INVO BioScience, Inc.

Good afternoon and welcome to the InvoBioscience second quarter fiscal year 2021 financial results conference call. All participants will be in 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, you may press star then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Robert Bloom with Lithum Partners. Please go ahead.

Thanks very much, Gary, and good afternoon, everyone. Thank you all for joining us for today's InvoBioscience second quarter 2021 financial results conference call. Joining us on the call today is Steve Shum, InvoBioscience's chief executive officer. the company's Chief Operating Officer and VP of Business Development, Mike Campbell, and the company's Chief Financial Officer, Andrea Gorin. At the conclusion of today's prepared remarks, we will open the call for a question and answer session. Before we begin with the event, we submit for the record the following statement. Certain matters discussed on this conference call by the management of InvoBioscience may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 is amended, Section 21E of the Securities Exchange Act of 1934 is 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, 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 the company's 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 the company's filings at www.sec.gov. The company is under no obligation to and expressly disclaim any such obligation to update or alter our forward-looking statements whether as the result of new information, future events, or otherwise. With that said, I'd like to turn the event over to Steve Shum, Chief Executive Officer of InvoBioscience. Steve, please proceed.

Great. Thank you, Robert. Welcome, everyone. Along with Mike Campbell, our Chief Operating Officer, joining us today is our recently appointed CFO, Andrea Gordon. I would like to welcome Andrea to the call. I'll cover a few highlights for the quarter before passing to Mike and Andrea for additional details. During the second quarter, we made excellent progress toward our key objectives, highlighted by last week's official opening of our first InvoCenter practice in Birmingham, Alabama. We consider that event to be one of the most significant milestones in the company's history. I really cannot say enough about all the hard work and dedication by our internal team and our partners to accomplish this milestone. The center is off to an encouraging start as we have surpassed our internal expectations for initial patient appointments and expected treatment cycles planned for the first month. More importantly, we have the additional centers opening soon. We expect the Atlanta, Georgia center where we signed a joint venture agreement with Bloom Fertility led by reproductive specialist Dr. Sue Ellen Carpenter to open in September of 2021. For our joint venture in Monterrey, Mexico with Dr. Arredondo and Dr. Ramirez, we expect it to open in the October timeframe. And finally, our San Francisco Bay Area Center should open shortly thereafter. As we stated earlier this year, our goal was to have three to five centers open before year end, and we fully expect to meet at least the minimum objective we set. We are certainly looking forward to the impact of the center operations on our revenue and overall results in the second half of this year and beyond. With the centers, we are now diversifying our business model beyond device sales through distributors to a model where we will capture a share of the revenue generated by the entire INBO patient solution. With the INBO center strategy, we are also advancing our key goal to democratize fertility treatment by bringing care to the vast underserved patient population that experiences infertility challenges. Longer term, we do believe a key to this effort will also involve working with and leveraging the large OBGYN community. In July this year, we appointed Dr. Barbara Levy as our Senior Vice President, Global Clinical Integration. Dr. Levy is a key opinion leader in the community and brings a lifelong passion to improve women's health, recognizing that a critical component to that is treatment for infertility. She has been a vocal advocate for women's health and health equity with appearances on the Oprah Winfrey Show and multiple other media outlets. She really has an impressive resume. I encourage you all to take a look at her background. Importantly to us, Dr. Levy shares our belief that OBGYNs can play an important role in helping to democratize fertility care on a global basis by providing accessibility to affordable and effective treatments, the key hallmarks of the InvoCell technology. We look forward to leveraging her experience to accelerate our clinical implementation strategy in this area. Beyond the progress with our InvoCenter strategy, we are continuing to make progress with our international distribution activities. As we noted last call, we continue to see increased training activities across our various distributors and partners. And it's generally multiple sessions with multiple Q&A follow-up activities. We do see this as a precursor or leading indicator for the business to begin seeing international revenue expansion, something we still expect to occur later this year. We also have two separate independent abstracts that will be presented on InvoCell at the American Society of Reproductive Medicine conference in October, which will reflect further real-world data around InvoCell. And by the way, when it comes to providing the market with additional evidence-based information around InvoCell, this is another exciting advantage with the InvoCenters. We expect to work with our JV partners to help further build data from our own centers that we can eventually report on and further publish around InvoCell. Overall, we feel Invo is well positioned for success. We have built out some critical core elements over the past two years. First and foremost is the team, which includes an experienced internal operating team with key positions filled, coupled with a strong and diverse board of directors, a scientific advisory board composed of well-known and respected fertility industry experts, and key outside opinion leaders and consultants. Second, our partners, which includes a growing list of quality distributors around the world and experienced and motivated joint venture partners. And equally important is our technology. We know how revolutionary InvoCell is, but more recently we have gained valuable real market usage data and hence further validation along with a clear understanding of how our technology fits in the industry and the key challenges it helps solve. Although our excitement and description of our position is not yet reflected in our operating results and specifically revenues just yet, we can see the market progress and momentum occurring with both the InvoCenters and distribution activities and believe this will become more evident in the quarters ahead. Before I turn this over to Mike and Andrea for comments, let me spend just a minute touching a bit on the industry dynamics and the important aspects of our technology that forms much of the basis for how we think about and plan or implement our commercialization strategy. Over the past 40 plus years, since the first IVF baby was born, the fertility market has grown into a 20 plus billion dollar global industry. Here in the US, according to the most recent 2019 CDC data, the industry performed approximately 330,000 IVF cycles across 448 clinics, which implies a roughly $5 billion domestic marketplace if we use the average cycle cost often reported. IVF has been the standard of care for advanced infertility treatment. One of the most important elements to these figures especially how it relates to our strategy and focus, and something we consistently highlight is the very large underserved or untreated patient population. For us, this is the key to our market approach. Our focus is on the massive number of patients who do not receive treatment today. To put some numbers to this, the CDC estimates there are close to 7 million patients in the US with fertility issues. While not everyone is necessarily seeking care, We, along with many other market participants, believe we likely should be performing over a million cycles per year or a three to four fold increase in our current volumes to better service the marketplace. Globally, those figures are even more profound with an estimated 150 million patients suffering with infertility against an estimated two and a half to three million cycles of IVF being performed today. There are some real challenges with bridging the gap of treating the volume patients that need care. Patient affordability and lack of insurance coverage is often the most discussed dynamic in the U.S., but that is only one part of the challenge. We see an equal or even greater challenge related to capacity limitations in the industry given the relatively small number of IVF clinics and limited number of clinicians and other human resources available. This constraint, even more than affordability, is a key issue, particularly outside the US. These market dynamics are really important to understand when it comes to Invo and our InvoCell product. Without question, and as I just mentioned, we have gained a great deal of added knowledge around our product over the past 18 to 24 months and how we can impact and benefit the industry. Thanks to our expanded team and their collective expertise, the additional real-world usage data by clinics and practitioners that have been utilizing InvoCell over the past couple of years, and a far better understanding of the process and workflows around InvoCell within the clinic. And this last point is why we also talk so much about efficiencies or scalability within InvoCell, something we feel very strongly about and have demonstrated in clinical settings, which, simply put, is the ability to treat more patients with less resources. We have proven this in a real-world clinical setting, which is why we believe InvoCell has the ability to have a profound impact on the industry's capacity challenges. As I mentioned, conventional IVF has been the advanced fertility treatment marketplace. When most think of advanced fertility treatment, they think IVF. This is why we were also excited to see the IVC term introduced a couple years ago. which indicates a new, different treatment process, an in vivo, in the body approach. IVC was introduced because of InvoCell's emergence into the marketplace. InvoCell is what facilitates the IVC process or procedure. In essence, InvoCell is IVC, which now offers an additional advanced fertility treatment method, and we can clearly see that IVC awareness is expanding. It's also important to note that we do not see IVC or InvoCell as an alternative or replacement to IVF, but rather a complement. The methods will coexist. Our position is very much focused on providing IVC or InvoCell as a solution to address the underserved patient. As the sheer numbers imply, there is a massive multi-billion dollar opportunity to add capacity, increase access, and help treat those that are going untreated today This is the essence of our strategy and approach, bringing advanced fertility care to the underserved. So again, the efficiencies of InfoCell can bring much needed capacity additions and access to the market, and we can do so at an affordable price, which is also one of the important challenges for the underserved market. The industry needs to add access, but the underserved patient also needs it to be done at a reasonable price point. InvoCell provides both benefits. As far as delivering our solution, we see multiple paths now. We can bring our technology into existing IVF clinics, which we have and will continue to do, which provides a clinic with that additional option, enabling them to treat more patients within their existing resources. Of course, as I've already highlighted, A key part of our commercialization strategy also involves opening new clinics designed to offer InvoCell as the primary treatment option, which is now officially underway. And longer term, we believe an important element to help further the goal of increasing access will be involving the large number of OBGYN practitioners. We fundamentally believe there is a pathway to involve this group of practitioners with InvoCell, and we look forward to Dr. Levy's contribution with this effort. Our goals are very clear, and we are very focused at driving InvoCell to address the very large unmet medical need. I'll turn this over to Mike now for some additional details around the commercialization efforts.