INVO Bioscience Reports First Quarter 2020 Financial Results

SARASOTA, Fla., May 15, 2020 /PRNewswire/ -- INVO Bioscience, Inc. (OTCQB: INVO), a medical device company focused on creating alternative treatments for patients diagnosed with infertility and developers of INVOcellĀ®, the world's only in vivo Intravaginal Culture System, today announced financial results for the quarter ended March 31, 2020.

Financial Results and Updates

    --  Revenue for the quarter ended March 31, 2020 totaled $258,571 compared
        to $189,432 in Q1 2019, an increase of 36% from the comparable period in
        2019. Revenue growth was driven by increased product sales in the U.S.
        related to the Company's U.S. commercialization partner, Ferring
        Pharmaceutical, and their ongoing marketing activities.
    --  Gross margin for the quarter ended March 31, 2020 was approximately 88%
        compared to approximately 94% in the quarter ended March 31, 2019.
    --  Incurred a net loss of $(1,444,392) during the quarter ended March 31,
        2020 compared to a net loss of $(458,570) during the quarter ended March
        31, 2019, as a result of increased commercialization efforts, which
        included non-cash expenses totaling approximately $760,000.
    --  The Company finished the quarter ended March 31, 2020 with a cash
        position of approximately $350,000. On May 15, 2020, the Company
        consummated a closing of its convertible note and unit purchase option
        offering, resulting in gross proceeds of $2.1 million.
    --  U.S. clinic locations trained to offer INVOcell have nearly tripled
        since our agreement with Ferring International Center, S.A. ("Ferring").
        Ferring has established a website, www.invocell.com, which provides
        information for patients and health care professionals, in addition to
        providing a tool to search for clinic locations that offer INVOcell.
    --  The Company's ticker symbol was changed to "INVO" to align our public
        market trading symbol with our corporate name and our innovative
        fertility solution to improve the consistency of our branding along with
        our overall recognition within the investment community.

Management Discussion

"Although the industry has been impacted by COVID-19 and the cadence in product ordering activity has been affected, we believe our annual goals remain achievable with a shift to the second half of the year. We also continue to advance a number of key initiatives aimed at increasing the adoption of INVOcell in the U.S. and around the world," commented Steve Shum, Chief Executive Officer of INVO Bioscience. "One critical advancement over the past few weeks was the April 2020 publishing of outcomes data by the Society for Assisted Reproductive Technology, or SART, which reflected increased usage of INVOcell (IVC) and clinical pregnancy success rates for 5-day incubation. We are pleased to see the increased adoption along with the further validation of the overall success rates using our technology. We also continue to ramp our commercialization efforts with the appointment of highly successful industry professionals covering key geographies and functions, which we believe will help to expand our international opportunities."

Recently Published 2018 Society for Assisted Reproductive Technology ("SART") Data*

The Society for Assisted Reproductive Technology ("SART") recently published the 2018 outcomes data in April 2020, which reflected increased usage of INVOcell and 5-day incubation results. This Retrospect data reflected an approximate 52% clinical pregnancy success rate for day-5 transfers, comparable to the 2017 data published last year.


                                                      
         
     Total SART Data 2017-2018 Day 5 IVC*



       
              SART IVC 5-Day TOTAL (2017 + 2018)   < 35              35 -37                   38 -40   41 -42    > 42   Total     Rate

    ---


       Cycles (Fresh + Frozen)                          361                  114                        63        17      2       557

    ---


       Clinical pregnancies                             198                   55                        29         5      1       288      51.7%

    ---


       Live birth per transfer                          156                   45                        23         4      1       229      41.1%

    ---

*INVO incubation period is country specific and is indicated for 3-5 days. In the US, the INVOcell Culture Device and Retention Device is not indicated for incubation periods exceeding 72 hours. FDA has not approved or cleared the product as safe and effective for use for incubation periods exceeding 72 hours (off-label). The Company has not studied the safety or efficacy of the device for incubation periods exceeding 72 hours and potential risks of off-label use is unknown. Reference US Instructions for Use (IFU) at https://www.invocell.com/hcp/wp-content/uploads/sites/6/2019/04/INVOcell-Instructions-For-Use-Booklet_R9-1.pdf.

International Market Update

    --  Africa and Eurasia: The Company previously executed distribution
        agreements in certain markets in Africa and Eurasia toward the end of
        2019.  Following execution of those agreements, the Company began the
        product registration and approval process in order to begin importing
        into those markets. While each market can vary in the time needed to
        complete such registrations, (from a few months to 6 months or more,
        depending on the market) these timelines were also impacted by COVID-19.
        The Company believes it is close to completing those registrations and
        expects to be in a position to begin delivering INVOcell to the
        respective partners or distributors in the second half of 2020.
    --  India: INVO Biosciences' JV partnership, signed in January 2020, is
        making progress toward opening the first dedicated INVO-only clinic.
        While there was an impact due to the pandemic, the Company believes the
        first clinic will come online before year end.
    --  New Markets: INVO Bioscience is targeting a number of additional markets
        and has discussions underway in Canada, Mexico, Columbia, Spain,
        Macedonia, Taiwan, Malaysia, and China among others.  The Company has
        set a goal of adding additional OUS markets (through distribution or
        partnerships) before year end.

Recent Key Appointments

    --  We appointed Christopher A. Myer as The Company's Vice President
        Business Development - Americas in March 2020  to direct the Company's
        initiative to develop the INVO clinic business in the United States and
        Canada, develop commercialization agreements in Mexico, as well as
        Central and South America, and develop cost savings analysis models for
        third-party payors and governments to highlight the benefits of the
        INVOcell solution.
    --  Appointed Inger Britt Carlsson, PhD, as the Company's Vice President of
        Medical Affairs in January 2020. Dr. Carlsson will be developing and
        overseeing INVO Bioscience's educational symposiums, generating
        scientific abstracts/publications on the INVOcell technology, and
        building relationships with key opinion leaders around the world.
    --  Appointed Yve Lyppens as Director Business Development Asia Pacific in
        March 2020.  Based in Hong Kong, Mr. Lyppens will be responsible for
        developing the Company's sales and distribution network throughout Asia.

Financial Results

Revenue for the period ended March 31, 2020 was $258,571 compared to $189,432 for the same period a year ago. The increase was the result of product sales to Ferring as well as from recognizing $178,572 of the Ferring seven-year U.S. exclusive licensing & distribution fee.

Gross margin reported for the period ended March 31, 2020 was approximately 88% or $228,577 compared to 94% or $178,454 for March 31, 2019. The decrease in gross margin relates primarily to a heavier mix of product sales versus the amortization of the up-front license payment which has zero cost of goods.

Operating expenses totaled $1,625,096 in the first quarter of 2020 compared to $527,565 in the same period a year ago. The increase in expenses was primarily the result of an increase in wages, professional fees, legal fees, and clinical support services. A substantial portion of the increase, or approximately $680,000, relates to non-cash charges associated with stock and option expensing, a portion of which was a one-time impact. The actual cash expense increase was consistent with the Company's plan to increase its product commercialization efforts as well as its clinical activities related to the 5-day label enhancement.

The net loss for the three months ended March 31, 2020 was $(1,444,392) as compared to a net loss of $(458,570) for the same three-month period in 2019.

The Company finished the quarter ended March 31, 2020 with a cash position of approximately $350,000. On May 15, 2020, the Company consummated a closing of its convertible note and unit purchase option offering, resulting in gross proceeds of $2.1 million (of which $1,961,360 was received in cash and $143,640 resulted from cancellation of indebtedness) before fees and commissions. The Company plans to use proceeds from the transaction to fund its operating plan and believe this convertible note and unit purchase option financing moves the company closer to its objective of uplisting its stock to a senior stock exchange, which could enhance visibility of the Company in the public markets.

Virtual Investor Conference Details

INVO Bioscience is scheduled to participate in a virtual presentation and fireside chat at the May 2020 Lytham Partners Virtual Investor Conference on Wednesday, May 20, 2020 at 2:00pm ET (11:00am PT).

A webcast of the presentation will be posted under the investor relations section of INVO Bioscience's website at www.invobioscience.com or can be accessed at https://www.webcaster4.com/Webcast/Page/2162/34792. A replay of the presentation will be available following the event.

Management will also be participating in virtual one-on-one meetings on May 21, 2020. To arrange a meeting, please contact Robert Blum of Lytham Partners at blum@lythampartners.com or visit www.lythampartners.com/virtual.

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.


                                                                       
       
                INVO BIOSCIENCE, INC.

                                                                   
     
         CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                         
          
                (unaudited)




                                                                                                      For the                                   For the


                                                                                                   Three Months                              Three Months


                                                                                                       Ended                                     Ended


                                                                                                     March 31,                                 March 31,


                                                                                                           2020                                       2019








     Revenue



     Product Revenue                                                                                                         $
          80,000                   $
          10,860



     License Revenue                                                                                                                178,571                          178,572








     Total Revenue                                                                                                                  258,571                          189,432





     Cost of Goods Sold:                                                                                                             29,994                           10,978






     Gross Margin                                                                                                                   228,577                          178,454







     Selling, general and administrative expenses                                                                                 1,595,046                          527,565



     Research and developments costs                                                                                                 30,050




           Total operating expenses                                                                                               1,625,096                          527,565





     Loss from operations                                                                                                       (1,396,519)                       (349,111)





     Other (income) expense:



     Interest expense                                                                                                                47,873                          109,459




      Total other (income) expenses                                                                                                  47,873                          109,459





     Loss before income taxes                                                                                                   (1,444,392)                       (458,570)





     Provisions for income taxes






     Net Loss                                                                                                             $
        (1,444,392)               $
          (458,570)






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






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






     Basic weighted average number of shares of common stock                                                                    157,375,918                      154,102,856






     Diluted weighted average number of shares of common stock                                                                  157,375,918                      154,102,856


                                                                                        
       
             INVO BIOSCIENCE, INC.

                                                                                      
       
       CONDENSED CONSOLIDATED BALANCE SHEETS




                                                                                                                                     March 31,                 December 31,


                                                                                                                                          2020                          2019




          ASSETS                                                                                                             (unaudited)



          Current assets



              Cash                                                                                                                            $
          350,000               $
           1,238,585



              Accounts receivable net                                                                                                                   3,699                            7,558



              Inventory, net                                                                                                                          162,283                          101,387



              Prepaid expense and other current assets                                                                                                173,235                          195,910




                Total current assets                                                                                                                  689,217                        1,543,440





          Property and equipment, net                                                                                                                 111,055                           93,055





          Other Assets:



          Capitalized patents, net                                                                                                                      6,782                            7,234



          Lease right of use, net                                                                                                                      96,354                          101,883



          Trademarks                                                                                                                                   54,474                           49,867




          Total other assets                                                                                                                          157,610                          158,984






          Total assets                                                                                                                        $
          957,882               $
           1,795,479






          LIABILITIES AND STOCKHOLDERS' DEFICIENCY



          Current liabilities



               Accounts payable and accrued liabilities, including related parties                                                            $
          294,739                 $
           371,530



               Accrued compensation                                                                                                                   487,161                          393,017



               Deferred revenue                                                                                                                       714,286                          714,286



               Current portion of lease liability                                                                                                      21,704                           21,365



               Convertible notes, net of discount                                                                                                     371,695



               Convertible notes, net of discount - related party                                                                                      33,152



               Income taxes payable                                                                                                                       912                              912




                    Total current liabilities                                                                                                       1,923,649                        1,501,110





          Commitments and contingencies





          Lease liability, net of current portion                                                                                                      75,992                           81,494



          Deferred revenue                                                                                                                          3,392,857                        3,571,429



          Convertible notes, net of discount                                                                                                                                          325,784



          Convertible notes, net of discount - related party                                                                                                                           28,824



          Deferred tax liability                                                                                                                          433                              433






          Total liabilities                                                                                                                         5,392,931                        5,509,074





          Stockholder's deficiency



          Preferred Stock, $.0001 par value; 100,000,000 shares authorized;

             No shares issued and outstanding as of March 31, 2020 and December 31,
      2019, respectively



          Common Stock, $.0001 par value; 200,000,000 shares authorized;                                                                               15,777                           15,631

             157,774,336 and 156,316,112 issued and outstanding as of March 31, 2020
      and December 31, 2019, respectively



             Additional paid-in capital                                                                                                            20,882,332                       20,159,540



             Accumulated deficit                                                                                                                 (25,333,158)                    (23,888,766)




                Total stockholder's deficiency                                                                                                    (4,435,049)                     (3,713,595)






          Total liabilities and stockholders' deficiency                                                                                      $
          957,882               $
           1,795,479

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SOURCE INVO Bioscience, Inc.