at 9.99% of outstanding common stock (adjustable by mutual agreement up to that limit), and Alumni has agreed not to engage in short selling or hedging of the common stock during specified periods.

We agreed to pay Alumni a commitment fee equal to 1% of the Commitment Amount (and, if applicable, 1% of any additional Commitment Amount), payable, at our election, in cash or in shares of common stock (or pre-funded warrants, at Alumni’s election) within five business days following the Effectiveness Date, with any share-based fee valued using the average VWAP for the five business days preceding August 4, 2026. On August 7, 2026, we issued 157,934 shares of common stock to Alumni as the commitment fee. The AMPA contains customary representations, warranties, covenants, and indemnification obligations, and includes no rights of first refusal, participation rights, penalties, or liquidated damages provisions.

The AMPA terminates on the earliest of June 30, 2028, the date Alumni has purchased shares equal to the full Commitment Amount, the date the common stock ceases trading on an Eligible Market, or the commencement of certain bankruptcy proceedings. As of the date of this report, we cannot determine the number of shares that may ultimately be issued under the AMPA, as this will depend on future purchase prices and whether the Commitment Amount is increased.

Increase in Authorized Common Stock (July 2026)

On July 23, 2026, our stockholders approved an amendment to our Amended and Restated Articles of Incorporation to increase our number of authorized shares of common stock from 50,000,000 to 250,000,000, and we filed a Certificate of Amendment to our Articles of Incorporation to increase our authorized shares of common stock for the same.

Amendment to Stock Incentive Plan

On July 23, 2026, our stockholders approved a fifth amendment to its Stock Incentive Plan to increase the number of shares of common stock available for issuance thereunder to a total amount of 1,000,000, equal to approximately 20% of the total issued and outstanding stock on a fully-diluted basis.

Acquisition of HRCFG

INVO Centers, LLC, a Delaware limited liability company (“INVO Centers” or “Purchaser”), our wholly owned subsidiary, is a party to that certain limited liability company agreement of HRCFG INVO LLC (“HRCFG INVO”) with HRCFG, LLC (“HRCFG”) to establish a joint venture partnership for a fertility clinic in Birmingham, Alabama (the “Alabama JV”). As a joint venture partner, HRCFG operated and managed the clinic under the name of Innovative Fertility Specialists.

On June 23, 2026, we consummated the acquisition of one-hundred percent (100%) of the membership interests of HRCFG pursuant to that certain Membership Interest Transfer Agreement (the “MITA”) by and among Purchaser, Karen Hammond (“Hammond”), Lisa Ray (“Ray”) and Nicholas Cataldo (“Cataldo” and collectively with Hammond and Ray, “Sellers”). Pursuant to the MITA, Sellers transferred all rights, title and interest in their respective membership interests (the “Membership Interests”) of HRCFG to Purchaser for a combined purchase price of $175,001, of which $1.00 was paid in cash on the closing date and $175,000 as additional consideration, $48,000 of which shall be payable to Sellers pro rata in equal monthly installments over a nine (9) month period starting in October 2026 and $127,000 of which shall be paid from HRCFG’s free cash flow.

Pursuant to the MITA, each Seller transferred, granted, conveyed, assigned and relinquished exclusively to HRCFG all of such Seller’s right, title, and interest in and to any assets, rights, or property of any kind that are primarily used in or necessary for the operation and management of the Alabama JV, including, without limitation, any intellectual property rights (collectively, the “Business Properties”). Under the MITA, for a period of approximately four (4) months (the “Transition Period”), Sellers will provide transition services to Purchaser, and for a period of twelve (12) months following the Transition Period (the “Support Period”), Sellers shall make themselves available to support HRCFG.

The Alabama JV is one of our four existing clinics. As a result of the acquisition, we now include the accounts of the Alabama JV in our consolidated financial statements on a prospective basis.

On June 2, 2026, we filed the 10-K Filing with the SEC, and on June 22, 2026, we filed the 10-Q Filing with the SEC. On June 23, 2026, the Staff notified us that we complied with the Timely Filing Rule and the matter was closed.

Cost of Goods Sold

Cost of goods sold for the three months ended June 30, 2026, was approximately $60 thousand, compared to approximately $3 thousand for the three months ended June 30, 2025. This increase of approximately $57 thousand was primarily attributable to an allowance for expired product.

Impairment Loss

There was no impairment loss for the three months ended June 30, 2026 compared to approximately $1.4 million for the three months ended June 30, 2025. The impairment loss in 2025 was due to an impairment related to the terms of a settlement agreement under which we released Dr. Pritts from her noncompetition commitment.

Gain on remeasurement

Gain on change in fair value of warrant liability

Gain on the change in fair value of warrant liability was $0 for the three months ended June 30, 2026 compared to approximately $1.7 million for the three months ended June 30, 2025. The gain in 2025 was due the fair value measurement of certain liability classified warrants at period end.

Loss from debt extinguishment

Loss from debt extinguishment was $0.2 million for the three months ended June 30, 2026 compared $0.7 million for the three months ended June 30, 2025. This debt extinguishment expense in 2025 was primarily related to the Amended and Restated Debenture.

Gain on settlement

Gain on settlement for the three months ended June 30, 2026 was $0 compared to $0.9 million for the three months ended June 30, 2025. The gain in 2025 was due to a settlement agreement with Dr. Pritts under with the purchase price for WFI was reduced.

Interest Income

Interest income was $0.1 million for the three months ended June 30, 2026 compared to $0 for the three months ended June 30, 2025. The interest was accrued from the NAYA Note Receivable.

Loss on Discontinued Operations

Loss on discontinued operations was $0 for the three months ended June 30, 2026, compared to $2.1 million for the three months ended June 30, 2025. The loss in 2025 consists of approximately $0.6 million from the loss from operations of NTI and approximately $1.5 million from the loss on disposal of NTI.

Comparison of the Six Months Ended June 30, 2026, and 2025

Revenue

Revenue for the six months ended June 30, 2026 was approximately $4.2 million, compared to approximately $3.5 million for the six months ended June 30, 2025. The increase of approximately $0.7 million, or 20%, was primarily attributable to increased revenue of $0.3 million from growth initiatives at WFI and the Georgia JV and $0.4 million the addition of Family Beginnings.

Cost of Services

Cost of services for the six months ended June 30, 2026 was approximately $2.6 million, compared to approximately $2.1 million for the six months ended June 30, 2025. An increase of approximately $0.6 million or 24%, of which approximately $0.4 million was attributable to the addition of the Indiana Clinic, approximately $0.1 million was attributable to one time staffing costs at the Georgia JV and approximately $0.1 million directly correlates to the increase in revenue at WFI and the Georgia JV.

Cost of Goods Sold

Cost of goods sold for the six months ended June 30, 2026, was approximately $65 thousand, compared to approximately $7 thousand for the six months ended June 30, 2025. This increase of approximately $58 thousand was primarily attributable to an allowance for expired product.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses for the six months ended June 30, 2026 were approximately $4.1 million, compared to approximately $3.8 million for the six months ended June 30, 2025. The increase of approximately $0.3 million, or approximately 9%, of which, $0.1 million was related to increased professional fees, $0.1 million was related to increased personnel costs, and $0.1 million was related to increased general administrative operating expenses.

Impairment Loss

There was no impairment loss for the six months ended June 30, 2026 compared to approximately $1.4 million for the six months ended June 30, 2025. The impairment loss in 2025 was due to an impairment related to the terms of a settlement agreement under which we released Dr. Pritts from her noncompetition commitment.

Gain on Remeasurement

Gain on the remeasurement was approximately $2.5 million for the six months ended June 30, 2026 compared to $0 for the six months ended June 30, 2025. The gain consisted of approximately $0.5 million on the remeasurement of the Alabama Note Receivable and approximately $2.0 million on the measurement of the previously held 50% membership equity related to the acquisition of HRCFG.