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spk00: Good afternoon, and welcome to the INVO Bioscience Report's first quarter of fiscal year 2021 financial results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, may press star, then one on your touch-tone phone. To withdraw from the question queue, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Joe Diaz from Lissom Partners. Please go ahead.
spk03: Thank you, and thanks, everyone, for joining us today for a review of InvoBioscience's first quarter 2021 financial results. Joining us on the call today is InvoBioscience's Chief Executive Officer, Steve Shum. At the conclusion of today's prepared remarks, who will open the call for a question and answer session. Before we begin with the event, we submit to the record the following statement. Certain matters discussed on this conference call by management of INGO Bioscience may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended, Section 21E of the Securities Exchange Act of 1934 as amended, and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements regarding the company's expected future financial position, results of operations, cash flows, financing plans, business strategies, product 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, uncertainty, and contingencies, many of which are beyond the company's control, which may cause actual results, performance, or achievements to differ materially from the 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 the company's filing at the Securities and Exchange Commission at www.sec.gov. The company is under no obligation and expressly disclaims any such obligation to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise. With that said, I'd like to turn the call over to Steve Shum, Chief Executive Officer of INBO Bioscience. Steve, please proceed.
spk02: Thank you, Joe, and welcome everyone listening on the call today. Mike Campbell, our Chief Operating Officer who would normally participate on the call, had an important meeting come up last minute and won't be joining this time, he'll be sure to make sure to make the next call. As we noted in the release that went out today, it's been an exciting start to the year and a very busy one for our team. We've worked hard to put the necessary resources and people in place to take advantage of the market opportunity and feel we're starting to see early progress and benefits. Most important, we advanced our Invo Clinic strategy here in the U.S. with the signing of our first two agreements. I would note that we expect to be executing on a third agreement soon. Both Mike and Chris Meyer have been instrumental in moving these efforts forward, both in the U.S. and Mexico. With the leadership of Ingrid Britt Carlson, our VP of Medical Affairs, along with support from the team, including our Scientific Advisory Board members, we have substantially enhanced our training materials and process. It's important to note that proper training is critical to the success of our distributors and partners, and training is not a one event session. It's generally multiple sessions with multiple Q&A follow-up activities. We have really experienced a notable increase in these training and support activities this year, which are occurring weekly now. Of course, this is exciting for us to see this activity level as it's a reflection of our team's efforts, the growing awareness around InvoCell and the expanding number of international distributors. The most important benefit is we also see this as a precursor or leading indicator for the business and driving future revenue growth. I want to also praise our international business development team who have been on the front lines and critical to pushing these activities along and supporting those efforts. Another very important milestone for international activities, we have recently seen InvoCell procedures or cycles being performed in Spain and Malaysia. These locations are reporting very good fertilization and embryo quality rates consistent with what we've seen throughout with InvoCell and positive patient satisfaction levels as well. We look forward to much more of this activity in the near future. And again, this is a result of proper training and support. Another important building block we recently expanded on this year and something that is absolutely necessary to supporting our commercialization efforts is marketing. We added both a new board member with strategic marketing expertise as well as an internal team member with the addition of Marilyn Chamberlain as our director of marketing. As we highlighted on our last call, additional published outcomes data with the recent fairing peer-reviewed publication and the SART data which further demonstrates quality outcomes with InvoCell, also continues to be impactful for our commercialization activities. This expanded retrospective data helps further validate the technology and provides confidence in the InvoCell solution. We intend to further advance these activities this year with additional planned publications. In fact, a few abstracts on InvoCell were submitted recently for the upcoming ASRM conference later this year. I'll take a few minutes to expand further on the commercial activities, which Mike wanted to make sure we highlighted for everyone. Commercialization activities have made solid progress just since the end of March when we held our last investor call. In the U.S., as announced earlier, we executed on the partnership agreement with Life Medical for our second in-vote clinic to be located in the San Francisco Bay Area. We've started planning meetings with our partner, and they are eager to finalize the location and begin the build-out phase. Structure-wise, it's a little different than our other U.S. joint venture agreement, but we expect that we'll have similar economics in terms of profit split. On the Birmingham Clinic, we're making progress towards opening. We received the construction permits to initiate the space build-out, which begins this week, and is expected to be completed in eight to 10 weeks. All of the clinic equipment is on order and there are no foreseeable delays in obtaining any of the required products. We do not have a specific opening date ready to share just yet, but we can say that we are feeling more confident that we can be ready to start seeing patients in the July, August timeframe. We will provide additional updates as they become available. I know we've highlighted our Birmingham partners a number of times, but it's worth noting again, as this is a critical point, the clinicians we are working with have already demonstrated success from a business model and patient standpoint with implementing InvoCell in a clinical practice. This is a huge benefit and provides us with tremendous confidence regarding the potential success of this clinic. Bering, our distribution partner here in the US, continues to focus on promoting and selling into the existing IVF clinics, and they are continuing to expand patient awareness through their marketing activities. We believe our strategy around creating the InvoClinics will really help add to that awareness, create market acceleration with InvoCell, and complement Faring's efforts. In Mexico, once we cleared the product registration process in February of this year, Dr. Arredondo and Dr. Ramirez started working at an accelerated pace to bring this joint venture operational as well. The site location in the city of Monterey is finalized, and the InvoCenter will be located within a local hospital, They are targeting a July timeframe for the construction build out to be completed. Lab equipment has been ordered here as well, which has an approximate six to eight week lead time. They do need to complete some local licensing, which is in process. As such, our partners are targeting a September, October timeframe to begin operational and begin treating patients. But again, we will provide more specific dates as we work through these remaining steps. Also, as a reminder, similar to Birmingham, Dr. Arundanda was an early adopter of INVO at his fertility clinics in San Antonio and Austin, and is well versed in the technology and how to successfully implement within a clinical practice. We remain active in Canada and expect to report on some developments there soon. As another reminder, the product already has clearance and can be sold into the Canadian marketplace. In other parts of the world, Earlier this year, we reported that we began initial sales to a few clinics in Spain. We've hosted a number of training sessions with the clinics, and more recently, they began performing initial procedures. While it's just a start, treating patients with InvoCell is a very important milestone for this market. In Malaysia, we've conducted a number of training sessions with our new distributor. One of the local hospitals in the country also started treating patients recently as part of an evaluation, and preliminary outcomes are good and what we would expect to see. Similar to Spain, these initial patient procedures are important as they begin the process of building real-world experience and confidence with the clinicians in these markets and something that can be built on within these regions. We do anticipate more of this in other markets soon. By the way, as a side note, our distributor in Malaysia has also recently inquired about expanding their territory outside of Malaysia. They're a great distribution partner, and we believe that request reflects their confidence as they have devoted time and resources to training and the initial activities within Malaysia. We recently entered into a distribution agreement for Thailand. The distributor is helping our team work through the local product registration process, and we have also begun training and recruiting local key opinion leaders to initiate procedures. They are a strong local player and have set some aggressive goals for InvoCell within that market, which is very encouraging. We'll look forward to additional updates as we complete initial steps in that market. As we noted previously, Pakistan remains a very interesting market opportunity. While the fertility industry there is small currently in terms of annual procedure volume, it's a large potential patient market with significant potential for growth. And our partner, Galaxy Pharma, is really the dominant player and market share leader. They too have been very active in training and been one of the more aggressive partners of bringing a large audience of clinicians in their network to our training sessions. They are eager to start and we hope to have product registration completed around the July timeframe of this year. Our India partner remains challenged by the very difficult COVID situation over there. They are still working to try and bring the first center up and running this year, but we know it's a challenge currently and we will provide further updates as they occur. Just a quick update on a few other earlier distribution agreements we executed in Africa, Turkey, and Jordan. All of these markets have been severely impacted by COVID. We have completed our training programs and these partners are prepared to begin promoting, marketing, and selling in the local markets. We're seeing some forward progress and believe these areas will begin contributing later this year. Overall, we feel the commercial team has come together and performing well. Our data and validation profile has vastly improved, which is critical for the commercial commercial effort. We've really honed our training proficiency. And now our marketing is quickly coming together to support these activities. We have an increasing pipeline and our distributor and partner activities continue to develop at a more accelerated pace. Turning back to the Invo clinics just for a minute. I realize we keep stressing the Invo clinic activities, but this is really an important point for everyone to understand. We believe this new business activity, which serves as an additional method for bringing InvoCell to the marketplace will prove to be transformative to the business. We expect these clinics will highlight and drive greater awareness and adoption of the technology, which we believe will in turn help accelerate volumes within the existing IVF clinics that offer InvoCell as part of their overall practice. and the INVO clinics will also allow us to participate in greater economics on a per procedure basis. We are keeping our original stated goal to have the initial three to five clinics up and running in the second half of this year. Turning to a few financial highlights, revenues for the quarter totaled $684,000, which compared to $258,000 in the prior year period. We recorded a net loss of 2.5 million compared to a loss of 1.4 million in the prior year. However, excluding non-cash charges related to equity-based expenses and additional amortization of the convertible debt discount, we had an adjusted EBITDA loss of approximately 981,000 compared to an EBITDA loss of 625,000 last year. We had approximately $224,000 in this year's first quarter related to costs associated with the in-vote clinic activities. So much of the actual cash increase over last year was related to the added business efforts, which again, we view as necessary before we start to see the added revenue impact of those efforts. We closed the quarter with approximately $8.4 million in cash. Subsequent to the quarter end, we also collected just over $500,000 in cash from receivables. During the quarter, we had $1.2 million of our convertible debt outstanding convert into common shares. So at period end, we have just a remaining $500,000 in convertible debt. As a reminder, that remaining debt is convertible at a fixed price of $320 per share. We also had just over half our outstanding warrants convert during the quarter, part on a cash basis and part cashless. We have approximately 216,000 warrants that remain outstanding. Our current outstanding shares stand at approximately 10.4 million. On the clinical side, with respect to our five-day label enhancement for the U.S. market, we do not have any updates report just yet. That remains a very active effort, and we have set a goal of completing the process this year, and we will provide updates as we have them. Also, as a reminder, the five-day labeling is just for the U.S. market. Our CE mark is already based on five-day. I'll conclude our prepared remarks by simply restating what we often highlight in many of our press releases and updates. There is a very significant underserved patient base around the world suffering from infertility, and there are some real challenges with respect to providing enough care to treat all those in need. in terms of affordable, efficient, and effective solutions and ones that can add capacity to the overall infrastructure. All of which are issues that we believe InvoCell can address. We are excited for the balance of 2021 and beyond and look forward to leveraging the progress we're making and the impact we believe that will have on our forward operating results. I will now open this up for questions.
spk00: Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchstone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. The first question today comes from Scott Henry with Roth Capital. Please go ahead.
spk04: Thank you and good afternoon. Just a couple questions. I guess first, the orders from fairing, obviously they can be kind of chunky depending where they come in. Could you give us a sense of what kind of cadence we may see throughout the year? Should we expect orders again in second quarter, third and fourth, or will it be in bonuses? Just trying to get a sense of how to model it.
spk02: Sure. Thanks, Scott. Yeah, as you know, the purchase requirements are annual requirements, so we continue to assume there will be volatility quarter-to-quarter until we and Farian further establish InvoCell in the market. As I mentioned, you know, Farian is adding additional marketing efforts this year for the U.S. market, so we'll see how quickly that helps accelerate volumes to work through existing stocks such that they will be ready to place their next order. Again, we would still anticipate some quarter-to-quarter volatility in that.
spk04: Okay. So, I mean, I probably wouldn't expect a ton in second quarter, given the big order that went in in first quarter, I guess would be my interpretation, until you get to that steady state. And then, you know, shifting gears, well, actually, first, were there any OUS product revenues in Q1? I know those are near-term, but I don't know if any happened in Q1.
spk02: Yeah, again, it was small. What we're starting to see on the international side are small, but for us it's very important that it's a start and getting the ball rolling, so to speak. But, yes, there was a little bit in Q1. Okay. And as we mentioned before, we would expect that to build as we move through the year.
spk04: Okay, great. And then on the five-day label, I know there was the hope that perhaps you could do it on retrospective analysis. Do you have any clarity on whether you'll be able to do retrospective analysis within that product?
spk02: Yeah, we actually do still have quite a bit of confidence we can achieve what the FDA is looking for utilizing the retrospective data. You know, it has required us to have to dig a little deeper. Some of that data is not readily available within the SART database, but we've been fortunate to have some really friendly, supportive clinics that are willing to give us access to that deeper data set that we need to support the submission. So, like I said, at a high level, we actually do have a fair amount of confidence we can achieve the objective utilizing the retrospective data.
spk04: Okay, great. And final question, SG&A was higher in the quarter. You mentioned a lot of that was for the build-out of the clinics, but you should continue to build out clinics, I guess, through 2021. Should I expect SG&A to stay around that $2 million level, or do you think that will pull back?
spk02: Well, I would want to note that we incurred some costs in terms of JV activities that were expensed in the period and which were not part of a specific facility build out or equipment purchase, which would appear as assets on our balance sheet. And those costs were primarily some of the legal costs in working through the agreements. we would like to think those will dissipate a bit, Scott. And, of course, to your point, we will be making these investments in those activities, but they'll be reflected a little differently rather than coming through the P&L. But we would anticipate there still might be some of that occurring, but I think maybe not at the level we saw in the first quarter. Okay, perfect.
spk04: Well, thank you for the clarity, and thank you for taking the questions.
spk02: Thanks, Scott.
spk04: Appreciate it.
spk00: Again, if you have a question, please press star then 1. The next question comes from Kyle Bauser with Caller Security. Please go ahead.
spk01: Great. Thanks. Hey, Steve. Thanks for all the updates. Maybe I'll just start on the peer-reviewed publication. It looked like a favorable outcome and the conclusion was that this, you know, InvoCell is a pretty nice alternative given the economics and the outcomes of that clinical data. I'm just kind of wondering how the pregnancy rate per transfer or per cycle start kind of compares to traditional IVF and maybe you could just kind of highlight some of the key takeaways anyways from that peer review.
spk02: Yeah, we think that that peer review reflected what we've seen in most of our other data in that it's, you know, fairly equivalent to what you see in IVF. I mean, within a few percentage points. And again, when you're doing a proper apples to apples comparison. But so, you know, from our vantage point, you know, we constantly say we get high quality outcomes and we view those as comparable. And when you look at it from a cost of procedure, This is where we often say we think we're even leading the way on having a more economical solution to achieving a high-quality outcome at an affordable price, really, especially in some of the higher-cost markets like we see here in the U.S.
spk01: Got it. And I think about 95% of the cases in that study used a five-day incubation period, and I appreciate the comments on that. your confidence that we could potentially use retrospective data. Just curious, what's your sense out in the field for kind of I guess the percentage of sites that are doing a five-day incubation off-label on their own? I know you can't market it for five-day in the U.S., but just kind of curious how the rate of using five days has trended maybe over the past 12 months or so. Has it gone up?
spk02: Yeah, I would say that we continue to see, I'd probably be conservative by saying at least 80%, if not even higher, of the InvoCell cycles being done using five-day transfers for the U.S. market. So that continues to be at a very high rate. We only see a couple of sites that still sometimes tend to do three-day.
spk01: Got it. Yep. Makes sense. And appreciate the color on timing. in terms of having InvoCell clinics up and running, I think, three to five by later this year. In Alabama, I think you said a July-August timeframe, we'll start seeing patients. And in Mexico, in September-October timeframe. Did you mention it for the San Francisco clinic with light? I'm kind of curious on timing there.
spk02: we didn't, we're not as deep in some of the planning process with them. Um, so we're, you know, we're a little deeper into, you know, planning and getting, you know, make the space and leases and equipment on the other two facilities. And that's still, um, a little, we, we, we just started some of those conversations with San Francisco. So of course, as a result, we would anticipate that a little later in the year, the hope to maybe even right towards the end. Um, you know, so, We didn't really give as much clarity on that one as what we did with Birmingham and Mexico for the exactly that reason that we're just we're just farther along with those other two. Okay, great. And I would say, yeah, and I would say, I'm not sure if you caught the comment, you know, we feel we're close on another agreement. And that one, there's been some pre work done to that that might move that that timetable. up as well, so that could end up being even earlier than potentially a San Francisco operation. So just stay tuned. We'll have more to report on that as we're ready.
spk01: Interesting. Okay. Well, thanks for taking my questions, and congrats on all the progress here.
spk04: Thanks, Kyle. Appreciate it.
spk00: Again, if you have a question, please press star, then 1. The next question comes from John Eden with Vista Partners. Please go ahead.
spk05: Good afternoon, Steve. Thanks for taking our questions today. Congratulations on, you know, advancing the business in the manner that you have, especially layering in the model of these clinics to lead the way. Could you speak a little bit about, first of all, that model in reference to Birmingham? Again, you've had, you know, Dr. Hammett out of there is one of the three partners in the LLC that you partnered with there with that 50-50 partnership, I believe. And she's had a great deal of success with Invasel. Could you kind of look at the numbers there? And I believe as opposed to what you were seeing in Birmingham at her prior meeting, practice, there was only really one doctor that was dedicated to it. And they did, I think, 700 plus cycles in a very short period of time. And now I believe you're looking to the idea is to get two doctors out of this one clinic moving forward once the doors open. Can you speak to that and what that might mean? And then scaling the revenue difference between sort of being the distributor versus a joint venture partner here?
spk02: Sure. So, as a reminder, in the previous practice Karen and Lisa were part of, they had figured from a capacity standpoint they could handle upwards of 700-ish cycles a year, and that was a very small practice in part-time embryologists, etc. So, They, you know, that, that, and that was actually quite a bit higher from a volume capability than what could have been done simply doing conventional IVF within that practice. So just as that as a backdrop, um, you're right, they had pretty good success. They were capable on a run rate basis of doing pretty good volume in that very small footprint and practice. What we're building in Birmingham is going to be a little bit bigger. A little bit added resources, so what we have estimator I would say what Mike and team have estimated is it's capable of doing up to a couple thousand cycles, you know before any further expansion would have to happen. We're not suggesting it's going to immediately get to those numbers. It'll take some time to ramp up, and this also ties back to the importance of some of the marketing resources we've brought into and anticipating bringing these clinic operations up and running is to help build that kind of volume within those practices. We expect that the practice will, on a per-procedure basis, be similar to what they were doing in the previous practice there in Birmingham, which is around roughly $5,000 to $6,000 per cycle. So that would be sort of the per procedure revenue approximately. And we're a 50-50 joint venture in that practice. Does that cover the main points you're looking for, Dylan?
spk05: Yeah, I think that hits it. So if I was pulling that out and if you were half as successful at max, you'd be 1,000 procedures a year. Call it on the low end, the 5,000, that's a $5 million clinic. And if you're a bit more successful, it could be something greater or double that. So it seems like in the footprint, again, it's relatively small, right? These footprints of these clinics, can you sort of just speak to that and what that looks like? that you're building up?
spk02: Yeah, I don't remember the exact square footage. There's obviously a lab. It doesn't require a huge footprint, a couple hundred square feet. And then there's two procedure rooms and a receptionist area. So again, I don't recall the exact square footage of the overall facility. But yeah, I would certainly at a high level say it's not huge.
spk05: No, and it's conservative in the amount of outlay that you have in comparison to an IBF lab that could be tens of millions of dollars in some situations. So it seems to me that's a pretty efficient model. And again, it's a reoccurring sort of theme here, right? Once you have this other leg of revenue coming in here in this back half of the year from not only Birmingham, but again, Life Medical, Mexico, and these other distributor relationships and possibly, as you mentioned today, a new one that's on the horizon here in the U.S., you start to see that this reoccurring nature starts to really take hold and build year after year. You mentioned in the release or on the call today a new relationship in Thailand Can you speak a little bit more about that? I was, I'm sorry, I was not aware of that. And so that's something that just came on. Can you, I apologize, but I missed it along the way here.
spk02: Yeah, we didn't do a separate, by the way, first on the U.S. side, you're exactly right. That's how we see it. It's why we have a lot of enthusiasm over bringing these initial in-vote clinics up and running. We think it's going to be very additive to the overall effort to build in both cells presence within the market and equally important or even more importantly, help this large underserved patient market out there that needs greater access to care. So, like I said, we're very excited for these efforts to get underway. As far as Thailand, we didn't do a separate news release on that distributor that was executed here recently. Again, our business development folks are active in a number of different markets and talking to potential distributors. We've brought on a couple of new ones. But this particular partner is a great distribution partner for that market. They've been active at wanting to get training underway. They have provided our team with some fairly, what I would say, fairly aggressive objectives and goals for that market, which is, you know, like I said before, very encouraging to see that. I think that it's partly all, and same with Malaysian distributor looking to add territories. All of this to us is indications of, you know, a growing presence and awareness for InvoCell on the market. When you look at the totality of it, of the greater number of training sessions going on, Ingrid Britt Carlson leads that effort, and she's definitely a lot busier these days over the last several months with active sessions requested from the distributors and clinicians. You look at distributors looking for additional territory, new distributors. All of these things are, in our mind, indication of the momentum that's starting to build around awareness of InvoCell. And we think that, again, as a leading indicator, ultimately be a precursor to driving, you know, the actual operating results of the business and it will manifest itself in, you know, growth in revenues and profitability for the business. So for us, it's very exciting to see all of this activity going on. It's head and shoulders above What we saw last year, obviously last year was certainly impacted by COVID, but part of it takes time for a business development team to cultivate their pipeline and generate their leads, get people paying attention, get through agreements with partners, go through training sessions. All of this has been a very concerted effort over the last year, and I think we're making great progress.
spk05: Yeah, I would say you are, from my perspective. Um, I, I, I guess, uh, you know, with all of this activity, uh, and, uh, it's just naturally organically creating, uh, a. Awareness of the product itself and this massively underserved market. I think it's something there as, as you put in your, and your press releases, you know, you know, more than 90% of couples in need of fertility, fertility treatment each year go without care. It's shocking. That opportunity to fill that gap in some manner is pretty exciting. Around this, though, I think the challenge is going to be, and I think you guys are up to it, is with the new marketing sort of team and emphasis and just global brain trust that you brought in in form of your new board member, Rebecca, and also David. your new director of marketing, Marilyn Chamberlain, it seems like you're really ramping that up, too, to help support these efforts, both the distributors, joint ventures, and partners to bring up this awareness. Is there currently plans to sort of, as you're leading into opening up these clinics, et cetera, ramping up what you're doing in addition to these partners to help lift the excitement and awareness and potentially push at least inquiries into those practices. Is that something you guys are working on?
spk02: Absolutely. I mean, I would say Merrill Lynn and working closely with Mike and the team are absolutely that front and center focus is to have a cohesive marketing message and strategy. It's all about driving awareness and bringing patients into the clinics. So Yeah, I mean, that's absolutely the focus. And marketing is something that we more recently added. So it's, you know, we're working fast and feverishly to catch up, so to speak, with the business development activities to make sure that that marketing activity and support is ready to go as the distributors are coming online and as the Invo clinics come online.
spk05: And so this plays in. Everything's pretty much the same. You're looking to not add, as far as headcount at Envil Bioscience, you're not going to add significantly, I would suppose, based on what you've told us again today, to that number, therefore keeping your costs and being able to leverage the organization and these partners through this plan. Has anything changed in that, or is that still consistent with the way you see things?
spk02: Yeah, we feel we're pretty set on our fixed infrastructure for sure. We've got the key pieces in place to your point. We've built up over the last year and a half. We're not a, you know, but we're at the same time, we're not a big team, but we've, like I said, we filled in the key areas we felt were important. As we move forward from here and as the business grows, there'll be some, as I think I mentioned this on our year-end call, there'll certainly be some variable costs increases as revenues grow. But yeah, we're shooting to try to keep our fixed structure fairly stable from here. And then as I said, as the business grows, we'll add some incremental costs, but we certainly would look to see the revenues grow much faster than any added costs.
spk05: Got it. Thank you. And then the last thing is, As you're reaching out, increasing those awareness, are you seeing any additional potential partners, joint ventures, distributors, et cetera, calling into you now that this is each one of these you add on, each one of these new relationships, each new doctor? Are you seeing anything coming out of the OBGYN world? Are those doctors coming at you now in a sense saying, hey, let us learn more, let us get trained? What are you seeing?
spk02: Yeah, we certainly are seeing more inbound. I wouldn't say attracting new partners is easy, but it's certainly getting easier, I think, as we are making progress and becoming more known and understood. And one of the reasons we keep saying the clinical validation, the retrospective real market use data that keeps coming out has been incredibly helpful to the to the commercial efforts because it adds confidence into the marketplace with potential clinicians and distribution partners. And so, yes, we are seeing increasing levels of inbound inquiries coming into us. I think I mentioned to you the other day, you know, We're starting to see more regular emails coming in on our website with prospective distributors or potential partners asking about InvoCell. And while it's not a huge volume, if I do a relative comparison to last year, it's significantly higher.
spk05: That makes sense. And it doesn't take a whole lot to move the needle for Invo at this stage with your high margins numbers. as you roll these clinics out and create this ongoing, you know, multi-legged revenue model that has this high margin business underlying the product, which I think you, again, confirmed is in the 90% range here on the product side. So all good. I'll step back in line. Again, congratulations on the quarter, and thanks again for answering the questions I had today. Thanks, John.
spk00: The next question comes from Larry Udell with Udell Associates.
spk06: Please go ahead. Mr. Udell, your line is open. Looks like maybe Larry dropped off.
spk00: Wait, wait.
spk02: Oh, never mind. Go ahead.
spk00: We'd like to turn the call back over to Steve Shum for any closing remarks. Thank you.
spk02: Okay. Great. Thank you. Again, we appreciate everyone that joined the call today. Please do not hesitate to reach out should you have any additional questions. And again, thank you for listening.
spk00: This conference is now concluded. Thank you for attending today's presentation. You may now...
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