Financial Data and Key Metrics Changes - Revenue for Q1 2022 totaled $163,000, a decrease from $685,000 in the prior year period [33] - The net loss was $2.8 million compared to a net loss of $2.5 million in the prior year [33] - Adjusted EBITDA loss was $2 million, compared to an adjusted EBITDA loss of $1 million last year [33] Business Line Data and Key Metrics Changes - Revenue consisted of product sales from INVOcell to IVF clinics in the U.S. and international distribution partners, as well as consolidated revenue from the Atlanta INVO Center [34] - The Atlanta INVO Center generated $106,000 in revenue for the quarter, showing a healthy increase from the previous quarter [36] - Combined revenue from Birmingham and Monterrey joint ventures was $170,000 in Q1 2022 [38] Market Data and Key Metrics Changes - The company has seen increased order flow from U.S. IVF clinics since taking over direct sales efforts in February [13][28] - A new distribution agreement was signed for China, with expected annual minimums totaling over $14 million over the initial five-year period [30][31] - Approximately 498 IVF clinics exist in China, with local sources indicating around 1 million treatment cycles annually [58][59] Company Strategy and Development Direction - The company plans to expand its INVO Center footprint, with ongoing discussions for new centers in Tampa, Kansas City, and San Francisco [10][17] - Marketing programs initiated in Atlanta are being applied to Birmingham and Mexico, with the goal of accelerating revenue ramp for future clinics [25][41] - The company is exploring ways to lower costs and accelerate expansion through partnerships with existing IVF clinics [12][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trends at existing INVO Centers and the impact of multi-channel marketing programs [9][41] - The company anticipates that increased patient flow will contribute to improved revenue activity in the coming months [82] - Management highlighted the importance of establishing strong partnerships and the evolving conversations with potential partners [42][80] Other Important Information - The company ended the quarter with approximately $3.8 million in cash and no outstanding debt [38] - The company is sourcing additional capital to support its expansion plans and corporate needs [39] Q&A Session Summary Question: Criteria for Evaluating Targets for Clinical Expansion - The company evaluates both quantitative and qualitative factors, including demographics and existing care levels in the market [46][47] Question: Progress on 5-Day Incubation Label Expansion - The company is finalizing submission for the 5-day clinical label and has collected sufficient data despite delays due to COVID [50][54] Question: Overview of IVF Clinics in China - There are approximately 498 IVF clinics in China, with local sources indicating around 1 million treatment cycles annually [58][59] Question: Distribution Strategy in China - The company plans to work with existing facilities in China and is excited about the partnership with Onesky for product registration [62][74] Question: Impact of Marketing Initiatives on Patient Flow - Marketing initiatives in Atlanta have led to increased patient inquiries, with direct results from advertising efforts [76][78]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 INVO Bioscience, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (Commission Nevada 001-39701 20-4036208 (I.R.S. Employer Ide ...

Call Start: 16:30 January 1, 0000 5:34 PM ET INVO Bioscience, Inc. (NASDAQ:INVO) Q4 2021 Earnings Conference Call March 31, 2022, 4:30 PM ET Company Participants Steven Shum – Chief Executive Officer Andrea Goren – Chief Financial Officer Michael Campbell – Chief Operating Officer and Vice President, Business Development Robert Blum – Lytham Partners, LLC Conference Call Participants John Heerdink – Vista Partners, LLC Lawrence Fidel – Fidelity Investments Scott Proctor – Private Investor Operator Good day, ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2021 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to INVO BIOSCIENCE, INC. (Exact name of registrant as specified in Charter) Nevada 001-39701 20-4036208 (State or other jurisdiction of incorporation or organization) (Commis ...

Financial Data and Key Metrics Changes - Revenue for Q3 2021 totaled $219,000, down from $336,000 in the prior year period, indicating a decrease of approximately 35% [40] - The net loss for the quarter was $2.2 million compared to $1.8 million in the prior year, reflecting an increase in losses [40] - Adjusted EBITDA loss was $1.6 million, compared to a loss of $935,000 in the previous year, showing a significant increase in operational losses [41] Business Line Data and Key Metrics Changes - The Birmingham INVO Center generated $38,000 in revenue starting in September, with expenses totaling $515,000, resulting in a loss of $239,000 net of non-controlling interest [43] - The Atlanta INVO Center was operational for only a few weeks in the quarter, with a note receivable of $201,000 reflected on the balance sheet [44] - The Monterey, Mexico INVO Center was not operational during the quarter, with a total investment of $44,000 in the joint venture to date [44] Market Data and Key Metrics Changes - The company has identified over 20 ideal locations in the U.S. for potential INVO Centers based on demographics and the lack of advanced fertility services [31] - The Birmingham facility is expected to ramp up patient flow, with outreach programs targeting approximately 600 OB/GYNs within a 100-mile radius [92] - The company is engaged in a 40-patient trial in Malaysia to compare INVO to IVF, with expectations for completion in early Q2 next year [33] Company Strategy and Development Direction - The company is regaining control of the U.S. market and plans to actively pursue establishing additional INVO Centers while supporting existing IVF practices [19][24] - The strategy includes expanding involvement with the OB/GYN community to enhance patient care access and increase utilization of INVO technology [25][86] - The company aims to address the large unmet medical need in fertility treatments, viewing it as a multibillion-dollar opportunity [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to take over U.S. distribution and service the market effectively, citing a strong team and clinical validation of INVOcell technology [11][12] - The management anticipates that all three INVO Centers will reach cash flow breakeven and start generating equity distributions during 2022 [47] - There is optimism regarding the potential for revenue growth and improved operating results as the company enters the fourth quarter with three operational INVO Centers [24][46] Other Important Information - The company has approximately $3 million in deferred license revenue to be recognized, with no obligation to return any portion to Ferring [45] - The company ended the quarter with approximately $4.7 million in cash and closed a $4 million offering in early October [46] - The company is ramping up marketing activities, including direct-to-consumer campaigns to create awareness for the INVO procedure [38] Q&A Session Summary Question: Were there any hurdles that Ferring had while selling INVOcell? - Management noted that they are not privy to Ferring's internal decision-making but acknowledged that the adoption process in existing clinics was slower than expected [55] Question: How might assumptions for 2022 change regarding the number of INVO Centers? - Management indicated they are reevaluating plans and are eager to pursue additional opportunities beyond the previously anticipated seven centers [59] Question: What types of interactions have been had with the FDA regarding label enhancement? - Management expects a 60 to 90-day timeframe for FDA review after submitting additional data [63] Question: How is the uptake going in Atlanta compared to established areas? - Management reported that the Atlanta center is progressing as expected, with outreach efforts yielding positive feedback from referring physicians [71] Question: What is the expected revenue capacity for the INVO Centers? - Management stated that approximately 200 patients per year would lead to breakeven, with a target of 500 to 600 patients annually, translating to potential revenues in the $3 million to $4 million range [78]

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 INVO Bioscience, Inc. (Exact name of registrant as specified in its charter) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Nevada 001-39701 20-4036208 (I.R.S. Employer Identification No.) 5582 Broadcast Court Sarasota, Florida, 34240 (Address ...

INVO Bioscience, Inc. (NASDAQ:INVO) Q2 2021 Earnings Conference Call August 16, 2021 4:30 PM ET Company Participants Robert Blum - Lytham Partners Steve Shum - CEO Mike Campbell - COO & VP of Business Development Andrea Goren - CFO Conference Call Participants Scott Henry - ROTH Capital Kyle Bauser - Colliers Securities John Heerdink - Vista Partners Rodney Baber - Paulson Ben Haynor - Alliance Global Partners Operator Good afternoon and welcome to the INVO Bioscience Second Quarter Fiscal Year 2021 Financi ...

[Preliminary Information](index=4&type=section&id=Preliminary%20Information) This section covers forward-looking statements and details the company's reverse stock splits [Forward Looking Statements](index=4&type=section&id=Forward%20Looking%20Statements) This section outlines forward-looking statements, their inherent risks, and the company's disclaimer regarding updates - Statements in the report are forward-looking, based on current expectations, estimates, forecasts, and projections, and are subject to risks and uncertainties[8](index=8&type=chunk) - Key factors that could cause actual results to differ include ability to commercialize products, regulatory approvals, market size and acceptance, economic conditions, intellectual property protection, competition, and financing availability[8](index=8&type=chunk) - The company disclaims any intention or obligation to update forward-looking statements[8](index=8&type=chunk) [Reverse Stock Splits](index=4&type=section&id=Reverse%20Stock%20Splits) This section details the two reverse stock splits effected in 2020 and their retroactive financial statement restatement - A **1-for-20 reverse stock split** was effected on May 26, 2020[9](index=9&type=chunk) - A **5-for-8 reverse stock split** was effected on November 9, 2020[9](index=9&type=chunk) - All shares, options, and warrants in the consolidated financial statements have been retroactively restated to reflect these reverse splits[9](index=9&type=chunk) [Part I. Financial Information](index=5&type=section&id=Part%20I.%20Financial%20Information) This part presents the company's unaudited consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents INVO Bioscience's unaudited consolidated financial statements and comprehensive explanatory notes [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) This section presents the company's unaudited consolidated balance sheets, detailing assets, liabilities, and equity Consolidated Balance Sheet Highlights (Unaudited) | Metric | June 30, 2021 | December 31, 2020 | | :--------------------------------- | :-------------- | :------------------ | | Cash | $6,643,080 | $10,097,760 | | Total current assets | $7,231,576 | $10,542,531 | | Total assets | $9,931,188 | $10,947,343 | | Total current liabilities | $1,717,053 | $2,287,991 | | Total liabilities | $5,572,845 | $5,204,237 | | Total stockholders' equity | $4,358,343 | $5,743,106 | - Cash decreased by **approximately $3.45 million** from December 31, 2020, to June 30, 2021[13](index=13&type=chunk) - Total assets decreased by **approximately $1.02 million**, while total liabilities increased by **approximately $0.37 million**[13](index=13&type=chunk) [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) This section presents the unaudited consolidated statements of operations, outlining revenue, expenses, and net loss Consolidated Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $208,472 | $246,072 | $892,995 | $504,643 | | Gross profit | $193,877 | $224,902 | $815,655 | $453,479 | | Selling, general and administrative expenses | $2,049,422 | $1,252,939 | $4,164,725 | $2,847,985 | | Research and development expenses | $31,016 | $34,890 | $97,283 | $64,940 | | Loss from operations | $(1,886,561) | $(1,062,927) | $(3,446,353) | $(2,459,446) | | Net loss | $(1,817,163) | $(1,322,881) | $(4,270,632) | $(2,767,273) | | Basic net loss per common share | $(0.17) | $(0.27) | $(0.42) | $(0.56) | - Total revenue decreased by **15%** for the three months ended June 30, 2021, but increased by **77%** for the six months ended June 30, 2021, compared to the respective prior periods[15](index=15&type=chunk) - Net loss increased significantly for both the three-month (**37.3%**) and six-month (**54.3%**) periods ended June 30, 2021, primarily due to higher operating expenses[15](index=15&type=chunk) [Consolidated Statements of Stockholders' Equity (Deficiency)](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficiency)) This section presents the unaudited consolidated statements of stockholders' equity, detailing changes in capital and deficit Consolidated Statements of Stockholders' Equity Highlights (Unaudited) | Metric | June 30, 2021 | December 31, 2020 | | :--------------------------------- | :-------------- | :------------------ | | Common Stock (Shares) | 10,459,035 | 9,639,268 | | Common Stock (Amount) | $1,046 | $964 | | Additional Paid-in Capital | $40,864,011 | $37,978,224 | | Accumulated Deficit | $(36,506,714) | $(32,236,082) | | Total Stockholders' Equity | $4,358,343 | $5,743,106 | - Total stockholders' equity decreased by **approximately $1.38 million** from December 31, 2020, to June 30, 2021, mainly due to the net loss[16](index=16&type=chunk) - Common stock shares outstanding increased from **9,639,268 to 10,459,035**, driven by conversions of notes payable, warrant exercises, and stock issued to employees/consultants[16](index=16&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section presents the unaudited consolidated statements of cash flows, categorizing activities into operating, investing, and financing Consolidated Statements of Cash Flows Highlights (Unaudited) | Cash Flow Activity | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(2,909,137) | $(2,014,414) | | Net cash used in investing activities | $(915,383) | $(29,730) | | Net cash provided by financing activities | $369,840 | $2,309,510 | | Cash and cash equivalents at end of period | $6,643,080 | $1,503,951 | - Net cash used in operating activities increased by **approximately $0.89 million** for the six months ended June 30, 2021, compared to the same period in 2020[19](index=19&type=chunk) - Cash used in investing activities significantly increased to **$915,383** in 2021, primarily due to notes receivable for joint ventures and acquisition of patents/trademarks[19](index=19&type=chunk) - Cash provided by financing activities decreased substantially from **$2.31 million** in 2020 (due to convertible notes) to **$0.37 million** in 2021 (from warrant/option exercises)[19](index=19&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes explaining the company's business, accounting policies, and specific financial line items [Note 1 – Description of Business](index=10&type=section&id=Note%201%20%E2%80%93%20Description%20of%20Business) This note describes INVO Bioscience as an ART medical device company, focusing on its INVOcell device for intravaginal culture - INVO Bioscience is a medical device company specializing in **Assisted Reproductive Technology (ART)**[22](index=22&type=chunk) - The company's primary product is **INVOcell**, the first Intravaginal Culture (IVC) system for natural in vivo incubation of eggs and sperm[22](index=22&type=chunk) - INVOcell received **FDA clearance in November 2015** and **CE mark in October 2019**, offering a more natural, safe, effective, efficient, and economical fertility treatment compared to IVF and IUI[22](index=22&type=chunk) [Note 2 – Summary of Significant Accounting Policies](index=10&type=section&id=Note%202%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) This note details significant accounting policies, including financial statement presentation, consolidation, revenue recognition, and loss per share - The financial statements are unaudited and prepared in conformity with GAAP, consolidating accounts of the Company and its wholly-owned subsidiaries, including Variable Interest Entities (VIEs) where the Company is the primary beneficiary[24](index=24&type=chunk)[25](index=25&type=chunk)[29](index=29&type=chunk) - Revenue is recognized in accordance with ASC 606, following a five-step model, with product revenue recognized upon shipment and license revenue (e.g., Ferring agreement) recognized over the subscription period[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk)[42](index=42&type=chunk) - Basic and diluted loss per share are the same due to the anti-dilutive effect of potential shares given the company's net loss[44](index=44&type=chunk) [Note 3 – Inventory](index=14&type=section&id=Note%203%20%E2%80%93%20Inventory) This note details inventory valuation using FIFO and presents a slight decrease in total inventory for the period Inventory Components | Component | June 30, 2021 | December 31, 2020 | | :---------------- | :-------------- | :------------------ | | Raw materials | $67,909 | $72,022 | | Work in process | $- | $29,645 | | Finished goods | $182,875 | $163,705 | | **Total inventory** | **$250,784** | **$265,372** | - Total inventory decreased by **$14,588** from December 31, 2020, to June 30, 2021[48](index=48&type=chunk) [Note 4 – Property and Equipment](index=14&type=section&id=Note%204%20%E2%80%93%20Property%20and%20Equipment) This note describes property and equipment accounting, including depreciation methods and changes in net value Property and Equipment, Net | Category | June 30, 2021 | December 31, 2020 | | :-------------------- | :-------------- | :------------------ | | Manufacturing equipment | $132,513 | $132,513 | | Medical equipment | $49,261 | $49,261 | | Office equipment | $2,689 | $2,689 | | Less: accumulated depreciation | $(57,312) | $(52,257) | | **Total equipment, net** | **$127,151** | **$132,206** | - Depreciation expense for the six months ended June 30, 2021, and 2020, was **$5,055** for both periods[51](index=51&type=chunk) [Note 5 – Patents and Trademarks](index=15&type=section&id=Note%205%20%E2%80%93%20Patents%20and%20Trademarks) This note details accounting for patents and trademarks, including capitalization, amortization, and impairment review Patent Costs, Net | Category | June 30, 2021 | December 31, 2020 | | :-------------------- | :-------------- | :------------------ | | Patents | $95,354 | $77,722 | | Accumulated amortization | $(73,199) | $(72,295) | | **Total patent costs, net** | **$22,155** | **$5,427** | - Amortization expenses related to patents were **$904** for the six months ended June 30, 2021, and **$903** for the same period in 2020[56](index=56&type=chunk) - Trademark assets increased by **$17,751** due to additional legal fees; trademarks have an indefinite life and are not amortized[57](index=57&type=chunk) [Note 6 – Notes Receivable](index=15&type=section&id=Note%206%20%E2%80%93%20Notes%20Receivable) This note details the new notes receivable balance, primarily from a joint venture partner, including interest and repayment terms Notes Receivable | Category | June 30, 2021 | December 31, 2020 | | :-------------------------- | :-------------- | :------------------ | | Notes receivable – HRCFG, LLC | $881,827 | $- | | **Total notes receivable** | **$881,827** | **$-** | - The note with HRCFG, LLC, includes **$880,000 principal** and **$1,827 accrued interest** as of June 30, 2021[58](index=58&type=chunk) [Note 7 – Leases](index=15&type=section&id=Note%207%20%E2%80%93%20Leases) This note outlines operating lease accounting under Topic 842, detailing ROU assets, lease liabilities, and future payments Lease Components on Consolidated Balance Sheet | Lease Component | June 30, 2021 | | :-------------------------- | :-------------- | | ROU assets - operating lease | $1,419,925 | | Current operating lease liability | $96,921 | | Long-term operating lease liability | $1,355,323 | | **Total lease liabilities** | **$1,452,244** | Future Minimum Lease Payments as of June 30, 2021 | Year | Amount | | :------------------------ | :-------------- | | 2021 | $58,524 | | 2022 | $137,388 | | 2023 | $140,668 | | 2024 | $125,762 | | 2025 and beyond | $1,193,694 | | **Total future minimum lease payments** | **$1,656,036** | [Note 8 – Convertible Notes and Notes Payable](index=17&type=section&id=Note%208%20%E2%80%93%20Convertible%20Notes%20and%20Notes%20Payable) This note details convertible notes, their terms, and the forgiveness of the Paycheck Protection Program loan - The 2020 Convertible Notes, with an original principal of **$3,494,840**, accrue interest at **10% per annum** and are convertible into common stock at **$3.20 per share**[65](index=65&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) 2020 Convertible Notes Principal Balances | Category | June 30, 2021 | December 31, 2020 | | :-------------------------- | :-------------- | :------------------ | | 2020 Convertible Notes | $500,000 | $1,700,000 | | Accrued interest | $1,111 | $24,373 | | Less beneficial conversion feature discount | $(94,773) | $(604,897) | | Less options discount | $(59,018) | $(224,051) | | Less warrants discount | $(62,460) | $(229,954) | | Less issuance cost | $(34,924) | $(129,408) | | **Total, net of discount** | **$249,936** | **$536,063** | - A Paycheck Protection Program loan of **$157,620**, plus **$1,506** of accrued interest, was forgiven on June 16, 2021, resulting in a gain of **$159,126** recognized as other income[80](index=80&type=chunk) [Note 9 – Related Party Transactions](index=20&type=section&id=Note%209%20%E2%80%93%20Related%20Party%20Transactions) This note discloses a related party transaction involving a director's company acting as co-managing underwriter for a public offering - Paulson Investment Company, where director Trent Davis is President, received **$271,440** in fees and commissions for co-managing the company's public offering in November 2020[82](index=82&type=chunk) [Note 10 – Stockholders' Equity](index=20&type=section&id=Note%2010%20%E2%80%93%20Stockholders'%20Equity) This note details changes in stockholders' equity, including reverse stock splits, a public offering, and equity issuances - The company completed a public offering in November 2020, selling **4,153,750 shares** of common stock at **$3.20 per share**, generating approximately **$11.8 million** in net proceeds[86](index=86&type=chunk) - In March 2021, **388,684 shares** of common stock were issued with a fair value of **$1,243,788** from the conversion of notes payable and accrued interest[88](index=88&type=chunk) - During the first half of 2021, the company issued **39,806 shares** to employees/directors and **96,500 shares** to consultants under the 2019 Stock Incentive Plan, with fair values of **$186,786** and **$324,850**, respectively[92](index=92&type=chunk) [Note 11 – Equity-Based Compensation](index=22&type=section&id=Note%2011%20%E2%80%93%20Equity-Based%20Compensation) This note outlines the 2019 Stock Incentive Plan, detailing stock option activity, valuation, and compensation expense Stock Option Activity (2019 Plan) | Metric | Number of Shares | Weighted Average Exercise Price ($) | | :-------------------------------- | :--------------- | :------------------------------ | | Outstanding as of December 31, 2020 | 939,114 | $5.73 | | Granted | 179,797 | $3.14 | | **Balance as of June 30, 2021** | **1,118,911** | **$5.32** | | Exercisable as of June 30, 2021 | 582,858 | $2.63 | - Stock-based compensation expense for stock options was **$760,606** for the six months ended June 30, 2021, up from **$596,390** in the prior year[100](index=100&type=chunk) - Stock-based compensation expense for restricted stock and restricted stock units was **$178,806** for the six months ended June 30, 2021, compared to **$320,971** in the prior year[104](index=104&type=chunk) [Note 12 – Unit Purchase Options and Warrants](index=24&type=section&id=Note%2012%20%E2%80%93%20Unit%20Purchase%20Options%20and%20Warrants) This note details unit purchase options and warrants, their activity, and fair value estimation using a Monte Carlo model Unit Purchase Options Activity | Metric | Number of Unit Purchase Options | Weighted Average Exercise Price ($) | | :-------------------------------- | :------------------------------ | :------------------------------ | | Outstanding as of December 31, 2020 | 303,623 | $3.20 | | Exercised | 210,730 | $3.20 | | **Balance as of June 30, 2021** | **92,893** | **$3.20** | Warrants Activity | Metric | Number of Warrants | Weighted Average Exercise Price ($) | | :-------------------------------- | :----------------- | :------------------------------ | | Outstanding as of December 31, 2020 | 310,373 | $3.48 | | Exercised | 180,323 | $3.20 | | **Balance as of June 30, 2021** | **130,050** | **$3.74** | - A Monte Carlo model was used to estimate the fair value of unit purchase options and warrants due to features like fundamental transaction payouts and reset events[106](index=106&type=chunk) [Note 13 – Income Taxes](index=26&type=section&id=Note%2013%20%E2%80%93%20Income%20Taxes) This note details income tax accounting, including deferred tax assets, valuation allowance, and a 0% effective tax rate - The company uses the asset and liability method for income taxes and has a valuation allowance for all deferred tax assets due to uncertain recoverability[111](index=111&type=chunk) - Income tax expense was **$0** for both the three and six months ended June 30, 2021 and 2020[112](index=112&type=chunk) - The annual forecasted effective income tax rate for 2021 is **0%**[112](index=112&type=chunk) [Note 14 – Commitments and Contingencies](index=26&type=section&id=Note%2014%20%E2%80%93%20Commitments%20and%20Contingencies) This note discloses a legal proceeding regarding promissory notes and conversion rights, with no expected material adverse effect - The company is involved in a legal dispute with James Bowdring concerning promissory notes and his alleged right to convert them into common stock, which the company disputes[113](index=113&type=chunk) - The company does not currently expect the lawsuit to have a material adverse effect on its results of operations, financial position, or cash flows[115](index=115&type=chunk) [Note 15 – Subsequent Events](index=26&type=section&id=Note%2015%20%E2%80%93%20Subsequent%20Events) This note reports subsequent events, specifically the issuance of common stock to employees in July and August 2021 - In July and August 2021, the company issued **10,000 shares** of common stock to employees under its 2019 Stock Incentive Plan[116](index=116&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's discussion and analysis of financial condition, operations, liquidity, and critical accounting policies [Overview](index=27&type=section&id=Overview) This section provides an overview of INVO Bioscience's business, focusing on its ART technology and INVOcell device benefits - INVO Bioscience is a medical device company focused on **Assisted Reproductive Technology (ART)**, aiming to increase access to care and expand fertility treatment globally with its INVOcell device[118](index=118&type=chunk) - The INVOcell device offers a more natural, safe, effective, efficient, and economical fertility treatment compared to conventional IVF, utilizing the woman's vaginal cavity for embryo development[118](index=118&type=chunk) - Benefits of the INVO solution include approximately **half the cost of IVF**, enhanced patient capacity by eliminating the need for a lab incubator, reduced risk of embryo transfer errors, greater couple involvement, and a more natural incubation environment[122](index=122&type=chunk) [Sales and Marketing](index=28&type=section&id=Sales%20and%20Marketing) This section outlines the company's commercialization strategy, focusing on distributors, partners, and INVO Centers globally - Commercialization efforts focus on identifying distributors and partners in targeted geographic regions to promote and sell the INVOcell device[123](index=123&type=chunk) - The company's primary focus in the U.S. is supporting the exclusive distribution agreement with Ferring International Center S.A. and establishing INVO Centers[123](index=123&type=chunk) Current International Distribution Agreements | Market | Distribution Partner | Initial Term | INVOcell Registration Status | | :------------- | :--------------------------------------- | :----------- | :--------------------------- | | Canada | Invaron Pharmaceuticals Inc. | 1-Year | Completed | | Mexico | Positib Fertility, S.A. de C.V. | TBD | Completed | | Malaysia | iDS Medical Systems | 3-year | Completed | | Turkey | Orcan Medical | 1-year | Completed | | Jordan | Biovate | 1-year | Completed | | Pakistan | Galaxy Pharma | 1-year | In process | | Thailand | IVF Envimed Co., Ltd. | 1-year | In process | | Sudan | Quality Medicines, Cosmetics & Medical Equipment Import | 1-year | In process | | Ethiopia | Quality Medicines, Cosmetics & Medical Equipment Import | 1-year | In process | | Uganda | Quality Medicines, Cosmetics & Medical Equipment Import | 1-year | In process | | Nigeria | G-Systems Limited | 1-year | Completed | | Togolese Republic | INVOSOLUX TOGO | 1-year | In process | | Iran | Tasnim Behboud | 1-year | In process | [Investment in Joint Ventures and Partnerships](index=29&type=section&id=Investment%20in%20Joint%20Ventures%20and%20Partnerships) This section details the company's strategy of forming joint ventures and partnerships to establish new INVO Centers globally - The company's commercialization strategy includes forming joint ventures and partnerships to establish new INVO Centers globally[132](index=132&type=chunk) Current Joint Venture Arrangements | Subsidiary Name | Country | Percent (%) Ownership | | :------------------------------------------ | :-------------- | :-------------------- | | HRCFG INVO, LLC | United States | 50% | | Bloom Invo, LLC | United States | 40% | | Positib Fertility, S.A. de C.V. | Mexico | 33% | | SNS MURNI INVO Bioscience Malaysia Sendirian Berhad | Malaysia | 50% | | Ginekalix INVO Bioscience LLC Skopje | North Macedonia | 50% | | Medesole INVO Bioscience India | India | 50% | - Key partnerships include the Alabama JV (HRCFG INVO, LLC), Atlanta JV (Bloom INVO LLC), Mexico JV (Positib Fertility, S.A. de C.V.), Malaysia JV, North Macedonia JV, India JV, and a partnership with Lyfe Medical Center I, LLC in California[134](index=134&type=chunk)[135](index=135&type=chunk)[137](index=137&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk)[142](index=142&type=chunk)[144](index=144&type=chunk) [Operations](index=31&type=section&id=Operations) This section describes the company's operational model, outsourcing manufacturing, and expected continued losses due to expansion - The company operates with a core internal team and outsources manufacturing, assembly, packaging, labeling, and sterilization to reduce fixed overhead and capital equipment needs[145](index=145&type=chunk) - Cash needs are primarily for funding sales and marketing, training, existing obligations, clinical activities for label expansion, administrative infrastructure, and public company professional fees[146](index=146&type=chunk) - The company expects to continue incurring losses in 2021 due to investments in INVO Centers and global expansion, anticipating increased revenue from distribution and partnership agreements to offset spending[147](index=147&type=chunk)[148](index=148&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, highlighting revenue, expenses, and net loss for the period - The company made progress in commercialization, adding key personnel, and signing a new joint venture for the Atlanta Clinic, with first patient visits expected in H2 2021[150](index=150&type=chunk) - The ART market benefits from tailwinds including a large underserved patient population, increasing infertility rates, growing awareness and acceptance of treatments, improved techniques, and better insurance reimbursement[152](index=152&type=chunk) Key Financial Performance (YoY Comparison) | Metric | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | Change (YoY) | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | Change (YoY) | | :----------------------------------- | :--------------------------- | :--------------------------- | :----------- | :--------------------------- | :--------------------------- | :----------- | | Revenue | $0.21 million | $0.25 million | -15% | $0.9 million | $0.5 million | +77% | | Gross Profit | $0.19 million | $0.22 million | -13.6% | $0.8 million | $0.5 million | +60% | | Gross Margin | 93% | 91% | +2 pp | 91% | 90% | +1 pp | | Selling, General & Administrative Expenses | $2.0 million | $1.3 million | +64% | $4.2 million | $2.9 million | +46% | | Research & Development Expenses | $31,016 | $34,890 | -11.2% | $97,283 | $64,940 | +50% | | Other Income | $0.16 million | $0 | N/A | $0.16 million | $0 | N/A | | Interest Income | $2,425 | $0 | N/A | $4,438 | $0 | N/A | | Interest Expense & Financing Fees | $0.09 million | $0.26 million | -65.4% | $1.0 million | $0.3 million | +233.3% | | Foreign Currency Exchange Loss | $1,028 | $0 | N/A | $1,492 | $0 | N/A | [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity, working capital, and future funding needs to support its business strategy - Net losses for the six months ended June 30, 2021, were approximately **$4.3 million**, an increase from **$2.8 million** in the prior year, with **$2.0 million** attributed to non-cash expenses[171](index=171&type=chunk) - Working capital decreased from approximately **$8.3 million** as of December 31, 2020, to **$5.5 million** as of June 30, 2021[171](index=171&type=chunk) - The company believes it has sufficient liquidity for at least the next 12 months, but may need additional funding through debt, equity, or licensing fees to meet longer-term needs and execute its business strategy[172](index=172&type=chunk)[173](index=173&type=chunk) [Cash Flows](index=36&type=section&id=Cash%20Flows) This section summarizes cash flow activities from operations, investing, and financing for the reported periods Summary of Cash Flows (Six Months Ended June 30) | Cash Flow Activity | 2021 | 2020 | | :--------------------------------- | :------------- | :------------- | | Operating activities | $(2,909,137) | $(2,014,414) | | Investing activities | $(915,383) | $(29,730) | | Financing activities | $369,840 | $2,309,510 | | Cash and cash equivalents at end of period | $6,643,080 | $1,503,951 | - Net cash used in operating activities increased by **approximately $0.9 million**, primarily due to increased net loss, partially offset by changes in accrued compensation and inventory[175](index=175&type=chunk) - Cash used in investing activities significantly increased due to notes receivable for joint ventures and acquisition of trademarks and patents[176](index=176&type=chunk) - Cash provided by financing activities decreased substantially as 2020 included proceeds from convertible notes, while 2021 primarily saw proceeds from warrant and unit purchase option exercises[177](index=177&type=chunk) [Critical Accounting Policies and Estimates](index=36&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section outlines critical accounting policies, including stock-based compensation, revenue recognition, and variable interest entities - Critical accounting policies include stock-based compensation (measured at grant-date fair value over vesting period), revenue recognition (following ASC 606's five-step model), and variable interest entities (assessing control and primary beneficiary status for consolidation)[180](index=180&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risks](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risks) This section states that there are no applicable quantitative and qualitative disclosures about market risks for the period - This item is not applicable[185](index=185&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the company's disclosure controls and procedures, confirming their effectiveness and no material changes [Evaluation of Disclosure Controls and Procedures](index=38&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures as of June 30, 2021 - Management, under the supervision of the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2021[187](index=187&type=chunk) [Changes in Internal Controls Over Financial Reporting](index=38&type=section&id=Changes%20in%20Internal%20Controls%20Over%20Financial%20Reporting) This section states that there were no material changes in internal controls over financial reporting during the period - There were no changes to the company's internal control over financial reporting that materially affected, or are reasonably likely to materially affect, internal control over financial reporting during the period[188](index=188&type=chunk) [Part II. Other Information](index=39&type=section&id=Part%20II.%20Other%20Information) This part provides additional information, including legal proceedings, risk factors, and other required disclosures [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) This section refers readers to the Annual Report on Form 10-K for a description of pending litigation - For a description of pending litigation, refer to Note 13 to the financial statements in the Annual Report on Form 10-K for the year ended December 31, 2020[190](index=190&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to the Annual Report on Form 10-K for risk factors, noting no material changes - Readers should review the risk factors in the Annual Report on Form 10-K for the fiscal year ended December 31, 2020[191](index=191&type=chunk) - There have been no material changes from the risk factors disclosed in the 2020 Annual Report on Form 10-K[191](index=191&type=chunk) [Item 2. Unregistered Issuance of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Issuance%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered issuances of equity securities or use of proceeds to report - None[192](index=192&type=chunk) [Item 3. Defaults Upon Senior Securities](index=39&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section indicates that there were no defaults upon senior securities during the reporting period - None[193](index=193&type=chunk) [Item 4. Mine Safety Disclosure](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This section states that mine safety disclosure is not applicable to the company - Not applicable[194](index=194&type=chunk) [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) This section refers to Current Reports on Form 8-K filed on June 30, 2021, and June 15, 2021, for additional information - Refer to Current Reports on Form 8-K filed on June 30, 2021, and June 15, 2021[194](index=194&type=chunk) [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including Sarbanes-Oxley Act certifications - Exhibits include Certifications of Principal Executive Officer and Principal Financial Officer under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[196](index=196&type=chunk) [Signatures](index=40&type=section&id=Signatures) This section contains the official signatures of the company's Chief Executive Officer and Chief Financial Officer [Signatures](index=40&type=section&id=Signatures) This section confirms the report's official signing by the Chief Executive Officer and Chief Financial Officer on August 16, 2021 - The report was signed by Steven Shum, Chief Executive Officer, and Andrea Goren, Chief Financial Officer, on August 16, 2021[199](index=199&type=chunk)

INVO Bioscience, Inc. (NASDAQ:INVO) Q1 2021 Earnings Conference Call May 17, 2021 4:30 PM ET Company Participants Joe Diaz - Investor Relations Steve Shum - Chief Executive Officer Conference Call Participants Scott Henry - ROTH Capital Kyle Bauser - Colliers Securities John Heerdink - Vista Partners Operator Good afternoon and welcome to the INVO Bioscience reports First Quarter of Fiscal Year 2021 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Plea ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 INVO Bioscience, Inc. (Exact name of registrant as specified in its charter) | Nevada | 001-39701 | 20-4036208 | | --- | --- | --- | | (State or other jurisdiction | (Commission | (I.R.S. Employer ...