ENDRA Life Sciences Inc. 10-K

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures As of the end of the period covered by this report, management performed, with the participation of our principal executive and principal financial officers, an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures. Based on the evaluation, our principal executive and principal financial officers concluded that, as of December 31, 2022, our disclosure controls and procedures were not effective due to a material weakness in internal control over financial reporting, as described below. Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance to the Company’s management and board of directors regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our consolidated financial statements would be prevented or detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial statement preparation and presentation. Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Management identified the following material weakness as of December 31, 2022: insufficient personnel resources within the accounting function to segregate the duties over financial transaction processing and reporting. Because of this material weakness, management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2022. Continuing Remediation Efforts During the year ended December 31, 2022, the Company undertook the following remediation measures to correct the material weakness in its internal control over financial reporting: · hired a Senior Director of Operations in October 2022 to assist with implementing operating procedures and policies expected to improve the Company’s disclosure controls and procedures, including with respect to segregation of duties; and · engaged on a contract basis a controller with expertise in the area of proper controls and procedures. Although this controller subsequently resigned due to unforeseen circumstances beyond her control, the Company intends to again fill the position. To remediate its internal control weakness, management intends to implement the following measures during 2023, as the Company’s financial means allow: · Add additional accounting personnel or outside consultants, such as a new controller, to properly segregate duties and to effect timely, accurate preparation of the financial statements; and · Complete the development of and maintain adequate written accounting policies and procedures. 47 Table of Contents As we are not an “accelerated filer” under SEC rules, we are not required to provide an auditor’s attestation of management’s assessment of internal control over financial reporting as of December 31, 2022. Changes in Internal Control of Financial Reporting During the quarter ended December 31, 2022, except as described above under “Continuing Remediation Efforts,” there were no changes that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information. Not applicable. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 48 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance. The following table sets forth the names and ages of all of our executive officers and directors. Our officers are appointed by, and serve at the pleasure of, the board of directors. Name Age Position Francois Michelon 57 Chief Executive Officer and Chairman Michael Thornton 54 Chief Technology Officer Irina Pestrikova 37 Senior Director of Finance Louis J. Basenese 45 Director Anthony DiGiandomenico 56 Director Michael Harsh 68 Director Alexander Tokman 61 Director Biographical information with respect to our executive officers and directors is provided below. There are no family relationships between any of our executive officers or directors. Francois Michelon joined ENDRA as Chief Executive Officer and Chairman of our board of directors in 2015. He has over 20 years of healthcare technology experience in general management, operations, strategy and marketing across the diagnostic imaging, surgical instrument and dental sectors. From 2012 to 2014, Mr. Michelon served as Vice President of Global Marketing for the 3i division of Biomet, Inc. (now Zimmer Biomet Holdings, Inc.), a provider of oral reconstruction technologies, where he was responsible for the upstream and downstream development of the division’s global portfolio. From 2004 to 2011, Mr. Michelon served as Group Director of Global Services and Visualization for Smith & Nephew plc’s Advanced Surgical Devices division, where he led in the B2B service and capital equipment sectors, and had responsibility over the financial performance of these as well. From 1997 to 2004, Mr. Michelon worked at GE Healthcare in a variety of global upstream and downstream marketing roles. Mr. Michelon received an MBA from Carnegie-Mellon University and a BA in Economics from the University of Chicago. He has also earned his Six Sigma Black Belt certification. Mr. Michelon’s extensive industry and executive experience and his intimate understanding of our business as our Chief Executive Officer position him well to serve as a member of our Board of Directors. Michael Thornton joined ENDRA as Chief Technology Officer in 2007. Prior to that, Mr. Thornton was a founder and President of Enhanced Vision Systems Corp., or EVS, a developer and supplier of medical imaging equipment to the pharmaceutical, biotech, and academic sectors. In 2002, EVS was acquired by General Electric Company and was integrated into the Functional and Molecular Imaging business unit of GE Medical Systems (now GE Healthcare, a subsidiary of General Electric Company). Following the acquisition of EVS by GE Medical Systems, Mr. Thornton held a number of positions at GE Healthcare, including Sales Manager, Global Product Manager, and Site Leader. He was a member of the leadership team that expanded the pre-clinical imaging business to include: computed tomography, optical, and positron emission tomography imaging technologies, with global market reach. He is also a founder of Volumetrics Medical Corp., a developer and manufacturer of quality assurance devices for diagnostic imaging. Prior to founding EVS, Mr. Thornton developed medical imaging related technologies at the Robarts Research Institute (London, Ontario, Canada) for which he obtained an MSc in Electrical Engineering from the University of Western Ontario. Mr. Thornton also holds a BASc in Electrical Engineering from the University of Toronto and is a member of the American Association of Physicists in Medicine. Irina Pestrikova joined ENDRA as Senior Director of Finance in June 2021. From 2014 to 2021, Ms. Pestrikova was the Director of Operations of Wells Compliance Group. Wells Compliance Group is a technology-based services firm supporting the financial reporting needs of publicly traded companies and privately held firms whose investor or shareholder base requires timely GAAP-compliant financial reporting. In her role as Director of Operations, Ms. Pestrikova provided accounting and bookkeeping services to a number of public companies, including ENDRA. Ms. Pestrikova has also been the Director of Finance & Operations of Atlas Bookkeeping, Inc., a provider of financial reporting, modeling and analysis, since 2020. She holds an MBA in Finance from Pepperdine University. 49 Table of Contents Louis J. Basenese , joined our Board of Directors in April 2020. Mr. Basenese is the President, Chief Market Strategist at Public Ventures, LLC, a registered broker-dealer, Member FINRA/SIPC. Previously, he was Founder and Chief Analyst of Disruptive Tech Research, LLC, an independent equity research and advisory firm focused exclusively on disruptive technology companies that has served the investment management community from June 2014 through September 2022. Since 2005, Mr. Basenese has also managed The Basenese Group, LLC, a consulting business focused on communications and business development for private and public small and microcap businesses. Mr. Basenese holds an M.B.A. in Finance from the Crummer Graduate School of Business at Rollins College and a Bachelor of Arts from the University of Florida. He is also a former Series 7 and Series 66 license holder. Mr. Basenese’s experience with investor relations and business development of technology-focused companies, as well as financing and strategic planning, provides him with the qualifications and skills necessary to serve as a member of our Board of Directors. Anthony DiGiandomenico joined our Board of Directors in 2013. A co-founder of MDB Capital Group LLC, Mr. DiGiandomenico focuses on corporate finance and capital formation for growth-oriented companies. He has participated in all areas of corporate finance including private capital, public offerings, PIPEs, business consulting and strategic planning, and mergers and acquisitions. Mr. DiGiandomenico has also worked on a wide range of transactions for growth-oriented companies in biotechnology, nutritional supplements, manufacturing and entertainment industries. Prior to forming MDB Capital Group LLC in 1997, Mr. DiGiandomenico served as President and CEO of the Digian Company, a real estate development company. Mr. DiGiandomenico has also served on the board of directors of Cue Biopharma, Inc., an immunotherapy company, and currently serves on the board of directors of Provention Bio, Inc. (Nasdaq: PRVB), a clinical-stage biopharmaceutical company. Mr. DiGiandomenico holds an MBA from the Haas School of Business at the University of California, Berkeley and a BS in Finance from the University of Colorado. Mr. DiGiandomenico’s financial expertise, general business acumen and significant executive leadership experience position him well to make valuable contributions to our Board of Directors. Michael Harsh joined our Board of Directors in 2015. He is a Portfolio Executive for the National Institutes of Health (NIH) Rapid Acceleration of Diagnostics (RADx) COVID-19 Response Program and a co-founder and Chief Product Officer of Terapede Systems, a digital Xray startup that focuses on developing an ultra-high resolution medical flat panel X-ray detector. He co-founded Terapede in 2015. Prior to Terapede, Mr. Harsh had a 36-year career with General Electric (“GE”). He held numerous positions within GE and served as Vice President and Chief Technology Officer of GE Healthcare, a multi-billion dollar division of GE, where he led its global science and technology organization and research and development teams in diagnostics, healthcare IT and life sciences. In 2004, Mr. Harsh was named Global Technology Leader - Imaging Technologies at the GE Global Research Center, where he led the research for imaging technologies across the company as well as the research associated with computer visualization and superconducting systems. Additionally, Mr. Harsh is a member of the boards of directors of Compute Health Acquisition Corp. (NYSE: CPUH), Imagion Biosystems (ASX: IBX.AX), and EmOpti, Inc., as well as a member of the Radiological Society of North America (RSNA), Research & Education Foundation Board of Trustees. He had previously served as a director for FloDesign Sonics until its acquisition by MilliporeSigma, a division of the Merck Group. He is also a McKinsey Senior Advisor and a consultant in the medical device industry. Mr. Harsh is a graduate of Marquette University, where he earned a bachelor’s degree in Electrical Engineering. He holds numerous U.S. patents in the field of medical imaging and instrumentation. In 2008, Mr. Harsh was elected to the American Institute for Medical and Biological Engineering College of Fellows for his significant contributions to the medical and biological engineering field. Mr. Harsh’s extensive industry, executive and board experience position him well to serve on our Board of Directors. Alexander Tokman joined our Board of Directors in 2008. He currently serves as a President of iUNU, a privately held AI/Computer Vision SaaS company and recently was a CEO-in-Residence at the Allen Institute for Artificial Intelligence (AI2), from 2019 to 2020. Mr. Tokman also serves as an independent board director for Izotropic Corporation (CSE: IZO), a company commercializing a dedicated breast CT imaging platform, and on the board of the American Academy of Thermography, a non-profit organization focused on bringing novel infrared imaging applications for disease diagnosis. 50 Table of Contents Mr. Tokman served as President, Chief Executive Officer, and a director of Microvision, Inc., a publicly traded laser beam scanning display and imaging company, from January 2006 to December 2017. Previously, Mr. Tokman completed a 10+ year tenure as an executive with GE Healthcare, where he led several global businesses, the latest being its Global Molecular Imaging and Radiopharmacy multi-technology business unit, of which he was General Manager from 2003 to 2005. Between 1995 and 2003, Mr. Tokman served in various leadership roles at GE Healthcare, where he led the definition and successful commercialization of several product segments, including PET/CT . Mr. Tokman is a certified Six Sigma and Design for Six Sigma (DFSS) Black Belt and Master Black Belt and as one of General Electric Company’s Six Sigma pioneers, he drove the quality culture change across GE Healthcare in the late 1990s. From 1989 to 1995, Mr. Tokman served as development programs lead and a head of Industry and Regional Development at Tracor Applied Sciences (BAE Systems). Mr. Tokman has both an MS and BS in Electrical Engineering from the University of Massachusetts, Dartmouth. Mr. Tokman’s industry expertise and significant executive leadership and director experience position him well to make valuable contributions to our Board of Directors. Board Independence The Board of Directors has determined that each of Mr. Basenese, Mr. DiGiandomenico, Mr. Harsh and Mr. Tokman is an independent director within the meaning of the director independence standards of The Nasdaq Stock Market (“Nasdaq”). Furthermore, the Board has determined that all of the members of the Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee are independent within the meaning of the director independence standards of Nasdaq and the rules of the SEC applicable to each such committee. Committees Audit Committee . Our Audit Committee consists of Mr. Basenese, Mr. DiGiandomenico, and Mr. Harsh. The Board of Directors has determined that each member of the Audit Committee is independent within the meaning of the Nasdaq director independence standards and applicable rules of the SEC for audit committee members. The Board of Directors has elected Mr. DiGiandomenico as Chairperson of the Audit Committee and has determined that he qualifies as an “audit committee financial expert” under the rules of the SEC. The Audit Committee is responsible for assisting the Board of Directors in fulfilling its oversight responsibilities with respect to financial reports and other financial information. The Audit Committee (1) reviews, monitors and reports to the Board of Directors on the adequacy of the Company’s financial reporting process and system of internal controls over financial reporting, (2) has the ultimate authority to select, evaluate and replace the independent auditor and is the ultimate authority to which the independent auditors are accountable, (3) in consultation with management, periodically reviews the adequacy of the Company’s disclosure controls and procedures and approves any significant changes thereto, (4) provides the audit committee report for inclusion in our proxy statement for our annual meeting of stockholders and (5) recommends, establishes and monitors procedures for the receipt, retention and treatment of complaints relating to accounting, internal accounting controls or auditing matters and the receipt of confidential, anonymous submissions by employees of concerns regarding questionable accounting or auditing matters. The Audit Committee met twice in 2022 as well as acted by written consent. Compensation Committee . Our Compensation Committee presently consists of Mr. Basenese, Mr. DiGiandomenico, Mr. Harsh and Mr. Tokman, each of whom is a non-employee director as defined in Rule 16b-3 of the Exchange Act. The Board has also determined that each member of the Compensation Committee is also an independent director within the meaning of Nasdaq’s director independence standards. Mr. Tokman serves as Chairperson of the Compensation Committee. Effective as of the 2022 Annual Meeting, Mr. Basenese will assume the Chairperson position. The Compensation Committee (1) discharges the responsibilities of the Board of Directors relating to the compensation of our directors and executive officers, (2) oversees the Company’s procedures for consideration and determination of executive and director compensation, and reviews and approves all executive compensation, and (3) administers and implements the Company’s incentive compensation plans and equity-based plans. The Compensation Committee did not meet separately from the board of directors in 2022 but acted by unanimous written consent. Corporate Governance and Nominating Committee . Our Corporate Governance and Nominating Committee consists of Mr. Harsh and Mr. Tokman. The Board of Directors has determined that each member of the Corporate Governance and Nominating Committee is an independent director within the meaning of the Nasdaq director independence standards and applicable rules of the SEC. Mr. Harsh serves as Chairperson of the Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee (1) recommends to the Board of Directors persons to serve as members of the Board of Directors and as members of and chairpersons for the committees of the Board of Directors, (2) considers the recommendation of candidates to serve as directors submitted from the stockholders of the Company, (3) assists the Board of Directors in evaluating the performance of the Board of Directors and the Board committees, (4) advises the Board of Directors regarding the appropriate board leadership structure for the Company, (5) reviews and makes recommendations to the Board of Directors on corporate governance and (6) reviews the size and composition of the Board of Directors and recommends to the Board of Directors any changes it deems advisable. The Corporate Governance and Nominating Committee did not meet separately from the Board of Directors in 2022 but acted by written consent. 51 Table of Contents Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires our directors, executive officers and persons who own more than ten percent of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC. Such persons are required by SEC regulations to furnish us with copies of all such filings. Based solely on our review of the copies of the reports that we received and written representations that no other reports were required, we believe that our executive officers, directors and greater than 10% stockholders complied with all applicable filing requirements on a timely basis during 2022, except for one Form 4 for Michael Thornton related to a purchase of shares May 18, 2022, which was reported on May 23, 2022. Code of Business Conduct and Ethics We have in place a Code of Business Conduct and Ethics (the “Code of Ethics”) that applies to all of our directors, officers and employees. The Code of Ethics is designed to deter wrongdoing and to promote: · honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; · full, fair, accurate, timely and understandable disclosure in reports and documents that we file with, or submit to, the SEC and in other public communications that we make; · compliance with applicable governmental laws, rules and regulations; · the prompt internal reporting of violations of the Code of Ethics to an appropriate person identified in the Code of Ethics; and · accountability for adherence to the Code of Ethics. A current copy of the Code of Ethics is available at www.endrainc.com. A copy may also be obtained, free of charge, from us upon a request directed to ENDRA Life Sciences, Inc., 3600 Green Court, Suite 350, Ann Arbor, Michigan 48105, attention: Investor Relations. We intend to disclose any amendments to or waivers of a provision of the Code of Ethics required to be disclosed by applicable SEC rules by posting such information on our website available at www.endrainc.com and/or in our public filings with the SEC. Item 11. Executive Compensation Our compensation philosophy is to offer our executive officers compensation and benefits that are competitive and meet our goals of attracting, retaining and motivating highly skilled management, which is necessary to achieve our financial and strategic objectives and create long-term value for our stockholders. We believe the levels of compensation we provide should be competitive, reasonable and appropriate for our business needs and circumstances. Our board of directors uses benchmark compensation studies in determining compensation elements and levels. The principal elements of our executive compensation program have to date included base salary, annual bonus opportunity and long-term equity compensation in the form of stock options. We believe successful long-term Company performance is more critical to enhancing stockholder value than short-term results. For this reason and to conserve cash and better align the interests of management and our stockholders, we emphasize long-term performance-based equity compensation over base annual salaries. 52 Table of Contents The following table sets forth information concerning the compensation earned by the individual that served as our principal executive officer during 2022 and our two most highly compensated executive officers other than the individual who served as our principal executive officer during 2022 (collectively, the “named executive officers”): 2022 Summary Compensation Table Name and Principal Position Year Salary ($) Option Awards ($) (1) Non-equity Incentive Plan Compensation ($) All Other Compensation ($)(2) Total ($) Francois Michelon 2022 423,000 212,609 - 587 636,196 Chief Executive Officer 2021 374,035 812,391 137,605 587 1,324,618 Michael Thornton 2022 301,278 208,128 - 392 509,798 Chief Technology Officer 2021 286,168 812,391 72,582 392 1,171,533 Renaud Maloberti 2022 296,000 55,581 - 365 351,946 Former Chief Commercial Officer 2021 263,272 608,766 58,254 365 930,657 ______________ (1) The amounts shown in this column indicate the grant date fair value of option awards granted in the subject year computed in accordance with FASB ASC Topic 718. For additional information regarding the assumptions made in calculating these amounts, see notes 2 and 8 to the financial statements included in Part II, Item 8 of this Annual Report. The shares underlying these option awards vest and become exercisable in three equal annual installments beginning on the first anniversary of their respective grant dates. (2) Represents insurance premiums paid by the Company with respect to life insurance for the benefit of the named executive officer. Employment Agreements and Change of Control Arrangements The following is a summary of the employment arrangements with our named executive officers. Francois Michelon . Effective May 12, 2017, the Company entered into an amended and restated employment agreement with Francois Michelon, our Chief Executive Officer and Chairman of the Board of Directors, which agreement was amended on December 27, 2019. Mr. Michelon’s employment with the Company is “at will” and may be terminated by him or the Company at any time and for any reason. Pursuant to the employment agreement, Mr. Michelon receives an annual base salary that is subject to adjustment at the Board of Directors’ discretion. Effective January 1, 2021, the Compensation Committee increased Mr. Michelon’s annual salary to $376,991 and, effective January 1, 2022, it increased Mr. Michelon’s annual salary to $423,000. Mr. Michelon is also eligible for an annual cash bonus based upon achievement of performance-based objectives established by the Board of Directors. If Mr. Michelon’s employment is terminated by the Company without cause (as defined in the 2016 Plan) or if Mr. Michelon resigns for good reason (as defined in the employment agreement), Mr. Michelon will be entitled to receive, subject to his execution of a standard release agreement, 12 months’ continuation of his current base salary and a lump sum payment equal to 12 months of continued healthcare coverage (or 24 months’ continuation of his current base salary and a lump sum payment equal to 24 months of continued healthcare coverage if such termination occurs within one year following a change in control). Under his employment agreement, Mr. Michelon is eligible to receive benefits that are substantially similar to those of the Company’s other senior executive officers. Michael Thornton . Effective May 12, 2017, the Company entered into an amended and restated employment agreement with Michael Thornton, our Chief Technology Officer, which agreement was amended on December 27, 2019. The employment agreement provides that Mr. Thornton’s employment with the Company is “at will” and may be terminated by him or the Company at any time and for any reason. Pursuant to the employment agreement, Mr. Thornton receives an annual base salary that is subject to adjustment at the Board of Directors’ discretion. Effective January 1, 2021, the Compensation Committee increased Mr. Thornton’s annual salary to $289,963 and, effective January 1, 2022, it increased Mr. Thornton’s annual salary to $324,000. If Mr. Thornton’s employment is terminated by the Company without cause (as defined in the 2016 Plan) or if Mr. Thornton resigns for good reason (as defined in the employment agreement), Mr. Thornton will be entitled to receive, subject to his execution of a standard release agreement, 12 months’ continuation of his current base salary and a lump sum payment equal to 12 months of continued healthcare coverage (or 24 months’ continuation of his current base salary and a lump sum payment equal to 24 months of continued healthcare coverage if such termination occurs within one year following a change in control). 53 Table of Contents Under his employment agreement, Mr. Thornton is eligible to receive benefits that are substantially similar to those of the Company’s other senior executive officers. Renaud Maloberti. On April 15, 2019, the Company entered into an employment agreement with Renaud Maloberti that provides for an annual base salary of $250,000 and eligibility for an annual cash bonus to be paid based on attainment of Company and individual performance objectives to be established by the Board of Directors. Effective January 1, 2021, the Compensation Committee increased Mr. Maloberti’s annual salary to $266,255 and, effective January 1, 2022, it increased Mr. Maloberti’s annual salary to $296,000. The employment agreement also provides for eligibility to receive benefits substantially similar to those of the Company’s other senior executive officers. On December 21, 2022, Renaud Maloberti notified the Company of his resignation as the Company’s Chief Commercial Officer, effective January 13, 2023. Pursuant to his employment agreement, on May 28, 2019, Mr. Maloberti was granted stock options to purchase 1,750 shares of the Company’s common stock. The stock options have an exercise price of $20.80 per share, and vested in three equal annual installments beginning on the first anniversary of the grant date. Additionally, our named executive officers are eligible to participate in our health and welfare programs and 401(k) plan, and other benefit programs on the same basis as other employees. Outstanding Equity Awards at 2022 Fiscal Year End The following table provides information regarding equity awards held by the named executive officers as of December 31, 2022. The number of securities underlying the equity awards and option exercise prices reflect the reverse stock split of our common stock at a ratio of 1-for-20, which was effective as of December 9, 2022. Option Awards Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Option Exercise Price ($) Option Expiration Date Francois Michelon 15,366 - 100.00 5/12/25 Chief Executive Officer 1,598 - 91.00 5/12/25 6,250 - 45.00 12/13/26 30,600 - 18.00 12/11/29 833 1,667 (1) 53.00 4/5/31 - 15,000 (2) 53.00 4/5/31 - 35,657 (3) 8.00 3/28/32 Michael Thornton 15,667 - 100.00 5/12/25 Chief Technology Officer 1,598 - 91.00 5/12/25 6,250 - 45.00 12/13/26 28,796 - 18.00 12/11/29 833 1,667 (1) 53.00 4/5/31 - 15,000 (2) 53.00 4/5/31 - 34,906 (3) 8.00 3/28/32 Renaud Maloberti 1,750 - 21.00 5/28/29 Former Chief Commercial Officer 2,143 - 18.00 12/11/29 667 333 (4) 35.00 1/24/30 417 833 (1) 53.00 4/5/31 - 7,500 (2) 53.00 4/5/31 - 5,000 (2) 47.00 6/10/31 - 9,322 (3) 8.00 3/28/32 54 Table of Contents (1) Represents unvested portion of stock option award which vests in three equal annual installments beginning on April 5, 2022. (2) Represents unvested portion of stock option award which vests as follows: (i) 25% vests upon the Company’s earning $5 million or more of revenue with a gross margin of 10% or greater, (ii) 25% vests upon the Company’s earning $10 million or more of revenue with a gross margin of 35% or greater, (iii) 25% vests upon the Company’s earning $15 million or more of revenue with a gross margin of 40% or greater, and (iv) 25% vests upon the Company’s earning $20 million or more of revenue with a gross margin of 50% or greater. (3) Represents unvested portion of stock option award which vests in three equal annual installments beginning on March 28, 2023. (4) Represents unvested portion of stock option award which vests in three equal annual installments beginning on January 25, 2021. Equity Compensation Plan Table The following table presents information on the Company’s equity compensation plans as of December 31, 2022. All outstanding awards relate to our common stock. Plan Category Number of Securities to Be Issued upon Exercise of Outstanding Options, Warrants and Rights (a) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) Equity compensation plans approved by security holders 402,232 (1) $ 31.47 51,972 (2) Equity compensation plans not approved by security holders - - - Total 402,232 $ 31.47 51,972 _________________ (1) Consists of outstanding stock options exercisable for shares of common stock issued under the 2016 Plan . (2) As of January 1, 2023, as a result of an automatic increase to the pool of shares available for issuance under the 2016 Plan on such date, the number of shares available for future issuance under the 2016 Plan was 919,937 shares. Director Compensation Effective April 9, 2020, the Company adopted a non-employee director compensation policy (the “ Compensation Policy ”) pursuant to which each of our non-employee directors receives, upon his or her initial election to the Board of Directors, a stock option exercisable for 2,500 shares of common stock with a per share exercise price equal to the closing price of the common stock on the Nasdaq on the grant date. All such stock options vest in three equal annual installments beginning on the one-year anniversary of the grant date. Under the Compensation Policy, on the first trading day of each calendar year, each non-employee director is awarded a stock option exercisable for 600 shares of common stock, with a per share exercise price equal to the closing price of the common stock on the Nasdaq on the grant date, which becomes exercisable on the first anniversary of its grant date. Additionally, pursuant to the Compensation Policy, each non-employee director is paid an annual cash retainer of $40,000, prorated for partial years of service and paid quarterly in arrears. Effective January 30, 2023, the Board of Directors adopted a revised Compensation Policy, pursuant to which each annual option grant will become exercisable in three equal annual installments beginning on the first anniversary of the grant date. 55 Table of Contents The following table sets forth information with respect to compensation earned by or awarded to each of our non-employee directors who served on the Board of Directors during the fiscal year ended December 31, 2022: Name Fees Earned or Paid in Cash ($) Option Awards ($) (1) Total ($) Louis Basenese 40,000 30,120 70,120 Anthony DiGiandomenico 40,000 40,502 80,502 Michael Harsh 40,000 40,552 80,552 Alexander Tokman 40,000 40,502 80,502 (1) The amounts shown in this column indicate the grant date fair value of option awards granted in the subject year computed in accordance with FASB ASC Topic 718. For additional information regarding the assumptions made in calculating these amounts, see Notes 2 and 8 to the audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. The following table shows the number of shares subject to outstanding option awards held by each non-employee director as of December 31, 2022: Name Shares Subject to Outstanding Option Awards (#) Louis Basenese 11,175 Anthony DiGiandomenico 16,401 Michael Harsh 16,426 Alexander Tokman 16,401 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters. The following tables set forth certain information regarding beneficial ownership of our voting stock as of March 16, 2023 by: · each person or group of affiliated persons known by us to be the beneficial owner of more than 5% of any class of our voting stock; · each named executive officer included in the Summary Compensation Table below; · each of our directors; · each person nominated to become director; and · all executive officers, directors and nominees as a group. Unless otherwise noted below, the address of each person listed in the tables is c/o ENDRA Life Sciences Inc. at 3600 Green Court, Suite 350, Ann Arbor, Michigan 48105. To our knowledge, each person listed below has sole voting and investment power over the shares shown as beneficially owned except to the extent jointly owned with spouses or otherwise noted below. Beneficial ownership is determined in accordance with the rules of the SEC. The information does not necessarily indicate ownership for any other purpose. Under these rules, shares of stock which a person has the right to acquire ( i.e. , by the exercise of any option or warrant) within 60 days after March 16, 2023 are deemed to be beneficially owned and outstanding for purposes of calculating the number of shares and the percentage beneficially owned by that person. However, these shares are not deemed to be beneficially owned and outstanding for purposes of computing the percentage beneficially owned by any other person. The applicable percentages of stock outstanding as of March 16, 2023 is based upon 3,169,103 shares of common stock and 141.397 shares of Series A Preferred Stock outstanding on that date. 56 Table of Contents Beneficial Ownership Name of Beneficial Owner Shares of Common Stock Beneficially Owned Percentage of Common Stock Beneficially Owned Shares of Series A Preferred Stock Beneficially Owned Percentage of Series A Preferred Stock Beneficially Owned Francois Michelon 72,333 (1) 2.2 % - - Michael Thornton 85,964 (2) 2.7 % - - Renaud Maloberti 8,913 (3) * - - Irina Pestrikova 2,208 (4) * Louis Basenese 9,896 (5) * - - Anthony DiGiandomenico 31,441 (6) * - - Michael Harsh 16,118 (7) * - - Alexander Tokman 20,483 (8) * - - All directors and executive officers as a group (8 persons) 247,356 7.4 % - - 5% Stockholders - - Michael Bryan, Sr. (9) 192,500 6.1 % Mark R. Busch (10) 17.488 12.4 % Donald Kendall (11) 106.421 75.3 % Juan R. Rivero (12) 17.488 12.4 % * Less than one percent. (1) Consists of 4,860 shares of common stock, 67,366 shares of common stock issuable upon the exercise of options that are presently exercisable or becoming exercisable within 60 days of March 16, 2023 and 107 shares of common stock issuable upon the exercise of restricted warrants. (2) Consists of 19,139 shares of common stock, 65,613 shares of common stock issuable upon the exercise of options that are presently exercisable or becoming exercisable within 60 days of March 16, 2023 and 1,212 shares of common stock issuable upon the exercise of restricted warrants. (3) Consists of 79 shares of common stock and 8,834 shares of common stock issuable upon the exercise of options that are presently exercisable or becoming exercisable within 60 days of March 16, 2023. (4) Consists of 2,208 shares of common stock issuable upon the exercise of options that are presently exercisable or becoming exercisable within 60 days of March 16, 2023. (5) Consists of 2,454 shares of common stock and 7,442 shares of common stock issuable upon the exercise of options that are presently exercisable or becoming exercisable within 60 days of March 16, 2023. (6) Consists of 19,101 shares of common stock, 12,340 shares of common stock issuable upon the exercise of options that are presently exercisable or becoming exercisable within 60 days of March 16, 2023 and 23,944 shares of common stock issuable upon the exercise of restricted warrants. (7) Consists of 3,457 shares of common stock, 12,359 shares of common stock issuable upon the exercise of options that are presently exercisable or becoming exercisable within 60 days of March 16, 2023 and 302 shares of common stock issuable upon the exercise of restricted warrants. (8) Consists of 8,143 shares of common stock and 12,340 shares of common stock issuable upon the exercise of options that are presently exercisable or becoming exercisable within 60 days of March 16, 2023. (9) According to the Schedule 13G filed on March 10, 2023 by Michael Bryan, Sr., Mr. Bryan beneficially owns 192,500 shares of common stock. The address of Mr. Bryan is 51 Wentworth Rd., Rye, New Hampshire 03870. (10) Shares jointly owned with spouse. Mr. Busch’s address is 300 S. Tryon St., Suite 1000, Charlotte, NC 28202. (11) Mr. Kendall’s address is 2000 Edwards Street, Suite B-100, Houston, TX 77007. Shares jointly owned with spouse. Mr. Busch’s address is 300 S. Tryon St., Suite 1000, Charlotte, NC 28202. (12) Mr. Rivero’s address is 14521 Jockey Circle, N. Davie, FL 33330. 57 Table of Contents Item 13. Certain Relationships and Related Transactions, and Director Independence Policy for Review of Related Person Transactions The Board of Directors has adopted a written policy with regard to related person transactions, which sets forth our procedures and standards for the review, approval or ratification of any transaction required to be reported in our filings with the SEC or in which one of our executive officers or directors has a direct or indirect material financial interest, with limited exceptions. Our policy is that the Corporate Governance and Nominating Committee shall review the material facts of all related person transactions (as defined in the related person transaction approval policy) and either approve or disapprove of the entry into any related person transaction. In the event that obtaining the advance approval of the Corporate Governance and Nominating Committee is not feasible, the Corporate Governance and Nominating Committee shall consider the related person transaction and, if the Corporate Governance and Nominating Committee determines it to be appropriate, may ratify the related person transaction. In determining whether to approve or ratify a related person transaction, the Corporate Governance and Nominating Committee will take into account, among other factors it deems appropriate, whether the related person transaction is on terms comparable to those available from an unaffiliated third-party under the same or similar circumstances and the extent of the related person's interest in the transaction. Related Person Transactions SEC regulations define the related person transactions that require disclosure to include any transaction, arrangement or relationship in which the amount involved exceeds the lesser of (a) $120,000 or (b) one percent of the average of the Company’s total assets at year-end for the last two completed fiscal years in which it was or is to be a participant and in which a related person had or will have a direct or indirect material interest. A related person is: (i) an executive officer, director or director nominee of the Company, (ii) a beneficial owner of more than 5% of any class of the Company’s voting securities, (iii) an immediate family member of an executive officer, director or director nominee or beneficial owner of more than 5% of any class of the Company’s voting securities, or (iv) any entity that is owned or controlled by any of the foregoing persons or in which any of the foregoing persons has a substantial ownership interest or control. Since January 1, 2021, the Company has not participated in any such related party transaction. Item 14. Principal Accountant Fees and Services RBSM audited our financial statements for the year ended December 31, 2022. The following table sets forth the aggregate fees billed or expected to be billed by RBSM for audit and non-audit services in 2022 and 2021, including “out-of-pocket” expenses incurred in rendering these services. The nature of the services provided for each category is described following the table. Fee Category 2022 2021 Audit Fees (1) $ 146,000 $ 112,000 Audit-Related Fees - ‒ Tax Fees (2) $ 30,000 $ 15,000 Total $ 176,000 $ 125,000 _________________ (1) Audit fees include fees for professional services rendered for the audit of our annual statements, quarterly reviews, consents and assistance with and review of documents filed with the SEC. (2) Tax fees include fees (or, for 2022, estimated fees) for professional services rendered for tax compliance, tax advice and tax planning. 58 Table of Contents PART IV Item 15. Exhibits, Financial Statements and Schedules (a) List of documents filed as part of this report: 1. Financial Statements (see “Financial Statements and Supplementary Data” at Item 8 and incorporated herein by reference) 2. Financial Statement Schedules (Schedules to the Financial Statements have been omitted because the information required to be set forth therein is not applicable or is shown in the accompanying Financial Statements or notes thereto) 3. Exhibits The following is a list of exhibits filed as part of this Annual Report: Exhibit Incorporated by Reference Number Exhibit Description Filed Herewith Form Exhibit Filing Date 3.1 Fourth Amended and Restated Certificate of Incorporation of the Company 8-K 3.2 05/12/17 3.2 Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation 8-K 3.1 12/08/22 3.3 Amended and Restated Bylaws of the Company S-1 3.4 12/06/16 4.1 Specimen Certificate representing shares of common stock of the Company S-1 4.1 11/21/16 4.2 Form of Warrant Agreement and Warrant comprising a part of the Company’s units issued in its 2017 initial public offering S-1 4.2 11/21/16 4.3 Form of Underwriters’ Warrant issued to certain designees of the underwriters in the Company’s 2017 initial public offering S-1 4.3 11/21/16 4.5 Form of Underwriters’ Warrant issued to certain designees of the underwriters in the Company’s October 2018 offering 10-Q 4.6 11/05/18 4.7 Form of Warrant issued in July 2019 Private Placement 8-K 4.2 07/29/19 4.8 Certificate of Designations of Series A Convertible Preferred Stock 8-K 4.1 12/11/19 4.9 Form of Warrant issued in December 2019 Series A Convertible Preferred Stock Offering 8-K 4.2 12/11/19 4.10 Certificate of Designations of Series B Convertible Preferred Stock 8-K 4.1 12/26/19 4.11 Form of Warrant issued in December 2019 Series B Convertible Preferred Stock Offering 8-K 4.2 12/26/19 4.12 Certificate of Designations of Series C Preferred Stock 8-K 3.1 09/27/22 4.13 Description of Securities 10-K 4.12 03/30/22 10.1 ENDRA Life Sciences Inc. 2016 Omnibus Incentive Plan * S-1 10.4 12/06/16 10.2 First Amendment to ENDRA Life Sciences Inc. 2016 Omnibus Incentive Plan* DEF 14A Appx. A 05/10/18 10.3 Form of Stock Option Award under 2016 Omnibus Incentive Plan* S-1 10.5 12/06/16 10.4 Form of Restricted Stock Unit Award under 2016 Omnibus Incentive Plan* S-1 10.6 12/06/16 10.5 Non-Employee Director Compensation Policy, effective April 9, 2020* 10-Q 10.2 08/14/20 10.6 Non-Employee Director Compensation Policy, effective January 30, 2023* x 10.6 Form of Indemnification Agreement by and between the Company and each of its directors and executive officers* S-1 10.8 11/21/16 10.7 Amended and Restated Employment Agreement, dated May 12, 2017, by and between the Company and Francois Michelon* 8-K 10.1 05/12/17 10.8 First Amendment to Employment Agreement, dated December 27, 2019, by and between the Company and Francois Michelon* 8-K 10.1 12/27/19 10.9 Amended and Restated Employment Agreement, dated May 12, 2017, by and between the Company and Michael Thornton* 8-K 10.2 05/12/17 59 Table of Contents 10.10 First Amendment to Employment Agreement, dated December 27, 2019, by and between the Company and Michael Thornton* 8-K 10.2 12/27/19 10.11 Collaborative Research Agreement, dated April 22, 2016, by and between the Company and General Electric Company S-1 10.17 11/21/16 10.12 Amendment to Collaborative Research Agreement, dated April 21, 2017, by and between the Company and General Electric Company S-1 10.21 05/03/17 10.13 Amendment 2 to Collaborative Research Agreement, dated January 30, 2018, by and between the Company and General Electric Company 8-K 10.1 01/30/18 10.14 Amendment 3 to Collaborative Research Agreement, dated January 13, 2020, by and between the Company and General Electric Company 8-K 10.1 01/15/20 10.15 Amendment 4 to Collaborative Research Agreement, dated December 16, 2020, by and between the Company and General Electric Company 8-K 10.1 12/21/20 10.16 Amendment 5 to Collaborative Research Agreement, dated December 16, 2022, by and between the Company and General Electric Company 8-K 10,1 12/19/22 10.17 Gross Lease, dated January 1, 2015, between the Company and Green Court LLC S-1 10.18 11/21/16 10.18 Amendment to Gross Lease, dated October 10, 2017, by and between the Company and Green Court LLC 10-Q 10.2 05/15/18 10.19 Second Amendment to Lease, dated March 15, 2021, by and between the Company and Green Court LLC 10-K 10.18 03/25/21 10.2 0 Consulting Agreement, dated October 31, 2017, by and between the Company and StarFish Product Engineering, Inc. 10-K 10.16 03/20/18 10.2 1 Employment Agreement, dated April 20, 2019, by and between the Company and Renaud Maloberti* 10-Q 10.2 08/08/19 21.1 Subsidiaries of the Company 10-K 21.1 03/30/22 23.1 Consent of RBSM LLP, Independent Registered Public Accounting Firm (with respect to Form S-3) x 23.2 Consent of RBSM LLP, Independent Registered Public Accounting Firm (with respect to Form S-8) x 24.1 Power of Attorney (included on signature page) x 31.1 Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 x 31.2 Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 x 32.1 Certification Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 x 101.INS XBRL Instance Document x 101.SCH XBRL Taxonomy Schema x 101.CAL XBRL Taxonomy Extension Calculation Linkbase x 101.DEF XBRL Taxonomy Extension Definition Linkbase x 101.LAB XBRL Taxonomy Extension Label Linkbase x 101.PRE XBRL Taxonomy Extension Presentation Linkbase x ________________ * Indicates management compensatory plan, contract or arrangement. Item 16. Form 10-K Summary None. 60 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ENDRA Life Sciences Inc. Dated: March 16, 2023 By: /s/ Francois Michelon Francois Michelon Chief Executive Officer and Director (Principal Executive Officer) POWER OF ATTORNEY AND SIGNATURES We, the undersigned officers and directors of ENDRA Life Sciences Inc., hereby severally constitute and appoint Francois Michelon our true and lawful attorney, with full power to him to sign for us and in our names in the capacities indicated below, any amendments to this Annual Report on Form 10-K, and generally to do all things in our names and on our behalf in such capacities to enable ENDRA Life Sciences Inc. to comply with the provisions of the Securities Exchange Act of 1934, as amended, and all the requirements of the Securities Exchange Commission. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signatures Title Date /s/ Francois Michelon Chief Executive Officer and Director (Principal Executive Officer) March 16, 2023 Francois Michelon /s/ Irina Pestrikova Senior Director, Finance (Principal Financial and Accounting Officer) March 16, 2023 Irina Pestrikova /s/ Louis J. Basenese Director March 16, 2023 Louis J. Basenese /s/ Anthony DiGiandomenico Director March 16, 2023 Anthony DiGiandomenico /s/ Michael Harsh Director March 16, 2023 Michael Harsh /s/ Alexander Tokman Director March 16, 2023 Alexander Tokman 61