INVO Bioscience Reports Third Quarter 2019 Financial Results

SARASOTA, Fla., Nov. 14, 2019 /PRNewswire/ -- INVO Bioscience, Inc. (OTCQB: IVOB), a medical device company focused on creating alternative treatments for patients diagnosed with infertility and developers of INVOcell®, the world's only in vivo Intravaginal Culture System, today announced financial results for the third quarter of 2019, ended September 30, 2019.

Q3 2019 Financial Results:

    --  Revenue for the quarter totaled $303,571 compared to $125,035 in the
        third quarter of 2018, an increase of 143%. Revenue growth was driven
        primarily by increased product sales in the U.S. as shipments to Ferring
        as they continue to increase their marketing activities.
    --  Gross margins for the quarter were approximately 85% compared to
        approximately 88% in the third quarter of 2018.
    --  Incurred a net loss of $(710,334) during the third quarter compared to a
        net loss of $(294,860) during the third quarter of 2018, as a result of
        increased commercialization efforts and certain one-time settlement
        costs.
    --  Company ended the quarter with a cash position of approximately $2.0
        million.

International Expansion Highlights

    --  The Company commenced its worldwide rollout for INVOcell with the recent
        signing of commercialization agreements covering Nigeria, Turkey,
        Jordan, Uganda, Ethiopia, and Sudan.
    --  Attained receipt of a CE Mark for the INVOcell culture and retention
        device in October 2019, the final requirement to begin commercially
        distributing the revolutionary alternative to traditional IVF through
        the entire European Union.

Management Discussion

Steve Shum, Chief Executive Officer of INVO Bioscience, commented, "We are excited with the progress being made to drive revenue growth domestically through our U.S. commercialization agreement with Ferring and now in other parts of the world with the recent signing of new commercial distribution agreements for Nigeria, Turkey, Jordan, Uganda, Ethiopia, and Sudan. We believe there is an incredible opportunity to drive adoption of the INVOcell over the coming years through the creation of commercialization agreements with partners. We will remain diligent to find partners that are incentivized to support the product through minimum purchase requirements or similar arrangements. Our agreement with Ferring for the U.S. and our recent agreements for Africa and Eurasia are great templates to continue working from and we look forward to further agreements announced in the future."

Shum continued, "Other near-term objectives include the initiation of our follow-on clinical study for the INVOcell device to expand the current label from a 3-day incubation period to a 5-day incubation period. As part of the Ferring agreement, if we achieve 5-day labeling approval from the FDA, we receive an additional $3 million non-dilutive milestone payment. In addition to the milestone payment, the new study will allow us to update our clinical data which we believe will allow us to show improved clinical pregnancy and birth rates and further enhance the value proposition we can provide to the market as an alternative to traditional IVF."

"Our technology is a simple and more natural solution, with comparable rates of effectiveness to existing options at lower costs, that has been designed to help the millions of couples worldwide that struggle with infertility but are currently unable to receive treatment. We are beginning to put in place the commercialization strategy that can allow for the proliferation of this technology which I believe has the ability to significantly enhance shareholder value," concluded Shum.

Financial Results

Revenue for the three months ended September 30, 2019, was $303,571 compared to $125,035 for the same three-month period in 2018, an increase of $178,536 or approximately 143%. 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 third quarter ended September 30, 2019 was approximately 85% or $258,645 compared to 88% or $109,666 for the three months ended September 30, 2018. The slight decrease in gross margin relates to the lower average selling price on product sales as compared to last year, due to the fixed price the Company now sells to Ferring under the agreement, which was partly offset by the amortization of the up-front license payment.

Selling, general and administrative expenses for the three months ended September 30, 2019 were $891,008 as compared to $299,548 for the three months ended September 30, 2018, an increase of $591,460 or 197%. The increase in SG&A during the third quarter of 2019 compared to the third quarter of 2018 was primarily the result of an increase in wages, professional fees, legal fees (including certain one-time settlement costs totaling $180,000) and other corporate expenses, part of which are associated with our plans to accelerate our various commercialization efforts.

During the three-month period ended September 30, 2019 we incurred $47,462 in interest expense, a decrease of $57,516, or 55%, compared to $104,978 in the three-month period ended September 30, 2018. The primary reason for the decrease in 2019 was the amortization of discount on the 2018 Convertible Notes Payable in the amount of $40,355 as compared to $79,771 during the same period of 2018.

Net loss of $710,334, or $(0.00) per basic and diluted share for the three months ended September 30, 2019 compared to a net loss of $294,860, or $(0.00) per basic and diluted share for the three months ended September 30, 2018.

Webcast

The Company will hold a live investor webcast next week to discuss the results and provide investors an overview of the Company and its strategy.

Date and Time: 11:00am ET (8:00am PT) on Thursday, November 21, 2019.

Live Webcast Information: Interested parties can access the conference call via a live Internet webcast, which is available in the Investor Relations section of the Company's website at https://invobioscience.com/investors/.

Questions: The webcast will be moderated by Lytham Partners. To submit a question in advance of the webcast, please email it to IVOB@lythampartners.com.

Replay: A webcast replay will be available for 90 days in the Investor Relations section of the Company's website at https://invobioscience.com/investors/.

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
Steve Shum, CEO
978-878-9505
steveshum@invobioscience.com

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


                                               
       
              INVO BIOSCIENCE, INC.


                                           
        
         CONDENSED CONSOLIDATED BALANCE SHEETS






                                                
       
              September 30,                
     
     December 31,


                                                                              2019                            2018




     ASSETS                                      
            (unaudited)



     Current Assets



     Cash                                                              $2,009,679                        $212,243


      Accounts receivable, net                                              27,021                         225,899



     Inventory, net                                                        69,330                          43,513


      Prepaid expenses and other
       current assets                                                      197,583                         249,454



         Total Current Assets                                            2,303,613                         731,109




      Property and equipment, net                                           95,582                          34,446





     Other Assets


      Capitalized patents, net                                               8,368                          11,792


      Leasehold right of use, net                                          107,374                               -



     Trademarks                                                            49,867                               -



     Total other assets                                                   165,609                          11,792





     Total assets                                                      $2,564,804                        $777,347

                                                                                                              ===




     LIABILITIES AND STOCKHOLDERS' DEFICIENCY



     Current liabilities


      Accounts payable and accrued
       liabilities, including
       related parties                                                    $457,413                        $571,828



     Accrued compensation                                                 948,423                       2,515,256



     Deferred revenue                                                     727,261                          18,895


      Current portion of leasehold
       liability                                                            21,029                               -



     Note payable                                                               -                        131,722


      Note payable -related party                                                -                         97,743


      Convertible notes, net of
       discount                                                                  -                        157,039


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



     Income Taxes Payable                                                  30,509                               -



      Total current liabilities                                          2,184,635                       3,501,570




      Commitments and contingencies
       (Note 12)                                                                 -





     Leasehold liability                                                   86,955                               -



     Deferred revenue                                                   3,750,000                               -


      Convertible notes, net of
       discount                                                            279,372                               -


      Convertible notes, net of
       discount -related party                                              24,448                               -






     Total liabilities                                                  6,325,410                       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; 155,996,112 and
       154,292,497 shares issued and
       outstanding as of September
       30, 2019 and December 31,
       2018, respectively                                                   15,559                          15,429


      Additional paid-in capital                                        19,355,513                      18,981,571



     Accumulated deficit                                             (23,131,678)                   (21,721,222)



      Total stockholders' deficiency                                   (3,760,606)                    (2,724,222)





      Total liabilities and
       stockholders' deficiency                                         $2,564,804                        $777,348

                                                                                                              ===


                                                           
          
                INVO BIOSCIENCE, INC.


                                                      
      
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


                                                             
             
                (unaudited)




                              
      
      For the Three       
          
                For the Three                      
       
      For the Nine        
      
      For the Nine


                               
      
      Months Ended        
          
                Months Ended                      
       
      Months Ended        
      
      Months Ended


                              
      
      September 30,       
          
                September 30,                     
       
      September 30,       
      
      September 30,


                                                 2019                                     2018                                      2019                       2018






     Revenue:


      Product Revenue                        $125,000                                 $125,035                                  $615,927                   $339,385


      License Revenue                         178,571                                                                           535,714                          -





      Total Revenue                           303,571                                  125,035                                 1,151,641                    339,385




      Cost of Goods Sold                       44,926                                   15,369                                   111,186                     46,503





      Gross Profit                            258,645                                  109,666                                 1,040,455                    292,882




      Selling, general,
       and administrative
       expenses                               891,008                                  299,548                                 2,087,725                  2,413,493



      Total operating
       expenses                               891,008                                  299,548                                 2,087,725                  2,413,493




      Loss from operations                  (632,363)                               (189,882)                              (1,047,270)               (2,120,611)





     Other (income) expense:


      Interest (income)
       expense                                 47,462                                  104,978                                   332,677                    184,100



      Total other (income)
       expenses                                47,462                                  104,978                                   332,677                    184,100




      Loss before income
       taxes                                (679,825)                               (294,860)                              (1,379,947)               (2,304,711)




      Provision for income
       taxes                                 (30,509)                                                                         (30,509)                         -






     Net Loss                             $(710,334)                              $(294,860)                             $(1,410,456)              $(2,304,711)

                                                                                                                                                             ---



      Basic net loss per
       weighted average
       shares of common
       stock                                  $(0.00)                                 $(0.00)                                  $(0.01)                   $(0.02)

                                                                                                                                                             ---



      Diluted net loss per
       weighted average
       shares of common
       stock                                  $(0.00)                                 $(0.00)                                  $(0.01)                   $(0.02)

                                                                                                                                                             ---



      Basic weighted
       average number of
       shares of common
       stock                              155,564,047                              147,454,700                               155,106,340                146,052,444





      Diluted weighted
       average number of
       shares of common
       stock                              155,564,047                              147,454,700                               155,106,340                146,052,444


                                                   
              
                INVO BIOSCIENCE, INC.


                                      
              
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                        
              
                (unaudited)




                                                   
              
                For the Nine                       
      
      For the Nine


                                                   
              
                Months Ended                       
      
      Months Ended


                                                   
              
                September 30,                      
      
      September 30,


                                                                                          2019                                      2018




     Cash flows from operating activities:



     Net Loss                                                                    $(1,410,456)                             $(2,304,711)


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


      Non-cash stock
       compensation issued for
       services                                                                         36,600                                 1,743,464


      Stock issued for
       settlement of legal
       dispute                                                                          93,750                                         -


      Amortization of discount
       on notes payable                                                                297,058                                   136,217


      Amortization of
       leasehold right of use
       asset                                                                             9,067                                         -


      Depreciation and
       amortization                                                                      7,126                                     3,663



     Changes in assets and liabilities:


      Accounts receivable                                                              198,878                                 (100,444)



     Inventories                                                                     (25,817)                                    8,277


      Prepaid expenses and
       other current assets                                                             56,871                                   110,133


      Accounts payable and
       accrued expenses                                                                 20,498                                 (164,847)


      Leasehold liability                                                              (8,456)                                        -


      Deferred revenue                                                               4,458,366                                         -


      Accrued interest                                                                (55,553)                                        -


      Accrued compensation                                                         (1,566,834)                                  201,600


      Income taxes payable                                                              30,509                                         -



                   Net cash provided by
                    (used in) operating
                    activities                                                       2,141,607                                 (366,648)






     Cash from investing activities:


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


      Payments to acquire
       trademarks                                                                     (49,867)                                        -



                   Net cash used in
                    investing activities                                             (114,706)                                        -






     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                                                                        (97,743)                                 (83,145)



                   Net cash provided by
                    (used in) financing
                    activities                                                       (229,465)                                  888,855





      Increase in cash and
       cash equivalents                                                              1,797,436                                   522,207




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





      Cash and cash
       equivalents at end of
       period                                                                       $2,009,679                                  $547,966

                                                                                                                                    ---




     Supplemental disclosure of cash flow information:





     Cash paid during the period for:



     Interest                                                                         $84,043                                    $6,071

                                                                                                                                    ---




     Taxes                                                                               $912                                    $3,648

                                                                                                                                    ---



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

                                                                                                                                    ---



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

                                                                                                                                    ---



      Common stock issued for
       prepaid services                                                                 $5,000                                  $153,000

                                                                                                                                    ---



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

                                                                                                                                    ---

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SOURCE INVO Bioscience, Inc.