Movano, Inc. (doing business as Movano Health) — FY2022 Form 10-K
Entity note: The filing identifies the registrant as Movano, Inc., not Corvex, Inc. It covers the fiscal year ended December 31, 2022; the financial comparisons are with FY2021. The 10-K was filed March 30, 2023.
Business context and reporting period
Movano is a development-stage health technology company with no commercial products or revenue to date. It is developing the Evie Ring, a women-focused wearable, and a proprietary system-on-a-chip intended to support non-invasive glucose monitoring and cuffless blood pressure measurement.
The company reported positive results from 2022 Evie Ring heart-rate and oxygen-saturation hypoxia studies and planned to submit for FDA clearance of those metrics in 2023. It also expected a direct-to-consumer Evie Ring launch in summer 2023, before any FDA decision. These were plans, not completed milestones as of the report.
Financial performance and liquidity
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $19.0 million | $13.4 million |
| Sales, general and administrative expense | $11.5 million | $6.4 million |
| Total operating expenses / operating loss | $30.5 million | $19.8 million |
| Net loss | $30.3 million | $21.8 million |
| Net loss per share, basic and diluted | $0.92 | $0.92 |
| Cash used in operating activities | $24.9 million | $16.2 million |
| Cash and cash equivalents at year-end | $10.8 million | $17.7 million |
Operating expenses rose 54% year over year; R&D increased 41% and SG&A increased 80%, primarily reflecting company growth and activity. Net loss increased by $8.6 million. Revenue-based margins are not meaningful because the company had no revenue.
Total assets were $13.2 million and total liabilities were $5.3 million at December 31, 2022. The company reported $7.9 million of stockholders’ equity and a $95.1 million accumulated deficit. Year-end short-term investments were zero, versus $15.9 million in 2021. The balance sheet lists no outstanding convertible notes or warrant liabilities at year-end; lease liabilities totaled approximately $0.4 million, and the company disclosed $0.4 million of non-cancelable vendor commitments.
FY2022 financing activities provided $2.3 million, mainly from ATM share sales. Approximately $47.7 million remained available under the $50 million ATM program at year-end. The company used $15.7 million of cash from investing activities, primarily from maturities of short-term investments.
Material changes versus FY2021
- Operating expenses increased $10.7 million, and operating loss widened from $19.8 million to $30.5 million.
- Net loss increased from $21.8 million to $30.3 million. FY2021 included interest expense and warrant-liability remeasurement, partly offset by PPP loan forgiveness; those items were absent in FY2022.
- Operating cash use increased by $8.7 million. Cash and cash equivalents declined by $6.9 million during FY2022.
- The company adopted lease accounting guidance in 2022, recognizing operating lease right-of-use assets and liabilities.
Outlook, risks, contingencies, and unusual items
- Going concern: Management and the auditor reported substantial doubt about the company’s ability to continue as a going concern within one year after issuance of the financial statements. The company stated that year-end cash, together with the February 2023 offering proceeds, would not fund projected operating requirements for at least the next 12 months from the filing date, nor complete development and commercialization. Additional financing is required; availability and terms are uncertain.
- Subsequent financing and dilution: On February 6, 2023, Movano completed a public offering with approximately $6.85 million in net proceeds, issuing 5.34 million shares and warrants for up to 2.67 million additional shares. In March 2023, it also sold approximately $2.8 million of shares through its ATM program. These financings provide cash but dilute existing holders and do not remove the disclosed funding risk.
- Development and regulatory risk: FDA clearance, product performance, manufacturing readiness, commercialization, and market acceptance remain uncertain. The filing states that glucose and blood-pressure accuracy had not yet been demonstrated at a level sufficient for a commercial product. RF-based products may also require FCC authorization.
- Execution and competition: Movano depends on third parties for manufacturing and may rely on partners for sales and distribution. It faces established wearable, glucose-monitoring, and blood-pressure competitors with greater resources.
- Internal controls: Management concluded disclosure controls were ineffective at December 31, 2022 and identified a material weakness in the design and operation of financial close and reporting controls, including account reviews and certain IT general controls. No financial-statement misstatement was identified. The auditor did not attest to internal control effectiveness.
- Legal and other items: The company reported no pending legal proceedings believed to have a material adverse effect. It disclosed standard indemnification arrangements and no material environmental expenditures. No formal financial guidance was provided.
Important facts for investors to verify
- Whether subsequent financing, ATM sales, and cash use have provided adequate runway, and whether further equity or debt issuance is likely.
- Actual progress and results for the Evie Ring launch, beta programs, manufacturing, and the planned FDA submission and clearance.
- Clinical evidence for the SoC’s glucose and blood-pressure accuracy, and the timing and cost of further trials and regulatory work.
- Progress in remediating the material weakness and improving disclosure and financial-reporting controls.
- The dilution impact of outstanding warrants, options, and future financing; the filing reported 1.94 million warrants and 6.92 million outstanding options at year-end 2022.