Amended Annual Report (10-k/a)

Date : 06/03/2019 @ 8:07PM
Source : Edgar (US Regulatory)
Stock : Invo Bioscience, Inc. (PC) (IVOB)
Quote : 0.2683  -0.0022 (-0.81%) @ 6:27PM

Amended Annual Report (10-k/a)



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


 

FORM 10-K /A

 


 

AMENDMENT NO. 1

 

(Mark One)

 

Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the fiscal year ended December 31, 2018

 

or

 

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from                                to                                      

         

INVO BIOSCIENCE, INC.

(Exact name of registrant as specified in Charter)

 

Nevada

333-147330

20-4036208

(State or other jurisdiction of incorporation or organization)

(Commission File No.)

(IRS Employee Identification No.)

 

407 Rear Mystic Avenue, Suite 34C, Medford, MA 02155

 (Address of Principal Executive Offices)

 

Registrant’s telephone number, including area code:   (978) 878-9505

 

Securities registered pursuant to Section 12(b) of the Act:

 

Common Stock, $0.0001 par value per share

 

Securities registered pursuant to Section 12(g) of the Act:

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    YES  ☐    NO  ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    YES  ☐    NO  ☒

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES  ☒    NO ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  YES   ☒    NO  ☐

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ☒

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”  “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   ☐

Accelerated filer     ☐

Non-accelerated filer     ☐ (Do not check if smaller reporting company)

Smaller reporting company    ☒

 

Emerging Growth Company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    YES ☐      NO ☒  

 

The aggregate market value of the voting common equity held by non-affiliates computed by reference to the closing price as reported on the OTC QB Venture Market of the Over-the-counter “OTC” market for the Registrant’s common stock as of the last business day of the registrant’s most recently completed second fiscal quarter of 2018 was $39,972,000.  There were no shares of non-voting common equity outstanding as of March 31, 2019.

 

The number of shares outstanding of the registrant’s common stock, $0.0001 par value, as of April 12, 2019 was 154,711,112.

 

 

 

 

 

EXPLANATORY NOTE  

 

This Amendment No. 1 on Form 10-K/A (Amendment) amends INVO Bioscience, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (Original Filing). The purpose of this Amendment No. 1 is to:

 

Fulfill the requirements of Part III of our Annual Report on Form 10-K, which include the following:

 

Item 10.  Directors, Executive Officers and Corporate Governance.

 

Item 11.  Executive and Director Compensation

 

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

Item 13.  Certain Relationships and Related Transactions, and Director Independence

 

Item 14.  Principal Accountant Fees and Services

 

As required by Rule 12b-15 promulgated under the Securities Exchange Act of 1934, as amended, we have included the entire text of the Items amended in this Amendment No. 1. However, there have been no changes to the text of such items other than the changes stated in the immediately preceding listing. Other than as described above and the inclusion with this Amendment No. 1 of new certifications by management, and related amendments to the List of Exhibits contained in Part IV, Item 15 of the Original Filing, this Amendment No. 1 speaks only as of the date of the Original Filing and does not amend, supplement or update any information contained in the Original Filing to give effect to any subsequent events. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Filing and our reports filed with the U.S. Securities and Exchange Commission (SEC) subsequent to the Original Filing. The filing of this Amendment shall not be deemed an admission that the Original Filing, when made, included any untrue statements of material fact or omitted to state a material fact necessary to make a statement misleading.

 

 

 

 

 

FORM 10-K

INVO BIOSCIENCE, INC.

 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

Part III

 

 

 

 

Item 10.

Directors, Executive Officers and Corporate Governance

4

Item 11.

Executive and Director Compensation

6

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

7

Item 13.

Certain Relationships and Related Transactions, and Director Independence

8

Item 14.

Principal Accountant Fees and Services

9

 

 

 

Part IV

 

 

 

 

Item 15.

Exhibits, Financial Statement Schedules

10

 

 

 

SIGNATURES

12

 

 

 

Part III

 

Item 10.  Directors, Executive Officers and Corporate Governance.

 

The Company’s Directors are to be elected annually by our stockholders at their annual meeting.  Each director holds his office until his successor is elected and qualified or his earlier resignation or removal.  However, the directors of INVO Bioscience were last elected in connection with the Share Exchange in December 2008, as INVO Bioscience has not subsequently held an annual stockholders meeting, INVO Bioscience’s executive officers are elected annually by our Board of Directors.  Each executive officer holds his office until they die or resign, is removed by the Board, or their successor is elected and qualified.  Information regarding our executive officers for the period 2011 through 2018, and currently, is presented below.

 

NAME

 

AGE*

 

POSITION

Ms. Kathleen Karloff

 

63

 

Director and Chief Executive Officer and Secretary, from 2011 through 2015, and from January 1 through September 19, 2016.  From September 20, 2016 to date, Ms. Karloff has served as Director, Chairman of the Board, President and Chief Executive Officer.

 

 

 

 

   

Dr. Kevin Doody, MD

 

57

 

Director from April 7, 2017.

 

 

 

 

   

Mr. Robert Bowdring

 

61

 

Director from March 2013 through 2015, and from January 1, 2016 to date. From 2011 to March 2013, Mr. Bowdring served as Chief Financial Officer (and principal accounting officer).  Further, from September 20, 2016 to date Mr. Bowdring has served as Treasurer and Secretary.  Finally, from March 6, 2017 to date Mr. Bowdring has served as Acting Chief Financial Officer (and acting principal accounting officer).

 

 

 

 

 

Mr. Michael Campbell

 

60

 

Director from October 11, 2017.

 

 

 

 

 

Mr. Steven Shum

 

48

 

Director from October 11, 2017.

 

 

 

 

 

*As of December 31, 2018. 

 

Kathleen Karloff, Chairperson, Chief Executive Officer and Director

 

Ms. Karloff co-founded INVO Bioscience in January 2007.  Since 2007 Ms. Karloff has served as, and she continues to serve as, a Director of INVO Bioscience.  Further, she served as Chief Executive Officer and Secretary from 2008 through September 19, 2016, and since September 20, 2016 has served, and continues to serve, as Chairman of the Board, President and Chief Executive Officer of INVO Bioscience.  Since 2007, Kathleen has obtained ISO certification and the CE mark for the INVOcell device and has implemented manufacturing and distribution systems.  From 2004 until September 2006, Kathleen was the Vice President of Operations for Medelle Corporation.  From 2000 through 2003, Kathleen was the Vice President of Operations for a start-up company Control Delivery Systems developing an intra-ocular drug therapy for Uveitis and Diabetic Macular Edema.  The Company was acquired by Psivida LTD.  Prior to that, she has held various positions at Boston Scientific during 13 years of dynamic growth from 1983 to 1997 her last position being the Director of Manufacturing.  Since leaving Boston Scientific, she has been Vice President of Operations on start-up teams of three device/pharmaceutical companies.  Ms. Karloff earned her B.S. in microbiology from Montana State University and attended Northeastern University for MBA coursework.

 

Kevin Doody, M.D., Medical Director and Director (Effective April 7, 2017)

 

Dr. Doody serves as Medical Director for INVO Bioscience and is also a member of the Board of Directors.  Dr. Doody is a renowned fertility specialist who is the founder and Medical Director for the Center for Assisted Reproduction (CARE Fertility) and Effortless IVF located in Bedford Texas. The Center for Assisted Reproduction, established in 1989, has been a pioneer of assisted reproductive technologies in the north Texas region with several firsts including the first ICSI pregnancy and the first to successfully implement a blastocyst culture system. CARE Fertility had the first pregnancy in the region with a pregnancy following embryo biopsy and pre-implantation genetic testing for cystic fibrosis.  CARE Fertility/ Effortless IVF also was the first to adopt the INVOcell™ Intravaginal Culture System since the INVOcell first obtained FDA clearance.  Dr. Doody is President of the Society for Assisted Reproductive Technology (SART), on the Board of Directors of the American Society for Reproductive Medicine (ASRM) and a member of the RESOLVE Physician Council.  As INVO Bioscience’s Medical Director, Dr. Doody provides medical and clinical guidance, INVO education and training, and oversight of risk management and post-market surveillance activities as well as support current and new product development.

 

 

Robert J. Bowdring, Director, Secretary, Treasurer and former Chief Financial Officer

 

Mr. Bowdring, joined the Company as its Corporate Controller in October 2008.  In January 2009, the Company appointed Mr. Bowdring as its Chief Financial Officer (and principal accounting officer), and he served in this capacity until March 2013.  When his service as Chief Financial Officer (and principal accounting officer) ended in March 2013, he became a member of the Board of Directors and a consultant.  Mr. Bowdring has served, and continues to serve, as a Director of and consultant to INVO Bioscience.  Further, on September 20, 2016, he was elected Treasurer and Secretary of INVO Bioscience, and on March 6, 2017 he was elected Acting Chief Financial Officer (and acting principal accounting officer), all positions in which he has continued to serve and currently serves.  Currently Mr. Bowdring is the Chief Financial Officer of Dynasil Corporation of America, he joined Dynasil in March 2013.  From April 2003 to August 2008, Mr. Bowdring served as CFO & Vice President of Finance and Administration for Cyphermint, Inc., a software development firm.  For the fourteen prior years, he was the Controller and Vice President of Lifeline Systems Inc., a public manufacturing and service company (NASDAQ: LIFE) in the personal emergency response market.  Mr. Bowdring has a strong history in senior financial management with more than 35 years’ experience serving in capacities such as chief financial officer, vice president of finance and controller.  Rob has been in both public and private manufacturing and service companies during his career.  Mr. Bowdring has a Bachelor’s Degree in Accounting from the University of Massachusetts in Amherst.

 

Michael J. Campbell, Director (Effective October 11, 2017)

 

Mr. Campbell is the Vice President of IVF Americas Business Unit for Cooper Surgical, Inc. (CSI), a wholly owned subsidiary of The Cooper Companies (NYSE: COO). Mr. Campbell has substantial medical device sales, marketing and business development leadership experience within Global Fortune 500 and Start-up Company environments.  During his over 11-year career at Cooper Surgical, Mike has been responsible for IVF product portfolio sales globally including the US, Canada, Latin America, Europe, Middle East, Africa, and Asia Pacific regions.  In addition to Mr. Campbell’s current position as Vice President of IVF Americas Business Unit, he served in various leadership roles including Vice President of International Business Unit from 2013-2014 and as Vice President of IVF Business Unit from 2006 to 2012.  Prior to joining Cooper Surgical, Mike was Vice President of Sales, Marketing and Business Development at Retroactive Bioscience from 1997 to 2006 and Vice President of Sales and Marketing for Gabriel Medical from 1994 to 1997.  Mr. Campbell also served in various senior management positions across marketing, sales and product management at Boston Scientific Corporation beginning in 1984 through 1994.

 

Steven M. Shum, Director (Effective October 11, 2017)

 

Mr. Shum is Chief Financial Officer of Eastside Distilling (NASDAQ: ESDI) since October 2015. Prior to joining Eastside, Mr. Shum served as an Officer and Director of XZERES Corp, a publicly-traded global renewable energy company, from October 2008 until April 2015 in various officer roles, including Chief Operating Officer from September 2014 until April 2015, Chief Financial Officer, Principal Accounting Officer and Secretary from April 2010 until September 2014 (under former name, Cascade Wind Corp) and Chief Executive Officer and President from October 2008 to August 2010. Mr. Shum also serves as the managing principal of Core Fund Management, LP and the Fund Manager of Core Fund, LP. He was a founder of Revere Data LLC (now part of Factset Research Systems, Inc.) and served as its Executive Vice President for four years, heading up the product development efforts and contributing to operations, business development, and sales. He spent six years as an investment research analyst and portfolio manager of D.N.B. Capital Management, Inc. His previous employers include Red Chip Review and Laughlin Group of Companies. He earned a B.S. in Finance and a B.S. in General Management from Portland State University in 1992.

 

Code of Ethics

 

We have adopted a Code of Conduct that applies to all employees including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The text of our Code of Conduct is posted in the “Investor Information—Corporate Governance” section of our website, www.INVOBioscience.com.

 

We intend to disclose on our website any amendments to, or waivers from, our Code of Business Conduct and Ethics that are required to be disclosed pursuant to the disclosure requirements of Item 5.05 of Form 8-K

  

Cumulative voting is not provided for in our Articles of Incorporation or any amendments thereto.  Directors are elected by a plurality vote. The common stock is not entitled to preemptive rights and is not subject to conversion or redemption.  Upon the occurrence of a liquidation, dissolution or winding-up, the holders of shares of outstanding common stock are entitled to share ratably in all assets remaining after payment of liabilities and satisfaction of preferential rights of any outstanding preferred stock.  There are no sinking fund provisions applicable to the common stock.

 

 

Item 11.  Executive and Director Compensation

 

Summary Compensation Table

 

The following Summary Compensation Table sets forth, for the years indicated, all cash compensation paid, distributed or accrued for services, including salary and bonus amounts, rendered in all capacities by the Company’s officers & directors who received or was entitled to receive remuneration in excess of $100,000 during the stated periods.  Note, none of our officers received cash compensation during the years 2010 through 2017.

 

SUMMARY COMPENSATION TABLE

 

Name and Principal Position

 

Year

 

Compensation ($)

   

Accrued Compensation ($)

   

Stock Award ($) (3)

   

All other Compensation ($)

   

Total ($)

 
                                             

Kathleen Karloff

 

2018

  $ 0     $ 120,000     $ 23,000     $ 0     $ 143,000  

CEO, President

 

2017

    0       120,000       0       0       120,000  

Chairperson Director

 

2016

  $ 0     $ 120,000     $ 359,900     $ 0     $ 479,900  

(1 & 3)

                                           
                                             

Robert Bowdring

 

2018

  $ 75,000     $ 45,000     $ 23,000     $ 0     $ 143,000  

Director (March 2013 to

 

2017

    0       120,000       0       0       120,000  

date & Consultant)

 

2016

  $ 0     $ 120,000     $ 359,900     $ 0     $ 479,900  

(2 & 3)

                                           

 

(1)

Kathleen Karloff was elected as the Chief Executive Officer, Secretary and member of the Board of Directors of the Company effective upon the resignation of Andrew Uribe in connection with the Share Exchange between Emy’s and INVO Bioscience on December 5, 2008.  She served in these positions until September 20, 2016, when she was elected Chairman of the Board, President and Chief Executive Officer in addition to her position as a director. On January 22, 2018, 200,000 shares were issued Ms. Karloff at the grant date closing market price of $0.115 with a value of $23,000.

(2)

Robert Bowdring was elected as the Chief Financial Officer (and principal accounting officer) on January 2, 2009 after joining the Company in October 2008 as Controller. He resigned as CFO in March 2013 and was appointed to the Board of Directors. From March 2013 to date Mr. Bowdring served the Company as a consultant providing guidance to the financial and administrative areas, with compensation accrued at a rate of $10,000 per month.  On September 20, 2016, he was elected Treasurer and Secretary, and in March 2017 he was elected Acting Chief Financial Officer (and acting principal accounting officer), in all of which positions he continues to serve to date in addition to remaining a Director. On January 22, 2018, 200,000 shares were issued to Mr. Bowdring at the grant date closing market price of $0.115 with a value of $23,000.

(3)

From 2010 through 2017 the named officers and directors did not receive any of their compensation in order to assist the Company’s cash flow during this time period, the amounts have been accrued until a time when the Company can afford to pay them.  For this effort it was decided that the named officers as well as the other consultants would receive stock grants. The per share price was based on the closing market price on the date of issue.

 

Compensation of Directors

 

In November 2017 the Company obtained three additional independent board of directors during the year. Each independent board member received 200,000 shares of restricted INVO Bioscience common stock for their services from November 2017 to October 2018. These share were issued in January 2018. In October 2018, each independent Director was issued 400,000 shares of restricted common stock, 200,000 shares were for the work provided by the Directors throughout 2018 and 200,000 shares were provided in advance as their 2019 Director’s compensation. In addition pursuant to an oral consulting agreement Mr. Bowdring has been accruing compensation for his oversight of the financial and administrative areas of the company at a rate of $10,000 per month as reflected in the table above. Our directors also receive reimbursement of out-of-pocket expenses incurred in attending Board and committee meetings.

 

Pursuant to our Director Compensation Policy, each of our non-employee directors received total annual compensation of 200,000 restricted common stock shares.

 

 

The table below summarizes the compensation paid to, or earned by, our non-employee directors for the director compensation year which began on January 1, 2018. Ms. Karloff, our Chairperson, President and Chief Executive Officer, does not receive any compensation for her Board service beyond the compensation she receives as an executive officer of the Company.

 

Name

 

Fees Earned or Paid In

   

Total($)(1)

 
 

Cash ($)

   

Stock Awards($)

     
                         

Kevin Doody, MD.

    -       179,000       179,000  

Michael Campbell

    -       179,000       179,000  

Steven Shum

    -       179,000       179,000  

 

(1) Represents the aggregate grant date fair value of the stock awards received by the director during fiscal year 2018 determined in accordance with FASB ASC Topic 718.

 

(2) For the director compensation year beginning January 2018, the three independent directors. The annual stock grants for the director compensation year beginning January 2018 was made on January 22, 2018, 200,000 shares were issued at the grant date closing market price of $0.115 with a value of $23,000 each, and on October 31, 2018 400,000 shares were issued to Dr. Doody, Mr. Campbell and Mr. Shum at the grant date closing market price of $0.39 per share with a value of $156,000.

 

Stock Option Grants

 

None.

 

Employment Contracts  

 

Currently, the Company has not entered into any employment agreements with the executive officers. However executive officer compensation plans are currently being established. While they are being developed the current compensation plan for both Ms. Karloff, CEO and Mr. Campbell, COO are a base salary of $175,000 and a 50% bonus if certain goals are achieved during 2019.

 

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

The following table and notes set forth the beneficial ownership of the common stock of the Company as of December 31, 2018, by each person who was known by the Company to beneficially own more than 5% of the common stock, by each director and named executive officer, and by all directors and executive officers as a group. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or dispositive power with respect to the securities. Unless otherwise indicated below, to our knowledge, all persons listed below have sole voting and dispositive power with respect to their shares of our common stock, except to the extent authority is shared by spouses under applicable law. Unless otherwise noted, the address of all of the individuals and entities named below is care of INVO Bioscience, Inc., 407R Mystic Avenue, Suite 34C, Medford, Massachusetts 02155:

 

a)     At December 31, 2018

 

  Name and Address of Beneficial Owner (1)

 

Nature of Security

 

Number of Shares

   

Percentage of Common Stock

 
                     

Kathleen Karloff

 

Common Stock

    14,200,183       9.2

%

                     

Robert Bowdring

 

Common Stock

    11,715,942       7.6

%

                     

Kevin Doody

 

Common Stock

    5,075,677       3.3

%

                     

Michael Campbell

 

Common Stock

    607,800       0.4

%

                     

Steven Shum

 

Common Stock

    600,000       0.4

%

                     

Claude Ranoux

 

Common Stock

    24,694,000       15.9

%

                     

All directors and executive officers as a group (5 persons)

    32,199,622       20.8

%

 

(1)

Beneficial ownership is determined in accordance with Rule 13d-3(a) of the Securities Exchange Act of 1934 and generally includes voting or investment power with respect to securities.  Except as indicated by footnotes and subject to community property laws, where applicable, the person named above has sole voting and investment power with respect to all shares of the Common Stock shown as beneficially owned by him or her. The number of shares outstanding on December 31, 2018 was 154,292,497

 

 

Changes in Control

 

There are no present arrangements, including pledges of the Company’s securities, known to the Company, the operation of which may result at a subsequent date in a change in control of the Company.

 

Item 13.  Certain Relationships and Related Transactions, and Director Independence

 

Conflicts of Interest

 

Certain potential conflicts of interest are inherent in the relationships between our officers and directors, and us.  From time to time, one or more of our affiliates may form or hold an ownership interest in and/or manage other businesses both related and unrelated to the type of business that we own and operate.  These persons expect to continue to form, hold an ownership interest in and/or manage additional other businesses which may compete with ours with respect to operations, including financing and marketing, management time and services and potential customers.  These activities may give rise to conflicts between or among the interests of us and other businesses with which our affiliates are associated.  Our affiliates are in no way prohibited from undertaking such activities, and neither our shareholders nor we will have any right to require participation in such other activities.

 

Further, because we intend to transact business with some of our officers, directors and affiliates, as well as with firms in which some of our officers, directors or affiliates have a material interest, potential conflicts may arise between the respective interests of us and these related persons or entities.  We believe that such transactions will be effected on terms at least as favorable to us as those available from unrelated third parties.

 

With respect to transactions involving real or apparent conflicts of interest, we intend to require that: (i) the fact of the relationship or interest giving rise to the potential conflict be disclosed or known to the directors who authorize or approve the transaction prior to such authorization or approval, (ii) the transaction be approved by a majority of our disinterested outside directors, and (iii) the transaction be fair and reasonable to us at the time it is authorized or approved by our directors.

 

In particular, the Company has entered into several transactions with James Bowdring, the brother of the Company’s Director, Treasurer and Secretary Robert Bowdring.  In the first such transaction, in December 2008, James Bowdring invested $100,000 to acquire 666,667 shares of the Company’s restricted common stock.

 

Then in April 2011 James Bowdring acquired the Q211 Note for $50,000.  The Q211 Note, which now has a principal balance of $25,000, is convertible into shares of common stock at $.03 per share (subject to adjustment) and is now overdue.  In addition, the Company issued James Bowdring warrants to purchase 1,666,667 shares of common stock at $.03 per share (subject to adjustment), which warrants have now expired unexercised.  See “Note 7 Notes Payable and Other Related Party Transactions.”

 

In November 2011 the Company issued James Bowdring for $10,000 the Q411 Note, which is convertible into shares of restricted common stock at $.01 per share (subject to adjustment).    James Bowdring also received warrants to purchase 500,000 shares of common stock at $.02 per share (subject to adjustment), which warrants have now expired unexercised.  See “Note 7 Notes Payable and Other Related Party Transactions.”

 

In May 2018, pursuant to Section 4(a)(2) of the Securities Act, the Company sold 150,000 shares of common stock to accredited investors who are family members of Robert J Bowdring, a Board Member in a private placement for cash of $30,000.

 

In May 2018, James Bowdring and his children participated in the “2018 Convertible Notes” offerings in the aggregate principal amount of $40,000. The 2018 Convertible Notes accrue interest at the rate of 9% per annum which is paid in stock. These Notes are due on March 31, 2021. The notes are convertible into shares of common stock at a price of $0.20 per share, provided, that if the Company completes a subsequent equity financing, the holders of the 2018 Convertible Notes can elect to convert the notes in shares of our common stock at a price equal to 75% of the price paid per share in such subsequent equity financing.

 

In May 2018, the Company sold 150,000 shares of common stock at a price of $0.20 per share for proceeds of $30,000 to Charles Mulrey and family, the brother-in-law of Robert J. Bowdring, Director & Acting Chief Financial Officer as part of the 2018 financing.

 

The Company has been renting its corporate office from Forty Four Realty Trust which is owned by James Bowdring, the brother of Director, Robert Bowdring since November 2012. It is a month to month rental arrangement for less than the going fair market real estate rental rate. The rent expense paid for the twelve months ended December 31, 2018 and 2017 was $5,600 and $4,400 respectively. In addition the Company purchases stationary supplies and marketing items at discounted rates from Superior Printing & Promotions which is also owned by James Bowdring and is in the same building as our corporate office. INVO Bioscience spent $2,130 and $4,100 with Superior during 2018 and 2017, respectively.

 

 

Item 14.  Principal Accountant Fees and Services

 

Effective October 10, 2016, our independent registered public accounting firm is Liggett & Webb P.A.  The following table summarizes the approximate aggregate fees billed to us or expected to be billed to us by our independent registered accounting firms for our 2018 and 2017 fiscal years:

 

   

Fiscal Year Ended

December 31, 201 8

   

Fiscal Year Ended

December 31, 2017

 

Audit Fees

  $ 58,000     $ 48,000  

Audit Related fees

  $ 5,000     $ -0-  

Tax Fees

  $ 2,500     $ 4,000  

All Other Fees

  $ -     $ -  

 

Our Board of Directors has adopted a procedure for pre-approval of all fees charged by our independent auditors.  Under the procedure, the Board approves the engagement letter with respect to audit and review services.  Other fees are subject to pre-approval by the Board, or, in the period between meetings, by a designated member of the Board.  Any such approval by the designated member is disclosed to the entire Board at the next meeting.  The audit fees paid to the auditors with respect to fiscal year 2018 and 2017 were pre-approved by the entire Board of Directors.

 

 

Part IV

 

Item 15.  Exhibits and Financial Statement Schedules

 

(a)     Financial Statements

 

The following are filed as a part of this report:

 

1. Financial Statements

 

  

  

Page

 

 

Report of Independent Registered Public Accounting Firm

  

F-1

 

 

Consolidated Balance Sheets as of December 31, 2018 and 2017

  

F-2

 

 

Consolidated Statements of Losses for the Years Ended December 31, 2018 and  2017

  

F-3

 

 

Consolidated Statement of Shareholders’ Deficit for the Period from January 1, 2017 to December 31, 2018

  

F-4

 

 

Consolidated Statements of Cash Flows for the Years Ended December 31, 2018 and  2017

  

  F-5

 

 

Notes to Consolidated Financial Statements

  

F-6

 

2. Financial Statement Schedules

 

Information required by Schedule II is shown in the Notes to Consolidated Financial Statements.  All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.

 

(b)     Exhibits

 

Exhibit No.

 

Description

3.1

 

Articles of Incorporation (1)

3.2

 

Certificate of Amendment to Articles of Incorporation of  INVO Bioscience (1)

3.3

 

By-Laws of INVO Bioscience (2)

3.4

 

Certificate of Amendment to Articles of Incorporation of  INVO Bioscience dated December 22, 2008 (3)

4.1

 

Form of Senior Secured Convertible Promissory Note - 2009 (4)

4.2

 

Form of Convertible Promissory Note Purchase Agreement - 2009 (4)

4.3

 

Form of Convertible Promissory Note – 2018 (7)

4.4

 

Form of Convertible Note Purchase Agreement – 2018 (7)

10.1

 

Kathleen Karloff Loan Agreement (5)

10.2

 

Kathleen Karloff Revised Loan Agreement (6)

10.3

 

Promissory Note – August 2016 (7)

10.4

 

Distribution Agreement between the INVO Bioscience, Inc and Ferring International Center S.A. (7) +

10.5

 

Supply Agreement between the INVO Bioscience, Inc and Ferring International Center S.A. (7) +

 

 

21.01 

 

Subsidiaries of the Registrant*

31.01

 

Certification by Chief  Executive Officer pursuant to Rule 13a-4(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.*

31.02

 

Certification by Chief Financial Officer pursuant to Rule 13a-4(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.*

32.01

 

Certification by the Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

32.02

 

Certification by the Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

101

XBRL Interactive Data File

101.INS 

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema

101.CAL

XBRL Taxonomy Extension Calculation Linkbase

101.DEF

XBRL Taxonomy Extension Definition Linkbase

101.LAB

XBRL Taxonomy Extension Label Linkbase

101.PRE 

XBRL Taxonomy Extension Presentation Linkbase

 

(1)   Incorporated by reference to INVO Bioscience’s predecessor EMY’S Registration Statement on Form SB-2/A filed with the Securities and Exchange Commission on January 25, 2008.

 

(2)   Incorporated by reference to the INVO Bioscience’s predecessor EMY’s Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on November 13, 2007.

 

(3)   Incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 5, 2009.

 

(4)   Incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 17, 2009.

 

(5)   Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the three months ended March 31, 2009 filed with the Securities and Exchange Commission on May 15, 2009.

 

(6)   Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the three months ended June 30, 2009 filed with the Securities and Exchange Commission on August 14, 2009.

 

(7)   Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 filed with the Securities and Exchange Commission on April 16, 2019

 

* Filed herewith

 + Portions of this exhibit have been omitted in accordance with Item 601(b)(10) of Regulation S-K

 

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on June 3, 2019.

 

 

INVO Bioscience, Inc.

 

 

 

 

 

Date June 3, 2019

By:

/s/ Kathleen Karloff

 

 

 

Kathleen Karloff

 

 

 

Chief and Principal Executive Officer

 

 

 

 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on June 3, 2019.

 

Signature

  

Capacity

 

 

/s/Kathleen Karloff

  

Chief and Principal Executive Officer and Director

Kathleen Karloff

 

 

 

/s/Robert J Bowdring

  

Director and Acting Chief Financial Officer (and acting principal accounting officer)

Robert J. Bowdring

 

 

 

 

 

 

 

 

12

 

 

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