What changed in this filing

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Item 1. Financial Statements

2023-11-14 compared with 2023-08-14 · 80 added, 68 removed, 306 unchanged (33% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

September 30,

Current Assets

10 unchanged sentences

Total Current Liabilities

Long Term Debt

Lease liabilities

Total Long Term Debt

Lease liabilities, non-current

Total Long Term Liabilities

Total Liabilities

24 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Operating Expenses

26 unchanged sentences

Condensed Consolidated Statements of Stockholders’ Equity

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Series A Convertible

Preferred Stock

Series B Convertible

Preferred Stock

Stockholders'

Balance as of March 31, 2022

Balance as of June 30, 2022

$ ( 75,140,079 )

Common stock issued for cash, net of funding costs

Fair value of vested stock options

2 unchanged sentences

( 3,440,227 )

Balance as of June 30, 2022

Balance as of September 30, 2022

$ ( 78,580,306 )

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Series A Convertible

Preferred Stock

Series B Convertible

Preferred Stock

Stockholders'

Balance as of March 31, 2023

Balance as of June 30, 2023

$ ( 87,369,780 )

Common stock issued for cash, net of funding costs

Warrants issued for cash, net of funding costs

Fair value of vested stock options

2 unchanged sentences

( 3,100,836 )

Balance as of June 30, 2023

Balance as of September 30, 2023

$ ( 90,470,616 )

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Series A Convertible

Preferred Stock

Series B Convertible

Preferred Stock

Stockholders'

6 unchanged sentences

( 9,889,496 )

Balance as of June 30, 2022

Balance as of September 30, 2022

$ ( 78,580,306 )

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Series A Convertible

Preferred Stock

Series B Convertible

Preferred Stock

Stockholders'

7 unchanged sentences

( 8,600,714 )

Balance as of June 30, 2023

Balance as of September 30, 2023

$ ( 90,470,616 )

2 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Six Months Ended

September 30,

Cash Flows from Operating Activities

3 unchanged sentences

Depreciation and amortization

Fixed assets write off

Stock compensation expense including common stock issued for RSUs

1 unchanged sentence

Changes in operating assets and liabilities:

Increase in prepaid expenses

Decrease in prepaid expenses

Increase in inventory

9 unchanged sentences

Cash Flows from Financing Activities

Proceeds from issuance of common stock

Proceeds from issuance of warrants

Proceeds from issuance of common stock, net

Proceeds from issuance of warrants, net

Net cash provided by financing activities

Net increase (decrease) in cash

Net decrease in cash

( 1,554,562 )

( 1,445,184 )

Cash, beginning of period

10 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2023 and 2022

For the three and nine months ended September 30, 2023 and 2022

Note 1 - Nature of the Business

ENDRA Life Sciences Inc.

(“ENDRA” or the “Company”) has developed and is continuing to develop technology for increasing the capabilities of clinical diagnostic ultrasound to broaden patient access to the safe diagnosis and treatment of a number of significant medical conditions in circumstances where expensive X-ray computed tomography (“CT”) and magnetic resonance imaging (“MRI”) technology is unavailable or impractical.

(“ENDRA” or the “Company”) has developed and is continuing to develop technology for characterizing tissue non-invasively, at the point of patient care, to broaden patient access to the safe diagnosis and treatment of a number of significant medical conditions in circumstances where expensive X-ray computed tomography (“CT”), magnetic resonance imaging (“MRI”) or other technologies are unavailable or impractical.

ENDRA was incorporated on July 18, 2007 as a Delaware corporation.

Certain reclassifications have been made to the 2022 consolidated financial statements in order to conform to the current period presentations.

These classifications did not impact the net loss for period ended June 30, 2023.

These classifications did not impact the net loss for period ended September 30, 2023.

Note 2 - Summary of Significant Accounting Policies

13 unchanged sentences

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

The balance sheet at December 31, 2022 has been derived from the audited financial statements at that date.

For further information, refer to the financial statements and footnotes thereto included in ENDRA Life Sciences Inc.

annual financial statements for the twelve months ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 16, 2023.

For further information, refer to the financial statements and footnotes thereto included in the Company’s annual financial statements for the twelve months ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 16, 2023.

Cash and Cash Equivalents

The Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of one year or less, when purchased, to be cash.

As of June 30, 2023 and December 31, 2022, the Company had no cash equivalents.

Cash equivalents include investments in an institutional money market fund, which invests in U.S.

Treasury bills, notes and bonds, and/or repurchase agreements, backed by such obligations.

Carrying value approximates fair value.

The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits.

12 unchanged sentences

A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest period presented in the financial statements.

As of June 30, 2023 and December 31, 2022, the Company recorded a right of use asset of $ 431,842 and $ 505,816 , respectively.

As of June 30, 2023 and December 31, 2022, the Company recorded a lease liability of $ 444,167 and $ 518,147 , respectively.

As of September 30, 2023 and December 31, 2022, the Company recorded a right of use asset of $ 393,451 and $ 505,816 , respectively.

As of September 30, 2023 and December 31, 2022, the Company recorded a lease liability of $ 405,773 and $ 518,147 , respectively.

Revenue Recognition

6 unchanged sentences

Research and development costs are charged to the statement of operations as incurred.

During the three months ended June 30, 2023 and 2022, the Company incurred $ 1,400,182 and $ 1,847,560 of expenses related to research and development costs, respectively.

During the six months ended June 30, 2023 and 2022, the Company incurred $ 2,791,496 and $ 3,060,582 of expenses related to research and development costs, respectively.

During the three months ended September 30, 2023 and 2022, the Company incurred $ 1,632,849 and $ 1,830,297 of expenses related to research and development costs, respectively.

During the nine months ended September 30, 2023 and 2022, the Company incurred $ 4,424,345 and $ 4,890,879 of expenses related to research and development costs, respectively.

Net Earnings (Loss) Per Common Share

2 unchanged sentences

Diluted loss per share is computed by increasing the denominator by the weighted average number of additional shares that could have been outstanding from securities convertible into common stock (using the “treasury stock” method), unless their effect on net loss per share is anti-dilutive.

There were 3,123,030 and 410,358 potentially dilutive shares, which include outstanding common stock options, and warrants, as of June 30, 2023 and December 31, 2022, respectively.

There were 3,100,429 and 410,358 potentially dilutive shares, which include outstanding common stock options, and warrants, as of September 30, 2023 and December 31, 2022, respectively.

September 30,

Options to purchase common stock

29 unchanged sentences

GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.

The Company has limited commercial experience and had a cumulative net loss from inception to June 30, 2023 of $ 87,369,780 .

The Company had working capital of $ 6,050,947 as of June 30, 2023.

The Company has limited commercial experience and had a cumulative net loss from inception to September 30, 2023 of $ 90,470,616 .

The Company had working capital of $ 4,228,598 as of September 30, 2023.

The Company has not established an ongoing source of revenue sufficient to cover its operating costs and to allow it to continue as a going concern and will require additional financing to fund its future planned operations, including research and development and commercialization of its products.

The accompanying financial statements for the three and six months ended June 30, 2023 have been prepared assuming the Company will continue as a going concern, but the ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable.

The accompanying financial statements for the three and nine months ended September 30, 2023 have been prepared assuming the Company will continue as a going concern, but the ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable.

Management’s plans to continue as a going concern include raising additional capital through sales of equity securities and borrowing.

6 unchanged sentences

Note 3 - Inventory

As of June 30, 2023 and December 31, 2022, inventory consisted of raw materials, subassemblies to be used in the assembly of TAEUS systems, and finished goods.

As of June 30, 2023, the Company had no orders pending for the sale of a TAEUS system.

As of June 30, 2023 and December 31, 2022, the Company had inventory valued at $ 2,757,633 and $ 2,644,717 , respectively.

As of September 30, 2023 and December 31, 2022, inventory consisted of raw materials, subassemblies to be used in the assembly of TAEUS systems, and finished goods.

As of September 30, 2023, the Company had no orders pending for the sale of a TAEUS system.

As of September 30, 2023 and December 31, 2022, the Company had inventory valued at $ 2,757,633 and $ 2,644,717 , respectively.

Note 4 - Fixed Assets

As of June 30, 2023 and December 31, 2022, fixed assets consisted of the following:

As of September 30, 2023 and December 31, 2022, fixed assets consisted of the following:

September 30,

Property, leasehold and capitalized software

2 unchanged sentences

Fixed assets, net

Depreciation expense for the three months ended June 30, 2023 and 2022 was $ 35,265 and $ 21,701 , respectively.

Depreciation expense for the six months ended June 30, 2023 and 2022 was $ 69,781 and $ 40,739 , respectively.

Depreciation expense for the three months ended September 30, 2023 and 2022 was $ 32,058 and $ 23,793 , respectively.

Depreciation expense for the nine months ended September 30, 2023 and 2022 was $ 101,839 and $ 64,532 , respectively.

Note 5 - Accounts Payable and Accrued Liabilities

As of June 30, 2023 and December 31, 2022, current liabilities consisted of the following:

As of September 30, 2023 and December 31, 2022, current liabilities consisted of the following:

September 30,

Accounts payable

9 unchanged sentences

Under the conditions of the loan, twenty-five percent (25%) of the loan will be forgiven if seventy-five percent (75%) is repaid prior to the initial term date .

As of September 30, 2023 and December 31, 2022, the loan had a balance of CAD 40,000 .

Note 7 - Capital Stock

8 unchanged sentences

Capital Stock

As of June 30, 2023, the authorized capital of the Company consisted of 90,000,000 shares of capital stock, comprised of 80,000,000 shares of common stock with a par value of $ 0.0001 per share, and 10,000,000 shares of preferred stock with a par value of $ 0.0001 per share.

The Company has designated 10,000 shares of its preferred stock as Series A Convertible Preferred Stock (“Series A Preferred Stock”), 1,000 shares of its preferred stock as Series B Convertible Preferred Stock (“Series B Preferred Stock”), 100,000 shares of its preferred stock as Series C Preferred Stock, and the remainder of the 9,889,000 preferred shares remain authorized but undesignated.

As of June 30, 2023, there were 7,481,603 shares of common stock, 141 .397 shares of Series A Preferred Stock, and no shares of Series B Preferred Stock or Series C Preferred Stock issued and outstanding, and a stock payable balance of $ 2,427 .

On April 27, 2023, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with Newbridge Securities Corporation (the “Underwriter”), relating to the issuance and sale (the “Offering”) of 3,750,000 shares of our common stock and warrants to purchase up to 1,875,000 shares of our common stock.

As of September 30, 2023, the authorized capital of the Company consisted of 90,000,000 shares of capital stock, comprised of 80,000,000 shares of common stock with a par value of $ 0.0001 per share, and 10,000,000 shares of preferred stock with a par value of $ 0.0001 per share.

The Company has designated 10,000 shares of its preferred stock as Series A Convertible Preferred Stock (“Series A Preferred Stock”), 1,000 shares of its preferred stock as Series B Convertible Preferred Stock (“Series B Preferred Stock”), 100,000 shares of its preferred stock as Series C Preferred Stock (“Series C Preferred Stock”), and the remainder of the 9,889,000 preferred shares remain authorized but undesignated.

As of September 30, 2023, there were 8,411,777 shares of common stock, 141 .397 shares of Series A Preferred Stock, and no shares of Series B Preferred Stock or Series C Preferred Stock issued and outstanding, and a stock payable balance of $ 2,061 .

On April 27, 2023, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with Newbridge Securities Corporation (the “Underwriter”), relating to the issuance and sale (the “Offering”) of 3,750,000 shares of the Company’s common stock and warrants to purchase up to 1,875,000 shares of the Company’s common stock.

The warrants were offered and sold at the rate of one warrant to purchase one share for every two shares of common stock purchased in the Offering.

6 unchanged sentences

The net proceeds to the Company from the Offering were approximately $ 4.7 million, after deducting underwriting discounts and commissions and other offering expenses.

During the six months ended June 30, 2023, the Company issued a total of 4,312,500 shares of its common stock in return for aggregate net proceeds of $ 4,712,750 .

During the six months ended June 30, 2022, the Company issued a total of 1,030,997 shares of its common stock in return for aggregate net proceeds of $ 8,399,512 under the June 2021 ATM Agreement.

During the nine months ended September 30, 2023, the Company issued a total of 4,312,500 shares of its common stock in return for aggregate net proceeds of $ 4,712,750 under the Offering.

The Company issued an additional 930,174 shares of its common stock in return for aggregate net proceeds of $ 1,113,832 under the June 2021 ATM Agreement.

During the nine months ended September 30, 2022, the Company issued a total of 1,030,997 shares of its common stock in return for aggregate net proceeds of $ 8,399,512 under the June 2021 ATM Agreement.

At-the-Market Equity Offering Program

On June 21, 2021, the Company entered into the At-The-Market Issuance Sales Agreement with Ascendiant (the “June 2021 ATM Agreement”) to sell shares of common stock for aggregate gross proceeds of up to $ 20.0 million, from time to time, through an “at-the-market” equity offering program under which Ascendiant acts as sales agent.

As of June 30, 2023, under the June 2021 ATM Agreement the Company has issued an aggregate of 1,064,634 shares of common stock in return for net proceeds of $ 9,216,618 , resulting in approximately $ 286,289 of compensation paid to Ascendiant.

As of September 30, 2023, under the June 2021 ATM Agreement the Company has issued an aggregate of 1,994,808 shares of common stock in return for net proceeds of $ 10,330,450 , resulting in $ 320,921 of compensation paid to Ascendiant.

Note 8 - Common Stock Options

1 unchanged sentence

Stock options are awarded to the Company’s employees, consultants and non-employee members of the board of directors under the Omnibus Plan and are generally granted with an exercise price equal to the market price of the Company’s common stock at the date of grant.

The aggregate fair value of these stock options granted by the Company during the six months ended June 30, 2023 was determined to be $ 1,017,235 using the Black-Scholes-Merton option-pricing model based on the following assumptions:

The aggregate fair value of these stock options granted by the Company during the nine months ended September 30, 2023 was determined to be $ 1,017,534 using the Black-Scholes-Merton option-pricing model based on the following assumptions:

(i) volatility rate of 105 % to 107 %, (ii) discount rate of 0 %, (iii) zero expected dividend yield, (iv) risk free rate of 3.68 % to 3.86 %, and (v) expected life of 10 years.

A summary of option activity under the Company’s Omnibus Plan as of June 30, 2023, and changes during the year then ended, is presented below:

A summary of option activity under the Company’s Omnibus Plan as of September 30, 2023, and changes during the year then ended, is presented below:

Balance outstanding at December 31, 2022

Cancelled or expired

Balance outstanding at June 30, 2023

Exercisable at June 30, 2023

Balance outstanding at September 30, 2023

Exercisable at September 30, 2023

Note 9 - Common Stock Warrants

4 unchanged sentences

The warrants expire November 2, 2026 .

The following table summarizes all stock warrant activity of the Company for the six months ended June 30, 2023:

The following table summarizes all stock warrant activity of the Company for the nine months ended September 30, 2023:

Balance outstanding at December 31, 2022

Balance outstanding at June 30, 2023

Exercisable at June 30, 2023

Balance outstanding at September 30, 2023

Exercisable at September 30, 2023

Note 10 - Related Party Transactions

7 unchanged sentences

therefore, the Company uses its estimated incremental borrowing rate at the time of lease commencement to discount the present value of lease payments.

The Company’s discount rate for operating leases at June 30, 2023 was 10 %.

The Company’s discount rate for operating leases at September 30, 2023 was 10 %.

Lease expense is recognized on a straight-line basis over the lease term to the extent that collection is considered probable.

1 unchanged sentence

The weighted-average remaining lease term is 2.25 years.

As of June 30, 2023, the maturities of operating lease liabilities are as follows:

As of September 30, 2023, the maturities of operating lease liabilities are as follows:

2025 and beyond

3 unchanged sentences

Long-term lease obligations

For the six months ended June 30, 2023 and 2022, the Company incurred rent expenses of $ 108,187 and $ 106,604 , respectively.

For the nine months ended September 30, 2023 and 2022, the Company incurred rent expenses of $ 163,104 and $ 160,302 , respectively.

From time to time the Company may become a party to litigation in the normal course of business.

As of June 30, 2023, there were no legal matters that management believes would have a material effect on the Company’s financial position or results of operations.

As of September 30, 2023, there were no legal matters that management believes would have a material effect on the Company’s financial position or results of operations.

Note 12 – Subsequent Events

Common Stock Issued

Subsequent to the three months ended September 30, 2023 through the date of this Quarterly Report on Form 10-Q, the Company issued a total of 43,145 shares of common stock in return for net proceeds of $ 44,451 under the June 2021 ATM Agreement.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements