INVO BioScience, Inc.

Good afternoon and welcome to the InvoBioscience second quarter fiscal year 2023 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 touchtone phone. 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 of Liftham Partners. Please go ahead.

Great. Thanks so much, Kate. Good afternoon, everyone, and thank you all for joining us for InvoBioscience's second quarter 2023 Financial Results Conference call. Joining us on the call today are InvoBioscience's CEO, Steve Shum, the company's Chief Operating and VP of Business Development, Mike Campbell, and Andrea Gorin, the company's Chief Financial Officer. 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 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 Provision's 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. companies under no obligation to, and expressly disclaims 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, let me turn the event over to Steve Shum, Chief Executive Officer of Advil Bioscience. Steve, please proceed.

Thank you, Robert, and welcome everyone. We are excited to be on the call today just a few days after completing and announcing what we believe is one of the most important developments in the company's history and one that we also believe targets the company for operating cash flow breakeven in 2024. The final closing of the acquisition of the Wisconsin Fertility Institute announced on Friday not only adds important operating scale to the business, but also further accelerates our transition from purely a medical device company to a healthcare services provider focused on the fertility market. And to remind everyone why this transition is important, it provides us the ability to capture a greater portion of the revenue and profit opportunity associated with treatment in general and with the treatment solution that InvoCell provides. To put that in context, an InvoCell device sold on its own creates revenue of approximately $400 per unit. A complete IVC procedure can generate about $4,500 to $7,000 per cycle of revenue with operating profits at scale well in excess of the device profit. This ability to capture greater revenue and profitability scale while also expanding the use of InvoCell and the IVC procedure is why we remain excited by the progress being made and is the key driver behind the transition. As background, this transition started in the latter part of 2021 with the opening of our first INBO center in Birmingham, Alabama. We quickly then added centers in Atlanta, Georgia, and Monterey, Mexico, which combined with Birmingham recorded revenues of $712,000 during the second quarter, an increase of 145% compared to the year-ago period, which equates to an annualized rate of approximately 3 million. Importantly, these centers are operating close to a break-even point currently, a significant accomplishment just more than a year since operations. With incremental growth expected at these clinics in the future and high contribution margins inherent in this model, we expect strong profitability in the years to come. The InvoCenter growth potential and profitability model is why we look forward to expanding those efforts. Which brings us back to the acquisition of Wisconsin Fertility, which is not only highly profitable, but we believe there are added growth opportunities available as we look to integrate the InvoCell solution within those existing operations. As we have reported, Wisconsin Fertility Institute had revenue of more than $5 million at their single location last year with net income of approximately $1.7 million. These are important metrics for a couple of reasons. First, it immediately doubles the existing run rate of our clinic operations. Second, the profitability of the clinic substantially improves our overall operating performance. And finally, it highlights the revenue net income potential that we believe is available with each of our existing InvoCenters. Over $5 million and $1.5 million in net profit per center is a goal we are looking to achieve in all of our centers when they reach scale. So as we look to the future, our center expansion strategy will be twofold. Company-built centers with our next one set to open in Tampa soon, and acquisitions where we can synergistically introduce InvoCell into existing IVF clinics that we take ownership of. So why was Wisconsin Fertility Institute such a logical choice for our first acquisition beyond the attractive financial profile. First, the clinic has an excellent reputation, not only in the local community, but nationally as one of the top fertility centers in America, having helped to welcome over 5,000 babies since opening its doors in 2007, and with approximately 550 conventional IVF procedures completed in 2022. It is led by an internationally renowned and well-respected fertility expert, Dr. Elizabeth Fritz, who shares in our vision and opportunity to democratize fertility. We look forward to having the Wisconsin Clinic and staff now part of our operations. With a fantastic team in place, a long-established track record in the local market, a shared vision, and, of course, the highly profitable nature of the operations, there is excitement all around on the completion of this transformative acquisition. Taking a step back to our existing operations, as I mentioned at the onset, our existing clinics continue to make solid progress. Revenue from all clinics during the quarter improved nicely compared to last year. It is our belief that this ongoing progress validates the company-built InvoCenter model and concept. Further, we have also gained significant experience and insight from these initial centers, which we believe we can apply to future centers to more quickly ramp them. On the topic of expansion, we are moving closer to opening the new INVO Center in Tampa, which we expect to be ready in the next 60 to 90 days. We are excited about Tampa, which we believe is a large and attractive market. We have assembled an excellent team to operate the practice with that team well into training and planning phases in preparation for the opening. We will keep you updated on the planned opening in the coming months. We are carefully evaluating timing on future InvoCenters, especially given our balanced efforts now between company-built and acquired practices. We believe there are a number of existing opportunities for both going forward. In addition to our clinics, we continue to support, service, and expand InvoCell across existing IVF clinics. To that end, product revenue increased 82% during the second quarter. The key component that we believe will Further drive adoption is the FDA's 510 clearance we received to expand the labeling on the InvoCell device and its incubate indication for use to provide for a five-day incubation period. This occurred in June of 2023. The results demonstrate and validate the improved patient outcomes with longer incubation time, which we believe will help build further credibility in the market around the solution. I cannot say enough what a significant accomplish this was and the importance and value this will bring in our efforts to increase adoption. Importantly, with that effort now successfully completed, we have now been able to eliminate the prior costs associated with this effort on a go-forward basis. On that note, in connection with our transition to a healthcare services company, we have implemented further corporate expense reductions which when combined with the profitable acquisition, the ongoing improvements in our existing InvoCenters and the 510 cost reductions significantly improves our operating picture and will lead us to a shorter timeframe to reach an overall adjusted EBITDA profit, which again, we are targeting in 2024. With that, let me turn this over to Andre to quickly cover added financial details.