Market Opportunity - There are over 150 million infertile couples globally, with only 1.5 million ART cycles performed annually, indicating a significant unmet market opportunity [31]. - The infertility treatment market is valued at approximately $6.6 billion annually, with a large portion of the market remaining untreated [33]. - The global need for ART is estimated at 1,500 cycles per million population per year, indicating a significant market opportunity for INVOcell [67]. - INVO Bioscience estimates that there are approximately 10 million infertile couples in Europe, with only about 800,000 receiving ART treatments, leaving over 9 million untreated [69]. - The company aims to penetrate 5% of the currently untreated infertility market in the U.S., which consists of over six million couples [68]. Product Overview - The INVOcell device offers a lower-cost infertility treatment option, costing less than half of traditional IVF treatments [27]. - The INVOcell device has demonstrated clinical pregnancy rates of 60% and live birth rates of 55% in U.S. clinical studies [34]. - The INVO procedure can be performed in a physician's office, avoiding the costs associated with IVF facilities [29]. - The INVOcell device is designed to provide a less expensive and simpler alternative to conventional IVF treatments, potentially increasing accessibility for patients [256]. - The INVOcell procedure requires approximately $100,000 in laboratory capital equipment, compared to at least $500,000 for traditional IVF setups [50]. Financial Performance - Total revenue for the year ended December 31, 2018, was $494,375, an increase of 75.2% compared to $282,145 for the year ended December 31, 2017 [248]. - Gross margin for 2018 was $404,008, representing a gross margin percentage of approximately 81.7% compared to 81.7% in 2017 [248]. - Net loss for the year ended December 31, 2018, was $3,076,091, significantly higher than the net loss of $702,163 for the previous year, indicating a 338.5% increase in losses [248]. - Total current assets increased to $731,109 as of December 31, 2018, compared to $234,385 as of December 31, 2017, reflecting a growth of 211.5% [246]. - Cash and cash equivalents at the end of the period increased to $212,243 from $25,759, marking an increase of 726.5% [253]. Regulatory and Distribution Agreements - The INVOcell device has received FDA clearance and is in the process of re-certifying the CE Mark for distribution in Europe [36][42]. - The company entered into a Distribution & Supply Agreement with Ferring, receiving an initial payment of $5 million and a potential second payment of $3 million [39]. - The company entered into a Distribution Agreement with Ferring on November 12, 2018, granting exclusive rights for the INVOcell device in the U.S. market [259]. - The FDA approval granted in 2015 allows INVO Bioscience to register and market INVO in countries such as Mexico, Australia, and China, expanding its international reach [72]. - The CE Mark, currently being renewed, enables the sale of the INVO device in Europe and certain South American and African countries, addressing the need for less costly fertility treatments [73]. Operational Developments - As of December 31, 2018, the company had approximately 100 INVOcell devices ready for sale and 3,600 in the assembly, sterilization, and packaging phase [34]. - The company plans to build five new centers in the U.S. to meet demand for the INVO procedure [65]. - Since receiving FDA clearance, over 3,800 INVOcells have been shipped in the U.S., with an additional 500 shipped internationally [57]. - The company has validated its manufacturing processes and is utilizing medical-grade materials for the INVOcell device [34]. - The company retained all commercialization rights for the INVOcell device outside of the United States, allowing for potential international market expansion [259]. Challenges and Risks - In the U.S., minimal insurance coverage for infertility treatments exists, with only 15 states mandating some form of reimbursement, impacting patient access to services [74]. - The company has generated minimal revenues and incurred significant expenses, indicating ongoing financial challenges as it establishes its business [258]. - The company had a working capital deficiency of $2,770,000 and a stockholder deficiency of $2,724,000 as of December 31, 2018, raising substantial doubt about its ability to continue as a going concern [290]. - The company reported a net loss of $3,076,091 for the year ended December 31, 2018, compared to a loss of $702,163 in 2017 [270]. Shareholder and Stock Information - The basic and diluted weighted-average number of common shares outstanding increased to 147,333,051 in 2018 from 141,305,050 in 2017 [270]. - The company issued 3,020,000 shares of common stock with a fair value of $1,540,000 to Dr. Kevin Doody for services previously provided [314]. - The Company issued 887,306 shares of common stock with a fair value of $349,602 to employees and service providers in December 2018 [316]. - The Company had no outstanding or committed stock options or warrants as of December 31, 2018 [321][322]. - The Company issued 793,335 shares of common stock for conversion of notes payable and accrued interest totaling $158,667 in December 2018 [316].
INVO BioScience(INVO) - 2018 Q4 - Annual Report