8-K: INVO Bioscience Completes Merger with NAYA Biosciences, Forms New Entity Focused on Fertility, Oncology, and Autoimmune Therapies

INVO Bioscience and NAYA Biosciences have finalized their merger, creating a combined company named NAYA Biosciences, which will focus on expanding its portfolio in fertility, oncology, and autoimmune disease treatments.

Summary

• INVO Bioscience and NAYA Biosciences have merged, forming a new entity named NAYA Biosciences.
• The combined company will operate the existing fertility business and expand into oncology and autoimmune disease therapeutics.
• The merger involved INVO acquiring 100% of NAYA's equity through a reverse triangular merger.
• INVO issued a combination of common stock, Series C-1 preferred stock, and Series C-2 preferred stock to NAYA's security holders.
• Series C-1 preferred stock will convert into common stock upon stockholder approval, subject to a 19.9% beneficial ownership limit.
• Series C-2 preferred stock will be convertible at the holder's option, also subject to a 9.99% beneficial ownership limit, which can be increased to 19.99%.
• Pro forma ownership after the merger will be 17.75% for INVO's pre-merger equity holders, assuming full conversion of preferred stock.
• The combined company will be led by Steve Shum (CEO), Andrea Goren (CFO), and Daniel Teper (President and CEO of NAYA Therapeutics subsidiary).

Sentiment

Score: 7

Explanation: The document is generally positive, highlighting the strategic benefits of the merger and the potential for growth. However, there are some risks and uncertainties mentioned, such as the need to regain compliance with Nasdaq listing requirements, which temper the overall sentiment.

Positives

• The merger creates a diversified portfolio combining revenue-generating fertility business with high-potential therapeutics.
• The combined company has improved access to capital and shared resources to accelerate pipeline development.
• The hub-and-spoke model allows for shared resources and talent to accelerate the development of lean, agile subsidiaries.
• The combined company has a strong leadership team with experience in biopharma, corporate management, and consulting.

Negatives

• The document does not explicitly state any negatives.

Risks

• The document mentions that the company awaits Nasdaq's formal determination regarding compliance with the minimum $2.5 million stockholders equity requirement.
• The company is also not in compliance with the minimum bid price requirement of $1.00 per share and has until May 17, 2025 to regain compliance.
• There is a risk that the anticipated benefits of the merger will not be realized or will not be realized within the expected time period.
• There is a risk that the company will not be able to integrate the business successfully and to achieve anticipated synergies and value creation.
• There is a risk of potential litigation relating to the merger.
• There is a risk of potential adverse reactions or changes to business relationships resulting from the announcement or completion of the merger.
• There is a risk of dilution caused by the company's issuance of additional shares of common stock in connection with the merger or if stockholder approval is obtained.

Future Outlook

The combined company expects to expand its focus to the development of first-in-class clinical-stage assets in oncology and autoimmune diseases, while continuing to operate the revenue-generating fertility business.

Management Comments

• We are confident that our expanded portfolio business model and combined assets have the potential to create significant value for both legacy and new shareholders, commented Steve Shum, CEO of the combined company.
• Combining scalable, profitable revenues from our fertility business with the upside of innovative therapeutics optimizes risk-return for investors.
• We are excited about the growth potential of NAYA as a public company with improved access to capital and shared resources to accelerate the development of its pipeline, added Dr. Daniel Teper, President of the combined company and CEO of the NAYA Therapeutics subsidiary.

Industry Context

The merger reflects a trend in the biotech industry to combine revenue-generating businesses with high-potential therapeutic development programs to optimize risk and return for investors. The focus on oncology and autoimmune diseases aligns with areas of significant unmet medical need and market growth potential.

Comparison to Industry Standards

• The merger of INVO and NAYA is similar to other acquisitions in the biotech industry where companies seek to diversify their portfolios and leverage synergies.
• The focus on fertility, oncology, and autoimmune diseases is consistent with current trends in the biotech industry, where these areas are seen as having high growth potential.
• The use of a hub-and-spoke model is a common strategy for companies with multiple business segments, allowing for shared resources and talent.
• The financial terms of the merger, including the issuance of common and preferred stock, are typical of similar transactions in the biotech industry.
• The leadership structure, with a combination of executives from both companies, is also a common approach in mergers and acquisitions.

Management Changes

Stakeholder Impact

• Shareholders of both INVO and NAYA will be impacted by the merger, with INVO shareholders owning 17.75% of the combined company on an as-converted-to-common basis.
• Employees of both companies will be impacted by the integration of the two businesses.
• Customers of INVO's fertility business will continue to be served by the combined company.
• The merger may impact suppliers and creditors of both companies.

Next Steps

• The combined company will change its name to NAYA Biosciences and trade on the NASDAQ under the NAYA ticker.
• The company will hold a stockholder meeting to ratify the merger, approve an increase in authorized shares, and approve the issuance of common stock upon conversion of preferred stock.
• The company will file a registration statement with the SEC to register for resale the shares of common stock issued pursuant to the merger and the shares issuable upon conversion of preferred stock and the debenture.
• The company will continue to monitor the closing bid price of its common stock and will consider implementing available options to regain compliance with the minimum bid price requirement under the Nasdaq Listing Rules.

Key Dates

Keywords

merger, NAYA Biosciences, INVO Bioscience, fertility, oncology, autoimmune, therapeutics, convertible debenture, preferred stock, clinical trials, biopharma