10-Q: Movano Faces Going Concern Doubt Amid Merger, Nasdaq Challenges

Movano Inc. reported significant losses and negative equity for Q3 2025, raising substantial doubt about its ability to continue as a going concern, even as it pursues a merger with Corvex Inc. and secures new financing.

Summary

• Net loss for the three months ended September 30, 2025, was $4.0 million, an improvement from $7.2 million for the same period in 2024.
• Net loss for the nine months ended September 30, 2025, was $12.4 million, compared to $19.1 million for the same period in 2024.
• Revenue for Q3 2025 increased to $80,000 from $50,000 in Q3 2024.
• Revenue for the nine months ended September 30, 2025, decreased to $389,000 from $902,000 in the same period in 2024.
• Cash and cash equivalents stood at $2.0 million as of September 30, 2025.
• The company reported an accumulated deficit of $160.5 million and a negative stockholders' equity (deficit) of $(1.701) million as of September 30, 2025.
• A merger agreement with Corvex Inc. was entered into on November 6, 2025, with pre-Merger Movano stockholders expected to own approximately 3.8% of the combined company (pro forma, pre-financing adjustments).
• Secured $3.0 million in Series A equity financing and established a $1.0 billion committed equity facility (ChEF) with Chardan Capital Markets LLC in November 2025.
• The company faces substantial doubt about its ability to continue as a going concern beyond Q1 2026 without further capital or merger completion.
• FDA 510(k) clearance was received for the pulse oximetry feature in the EvieMED Ring in November 2024.
• A $1.5 million bridge loan from Evie Holdings, LLC was amended, extending its maturity to March 31, 2026, and includes a $3.0 million repayment premium.
• The company is not in compliance with Nasdaq Listing Rule 5550(b)(1) regarding the minimum $2.5 million stockholders' equity requirement.

Sentiment

Score: 2

Explanation: The company is in a precarious financial position with negative equity, critically low cash reserves, and a 'going concern' warning. While the proposed merger and new financing facilities offer a potential lifeline, they come with significant dilution for existing shareholders and high-cost debt. The operational improvements (reduced losses) are overshadowed by the severe liquidity and solvency issues, indicating a high level of financial risk.

Positives

• Net loss decreased to $4.0 million in Q3 2025 from $7.2 million in Q3 2024, and to $12.4 million for the nine months ended September 30, 2025, from $19.1 million in the prior year.
• Q3 2025 revenue increased to $80,000 from $50,000 in Q3 2024.
• Received FDA 510(k) clearance for the pulse oximetry feature in the EvieMED Ring in November 2024, positioning it as a medical device.
• Entered into a merger agreement with Corvex Inc., providing a potential strategic path forward for the company.
• Secured $3.0 million in Series A equity financing in November 2025, providing immediate capital.
• Established a $1.0 billion committed equity facility with Chardan Capital Markets LLC, offering a significant potential source of future capital.
• Successfully regained compliance with Nasdaq's Periodic Filing Rule and Minimum Bid Price Requirement.

Negatives

• Accumulated deficit of $160.5 million as of September 30, 2025, indicates significant historical losses.
• Negative stockholders' equity (deficit) of $(1.701) million as of September 30, 2025, reflecting a precarious financial position.
• Cash and cash equivalents of only $2.0 million as of September 30, 2025, are insufficient to fund operations beyond Q1 2026 without further capital or merger completion.
• Nine-month revenue decreased by 57% to $389,000 in 2025 from $902,000 in 2024, primarily due to reduced marketing efforts.
• The $1.5 million bridge loan carries a $3.0 million repayment premium upon certain triggering events or maturity, resulting in an extremely high effective annual interest rate of approximately 532.59%.
• Material weaknesses identified in internal controls over financial reporting, including an ineffective control environment and IT general controls.
• Pre-Merger Movano stockholders are expected to own only approximately 3.8% of the combined company (pro forma, pre-financing adjustments), indicating substantial dilution.
• The company is not in compliance with Nasdaq Listing Rule 5550(b)(1) requiring a minimum of $2,500,000 in stockholders' equity, facing potential delisting.

Risks

• Substantial doubt exists about the company's ability to continue as a going concern if additional capital is not raised or the merger is not consummated.
• Inability to raise sufficient additional capital on acceptable terms or at all could lead to delays, reduction, or elimination of operations, or even bankruptcy/liquidation.
• The merger with Corvex Inc. may not close on a timely basis or at all, due to various closing conditions including stockholder approval and regulatory clearances.
• The pendency of the merger could disrupt business operations, affect relationships with customers, suppliers, and employees, and divert management resources.
• Significant dilution for existing Movano stockholders post-merger, with pre-Merger Movano stockholders potentially owning as little as 3.1% of the combined company on a fully-diluted basis (assuming earnout shares are issued).
• Risk of Nasdaq delisting due to non-compliance with the Stockholders Equity Requirement.
• Material weaknesses in internal controls over financial reporting could lead to material misstatements.
• Dependence on third-party manufacturers for product supply poses operational risks.
• Potential claims of intellectual property infringement, trade secret misappropriation, product liability, or product recalls could incur significant costs.
• Need to secure required FCC, FDA, and other regulatory approvals for products, which can be a lengthy and uncertain process.
• Impact of macroeconomic and geopolitical conditions, including increases in prices caused by rising inflation, could adversely affect financial performance.

Future Outlook

The company expects to require additional financing to fund its future planned operations and is highly dependent on the outcome of the planned merger with Corvex Inc., which is expected to close in the first quarter of 2026. It anticipates raising additional capital through equity issuance, including sales under the new $1.0 billion Equity Facility, borrowings, or strategic alliances. Prior to the merger closing, the company is permitted to market for sale its current operating assets and distribute net proceeds to pre-merger Movano stockholders.

Management Comments

• The Company has incurred losses from operations and has generated negative cash flows from operating activities since inception and expects to continue to incur net losses for the foreseeable future.
• The Company believes that its cash and cash equivalents as of September 30, 2025, with the additional $3.0 million raised in the Series A Financing in November 2025, will not be sufficient to fund its projected operating requirements beyond the first quarter of 2026 without raising further capital or completing the Merger.
• These circumstances raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are issued.
• We believe EvieMED is 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.

Industry Context

Movano Health operates in the competitive and evolving consumer health devices and medical wearables market. Its products, such as the Evie Ring and EvieMED Ring, aim to provide vital health information and actionable insights. The FDA 510(k) clearance for the EvieMED Ring's pulse oximetry feature is a significant development, positioning it as a medical device and differentiating it from competitors who may only have clearance for individual algorithms. This could enhance its appeal to clinicians and for applications like clinical trials and remote patient monitoring. The company's ongoing development of a System-on-a-Chip (SoC) for non-invasive continuous glucose monitoring (CGM) and cuffless blood pressure monitoring targets major unmet needs in the health tech industry, potentially offering a disruptive technology if successful in achieving Class II FDA clearance.

Comparison to Industry Standards

• The EvieMED Ring's FDA 510(k) clearance for its entire system (hardware and software) for pulse oximetry is highlighted as a competitive advantage, differentiating it from some industry competitors who may only achieve FDA clearance for individual algorithms under Software as a Medical Device guidance. This suggests a higher standard of regulatory validation for the EvieMED system.
• The company is actively developing a patented System-on-a-Chip (SoC) for non-invasive continuous glucose monitoring (CGM) and cuffless blood pressure monitoring, aiming for Class II FDA clearance. This initiative targets a significant unmet need in the health tech industry, where current solutions often involve invasive methods or bulky devices, potentially setting a new benchmark for convenience and accessibility in these monitoring categories.

Management Changes

Corporate Governance

Legal Proceedings

• No pending legal proceedings that are believed to have a material adverse effect on the business or financial condition.
• Potential for stockholder litigation related to the merger, which could delay or prevent completion and incur significant costs for defense or settlement.

Related Party Transactions

• A $1.5 million bridge loan was obtained from Evie Holdings, LLC, a noncontrolling shareholder, on August 6, 2025. This loan includes a $3.0 million repayment premium upon certain triggering events or maturity.
• Interest expense (related party) of $1.5 million was recognized for the three months ended September 30, 2025, primarily due to the amortization of the original issue discount on the bridge loan.

Stakeholder Impact

• Shareholders: Face significant dilution from the merger (pre-Merger Movano stockholders to own ~3.8% initially, potentially 3.1% with earnouts), risk of delisting from Nasdaq, and potential distribution of net proceeds from asset sales prior to merger.
• Employees: Experienced changes in compensation structure (RSUs cancelled, NSOs granted) and may face uncertainty due to the merger and strategic alternatives process.
• Creditors (Evie Holdings, LLC): Hold a secured position on all company assets, including intellectual property, for the bridge loan, which includes a substantial premium.
• Customers: Continued development and availability of Evie Ring and EvieMED Ring, with potential for advanced monitoring features in the future.

Next Steps

• Consummate the merger with Corvex Inc., which is expected to close in the first quarter of 2026.
• File a Registration Statement on Form S-1 with the SEC to enable sales under the $1.0 billion Equity Facility.
• Market for sale its current operating assets and distribute net proceeds to pre-merger Movano stockholders prior to the merger closing.
• Address Nasdaq's Stockholders Equity Requirement to avoid delisting.
• Continue clinical trials and algorithm development for the System-on-a-Chip (SoC) for non-invasive glucose and cuffless blood pressure monitoring.

Key Dates

Recommendation

The company is in severe financial distress, evidenced by negative stockholders' equity, critically low cash reserves, and a 'going concern' warning. While the proposed merger with Corvex Inc. and new financing facilities offer a potential path to survival, the terms involve extreme dilution for existing Movano shareholders, who are expected to own a very small percentage of the combined entity. The high-cost bridge loan with a substantial premium further exacerbates the financial burden. Additionally, ongoing Nasdaq non-compliance issues and identified material weaknesses in internal controls add to the significant operational and governance risks. For a seasoned investor, the current risk-reward profile is highly unfavorable, suggesting a strong sell.

Keywords

Movano Inc., MOVE, 10-Q, Quarterly Report, SEC Filing, Financial Results, Going Concern, Merger, Corvex Inc., Equity Financing, Bridge Loan, Nasdaq Listing, Evie Ring, EvieMED Ring, Wearable Technology, Health Tech, FDA Clearance, Pulse Oximetry, Dilution, Internal Controls, Risk Factors