INVO Fertility, Inc. Q1 FY2022 earnings call

• INVO Center Expansion: Targeting metropolitan areas with criteria like demographics, treatment cycle gaps, and referral network dynamics. Tampa lease in final review; using equipment leasing to reduce upfront investment. Discussions with clinician partners progressing well.
• Marketing Programs: Multi-channel marketing in Atlanta showing positive patient flow (15-20 INVOcell inquiries weekly, 40-50 new consultations monthly). Similar efforts underway in Birmingham and Mexico. Google Adwords in Atlanta generating inquiries.
• Distribution Activities: U.S. distribution efforts since February have growing order flow. Signed new China distribution agreement with Onesky Holding Limited, with annual minimums over $14 million over 5 years.
• Clinical Label Expansion: Finalizing submission for 5-day incubation label, collected data despite COVID impacts, expect to submit by end of the month.

Revenue for the first quarter totaled $163,000. Product revenue comes from INVOcell sales to U.S. IVF clinics and distribution partners abroad, as well as consolidated revenue from the Atlanta INVO Center, which generated $106,000. The company's three operating INVO Center joint ventures (Atlanta, Birmingham, Monterrey) had combined revenue of $170,000 in the first quarter and a combined net loss of $159,000. Most of last year's Q1 revenue included a one-time Ferring purchase, but future product revenue is expected to be more consistent and reflect true end market demand.

• Product revenue expected to grow and become more consistent, reflecting true end market demand.
• Continued expansion of INVO Centers in locations like Tampa, Kansas City, San Francisco; marketing efforts in new markets to accelerate revenue ramp.
• Expect incremental growth from existing clinics and distribution activities.

Factors causing actual results to differ from forward-looking statements, as outlined in company filings. Risks include uncertainties in market adoption, regulatory approvals, and operational execution.

Q: What criteria does the company utilize when evaluating targets for clinical expansion?

A: Look for areas with attractive demographics, large gaps in treatment cycles, and less captive referral networks. Also consider the dynamic of the local referral network.

Q: What's the progress on the 5-day incubation label?

A: Finalizing submission, collected data despite COVID impacts, expect to submit by end of the month. Collected data from key clinics and satisfied with volume.

Q: Tell us about the China market?

A: ~500 IVF clinics, ~1 million cycles annually, underserved. Distribution through partners; registration process takes 18-24 months. Onesky Holding Limited agreement with annual minimums over $14 million over 5 years.

Q: Impact of marketing initiatives in Atlanta?

A: Patient flow increasing, Google Adwords generating inquiries, activity level building with 9 inquiries from Google Adwords today alone.