Abstract – MainSquare Co. (dba “Teleo”) is developing a HIPAA-compliant virtual therapy room for children that transforms how clinicians deliver psychotherapy to children remotely, improving client engagement over standard video conferencing platforms (e.g., Zoom). One in 5 children have a mental health disorder. Remote teletherapy can help by enabling more accessible, convenient, and lower-cost care for children. Given these advantages, mental healthcare providers are permanently adopting telehealth. As of September 2022, 88% of mental health treatment providers offered Telehealth, versus 39% in April 2019. Unfortunately, clinicians working with children remotely experience low in-session engagement. Today, 50-70% of children end treatment early due to low engagement and the median number of sessions attended is one. Low engagement is tied to worse clinical outcomes in children and reduced revenue for health systems due to no-shows, treatment drop-out, and therapist distress / provider turnover. In-session engagement – active involvement in an intervention – is associated with improved outcomes for depression, anxiety, and substance disorders Teleo improves client engagement by 1) integrating evidence-based therapy tools, worksheets, activities, and games – from Teleo or providers – into a single virtual space with video conferencing, eliminating platform switching and streamlining use of evidence-based practices (EBPs); 2) making interventions more interactive through new two-way mirroring technology, eliminating screen and link sharing, and making previously one-sided activities highly collaborative; and 3) making virtual environments personalizable to each client. Teleo is in pilot- use by dozens of early-adopting clinicians. Of these, 83% say Teleo improves engagement with clients; 42% say Teleo improves clinical outcomes; 88% would be disappointed without Teleo. Teleo is in pilot with the largest community mental health provider to youth Medicaid populations in CA and cleared IT / compliance a large community health system (6,000+ child psych patients / month). Teleo has commercial interest from 40 other organizations. This STTR funds otherwise impossible empirical validation called upon by early partners. In Phase I, Teleo will conduct user experience focus groups and interviews to solicit qualitative feedback from both clinicians and patients. Based on feedback, the product will be iterated upon and then utilized in a pilot randomized control trial (RCT) with 42 subjects over 4 sessions to evaluate the potential for Teleo to improve pediatric patient engagement in teletherapy relative to standard video conferencing. In Phase II, Teleo will perform R&D to improve clinician acceptability, clinical workflows, and client engagement. Again, the product will be evaluated in an RCT but this time vastly expanded to include 156 subjects over 12 sessions with broad patient diversity. Engagement and clinical outcomes, as well as practice performance...