INVO Bioscience Reports Record Second Quarter 2019 Financial Results with Revenue Increasing 498%

SARASOTA, Fla., Aug. 14, 2019 /PRNewswire/ -- INVO Bioscience, Inc. (OTCQB: IVOB), a medical device company which was granted FDA clearance for its Intravaginal Culture System, INVOcell(®), today announced financial results for the second quarter of 2019, ended June 30, 2019.

Q2 2019 Financial Results and Recent Highlights:

    --  Revenue for the quarter totaled $658,638 compared to $110,210 in the
        second quarter of 2018, an increase of 498%. Revenue growth was driven
        primarily by increased product sales in the U.S. as shipments to Ferring
        were above expectations outlined in May 2019 as they began to increase
        their marketing activities.
    --  Sequentially, revenue increased approximately 248% for the second
        quarter compared to $189,432 in the first quarter of 2019.
    --  Gross margins for the quarter improved to approximately 92% compared to
        approximately 85% in the second quarter of 2018.
    --  Improved net loss to $(241,552) during the second quarter compared to
        $(458,570) during the first quarter of 2019.
    --  Company ended the quarter in a strong cash position of approximately
        $2.7 million.
    --  Announced the appointment of Pressly Ahammed as the Company's new
        Director of International Business Development. Ahammed, together with
        Chief Operating Officer, Michael Campbell, have advanced business
        development efforts outside the U.S., including India, China, Latin
        America and the European Union.
    --  On January 14, 2019 the Company closed an exclusive U.S. licensing
        agreement with Ferring International Center S.A. the parent Company of
        Ferring Pharmaceuticals U.S. to commercialize the INVOcell(TM) system
        for use in the treatment of infertility. As part of the U.S. licensing
        agreement the Company received a $5 million one-time milestone payment,
        with the ability to receive an additional $3 million upon obtaining a
        label enhancement from the U.S. Food and Drug Administration.

Management Discussion

Katie Karloff, Chair and Chief Executive Officer of INVO Bioscience, commented, "We are extremely pleased that our second quarter revenues were significantly higher both year-over-year - approximately 498% and sequentially - approximately 248%. Ferring, as our U.S commercialization partner, is exceeding our expectations as they begin to increase both the number of clinics offering the INVOcell and awareness of its attributes. During the quarter we shipped nearly $500,000 in product to them, putting them well above their prorated annual minimum requirements. We are confident in Ferring's capabilities to expand adoption of the INVOcell procedure and look forward to their continued efforts to grow market share in the years to come."

Karloff continued, "We are seeing interest from a number of international reproductive specialists to add the INVOcell technology into their respective practices in markets ranging from India, China, Latin America and the European Union. Our business development team is engaging with potential partners who have strong capabilities in these various markets and are staying diligent in our efforts to align ourselves with the best partners that can help bring INVOcell to the millions of couples around the world for which we believe it is an ideal solution to their fertility needs. Domestically, beyond Ferring's efforts, we are making consistent progress with a number of key opinion leaders in the reproductive industry to establish INVOcell centers throughout the United States with a goal to have multiple centers up and running in 2020."

"As industry research continues to indicate, the need for affordable and effective reproductive services are highly sought after, both in the U.S. and around the world. We believe INVOcell has an important role to play in this large and expanding global market. We have made tremendous progress over the last twelve months, particularly in the U.S. through our agreement with Ferring, and look to further advance INVOcell's adoption throughout the rest of the world in the future," Karloff concluded.

Financial Results

Revenue for the three months ended June 30, 2019, was $658,638 compared to $110,210 for the same three-month period in 2018, an increase of $548,428 or approximately 498%. The increase was primarily the result of increased product sales as Ferring began to increase their marketing activities as well as from recognizing 3.6% of the Ferring seven-year U.S. exclusive licensing & distribution fee.

Gross margin reported for the second quarter ended June 30, 2019 was approximately 92% or $603,356 compared to 85% or $93,500 for the three months ended June 30, 2018. The increase in gross margin was related to the 2019 licensing fee that did not have any cost of sales expenses associated with it. The cost of sales recognized during the second quarter of 2019 were attributed to product shipments to Ferring.

Selling, general and administrative expenses for the three months ended June 30, 2019 were $669,152 as compared to $1,883,946 for the three months ended June 30, 2018, a decrease of $1,214,794 or approximately 64%.

During the three-month period ended June 30, 2019 we incurred $175,756 in interest expense compared to $74,682 in the three-month period ended June 30, 2018. The primary reason for the increase in 2019 was the amortization of discount on the 2018 Convertible Notes Payable in the amount of $163,466 as compared to $56,446 during the same period of 2018.

Net loss of $241,552, or $(0.00) per basic and diluted share for the three months ended June 30, 2019 compared to a net loss of $1,865,128, or $(0.01) per basic and diluted share for the three months ended June 30, 2018.

About INVO Bioscience

We are a medical device company focused on creating simplified, lower cost treatments for patients diagnosed with infertility. Our solution, the INVO Procedure, is a disruptive new technology. The INVO Procedure is a revolutionary in vivo method of vaginal incubation that offers patients a more natural and intimate experience. Our lead product, the INVOcell, is a patented medical device used in infertility treatment and is considered an Assisted Reproductive Technology (ART). The INVOcell is the first Intravaginal Culture (IVC) system in the world used for the natural in vivo incubation of eggs and sperm during fertilization and early embryo development, as an alternative to traditional In Vitro Fertilization (IVF) and Intrauterine Insemination (IUI). Our mission is to increase access to care and expand fertility treatment across the globe with a goal to lower the cost of care and increase availability of care. For more information, please visit http://invobioscience.com/

Safe Harbor Statement

This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company invokes the protections of the Private Securities Litigation Reform Act of 1995. All statements regarding our expected future financial position, results of operations, cash flows, financing plans, business strategies, products and services, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include words such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may," "could," "should," "will," and other similar expressions are forward-looking statements. All forward-looking statements involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. Factors that may cause actual results to differ materially from those in the forward-looking statements include those set forth in our filings at www.sec.gov. We are under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.

For more information, please contact:

INVO Bioscience
Kathleen Karloff, CEO
978-878-9505 ext. 504
kkarloff@invobio.com

Investors
Lytham Partners, LLC
Robert Blum
602-889-9700
IVOB@lythampartners.com


                                             
       
             INVO BIOSCIENCE, INC.


                                         
        
        CONDENSED CONSOLIDATED BALANCE SHEETS






                                                
           
              June 30,              
     
     December 31,


                                                                         2019                              2018




     ASSETS                                       
            (unaudited)



     Current Assets



     Cash                                                         $2,663,171                          $212,243



     Accounts receivable, net                                        240,214                           225,899



     Inventory, net                                                   76,475                            43,513


      Prepaid expenses and other current
       assets                                                         195,481                           249,454




        Total Current Assets                                       3,175,341                           731,109





     Property and equipment, net                                      98,109                            34,446





     Other Assets



     Capitalized patents, net                                          9,502                            11,792



     Leasehold right of use, net                                     112,827




     Total other assets                                              122,329                            11,792





     Total assets                                                 $3,395,779                          $777,347





      LIABILITIES AND STOCKHOLDERS'
       DEFICIENCY



     Current liabilities


      Accounts payable and accrued
       liabilities, including related
       parties                                                       $528,640                          $571,828



     Accrued compensation                                            969,226                         2,515,256



     Deferred revenue                                                727,261                            18,895


      Current portion of leasehold liability                           18,898



     Note payable                                                                                     131,722



     Note payable - related party                                     35,000                            97,743


      Convertible notes, net of discount                                                               157,039


      Convertible notes, net of discount -
       related party                                                                                     9,087




     Total current liabilities                                     2,279,025                         3,501,570




      Commitments and contingencies (Note
       12)





     Leasehold liability                                              94,173



     Deferred revenue                                              3,928,571


      Convertible notes, net of discount                              232,960


      Convertible notes, net of discount -
       related party                                                   20,072






     Total liabilities                                             6,554,801                         3,501,570





     Stockholders' Deficiency


      Preferred Stock, $.0001 par value;
       100,000,000 shares authorized; No
       shares issued and outstanding as of
       June 30, 2019 and December 31, 2018,
       respectively


      Common Stock, $.0001 par value;
       200,000,000 shares authorized;
       155,546,112 and 154,292,497 shares
       issued and outstanding as of June 30,
       2019 and December 31, 2018,
       respectively                                                    15,554                            15,429



     Additional paid-in capital                                   19,246,768                        18,981,571



     Accumulated deficit                                        (22,421,344)                     (21,721,222)



      Total stockholders' deficiency                              (3,159,022)                      (2,724,222)





      Total liabilities and stockholders'
       deficiency                                                  $3,395,779                          $777,348


                                                               
          
                INVO BIOSCIENCE, INC.


                                                           
     
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


                                                                    
          
                (unaudited)




                                  
       
       For the Three          
          
                For the Three                     
       
       For the Six        
       
       For the Six


                                  
       
       Months Ended           
          
                Months Ended                     
       
       Months Ended       
       
       Months Ended


                                    
       
       June 30,               
          
                June 30,                         
       
       June 30,           
       
       June 30,


                                                      2019                                        2018                                      2019                        2018






     Revenue:



     Product Revenue                             $480,067                                    $110,210                                  $490,927                    $214,350



     License Revenue                              178,571                                                                              357,143






     Total Revenue                                658,638                                     110,210                                   848,070                     214,350




      Cost of Goods Sold                            55,282                                      16,710                                    66,260                      31,134






     Gross Profit                                 603,356                                      93,500                                   781,810                     183,216




      Selling, general, and
       administrative expenses                     669,152                                   1,883,946                                 1,196,717                   2,113,945



      Total operating expenses                     669,152                                   1,883,946                                 1,196,717                   2,113,945




      Loss from operations                        (65,796)                                (1,790,446)                                (414,907)                (1,930,729)




      Other (income) expense:


      Interest (income) expense                    175,756                                      74,682                                   285,215                      79,122



      Total other (income)
       expenses                                    175,756                                      74,682                                   285,215                      79,122




      Loss before income taxes                   (241,552)                                (1,865,128)                                (700,122)                (2,009,851)




      Provision for income taxes






     Net Loss                                  $(241,552)                               $(1,865,128)                               $(700,122)               $(2,009,851)





      Basic net loss per weighted
       average shares of common
       stock                                       $(0.00)                                    $(0.01)                                  $(0.01)                    $(0.01)





      Diluted net loss per
       weighted average shares of
       common stock                                $(0.00)                                    $(0.01)                                  $(0.01)                    $(0.01)





      Basic weighted average
       number of shares of common
       stock                                   155,260,947                                 147,316,458                               154,873,694                 145,339,696





      Diluted weighted average
       number of shares of common
       stock                                   155,260,947                                 147,316,458                               154,873,694                 145,339,696


                                           
              
                INVO BIOSCIENCE, INC.


                              
              
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                
              
                (unaudited)




                                                
              
                For the Six                    
        
        For the Six


                                                
              
                Months Ended                  
        
        Months Ended


                                                  
              
                June 30,                      
        
        June 30,


                                                                                   2019                                      2018




     Cash flows from operating activities:



     Net Loss                                                               $(700,122)                             $(2,009,851)


      Adjustments to reconcile net loss to net cash provided by operating
       activities:


      Non-cash stock
       compensation issued for
       services                                                                  26,600                                 1,743,464


      Amortization of discount
       on notes payable                                                         256,703                                    56,446


      Amortization of
       leasehold right of use
       asset                                                                      3,614                                         -


      Depreciation and
       amortization                                                               3,465                                     2,268



     Changes in assets and liabilities:


      Accounts receivable                                                      (14,315)                                 (52,696)



     Inventories                                                              (32,962)                                    (522)


      Prepaid expenses and
       other current assets                                                      53,974                                    21,619


      Accounts payable and
       accrued expenses                                                           1,280                                 (167,131)


      Leasehold liability                                                       (3,370)                                        -


      Deferred revenue                                                        4,636,937                                         -


      Accrued interest                                                           24,458                                         -


      Accrued compensation                                                  (1,546,030)                                  156,900



                   Net cash provided by
                    (used in) operating
                    activities                                                2,710,232                                 (249,503)






     Cash from investing activities:


      Payments to acquire
       property, plant, and
       equipment                                                               (64,839)                                        -



                   Net cash used in
                    investing activities                                       (64,839)                                        -






     Cash from financing activities:


      Proceeds from the sale
       of common stock                                                                -                                   47,000


      Proceeds from the sale
       of common stock -
       related parties                                                                -                                   30,000


      Proceeds from
       convertible notes
       payable                                                                        -                                  855,000


      Proceeds from
       convertible notes
       payable -related
       parties                                                                        -                                   40,000


      Principal payment on
       notes payable                                                          (131,722)                                        -


      Principal payment on
       notes payable -related
       parties                                                                 (62,743)                                 (28,000)



                   Net cash provided by
                    (used in) financing
                    activities                                                (194,465)                                  944,000





      Increase in cash and
       cash equivalents                                                       2,450,928                                   694,497




      Cash and cash
       equivalents at
       beginning of period                                                      212,243                                    25,759





      Cash and cash
       equivalents at end of
       period                                                                $2,663,171                                  $720,256

                                                                                                                             ---




     Supplemental disclosure of cash flow information:





     Cash paid during the period for:



     Interest                                                                   $9,823                  
        $                 -

                                                                                                                             ---



      Leasehold right of use
       asset and leasehold
       liability upon adoption
       of ASU 2016-02, lease
       (Topic 842)                                                             $116,441                  
        $                 -

                                                                                                                             ---




     Taxes                                      
              $                         -                                     $912

                                                                                                                             ---



      Common stock issued upon
       note payable and
       accrued interest
       conversion                                                              $238,723                  
        $                 -

                                                                                                                             ---



      Common stock issued for
       prepaid services                          
              $                         -                                 $153,000

                                                                                                                             ---



      Beneficial conversion
       feature on convertible
       notes                                     
              $                         -                                 $895,000

                                                                                                                             ---

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SOURCE INVO Bioscience, Inc.