Business Combinations

12 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Business Combinations

Note 3 – Business Combinations

Wisconsin Fertility Institute

On August 10, 2023, INVO, through Wood Violet Fertility LLC, a Delaware limited liability company (“Buyer”) and wholly owned subsidiary of INVO Centers LLC (“INVO CTR”), a Delaware company wholly-owned by INVO, consummated its acquisition of the Wisconsin Fertility Institute (“WFI”) for a combined purchase price of $10 million, of which $2.5 million was paid on the closing date (net cash paid was $2,150,000 after a $350,000 holdback) plus assumption of the inter-company loan owed by WFRSA (as defined below) in the amount of $528,756. The remaining three installments of $2.5 million each will be paid on the subsequent three anniversaries of closing. The sellers have the option to take all or a portion of the final three installments in shares of INVO common stock valued at $125.00, $181.80, and $285.80, for the second, third, and final installments, respectively.

WFI is comprised of (a) a medical practice, Wisconsin Fertility and Reproductive Surgery Associates, S.C., a Wisconsin professional service corporation d/b/a Wisconsin Fertility Institute (“WFRSA”), and (b) a laboratory services company, Fertility Labs of Wisconsin, LLC, a Wisconsin limited liability company (“FLOW”). WFRSA owns, operates and manages WFI’s fertility practice that provides direct treatment to patients focused on fertility, gynecology and obstetrics care and surgical procedures, and employs physicians and other healthcare providers to deliver such services and procedures. FLOW provides WFRSA with related laboratory services.

INVO purchased the non-medical assets of WFRSA and one hundred percent of FLOW’s membership interests. The Buyer and WFRSA entered into a management services agreement pursuant to which WFRSA outsourced all its non-medical activities to the Buyer.

The Company’s consolidated financial statements for the year ended December 31, 2023 include WFI’s results of operations. For the year ended December 31, 2023, WFI’s results of operations are included from the acquisition date of August 10, 2023 through December 31, 2023. The Company’s consolidated financial statements reflect the preliminary purchase accounting adjustments in accordance with ASC 805 “Business Combinations”, whereby the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values on the acquisition date.

The following allocation of the purchase price is as follows:

Consideration given:
Cash	2,150,000
Holdback	350,000
Additional payments	7,500,000
	10,000,000
Assets and liabilities acquired:
FLOW intercompany receivable	528,756
Accounts receivable	214,972
Property and equipment, net	25,292
Other current assets	56,274
Tradename	253,000
Noncompetition agreement	3,961,000
Goodwill	5,878,986
Deferred revenue	(389,524	)
WFRSA intercompany note	(528,756	)
	10,000,000

Pro Forma Financial Information

The following unaudited pro forma consolidated results of operations for the years ended December 31, 2023 and 2022 assume the acquisition was completed on January 1, 2022:

	Year Ended December 31,
	2023			2022
Pro forma revenue		6,228,171			6,201,871
Pro forma net loss		(7,123,212	)		(9,208,504	)

Pro forma data does not purport to be indicative of the results that would have been obtained had these events actually occurred at the beginning of the periods presented and is not intended to be a projection of future results. The share and per share data have been retroactively reflected for the acquisition.

As of December 31, 2023, the Company has $259,407 in undeposited funds held in reserve that it intends to use towards the Holdback amount once it becomes due.