Invo Bioscience Inc (OTCMKTS:IVOB) Steps Down
At the end of February, Invo Bioscience Inc (OTCMKTS:IVOB) issued a shareholder update and told investors what they had been up to during the previous few months. They proudly announced that they had been asked by the FDA to conduct some tests on their INVOCell device, said that they had complied with all the requirements, and informed us that the Administration should respond within the next 60 days. The deadline came and went twelve days ago, but unfortunately, the company remained eerily quiet.
The people who have been around IVOB for long enough are probably having a bit of a deja vu moment right now. On March 30, 2012, the management team said that they’ll need 15 more days in order to put together the 2011 10-K. It’s now been exactly 1,132 days since then and the report is still not out.
With that in mind, the stock’s hesitant performance is hardly surprising. At the end of last month, people thought that IVOB will manage to stick to the deadline for a change and they started buying. The ticker managed to climb from under $0.30 all the way to $0.60 in a matter of a few short sessions and it even logged a 52-week high of $0.69 per share. Unfortunately, it wiped off a significant chunk of its value yesterday and reclaiming it could prove to be difficult.
IVOB opened what turned out to be a rather wild session on Tuesday with a massive gap down of $0.43. It spent the better part of the morning deep in the red, and although it tried to recover in the afternoon, all it managed to do was register an intraday high of $0.53 and a close of $0.47 per share – 21% below the price at the end of Monday’s session.
The drop shows that the majority of investors aren’t fond of companies who tend to miss their deadlines. Still, there are those who can find a silver lining just about everywhere. They’ll say that as long as the product is good, nothing else matters.
Truth be told, once you do a bit of research, you’ll notice that over the years, there’s been no shortage of articles dedicated to INVOCell. Most of them praise the device for providing a clever and relatively cost-effective solution to women with fertility problems.
The fact that the latest financials are now more than three-and-a-half years old, however, is still a problem. Investors simply have no way of knowing how successful the INVOCell is and the only thing they can rely on is the latest 10-Q which will actually tell them that the device wasn’t off to the best of starts.
While it still isn’t FDA-approved, IVOB have the right to sell it in Europe and various other countries. It received its CE marking in May 2008, but unfortunately, during the first three years and four months, it generated a rather underwhelming $236 thousand in revenues.
The question marks around the balance sheet are also worth bearing in mind. The report tells us that IVOB had just $2 thousand in the bank and a working capital deficit of almost $3 million at the end of Q3 of 2011. What’s more, a significant portion of the liabilities consisted of toxic debt, some of which was convertible into stock at a 50% discount. And this, in turn means that investors have no idea what the share structure looks like.
All in all, the stop sign is put on IVOB‘s company profile for a very good reason. Once it’s removed, things might look a little bit different, but until then, the ticker remains a rather risky proposition.
