The broader impact/commercial potential of this Small Business Innovation Research (SBIR) Phase I project is a technology to support social-emotional health by fostering co-presence, defined as a sense of being together in a virtual environment analogous to person-to-person physical interaction. Loneliness can be debilitating and have detrimental impact on patients aged 65 and over, causing an estimated $7 billion in Medicare costs associated with the effects of morbidity and mortality factors, such as dementia, heart disease, stroke, and depression. The recent COVID-19 pandemic has highlighted both the challenges and opportunities of digital tools in fostering connections associated with mental and physical health. The proposed virtual reality solution and the emerging digital therapeutics sector can address significant challenges faced by hospitals, assisted living care facilities, and mental health facilities, improving clinical outcomes. The findings of this project are expected to impact other human interaction contexts, such as training, education, and others.This Small Business Innovation Research (SBIR) Phase I project advances translation of digital therapeutic tools to foster co-presence. The project compares physiological and psychological markers between pairs of individuals in both real and virtual contexts in search of significant markers for co-presence. Objectives include development of a custom virtual reality application and collection of quantitative data on pairs of individuals interacting in three social contexts. Proposed research will evaluate the degree to which virtual reality fosters co-presence and focus on specific algorithms and design choices as significant drivers of co-presence.This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.