Greeting and welcome to the Movano Second Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, J. Cogan, Movano's Chief Financial Officer. 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 2022 and in recent weeks. Afterward, I'll cover the highlights of our quarterly operating results and provide perspective on our financial position. Finally, Movano's Founder and Chief Technology Officer, Michael Leabman will join John and me for the Q&A. Before we begin, I'd like to remind everyone that we will make forward-looking statements during today's call. Whether in prepared remarks or during the Q&A session, these forward-looking statements are subject to inherent risks and uncertainties. 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 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. Now I'd like to turn the call over to our CEO, John Mastrototaro.

Welcome everyone. Thank you for joining us for Movano's second quarter 2022 earnings call. This year, we have our site set on one primary goal; preparing for commercialization of our first product, the Movano Ring, a sophisticated smart ring designed for women that blends the best features of medical and wellness devices to help them better understand the correlation between how they feel and various aspects of their health. To ensure readiness for our future launch, we are focusing on a few key areas. First and foremost, we're gearing up for a beta test program in the second half of this year, which will help us optimize our product and prepare for a broad direct-to-consumer commercial launch. Second, we're making great progress in developing relationships and creating partnerships across the broader healthcare landscape that are critical to building the foundation for an enterprise solution. Finally, we're continuing to put our technology through clinical testing to gather more data, advance our algorithms and work toward a suite of FDA clearances. We've made significant progress in each of these areas over the course of the last quarter and in recent weeks, and would like to update you on where we stand in today's call. We've previously announced that we're planning for a limited beta release within the second half of 2022 and we're still on track to meet that milestone. To prepare for the Beta, we are spending a significant amount of time, alpha testing our device internally; to test the hardware, software, firmware, wearability and battery life of our device, many of our employees have been wearing our Ring prototypes as they go about their daily routines at home, at work, at the gym and beyond. We're running the ring through a series of different activities and scenarios, and then evaluating…

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 reported an operating loss of $6.8 million in the second quarter of 2022, compared to an operating loss of $5 million in the year ago period. The increase was primarily related to the expansion of our team and accelerated R&D and commercialization initiatives. At the end of the second quarter of 2022, we had $21.3 million of cash and cash equivalence and total assets of $24.4 million. We will not be providing specific financial guidance, but as you've heard in today's quarterly report, as well as through our commentary on previous quarterly calls, we're making great progress and doing so on a capital efficient basis. As evidence by today's news regarding our upcoming beta evaluations with multiple strategic partners, encouraging clinical studies results and plans for a direct to consumer launch of the Movano ring in the first half of 2023. As that concludes our formal remarks, we'd be glad to take your questions. Operator, we're ready to begin the Q&A section of the call. Thanks.

Thank you. We will now be conducting a question-and-answer session. [Operator instructions] And operator, while we're waiting for the queue on the phone call side, why don't we go ahead and take some of the questions from the webcast. I can see there's a few in queue already. So I'll go ahead and get started with those.

First question John, I can take has to do with the balance sheet and cash. Do you have enough cash to launch direct-to-consumer without raising capital? And when do you need to raise more capital?

Our cash burn was just over $6 million in the second quarter of 2022, a little higher than the past couple quarters and we had $21.3 million in cash and equivalents at the end of the period. As we've talked about in the past, capital deployment and efficiency are important strategic objectives for the company. We've been making very targeted investments over the past four years, that includes team building, clinical studies, tech development, and that's all served us very well. And we expect to continue to be very efficient as we go both on an absolute basis, as well as relative to our peer set. We don't provide financial guidance and we can't com comment on the potential timing of a capital raise as you're well aware. But as we've noted in our financial filings, we do expect to raise more capital over time and we plan to continue to make good progress between now and whenever that might be.

For the second question, John I think you can take this one; has to do with the planned beta programs. The question is today's news with several strategic partners sounds like a meaningful catalyst for the company. Can you tell us a little more about the partners, the specifics of the beta programs and the potential for an enterprise solution?

Yeah, sure. That's great. Well, first off, I'd want to say that we're incredibly excited about the opportunity to partner with several leaders in healthcare as we test our initial Movano Ring. As we said in the prepared remarks and also announced earlier today, Stanford University through their applied sports science department is looking to test wearable technology like our ring to help drive innovation and the ethical of athletic performance and improve the quality of life of Stanford athletes. So we're excited to partner with them to evaluate our ring for those folks who are really the most elite of athletes quite frankly in the world, many of whom are Olympic athletes. And then while we can't name the other beta program partners at this time, as we did mention, we're partnering with a major global pharmaceutical company, a leading global medical device company, as well as integrated health network or organization. And I would like to say that the level of interest certainly suggests that there's potential for a significant enterprise opportunity for the company in the future. We had unveiled the Movano ring at the CES less than eight months ago. And as we've noted on prior calls, several elements of the ring and our mission have resonated broadly in our conversations with potential strategic partners. Our focus on women, the medical grade data and the pursuit of FDA clearances, providing intelligent insights that connect cause and effect and offering a solution that's affordable enough that it can be employed by a mass audience. So based upon that, we feel like we're in a really good position as it relates to strategic partnerships and the beta programs, which are scheduled to kick off in the fourth quarter are subtly different for each beta partner based upon their particular goals and the folks that they'll be using the ring with. But each of those programs is going to offer a valuable opportunity for us to collect feedback on our platform outside of the lab and get it more out into the real world. So we're very excited about where we stand today with that.

Okay, great. Thanks, John. I'm going to combine two questions into one here. They both have to do with the direct-to-consumer launch. One is just asking, can we be a little bit more specific about the plans for the DTC launch for the Ring? And then there's another question where they note that the single chip or the system on a chip is not going to be part of that first consumer ring. And can we expand on what technology is currently planned to be in the Movano Ring, the first product that we're launching?

Well, let me handle the second part first. With regard to the system on a chip, not in the first ring, because we have the chip back and we're current -- and we tested it, it's functional, but we need to put it into a prototype system to evaluate. We've decided to do that separately at this juncture. The chip is small enough that it can fit into a ring form factor, which is great. And that's really a feed of our engineering team to work with our foundry to make that happen, but we do want to evaluate it further and we want to use it in our prototype testing. So at this point within the ring, we have sensors that allow us to measure heart rate, heart rate variability, SPO2, respiration rate temperature, sleep and sleep stages, activity levels, and calories burned as well as cycle tracking for women, menstrual cycle tracking. So that's where we are today and then over time, we plan to add additional functionality into the product in future generations. With regard to the direct-to-consumer launch, I first want to reiterate that we have a phenomenal go-to-market team, spearheading the launch of our first product. Under their leadership, we've partnered with several world-class firms in the area of consumer research, app development, branding, website development and more. We're also making great progress in not only each of these areas, but notably in the research aspect where it's proving out time and again, that we're developing the right product for the right market at the right time. Obviously there's still a lot of work for us to do, but we're bringing on additional team members as we need them. And as we highlighted in the call. We've brought in an exceptionally talented UX-UI designer and a new brand executive into the organization. And we're just very excited about the opportunity in front of us and we'll certainly keep you posted as we move forward, but as we said on the call, our plan is to commercialize the product in the first half of 2023.

Okay. The next question from the webcast has to do with clinical studies. Please elaborate on the importance of the recent hypoxia study, as well as the status of your clinical work on blood pressure and glucose.

Well, as you know medical grade data is a top priority for the company. We've constructed the organization as a medical device company from the outset. And so we're really pleased with the results of our pilot hypoxia study, which is a major step forward for us and based upon the positive results we're planning to conduct the larger pivotal study for the FDA submission later this year. Based upon the data that we saw from the first study, heart rate and SPO2 would likely be the two parameters that we filed with the FDA when that first submission goes to the agency later in the year. We're also looking forward to the next round of the blood pressure and glucose studies that we plan to conduct this fall with the new single chip in the new prototype form factors and we are expecting to get a higher level of data accuracy because of the fact that we scale down the size of the technology into the single chip. We have more intimate contact between the antennas of the chip and the body which will allow us to get more robust, cleaner signals that will hopefully help us in what we're doing for the blood pressure and glucose estimates that we're making with a product. We've recognized in the prior studies, that every time we scale down the size of the technology, we get better data and so this is the kind of the ultimate step in scale down, and we're really excited to see where these studies go. Naturally, these are really hard problems to solve. It takes a lot of investment and a very highly talented team but we've intentionally structured the organization to be able to address these technical challenges and we think it was the right strategic decision to make, and it's encouraging to see the progress that we've made and again, we're looking forward to the studies in the latter half of this year.

Okay. Thanks, John. Looks like we have one more question in the webcast and operator; I'm not sure if there's any on the phone lines, but we can address that after this last question from the webcast. Can you provide just a few more details on the Ring in regards to the pricing or subscription model or anything else about the direct-to-consumer launch?

Jay, I'll let you go ahead and respond to that one since you're closer to it.

Okay, great. Yeah, so we've talked about making our solution attractive and accessible to a wide audience and remain committed to that. We believe good health is a fundamental, right and we're continuing to develop the marketing strategy for the Ring. We're not in a position to be more specific on pricing or other features of the model at this time. But as we've stated in the past, we're looking to an economic model that we think will work both for our customers as well as shareholders.

Okay. Operator, are there any questions on the phone lines

There aren't any.

Okay, great. I think we can wrap up for today. Thank you everybody for your time today. As a reminder, you can stay connected and up to date on Movano news and events by checking out our investor website@irdotmoveo.com.

This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation and have a wonderful evening.