| Convertible Notes and Notes Payable | Note
9 – Convertible Notes and Notes Payable 2020
Convertible Notes Payable From
May 15, 2020 through July 1, 2020, the Company entered into definitive securities purchase agreements (“Purchase Agreements”)
with accredited investors for their purchase of (i) secured convertible notes issued by us in the aggregate original principal amount
of $ 3,494,840 303,623 3.20 5 3.20 Each purchaser of a Note was issued a 5-year
Purchase Option to purchase 0.086875 Units (as adjusted for subsequent reverse splits for each dollar of Notes purchased. 3,351,200 143,640 8% 236,000 5 6,750 3.20 2,998,905 413,456 9% Pursuant
to those certain Secured Convertible Notes issued in connection with the Purchase Agreements, interest on
such Notes accrues at a rate of ten percent ( 10% )
per annum and is payable either in cash or in shares of the Company’s common stock at a conversion price of $ 3.20
(following and subject to adjustment for stock
splits, combinations or similar events and anti-dilution provisions, among other adjustments) on each
of the six- and twelve-month anniversary of the issuance date and on the maturity dates of November 15, 2021, December 22, 2021 and December
30, 2021. All
amounts of principal and interest due under the Notes are convertible at any time after the issuance date, in whole or in part (subject
to rounding for fractional shares), at the option of the holders, into the Company’s common stock at a fixed conversion price of
$3.20, which is subject to adjustment as described above. Upon
any issuance by the Company of any of its equity securities, including common stock, for cash consideration, indebtedness or a combination
thereof after the date hereof (a “Subsequent Equity Financing”), each holder of a Note will has option to convert the outstanding
principal and accrued but unpaid interest of its Note into the number of fully paid and non-assessable shares of common stock issued
in the Subsequent Equity Financing (“Conversion Securities”) equal to the product of unpaid principal, together with the
balance of unpaid and accrued interest and other amounts payable hereunder multiplied by 1.1, divided by the price per share paid by
the investors for the Conversion Securities. A
Note may not be converted and shares of common stock may not be issued under the Notes if, after giving effect to the conversion or issuance,
the holder together with its affiliates would beneficially own in excess of 9.99% of the Company’s outstanding ordinary shares. The
Company may prepay the Notes at any time in whole or in part by paying an amount equal to 100% of the principal amount to be redeemed,
together with accrued and unpaid interest plus a prepayment fee equal to one percent (1%) of the principal amount to be repaid. The
Notes contain customary events of default including but not limited to: (i) failure to make payments when due; and (ii) bankruptcy or
insolvency of the Company. If an event of default occurs, each holder may require the Company to redeem all or any portion of the Notes
(including all accrued and unpaid interest thereon), in cash. Pursuant
to the terms of a Security Agreement entered into between the Company and the noteholders under the Purchase Agreements, the Notes are
secured by the proceeds from the $ 3,000,000 Of
the $ 3,494,840 1,048,904 2,062,586 In
November 2020, noteholders holding notes with a principal value of $ 1,319,840 475,000 1,200,000 500,000 INVO
BIOSCIENCE, INC. NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS September
30, 2021 (UNAUDITED) Principal
balances of the 2020 Convertible Notes were as follows: Schedule
of Convertible Notes
September 30, 2021 December 31, 2020
2020 Convertible Notes 500,000 1,700,000
Accrued interest 13,890 24,373
Less beneficial conversion feature discount (45,232 ) (604,897 )
Less options discount (55,284 ) (224,051 )
Less warrants discount (58,505 ) (229,954 )
Less issuance cost (14,330 ) (129,408 )
Total, net of discount $ 340,539 $ 536,063 Interest
expense on the 2020 Convertible Notes was $ 12,779
and $ 89,158
for the three months ended September 30, 2021,
and 2020, respectively. Interest
expense on the 2020 Convertible Notes was $ 60,628
and $ 120,939
for the nine months ended September 30, 2021,
and 2020, respectively. Amortization
of options discount on the 2020 Convertible Notes was $ 3,734
and $ 26,428
for the three months ended September 30, 2021,
and 2020, respectively. Amortization
of options discount on the 2020 Convertible Notes was $ 168,767
and $ 35,805
for the nine months ended September 30, 2021,
and 2020, respectively. Amortization
of warrant discount on the 2020 Convertible Notes was $ 3,955
and $ 27,053
for the three months ended September 30, 2021,
and 2020, respectively. Amortization
of warrant discount on the 2020 Convertible Notes was $ 171,449
and $ 36,656
for the nine months ended September 30, 2021,
and 2020, respectively. Amortization
of beneficial conversion feature on the 2020 Convertible Notes was $ 49,541
and $ 345,208
for the three months ended September 30, 2021,
and 2020, respectively. Amortization
of beneficial conversion feature on the 2020 Convertible Notes was $ 559,665
and $ 468,231
for the nine months ended September 30, 2021,
and 2020, respectively. Amortization
of issuance costs on the 2020 Convertible Notes was $ 20,594
and $ 61,187
for the three months ended September 30, 2021,
and 2020, respectively. Amortization
of issuance costs on the 2020 Convertible Notes was $ 115,078
and $ 81,764
for the nine months ended September 30, 2021,
and 2020, respectively. Paycheck
Protection Program On
July 1, 2020, the Company received a loan in the principal amount of $ 157,620 The loan matured 18 months from the date of funding, was payable over 18 equal monthly installments, and
had an interest of 1% per annum. Up to 100% of the principal balance of the loan was forgivable based upon satisfaction of certain criteria
under the Paycheck Protection Program. 1,506 159,126 INVO
BIOSCIENCE, INC. NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS September
30, 2021 (UNAUDITED) |
