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Invo Bioscience, Inc. (INVO) SEC Filing 10-Q Quarterly Report for the period ending Thursday, March 31, 2022

Invo Bioscience, Inc.

CIK: 1417926 Ticker: INVO

 

Exhibit 99.1

 

INVO Bioscience Reports 2021 Financial Results

 

Company to Host Conference Call Today at 4:30pm ET; Slide Presentation Also Available

 

SARASOTA, Fla., March 31, 2022 -- INVO Bioscience, Inc. (Nasdaq: INVO) (“INVO” or the “Company”), a commercial-stage fertility company focused on expanding access to advanced treatment worldwide with its INVOcell

® medical device and the intravaginal culture (“IVC”) procedure it enables, today announced financial results for the year ended December 31, 2021, and provided a business update.

 

Recent Operational Highlights

 

Regained full U.S. commercialization rights to sell its INVOcell® solution directly into existing in vitro fertilization (IVF) clinics, to expand the number of U.S. INVO Centers free of any limitations, and to pursue its market expansion strategy focused on increasing access to care and democratizing fertility care for the underserved patient population.
Opened three INVO Center’s in 2021, including Birmingham, Alabama, Atlanta, Georgia, and Monterrey, Mexico with another clinic scheduled to open in the San Francisco area. The Company recently identified Tampa, Florida as the location of the next INVO Center.
Entered into an agreement with Ovo in Spain to expand INVOcell® commercialization in all four of their Ovoclinics, establish a European center of excellence and training site for INVOcell® and the IVC procedure, and leverage Ovobank’s fertility clinic relationships across Europe.
Completed the acquisition of a Canadian-based entity, originally formed to offer INVOcell®, to advance distribution efforts in Canada, where the product is already approved by Health Canada and cleared for importing.
Obtained regulatory approval to commercialize INVOcell® in Thailand and Nigeria.
Presented four poster abstracts discussing INVOcell® at the 77th Scientific Congress & Expo of the American Society for Reproductive Medicine held in Baltimore, Maryland in October 2021.
Revenue was $4.2 million for the year ended December 31, 2021, including $2.9 million due to the accelerated recognition of deferred revenue from the Ferring license, and compared to $1.0 million for the previous year.
Adjusted EBITDA for 2021 was $(2.8) million, which included a $0.7 million loss attributable to the Company’s joint ventures, compared to $(3.7) million in the prior year (see Adjusted EBITDA Table).

 

Management Commentary

 

“2021 was an exciting year for INVO as we opened our first INVO Center clinics,” commented Steve Shum, CEO of INVO. “Our INVO Center model represents a strategy aimed at expanding adoption of INVOcell® and allowing us to capture a significantly larger percentage of the per-cycle IVC procedure revenue it enables. The INVO Centers are designed to offer attractive economics for our shareholders, medical practitioner partners and patients, and we believe are key to our efforts to address the fertility industry’s biggest challenges of cost and capacity. In addition to our announced plans to open additional centers in the San Francisco Bay Area and Tampa, Florida, we are evaluating over 20 additional US locations which represent attractive opportunities to open new INVO Centers. We also are in discussions for similar ventures across the globe. On the distribution side of our business, during the first quarter of 2022, we began selling directly to existing IVF fertility clinics in the U.S., after regaining full domestic commercialization rights to the INVOcell® upon termination of our prior agreements with Ferring. We are also seeing increased distribution activity from some of our partners in Europe and Africa.”

 

 

 

 

“We are enthusiastic about our multi-channel strategy of supporting, servicing, and expanding across existing IVF clinic networks and building new, dedicated INVO Centers,” Shum continued. “We expect this strategy to drive increased market awareness and utilization of our revolutionary technology, and provide an affordable and equally effective fertility treatment alternative to the large, underserved patient population.”

 

INVO Center Slide Presentation

 

Accompanying today’s financial results, the company has issued a slide presentation further discussing its important INVO Center model and approach which will be accessible on the Investor Relations section of the Company’s website at https://www.invobioscience.com/investors/.

 

Financial Results

 

Revenue for 2021 was $4.2 million, compared to $1.0 million in 2020. Of the $4.2 million in revenue for 2021, $2.9 million was due to the accelerated recognition of deferred revenue related to the early termination of the U.S. distribution agreement with Ferring.

 

Gross margin in 2021 was 97% compared to approximately 91% in 2020.

 

Selling, general and administrative expenses for the years ended December 31, 2021 and 2020 were $9.0 million and $6.1 million, respectively, of which $2.7 million and $1.8 million, respectively, was for non-cash, stock-based compensation expense. The increase of approximately $2.9 million, or 49%, in selling general and administrative expenses was primarily the result of approximately $0.9 million in increased non-cash, stock-based compensation, approximately $0.7 million in increased personnel expenses, approximately $0.5 million in increased expenses related to the operations of the consolidated Atlanta JV and approximately $0.4 million in legal and startup costs related to new and potential INVO Centers.

 

We began funding additional research and development (“R&D”) efforts in 2020 as part of our 5-day FDA label expansion efforts. R&D expenses for the years ended December 31, 2021 and 2020 were $0.2 million and $0.4 million, respectively.

 

Loss from equity investments for the years ended December 31, 2021 and 2020, was $0.3 million and $0, respectively. The increase in loss is due to the investment in the Alabama JV becoming operational in the third quarter of 2021. The clinic was only open for part of the period and was still in the early ramp up phase.

 

Interest expense and financing fees for the years ended December 31, 2021 and 2020 were $1.3 million and $2.8 million, respectively. The decrease of approximately $1.5 million, or approximately 55%, was primarily due to a decrease in amortization of discount, debt issuance cost and interest on the 2020 convertible notes.

 

 

 

 

Adjusted EBITDA (see Adjusted EBITDA Table) for the year ended December 31, 2021, was $(2.8) million, which included a $0.7 million loss attributable to our joint ventures, compared to adjusted EBITDA of $(3.7) million for the year ended December 31, 2020.

 

As of December 31, 2021, the Company had approximately $5.7 million in cash.

 

Use of Non-GAAP Measure

 

Adjusted EBITDA is a non-GAAP measure. This measure is not intended to be a substitute for those financial measures reported in accordance with GAAP. Adjusted EBITDA has been included because management believes that, when considered together with the GAAP figures, it provides meaningful information related to our operating performance and liquidity and can enhance an overall understanding of financial results and trends. Adjusted EBITDA may be calculated by us differently than other companies that disclose measures with the same or similar terms. See our attached financials for a reconciliation of this non-GAAP measure to the nearest GAAP measure.

 

Conference Call Details

 

INVO Bioscience has scheduled a conference call for Thursday, March 31, 2022, at 4:30 pm ET (1:30 pm PT) to review these results and recent events. Interested parties can access the conference call by dialing (833) 756-0861 or (412) 317-5751 or can listen via a live Internet webcast at https://app.webinar.net/ELRqV6y23Y9, which is also available in the Investor Relations section of the Company’s website at https://www.invobioscience.com/investors/. A teleconference replay of the call will be available through April 7, 2022, at (877) 344-7529 or (412) 317-0088, confirmation #1918743. A webcast replay will be available in the Investor Relations section of the Company’s website at https://www.invobioscience.com/investors/ for 90 days.

 

About INVO Bioscience

 

We are a commercial-stage fertility company dedicated to expanding the assisted reproductive technology (“ART”) marketplace by making fertility care accessible and inclusive to people around the world. Our flagship product is INVOcell®, a revolutionary medical device that allows fertilization and early embryo development to take place in vivo within the woman’s body. Our primary mission is to implement new medical technologies aimed at increasing the availability of affordable, high-quality, patient-centered fertility care. This treatment solution is the world’s first intravaginal culture technique for the incubation of oocytes and sperm during fertilization and early embryo development. This technique, designated as “IVC”, provides patients a more natural, intimate, and more affordable experience in comparison to other ART treatments. The IVC procedure can deliver comparable results at a fraction of the cost of traditional in vitro fertilization (“IVF”) and is a significantly more effective treatment than intrauterine insemination (“IUI”). Our commercialization strategy is focused on the opening of dedicated “INVO Centers” offering the INVOcell® and IVC procedure (with three centers in North America now operational), in addition to continuing to sell our technology solution into existing fertility clinics. For more information, please visit www.invobio.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.

CONSOLIDATED BALANCE SHEETS

 

   December 31, 2021   December 31, 2020 
         
ASSETS          
Current assets          
Cash  $5,684,871   $10,097,760 
Accounts receivable   50,470    21,699 
Inventory   287,773    265,372 
Prepaid expenses and other current assets   282,751    157,700 
Total current assets   6,305,865    10,542,531 
Property and equipment, net   501,436    132,206 
Intangible assets, net   132,093    94,963 
Lease right of use   2,037,052    79,319 
Other assets   -    240 
Investment in joint ventures   1,489,934    98,084 
Total assets  $10,466,380   $10,947,343 
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities          
Accounts payable and accrued liabilities  $443,422   $328,927 
Accrued compensation   581,689    527,326 
Deferred revenue, current portion   5,900    714,286 
Lease liability, current portion   221,993    22,707 
Note payable – Payroll Protection Program   -    157,620 
Convertible notes, net   -    536,063 
Income taxes payable   -    1,062 
Total current liabilities   1,253,004    2,287,991 
Lease liability, net of current portion   1,901,557    58,634 
Deferred revenue, net of current portion   -    2,857,143 
Deferred tax liability   1,139    469 
Total liabilities   3,155,700    5,204,237 
Stockholders’ equity          
Common Stock, $.0001 par value; 125,000,000 shares authorized; 11,929,147 and 9,639,268 issued and outstanding as of December 31, 2021 and December 31, 2020, respectively   1,193    964 
Additional paid-in capital   46,200,509    37,978,224 
Accumulated deficit   (38,891,022)   (32,236,082)
Total stockholders’ equity   7,310,680    5,743,106 
Total liabilities and stockholders’ equity  $10,466,380   $10,947,343 

 

 

 

 

INVO BIOSCIENCE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

   For the Year Ended
December 31,
 
   2021   2020 
Revenue:          
Product revenue  $544,942   $323,000 
Clinic revenue   43,745    - 
License revenue   3,571,429    714,286 
Total revenue  $4,160,116   $1,037,286 
Cost of goods sold:          
Production costs   126,326    79,035 
Depreciation   18,726    9,725 
Total cost of goods sold   145,052    88,760 
Gross profit   4,015,064    948,526 
Operating expenses          
Selling, general and administrative   9,015,158    6,065,066 
Research and development   216,430    398,426 
Total operating expenses   9,231,588    6,463,492 
Loss from operations   (5,216,524)   (5,514,966)
Other income (expense):          
Loss from equity method joint ventures   (327,542)   - 
Gain on extinguishment of debt   159,126    - 
Interest income   3,657    4,190 
Interest expense   (1,265,359)   (2,836,504)
Foreign currency exchange loss   (3,534)   - 
Total other expense   (1,433,652)   (2,832,314)
Net loss before income taxes   (6,650,176)   (8,347,280)
Income taxes   4,764    36 
Net loss  $(6,654,940)  $(8,347,316)
Net loss per common share:          
Basic  $(0.63)  $(1.52)
Diluted  $(0.63)  $(1.52)
Weighted average number of common shares outstanding:          
Basic   10,632,413    5,489,738 
Diluted   10,632,413    5,489,738 

 

 

 

 

Adjusted EBITDA

 

   Years Ended 
   December 31 
   2021   2020 
         
Net loss  $(6,654,940)  $(8,347,316)
Gain on extinguishment of debt   (159,126)   - 
Interest expense   80,706    346,458 
Foreign currency exchange loss   3,534    - 
Stock-based compensation   1,164,277    616,002 
Stock option expense   1,543,912    1,140,989 
Amortization of debt discount   1,188,310    2,494,236 
Depreciation and amortization   27,761    11,917 
   $(2,805,566)  $(3,737,714)
           
Loss from equity method JV  $327,542   $- 
Loss from consolidated JV (less depreciation)    368,959    - 
   $(2,109,065)  $(3,737,714)

 

 

 

 

 

INVO Center Results

 

The following tables summarize the combined financial information of our consolidated and equity method joint venture INVO Centers:

 

   Year Ended December 31, 
   2021   2020 
Statements of operations:          
Operating revenue  $195,417   $- 
Operating expenses*   (1,192,601)   - 
Net income  $(997,184)  $- 

 

   December 31, 2021   December 31, 2020 
Balance sheets:          
Current assets  $660,877   $      - 
Long-term assets   2,374,471    - 
Current liabilities   (585,226)   - 
Long-term liabilities   (743,972)   - 
Net assets  $1,706,150   $- 

 

*2021 operating expenses include approximately $0.5 million of one time and pre-revenue startup and labor expenses

 

CONTACT: INVO Bioscience, Steve Shum, CEO, 978-878-9505, sshum@invobio.com; or Investor, Lytham Partners, LLC, Robert Blum, 602-889-9700, INVO@lythampartners.com

 

 

 


The following information was filed by Invo Bioscience, Inc. (INVO) on Thursday, March 31, 2022 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Invo Bioscience, Inc.'s 10-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Cover
Consolidated Balance Sheets (Unaudited)
Consolidated Balance Sheets (Unaudited) (Parenthetical)
Consolidated Statements Of Cash Flows (Unaudited)
Consolidated Statements Of Operations (Unaudited)
Consolidated Statements Of Stockholders' Equity (Unaudited)
Agreements And Transactions With Vie???S
Agreements And Transactions With Vie???S (Tables)
Commitments And Contingencies
Equity-Based Compensation
Equity-Based Compensation (Details Narrative)
Equity-Based Compensation (Tables)
Income Taxes
Income Taxes (Details Narrative)
Intangible Assets
Intangible Assets (Details Narrative)
Intangible Assets (Tables)
Inventory
Inventory (Tables)
Leases
Leases (Tables)
Liquidity
Liquidity (Details Narrative)
Notes Payable
Notes Payable (Details Narrative)
Property And Equipment
Property And Equipment (Details Narrative)
Property And Equipment (Tables)
Related Party Transactions
Related Party Transactions (Details Narrative)
Schedule Of Aggregate Restricted Stock Awards And Restricted Stock Unit Activity (Details)
Schedule Of Antidilutive Securities Excluded From Computation Of Earnings Per Share (Details)
Schedule Of Earnings From Investments In Unconsolidated Variable Interest Entities (Details)
Schedule Of Earnings Per Share Basic And Diluted (Details)
Schedule Of Estimated Useful Lives Of Property And Equipment (Details)
Schedule Of Fair Value Measurement Inputs And Valuation Techniques (Details)
Schedule Of Financial Information Of Investments In Unconsolidated Variable Interest Entities (Details)
Schedule Of Finite-Lived Intangible Assets (Details)
Schedule Of Future Minimum Lease Payments (Details)
Schedule Of Inventory (Details)
Schedule Of Investments In Unconsolidated Variable Interest Entities (Details)
Schedule Of Lease Components (Details)
Schedule Of Property And Equipment (Details)
Schedule Of Share Based Payments Arrangements Options Exercised And Options Vested (Details)
Schedule Of Share-Based Payment Award, Stock Options, Valuation Assumptions (Details)
Schedule Of Stock Options Activity (Details)
Schedule Of Unit Purchase Stock Options Activity (Details)
Schedule Of Warrants Activity (Details)
Stockholders??? Equity
Stockholders??? Equity (Details Narrative)
Subsequent Events
Subsequent Events (Details Narrative)
Summary Of Balances With Variable Interest Entities (Details)
Summary Of Significant Accounting Policies
Summary Of Significant Accounting Policies (Details Narrative)
Summary Of Significant Accounting Policies (Policies)
Summary Of Significant Accounting Policies (Tables)
Summary Of Transaction With Variable Interest Entities (Details)
Unit Purchase Options And Warrants
Unit Purchase Options And Warrants (Details Narrative)
Unit Purchase Options And Warrants (Tables)
Variable Interest Entities
Variable Interest Entities (Details Narrative)
Variable Interest Entities (Tables)

Material Contracts, Statements, Certifications & more

Invo Bioscience, Inc. provided additional information to their SEC Filing as exhibits

Ticker: INVO
CIK: 1417926
Form Type: 10-Q Quarterly Report
Accession Number: 0001493152-22-013778
Submitted to the SEC: Mon May 16 2022 4:07:40 PM EST
Accepted by the SEC: Mon May 16 2022
Period: Thursday, March 31, 2022
Industry: Surgical And Medical Instruments And Apparatus

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