What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-14 compared with 2025-05-15 · 69 added, 51 removed, 124 unchanged (49% of the section changed)

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Information that is contained in and can be accessed through our website, X posts and LinkedIn are not incorporated into, and do not form a part of, this Quarterly Report or any other report or document we file with the SEC.

We were incorporated as a Delaware corporation in 2007.

Currently, we are developing a next-generation enhanced ultrasound technology platform— Thermo-Acoustic Enhanced Ultrasound, or TAEUS®.

Our first TAEUS platform application focuses on measuring fat in the liver.

Our vision is to become a leading biomarker solution for metabolic diseases and Glucagon-Like Peptide-1 (“GLP-1”) drug management.

Our mission is to develop and offer an accurate, simple-to-use, inexpensive, at the point-of-care test – like a blood pressure cuff for the assessment and management of metabolic disease.

We intend to focus on serving these four markets:

Pharmaceutical Companies and Clinical Research Organizations (“CROs”) - to assist them in the efficient screening and monitoring of subjects for new GLP-1 therapeutics in clinical trials by providing a critical biomarker in the treatment of metabolic dysfunction-associated steatohepatitis (“MASH”), obesity, and blood sugar regulation.

High-end Primary Care Networks (Concierge Medicine) - to assist them in screening patients for obesity, diabetes, and liver disease, as well as monitoring response to lifestyle changes and drug therapies.

Bariatric and Metabolic Clinics - for the management of obesity, the detection of metabolic disease, and monitoring response to therapies.

Primary and Internal Medicine at Large - to screen patients for metabolic disease related to obesity, diabetes, and hypertension, and monitor response to lifestyle change and drug therapies.

The primary care segment may utilize external laboratories, imaging centers, and pharmacies to perform point-of-care liver fat assessment exams, hence this group is expected to be a part of ENDRA’s go-to-market strategy for the primary care provider segment at large.

The primary focus of the TAEUS platform is to establish key biomarkers for metabolic diseases management with specific focus on the emerging GLP-1 therapies.

We are redefining TAEUS technology to make it more scalable and to improve its adoption in newly targeted large market segments.

As a result, we now intend to emphasize the following:

Leveraging artificial intelligence and machine learning models to complement our TAEUS technologies and further improve their accuracy;

Integrating thermo-acoustic technology with conventional ultrasound technologies to simplify, and reduce, the procedure time while reducing

Reducing the form factor of TAEUS and making it cost effective.

We plan to implement a new low barrier-to-entry, multi-year, subscription-based business model with monthly recurring revenue.

We will retain our traditional direct product sale model with annual upgrade and maintenance fees for customers who may prefer it, but our primary focus will be on the subscription-based approach.

In either case, sales are expected to be made by a direct sales force using a value proposition rooted in clinical data supported by results from reference sites.

We continue to examine the positioning (need, cost, and technical considerations) of our TAEUS platform in the rapidly evolving market for point-of-care assessment of liver fat disease against other opportunities for our platform, such as monitoring of thermo-ablative surgical procedures.

We are developing a thermo-acoustic medical device designed specifically for accurate liver fat measurement for metabolic disease detection and management and GLP-1 drug eligibility and management.

Our goal is to create the next-generation enhanced ultrasound technology platform designed to establish key biomarkers for metabolic diseases management and emerging GLP-1 therapies.

Our business model will primarily be a low barrier-to-entry, multi-year, subscription-based business model with monthly recurring revenue (MRR), while also offering a traditional product sale with annual upgrade and maintenance fees.

These sales are expected to be made by a direct sales force to four markets:

Pharmaceutical Companies and Clinical Research Organizations (“CROs”) - to assist them in the efficient screening and monitoring subjects for new GLP-1, NASH/MASH and Insulin Sensitizers clinical trials.

High-End Primary Care Clinics - to assist them screening patients for obesity, diabetes and liver disease as well as monitor response to lifestyle changes and drug therapies.

Bariatric and Metabolic Clinics - for obesity and other metabolic diseases detection and therapies response monitoring

Primary & Internal Medicine at Large - to screen patients for obesity, diabetes and liver disease and monitor response to lifestyle change and drug therapy

Each of our solutions will require regulatory approvals before we are able to sell or license the application.

Based on certain factors, such as the installed base of ultrasound systems, availability of other imaging technologies, such as CT and MRI, economic strength and applicable regulatory requirements, we intend to seek initial approval of our applications for sale in the European Union and the United States.

Recent Developments

In July 2025, the Board authorized the Company to develop and pursue a cryptocurrency treasury strategy.

Following this authorization, the Company:

(i) retained Anchorage Digital Bank, N.A., a U.S.-based, institutional-grade custodian, to hold cryptocurrency acquired by the Company in connection with its treasury strategy and (ii) engaged Arca Investment Management, LLC to manage the Company’s cryptocurrency holdings and to implement a bitcoin-based income-generating strategy.

On July 23, 2025, in connection with the Company’s cryptocurrency treasury strategy, the Board formed a Cryptocurrency Advisory Board (the “Advisory Board”) to assist the Company in developing and managing its cryptocurrency treasury strategy.

The Board appointed the following individuals to the Advisory Board:

James Altucher, an entrepreneur, author, cryptocurrency advocate, and former hedge fund manager;

James Manning, founder and CEO of Mawson Infrastructure Group, a U.S.-focused digital infrastructure provider;

Rayne Steinberg, co-founder and CEO of Arca Investment Management, LLC, an institutional-grade cryptocurrency asset management firm.

Our cryptocurrency strategy has not been implemented or tested and, as of the date of this Quarterly Report, we have not acquired any cryptocurrency.

We may ultimately determine in the future not to implement our strategy.

Financial Operations Overview

No revenue has been generated by our TAEUS technology, which we have not commercially sold as of March 31, 2025.

No revenue has been generated by our TAEUS technology, which we have not commercially sold as of June 30, 2025.

Research and Development Expenses

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Critical Accounting Policies and Estimates

Warrant Liability

The Company accounts for the liability classified warrants in accordance with the guidance contained in ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging.

Such guidance provides criteria for instruments do not meet the criteria for equity treatment thereunder.

This liability is subject to re-measurement at each balance sheet date.

With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations.

Use of Estimates

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Any adjustments applied to estimates are recognized in the period in which such adjustments are determined.

Warrant Liability

The Company accounts for the liability classified warrants in accordance with the guidance contained in ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging.

Such guidance provides criteria for instruments do not meet the criteria for equity treatment thereunder.

This liability is subject to re-measurement at each balance sheet date.

With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations.

Share-based Compensation

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On January 1, 2025, the pool of shares issuable under the Omnibus Plan automatically increased by 178,033 shares from 1,738 shares to 179,771 shares.

As of March 31, 2025, there were 179,474 shares of common stock remaining available for issuance under the Omnibus Plan.

As of June 30, 2025, there were 17,978 shares of common stock remaining available for issuance under the Omnibus Plan.

We record share-based compensation in accordance with the provisions of the Share-based Compensation Topic of the FASB Codification.

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Results of Operations

Three months ended March 31, 2025 and 2024

We had no revenue during the three months ended March 31, 2025 and 2024.

Three months ended June 30, 2025 and 2024

We had no revenue during the three months ended June 30, 2025 and 2024.

Cost of Goods Sold

We had no cost of goods sold during the three months ended March 31, 2025 and 2024.

We had no cost of goods sold during the three months ended June 30, 2025 and 2024.

Research and Development

Research and development expenses were $528,685 for the three months ended March 31, 2025, as compared to $1,041,526 for the three months ended March 31, 2024, a decrease of $512,841 or 49%.

Research and development expenses were $381,061 for the three months ended June 30, 2025, as compared to $716,366 for the three months ended June 30, 2024, a decrease of $335,305, or 47%.

The costs include primarily wages, fees, equipment and third-party costs for the development of our TAEUS product line.

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Sales and Marketing

Sales and marketing expenses were $68,991 for the three months ended March 31, 2025, as compared to $238,660 for the three months ended March 31, 2024, a decrease of $169,669, or 71%.

Sales and marketing expenses were $68,834 for the three months ended June 30, 2025, as compared to $162,952 for the three months ended June 30, 2024, a decrease of $94,118, or 58%.

The costs include primarily headcount and pre-selling activities for our TAEUS product line.

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General and Administrative

Our general and administrative expenses for the three months ended March 31, 2025 were $871,606, compared to $1,500,355 for the three months ended March 31, 2024, a decrease of $628,749, or 42%.

Our wage and related expenses for the three months ended March 31, 2025 were $368,607, compared to $641,381 for the three months ended March 31, 2024.

Wage and related expenses in the three months ended March 31, 2025 included $83,047 of stock compensation expense related to the issuance and vesting of options for the three months ended March 31, 2025.

Our professional fees, which include legal, audit, and investor relations, for the three months ended March 31, 2025 were $305,860, compared to $639,872 for the three months ended March 31, 2024.

Other income was $24,390 for the three months ended March 31, 2025 was primarily due to interest income.

Other income was $4,841 for the three months ended March 31, 2024, a decrease of $19,549 or 404%.

For the three months ended March 31, 2025, there were changes in fair value of warrant liability of $408,562.

As a result of the foregoing, for the three months ended March 31, 2025, we recorded a net loss of $1,036,330, compared to a net loss of $2,775,700 for the three months ended March 31, 2024.

Our general and administrative expenses for the three months ended June 30, 2025 were $851,195, compared to $1,351,535 for the three months ended June 30, 2024, a decrease of $500,340, or 37%.

Our wage and related expenses for the three months ended June 30, 2025 were $239,886, compared to $ 581,096 for the three months ended June 30, 2024.

Wage and related expenses in the three months ended June 30, 2025 included $68,504 of stock compensation expense related to the issuance and vesting of options and RSUs for the three months ended June 30, 2025.

Our professional fees, which include legal, audit, and investor relations, for the three months ended June 30, 2025 were $413,954, compared to $582,327 for the three months ended June 30, 2024.

Other income was $13,066 for the three months ended June 30, 2025 was primarily due to interest income.

Other income was $1,700 for the three months ended June 30, 2024, an increase of $ 11,366, or 669%, due to increased interest income.

For the three months ended June 30, 2025, there were changes in fair value of warrant liability of $62,112 .

As a result of the foregoing, for the three months ended June 30, 2025, we recorded a net loss of $1,225,912, compared to a net loss of $2,229,153 for the three months ended June 30, 2024.

Six months ended June 30, 2025 and 2024

We had no revenue during the six months ended June 30, 2025 and 2024.

Cost of Goods Sold

We had no cost of goods sold during the six months ended June 30, 2025 and 2024.

Research and Development

Research and development expenses were $909,746 for the six months ended June 30, 2025, as compared to $1,757,892 for the six months ended June 30, 2024, a decrease of $848,416, or 48%.

The costs include primarily wages, fees, equipment and third-party costs for the development of our TAEUS product line.

Research and development expenses decreased from the prior year as we completed development of our initial TAEUS product and began focusing our spending on clinical trials and commercialization of the product that has been developed.

Sales and Marketing

Sales and marketing expenses were $137,825 for the six months ended June 30, 2025, as compared to $401,612 for the six months ended June 30, 2024, a decrease of $263,787, or 66%.

The costs include primarily headcount and pre-selling activities for our TAEUS product line.

Sales and marketing expenses decreased largely due to our restructuring in the second quarter of 2024.

Currently, our marketing efforts are through our website and attendance of key industry meetings.

General and Administrative

Our general and administrative expenses for the six months ended June 30, 2025 were $1,722,801, compared to $2,851,890 for the six months ended June 30, 2024, a decrease of $1,129,089, or 40%.

Our wage and related expenses for the six months ended June 30, 2025 were $482,576, compared to $1,222,478 for the six months ended June 30, 2024.

Wage and related expenses in the six months ended June 30, 2025 included $151,551 of stock compensation expense related to the issuance and vesting of options and RSUs for the three months ended June 30, 2025.

Our professional fees, which include legal, audit, and investor relations, for the six months ended June 30, 2025 were $719,815, compared to $1,222,199 for the six months ended June 30, 2024.

Other income was $37,395 for the six months ended June 30, 2025, compared to other income of $6,541 for the six months ended June 30, 2024, an increase of $30,915, or 473%, due to increased interest income.

For the six months ended June 30, 2025, there were changes in fair value of warrant liability of $470,674.

As a result of the foregoing, for the six months ended June 30, 2025, we recorded a net loss of $2,262,242, compared to a net loss of $5,004,853 for the six months ended June 30, 2024.

Near-Term Liquidity and Capital Resources

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In the absence of immediate additional liquidity, we will be forced to delay or reduce our product development programs and commercialization efforts, materially curtail or cease our operations, sell or dispose of our rights or assets, pursue sale or other strategic transactions, or undergo restructuring or insolvency proceedings.

As of March 31, 2025, we had an accumulated deficit of $104,474,429 and had $2,064,874 in cash.

As of June 30, 2025, we had an accumulated deficit of $105,700,341 and had $1,808,574 in cash.

To date we have funded our operations through private and public sales of our securities and will need to raise additional funds in order to execute on our business plan, fully commercialize our TAEUS technology, and generate revenues.

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The consolidated financial statements included in this Form 10-Q have been prepared assuming we will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

As reflected in the accompanying consolidated financial statements, during the three months ended March 31, 2025, we incurred net losses of $1,036,330 and used cash in operations of $1,293,129.

In light of our cash balance as of March 31, 2025, we will need to raise additional capital in order to fund operations through the next twelve months, and prior to any ability to fund operations from revenue generated from the sale of our products.

As reflected in the accompanying consolidated financial statements, during the six months ended June 30, 2025, we incurred net losses of $2,262,242 and used cash in operations of $2,406,844.

In light of our cash balance as of June 30, 2025, we will need to raise additional capital in order to fund operations through the next twelve months, and prior to any ability to fund operations from revenue generated from the sale of our products.

The financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.

Operating Activities

During the three months ended March 31, 2025, we used $1,293,129 of cash in operating activities primarily as a result of our net loss of $1,036,330, offset by share-based compensation of $83,046, amortization of right of use assets of $31,797, depreciation expense of $13,786 change in fair value of warrant liability of $(408,562), and net changes in operating assets and liabilities of $23,134.

During the three months ended March 31, 2024, we used $2,144,312 of cash in operating activities primarily as a result of our net loss of $2,775,700, offset by share-based compensation of $317,497, amortization of right of use assets of $40,376, inventory reserve of $142,733, depreciation expense of $15,300, fixed assets write-off of $8,808, and net changes in operating assets and liabilities of $106,674.

During the six months ended June 30, 2025, we used $2,406,844 of cash in operating activities primarily as a result of our net loss of $2,262,242, offset by share-based compensation of $171,809, amortization of right of use assets of $55,231, depreciation expense of $23,142, change in fair value of warrant liability of $(470,674), and net changes in operating assets and liabilities of $75,890.

Investing Activities

During the three months ended March 31, 2025, we used $17,280 in investing activities related to purchases of fixed assets.

During the three months ended March 31, 2024, we used $27,000 in investing activities related to purchases of fixed assets and received $3,204 in proceeds from sale of fixed assets.

During the six months ended June 30, 2025, we used $17,280 in investing activities related to purchases of fixed assets.During the six months ended June 30, 2024, we used $16,000 in investing activities related to purchases of fixed assets, and received $3,204 in proceeds from sale of fixed assets.

Financing Activities

During the three months ended March 31, 2025, our financing activities provided $145,803 in proceeds from issuances of common stock.

During the three months ended March 31, 2024, our financing activities provided $419,967 in proceeds from issuances of common stock, $77,419 in proceeds from warrant exercises.

During the six months ended June 30, 2025, our financing activities provided $1,003,218 in proceeds from issuances of common stock.During the six months ended June 30, 2024, our financing activities provided $1,148,470 in proceeds from issuances of common stock, $6,687,248 in proceeds from warrant exercises.

We also used $28,484 to repay a loan from TD Bank under the Canadian Emergency Business Account.

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Off-Balance Sheet Transactions

At March 31, 2025, the Company did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.

At June 30, 2025, the Company did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.

Quantitative and Qualitative Disclosure About Market Risk

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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 2. Management’s Discussion and Analysis