Hello everyone and welcome to this ENDRA Life Sciences First Quarter 2020 Earnings Conference Call. During today's prepared remarks all phone participants will remain in a listen-only mode but later you will have the opportunity to ask questions. As a reminder today's conference is being recorded. And to get us started with opening remarks and introductions, I am pleased to turn the floor to CFO, Mr. David Wells. Good afternoon Mr. Wells.

Thank you, Jim. Good afternoon and welcome to ENDRA's first quarter 2020 business update and financial conference call. We issued a press release this afternoon. For those of you who don't have a copy of the release, you can access it in the Investors section of our website at www.endrainc.com. Before we begin, please note that today's presentation includes forward-looking statements. All statements other than statements of historical facts, including statements regarding our strategies, financial condition, operations, costs, plans and objectives, as well as anticipated results of our development and commercialization efforts and the timing for receipt of required regulatory approvals and product launches are forward-looking statements. Except as otherwise required by federal securities laws, the company disclaims any obligations or undertaking to update or revise any forward-looking statements. Please refer to our Form 10-K for the 2019 fiscal year filed with the SEC to get a better understanding of the risks and uncertainties related to forward-looking statements. I will now turn the call over to our Chairman and Chief Executive Officer, Francois Michelon. Francois?

Thank you, David. Good afternoon, everyone. And thank you for joining us today to review ENDRA’s first quarter 2020 performance and 2020 business update. Along with David and me on today's call are Renaud Maloberti, Chief Commercial Officer; and Michael Thornton, ENDRA's Chief Technology Officer. Let me quickly go through today's agenda. First, I'll highlight our recent achievements and David will review financials. Then I’ll provide an update on our key milestones and expectations for 2020, followed by Renaud who will provide additional commentary on commercial activities with a focus on Europe. And finally, we'll open the call for Q&A. Before I begin, I want to acknowledge all the people who are dealing with COVID-19 as a patient, parent, a family member or friend; our thoughts and well wishes are with all of you, and our particular appreciation goes out to the frontline caregivers providing help to those in need. On a corporate level, David will detail proactive actions we've taken to align the company's structure with this environment while also ensuring our ability to bring the TAEUS system to market in 2020. Right now, I'd like to discuss the company's progress during the quarter on our stated 2020 objectives and commercial milestones. For those who may not be aware of ENDRA's story, we are the pioneer of Thermo Acoustic Enhanced Ultrasound known as TAEUS. TAEUS will allow clinicians to visualize tissue in ways similar to an MRI but at 50 times lower cost at the point of patient bedside. ENDRA's goal is to develop clinical applications for the TAEUS technology in areas of high unmet clinical need, and our initial focus is on helping the more than 1 billion people globally affected by Non-Alcoholic Fatty Liver Disease known as NAFLD, and Non-Alcoholic Steatohepatitis, known as NASH, where there is an acute need for a practical tool to assess and monitor liver fat before the conditions progress to fibrosis, cirrhosis, and possibly cancer. During the first quarter, we achieved a major milestone paving the way for commercialization of TAEUS when we received a CE Mark approval for our TAEUS Fatty Liver Imaging Probe, also known as FLIP. We received this ahead of schedule in March. The CE Mark indicates that the TAEUS FLIP system complies with all applicable European directives and regulations in the European Union and other CE Mark geographies which include 27 EU member states. In spite of the global slowdowns brought on by the COVID-19 pandemic, we've continued to move aggressively to capitalize on our CE Mark approval and our first mover advantage. More specifically, we've launched new clinical education tools and are advancing a network of potential TAEUS evaluation sites in Europe where we see the greatest opportunity to achieve near-term commercial success. We remain on target to install TAEUS at our first evaluation sites in Europe this summer. This will be followed by training our partners, recruiting and scanning patients as soon as hospital operations return to normal. And we see this cycle gaining momentum over the summer and are encouraged by our partners’ enthusiasm to start using the TAEUS system. Renaud will provide more details in a few minutes regarding the important activities underway to support the commercial ramp in Europe. Turning now to the progress we're making in our second key market, the U.S. With our CE Mark in hand, we focused our regulatory resources on completing our 510(k) application to the FDA during the current quarter. I'm happy to report we remain on track to make the final submission to the FDA during the current quarter, finalizing verification testing, labeling requirements, and assuring compliance with SEC regulation which will position ENDRA to receive approval and begin initial commercial activities of the TAEUS FLIP system in the U.S. in the second half of this year. I cannot overstate the significance of this upcoming milestone as the FDA approval will position ENDRA to simultaneously ramp commercially in two major markets in 2020, the U.S. and Europe, each with an acute need for a practical and cost-effective liver diagnostic solution. In anticipation of the FDA milestone, we continue to advance our pre-commercial activities in the U.S. This includes renewing our collaboration agreement with GE Healthcare during the first quarter, extending the agreement’s term to January of 2021. As a reminder, under the terms of the agreement, GE Healthcare will continue to support ENDRA’s commercialization activities for its TAEUS technology for use in the fatty liver application by facilitating introductions to GE Healthcare ultrasound customers. In return, ENDRA will afford GE certain rights of first offer with respect to manufacturing and licensing for the TAEUS liver application. As widely reported, COVID-19 has impacted existing and new clinical trials for countless companies. However, we're encouraged by the fact that healthcare facilities appear to be gradually returning to normal. What's more? The recent Centers for Medicare guidance about healthcare facilities restarting elective procedures aligns with the feedback we are getting from our clinical partners. On that front, we continue to strengthen our relationship with our U.S. clinical partners, Rocky Vista University and the University of Pittsburgh Medical Center, finalizing experimental design and patient recruitment even as COVID-19 has affected hospital operations. As soon as these sites are ready to resume normal operations, ENDRA will be ready. And we see that happening in June and July. As an important reminder, clinical data from the two U.S. evaluation sites, Rocky Vista and University of Pittsburgh, are not required for our planned U.S. 510(k) submission this quarter. I want to make that very clear. The agreements with Rocky Vista and UPMC were signed using the Institutional Review Board process, also known as the IRB, which allows research institutions to use technology that's deemed to be low risk ahead of the FDA regulatory clearance. So we'll be ahead of the game, collecting clinical data that can support our U.S. commercial launch, even before we anticipate receiving the 510(k) approval later this year. Following 510(k) approval, we can look forward to leveraging Rocky Vista and UPMC as great reference sites for our U.S. commercial teams. Organizationally I’d like to highlight the recent additions to the ENDRA team. During Q1, we expanded our Scientific Advisory Board with the addition of Dr. Raza Malik, Director of Hepatology and Associate Chief, Division of Gastroenterology at Tufts Medical Center in Boston. More recently, we added Louis Basenese, Founder of Disruptive Tech Research to ENDRA's Board of Directors. While Dr. Malik bolsters our already strong team of clinical professionals advocating on behalf of ENDRA to the worldwide liver health community, we look forward to leveraging Louis’ expertise in identifying disruptive patent-protective technologies, as well as corporate communications to help us broaden awareness with institutional and retail investors as we begin our commercialization phase. Bottom line, I could not be more pleased with the progress we've made during these challenging times to keep the company on track to receive critical regulatory approvals and advance commercialization activities on schedule in Europe and the United States. I'd like to turn the call over to David Wells to review the financial results for the first quarter ending March 31, 2020. David?

Thank you, Francois. I will now provide a summary of our reported first quarter 2020 financial results. Our operating expenses increased to $3.1 million for the quarter ended March 31, 2020, up from $2.7 million for the same period in 2019. Our research and development spending decreased year-over-year by $255,000, while our sales and marketing costs increased $214,000 for the quarter. Our general and administrative costs were up by $551,000, due to employment-related costs, including non-cash expenses for stock compensation, additional spending on costs associated with being a publicly traded company, including Investor Relations, and increased costs for insurance. Our net loss for the quarter ended March 31, 2020 was $3.3 million as compared to a net loss of $2.7 million for the quarter ended March 31, 2019. Our net loss included non-cash charges, which totaled $817,000, comprising expenses for equity-based compensation, and amortization of debt discount. Our net loss per share for the quarter ended March 31, 2020 was $0.29 per basic and diluted share. Our cash balance as of March 31, 2020, totaled approximately $3.1 million, as compared to approximately $6.2 million as of December 31, 2019. The decrease in cash for the first quarter is the result of our spending for normal operations, costs associated with the submission of key regulatory filings, as well as the purchase of inventory in preparation for the sale of TAEUS systems. We do not expect this elevated level of spend to persist for the remainder of the year. In fact, during the last call, I reminded our shareholders of the advantages of our asset-light operating model. This is especially relevant and advantageous now in the uncertain and challenging economic environment that we find ourselves. As Francois mentioned earlier, as the COVID-19 pandemic has unfolded, ENDRA has taken preemptive actions to align the company's cost structure with this environment, while also ensuring our ability to bring the TAEUS system to market in 2020. These actions include for the remainder of 2020, implementing a cash salary reduction of 33% for the company's management team, and paying non-employee directors annual retainers in the form of restricted stock units instead of cash. We also submitted an application under the Small Business Administration's Paycheck Protection Program or the PPP. The application was approved. And on May 22nd of this year, excuse me, on April 22nd of this year, we received the proceeds of this PPP loan in the amount of approximately $308,000. We continue to actively pursue and evaluate opportunities to strengthen our balance sheet and position our company for the exciting commercial growth opportunities that lie ahead. This includes the exercise of outstanding warrants, various market-based funding opportunities, strategic partnerships, as well as non-dilutive academic research grants. I will now turn the call over to Renaud. Renaud?

Thank you, David. Since joining ENDRA in May 2019, we have made great progress in building awareness and seeding the market for sales of ENDRA's TAEUS technology ahead of key regulatory approval. With that in mind today, I'd like to update investors on our European commercialization strategy and key progress. Immediately upon securing CE Mark approval, we accelerated our efforts to establish clinical evaluation reference sites in each target European market, including Germany, France, Switzerland, and the UK. The purpose of these reference sites is to get the TAEUS technology into the hands of early clinical adopters who will serve as commercial springboards. We believe this go-to-market strategy is the fastest way to establish clinical usage, secure initial sales, as well as achieve a faster sales ramp. On the last call, we indicated that we plan to deploy our CE Mark TAEUS liver systems to the selected evaluation sites beginning in the second half of 2020. We remain on track with this goal and anticipate starting our first EU evaluation site this summer. These evaluation sites in Europe and the U.S. will serve two very important purposes to support our commercialization efforts. First, these sites will help build our clinical evidence, human data with our TAEUS liver device. As we've mentioned before, old medical technologies need to have a strong base of data on which to build a compelling clinical value proposition. Second, these evaluation sites will also serve as regional reference and anchor sites with commercial concrete teams, allowing them to bring in new potential customers to see the product in clinical use. We also discussed our adapted approach to engage with our target audiences in a digital format to maintain a high degree of market awareness and grow our clinical relationship despite the reformatting of key clinical and industry conferences to online venues due to COVID-19. To that end, we launched ENDRA’s new liver focused website on April 30th that reinforces our commitment to enabling better, earlier detection of NAFLD/NASH. This site is being translated into multiple languages to educate the market and support commercial pipeline expansion. We also shared a new educational video with over 3,500 interested clinicians entitled How to Use the TAEUS Liver Device, which is available on our website. These clinician relationships have been developed through marketing outreach, participation in key global clinical conferences, and contributions from partners like GE Healthcare. We continue to add new relationships each week and month as we view this database as an important marketing pipeline as we begin commercialization. This is all part of our plan to increase communications with potential partners and investors as commercialization begins. We encourage people to regularly check our website for updated information and content regarding our TAEUS system and market opportunities. We are making also excellent progress in our recruitment plans to build a small team of TAEUS clinical market development specialists in Europe who will provide direct support and on-site training to clinical reference sites and work with our commercial partner GE Healthcare at a local level. This small team of market development specialists will focus on fostering relationships with key local clinical leaders, execute our launch and learn ENDRA strategy, and continue building awareness and credibility for the TAEUS technology in target markets. We plan to start making job offers to the final commercial candidates in June. So we are very excited to initiate our commercial activities in Europe and I look forward to updating you on our progress and initial sales in upcoming quarters. Now I will turn the call to Francois who will make some final remarks.

Thanks very much, Renaud and David. I'll wrap up the call before Q&A with the following key points looking forward into 2020: First, we remain laser-focused on two key milestones; ramping up commercialization activities in Europe; and finalizing our 510(k) submission to the FDA in the U.S. We look forward to providing investors with updates in the coming weeks and months as we make specific progress on both fronts. Second, as I mentioned in the Q&A of our last quarterly call, we've definitely seen an uptick in the strategic partners approaching ENDRA from the pharmaceutical and contract research organization sectors involved in the development of therapies for NAFLD and NASH. I don't want to overstate the progress of these partnership discussions, but I believe ENDRA’s technology is a natural fit for these companies who are seeking to drive efficiencies in their clinical trials while facing the same impracticalities as clinicians with liver biopsy and MRI to screen and monitor patients during the studies. A partnership with one or several of these companies makes perfect sense for ENDRA and would nicely complement our GE partnership with the ultrasound equipment side. With that, I'd like to open the call for questions. Operator?

We'll hear first from Brooks O'Neil with Lake Street Capital.

So, as always, I guess I'm trying to understand how you think about the speed to commercialization, both in Europe and ultimately in the U.S.? And how do you balance that against your rate of cash burn and obviously your available cash? Just trying to think forward through the rest of the year and kind of assess how these two key factors balance up?

So I think building on what David mentioned earlier in terms of our asset-light historical operating model, we're clearly ramping down the engineering spending as the product is finalized and carefully ramping up the commercial spending. So you're not going to see a net doubling per se of our spend with commercialization underfoot. That's one of the benefits of having partnered with service providers and engineering. And as David and Renaud have also mentioned, we're being very careful about timing, the build-out of a small commercial team in Europe. So right now, to be very clear, we've got a great pipeline with some final candidates. But we don't have any people on our payroll sitting idly in Europe. We're carefully engaged with the evaluation sites that we're talking to. And at the right time, starting in June, we're going to start building out that small team. I anticipate it'll be four to five people in Europe. And that, as I mentioned, historically is for a couple of reasons. One, we want to control our destiny for the company and investors' sake. And having a small team there carefully managing evaluation sites, pursuing commercial opportunities locally is something that we want to control. But it also allows us to be complemented by our partner GE Healthcare, as we've mentioned. And GE has been very generous in their sharing of customer information, and will continue to introduce us to ultrasound customers focused on the abdomen and liver. And we believe that that'll help us manage our cost structure commercially in Europe in partnership with GE. I hope that's helpful in answering your question.

Very helpful indeed. So second question. I'm just curious how you view the COVID-19 impact on U.S. regulatory approval pathway and do you see that slowing things down at all? Or do you think you can continue to move forward more or less on schedule as you head towards U.S. approval?

Yes, I can tell you what we control in terms of our submission this quarter is certainly in hand and there's no issue as we've discussed, or impact us for the submission from COVID. I can't speak for the FDA, but the signals we're getting Brooks are positive. Medicare, as David mentioned, has referenced returning to elective procedures, and those elective procedures are not cosmetic procedures. They're all the bread and butter operations, orthopedic joints, general surgery, and many other procedures. So, I am seeing that opening up. We're certainly getting the same feedback from our U.S. and European evaluation sites. And I have to imply, since I have not seen otherwise that the FDA is also remaining efficient in that regard and not being impacted or focused, if you will, from game-changing technology like ENDRA. So I remain confident that we will file the 510(k) in the U.S. in June and that will, according to historical timelines, position us to get approval by the end of the year in November. I hope that's helpful.

Yes, it's very helpful. And then the last question I had is, obviously, we see the value of the GE partnership, they have a huge brand organization in place. Can you begin to speculate on how you might envision the relationship extending beyond the deadline of the current agreement?

Yes, I think to be fair to both of us, what we have in hand already with them is what we need to focus on initially in terms of building out carefully the target markets working with local GE teams. We are in regular contact with the global GE Healthcare teams. They've been very generous, as I said, in terms of introductions. But they've also provided us with demo systems and other ultrasound capital that are very helpful to a small company and further support our capital-efficient process so that we don't have to invest in that. So without dodging the question Brooks, I think the best path to success and enlargement of a relationship and a contract with GE or other partners is proving that we're very successful executing this commercialization plan in the second half with GE's help. And I think that will prove to all parties and others who may be sitting on the sidelines that this product is indeed as attractive as we believe. So I hope that's helpful as well in answering the question.

Next, we'll hear from Joe G. Michael at Catalytic. Please go ahead. Your line is open.

I have just one question. I think I understand the commercialization process in Europe, where you are focusing on early adopters and centers of influence with reference centers. Can you explain what the commercialization strategy in the U.S. will look like, assuming you receive your 510(k) approval this year?

Yes, that's a great question. It's quite similar to our approach in Europe, with the exception that we have already begun evaluating and gathering clinical data in the U.S. through UPMC and Rocky Vista. Specifically, as we move toward 510(k) approval, we plan to establish a small regional commercial team in the U.S., likely consisting of around five commercial representatives working directly with the evaluation sites I mentioned, as well as some others in the pipeline that we expect to announce in the coming months. We aim to commercially engage the next series of adopters at those sites. With the clinical data we will have from UPMC, Rocky Vista, and our European locations, you can envision a small U.S. commercial team leveraging those reference sites and that data to connect with our shared ultrasound customer base with GE, promoting the TAEUS liver device to enhance the functionality of existing ultrasound systems. Essentially, it's going to mirror our efficient model for Europe. Does that address your question?

Our next question will come from the line of Vernon Bernardino with H.C. Wainwright. Please go ahead, Vernon.

Hi, guys. Thanks for taking my question and congrats on the CE Mark approval. I'm sure that was a lot of hard work and seems earlier than expected there. Definitely like to get good surprises especially in this environment. So I just wanted to ask a few questions about the digital format. Just wondering if you could provide a little kind of detail, I assume perhaps you already have the videos already ready for that presentation.

And by the way, Vernon, yes, just to emphasize, this is a build-out. Leveraging our website is the main repository, but we're also very proactively engaging through our own CRM of now 3,500 clinicians and engaging them directly with this new content. But it's publicly available at endrainc.com. And you'll see there, new animations that simply explain to clinicians how the product, which we show for the first time in real format in the video, can be integrated seamlessly and easily into their clinical practices. And you’ll also start seeing a number of videos and interviews that I think articulate in our own voice, mine to begin, the current progress on our plans as a company.

Okay. Will there be live cases from other companies that I cover? I'm sure that's not possible, especially in a situation where everyone is protected and the procedures, particularly in smaller centers, are not in hospitals. Is that something that you included in the plan?

Yes, our product in Europe is CE approved, allowing us to sell and market it. Once we get our product into the reference sites mentioned during this call in each key market, and as we finalize the paperwork with several verbal approvals and agreements, we will certainly be able to demonstrate it. We plan to have testimonials and video demonstrations of the product, which is non-invasive and easy to use, without the need for special environments like an MRI or surgery. Aside from the COVID limitations, there are no barriers to sharing this information. We aim to create more content so that clinicians and investors can see our product in action, both in the U.S. and Europe.

Okay. And I see from some of these companies I follow in the U.S. that especially with their clinical trials, that they're able to continue although at a slower pace work as far as clinical trials are concerned in these non-hospital small centers. Now for these procedures with TAEUS FLIP, is the target in the U.S. and do you see that also as indication that's where you're going to see initial commercialization in Europe?

Yes. So our investor presentation shares our targets in terms of clinical segments, Vernon. First and foremost, the radiologists that perform currently upwards of 50 million to 70 million abdominal and liver ultrasound scans for other reasons, they can't measure fat the way we do, but they do that for other reasons. So there's an established clinical practice. And those radiologists are typically in a hospital or small clinic setting. Second clinical segment are the gastro hepatologists. Those are the liver specialists. And frankly, in Europe, quite a few of them use ultrasound already in the U.S., less so. But they've expressed enormous appetite to have tools, especially with the new therapies that are starting to come online with Zydus and others to be approved later this year, for a tool that would allow them to assess and screen patients and then monitor the progression of that therapy on those new drugs. Those gastro hepatologists are also in both hospital clinic and private practice settings. And we clearly have messaging and outreach and awareness of where those clinicians are. I will say to answer the other part of your question, we are getting signals from both hepatologists and radiologists in our network that facilities, small and large, are starting to consider, and in some cases, return to elective procedures. And so, we have confidence that in June and July, we'll start placing our systems at those first evaluation sites and continue through the summer. It is going to be institution dependent, but we have very good feedback from the clinicians we're talking to. I hope that's helpful and comprehensive.

And one more question. Renaud, if I missed it, so you mentioned that Germany, Switzerland, UK, and I think there was one other?

And France.

Next, we'll hear from Ascendiant Capital and the line of Mr. Ed Woo.

My question is more on the U.S. When you do get approval and you do target these reference centers, will you be targeting certain geography or will it be pretty broad-based depending on the centers?

Our criteria for selecting evaluation sites are clear and several. They must be centers of excellence in liver health with influential individuals who can assist us. We are not selecting just any community hospital with an ultrasound. The University of Pittsburgh Medical Center is a prime example of a top-tier liver transplant and liver health facility located in my hometown of Pittsburgh, making it a strong anchor account. We aim to establish similar sites in Europe, but focusing on the U.S., we seek to partner with regional centers of excellence that have early adopters and leading clinicians. Expect more announcements across the U.S., likely distributed geographically to support the regionalized model I've mentioned, with around five commercial staff in the U.S. at ENDRA. Generally, this will involve major urban centers with substantial populations and relevant clinicians. You will witness a diversified approach featuring liver centers of excellence and, importantly, early adopter clinicians who can help us craft our clinical value proposition and sway future customers to make purchases.

Great. And then have you set a timeframe for how long these evaluation periods will last?

Yes, great question. So it depends on how many patients we're doing. But just to put it in perspective, we are not talking about a pharmaceutical length type of study that could last several years. Typically, in the case of these evaluation sites, they have patients already. And targeting 75 to 100 patients as a base target is something that can be achieved in six to nine months typically. We're doing also everything we can to facilitate that with the evaluations by providing loaner equipment of ultrasound when the evaluation site says that it could accelerate the scan so that they don't necessarily have to depend on radiology in the department. So GE has been very helpful in that regard. And to answer that question, I think six to nine months is a good rule of thumb for 75 patients. And I believe we'll have strong success in recruiting those patients, because clearly we've established those. The hepatologists and radiologists already have that pipeline of existing patients that they can use in the study. I hope that's helpful. Thank you very much. And operator, I think that seems to be the end of the questions. So after this final thank you to the investors, we can wrap it up. But I appreciate everyone calling in, listening to our story and all the support we're getting from both the analytical community and the investors directly, and we remain very optimistic and will continue to inform you of our progress over the coming weeks and months. And look forward to speaking with all of you again on our next quarterly call. Thank you.

Francois, thank you. And on behalf of the rest of the leadership team, Michael, Renaud, and David, we thank you all for joining today. You may now disconnect your lines and we hope that you have a good evening.