INVO Fertility, Inc. (IVF) Q3 2021 Earnings Report, Transcript and Summary

Good day, and welcome to the INVO Bioscience Reports Third Quarter of Fiscal Year 2021 Financial Results Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I'd now like to turn the conference over to Robert Blum with Lytham Partners. Please go ahead.

All right, thank you very much, Jason. Good afternoon, everyone. And thank you all for joining us during today's INVO Bioscience third quarter 2021 financial results conference call. Joining us on today’s call is INVO Bioscience’s Chief Executive Officer, Steve Shum; the company's Chief Operating Officer and VP of Business Development, Mike Campbell; and the company's Chief Financial Officer, Andrea Goren. At the conclusion of today's prepared remarks, we'll 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 INVO Bioscience maybe 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, 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 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 filings at www.sec.gov. The company is under no obligation too and expressly disclaims any such obligation to update or alter the company’s forward-looking statements, whether results 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 INVO Bioscience. Steve, please proceed.

Thank you, Robert and welcome everyone. Similar to our last quarter, both Mike and Andrea are participating on the call as well. Before we recap the third quarter and provide a general update. Let me take a few minutes to address the most recent development regarding the change to our U.S. distribution approach and the termination of the Ferring agreement. It was something we announced last week and we recognized it has created some questions. I would start by emphasizing what we conveyed in our press release. With the team we have assembled, many of whom are have many years of experience in the device commercialization business within the fertility space. We feel very confident about our ability to take over and service the entire U.S. market. We are well positioned to do so, and we are excited by the opportunity to regain control of the U.S. moving forward. A tremendous amount of work has occurred over the past three years that provides a solid foundation and positions us really well to begin handling the entire U.S. market again, and which will enable further progress moving forward. A few key points to keep in mind on this, we've built a great team and a strong board of directors. We've seen much more real market usage data around INVOcell become available along with peer-reviewed papers and abstract posters, all of which reflects excellent patient outcomes, adding to the clinical validation around the technology, which builds confidence for practitioners and patients alike. Many practitioners have been trained on the technology now, including a growing list outside the U.S. Of course, we've just opened our first INVO Center, a very substantial milestone for the company and something we believe will be very impactful to the overall commercial progress moving forward. We've added marketing resources just recently completed our new branding logo, website and messaging, and will shortly be kicking off programs to help create greater awareness within patients and referring physicians. Again, as we regain control of the U.S. market, we can also really synchronize this marketing effort across all the key channels. We did not expect the decision by Ferring, but we respect it and thank them for their contributions towards advancing INVOcell. We knew, and I think many of our long-term shareholders also understood that building INVOcell within the existing IVF clinics, which is where Ferring was primarily focused was and has been a slower process. Of course, this is why we are pursuing the additional channel strategies we've laid out and which are now underway. However, we also see the IVF clinics as important, and we will fully support this part or channel of the market. Also, we do not need to add resources at this time to support the existing IVF clinic market. We do have a few transition details to work out with Ferring, but an important point to remember is once we complete that process, we will begin selling product directly to the IVF clinics. We would anticipate that will also have the benefit of smoothing out the revenue from that part of the market, rather than the occasional large orders and then periods of no activity, which will be beneficial for our planning purposes. So again, with all the foundational work and additive components that have occurred over these past three years, quite frankly, we could not be more excited to regain control over the U.S. market at this stage. During the third quarter, we made progress towards our core objectives, especially with the Birmingham INVO Center treating their first patient in the month of September. It was not a large number of patients and we are running a promotional pricing program during these first couple of months. However, it's very important to note that relative how we've modeled the clinics and the expectations Birmingham ran ahead of our plan for the first month. So we are pleased and as we consider to be right on pace, actually a little ahead toward the goals we have for first year operations and the expected ramp up. Equally, if not more exciting to our partners in Birmingham, as well as the whole INVO team, we now have a number of patients pregnant and on their way to having a child, thanks to INVOcell and our new INVO Center. As we've noted in separate releases, the Atlanta and Mexico centers are also now up and running and seeing patients and we are moving the planned Bay Area center as our next planned opening. As we look ahead, the recent change in the U.S., it does not impact our view of market, the opportunity and the methods in which we will continue to pursue commercializing INVOcell and open access to greater patient care. We have a clear objective and it hasn't changed. We intend to actively pursue establishing additional INVO Centers. Of course, we can now also expand our approach and thinking around this effort in terms of the potential number of centers over time, but also how we might best approach such an expansion and better involve the OB/GYN community. And again, we will look to fully support the existing IVF practices to drive improving utilization within that channel. Our international activities continue to progress as well. Mike will give a few highlights on this front. On the data front as most of you know, the Annual American Society of Reproductive Medicine, ASRM conference was held last month, we were pleased to have four separate independent abstract posters presented this year on INVOcell at the event, which reflected further real-world data around INVOcell. As we've stressed many times, we cannot say enough how valuable and critical it is to have this growing body of validation data. It really helps with building confidence around the technology and will play a critical role in seeing increasing acceleration in the cycle. [Technical Difficulty] This is another advantage with the INVO Centers, we expect to work with our JV partners to help further build data around our own centers that we can report on and further publish around INVOcell. To recap my remarks, we feel INVO is incredibly well positioned for success. Our team, our key opinion leaders, our partners, and our technology are all coming together nicely. Although not expected, we are excited to be regaining full control of the U.S. market at the same time as this progress has occurred, and we look forward to capitalizing on it. Our goals are clear and we remain focused at driving INVOcell toward addressing the very large unmet medical need and treat patients that need care as the sheer numbers imply there is a massive multibillion dollar opportunity to add capacity, increase access, and treat those that go untreated today. This remains the essence of our strategy and approach. We also remain confident that the market progress and momentum occurring with both the INVO Centers and distribution activities will become evident in the quarters ahead in terms of revenue growth and improving operating results. As we enter this fourth quarter specifically, we now have three INVO centers operating with a fourth on the horizon. Let me turn this over to Mike now for some additional details around the commercialization efforts. Mike?

Great. Thanks Steve. So as Steve is highlighted, the INVO Bioscience team is truly excited with the new opportunities in U.S. market moving forward. As you may know, and as Steve mentioned, our U.S. commercial and clinical team has extensive experience and some very, very strong relationships in the fertility market. We are well into the planning process to determine how best to take advantage and coordinate our various commercialization approaches to expanding in the cell utilization here in the U.S. The great part now is we can expand our thinking and evaluate additional opportunities and more importantly, pursue our goals to better involve the OB/GYN community. As we see this segment is critical to truly expanding care in a more dramatic way, something the IVF industry needs to do if we're going to treat the volume of patients that need care. So we expect to be very strategic and comprehensive in our approach. Regarding our current JV partnership activities, as Steve mentioned Birmingham, Atlanta, and Mexico all up and running. Life Medical, our partner in California has signed a lease on a property located in Daly City, which is just south of San Francisco in a great central location to cover many of the communities of the Bay Area. We are now in the development phase of the process and close to finalizing the clinic layout. We will be pushing the schedule as quickly as possible and plan to get this facility online in Q1 2022. Our Birmingham facility, as Steve mentioned is doing extremely well and they have completed two batches of patient treatment cycles in October and November, the great pregnancy rates, which is consists with what we see in the overall INVOcell data set. Patient flow is ramping within our projections and we are truly grateful for the exceptional work and dedication of our clinical team at Innovative Fertility Specialists. In Atlanta, Dr. Sue Ellen Carpenter and her team at Bloom Fertility have initiated their initial IVF procedures last week. As Steve mentioned, there were just a few patients in the first treatment batch, but in line with how we generally laid out our forecast and ramp up this facility. We have also been doing some outreach efforts in Atlanta to help develop physician referral programs to targeted INVOcell product education. For this critical function, we have partnered with the medical and marketing group MMGI. MMGI has nationwide expertise in medical device and specialty pharmaceutical launches, strategic communications and market expansion initiatives. We have been encouraged by the positive early response and support of opening the INVO centers in Atlanta as a number of OB-GYNs and even urologists have been highly engaged and have started to refer prospective patients for consultations. We are considering this model to help build referral networks for each of our INVO centers and expand the scope of these initiatives further broadening awareness. So as Steve stated earlier, we now have several U.S.-based market channel opportunities for our technology. We plan to support the adoption and expansion of INVO through the existing IVS center network. We have also identified several U.S.-based markets that would be ideal for the INVO center concept based on demographics and the lack of viable advanced fertility services, which great here is now we have the ability to actively pursue our top 20 to 25 opportunities. Regarding the rest of the world markets, we have made significant progress since our last call and I will note some of the highlights here. Chris Myer, our Americas Business Development Manager was with our partners in Monterey and Mexico last week to help finalize some of the finishing touches on this facility. The center has been completed and we are finishing up the training and onboarding of the staff. The physicians have begun patient consultations, and we expect that we will begin with INVO procedures within the next few weeks. In Malaysia, we are engaged in a 40 patient trial within a public hospital sector to compare IBC to IVF. And we expect this trial to be completed in early Q2 next year. We are also engaged in joint venture discussions with two physicians groups to establish INVO centers for the private medical sector in Malaysia as well. In Pakistan, our partner Galaxy Medical continues to experience success with their mobile INVO center concept. This is where they transport the fertility lab equipment to regional medical practices to perform INVO procedures. Currently they have nine mobile labs operational and plan to have a total of 30 labs operational by the end of 2022. In Europe, we’re in discussions with fertility service provider group that has five operational IVF centers in Spain to add INVO as an economical option within their network. They have completed their initial evaluation with great results, and we plan to help support them with a private direct to consumer market expansion program to help drive patients to the centers. And lastly, some really exciting news out of Africa, Inger Britt Carlsson, our VP of Medical Affairs will be presenting the INVO technology and the scientific session at the Middle East Fertility Society meeting on December 3rd in Dubai. This is the region’s largest fertility society meeting and we expect that it would be well attended this year. Although our product registration still is in process for Sudan, registrations have been completed for Ethiopia and Nigeria, and we have scheduled live in-country hands on training sessions for all three markets in early February. We expect about 100 participants, including physicians, nurses, embryologist and other fertility related healthcare practitioners to participate. So in addition to these, our current international partnerships and distribution agreements, we have an extremely active pipeline in other world markets for both joint venture and distribution opportunities and I hope to be able to share some of this information with you soon. Lastly, now that we are active in the commercialization stage, we are ramping up on marketing activities as Steve mentioned. We just recently rolled out our new logo branding and company website, which were in the initial pieces of the program. We expect to add in direct to consumer and social media campaigns to help create awareness for the INVO procedure and some additional business to business programs to help build patient referral networks for all of our INVO centers. So with that, I want to thank you for joining the call today and for your continuous support. And I’ll send it back to you, Steve.

Great. Thanks, Mike. I’m just going to turn it right back over to Andrea to briefly review financials. And then I’ll conclude some remaining remarks. Andrea?

Thank you, Steve. Hello everybody. Revenue for the quarter totaled $219,000, which compares to $336,000 in the prior year period. We recorded a net loss of $2.2 million compared to $1.8 million in the prior year, excluding non-cash charges mainly related to equity based compensation. Our adjusted EBITDA loss was $1.6 million compared to an EBITDA loss of $935,000 last year. The $1.6 million adjusted EBITDA loss for the quarter included $337,000 attributable to our joint ventures. So an apples to apples comparison would be $1.3 million in the current quarter compared to $935,000 last year. This level of corporate expenses is consistent with our stated internal company operational goals. During the quarter two of our operating INVO centers as mentioned impacted our income statement. In Birmingham, the INVO center was consolidated in our financial statements. It generated $38,000 in revenue starting in September. Expenses totalling $515,000 and a $239,000 loss net of non-controlling interest. The expense level does include approximately $380,000 of pre-revenue startup and labor expenses. Our note receivable, which currently has $1.33 million outstanding was eliminated, excuse me, as an intercompany transaction in consolidation and is not reflected on our balance sheet. The $201,000 reflected as a note receivable on the balance is due from Atlanta – from the Atlanta INVO center, which was operational only for a few weeks in the quarter. In addition to this note, we also made $165,000 equity contribution to the joint venture. And our third INVO center located in Monterey, Mexico was not operational during the quarter. To date we have invested $44,000 in the joint venture. At the end of the quarter, we had approximately $3 million in deferred license revenue to be recognized. We are still in the process of analyzing the precise timing and recognition treatment for the remaining amount. We do expect that we’ll move from being a liability to equity on our balance sheet. For the avoidance of doubt, INVO does not need to return any portion of the deferred revenue to Ferring. We ended the quarter with approx – excuse me, with approximately $4.7 million in cash. In early October, we closed a $4 million offering and expect to close on an additional $2 million by the end of this month. We believe that this level of cash is sufficient to support our corporate expenses and INVO center development activity at least through 2022. As our INVO centers generate an operating track record, we believe that debt financing will be available to us on reasonable terms to refinance our investment in the open INVO centers and to support development of new INVO centers. While the precise timing of our INVO centers cash flow breakeven point remains difficult to estimate, we are reasonably certain that all three INVO centers will reach that threshold and start to repay our loans and to make equity distributions during 2022. We expect that together with our current cash resources, liquidity from INVO center operations and debt sources will be sufficient to meet our near-term business development needs. As of today, we have $500,000 in convertible debt with a fixed conversion price of $3.20 per share, approximately $260,000 warrants and 11.7 million shares of common stock outstanding. Looking forward, we expect our growing activities across the globe to add financial resources and to support our efforts to deliver affordable and effective fertility treatments to those in need. It is an exciting time to be involved with INVO. Back to you, Steve.

Thank you, Andrea. On our five day clinical efforts, of course we are continuing to aggressively complete those requirements. We are just wrapping up the remaining data we needed and should be submitting to FDA this month. Similar to last quarter, I will just conclude our prepared remarks by expressing an appreciation to our entire team, including our internal operating team, our Board, our Scientific Advisory Board, our partners and key consultants. We have a lot of work in front of us and even more so here in the U.S., but we are excited and up for the challenge. Moderator, let’s go ahead and open up for questions now.

Thank you. [Operator Instructions] Our first question comes from Kyle Bauser from Colliers Securities. Please go ahead.

Thank you and thanks for all the updates today. So maybe I’ll start with U.S. commercialization. It’s great that you regained those rights for INVOcell. Just kind of curious, were there any hurdles that Ferring had while selling INVOcell or any difficulties in getting traction with INVOcell adoption or was the termination of the agreement just kind of a function of changing dynamics and perhaps the clear advantage of opening centers versus their sales efforts?

Well, we don’t – we’re not privy to all the decision making that was occurring inside Ferring and we don’t necessarily want to speculate on why they made their decision. Certainly again, as we mentioned the process of seeing in traction in the existing clinics has been slower that could have been a factor for inference evaluation. Remember most IVF clinics, they are very busy clinics. And so it takes time to adopt and process and procedure. One of the other, items that we identified early on we believe is that the targeted patient, the underserved patient often isn’t seeking care to an existing or traditional IVF clinic. So that’s something on the patient awareness front that we want to work on, especially as we go into next year. So we’re excited to take over the whole market. We’re excited to work on servicing the IVF clinics. You’ve certainly heard us stayed over the last number of quarters, we’re equally excited about pursuing the additional channel opportunities. We think those will be quite effective at helping to build overall attraction and awareness in the market. We think that will help within the existing IVF clinics. So yes, that’s – again, we’re just focused on how we see it and now what we want to do as we move forward from here. Maybe Mike, if you want to add anything further to any of that.

No, Steve. I think that’s really accurate. And again, as Steve mentioned, pretty sudden decision and we are actively pursuing our commercialization strategy. And as Steve mentioned, we’re certainly going to get on all three roads and just look at all these opportunities. And lastly, we have a ton of experience here, both myself, Chris Myer, Inger Britt Carlsson all in the fertility market for many years, and we know who these accounts are. And I think we can just pick the ball up from throwing and run with it.

Sure. No, agreed. That’s helpful. And given the update and sorry if I missed this. But how might your assumptions have changed for 2022 in terms of the number of INVO only centers in the U.S. Any kind of internal goals or plans for opening up new ones would be great.

Well, we’re still in the early phases of reevaluating some of our plans, but I would just say at a high level, we certainly are expanding our thinking and approach to the market. I mean, we always felt under the Ferring Agreement that we would have the ability to expand beyond seven once we – brought the first seven up and operational, but now we can – again, we don’t have to worry about potential limitations. And we’re looking across the market, we’ve done some analysis already. We’ve done this early on. We think we’ve identified a number of ideal locations based on demographics and current level of fertility care. So we’re eager to pursue aggressively those additional opportunities. And I would say as we final – and we also may be a little more creative at how we approach some of the partnering activities and with who. So we’re certainly expanding our thinking along those lines and look forward to perhaps a more aggressive rollout plan.

Got it. Appreciate that. And then lastly, if I may, I think you said you’ll submit some additional data to support your label enhancement to five day this month. Just kind of curious what types of interactions you had with the FDA? And once you submit that what’s your expected timeline for a decision? Thank you.

Yes. Like I said, our goal is to wrap up the additional collection of data, which has taken longer, but we’re pretty close and prepare that and look to try to submit that this month. From there, I would think that we’ll be somewhere between a 60 and 90 day timeframe for review and any questions to come back from the FDA. We’re certainly hopeful that we have addressed everything they had asked for. But there could be additional questions.

Got it. Okay. Thanks so much for all the updates.

Thank you, Kyle.

The next question comes from Scott Proctor from Platinum Point. Please go ahead.

Hey, Steve congrats on kind of the shift in the business strategy here. Certainly an exciting time for INVO. I guess, I have a question just about how do – how things are going in Atlanta. I know there’s a little bit of a head start with Alabama as that was already kind of a hot place for INVO. How are things going at Atlanta? How do you guys feel about the uptake there relative to what you’ve seen in the more established area of the country?

I think I’ll pass that one to Mike and let him give you some color on that.

Yes. Scott, Mike Campbell. Yes, it’s right along what we expected. So of course, Karen Ham is in the group at Innovative Fertility Specialists were already in the INVO procedures. So that thing took off a little more quickly. Alabama is a facility and Sue Ellen Carpenter just put this team together. And we started the patient recruitment and consultations not too long ago. So it’s in line with our expectations. And of course, it’s going to take some time for that facility to ramp up. So really no surprises there.

I would say, Scott too, in addition, and as Mike mentioned in his prepared remarks too, that we implemented a program to do some outreach to referring positions in the area. And I think everyone was pleasantly surprised with the positive feedback and engagement that’s been occurring around that. For us, I think it speaks to everything that we’ve always assessed around the market, which there are a lot of patients, they’re often getting stranded at the OB-GYN location and unable to progress to a conventional IVF center. And there’s a – it’s a big population in Atlanta. There’s a number of practices that are seeing those patients. And like I said, I think the feedback – the early on feedback has been really terrific.

Excellent. Thanks for that color. Certainly a really exciting development. I saw in the prepared remarks, or I heard earlier on that you guys have identified more than 20 cities where you believe that they are kind of the right characteristics to open up additional INVO only clinics. And you mentioned, you’re thinking about potentially more aggressive approach, financing through debt that all sounds really good. I guess, do you guys have any way of measuring the impact of how the INVO brand is just grown generally through these success cases versus kind of what you guys have been doing in the past, just going through distributor channel? How do you guys think about the – I guess, the byproducts of just success stories within individual INVO clinics as a marketing strategy versus just traditional distributor channels?

Well, I think you’re bringing up a really good point, which is additional validation data. And we talk about that a fair amount. But it has a cumulative effect that every time you have more just it adds on top of your data pile, if you will. And it really lends itself to a lot of confidence building. And it’s still early in the overall awareness front, especially what we’ve seen in Atlanta, even though the engagement has been terrific that we – it was also a dynamic where very few are – even any of the potential referring physicians we spoke with had even really had much familiarity if at all on INVOcell. So again, we can see that it’s early, but there also is clear growing moment. And I look at it as I think that has an accelerating effect as you continue to progress down the timeline and build more evidence and you build more knowledge in the marketplace and awareness in the marketplace, it tends to, again, I would see it as – we believe it’ll start to accelerate and there’s even early signs of some of that. And I think the INVO centers have been a big boost in that – on that front.

Yes. Steve, I just want to throw just one more comment on that, which is really critical. And that’s creating awareness. So as Steve mentioned, a lot of these patients are not aware of the technology, and their conversation with their primary care physician is typically – right now we can only refer you to an INVO center. So creating awareness and direct to consumer campaigns are very high on our list. And we want to create the awareness that this alternative technology is available. And initially we’re just going to target our INVO center markets. But again, our thinking has been expanded due to the recent events. And we’re putting programs together to look at expanding this throughout the entire market now.

Great. That’s that sounds amazing. I guess, just real quick, last question for me. I know you guys don’t issue guidance or anything like that. But you mentioned earlier that you anticipate like all three current INVO centers that have been open to be breakeven or better sometime in 2022. That’s pretty fast. I’m just wondering, if you guys have any kind of indication of where these clinics will top out in terms of capacity from like a revenue standpoint, just so I could update models on my end with the potential for more clinics coming to market than initially thought under the prior agreement of Ferring. Where do you think, like revenue wise, or like on a quarterly basis, these clinics could operate? Is it like in the $3 million to $5 million area?

Yes, Scott, I mean, what we’ve stated and we’ll continue to state is that approximately 200 patients per year the clinic should be approximately breakeven. But our near-term objective, and that’s probably within a 12 to 18 month period is to bring them to in the neighborhood of 500 to 600 patient – annualized patient volume. We believe they’ll have greater capacity than even that, but that’s our kind of immediate focus and objective. So based on average patient procedure costs, you’d probably be in the $3 million to $4 million range.

Great. Thanks. Appreciate it guys. Congrats again and I’ll looking forward the following story.

Thank you, Scott.

[Operator Instructions] Our next question comes from Rodney Baber from Paulson Investments. Please go ahead.

Steve, how you doing? It’s good to hear about all this. These are exciting times, so I’m really looking forward to seeing this play out. A lot of the good questions have been asked but just trying to ask something that might be helpful and just give us your thinking. And Mike, you may have the most fun job in the company right now because of the opportunities and with your skillset and background and all that. I want to ask you this question because when you’re thinking about how you spend your time, you’ve got a number of different ways to go at it. You can go open a new clinic, or you can go after an OB-GYN group, or you have other distribution channels available to you. So how do you view that right now? Would you be happier if you could open up another three or four clinics? Do you need to bring the OB-GYN groups in because they provide a different flow that that can be managed in a different way? I mean, how do you think about setting your priorities and how you move this forward? In other words, if we were a year from now and we were looking back on what you’ve done this next year, what would we have seen? What do you think you would’ve produced? And how would you have decided what that was and where do you think it could possibly be? And I’m not asking for a projection, I’m just saying, you’ve only got so much you could do in a day. How do you take on these priorities and execute with them? What’s your thinking now after going through this for a while?

Yes. Yes. That’s a great question, Rodney. And these are great problems because we do have multiple channel opportunities. I think I’ll stop by saying that again, based on the current available fertility specialists in the U.S., there just isn’t enough capacity or human capacity to handle the numbers procedures are there, clinically infertile people that need treatment. So that all indicators point that we really need to expand the utilization and through the existing IVF centers it’s not possible. So we have to expand that point. So that just means more providers. And again, the OB-GYN is a great network, it’s not been tested, it’s not been tried, but we think that it’s the perfect opportunity to add that element into this equation. And it’s something that we just need to test. So I’m going to tell you, we’re going to get on all three roads and we’re going to service the IVF centers. We’re going to win there and help them with utilization and adoption and integration, I think that’s really where the key is. They’ve been trained on the technology, not a whole lot of utilization. And I think that’s because of the difficulty of integrating this sense of the account practice. So I think that’s possible. So yes, we got a lot of good problems. We have a sort out, myself, Steve and Andrea and the team, we’re going to get together and think through all this and put everything on the table. And develop the best strategies going forward that’s going to benefit not only the company, but the patients. I would say you’re going to see a year from now a little bit of all of it. Hopefully the IVF centers will increase their adoption. Hopefully we’ll build another half dozen or so IVF centers and then embryo centers. And then, add the element of the OB-GYN community in here somewhere somehow that’s the plan.

Well, let’s go to the OB-GYN sector for a second. So six centers would be terrific. OB-GYN groups, I understand, you’ve had some real success in the Atlanta area with people groups wanting to come in and get involved. And they have hundreds of doctors that can feed in to the clinic you install somewhere that you use. Can you give us a little more color? Let’s say that you’ve got your reference account and you’re rolling him out and he’s got 100 doctors and he’s got X number of patients that are rolling. How would that develop? How those – do you put a clinic in his center, there were this guy’s running this business, or do you use your center – your clinic that you’ve got that you used in the INVO center with and you run them through there. I mean, what would be the way that would work?

Well, you mentioned Atlanta and the way that's working now with that outreach program is just to create awareness that this technology exists. So the OB/GYN, at the end of the road with their fertility patient has another option for them. If they can't or have the ability to go to an IVF center, now there's an option to refer that patient to our INVO Center, which is in Atlanta. So, I don’t know, if that's your question, but your question is, typically how are we going to install the INVO embryology services with additional programs? Is that what you mean?

Yes, more or less. Yes. And what's the treatment for that. I mean, how many OB/GYNs are there in the Atlanta area? Is it a thousand? Are there 20 groups that could use your services or give us a perspective on the size of the opportunity for that channel?

Yes, I'm not close to that program. So I don't know the numbers they arriving. I couldn't answer that question right now, but again, we have an outreach program into those facilities that's being managed by a company that we contracted. So I just don't have that number for you.

Got you. Steve, let me come back to you and I’ll jump out of the queue and let somebody else ask, but just coming back to Birmingham for a minute. Under the impression, you've done a couple of tranches now 16 or 17 patients each, and I'm just wondering, what does the pipeline look like? You've had a couple of months and 30 something patients through there, is your pipeline going to grow rapidly? It going to continue to be that size as you work out the kinks or do you see your outreach program and awareness program providing a larger pool of people to pull through that center is as it gets to maturity?

Well, yes, that's certainly what we want to do is, right now Karen and team are doing their own efforts to pull patients in. And so we haven't even really come in to support their efforts with additional efforts, we'd like to do what we're basically doing in Atlanta? Just as a follow-up because Mike didn't have the Atlanta info, but I believe the group we're working with had identified about 600 OB/GYNs within about 100 mile radius of Birmingham. So I would imagine it's probably even bigger in Atlanta area. So there's a good pool to begin an outreach program in their area. Karen had enough flow of patients to start with, to run through the first couple of months and working out all the clinic procedures and things like that. So I think she and team are supportive of having us start to apply increasing efforts on top of theirs to help drive additional patients. They're 100% aligned with us in terms of wanting to ramp that clinic up to a consistent flow of patients. That's consistent with our objectives and goals there. Like I said, they're a 100% aligned with that. So and as you heard both Mike and I say, we just recently completed some of our new marketing logo and messaging and the new website went up. So we're – now we'll start the next phase of that, which is preparing some of those additional programs I wish will be to support Karen and the clinic in Birmingham.

Okay. One question, I'm going to jump out for a second, the 600 OB/GYNs in Atlanta, is it fair to say that those guys are sending the patients that have fertility issues to the IVF centers in that neck of the woods?

Yes, but that number was – what was in the surrounding – the area around Birmingham actually. So yes, I think Mike would tell you this. I think often what happens is when a patient has failed the potential options at the [Technical Difficulty] available to the patient. And so, yes, I think often what happens.

For some reason you're going out, as far as me hearing you, you were kind of going out there for a second. You're going grainy, I don't know if I'm – it's just me, but I couldn't really hear that.

No, that would be me.

I'm just trying to get a handle on what would the – 600 OB/GYNs around the Birmingham area, what kind of flow that would mean versus how many of those people are going to the IVFs now, if there was any stats on that, that'd be a fun number to know because you could take market share from the IVF clinics basically with your outreach program, but you probably don't have that number handy, but anyway, let me jump out for a minute and see what else comes up and thank you.

Thanks, Rodney.

Our next question comes from John Heerdink from Vista Partners, LLC. Please go ahead.

Hi gentlemen, this is John Heerdink. Congratulations on the quarter and the progress made, excited to see where you guys are headed. Quick follow up and to go a little deeper on your other questions, this is regards to Birmingham being a great example as to what was going on with Dr. Karen Hammond, before you, in a sense plucked her and created this joint venture where you own 50% of now and innovative. And what she did and a year before that and I believe the numbers are longer, about 700 of these cycles. She had done with it when things were growing at full speed there at her last outfit. Could you speak to that? And I believe she was averaging about $5,500 a cycle, which puts her on close to around $4 million. Is this what gives you confidence or in sort of as you model these 20 sites that you're looking to go forward and sort of verify that? Because if that's the case, you're sort of looking at somewhere between a $60 million to $100 million business just there, here in the U.S. initially if I'm doing my math right. And one or two, see if I can get some confirmation about that.

Well, yes, and to be clear on the prior practice, Karen and her team were associated with, they – because it was a COVID year, they had months, they had individual months where they did in fact treat, I think 60 plus patients in a month. I don't believe they were doing that consistently every month, just because of some of the volatility around COVID and patients dropping off because of travel concerns and things like that. But the bigger point is that it was a pretty small footprint practice, and she certainly felt that they would be capable of doing anywhere from 700 plus patients per year in that clinic. And so it does give us a tremendous amount of confidence. It was probably one of the key data points that gave us the confidence to pursue the whole effort of building dedicated INVO Centers. We were fortunate to convince Karen to team up with us to do the first one. And we specifically built that first Birmingham practice. That's a little bigger in terms of both the people resources and the physical footprint. So it can in fact do even more capability than what her previous practice was capable of doing in terms of volume. But what we need to do is develop programs to drive the consistent patient flow into that clinic. And of course, as you've heard, that's definitely going to be a pretty important focus as we move forward from here for not just Birmingham, but all of the clinics is to again, drive the awareness, both in the patient market, as well as referring physician marketplace.

That makes sense. Thank you. I guess beyond – in the 20 sort of sites that you've thrown out here which is exciting now that you're not restricted by the Ferring relationship moving forward. And I guess, it's an initial target is have you looked beyond that? Is there – what is the grander thinking? Is there at this point realistic to think you have one of these in 50 states at some point as this scales up, or is it necessary? Is it not necessary? Do you think? I mean, we have over 400 plus IVF clinics, I think 440 across the U.S. and they're not making a dent in servicing this underserved market. So 20, although that's exciting to see scaled up and you got three going and four on the way. It seems like that's just – possibly just a small portion of what it might take to really service this massive market here in the U.S., am I seeing this wrong or is that correct? How would you address that?

Yes, in order to properly serve this market, and if we achieve our goals of opening up the market with the use of INVOcell, I would say it would certainly require more than 20 or 30 centers, but to Mike's point, in how this may evolve over time, it's likely there may be more involvement in trying to involve the OB/GYN community. And so rather than necessarily building a center, like what we did in Birmingham, there may be opportunities to provide embryology services and team up with existing OB/GYN practices. That could be – we think that could be a highly efficient way to ultimately really open up access to care and open up transaction volume with INVOcell as the primary technology, helping to address that underserved patient market.

That makes sense and that would afford even a greater amount of scalability without having to build out very exciting and still having control which is what I think most excites me about the business model going forward that INVO’s in control and working with physicians and distributors and patients, right. And really taking this to the market, sort of similar to what has happened with another industries, Smile Direct, et cetera, that were patient populations are informed of a more affordable option that might be even more attractive than what's existing in the market today. It's very interesting to me to see how this plays out going forward, but I think the potential is it seems to be extraordinary to me. And I guess, speaking to OB/GYNs, I know you hired Dr. Barbara Levy as Head of your Global Clinical affairs. And now she's been in there a few months now, and you've also had some real marketing power come to the table in the corner of a board member, Rebecca and who had formerly, I guess, 20 plus years at Coca-Cola and then Former Head of Global Marketing at Uber. Can you speak to that, how those two very powerful women, and before that Barbara Ryan, who is 30 plus years on Wall Street and very involved in many women's health companies, both biotech and otherwise who's also on your board, how those three women in particular are really helping guide this company and helping you on a day-to-day basis in some way?

Well, you're just highlighting why we always highlight the value of our team. Because it even goes deeper than that. Mike Campbell or Chris Myer or Inger Carlsson, all of our other people on the team that are experts in the field of their wheelhouse as well as our key opinion leaders, our partners that are excellent partners as well, our board members, it's across the board. I think it takes a team to really build something like this. And I would say that I think one of the great things that INVO has done is put some really valuable people together to really help accomplish our mission. And they're all very active in what they bring to the table. Rebecca has been fantastic and working with our internal marketing person, Meryle Lynn Chamberlain, to work through some of our marketing strategies and some of the new materials that we've created and some of the new activities we're going to be unveiling here soon on the marketing front and awareness front, Dr. Levy, Mike works very closely with her. This is a big part of our initiative because she's helping us figure out what's needed to really be able to take advantage and leverage the OB/GYN community, because we're going to need that network of practitioners in order to be able to bring care to the volume of patients that we believe need care. So I can't speak highly enough about her. I'm sure Mike could give you chapter and verse of how excited he is to work with her. But again, even our other internal people that have deep relationships in the space are very excited to leverage everything, all the tools we now have in this company. And now that we have the standalone INVO Centers to point to as well, I think we're really starting to have more experts in the field, more practitioners, and even patients starting to take notice and become increasingly aware of INVO. And that's a great thing, because as I said, I think that all of that cumulative effect will have an accelerating effect to our progress as we've moved forward from here. Mike, sorry to ramble. I wanted to let – do you have anything else you'd want to add there?

No, I think you hit the nail on the head, Steve, everybody brings her expertise and yes, I can't say enough about some of the folks were brought to the table here to help us. Barbara Levy is certainly a key. And again, this is not a simple process and she's an expert in the industry and the certain things we need to have and do that she's help guiding and help putting together strategy. But the key here, John, again, is the human capital. Again, there's a lot of patients that need help. That's why we're all here. I think we have a great solution for them and we just have to figure out, how do we get this technology to the masses? What is the best strategy? What is the best route and whatever that turns out to be, that's what we're going to do. And again, we have different channels, market channels that have access and we’re going to explore them all. So it's going to be an exciting year next year. And yes, I think you are going to see a different company in the next 12 months.

Thank you, gentlemen, and congratulations on the progress and look forward to the future. I'll step back in line here.

Thanks, John.

This concludes our question-and-answer session. I'd like to turn the conference back over to Steve Shum for any closing remarks.

Thank you again for everyone that listened in. We appreciate your interest and support, and as always, if any of you have any follow-up questions, do not hesitate to reach out to us. We'd happy to make ourselves available as needed. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.