Greetings and welcome to the Movano Second Quarter 2023 Earnings Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Jay Cogan, Chief Financial Officer. Sir, please go ahead.

Thank you, operator, good afternoon, everyone, and thank you for joining us today. Our CEO, John Mastrototaro, will open today's call with prepared remarks about the progress we've made during the second quarter of 2023 and in recent weeks. Our Chief Marketing Officer, Tyler Bucher, will join us to give an update on the upcoming launch of the EV ring. Afterward, I'll cover the highlights of our quarterly operating results and provide a perspective on our financial position. Finally, Movano Health, Founder and Chief Technology Officer, Michael Leabman; and Stacy Salvi, our Vice President of Strategy, will join John, Tyler, and me for the Q&A. Movano Health issued a news release earlier this afternoon detailing our second quarter financial results. This news release and today's presentation are available on our website. Before we begin, I'd like to remind everyone that we'll make forward-looking statements during today's call based on our current expectations, whether in prepared remarks or during the Q&A session, these forward-looking statements are subject to inherent risks and uncertainties and actual results may be materially different from such statements. 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. So with that, I'd like to turn the call over to our CEO, John Mastrototaro.

Welcome, everyone. Thank you for joining us for Movano Health's second quarter earnings call. As you know, preparing for the commercial release of a product as innovative and complex as the EV ring requires a focused road map and a dedication to delivering a high-quality health solution. At our last earnings call, we announced the planned launch date of September. Over the past few months, we have demonstrated significant progress with the development of our production ring as well as fulfilling the requirements of our FDA submission. We recently validated a new high-performance sensor with increased sensitivity that has materially improved the efficacy of the EV ring. Testing shows we're getting better, more accurate data across a wider group of people, particularly those with smaller fingers or lower perfusion. As a company pursuing medical device clearance, prioritizing data quality from the start is essential. We believe this new sensor could be critical to EV's long-term success. However, it naturally requires more time to test. Therefore, we have made a business decision to move our launch date out by an estimated two months. That said, we are still planning to launch ahead of Black Friday, and this extra time will significantly benefit us in several ways. It enables us to expand upon the capabilities of the EV ring, to complete a critical round of testing with the new sensor, and to better position the ring for significant media and influencer exposure ahead of the holiday season. EV is not just the number one wearable. It's a medical-grade smart ring that meets FDA guidelines and is designed specifically for women. We believe EV has the potential to be a game-changing solution that ushers in a new era of women's health with actionable insights and a personalized experience for our users. We want to ensure that we're delivering on that promise from the onset. While we are not the first technology company to experience a delay leading to a planned launch date, we don't take it lightly, and the team is working tirelessly to prepare for the launch in November. We are taking the long view here and believe these actions will help us deliver a health solution that women deserve and respond positively to while simultaneously bolstering value for our shareholders. Obtaining FDA clearance has always been a top priority for Movano Health. We're very excited to have successfully submitted our first 510(k) application to the FDA for the EV ring pulse oximeter. This is a monumental milestone as it makes EV one of the first consumer wearables to seek FDA clearance and demonstrates the company's commitment to meeting the highest standards of safety and accuracy. As we highlighted in a recent press release, the submission has passed the initial screening for completeness and is now under full review by the FDA. We'll be working closely with the FDA throughout their review process. While there is no guarantee the EV ring will receive clearance, we're cautiously optimistic based on the clinical performance achieved by the ring and the quality of our submission. As we've noted on past earnings calls, we are prepared to launch the EV ring as a wellness device if we have not received the decision from the FDA by our planned launch date. We also continue to believe that obtaining FDA clearance could be a catalyst for commercial agreements with healthcare and other enterprises over time. We look forward to keeping you updated on our progress in this area. To that end, we're preparing for our second round of beta programs. Since our first initial set of data evaluations in the spring, we've made major enhancements to the ring, adding several new features related to our app, configuration, mechanical constructs, and firmware. We had significant interest from a wide variety of health and fitness companies to participate in our next data round and have chosen to work with three partners: a global athletic apparel company interested in our women-specific market, a major health insurer, and a leading remote patient monitoring company, each keen to leverage the EV ring's medical-grade capabilities alongside their end-market and future offerings. We expect the next set of data programs will enable us to perfect our end-to-end solution with a broad audience and presents us with an opportunity to get more rings on the fingers of more people, which is important to ensure commercial success. Outside of these beta evaluations, we continue to dialogue with numerous potential partners given the broad interest in continuous, accessible, medical-grade data packaged in a highly attractive form factor and combined with a differentiated app experience. As you'll recall, the EV ring uses a PPG sensor to read heart rate and SpO2, a skin temperature sensor, and an accelerometer. This sensor suite enables the tracking of key health and wellness metrics such as sleep stages and duration, resting heart rate, heart rate variability, SpO2, respiration rate, calories burned, skin temperature variability, and steps and active minutes. The companion app enables the logging of menstrual cycles, mental symptoms, mood, and workouts. All of this data, including the medical-grade heart rate and SpO2 data, are aggregated in the mobile app, which is personalized for the user based on her specific health goals. EV helps women understand their unique bodies and how menstrual cycles, mood, and energy levels relate to their health with clear insights derived from women's specific research. Daily, weekly, and monthly views of key body metrics also help women identify trends across all aspects of their health. The ring will be available in three beautiful finishes: gold, rose gold, and silver for $269 with no subscription fee and free shipping. The water-resistant ring is lightweight and has an open design to accommodate any swelling that may occur throughout the day or night. At launch, consumers will be able to purchase the EV ring directly from our website and have it shipped anywhere in the United States, with plans for expansion to other territories in the future. Notably, our app also harnesses the positive advancements offered by artificial intelligence. Utilizing both machine learning and deep learning techniques, we are training the EV app to not only derive more accurate metrics around sleep and activity but also to suggest original correlations that we can leverage to offer our users a more comprehensive view of their health. Initially, the app will be compatible with iOS devices, and we expect to release an Android version in early 2024. To ensure excitement and awareness of the EV ring launch, the marketing team has been building and executing a full 360-degree marketing campaign. I'll now let our CMO, Tyler Bucher, update you on how her team is preparing for launch.

Thanks, John. Momentum for the EV ring continues to build at a steady pace, and we've been ramping up our communications across social content and email over the last two months. Since CES, we've had over 600,000 visitors to our website, with more than 100,000 people signed up to receive updates about our release. Our engagement on social and email has been well beyond our internal expectations, and we've continuously seen positive responses to quotes that highlight our unique benefits and product features. Next up will be the launch of our paid brand campaign, which will present the EV ring in a whole new way and really showcase the game-changing solutions for women that we're bringing to market. In addition to our paid and social efforts, we will shortly begin to send EV samples to influencers, celebrities, and the media. The revised release date gives us the opportunity to place rings into the hands of individuals with enough time to complete thorough device evaluations and draft comprehensive reviews, which are critical for cultivating consumer trust and influencing buying decisions. The level of interest we have from the press and consumers positions us well as a potential must-have gift for the holiday season, as well as the go-to choice for the New Year when people often turn their attention to new healthy habits. We'll also be showcasing the EV ring at CES in January, where we will be exhibiting on the floor and sharing a sneak peek of the new features we plan to release following the launch. We're building a new commercial website to support our direct-to-consumer plans that will allow users to purchase the ring directly from us and receive a free sizing kit to help find their perfect fit. The entire site is set up to provide an educational, immersive, and frictionless customer experience from consideration to the moment of purchase. Additionally, we've established a best-in-class customer service team to manage all aspects of customer care and create a positive first impression for the brand. We're also very excited to share that we've recently announced the establishment of our Medical Advisory Board, a group of subject matter experts and trusted advisers for our team. This esteemed board will help establish the EV ring as a highly credible health and wellness resource, and we plan to leverage their medical and scientific expertise to enhance the EV ring's product roadmap and provide trusted content. I’d like to give you a brief overview of our esteemed inaugural members. Dr. Mary Claraver, a board-certified OB/GYN, has helped thousands of women going through perimenopause actualize their health and wellness goals by creating an online program to empower and educate women. Dr. Andrea Kimura is a sleep medicine specialist whose current work focuses specifically on helping women improve their sleep habits. Dr. Roth White is renowned for her work in stress management and diversity, equity, and inclusion. Finally, we are preparing to launch our first white paper titled 'Women and Biometrics: Harnessing the Potential of Gender-Specific Health and Wellness Data,' written by Dr. Kristen Harloe, which focuses on the impact of gender differences on health and wellness across various areas including heart health, activity, and mental health. This detailed paper is a significant deep dive into these noted disparities and we hope women will find the information helpful and informative. We'll be modifying the paper into blog posts and social content so that this information will be accessible across multiple channels to drive traffic to our website and social media pages. Our team is confident that our marketing efforts combined with the product's innovative features and pursuit of FDA clearance are setting Movano Health up for a successful and impactful launch of the EV ring. With that, I'd like to turn it back to John.

Thank you, Tyler. To support all the activities we've just laid out, our operations team has been building the foundation of our supply chain and order fulfillment capabilities. With a well-prepared supply chain and FDA-compliant contract manufacturing sites, the team is prepping to handle increased demand and ensure a seamless production process. We're also finalizing manufacturing processes, equipment automation, hard tooling and packaging, as well as software integrations for order fulfillment and logistics. In addition to our commercial launch, we continue to move forward with testing our proprietary single-chip radio frequency solution, which is the backbone of our cuff-less blood pressure and noninvasive glucose initiatives. In May, we completed a three-week IRB-approved clinical study on 51 volunteers in the Movano Health clinical lab to evaluate the efficacy of our single-chip prototype in estimating blood pressure. This was the very first time we've used our single-chip solution in a clinical study. We analyzed the data and saw promising signals. We learned a lot from this initial study and have made modifications to improve the prototype and measurement algorithms, and plan to execute a follow-up blood pressure study on an additional 50 people in the coming weeks. We've also been conducting testing to evaluate glucose data. As a result, we're optimizing antennas and the circuit board layout to improve signal sensitivity. Once complete, we'll leverage the modified platform in an upcoming glucose clinical trial. After almost two years of extensive research and development, we're looking forward to bringing the EV ring to market. The timing for such a product couldn't be better with increased interest in medical-grade technologies for home use and a strong focus on women's health and empowerment. We believe we've designed an exceptional product and are excited to deliver it to our customers who are highly engaged and looking for a solution that aids them in their health journey. With that, I'll turn it back to Jeremy to go over the financials.

Thanks, John. We detailed the financial results in today's second 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 $7.4 million in the second quarter of 2023, which compares to an operating loss of $6.8 million in the year-ago period. The increase was primarily related to the accelerated commercialization initiatives described earlier in the call. Our cash burn in the period was $7.9 million, a bit higher than the run rate for the prior six quarters, given certain prelaunch and FDA submission costs and other timing considerations. With regards to capital, we raised $9.2 million in gross proceeds or $8.1 million net through an underwritten public offering of shares of Movano Health common stock in the period. At the end of the second quarter of 2023, we had $14.5 million of cash and cash equivalents and total assets of $17.6 million. That concludes our formal remarks, and we'd be glad to take your questions. Operator, we're ready to begin the Q&A section of the call.

Thank you. You may ask questions on the webcast link.

And I remind the participants that you can also ask questions in the webcast link as well. I'll start with the webcast questions. John, maybe the first one will be for you, just in terms of can you talk more about why you've delayed the launch date?

Sure, Jay. First off, I want to say that as a medical device company, the quality and accuracy of the data that we're providing is essential. We had an opportunity to enhance our product by incorporating this new component into the ring. This component is more accurate and addresses perfusion issues that could be within our target market. Essentially, what the new component does is it has the ability to collect more of the signal that is being reflected from the finger. So with a female-focused product and with the size of the ring going down to size five, where you may have much smaller fingers, lower perfusion, and smaller blood vessels, this larger component allows us to collect more data from the finger. We've seen that it is able to get more of the signal than we could do before, which increases our ability to provide more accurate data because we have a better signal. The delay provides us more time to get in front of the media, influencers, and others run it through its paces before we get to launch. At the end of the day, we want to be able to deliver a product that we can be proud of and stand behind, and we believe that pushing back the launch by a couple of months gives us time to assure just that. Additionally, the delay provides time to set up production and manufacturing, and build inventory to meet the demand that comes onto the market.

Okay. John, I think this next question is for you as well. What gives you confidence in your ability to meet the new launch date?

It's a great question. Several things. First, to submit to the FDA for the ring, we had to produce the fully baked product. All testing has been completed, including environmental testing, biocompatibility testing, electrical testing, and cloud platforms, as well as cybersecurity testing. All documentation is with the FDA. So, we have done a lot of the heavy lifting for this product. We're continuing to push forward with marketing, production readiness, customer service, etc. We've tested this new component and seen how it performs - we know we're getting more signal collected from it. So we feel confident that this is not going to somehow not work at the end of the day because we've tested it thoroughly. The majority of the system is the same as what it was before. I'll stop there.

Okay. Tyler, I think this next question is for you, any concern about your ability to capitalize on holiday traffic with the launch ahead of Black Friday?

That's a great question. No, while the team is focused on maximizing holiday timing to drive sales, we believe that our overall launch extends far beyond just the fourth quarter. The macro awareness around women and their health that we're seeing in the media and in business indicates that the time is now for a product like the EV ring. Our launch is merely the first step in a much bigger plan to serve our growing community of consumers for the long term, but we feel very confident that the momentum generated so far will translate into purchases during the holiday season and beyond.

I'll take the next question regarding cash burn. Why did your cash burn increase in the quarter? Did the later launch affect it, and what will the burn rate be after launch? Our cash burn has averaged about $6.5 million per quarter for the last several quarters. As you approach a launch date, additional resources are necessary. For us, this included raw materials, tooling, FDA and product testing, and some marketing dollars that we've begun to utilize. We continue to be focused on being good stewards of our capital. Any push out of gross profits will be offset by lower marketing spend and other launch-related costs going into the events, so it's relatively immaterial. While we would have preferred launching in September, we think it will be a wash. We need to raise additional capital over time but we've seen increased interest as we hit key milestones, for example, our FDA submission.

Okay. John, this next question is for you. Can you give us some more insight into the FDA process? What are the next milestones? When do you expect to hear back from the FDA?

Happy to answer, Jay. The first step in the FDA 510(k) process is making the filing. After that, the FDA acknowledges receipt of the filing - the next step is assessing the entire package for completeness. This 15-day review is essential, and we recently announced that we had passed that step, so now the 510(k) is in the formal review. The agency typically comes back with detailed questions after doing the detailed review at 60 days post-filing date. When we received confirmation of our filing, we were informed that our official date is essentially when they gave us the 15-day review. So, we expect some feedback in about 60 days. There will likely be back and forth with generated responses, and eventually, final labeling materials will be reviewed, assuming they will clear it. There are no guarantees that they will clear it, but we feel very good about our filings. Any subsequent filings will be easier due to the clarity we've achieved, and a significant portion of what we’ve already submitted would be identical.

Okay. And we've got one more from the webcast here. Michael, or gentlemen, I think this would best be answered by you. What were the results of your latest blood pressure study with your single-chip technology? And what are you doing to make further progress?

Certainly. The significant change in our last study involved the use of our single chip, which is much smaller, more efficient and self-contained. We're able to obtain much cleaner data from that platform. Since then, we've made a couple of enhancements on the antenna side and algorithmic standpoint, and we hope the next study to start in a couple of weeks will yield the data we need to fine-tune our technology. This also applies to glucose monitoring. We're currently focusing on optimizing our antennas, as they are quite complicated to perfect. We're making continued progress and finding more solutions as we go along.

Okay. Operator, I think that does it for the Q&A from the webcast and on the phone lines as well. I'll turn it back to you.

Thank you. We do have one question on the phone line from the line of Marie Thibault with B. Riley. Please proceed with your question.

Can you hear me?

Yes. We can.

I saw an ad for a watch that does glucose monitoring, that’s not invasive. Is that something that's FDA cleared, or is it still pending like the blood pressure monitoring?

I can't answer specifically, since I don't know about the one you're referencing. There was a recent mention of a device trying to make glucose measurements non-invasively. However, it hasn't gone through the rigorous FDA review process yet. Non-invasive glucose monitoring is challenging. We like our platform in development for that. We’ve seen some positive signals in our earlier studies, and enhancements are being made to get stronger signals. Michael, do you have anything to add?

The millimeter wave signal we’re using has high fidelity and is less sensitive to light movement than optical solutions. We're confident that our architecture will advance glucose and blood pressure measurements.

Have you looked at partnerships with insurance companies as well? Thank you.

Absolutely. In our beta evaluations, we've completed a partnership with an integrated healthcare network. We’re already working with another entity that's payer-like. Our product's medical device status facilitates partnerships and future reimbursement opportunities, especially for high-risk populations. We see significant potential in the healthcare space because we are pursuing FDA clearance strategically.

We feel we have numerous opportunities to create value and are looking forward to continuing that journey. Operator, I think that concludes the Q&A for us today. We'd like to thank everyone for your time. As a reminder, you can stay connected and up-to-date on Movano Health news and events by checking out our investor website.

Thank you. This concludes today's conference. You may now disconnect your lines at this time. Thank you for your participation.