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INVO Bioscience Reports Q3 2020 Revenue Of $336,071, Net Loss Per Share Of $(0.36)

SARASOTA, Fla., Nov. 16, 2020 /PRNewswire/ -- INVO Bioscience, Inc. (NASDAQ:INVO), a medical device company focused on creating alternative treatments for patients diagnosed with infertility and developers of

· 11/16/2020 16:22

SARASOTA, Fla., Nov. 16, 2020 /PRNewswire/ -- INVO Bioscience, Inc. (NASDAQ:INVO), 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 quarter ended September 30, 2020.

INVO Bioscience, Inc. is 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 (IVC) used for the natural in vivo incubation of eggs and sperm during fertilization and early embryo development. (PRNewsfoto/INVO Bioscience, Inc.)

Recent Highlights

  • Revenues of $336,071 in the third quarter of 2020 increased 37% sequentially and 11% compared to the year ago quarter.
  • Effective November 13, 2020, shares of the Company's common stock began trading on the Nasdaq Capital Market.
  • Established a joint venture to operate dedicated INVOcell fertility clinics in Mexico.
  • Submitted a 510k with the U.S. Food and Drug Administration (FDA) for 5-day label expansion utilizing the retrospective data made available earlier this year. 
  • Strengthened the board with the addition of independent directors Barbara Ryan, Matthew Szot and Jeffrey J. Segal, M.D.
  • Ended the quarter, September 30, 2020, with a cash position of approximately $0.9 million. In November 2020, the Company announced the execution of an underwriting agreement with Roth Capital Partners for an underwritten public offering of 3,625,000 shares of its common stock at a public offering price of $3.20 per share for expected total gross proceeds of $11.6 million. The offering is expected to close on November 17, 2020.
  • Net loss for the third quarter totaled $(1.77) million, which included $(837,236) of non-cash charges primarily related to the debt discount amortization and stock-based compensation. Adjusted EBITDA for the third quarter period was $(934,788).

Management Discussion

"Sales during the third quarter ended September 30, 2020 increased 37% sequentially over the quarter ended June 30, 2020, driven by higher sales in the United States as our partner Ferring placed additional orders toward the required annual minimum," commented Steve Shum, Chief Executive Officer of INVO Bioscience. "Although the market for fertility treatment services has been affected by COVID-19 this year, we have utilized this period to put in place what we believe are the necessary and important building blocks to create an organization well positioned to rapidly expand the adoption of the INVOcell solution, and we are starting to recognize the benefit of this work. In our opinion, the additional retrospective data made available this year, which represented the second year of available INVOcell usage data, provides a critically important element for our commercialization efforts."

"One of our most recent developments included the signing of our second joint venture agreement to open dedicated INVO clinics, this one in Mexico with Dr. Francisco Arredondo and Dr. Ramiro Ramirez. Dr. Arredondo was one of the early adopters of the INVOcell solution while practicing in the United States. We continue to engage in active discussions with additional partners in many of the major fertility markets for both distribution agreements and joint-venture concepts."

"We also took what we believe were critical and necessary actions to strengthen the Company operationally, financially and functionally which we believe positions us well to execute on our initiatives. These included the hiring of highly accomplished industry individuals to drive the commercialization efforts; the raising of capital required to fund our key commercial and development programs; the appointment of independent board members to meet corporate governance requirements; and the listing of the Company on the Nasdaq. With our strengthened balance sheet, we believe we have the tools, infrastructure and people now in place to drive long-term adoption of INVOcell, grow revenue, achieve profitability and drive shareholder value," concluded Mr. Shum.

Market Update

  • United States: We continue to focus our U.S. efforts on supporting our partner, Ferring, and establishing certain INVO clinics in accordance with our agreement. Although the effort to develop INVO clinics has taken longer than we originally envisioned, we believe we are making excellent progress and expect to provide updates near-term.
  • Mexico: In September 2020, INVO Bioscience created a joint venture with Dr. Francisco Arredondo, MD MPH, a respected and experienced board certified reproductive endocrinologist, and Dr. Ramiro Ramirez, MD, a physician and owner of several successful enterprises in Mexico, focused on developing the Mexico market for INVOcell. Dr. Arredondo was an early adopter of the INVOcell solution as he began offering IVC via the INVOcell to his patients at fertility clinics in San Antonio and Austin in 2016. In 2017, due to the initial success in expanding the accessibility of infertility treatment to patients utilizing INVOcell, he decided to open a center where he would exclusively offer the INVOcell solution in McAllen, Texas. The new jointly owned operation is targeting to open the initial center in the city of Monterrey, Mexico in early 2021.
  • India: INVO Biosciences' JV partnership, signed in January 2020, is focused on opening dedicated INVO-only clinics in the India marketplace. While these efforts have and continue to be delayed due to the pandemic and the various lockdowns, the joint-venture's revised target for establishing the first clinic is now first quarter of 2021.
  • 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. The Company has received the first of the product registration approvals for Turkey and Jordan and is now working with those distribution partners to begin training and commercialization activities. Work is continuing with the remaining countries to complete registrations.
  • New Markets: INVO Bioscience is targeting a number of additional markets outside the U.S. (OUS) and has discussions underway in Canada, Columbia, Spain, Macedonia, Indonesia, Russia, Malaysia, and China among others. The Company is maintaining its goal of adding additional OUS markets through distribution or partnerships before year end.

Clinical/Regulatory Update

The Company continues to advance its 5-day label expansion efforts. The clinical trial, which previously received IRB approval to begin recruitment, and was placed on hold earlier this year due to the pandemic, should be ready to resume shortly. Separately, a 510(k) application utilizing real world data to support label expansion was submitted and is now pending with the FDA. The Company received a request for additional information from the FDA and is preparing its response to those questions, expected to be submitted in January 2021.   

Financial Results

Revenue for the three months ended September 30, 2020, was $336,071 compared to $303,571 for the same three-month period in 2019, an increase of 11%, and compared to $246,072 in the second quarter of 2020 ended June 30, 2020, an increase of 37%.

The gross margin reported for the three months ended September 30, 2020 was 92% compared to 85% for the three months ended September 30, 2019.

Selling, general and administrative expenses for the three months ended September 30, 2020 were $1,463,887 compared to $891,008 for the three months ended September 30, 2019. The increase of $572,879 or 64%, in the third quarter of 2020 was primarily the result of an increase in personnel expenses, stock-based compensation and other corporate expenses.

We began to fund additional research and development ("R&D") efforts in 2020 in order to support our 5-day label expansion efforts, and additional patent filings. R&D expenses were $112,552 for the three months ended September 30, 2020. During the same period in 2019 we did not fund any R&D activity.

During the three months ended September 30, 2020, we incurred $504,061 in interest expense, compared to $47,462 in the three months period ended September 30, 2019. The increase of $456,599 or approximately 962% was primarily due to the increase in the amortization of the debt discount, debt issuance cost and interest on the 2020 Convertible Notes.

We reported a net loss of $1,771,827 for the three months ended September 30, 2020, compared to a net loss of $710,334 for the three months ended September 30, 2019. The increase of $1,061,493 or approximately 149%, is primarily due to an increase in operating expense, interest expenses and financing fees. Total non-cash related expenses in the period totaled $837,236, primarily associated with the debt amortization and equity-based expensing.

The Company ended the quarter ended September 30, 2020 with a cash position of approximately $0.9 million. In November 2020, the Company announced of its execution of an underwriting agreement with Roth Capital Partners for an underwritten public offering of 3,625,000 shares of its common stock at a public offering price of $3.20 per share. Upon closing of the offering, the gross proceeds to INVO Bioscience from this offering are expected to be $11.6 million.

Conference Call Details

INVO Bioscience has scheduled a conference call for Thursday, November 19, 2020, 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 (877) 270-2148 or (412) 902-6510 or can listen via a live Internet webcast at https://www.webcaster4.com/Webcast/Page/2162/38898, which is also available in the Investor Relations section of the Company's website at https://www.invobioscience.com/investors/.

If you would like to submit a question to be addressed on the call, please email INVO@lythampartners.com.

A teleconference replay of the call will be available for seven days at (877) 344-7529 or (412) 317-0088, confirmation #10150131. A webcast replay will be available in the Investor Relations section of the Company's website at https://www.invobioscience.com/investors/ for 30 days.

About INVO Bioscience

INVO Bioscience, Inc. (NASDAQ:INVO) is an innovative medical device company developing solutions for the global infertility industry. INVO's goal is to increase access to care and expand fertility treatment across the globe while seeking to lower the cost and increase the availability of care. INVO's lead commercial product, the INVOcell, is a patented Assisted Reproductive Technology (ART) used in the treatment of infertility. The INVOcell device and procedure is unique as 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), the revolutionary in vivo method of vaginal incubation offers patients a more natural and intimate experience. INVO Bioscience is headquartered in Sarasota, FL. 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.

CONDENSED CONSOLIDATED BALANCE SHEETS


 

 

 

September 30,


 

 

December 31,


 

 

 

2020


 

 

2019


 

ASSETS


 

(unaudited)


 

 

 (unaudited)


 

Current assets


 

 

 

 

 

 

 

 

Cash


 

$

908,289


 

 

$

1,238,585


 

Accounts receivable


 

 

3,699


 

 

 

7,558


 

Inventory


 

 

241,484


 

 

 

101,387


 

Prepaid expenses and other current assets


 

 

218,667


 

 

 

195,910


 

Total current assets


 

 

1,372,139


 

 

 

1,543,440


 

 

 

 

 

 

 

 

 

 

Property and equipment, net of depreciation of $49,730 and $42,147 respectively


 

 

106,000


 

 

 

93,055


 

 

 

 

 

 

 

 

 

 

Other assets:


 

 

 

 

 

 

 

 

Capitalized patents, net of amortization of $71,843 and $70,488 respectively


 

 

5,879


 

 

 

7,234


 

Lease right of use


 

 

84,953


 

 

 

101,883


 

Trademarks


 

 

87,347


 

 

 

49,867


 

Investment in joint ventures


 

 

32,674


 

 

 

 

 

Total other assets


 

 

210,853


 

 

 

158,984


 

 

 

 

 

 

 

 

 

 

Total assets


 

$

1,688,992


 

 

$

1,795,479


 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIENCY


 

 

 

 

 

 

 

 

Current liabilities


 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities, including related parties


 

$

455,978


 

 

$

371,530


 

Accrued compensation – related party


 

 

532,592


 

 

 

393,017


 

Deferred revenue, current portion


 

 

714,286


 

 

 

714,286


 

Current portion of lease liability


 

 

22,356


 

 

 

21,365


 

Notes payable


 

 

157,620


 

 

 

-


 

Income taxes payable


 

 

-


 

 

 

912


 

Total current liabilities


 

 

1,882,832


 

 

 

1,501,110


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease liability, net of current portion


 

 

64,436


 

 

 

81,494


 

Deferred revenue, net of current portion


 

 

3,035,714


 

 

 

3,571,429


 

Convertible notes, net of discount of $3,008,258 and $174,310 respectively


 

 

607,521


 

 

 

325,784


 

Convertible notes – related party, net of discount of $0 and $17,151 respectively


 

 

-


 

 

 

28,824


 

Deferred tax liability


 

 

433


 

 

 

433


 

 

 

 

 

 

 

 

 

 

Total liabilities


 

 

5,590,936


 

 

 

5,509,074


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' deficiency


 

 

 

 

 

 

 

 

Preferred Stock, $.0001 par value; 100,000,000 shares authorized; No shares

     issued and outstanding as of September 30, 2020 and December 31, 2019, 

     respectively


 

 

-


 

 

 

-


 

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

     4,953,910 and 4,884,879 issued and outstanding as of September 

     30, 2020 and December 31, 2019, respectively


 

 

495


 

 

 

489


 

Additional paid-in capital


 

 

24,525,427


 

 

 

20,174,682


 

Accumulated deficit


 

 

(28,427,866)


 

 

 

(23,888,766)


 

Total stockholders' deficiency


 

 

(3,901,944)


 

 

 

(3,713,595)


 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' deficiency


 

$

1,688,992


 

 

$

1,795,479


 

 

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,


 

 

 

2020


 

 

2019


 

 

2020


 

 

2019


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product revenue


 

$

157,500


 

 

$

125,000


 

 

$

305,000


 

 

$

615,927


 

License revenue


 

 

178,571


 

 

 

178,571


 

 

 

535,714


 

 

 

535,714


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue


 

 

336,071


 

 

 

303,571


 

 

 

840,714


 

 

 

1,151,641


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Goods Sold


 

 

27,398


 

 

 

44,926


 

 

 

78,562


 

 

 

111,186


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Margin


 

 

308,673


 

 

 

258,645


 

 

 

762,152


 

 

 

1,040,455


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development


 

 

112,552


 

 

 

-


 

 

 

177,492


 

 

 

-


 

Selling, general and administrative expenses


 

 

1,463,887


 

 

 

891,008


 

 

 

4,311,872


 

 

 

2,087,725


 

Total operating expenses


 

 

1,576,439


 

 

 

891,008


 

 

 

4,489,364


 

 

 

2,087,725


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations


 

 

(1,267,766)


 

 

 

(632,363)


 

 

 

(3,727,212)


 

 

 

(1,047,270)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense


 

 

504,061


 

 

 

47,462


 

 

 

811,888


 

 

 

332,677


 

Total other expenses


 

 

504,061


 

 

 

47,462


 

 

 

811,888


 

 

 

332,677


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes


 

 

(1,771,827)


 

 

 

(679,825)


 

 

 

(4,539,100)


 

 

 

(1,379,947)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes


 

 

-


 

 

 

(30,509)


 

 

 

-


 

 

 

(30,509)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss


 

$

(1,771,827)


 

 

$

(710,334)


 

 

$

(4,539,100)


 

 

$

(1,410,456)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net loss per weighted average shares

of common stock


 

$

(0.36)


 

 

$

(0.15)


 

 

$

(0.92)


 

 

$

(0.29)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net loss per weighted average

shares of common stock


 

$

(0.36)


 

 

$

(0.15)


 

 

$

(0.92)


 

 

$

(0.29)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average number of shares

of common stock


 

 

4,946,125


 

 

 

4,861,377


 

 

 

4,932,405


 

 

 

4,847,074


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average number of

shares of common stock


 

 

4,946,125


 

 

 

4,861,377


 

 

 

4,932,405


 

 

 

4,847,074


 

 


 

 

Adjusted EBITDA


 

 

 

 

 

 

Three Months Ended

Nine Months Ended


 

 

 

September 30


 

September 30


 

 

 

2020


 

2020


 

 

 

 

 

 

Net Loss

$                (1,771,827)


 

$                 (4,539,100)


 

Additions:


 

 

 

 

 

Interest Expense

88,963


 

133,845


 

 

Provision for Income taxes

-


 

-


 

 

Stock-based compensation

74,201


 

480,975


 

 

Stock Option expense

255,797


 

852,187


 

 

Amortization of Debt discount

415,098


 

678,043


 

 

Depreciation and amortization

2,980


 

8,938


 

 

 

 

 

 

Adjusted EBITDA*

$                    (934,788)


 

$                 (2,385,112)


 

 

 

 

 

 

*Adjusted to also include non-cash, stock-based expensing


 

 

 

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SOURCE INVO Bioscience, Inc.