# Corvex, Inc.: Form 10-Q for the period ended Mar 31, 2024

- Company: [Corvex, Inc.](/companies/move.md) (CIK 1734750)
- Form: 10-Q
- Filed: 2024-05-17
- Accepted by EDGAR: May 17, 2024, 20:27 ET
- Period: 2024-03-31
- Accession: 0001213900-24-044765
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1734750/000121390024044765/ea0204497-10q_movano.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1734750/000121390024044765/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-01-01 to 2024-03-31 | $852.0k | us-gaap:Revenues |
| Research and development | 3 months, 2024-01-01 to 2024-03-31 | $2.9m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2024-01-01 to 2024-03-31 | −$5.8m | us-gaap:OperatingIncomeLoss |
| Net income | 3 months, 2024-01-01 to 2024-03-31 | −$5.7m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-01-01 to 2024-03-31 | −$0.10 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-01-01 to 2024-03-31 | −$0.10 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-01-01 to 2024-03-31 | 56,023,273 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2024-01-01 to 2024-03-31 | −$4.1m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2024-01-01 to 2024-03-31 | $6.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2024-03-31 | $2.1m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-03-31 | $4.4m | us-gaap:AssetsCurrent |
| Total assets | at 2024-03-31 | $5.1m | us-gaap:Assets |
| Current liabilities | at 2024-03-31 | $6.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-03-31 | $6.6m | us-gaap:Liabilities |
| Shareholders' equity | at 2024-03-31 | −$1.5m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 22,119 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 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 need to secure required FCC, FDA and other regulatory approvals from governmental authorities in the 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; and
- 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, 2023 (the “2023 Form 10-K”). 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 Inc., dba Movano Health, a Delaware corporation, 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 is the Evie Ring, a wearable designed specifically for women that was launched in November 2023. The Evie Ring combines health and wellness metrics to give a full picture of one’s health, which 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 provides women 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 launched the Evie Ring as a general wellness device without any FDA premarket clearances. Separately, we are planning to seek FDA clearances on our medical device, which will be sold under the brand name Evie Med. We believe Evie Med will be one of the first patient wearables with FDA clearance on the entire system, both hardware and software, differing from our competition which sometimes gets FDA clearance on an individual algorithm under “Software as a Medical Device” guidance. In July 2023, we filed our first 510(k) submission to the FDA for the Evie Med Ring’s pulse oximeter to monitor pulse and SpO2 data, following a successful pivotal hypoxia trial during the fourth quarter of 2022. The submission was reviewed by the FDA, and the Company is working with the agency to address the review commentary. With progressive changes in the device and significant additional requirements from FDA since the initial submission, we opted to withdraw the 2023 510(k). Armed with FDA’s review of the initial 510(k) and excellent results from a second pivotal hypoxia trial using the production model ring completed in the first quarter of 2024, we re-submitted in April 2024 and expect a decision in July 2024. We believe that FDA clearance of these metrics, sold via prescription under the brand name Evie Med, would foster clinical-level confidence in Evie Med’s monitoring capabilities and could make the device attractive to clinicians and to facilities engaged in clinical trials for at-home and/or long-term patient monitoring.

In addition to the Evie Ring and Evie Med Ring, we are developing one of the smallest patented and proprietary System-on-a-Chip (“SoC”) designed specifically for blood pressure or continuous glucose monitoring systems (“GCM”). 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. To that end, we are currently conducting a longitudinal study (n=100) to program the effects of stress on blood pressure over time, with results pending. 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.

On April 28, 2021, the Company established Movano Ireland Limited, organized under the laws of Ireland, as a wholly owned subsidiary of the Company.

### Financial Operations Overview

We are an early-stage technology 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 commercial product, the Evie Ring. To date, we have funded our operations primarily from the sale of our equity securities.

We have incurred net losses in each year since inception. Our losses were $5.7 million and $7.1 million for the three months ended March 31, 2024 and 2023, respectively. Substantially all our net losses have resulted from costs incurred in connection with our research and development programs and from sales, general and administrative costs associated with our operations.

As of March 31, 2024, we had $2.1 million in available cash and cash equivalents.

### Critical Accounting Policies and Estimates

The discussion and analysis of our condensed consolidated financial condition and results of operations are based on our condensed consolidated financial statements, which we have prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements as well as the reported revenue and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and judgments. We base our estimates on 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.

There have been no material changes in our critical accounting policies and estimates during the three months ended March 31, 2024, as compared to those disclosed in the 2023 Form 10-K.

### Recently Issued and Adopted Accounting Pronouncements

A description of recently adopted and recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2, *Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements*, to our audited financial statements for the year ended December 31, 2023, and notes thereto, included in the Company’s Annual Report on Form 10-K.

See Note 2 to our condensed consolidated financial statements included in Part I, Item 1, “Notes to Condensed Consolidated Financial Statements,” of this Quarterly Report on Form 10-Q for a description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations.

### Results of Operations

#### Three months ended March 31, 2024 and 2023

Our condensed consolidated statements of operations for the three months ended March 31, 2024 and 2023 as discussed herein are presented below.

*(in thousands)*

|  | Three Months Ended March 31, 2024 | 2023 | Change $% |  |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $852 | $— | $852 | n/a |
| COSTS AND EXPENSES: |  |  |  |  |
| Cost of revenue | 1,215 | — | 1,215 | n/a |
| Research and development | 2,887 | 3,894 | (1,007) | -26% |
| Sales, general and administrative | 2,504 | 3,309 | (805) | -24% |
| Total costs and expenses | 6,606 | 7,203 | (597) | -8% |
| Loss from operations | (5,754) | (7,203) | 1,449 | 20% |
| Other income (expense), net: |  |  |  |  |
| Interest and other income, net | 34 | 107 | (73) | -68% |
| Other income (expense), net | 34 | 107 | (73) | -68% |
| Net loss | $(5,720) | $(7,096) | $1,376 | 19% |

#### Revenue

Revenue totaled $0.9 million and $0 for the three months ended March 31, 2024 and 2023, respectively. This increase of $0.9 million was due to recognition of revenue upon the transfer of control of the various Evie Ring Elements, which began in this quarter.

#### Cost of revenue

Cost of revenue totaled $1.2 million and $0 for the three months ended March 31, 2024 and 2023, respectively. This increase of $1.2 million was due to the direct costs of $1.0 million related to the transfer of control of the various Evie Ring elements, shipping and fulfillment costs of $0.1 million and inventory that was designated as scrap materials of $0.1 million.

#### Research and Development

Research and development expenses totaled $2.9 million and $3.9 million for the three months ended March 31, 2024 and 2023, respectively. This decrease of $1.0 million was due primarily to lower research and laboratory expenses and other professional fees. Research and development expenses for the three months ended March 31, 2024 included expenses related to employee compensation of $1.4 million, other professional fees of $0.7 million, research and laboratory expenses of $0.5 million, and other expenses of $0.3 million. Research and development expenses for the three months ended March 31, 2023 included expenses related to employee compensation of $1.6 million, other professional fees of $1.1 million, research and laboratory expenses of $1.0 million, and other expenses of $0.2 million.

#### Sales, General and Administrative

Sales, general and administrative expenses totaled $2.5 million and $3.3 million for the three months ended March 31, 2024 and 2023, respectively. This decrease of $0.8 million was due primarily to lower Company headcount with respect to sales, general and administrative employees and related costs. Sales, general and administrative expenses for the three months ended March 31, 2024 included expenses related to employee and board of director compensation of $1.2 million, professional and consulting fees of $0.7 million, and other expenses of $0.6 million. Sales, general and administrative expenses for the three months ended March 31, 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 $1.0 million.

#### Loss from Operations

Loss from operations was $5.8 million for the three months ended March 31, 2024, as compared to $7.2 million for the three months ended March 31, 2023.

#### Other Income (Expense), Net

Other income (expense), net for the three months ended March 31, 2024 was a net other income of $34,000 as compared to a net other income of $107,000 for the three months ended March 31, 2023.

#### Net Loss

As a result of the foregoing, net loss was $5.7 million for the three months ended March 31, 2024, as compared to $7.1 million for the three months ended March 31, 2023.

### Liquidity and Capital Resources

At March 31, 2024, we had cash and cash equivalents totaling $2.1 million. During the three months ended March 31, 2024, we used $4.1 million of cash in our operating activities. 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 three months ended March 31, 2024, we sold an aggregate of 273,307 shares of common stock through the ATM program for proceeds of approximately $0.2 million, net of commissions paid. Approximately $44.2 million remained available on the ATM equity offering program at March 31, 2024.

On April 2, 2024, the Company entered into a securities purchase agreement for the private placement of an aggregate of 45,252,517 units with each unit consisting of (1) one share of the Company’s common stock or at the election of the purchaser a pre-funded warrant, and (2) one warrant to purchase one share of common stock. The purchase price paid for each unit was $0.533. Certain directors and officers participated and purchased 287,500 units at an offering price of $0.565 per share.

Each pre-funded warrant has an exercise price of $0.001 per share, was immediately exercisable on the date of issuance and does not expire. Each warrant has an exercise price equal to $0.4071 per share, was exercisable immediately and expires on the fifth anniversary of the initial exercise date of the warrant. The warrants issued to the Company’s officers and directors have an exercise price equal to $0.44.

The private placement transaction closed on April 5, 2024, resulting in gross proceeds to the Company of approximately $24.1 million, before deducting offering fees and expenses of approximately $1.4 million.

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)*

|  | Three Months Ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| Net cash used in operating activities | $(4,131) | $(6,080) |
| Net cash used in investing activities | (6) | (13) |
| Net cash provided by financing activities | 164 | 9,603 |
| Net increase/(decrease) in cash and cash equivalents | $(3,973) | $3,510 |

### Operating Activities

During the three months ended March 31, 2024, the Company used cash of $4.1 million in operating activities, as compared to $6.1 million used in operating activities during the three months ended March 31, 2023.

The $4.1 million used in operating activities during the three months ended March 31, 2024 was primarily attributable to our net loss of $5.7 million during the period. The net loss was offset by changes in our operating assets and liabilities totaling $0.9 million and by non-cash items, including stock-based compensation, totaling $0.7 million.

The $6.1 million used in operating activities during the three months ended March 31, 2023 was primarily attributable to our net loss of $7.1 million during the period and changes in our operating assets and liabilities totaling $0.3 million. These items were offset by non-cash items, including stock-based compensation, totaling $0.7 million.

### Investing Activities

During the three months ended March 31, 2024 the Company used cash of $6,000 in investing activities, consisting of purchases of property and equipment.

During the three months ended March 31, 2023 the Company used cash of $13,000 in investing activities, consisting of purchases of property and equipment.

### Financing Activities

During the three months ended March 31, 2024, the Company was provided cash of $0.2 million which included net proceeds of $0.2 million for the issuance of common stock through the ATM activity.

During the three months ended March 31, 2023, the Company was provided cash of $9.6 million which included net proceeds of $6.7 million from the issuance of common stock, net proceeds of $2.8 million for the issuance of common stock through the ATM activity and $0.1 million from the issuance of common stock upon the exercise of common stock options.

### Off-Balance Sheet Transactions

At March 31, 2024, the Company did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.

### Non-cancelable Obligations

The Company did not have any non-cancelable obligations at March 31, 2024.

## Controls and procedures

As filed, 4,317 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 March 31, 2024, 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 2023 Form 10-K, we identified one material weakness in our internal control over financial reporting at December 31, 2023 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 three months ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 519 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 2023 Form 10-K. We believe that there have been no material changes to the risk factors described in the 2023 Form 10-K.

Filed May 17, 2024.
Source: SEC EDGAR, the filing index for accession 0001213900-24-044765. Last ingested by Listed: Oct 24, 2026, 15:07 ET. No prices; not investment advice.