INVO Reports Record First Quarter 2024 Financial Results

Rhea-AI Summary

INVO Bioscience reported record Q1 2024 revenue growth of 353% year-over-year, reaching $1,576,286. Clinic revenue surged 417% to $1,537,199, derived from its Atlanta and Madison IVF centers. The total revenue from all clinics increased 189% to $1,869,513. Operating expenses decreased to $2.5 million, while net loss reduced to $(1.6) million from $(2.6) million. Adjusted EBITDA improved to $(0.5) million from $(1.7) million. The company also highlighted its definitive merger agreement with NAYA Biosciences, where NAYA shareholders will receive 7.3333 shares of INVO for each share of NAYA. The merger is subject to closing conditions, including shareholder approval and a $5 million funding requirement.

Positive

• Revenue increased by 353% to $1,576,286 compared to Q1 2023.
• Clinic revenue rose 417% to $1,537,199 from $297,381.
• Total revenue from all clinics grew 189% to $1,869,513.
• Operating expenses decreased by $0.1 million to $2.5 million.
• Net loss reduced to $(1.6) million from $(2.6) million.
• Adjusted EBITDA improved significantly to $(0.5) million from $(1.7) million.

Negative

• Reported net loss remains substantial at $(1.6) million.
• Adjusted EBITDA, although improved, remains negative at $(0.5) million.
• The merger with NAYA Biosciences requires significant funding and is subject to shareholder approval and other conditions.
• Included $80,000 in Q1 2024 operating expenses related to the merger agreement with NAYA.

Insights

Financial Analyst

INVO Bioscience's Q1 2024 financial results show a significant turnaround compared to Q1 2023. The company reported a 353% increase in revenue and a 417% rise in clinic revenue, primarily from its INVO Centers in Atlanta and Madison. These figures indicate a successful shift from a medical device company to a healthcare services provider. However, despite these improvements, the company reported a net loss of $1.6 million, albeit an improvement from the $2.6 million loss in the prior year. This suggests that while revenue is growing, cost management remains a critical area to watch.

Adjusted EBITDA, which excludes certain costs, showed an improvement from a loss of $1.7 million to $0.5 million. This metric is important as it can provide a clearer picture of the company's operational performance without the noise of non-cash charges and one-time expenses. However, investors should be cautious, as Adjusted EBITDA is not a GAAP measure and can vary significantly between companies in its calculation methods.

The company's strategic initiatives seem to be bearing fruit, but the upcoming merger with NAYA Biosciences brings additional uncertainties and potential dilution of shares, which needs careful consideration. The merger could diversify INVO's business into oncology and regenerative medicine, potentially opening new revenue streams, but it also comes with execution risks and requires substantial funding.

Market Research Analyst

The fertility market is a growing sector, driven by increasing infertility rates and rising awareness of fertility treatments. INVO Bioscience's strong revenue growth in Q1 2024 reflects a successful capture of market demand. The consolidation of clinic revenues and the strategic transformation from a device-focused to a service-oriented business model align with broader industry trends of integrated care solutions. This shift could position INVO well against competitors who are either purely service or device-oriented.

The company's INVOcell® procedure, which allows for intravaginal culture, is a distinctive offering in the fertility market and could be a unique selling point. As fertility treatments become more advanced and accessible, INVO's growth in clinic revenue indicates a solid market acceptance of their services. However, market saturation and competition from established fertility clinics could pose challenges.

The proposed merger with NAYA Biosciences indicates an ambition to diversify into oncology and regenerative medicine. While this could mitigate risks associated with being solely in the fertility market, it also requires navigating regulatory and operational challenges unique to these sectors. The merger could potentially enhance INVO’s value proposition, but investors should monitor how well the company manages this transition and integrates NAYA's operations.

Healthcare Services Expert

The reported 353% revenue growth for INVO Bioscience in Q1 2024 is substantial and noteworthy within the healthcare services sector. This growth is largely attributed to the performance of their INVO Centers, which suggests a robust demand for their fertility services. The INVOcell® device, enabling intravaginal culture, offers a less invasive alternative to traditional IVF, potentially appealing to a broader patient base.

However, the company’s net loss of $1.6 million indicates ongoing financial challenges. The improvement in their adjusted EBITDA is promising, but achieving sustainable profitability will require continued revenue growth and stringent cost control. The merger with NAYA Biosciences is poised to diversify their service offerings, but also introduces complexities in managing a broader portfolio and integrating operations across different therapeutic areas.

From a healthcare services perspective, INVO's focus on expanding access to advanced fertility treatments aligns with broader healthcare trends toward accessibility and patient-centric care. Yet, the success of their strategy will depend on how effectively they can manage the operational aspects of running multiple clinics while ensuring high-quality patient outcomes.

353% Revenue Growth with improvement in Adjusted EBITDA

SARASOTA, Fla., May 15, 2024 (GLOBE NEWSWIRE) -- INVO Bioscience, Inc. (Nasdaq: INVO) ("INVO" or the "Company"), a healthcare services fertility company focused on expanding access to advanced treatment worldwide through the establishment and acquisition of fertility clinics, and with the intravaginal culture ("IVC") procedure enabled by its INVOcell® medical device, today announced financial results for the first quarter of 2024 and provided a business update.

Q1 2024 Financial Highlights (all metrics compared to Q1 2023 unless otherwise noted)

• Revenue was $1,576,286, an increase of 353% compared to $348,025.
• Clinic revenue increased 417% to $1,537,199, compared to $297,381. All reported clinic revenue is derived from the Company's INVO Center in Atlanta, Georgia, and its IVF clinic in Madison, Wisconsin, which are consolidated in the Company's financial statements.
• Revenue from all clinics, inclusive of both those accounted for as consolidated and under the equity method, was $1,869,513, an increase of 189% compared to $646,707.
• Total operating expenses were $2.5 million, a $0.1 million decrease compared to $2.6 million. Included in the Q1 2024 operating expenses were approximately $80,000 pertaining to the definitive merger agreement with NAYA Biosciences, Inc. ("NAYA") to acquire NAYA in an all-stock transaction.
• Reported Net loss was $(1.6) million compared to $(2.6) million.
• Adjusted EBITDA (see table included) was $(0.5) million, including the transaction costs related to the potential merger, compared to $(1.7) million in the prior year.

Management Commentary

"We are pleased with the progress we have made at INVO, reporting record first quarter 2024 revenue with growth of 353% compared to the first quarter of 2023, and a substantial $1.2 million improvement in our adjusted EBITDA,” commented Steve Shum, CEO of INVO. “The strategic initiatives we have implemented to capture a greater share of the total fertility cycle revenue and profit through the transformation of INVO from a medical device company into an innovative healthcare services company are starting to bear fruit. The growth in revenue, coupled with careful management of our operating expenses demonstrates that we are potentially on track to achieve our stated goals of reaching break-even or profitability with our current operations (excluding the proposed merger with NAYA) in 2024. We also remain excited about our position in the fertility market, the opportunities we have to acquire additional clinics and to open new INVO Centers, and our ongoing efforts to make advanced fertility care more accessible and inclusive to people around the world.”

Definitive Merger Agreement

On October 23, 2023, INVO and NAYA, a company dedicated to increasing patient access to breakthrough treatments in oncology and regenerative medicine, jointly announced that they had entered into a definitive merger agreement (the "Merger") for INVO to acquire NAYA Biosciences in an all-stock transaction. Under the terms of the agreement, NAYA Biosciences' shareholders would receive 7.3333 shares of INVO for each share of NAYA Biosciences at closing, for a total of approximately 18,150,000 shares of INVO. Following the closing of the Merger, the combined company is expected to operate under the name "NAYA Biosciences."

As described in greater detail in the Company's SEC filings and press releases, the Merger remains subject to certain closing conditions including shareholder approval, the sale of $5,000,000 of our Series A Preferred Stock plus sufficient funding, as agreed, to adequately support INVO’s current operations and business plan through the closing of the Merger and for an additional twelve months after closing, including a catch-up on INVO’s accrued payables. To date, NAYA has provided approximately $906,000 in financing through the purchase of Series A Preferred Stock at a price of $5.00 per share.

“As reflected in the recent merger amendment and subject to meeting all agreed terms, INVO and NAYA remain committed to completing the merger between our two companies, creating a company uniquely positioned in both the fertility and oncology space,” commented Shum. "We are working on an update to our Proxy S-4 and plan on scheduling the related stockholders’ meeting as soon as possible, and once the SEC’s review of our filing is complete.”

Financial Tables

Included in this press release is a reconciliation of Adjusted EBITDA. All additional financial tables are included in the Company’s 10-Q, which can be found on the Company’s website at https://www.invobioscience.com/sec-filings/ or at https://www.sec.gov/.

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.

About INVO Bioscience

We are a healthcare services fertility company dedicated to expanding access to fertility care around the world. Our commercial strategy is primarily focused on operating fertility-focused clinics, which include the opening of “INVO Centers” dedicated primarily to offering the intravaginal culture (“IVC”) procedure enabled by our INVOcell® medical device and the acquisition of US-based, profitable in vitro fertilization (“IVF”) clinics. Our proprietary technology, INVOcell®, is a revolutionary medical device that allows fertilization and early embryo development to take place in vivo within the woman's body. 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. We believe the IVC procedure can deliver comparable results at a fraction of the cost of traditional IVF and is a significantly more effective treatment than intrauterine insemination ("IUI"). 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.

	Adjusted EBITDA
			Three Months Ended
			March 31
				2024				2023
Net loss attributable to Invo Bioscience, Inc.			$	(1,596,513	)		$	(2,550,879	)
		Interest expense		83,257				38,209
		Amortization of debt discount		98,038				178,380
		Tax expense		1,836				-
		Stock-based compensation		142,542				196,403
		Stock option expense		71,301				325,834
		Non cash compensation for services		45,000				45,000
		Foreign currency exchange loss		-				135
		Loss on disposal of fixed assets		561,663				-
		Gain on lease termination		(94,551	)			-
		Depreciation and amortization		226,960				19,087
Adjusted EBITDA			$	(460,467	)		$	(1,747,831	)
Proforma net loss			$	(1,596,513	)		$	(2,088,428	)
		Interest expense		83,257				38,209
		Amortization of debt discount		98,038				178,380
		Tax expense		1,836				-
		Stock-based compensation		142,542				196,403
		Stock option expense		71,301				325,834
		Non-cash compensation for services		45,000				45,000
		Foreign currency exchange loss		-				135
		Loss on disposal of fixed assets		561,663				-
		Gain on lease termination		(94,551	)			-
		Depreciation and amortization		226,960				19,087
Proforma adjusted EBITDA			$	(460,467	)		$	(1,285,380	)

CONTACT

INVO Bioscience:
Steve Shum
978-878-9505
sshum@invobio.com

INVO Investor Contact:
Robert Blum (Lytham Partners, LLC)
602-889-9700
INVO@lythampartners.com

FAQ

What was INVO's revenue growth in Q1 2024?

INVO's revenue grew by 353% year-over-year to $1,576,286 in Q1 2024.

How much did INVO's clinic revenue increase in Q1 2024?

INVO's clinic revenue increased by 417% to $1,537,199 in Q1 2024.

What was INVO's total revenue from all clinics in Q1 2024?

INVO's total revenue from all clinics was $1,869,513, up 189% year-over-year.

What were INVO's operating expenses in Q1 2024?

INVO's operating expenses were $2.5 million in Q1 2024, a decrease of $0.1 million from Q1 2023.

What was INVO's net loss in Q1 2024?

INVO reported a net loss of $(1.6) million in Q1 2024, down from $(2.6) million in Q1 2023.

How did INVO's adjusted EBITDA change in Q1 2024?

INVO's adjusted EBITDA improved to $(0.5) million in Q1 2024 from $(1.7) million in Q1 2023.

What is the status of INVO's merger with NAYA Biosciences?

INVO has a definitive merger agreement with NAYA Biosciences, subject to shareholder approval and other conditions.

What are the terms of the INVO and NAYA Biosciences merger?

NAYA Biosciences' shareholders will receive 7.3333 shares of INVO for each share of NAYA under the merger terms.

What additional funding is required for the INVO and NAYA merger?

The merger requires a $5 million funding through the sale of Series A Preferred Stock.