# Corvex, Inc.: Form 10-Q for the period ended Sep 30, 2023

- Company: [Corvex, Inc.](/companies/move.md) (CIK 1734750)
- Form: 10-Q
- Filed: 2023-11-14
- Accepted by EDGAR: Nov 14, 2023, 21:01 ET
- Period: 2023-09-30
- Accession: 0001213900-23-086893
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1734750/000121390023086893/f10q0923_movanoinc.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1734750/000121390023086893/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Research and development | 3 months, 2023-07-01 to 2023-09-30 | $5.6m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2023-01-01 to 2023-09-30 | $13.7m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2023-07-01 to 2023-09-30 | −$9.1m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2023-01-01 to 2023-09-30 | −$23.7m | us-gaap:OperatingIncomeLoss |
| Net income | 3 months, 2023-07-01 to 2023-09-30 | −$9.0m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2023-01-01 to 2023-09-30 | −$23.3m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-07-01 to 2023-09-30 | −$0.18 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2023-01-01 to 2023-09-30 | −$0.53 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-07-01 to 2023-09-30 | −$0.18 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2023-01-01 to 2023-09-30 | −$0.53 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-07-01 to 2023-09-30 | 50,711,449 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2023-01-01 to 2023-09-30 | 43,818,011 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2023-01-01 to 2023-09-30 | −$20.9m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2023-01-01 to 2023-09-30 | $51.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2023-09-30 | $7.7m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-09-30 | $9.2m | us-gaap:AssetsCurrent |
| Total assets | at 2023-09-30 | $10.6m | us-gaap:Assets |
| Current liabilities | at 2023-09-30 | $5.5m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-09-30 | $5.6m | us-gaap:Liabilities |
| Shareholders' equity | at 2023-09-30 | $4.9m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 21,643 characters.

### Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are intended to be covered by the “safe harbor” created by those sections. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as “believe,” “expect,” “may,” “will,” “should,” “would,” “could,” “seek,” “intend,” “plan,” “goal,” “project,” “estimate,” “anticipate,” “strategy”, “future”, “likely” or other comparable terms and references to future periods. All statements other than statements of historical facts included in this Form 10-Q regarding our strategies, prospects, financial condition, operations, costs, plans and objectives are forward-looking statements. Examples of forward-looking statements include, among others, statements we make regarding expectations for revenues, cash flows and financial performance, the anticipated results of our development efforts, product features and the timing for receipt of required regulatory approvals and product launches.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:

- our limited operating history and our ability to achieve profitability;
- our ability to continue as a going concern and our need for and ability to obtain additional capital in the future;
- our ability to demonstrate the feasibility of and develop products and their underlying technologies;
- the impact of competitive or alternative products, technologies and pricing;
- our ability to attract and retain highly qualified personnel;
- our dependence on consultants to assist in the development of our technologies;
- our ability to manage the growth of our Company and to realize the benefits from any acquisitions or strategic alliances we may enter in the future;
- the impact of macroeconomic and geopolitical conditions, including increases in prices caused by rising inflation;
- our dependence on the successful commercialization of the Evie Ring;
- our dependence on third parties to design, manufacture, market and distribute our proposed products;
- the adequacy of protections afforded to us by the patents that we own and the success we may have in, and the cost to us of, maintaining, enforcing and defending those patents;
- our ability to obtain, expand and maintain patent protection in the future, and to protect our non-patented intellectual property;
- the impact of any claims of intellectual property infringement, trade secret misappropriation, product liability, product recalls or other claims;
- our need to secure required FCC, FDA and other regulatory approvals from governmental authorities in United States;
- the impact of healthcare regulations and reform measures;
- the accuracy of our estimates of market size for our products;
- our ability to implement and maintain effective control over financial reporting and disclosure controls and procedures;
- our success at managing the risks involved in the foregoing items.

The risks included above are not exhaustive. Other important risks and uncertainties are described in the Risk Factors and in Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”) and subsequently filed Quarterly Reports on Form 10-Q. Except as otherwise required by the federal securities laws, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

### Overview

Movano is developing a platform to deliver purpose-driven healthcare solutions to bring medical-grade, high-quality data to the forefront of consumer health devices.

Our initial commercial product in development is the Evie Ring, which is a wearable designed specifically for women. The Evie Ring combines health and wellness metrics to give a full picture of one’s health, which we expect to include resting heart rate, heart rate variability (“HRV”), blood oxygen saturation (“SpO2”), respiration rate, skin temperature variability, period and ovulation tracking, menstrual symptom tracking, activity profile, including steps, active minutes and calories burned, sleep stages and duration, and mood tracking. The device will provide women and their network of caregivers with continuous health data distilled down to simple, yet meaningful, insights to help them make manageable lifestyle changes and take a more proactive approach that could mitigate the risks of chronic disease.

We expect to initially launch the Evie Ring as a general wellness device without any FDA premarket clearances, but plan to seek FDA clearances on its vital signs monitoring capabilities which would make it one of the first consumer wearables that offers an FDA cleared device and not only software for medical use. In July of 2023, we filed our first 510(k) submission to the FDA for the Evie Ring’s pulse oximeter to monitor heart and SpO2 data, following a successful pivotal hypoxia trial during the fourth quarter of 2022. The submission has been reviewed with the FDA, and we are corresponding with the FDA to address the review commentary. The FDA clearance of these metrics would ensure confidence of the Evie Ring’s vital signs monitoring capabilities and could make the device attractive for doctors and in clinical trials for patient monitoring.

In addition to the Evie Ring, we are developing the smallest ever patented and proprietary System-on-a-Chip (“SoC”) designed specifically for blood pressure or continuous glucose monitoring (“CGM”) systems. We built the integrated sensor from the ground up with multiple antennas and a variety of frequencies to achieve an unprecedented level of precision in health monitoring. We are currently conducting clinical trials with the SoC and developing algorithms that, if successful, will enable us to develop wearables that can monitor glucose non-invasively and blood pressure without a cuff. Our end goal is to bring a Class II FDA-cleared device to the market that includes CGM and cuffless blood pressure monitoring capabilities. Over time, our technology could also enable the measurement and continuous monitoring of other health data.

### Financial Operations Overview

We are a development stage company with a limited operating history. To date, we have invested substantially all of our efforts and financial resources into (i) the research and development of the products we are developing, including conducting clinical studies and related sales, general and administrative costs, and (ii) the commercialization of our first proposed commercial product, the Evie Ring. To date, we have funded our operations primarily from the sale of our equity securities.

### Critical Accounting Policies and Estimates

Management’s discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material. There have been no material changes in our critical accounting policies and estimates during the three and nine months ended September 30, 2023, as compared to those disclosed in the 2022 Form 10-K.

### Results of Operations

#### Three and nine months ended September 30, 2023 and 2022

Our condensed consolidated statements of operations for the three and nine months ended September 30, 2023 and 2022 as discussed herein are presented below.

*(in thousands, except share and per share data)*

*(in thousands, except share and per share data)*

| OPERATING EXPENSES: | Three Months Ended September 30, 2023 | 2022 | Change $% |  | Nine Months Ended September 30, 2023 | 2022 | Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Research and development | $5,636 | $5,146 | $490 | 10% | $13,701 | $13,849 | $(148) | -1% |
| Sales, general and administrative | 3,443 | 3,511 | (68) | -2% | 9,965 | 8,592 | 1,373 | 16% |
| Total operating expenses | 9,079 | 8,657 | 422 | 5% | 23,666 | 22,441 | 1,225 | 5% |
| Loss from operations | (9,079) | (8,657) | (422) | -5% | (23,666) | (22,441) | (1,225) | -5% |
| Other income (expense), net: |  |  |  |  |  |  |  |  |
| Interest and other income, net | 117 | 55 | 62 | 113% | 341 | 39 | 302 | 774% |
| Other income (expense), net | 117 | 55 | 62 | 113% | 341 | 39 | 302 | 774% |
| Net loss | $(8,962) | $(8,602) | $(360) | 4% | $(23,325) | $(22,402) | $(923) | -4% |

#### Research and Development

Research and development expenses totaled $5.6 million and $5.1 million for the three months ended September 30, 2023 and 2022, respectively. This increase of $0.5 million was due primarily to an increase in research and laboratory expenses, which was partially offset by lower Company headcount with respect to research and development employees, and lower other professional fees. Research and development expenses for the three months ended September 30, 2023 included expenses related to employee compensation of $1.6 million, other professional fees of $1.6 million, research and laboratory expenses of $2.1 million, and other expenses of $0.3 million. Research and development expenses for the three months ended September 30, 2022 included expenses related to employee compensation of $2.5 million, other professional fees of $1.9 million, research and laboratory expenses of $0.5 million, and other expenses of $0.2 million.

Research and development expenses totaled $13.7 million and $13.8 million for the nine months ended September 30, 2023 and 2022, respectively. This decrease of $0.1 million was due primarily to lower Company headcount with respect to research and development employees and lower other professional fees, which was partially offset by an increase in research and laboratory expenses. Research and development expenses for the nine months ended September 30, 2023 included expenses related to employee compensation of $5.0 million, other professional fees of $4.1 million, research and laboratory expenses of $3.8 million, and other expenses of $0.8 million. Research and development expenses for the nine months ended September 30, 2022 included expenses related to employee compensation of $7.2 million, other professional fees of $5.0 million, research and laboratory expenses of $1.0 million, and other expenses of $0.6 million.

#### Sales, General and Administrative

Sales, general and administrative expenses totaled $3.4 million and $3.5 million for the three months ended September 30, 2023 and 2022, respectively. This decrease of $0.1 million was due primarily to the lower Company headcount and administrative activities. Sales, general and administrative expenses for the three months ended September 30, 2023 included expenses related to employee and board of director compensation of $1.7 million, professional and consulting fees of $0.6 million, and other expenses of $1.1 million. Sales, general and administrative expenses for the three months ended September 30, 2022 included expenses related to employee and board of director compensation of $1.6 million, professional and consulting fees of $0.8 million, and other expenses of $1.1 million.

Sales, general and administrative expenses totaled $10.0 million and $8.6 million for the nine months ended September 30, 2023 and 2022, respectively. This increase of $1.4 million was due primarily to the growth of the Company and its activities. Sales, general and administrative expenses for the nine months ended September 30, 2023 included expenses related to employee and board of director compensation of $5.1 million, professional and consulting fees of $1.8 million, and other expenses of $3.1 million. Sales, general and administrative expenses for the nine months ended September 30, 2022 included expenses related to employee and board of director compensation of $4.3 million, professional and consulting fees of $2.2 million, and other expenses of $2.1 million.

#### Loss from Operations

Loss from operations was $9.1 million for the three months ended September 30, 2023, as compared to $8.7 million for the three months ended September 30, 2022.

Loss from operations was $23.7 million for the nine months ended September 30, 2023, as compared to $22.4 million for the nine months ended September 30, 2022.

#### Other Income (Expense), Net

Other income (expense), net for the three months ended September 30, 2023 was a net other income of $117,000 as compared to a net other income of $55,000 for the three months ended September 30, 2022.

Other income (expense), net for the nine months ended September 30, 2023 was a net other income of $341,000 as compared to a net other income of $39,000 for the nine months ended September 30, 2022.

#### Net Loss

As a result of the foregoing, net loss was $9.0 million for the three months ended September 30, 2023, as compared to $8.6 million for the three months ended September 30, 2022.

As a result of the foregoing, net loss was $23.3 million for the nine months ended September 30, 2023, as compared to $22.4 million for the nine months ended September 30, 2022.

### Liquidity and Capital Resources

At September 30, 2023, we had cash and cash equivalents totaling $7.7 million. During the nine months ended September 30, 2023, we used $20.9 million of cash in our operating activities. Our cash and cash equivalents are expected to be sufficient to enable us to complete the development and initial commercial launch of our first proposed commercial product, the Evie Ring. However, our cash and cash equivalents are not expected to be sufficient to fund our operations for the next twelve months after the date these condensed consolidated financial statements are issued.

In August 2022, we entered into an at-the-market issuance (“ATM”) agreement with B. Riley Securities Inc., or B. Riley, to sell shares of our common stock for aggregate gross proceeds of up to $50.0 million, from time to time, through an ATM equity offering program under which B. Riley acts as sales agent. During the nine months ended September 30, 2023, the Company sold an aggregate of 2,360,036 shares of common stock through the ATM program for proceeds of approximately $3.1 million, net of commissions paid. Approximately $44.5 million remains available on the ATM equity offering program at September 30, 2023.

We expect to continue to incur significant expenses and increasing operating losses for at least the next several years. We anticipate that our expenses will increase substantially as we:

- advance the engineering design and development of the Evie Ring and other potential products;
- prepare applications required for marketing approval of the Evie Ring in the United States;
- develop our plans for manufacturing, distributing and marketing the Evie Ring and other potential products; and
- add operational, financial and management information systems and personnel, including personnel to support our product development, planned commercialization efforts and our operation as a public company.

Until we can generate a sufficient amount of revenue from our planned products, if ever, we expect to finance future cash needs through public or private equity offerings, debt financings or corporate collaborations and licensing arrangements. Additional funds may not be available when we need them on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of our research or development programs or our commercialization efforts or it may become impossible for us to remain in operation. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience additional dilution, and debt financing, if available, may involve restrictive covenants. To the extent that we raise additional funds through collaborations and licensing arrangements, it may be necessary to relinquish some rights to our technologies or applications or grant licenses on terms that may not be favorable to us. We may seek to access the public or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.

These circumstances raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. Our condensed consolidated financial statements do not include adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern. Our ability to continue as a going concern depends on our ability to raise additional capital as described above to support our future operations.

The following table summarizes our cash flows for the periods indicated (in thousands):

|  | Nine Months Ended September 30, 2023 | 2022 |
| --- | ---: | ---: |
| Net cash used in operating activities | $(20,928) | $(18,590) |
| Net cash provided by / (used in) investing activities | (51) | 14,920 |
| Net cash provided by financing activities | 17,889 | 1,940 |
| Net decrease in cash and cash equivalents | $(3,090) | $(1,730) |

### Operating Activities

During the nine months ended September 30, 2023, the Company used cash of $20.9 million in operating activities, as compared to $18.6 million used in operating activities during the nine months ended September 30, 2022.

The $20.9 million used in operating activities during the nine months ended September 30, 2023 was primarily attributable to our net loss of $23.3 million during the period. The net loss was offset by non-cash items, including stock-based compensation of $2.3 million and depreciation of $0.1 million.

The $18.6 million used in operating activities during the nine months ended September 30, 2022 was primarily attributable to our net loss of $22.4 million during the period and changes in our operating assets and liabilities totaling $1.3 million. These items were offset by non-cash items, including stock-based compensation of $2.3 million, depreciation of $0.1 million, and accretion of discount on short-term investments of $0.1 million.

### Investing Activities

During the nine months ended September 30, 2023 the Company used cash of $51,000 in investing activities, consisting of purchases of property and equipment.

During the nine months ended September 30, 2022 the Company was provided cash of $14.9 million in investing activities, consisting primarily of $15.0 million from maturities of short-term investments and offset by purchases of property and equipment of $0.1 million.

### Financing Activities

During the nine months ended September 30, 2023, the Company was provided cash of $17.9 million which included net proceeds of $6.7 million and $8.1 million from the issuance of common stock in public offerings in February 2023 and June 2023, respectively, net proceeds of $3.1 million from the issuance of common stock through the ATM equity offering program and $0.1 million from the issuance of common stock upon the exercise of common stock options.

During the nine months ended September 30, 2022, the Company was provided cash of $1.9 million from the issuance of common stock, after issuance costs of $0.1 million.

### Off-Balance Sheet Transactions

At September 30, 2023, the Company did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.

### Non-cancelable Obligations

The Company also had approximately $10,000 of non-cancelable contractual commitments as of September 30, 2023, primarily related to its vendor arrangements. These commitments are generally due within one to three months.

## Controls and procedures

As filed, 4,324 characters.

### Evaluation of Disclosure Controls and Procedures

We are responsible for maintaining disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Disclosure controls and procedures are controls and other procedures designed to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Based on our management’s evaluation (with the participation of our principal executive officer and our principal financial officer) of our disclosure controls and procedures as required by Rule 13a-15 under the Exchange Act, our principal executive officer and our principal financial officer have concluded that, due to the previously identified material weakness in our internal controls over financial reporting that is described below, our disclosure controls and procedures were not effective as of September 30, 2023, the end of the period covered by this report.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. As previously disclosed in our 2022 Form 10-K, we identified one material weakness in our internal control over financial reporting at December 31, 2022 related to ineffective design and operation of our financial close and reporting controls. Specifically, we did not design and maintain effective controls over certain account reviews and analyses and certain information technology general controls. Although we are making efforts to remediate these issues, these efforts may not be sufficient to avoid similar material weaknesses in the future.

### Inherent Limitations on Effectiveness of Controls

Our management, including our principal executive officer and our principal financial officer, do not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of control effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the nine months ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 468 characters.

We operate in a rapidly changing environment that involves a number of risks that could materially affect our business, financial condition or future results, some of which are beyond our control. In addition to the other information set forth in this report, the risks and uncertainties that we believe are most important for you to consider are discussed in Part I, “Item 1A. Risk Factors” in the 2022 Form 10-K and subsequently filed Quarterly Reports on Form 10-Q.

Filed Nov 14, 2023.
Source: SEC EDGAR, the filing index for accession 0001213900-23-086893. Last ingested by Listed: Oct 24, 2026, 15:07 ET. No prices; not investment advice.