Corvex, Inc.

Good afternoon, everyone, and thank you for joining us today. Our CEO, John Mastratataro, will open today's call with prepared remarks about the progress we've made during the third quarter of 2022 and in recent weeks. Afterward, I'll cover the highlights of our quarterly operating results and provide perspective on our financial position. Finally, Movano Health's founder and chief technology officer, Michael Liebman, and Stacey Salvi, our vice president of strategy, will join John and me for the Q&A. Before we begin, I would like to note we've made the conscious decision to change our company name to Movano Health to better align with our mission to make medical grade data accessible and actionable for all. While our legal company name will remain Movano Inc., our DBA is Movano Health, which we believe better reflects our identity. I also want to remind everyone that we will make forward-looking statements during today's call. Whether in prepared remarks or during the Q&A session, these forward-looking statements are subject to inherent risks and uncertainties. These risks and uncertainties are detailed in the risk factors section of our filings with the Securities and Exchange Commission, specifically in the company's forms 10-Q and 10-K. Except as otherwise required by federal securities laws, Movano Health disclaims any obligation to update or make revisions to such forward-looking statements contained herein or elsewhere to reflect changes in expectations with regards to those events, conditions, and circumstances. Now, I'd like to turn the call over to our CEO, John Mastritotaro.

Thank you, Jay, and welcome, everyone. Thank you for joining us for Movano Health's third quarter earnings call. We are on the cusp of bringing our first product to market, and our work over the last quarter continued to be laser focused on preparing for a successful commercial launch. After several years of research, we're confident that we're developing the right wearable health solution at the right time. Data from the American Heart Association and the Centers for Medicare and Medicaid Services has brought to light some pretty harsh realities. As of 2020, nearly 40% of Americans are living with a chronic illness. And in that same year, the U.S. spent almost 20% of its total GDP on health care. When you layer on the impact the pandemic has had on consumers' overall health, we're in an environment where people are eager for a solution that helps them to better prevent or manage illness. Wearable devices offer an unparalleled opportunity for people to take control of their health outside of their annual doctor visits. While wearables have undoubtedly made people more aware of their health through data, the way it's presented, often in the form of complex graphs and charts, can be overwhelming for anyone who isn't an elite athlete, and accuracy remains a concern. At Movano Health, it is our mission to make medical grade data accessible and actionable for everyone. We're developing technology at the intersection of medical and consumer devices by combining medical grade accuracy with an intuitive user experience and contemporary and comfortable designs. Our goal is to create devices that consumers want to wear and can trust to deliver meaningful insights that help them improve health outcomes over time. What makes us different is that we are a medical device company at our core. and we're holding ourselves to a higher standard than traditional wellness companies by developing solutions that qualify for FDA clearance. Our commitment to commercializing FDA cleared wearable devices has presented a couple of major opportunities for us. The first is our direct to consumer launch of our smart ring and the opportunity to help women better understand what's going on with their bodies and motivate them to do the things they need to feel healthier. As we researched the need state amongst consumers, it became clear that there is an imbalance between how engaged women are in the healthcare system, often making decisions for themselves and their families, and how much more likely they are to feel dismissed by the healthcare system. as well as how unprepared many women feel for the inevitable life stages they're going to experience. We aim to address these issues with our Smart Ring, which is launching in the first half of 2023. Second, because we are the only wearable company pursuing FDA clearances on the entire solution, including our hardware, we believe there is a significant enterprise opportunity for Movano Health working directly with a range of potential B2B partners. As we've highlighted in the past, healthcare entities such as pharmaceutical and medical device companies, as well as integrated health networks and insurers are looking for wearable solutions that can provide actionable medical grade data. We are proactively seeking such opportunities and are optimistic about the future potential given our medical device roots and the fact that many of these organizations have sought us out. We've made significant progress in Q3 and recent months to bring these opportunities to life, and I want to go into more detail on our efforts. Throughout the third quarter and into Q4, we have been internally testing the ring experience to optimize accuracy, comfort, and battery life in anticipation of our first beta programs which are slated to commence this quarter and continue into the early part of 2023. As it stands today, we're excited to have formalized beta programs with four excellent partners. We recently announced that our first beta program will be with Novant Health, an integrated system of medical centers that reported over $7 billion in revenue in 2021. With more than 1,800 physicians providing care through close to 6 million annual patient visits. At nearly 800 locations across North Carolina, South Carolina, and Georgia, Novant Health is seeking novel technology like Movano's solutions that can provide doctors greater visibility into patients' day-to-day health metrics. The beta program will involve Novant's internal teams as they evaluate the technology for its possible use cases for patients. We're looking forward to kicking off the beta program with Novant Health in the near term. As we talked about our last earnings call, we're conducting a beta program with Stanford University's Applied Sports Science Department. We'll be testing our device with a group of Stanford athletes in January to evaluate how our solution can improve performance and recovery. We'll also be conducting beta programs with two additional partners, a global pharmaceutical and medical device company, as we previously highlighted in our second quarter 2022 earnings release. We continue to be amazed with the depth of demand and anticipation for our beta program, confirming there's not only interest in what we're doing, but also in the category overall. We believe that leading pharmaceutical and medical device enterprises are seeking to participate in the company's beta programs as a result of our commitment to deploy medical grade data in a consumer wearable device, which has the potential to help these enterprises improve remote care, as well as provide critical clinical trial and post-market surveillance health data. In addition to gearing up for our beta programs, we are working closely with our best-in-class marketing research partner and mobile app developer to build the brand and prepare for the commercial launch of our first product. Alongside these partners, we've interviewed over 1,000 women, held focus groups, and conducted deep dives to identify key user journeys so we develop a targeted and sticky user experience that meets or exceeds consumer needs. Earlier this month, we put out our first newsletter to over 8,000 people who have contacted us through our website to gain credibility as thought leaders, engage our existing followers, and lay the groundwork for our brand launch at CES in January 2023. At the show, we'll announce the new brand for our first product and unveil additional launch details. We recently shared some exciting news about our rings. We're one step closer to our first FDA submission for the measurement of heart rate and SpO2. Following a successful pilot hypoxia study in July, which compared the accuracy of Movano Health's heart rate and SpO2 data to reference devices, we completed the pivotal hypoxia study in October. In the initial pilot study, our wearable solution achieved a margin of error well within the FDA's accuracy requirement for SpO2, and the ring also estimated heart rate with an accuracy commensurate with the FDA's standards. Based on the positive results from the first study, we expect to achieve a similar level of accuracy from the second hypoxia study and plan to provide more information once the study data is officially released by the Clinical Center later this year or in early 2023. Assuming the results of the pivotal study are in line with the industry standards used by the FDA for evaluating SpO2 devices, we will be in a position to file for FDA clearance on these metrics early next year. Another important health measure for any individual is the quality of their sleep. Because of this, we will initiate formal sleep studies before year end to optimize our algorithms for sleep detection and assessment. As is the case with every metric we monitor, clinical evaluations will be conducted per regulatory requirements with an end goal of achieving optimal accuracy for the assessment of sleep disturbances. While we're preparing for the commercialization of our first product, we continue to make good progress developing and testing our proprietary single-chip solution the smallest ever customized seed for cuffless blood pressure and noninvasive glucose monitoring. The last time we updated you, we were integrating the chip into the smallest wrist worn wearable prototype we've built to date. We have since completed the integration and have successfully bench tested the prototype. We're about to evaluate the efficacy of the new prototype in a blood pressure study, which is scheduled to begin in Q4. The study will take place at Movano's clinical lab with roughly 100 subjects. Shortly after the blood pressure study wraps up, we'll be testing the prototype in a glucose study. Each time we have reduced the size of our prototype in the past, we've seen major improvements in the fidelity of the RF data we collect, and we expect to achieve similar improvements with the new prototype as we march toward the opportunity to integrate such data into our wearable health solutions. Our company is deeply committed to developing wearable devices that go beyond the status quo and give consumers a higher level of confidence and trust in their health data. Pursuing the medical device route is not easy. It requires extra infrastructure, documentation, testing, and capital. However, we've received overwhelmingly positive feedback from potential strategic partners, consumers, as well as the media on our differentiated approach and feel confident in our direction. At the same time, we've been very thoughtful about the investments we've made in our team and technology and believe we have been good stewards of capital on an absolute and relative basis. I'm truly excited to be part of a company with this broad range of opportunities ahead of us. There's a lot of excitement and anticipation building, and we're all looking forward to the day our product is introduced to the market.

Thanks, John. We detailed the financial results in today's third quarter earnings release, which you can find on our website, but I'll share a few key line items. Movano Health reported an operating loss of $8.7 million in the third quarter of 2022. compared to an operating loss of $5.2 million in the year-ago period. The increase was primarily related to the expansion of our team and accelerated R&D and commercialization initiatives. Our cash burn in the period was $6.4 million in line with the prior three quarters. However, in third quarter 2022, the burn was partially offset by $1.9 million in net proceeds raised via our $50 million ATM facility. As you'll recall, we executed our ATM agreement in August of this year and raised nearly $2 million in gross proceeds and an average price of $2.94 per share over the last half of the quarter. We continue to view the ATM as an opportunistic source of capital and are pleased with the execution to date. At the end of the third quarter, we had $16.8 million of cash, cash equivalents, and short-term investments and total assets of $19.5 million. We will not be providing specific financial guidance, but as you've heard in today's quarterly report, as well as through our commentary on previous calls, we're making great progress toward the direct-to-consumer launch of our Smart Ring in the first half of 2023, and doing so on a capital-efficient basis. As that concludes our formal remarks, we'd be glad to take your questions. Operator, we're ready to begin the Q&A section of the call.