Filing summary
Entity note: The supplied filing is Movano Inc.’s Form 10-Q, not a filing for Corvex, Inc. It covers the unaudited quarter ended March 31, 2022; comparisons are with the quarter ended March 31, 2021 unless noted. Movano trades on Nasdaq under MOVE.
Business context and reporting period
Movano is a development-stage company developing healthcare technology and wearable products, including the Movano Ring, intended to combine health measurements with an app and personalized feedback. The company had not completed product development and had generated no revenue as of March 31, 2022. It expects to pursue strategic partnerships.
Financial results and liquidity
Amounts below are in millions of dollars, except per-share data and percentages. The filing reports no revenue, so revenue growth and margins are not applicable.
| Metric | Q1 2022 | Q1 2021 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $4.591 | $1.942 |
| General and administrative expense | $2.347 | $1.324 |
| Total operating expenses / operating loss | $6.938 | $3.266 |
| Net loss | $6.932 | $5.608 |
| Net loss attributable to common stockholders | $6.932 | $8.097 |
| Basic and diluted loss per share | $0.21 | $1.01 |
| Cash used in operating activities | $5.782 | $4.040 |
| Cash and cash equivalents at quarter-end | $18.442 | Not stated here |
At March 31, 2022, short-term investments were $9.247 million, bringing cash, cash equivalents and short-term investments to $27.689 million. Total assets were $29.637 million; total liabilities were $3.103 million; and stockholders’ equity was $26.534 million. Current assets of $28.245 million exceeded current liabilities of $2.631 million. The company reported no outstanding convertible notes or warrant liabilities; lease liabilities were $0.393 million in total.
Material changes versus the prior comparable period
- Operating expenses rose 112% to $6.938 million, including a 136% increase in R&D and a 77% increase in G&A, which management attributed primarily to company growth and increased activities.
- Operating loss widened from $3.266 million to $6.938 million. Net loss increased from $5.608 million to $6.932 million.
- Loss attributable to common stockholders and loss per share were lower than in Q1 2021, when results included $2.489 million of preferred-stock accretion and substantial interest and fair-value charges related to convertible notes and warrants. Those items did not recur in Q1 2022.
- Operating cash use increased by $1.742 million. Investing activities provided $6.549 million, mainly from maturities of short-term investments; there were no financing cash flows in Q1 2022. Cash and cash equivalents increased by $0.767 million during the quarter.
Outlook, risks and unusual items
- Management said quarter-end cash and short-term investments were expected to fund projected operating requirements for at least 12 months, but not to complete product development and commercialization. The company expects significant expenses and increasing operating losses for at least the next several years and anticipates needing additional financing.
- Additional capital may come from equity, debt, collaborations or licensing. Availability and acceptable terms are uncertain; equity financing could dilute shareholders, debt could impose restrictive covenants, and partnerships could require relinquishing rights.
- Key stated risks include product and technology development, commercialization, competition, regulatory approvals, dependence on third parties, intellectual property protection, financing needs, personnel, and possible COVID-19 impacts. Management said risk factors were not materially changed from the 2021 Form 10-K.
- Disclosure controls and procedures were concluded to be ineffective as of March 31, 2022. The company reported a material weakness involving the design and operation of financial close and reporting controls, including account reviews and analyses and certain IT general controls; remediation efforts were underway.
- The company adopted lease accounting standard ASC 842 on January 1, 2022, recognizing a $0.380 million right-of-use asset and $0.429 million lease liability. The adoption had no material impact on results or cash flows. After quarter-end, the company amended its office lease for additional space and approved, subject to shareholder approval, a proposed increase in shares reserved under its 2019 plan.
- Management reported no pending legal proceeding believed likely to have a material adverse effect and no material subsequent event requiring adjustment or disclosure.
Important facts for investors to verify
- Confirm the issuer identity: the source is Movano Inc., despite the request metadata naming Corvex, Inc.
- Track product-development and regulatory milestones for the Movano Ring and any strategic partnerships; the filing provides no revenue or product-launch guidance.
- Assess cash burn and financing needs against management’s stated 12-month operating runway, noting that this runway does not cover full development and commercialization.
- Monitor remediation of the disclosed material weakness and whether controls are subsequently assessed as effective.
- Review potential dilution from outstanding options and warrants, as well as the proposed increase in the 2019 equity-plan share reserve.