Movella Holdings Inc.

Hello, and thank you for standing by. Welcome to Mobella's second quarter fiscal year 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. I would now like to turn the conference over to Lana Adair. You may begin.

Good afternoon and welcome to Novella's second quarter 2023 earnings conference call. Today's discussion will contain forward-looking statements based on the environment as currently seen by the company's management and, as such, are subject to various risks and uncertainties. Actual results may differ materially. It also contains references to non-GAAP financial measures that the company believes provide useful information to its investors. The earnings relief, most recent annual report on Form 10-K, and other filings at the SEC, each of which are posted on Mozilla's IR website, provide more information on the specific risk factors that could cause actual results to differ materially from management's expectations. They also provide additional information on non-GAAP financial measures including reconciliations where appropriate to corresponding gap financial measures. Guidance provided today incorporates the order trends that management has seen to date and what they believe today to be appropriate assumptions. Results are inherently unpredictable and may be materially affected by many factors, including fluctuations in foreign exchange rates, changes in global economic and geopolitical conditions, and cuts in demand and spending, including the impact of recessionary fears, world events, the rate of growth of our core markets, including the live streaming community, and other various factors detailed in the earnings release and the company's filings with the SEC. It's not possible to accurately predict demand for goods and services, and therefore the company's actual results could differ materially from guidance. And now I'll turn the call over to Novello's CEO, Ben Lee.

Thanks, Lana, and thank you all for joining us today. We are pleased to share our results for the second quarter of fiscal year 2023. I'll begin with a high-level overview of the quarter's results and the business. We're excited to have launched the obscure broadcasting platform last week, expanding Movala's XSense mocap technology from professional Hollywood studios to individual streamers and VTubers. Obscure enables live streamers to create engaging content, including motion enabled avatars. We achieved $8.4 million of revenue in Q2 of 2023, down 3% year over year. While the writer's strike impacted our top line in Q2, our results reflect the resiliency embedded in the business. and our continued expansion of movement digitization use cases into our existing markets, as well as new growth areas, such as automotive workplace ergonomics. We remain well positioned for significant opportunity ahead, particularly in film and game production, once all parties reach a resolution. We continue to be in a very strong cash position with $51 million on the balance sheet, which affords us the opportunity to make measured investments in new products and use cases while managing our expenses prudently. In our last earnings call, which was our first call as a public company, I provided a detailed overview of our technology and markets. Since some of you may be newer to the story, I'd like to share an abbreviated refresher. Movala is a global leader in digitizing movement of the human body and of automatons that mimic human movement. We digitize movement with a highly differentiated full stack solution that integrates sensors, visualization software, and AI analytics. Movala is best known for XSense technology. Our XSense products integrate sensors, advanced algorithms, and user-friendly software that digitize nonverbal movements of the human body and automatons. Mogada technology is based on our proprietary inertial sensors, which are small, lightweight devices that can be attached to the body or to objects to digitize movements in 3D space. Movala sensors are incredibly accurate with a high sampling rate that captures even the most subtle movements. But what really sets Movala apart is our software. Movala software is designed to be user-friendly and intuitive, allowing developers and creators to capture and analyze movement data quickly and easily. And with our powerful analytics tools, Movala software makes it easy to turn raw movement data into actionable insights, helping users to optimize performance and improve results. Movalis full-stack product portfolio is protected by over 160 granted patents, which provides a strong competitive moat. We continue to invest in the advancement of our products and extending our technology leadership. Our products serve three diversified core end markets, entertainment, health and sports, and automation and mobility. We sell directly as well as through channel partners and serve the Americas, EMEA, and APEC geographies. Now I'll share with you our recent wins and progress in each of these end markets. In the health and sports market, biomechanics researchers and industrial athletes are leveraging our workspace ergonomics solutions. In Q2 2023, we continued to expand our use cases in the automotive industry, assisting automotive manufacturers in the improvement of the safety and wellness of industrial athletes. Our Xsense motion capture tools provide information about the physical stresses of employees while they work on the production lines. If data indicates increased ergonomic stresses, workplace adjustments are made to reduce physical stress, which also can result in improved mental health. In the second quarter, we announced an exciting project with BMW, building on our previously announced partnership with Toyota. The BMW group selected Movala's workplace ergonomic solutions with XSEN's MoCap system and software to provide faster, objective workplace ergonomic assessments across all international production facilities. The BMW Group utilizes Movela's motion capture technology to easily transform realistic, accurate, ergonomic evaluations of production workers with superior precision. We also continue to expand into additional use cases within the automotive industry this quarter. For example, in Q2, we secured a key project with a leading electric vehicle company to assist training of humanoid robots and workplace ergonomics. Our X10 suits are used to capture and digitize human body movements of shop floor workers. The data is then used for robots to mimic and replicate precise human movements. In the automation and mobility market, our sensor fusion modules are used today by top companies to sense movements of robots and automatons on land, sea, and in the air. In Q2, we showcased a robotic mower designed by iKnowHow which relies on our MTI 680G sensor module to keep it on track, even when satellite positioning center is temporarily unavailable. Autonomous mowing can be safely performed with 24-7 reliability. MoVoLA continues to expand into new agricultural robotics use cases such as this. Next, turning to the entertainment market, Movala remains the gold standard for Hollywood-quality motion capture. In the film and video game industry, Movala's Xsense motion capture technology has been used to create highly realistic and immersive experiences by digitizing movements of actors and animating them in real time. Emerging new use cases for entertainment beyond the professional studios continue to expand, particularly in the individual creator and live streaming market. In Q1, we preview the strong early response to our new Opsphere platform. The live streaming community continue to be enthusiastic about this offering. Our pre-launch private event in July was attended by VTuber live streamers who collectively represented over 100 million monthly views. We are encouraged by the early social media engagement with our official launch. The obscure launch announcement reached viral levels on Twitter, now X, with half a million views on the first day. Obscure provides creators with user-friendly tools to deliver interactive experiences, including real-time human movements for digital avatars during live streaming sessions on well-known streaming sites such as Twitch. Obscure is the first broadcasting software built on Unreal Engine 5 and is the ultimate tool for streamers looking to grow a vibrant community and captivate the audiences. Obscure incorporates AI computer vision for face and body tracking to enhance better real-time nonverbal engagement. Creators can choose to stream in various formats that include a classic webcam layout or a customizable 3D environment, or as a 3D VTuber, wearing our obscure mocap sensors powered by Xsense. We are now shipping the obscure mocap box. The mocap box includes the obscure upper body mocap set with nine sensors and new comfortable washable gloves that digitize the intricate movements of the fingers and hands. Obscure mocap box has an up to 12-hour battery life. to accommodate those long streaming sessions required by VTubers. In other developments, in Q2, we hosted our growing developer community at the annual Movala Thought Developers Conference. Over 300 attendees and thought leader speakers in digital health participated in our market event. We continue to believe that there is further opportunity to expand and grow our third-party developers community through the Movala DOT SDK. Movala DOT sensors and our software development kit save developers the engineering effort of making their own sensors so they can focus their resources on creating amazing apps. So far, our DOT third-party developer count has grown to over 800, many of which are starting to announce exciting products, primarily serving the health and sports market. At Movela, we continue to refine our AI algorithms that power our products for digitizing movement. We have invested in AI across our full stack to provide more precise lifelike movements of digital characters, avatars, and robots. Our sensors collect massive amounts of data that often comes with noise and bias. At the firmware level, our intelligent algorithms decipher and extract useful data from a sea of noisy raw data. Then our sensor fusion algorithms aggregate and integrate the curated data from the gyroscope, accelerometer, and magnetometer to generate positioning and orientation information. At the software level, our AI assembles the positioning and orientation information from the sensors with a 3D human body biomechanical model to duplicate precise human body movement represented by an avatar in our software in virtual space. Our AI algorithms continuously adapt to temporal variations in human body movement, as well as changes and disturbances in noisy environments to maintain accurate spatial movements of the avatar. Our HD reprocessing AI software evaluates data from 17 sensors on the body and learns and balances good versus poor sensor data to continuously maintain realistic human body movements. We see recent advancements in AI as an enormous growth acceleration opportunity. We believe that our business will be a strong beneficiary of AI, especially with generative AI. For example, StepLab, an intelligent gate tracking app developed by a Movala partner, 0C7, analyzes walking motion scientifically using just two mobile thought sensors with one on each foot. In addition to the visualization and graphical information, the StepLab app uses generative AI to process gait data collected by mobile thought sensors for assessment and recommendation to enhance the patient's ability to improve their walking motion. Thank you. And with that, I'll turn it over to Steve to provide more detail on our second quarter 2023 financial results.