The following discussion of our financial condition and results of operations
should be read in conjunction with the financial statements and the related
notes thereto included elsewhere in this Annual Report. This discussion and
analysis contains forward-looking statements that are based on our management's
current beliefs and assumptions, which statements are subject to substantial
risks and uncertainties. Our actual results may differ materially from those
expressed or implied by these forward-looking statements as a result of many
factors, including those discussed in "Risk Factors" in Item 1A of this Annual
Report. Please also see "Cautionary Note Regarding Forward-Looking Statements"
at the beginning of this Annual Report.



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.





The Company's 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, including resting heart
rate, heart rate variability ("HRV"), 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.



In addition to the Evie Ring, we are developing one of the smallest patented and
proprietary SoC designed specifically for blood pressure or CGM systems. Movano
Health 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 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.

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 a development stage company with a limited operating history. To date, we
have invested substantially all of our efforts and financial resources into the
research and development of the products we are developing, including conducting
clinical studies and related sales, general and administrative costs. 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 net losses were
$30.3 million and $21.8 million for the years ended December 31, 2022 and 2021,
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 December 31, 2022, we had $10.8 million in available cash and cash equivalents.

Adoption of New Accounting Pronouncement - Leases





In February 2016, the FASB issued ASU 2016-02, Leases (ASC 842) which requires
lessees to recognize leases on the balance sheet by recording a right-of-use
asset and lease liability. We adopted this new guidance as of January 1, 2022
and applied the modified retrospective approach, whereby prior comparative
periods will not be retrospectively presented in the consolidated financial
statements. We elected the package of practical expedients not to reassess prior
conclusions related to contracts containing leases and lease classification and
the lessee practical expedient to combine lease and non-lease components for all
asset classes. We made a policy election to not recognize right-of-use assets
and lease liabilities for short-term leases for all asset classes. See Note 13
Commitments and Contingencies of our consolidated financial statements for
further details.



Upon adoption on January 1, 2022, we recognized right-of-use assets and lease
liabilities for operating leases of $380,000 and $429,000, respectively. The
difference between the right-of-use asset and lease liability primarily
represents the net book value of deferred rent recognized as of December 31,
2021, which was adjusted against the right-of-use asset upon adoption.



                                       33

Critical Accounting Policies and Estimates


Our consolidated financial statements are prepared in accordance with U.S.
generally accepted accounting principles, or GAAP, which requires management to
make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue and expenses. These estimates require the use of judgment
as future events, and the effect of these events cannot be predicted with
certainty.



Liquidity



In accordance with Accounting Standard Codification ("ASC") 205-40,
"Presentation of Financial Statements - Going Concern", the Company continually
evaluates whether there are conditions or events, considered in the aggregate,
that raise substantial doubt about our ability to continue as a going concern
within one year after the date that the consolidated financial statements are
issued. We have incurred operating losses and negative cash flows from operating
activities in each year since its inception.



We believe that our cash and cash equivalents as of December 31, 2022 with the
addition of the $6.85 million raised in our February 2023 public offering will
not be sufficient to fund our projected operating requirements for at least the
next 12 months from the filing date of this annual report.

Redeemable Convertible Preferred Stock





We recorded all shares of redeemable convertible preferred stock at their
respective issuance price less issuance costs on the dates of issuance. Under
certain circumstances, we would have been required to redeem the Series A and
Series B redeemable convertible preferred stock unless an Initial Public
Offering ("IPO") had been consummated prior to April 1, 2021, or an extension or
waiver was obtained upon approval of a majority of the holders of such preferred
stock. As the preferred stock became redeemable due to the passage of time, we
considered the preferred stock to be redeemable as of April 1, 2021. We record
the accretion of the Series A and B preferred stock balances to their respective
redemption amounts using the effective interest method. Upon the IPO, the
redeemable convertible preferred stock converted in to 11,436,956 shares of
common stock.

Paycheck Protection Program Loan





We accounted for funds received from the Paycheck Protection Program as a
financial liability with interest accrued and expensed over the term of the loan
under the effective interest method. The loan remained recorded as a liability
until the Company was legally released from the liability. The amount that was
ultimately forgiven by the lender was recognized in the consolidated statement
of operations and comprehensive loss as a gain extinguishment.

Convertible Financial Instruments





We bifurcate embedded redemption and conversion options from their host
instruments and account for them as freestanding derivative financial
instruments at fair value, if certain criteria are met. The criteria include
circumstances in which (a) the economic characteristics and risks of the
embedded derivative instrument are not clearly and closely related to the
economic characteristics and risks of the host contract, (b) the hybrid
instrument that embodies both the embedded derivative instrument and the host
contract is not re-measured at fair value under otherwise applicable GAAP with
changes in fair value reported in earnings as they occur and (c) a separate
instrument with the same terms as the embedded derivative instrument would be
considered a derivative instrument. Debt discounts under these arrangements are
amortized to interest expense using the interest method over the earlier of the
term of the related debt or their earliest date of redemption.



We may retain a third-party appraiser to estimate the fair value of the
derivative financial instruments. These fair value estimates are subjective in
nature and require careful consideration and judgement. Management reviews the
third-party reports for reasonableness of the assigned values. We believe that
the appraised values represent the fair value of the freestanding derivative
financial instruments, and we have not had to modify the assumptions.



From time to time, we issue convertible financial instruments to nonemployees in
payment for services that are provided. Until the services are completely
rendered, we will expense the principal and any interest earned prior to the
service completion to the representative expense account for the services
performed and will record a noncurrent liability for the expected amount of the
principal balance. Upon completion of the services, we will reclassify the
noncurrent liability balance to the balance of an outstanding convertible
financial instrument and assess the embedded redemption and conversion options
that are applicable at that time.



Common Stock Warrants




During the normal course of business, from time to time, we issue warrants to
purchase common stock as part of a debt or equity financing or to vendors as
consideration to perform services. We assess each warrant to determine if it
meets the characteristics of a liability or a derivative, and if the warrant
does meet the characteristics of a liability or a derivative, we classify the
warrant as a liability measured at fair value. The derivative liabilities are
remeasured at each period end, on a recurring basis, to the estimated fair value
with the changes in fair value reflected as current period income or loss until
the warrant is exercised, extinguished, or expires. If the warrant does not meet
the characteristics of a liability or a derivative, we classify the warrant as
equity, and record the warrant at its fair value on the date of issuance. The
fair value of our warrants is estimated using the Black-Scholes option pricing
model which contains estimates and assumptions that require careful
consideration and judgment. To date, we have not experienced changes in these
estimates and have not had to modify our assumptions.



                                       34





Stock-Based Compensation



We measure equity classified stock-based awards granted to employees, directors,
and nonemployees based on the estimated fair value on the date of grant and
recognizes compensation expense of those awards on a straight-line basis over
the requisite service period, which is generally the vesting period of the
respective award. The fair value of each stock option grant is estimated on the
date of grant using the Black-Scholes option pricing model. This valuation model
for stock-based compensation expense requires us to make assumptions and
judgments about the variables used in the calculation including the expected
term, the volatility of the Company's common stock, and an assumed risk-free
interest rate. As a result, if we revise our assumptions and estimates, our
stock-based compensation expense could change. These assumptions include:



Dividend Rate - The expected dividend rate was assumed to be zero, as we have
not previously paid dividends on common stock and have no current plans to

do
so.

Expected Volatility - The expected volatility was derived from the historical stock volatilities of several public companies within our industry that we consider to be comparable to our business over a period equivalent to the expected term of the stock option grants.





Risk-Free Interest Rate - The risk-free interest rate is based on the interest
yield in effect at the date of grant for zero coupon U.S. Treasury notes with
maturities approximately equal to the option's expected term.



Expected Term - The expected term represents the period that our stock options
are expected to be outstanding. The expected term of option grants that are
considered to be "plain vanilla" are determined using the simplified method. The
simplified method deems the term to be the average of the time-to-vesting and
the contractual life of the options. For other option grants not considered to
be "plain vanilla," we determined the expected term to be the contractual life
of the options.

Forfeitures - We made the one-time policy election to recognize forfeitures when they occur.





Fair Value of Common Stock



Prior to our IPO in March 2021, the fair values of the shares of our common
stock underlying our share-based awards and warrant grants were estimated on
each grant date by our board of directors. In order to determine the fair value
of our common stock, our board of directors considered, among other things,
valuations of our common stock prepared by an independent third-party valuation
firm in accordance with the guidance provided by the American Institute of
Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company
Equity Securities Issued as Compensation.



The fair value of our common stock was estimated using a two-step process.
First, our enterprise value was established using generally accepted valuation
methodologies, such as comparable public company and market adjusted option
pricing analysis as well as consideration of company financing transactions.
Second, the enterprise value was allocated among the securities that comprise
our capital structure using the option-pricing method. The option-pricing method
treats all levels of the capital structure as call options on the enterprise's
value, with exercise price based on the "breakpoints" between each of the
different claims on the securities. The inputs necessary for the option-pricing
model include the current equity value (the enterprise value as previously
calculated), breakpoints (the various characteristics for each class of equity,
including liquidation preferences and priority distributions, in accordance with
our certificate of incorporation, as amended and restated), term, risk-free

rate, and volatility.



                                       35





Given the absence of a public trading market for our common stock, our board of
directors exercised their judgment and considered a number of objective and
subjective factors to determine the best estimate of the fair value of our
common stock, including valuations performed by an independent third party,
developments in our operations, sales of preferred stock, the prices, rights,
preferences and privileges of our preferred stock relative to the common stock,
actual operating results and financial performance and capital resources, the
conditions in the our industry and the economy and capital markets in general,
the stock price performance and volatility of comparable public companies, the
likelihood of achieving a liquidity event for shares of our common stock
underlying these stock options, such as an initial public offering or sale of
our company, and the lack of liquidity of our common stock, among other factors.



The assumptions underlying these valuations were highly complex and subjective
and represented management's best estimates, which involved inherent
uncertainties and the application of management's judgment. As a result, if we
had used significantly different assumptions or estimates, the fair value of our
common stock and our stock-based compensation expense could be materially
different.



The fair value of the underlying common stock was determined by the board of
directors until the IPO when our common stock started trading on The Nasdaq
Capital Market under the ticker symbol MOVE on March 23, 2021. Consequently,
after our IPO the fair value of the shares of common stock underlying the stock
options is the closing market price on the option grant date.



Income Taxes



We account for income taxes using the asset and liability method. Under this
method, deferred tax assets and liabilities are determined based on differences
between the financial statement and tax basis of assets and liabilities and net
operating loss and credit carryforwards using enacted tax rates in effect for
the year in which the differences are expected to reverse. Valuation allowances
are established when necessary to reduce deferred tax assets to the amounts
expected to be realized.



We account for unrecognized tax benefits using a more-likely-than-not threshold
for financial statement recognition and measurement of tax positions taken or
expected to be taken in a tax return. We establish a liability for tax-related
uncertainties based on estimates of whether, and the extent to which, additional
taxes will be due. We record an income tax liability, if any, for the difference
between the benefit recognized and measured and the tax position taken or
expected to be taken on our tax returns. To the extent that the assessment of
such tax positions changes, the change in estimate is recorded in the period in
which the determination is made. The liability is adjusted considering changing
facts and circumstances, such as the outcome of a tax audit. The provision for
income taxes includes the impact of liability provisions and changes to the
liability that are considered appropriate. Changes in recognition or measurement
are reflected in the period in which the change in judgment occurs.



                                       36





Results of Operations

Years Ended December 31, 2022 and 2021

Our consolidated statements of operations for the years ended December 31, 2022 and 2021 as discussed herein are presented below.





                                             Year Ended December 31,                Change
                                               2022             2021            $             %
                                                                (in thousands)
OPERATING EXPENSES:
Research and development                   $     18,994       $  13,427     $   5,567            41 %

Sales, general and administrative                11,468           6,376    

    5,092            80 %
Total operating expenses                         30,462          19,803        10,659            54 %

Loss from operations                            (30,462 )       (19,803 )     (10,659 )         (54 )%

Other income (expense), net:
Interest expense                                      -            (883 )         883           100 %
Change in fair value of warrant
liability                                             -          (1,581 )       1,581           100 %
Change in fair value of derivative
liability                                             -             121          (121 )        (100 )%
Forgiveness of Paycheck Protection
Program Loan                                          -             351          (351 )        (100 )%
Interest and other income, net                      133              22    

      111           505 %
Other income (expense), net                         133          (1,970 )       2,103           107 %

Net loss                                   $    (30,329 )     $ (21,773 )   $  (8,556 )         (39 )%




Research and Development



Research and development expenses totaled $19.0 million and $13.4 million for
the years ended December 31, 2022 and 2021, respectively. This increase of $5.6
million was due primarily to the growth of the Company and its activities.
Research and development expenses for the year ended December 31, 2022 included
expenses related to employee compensation of $9.4 million, other professional
fees of $6.7 million, tools and equipment expenses of $2.0 million, rent of $0.2
million, depreciation and amortization of $0.1 million, and other expenses of
$0.6 million. Research and development expenses for the year ended December 31,
2021 included expenses related to employee compensation of $6.0 million, tools
and equipment expenses of $1.0 million, other professional fees of $5.9 million,
rent of $0.1 million, depreciation and amortization of $0.1 million, and other
expenses of $0.3 million.



                                       37

Sales, General and Administrative





Sales, general and administrative expenses totaled $11.5 million and $6.4
million for the years ended December 31, 2022 and 2021, respectively. This
increase of $5.1 million was due primarily to the growth of the Company and its
activities. Sales, general and administrative expenses for the year ended
December 31, 2022 included expenses related to employee and board of director
compensation of $6.1 million, professional and consulting fees of $2.5 million,
rent of $0.1 million, insurance of $1.3 million, and other expenses
of $1.5 million. Sales, general and administrative expenses for the year ended
December 31, 2021 included expenses related to employee and board of director
compensation of $3.2 million, professional and consulting fees of $1.7 million,
and other expenses of $1.5 million.



Loss from Operations

Loss from operations was $30.5 million for the year ended December 31, 2022, as compared to $19.8 million for the year ended December 31, 2021.

Other Income (Expense), Net


Other income (expense), net for the year ended December 31, 2022 was a net other
income of $0.1 million as compared to a net other expense of $2.0 million for
the year ended December 31, 2021. Other income (expense), net for the year ended
December 31, 2022 reflected the net interest income on short-term investments.
Other income (expense), net for the year ended December 31, 2021 included
interest expense of $0.9 million related to the accrual of interest and
amortization of debt discounts on the convertible promissory notes and $1.6
million related to the change in the fair value of warrant liability, which were
partially offset by $0.1 million related to the change in fair value of the
derivative liability and forgiveness of the Paycheck Protection Program Loan of
$0.4 million.



Net Loss

As a result of the foregoing, net loss was $30.3 million for the year ended December 31, 2022, as compared to $21.8 million for the year ended December 31, 2021.

Liquidity and Capital Resources





At December 31, 2022, we had cash, cash equivalents $10.8 million. During the
year ended December 31, 2022, the Company used $24.9 million of cash in our
operating activities. Our cash and short-term investments are not expected to be
sufficient to enable us to complete the development and commercialization of our
first proposed commercial product, the Evie Ring. 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 year ended December 31,
2022, the Company sold an aggregate of 810,400 shares of common stock through
the ATM program for proceeds of approximately $2.2 million, net of commissions
paid. Approximately $47.7 million remains available on the ATM equity offering
program at December 31, 2022. 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.




                                       38






Until we can generate a sufficient amount of revenue from our 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 consolidated
financial statements are issued. Our 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 through the sale of equity or debt securities to support

our
future operations.



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



                                                         Year Ended December 31,
                                                           2022             2021


Net cash used in operating activities                  $    (24,902 )     $ (16,183 )
Net cash provided by/(used in) investing activities          15,724         (16,699 )
Net cash used in financing activities                         2,262

44,847

Net increase/(decrease) in cash and cash equivalents $ (6,916 ) $


 11,965




Operating Activities

During the year ended December 31, 2022, the Company used cash of $24.9 million in operating activities, as compared to $16.2 million used in operating activities during the year ended December 31, 2021.





The $24.9 million used in operating activities during the year ended December
31, 2022 was primarily attributable to our net loss of $30.3 million and changes
in our operating assets and liabilities totaling $2.1 million. These items were
offset by non-cash items, including stock-based compensation of $3.1 million,
depreciation of $0.1 million and accretion of discount on short-term investments
of $0.1 million.



The $16.2 million used in operating activities during the year ended December
31, 2021 was primarily attributable to our net loss of $21.8 million during the
year and changes in our operating assets and liabilities totaling $1.3 million.
These items were offset by non-cash items, including depreciation and
amortization of $0.1 million, stock-based compensation of $1.9 million,
accretion of the debt discount on our convertible promissory notes of
$0.8 million, the forgiveness of our PPP loan of $0.4 million, accrued interest
on our convertible promissory notes of $0.1 million, accretion of discount on
short-term investments of $0.2 million, compensation of nonemployee services
upon the issuance of common stock of $0.1 million, the change in the fair value
of the derivative liability of $0.1 million and the change in the fair value of
the warrant liability of $1.6 million.



                                       39





Investing Activities



During the year ended December 31, 2022 the Company was provided cash of $15.7
million in investing activities, consisting of $15.8 million in maturities of
short-term investments and offset by $0.1 million for the purchase of office and
laboratory equipment.



During the year ended December 31, 2021 the Company used cash of $16.7 million
in investing activities, consisting of $23.6 million in purchases of marketable
securities and $0.6 million for the purchase of office and laboratory equipment,
offset by maturities of short-term investments of $7.5 million.



Financing Activities



During the year ended December 31, 2022, the Company was provided cash of $2.3
million from financing activities, comprised of $2.3 million from the issuance
of common stock.



During the year ended December 31, 2021, the Company was provided cash of
$44.8 million from financing activities, comprised of $44.7 million from the net
proceeds of our initial public offering and $0.1 million from the issuance

of
common stock.



Funding Requirements



We anticipate that, excluding non-recurring items, we will continue to generate
annual losses for the foreseeable future as we continue the development of our
Evie Ring and other products in development. We will require additional capital
to fund our operations, to complete our ongoing and planned clinical studies, to
commercialize our products, to continue investing in and to further develop our
general infrastructure, and such funding may not be available to us on
acceptable terms or at all.



If we are unable to raise additional capital in sufficient amounts or on terms
acceptable to us, we may be required to delay, limit, reduce the scope of, or
terminate one or more of our clinical studies, research and development
programs, or our future commercialization efforts.

Our future funding requirements will depend on many factors, including the following:

? the scope, rate of progress, results and cost of our product development

and clinical testing;

? the cost of manufacturing our products in development and any products

that we may develop in the future;

? the number and characteristics of the potential products that we pursue;

? the cost, timing, and outcomes of regulatory approvals; and

? the magnitude and extent to which the COVID-19 pandemic impacts our

business operations and operating results, as described in "Risk Factors -


        Risks Related to Our Business."

We expect to satisfy future cash needs through existing capital balances, through some combination of public or private equity offerings, debt financings, licensing arrangements, and other marketing and distribution arrangements. Please see "Risk Factors-Risks Related to Our Business."





Contractual Obligations

Material contractual obligations arising in the normal course of business primarily consist of operating leases. See Note 13 to the consolidated financial statements for amounts outstanding for operating leases on December 31, 2022.

Off-Balance Sheet Transactions

At December 31, 2022, 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 $0.4 million of non-cancelable contractual commitments as of December 31, 2022, primarily related to its vendor arrangements. These commitments are generally due within one to ten months.

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