8-K
ENDRA Life Sciences Inc. (NDRA)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
| Date of<br>Report (Date of earliest event reported) | March<br>26, 2020 |
|---|
ENDRA Life Sciences Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-37969 | 26-0579295 |
|---|---|---|
| (State<br>or other jurisdiction of incorporation | (Commission<br>File Number) | (IRS<br>Employer Identification No.) |
| 3600<br>Green Court, Suite 350 Ann Arbor, MI | 48105 | |
| --- | --- | |
| (Address<br>of principal executive offices) | (Zip<br>Code) | |
| Registrant's<br>telephone number, including area code | (734)<br>335-0468 |
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common<br>stock, par value $0.0001 per share | NDRA | The<br>Nasdaq Stock Market LLC |
| Warrants,<br>each to purchase one share of Common Stock | NDRAW | The<br>Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☑
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On March 26, 2020, ENDRA Life Sciences Inc. issued a press release announcing its financial results for the quarter and year ended December 31, 2019. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d)
Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Press<br>Release dated March 26, 2020, furnished herewith. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ENDRA Life Sciences Inc. | ||
|---|---|---|
| March<br>26, 2020 | ||
| By: | /s/<br>Francois Michelon | |
| Name: | Francois<br>Michelon | |
| Title: | President<br>and Chief Executive Officer |
ndra_ex991
Exhibit 99.1
ENDRA Life Sciences Provides Business Update and Reports Fourth Quarter and Full Year 2019 Financial Results
ANN ARBOR, Michigan - March 26, 2020 - ENDRA Life Sciences Inc. (“ENDRA”) (NASDAQ: NDRA), the pioneer of Thermo Acoustic Enhanced UltraSound (TAEUS™), today provided a business update and reported fourth quarter and full year 2019 financial results.
“I am proud of the many, notable achievements ENDRA has made over the last year, which have given us strong forward momentum as we move towards our goal of bringing our breakthrough liver fat measurement application of the TAEUS technology to the EU and U.S. markets,” said Francois Michelon, Chairman and Chief Executive Officer. “Like others in our industry, we continue to monitor and evaluate the near and long term potential impacts of the COVID19 pandemic, and are making required adjustments to ensure ENDRA remains well positioned to deliver on our plans.”
Key 2019 Highlights
●
Submitted CE Mark technical file for TAEUS liver device in the EU.
●
Completed two-part, first in-human feasibility study of TAEUS liver application at Robarts Research Institute and reported top-line results.
●
Announced new clinical study partnerships with two leading clinical institutions.
●
Expanded leadership team with new Chief Commercial Officer, Renaud Maloberti, and Vice President of Engineering and Programs, Amy Sitzler.
●
Increased intellectual property portfolio to 64 filed, issued and licensed patents and pending patent applications.
Subsequent Events in Q1 2020
●
Received CE Mark Approval for TAEUS FLIP (Fatty Liver Imaging Probe) System targeting Non-Alcoholic Fatty Liver Disease (“NAFLD”) and Non-Alcoholic Steatohepatitis (“NASH”).
●
Renewed collaboration agreement with the GE Healthcare unit of General Electric Company (“GE”), extending the agreement’s term to January 2021.
●
Expanded Scientific Advisory Board with the addition of Raza Malik, M.D., Director of Hepatology and Associate Chief of the Division of Gastroenterology at Tufts Medical Center in Boston.
“Results generated from our feasibility study in 2019 and strong clinical reception to our ongoing pre-commercial activities have reinforced our excitement about the potential for the TAEUS liver fat application. We continue to believe it is well positioned to address a significant clinical need and technology gap for a safe, non-invasive, cost-effective and point-of-care tool to assess liver fat in patients with chronic liver conditions like NAFLD and NASH,” continued Michelon. “With the receipt of the CE Mark approval for TAEUS liver system, which was earlier than anticipated, we are looking forward to ramping up our initial commercialization efforts in Europe and making our regulatory filing in the U.S. in the second quarter of 2020.”
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Financial Results for Year Ended December 31, 2019
●
Operating expenses increased to $10.8 million in FY 2019 from $9.0 million in FY 2018. The increase was due almost exclusively to increased costs associated with the development of our TAEUS product line.
●
Net loss in FY 2019 totaled $13.3 million, and after a non-cash deemed dividend related to the issuance of preferred stock of $4.2 million the loss was $17.5 million, or ($2.34) per basic and diluted share, as compared to a net loss of $9.8 million, or ($2.17) per basic and diluted share in FY 2018.
●
Cash at December 31, 2019 totaled $6.2 million, as compared to $6.5 million at December 31, 2018, with no long-term debt outstanding. The decrease of cash is a result of our spending for normal operations offset by our funding throughout the year.
2020 Goals & Milestones
●
Initiate EU commercial strategy with an emphasis on establishing clinical evaluation reference sites in target markets and executing TAEUS product marketing communication and education campaigns.
●
Bolster and finalize 510(k) regulatory package with important additional verification testing targeting submission to the Food and Drug Administration (FDA) in the second quarter of 2020.
●
Begin measured investment in commercial activities and organization to support pre-launch and early commercial stage activities in partnership with GE.
●
Engage additional clinical partners and grow the clinical evidence base supporting TAEUS utility in a clinical setting.
●
Current cash position expected to be sufficient to fund operations through initial commercialization activities.
Conference Call and Webcast Access
Management will host a conference call and webcast today at 4:30 p.m. ET to discuss the results and provide an update on recent corporate developments.
Dial-in Number
U.S./Canada Dial-in Number: 844-602-0380
International Dial-in Number: 862-298-0970
Replay Dial-in Number: 877-481-4010
Replay International Dial-in Number: 919-882-2331
Replay Passcode: 33509
A telephone replay will be available March 26, 2020 through 4:30 p.m. ET on April 9, 2020.
A live audio webcast will be available through the Events and Presentations page of the Investors section of the company’s website at www.endrainc.com. A replay of the webcast will be available on the website for 90 days.
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About ENDRA Life Sciences Inc.
ENDRA Life Sciences Inc. is the pioneer of Thermo Acoustic Enhanced UltraSound (TAEUS™), a ground-breaking technology that mirrors some applications similar to CT or MRI, but at 50X lower cost, at the point of patient care. TAEUS is designed to work in concert with one million ultrasound systems in global use today. TAEUS is initially focused on the measurement of fat in the liver, as a means to assess and monitor NAFLD and NASH, chronic liver conditions that affect over 1 billion people globally, and for which there are no practical diagnostic tools. Beyond the liver, ENDRA is exploring several other clinical applications of TAEUS, including visualization of tissue temperature during energy-based surgical procedures. www.endrainc.com
Forward-Looking Statements
All statements in this release that are not based on historical fact are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as "believe," "expect," "may," "will," "should," "could," "seek," "intend," "plan," "goal," "estimate," "anticipate" or other comparable terms. Examples of forward-looking statements include, among others, estimates of the timing of future events and achievements, such as the expectations listed above under the heading “2020 Guidance”; making our 510(k) submission with the FDA and commercializing the TAEUS device; and expectations concerning ENDRA's business strategy. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including, among others, our ability to develop a commercially feasible technology; receipt of necessary regulatory approvals; the impact of COVID-19 on our business plans; our ability to find and maintain development partners, market acceptance of our technology, the amount and nature of competition in our industry; our ability to protect our intellectual property; and the other risks and uncertainties described in ENDRA's filings with the Securities and Exchange Commission. The forward-looking statements made in this release speak only as of the date of this release, and ENDRA assumes no obligation to update any such forward-looking statements to reflect actual results or changes in expectations, except as otherwise required by law.
Company Contact:
David Wells
Chief Financial Officer
(734) 997-0464
investors@endrainc.com
www.endrainc.com
Media & Investor Relations Contact:
MacDougall
Amanda Houlihan
(781) 235-3060
endra@macbiocom.com
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ENDRA Life Sciences Inc.
Consolidated Balance Sheets
| December<br>31, | December<br>31, | |
|---|---|---|
| Assets | 2019 | 2018 |
| Assets | ||
| Cash | $6,174,207 | $6,471,375 |
| Prepaid<br>expenses | 116,749 | 145,424 |
| Inventory | 113,442 | 59,444 |
| Other current<br>assets | 130,701 | 273,315 |
| Total Current<br>Assets | 6,535,099 | 6,949,558 |
| Other<br>Assets | ||
| Fixed assets,<br>net | 236,251 | 273,233 |
| Right of use<br>assets | 404,919 | - |
| Total<br>Assets | $7,176,269 | $7,222,791 |
| Liabilities<br>and Stockholders’ Equity | ||
| Current<br>Liabilities: | ||
| Accounts payable<br>and accrued liabilities | $1,708,525 | $974,583 |
| Convertible notes<br>payable, net of discount | 298,069 | - |
| Lease liabilities,<br>current portion | 66,193 | - |
| Total Current<br>Liabilities | 2,072,787 | 974,583 |
| Long<br>Term Debt: | ||
| Lease<br>liabilities | 342,812 | - |
| Total Long Term<br>Debt | 342,812 | - |
| Total<br>Liabilities | 2,415,599 | 974,583 |
| Stockholders’<br>Equity | ||
| Series A<br>Convertible Preferred Stock, $0.0001 par value; 10,000 shares<br>authorized; 6,338.490 shares issued and outstanding | 1 | - |
| Series B<br>Convertible Preferred Stock, $0.0001 par value; 1,000 shares<br>authorized; 351.711 shares issued and outstanding | - | - |
| Common stock,<br>$0.0001 par value; 50,000,000 shares authorized; 8,421,401 and<br>7,422,642 shares issued and outstanding | 842 | 742 |
| Additional paid in<br>capital | 49,933,736 | 33,939,162 |
| Stock<br>payable | 43,528 | - |
| Accumulated<br>deficit | ( 45,217,437) | (27,691,696) |
| Total<br>Stockholders’ Equity | 4,760,670 | 6,248,208 |
| Total<br>Liabilities and Stockholders’ Equity | $7,176,269 | $7,222,791 |
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ENDRA Life Sciences Inc.
Consolidated Statements of Operations
| Year<br>Ended | Year<br>Ended | |
|---|---|---|
| December<br>31, | December<br>31, | |
| 2019 | 2018 | |
| Revenue | $- | $6,174 |
| Cost of Goods<br>Sold | - | - |
| Gross<br>Profit | - | 6,174 |
| Operating<br>Expenses | ||
| Research and<br>development | 6,574,999 | 4,722,465 |
| Sales and<br>marketing | 412,434 | 262,641 |
| General and<br>administrative | 3,856,159 | 3,752,535 |
| Impairment of<br>inventory | - | 287,541 |
| Total operating<br>expenses | 10,843,592 | 9,025,182 |
| Operating<br>loss | (10,843,592) | (9,019,008) |
| Other<br>Expenses | ||
| Amortization of<br>debt discount | (2,355,469) | (729,241) |
| Other<br>expense | (106,903) | (48,012) |
| Total other<br>expenses | (2,462,372) | (777,253) |
| Loss from<br>operations before income taxes | (13,305,964) | (9,796,261) |
| Provision for<br>income taxes | - | - |
| Deemed<br>dividend related to Preferred Stock | $( 4,219,777) | - |
| Net<br>Loss attributable to common stockholders | $( 17,525,741) | $(9,796,261) |
| Net<br>loss per share – basic and diluted | $(2.34) | $(2.17) |
| Weighted<br>average common shares – basic and diluted | 7,499,984 | 4,504,873 |
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ENDRA Life Sciences Inc.
Consolidated Statements of Cash Flows
| Year<br>Ended | |
|---|---|
| December<br>31, | |
| 2019 | |
| Cash<br>Flows from Operating Activities | |
| Net<br>loss | (13,305,964) |
| Adjustments to<br>reconcile net loss to net cash used in operating<br>activities: | |
| Depreciation and<br>amortization | 80,577 |
| Common stock,<br>options and warrants issued for services | 1,399,547 |
| Amortization of<br>debt discount | 2,355,469 |
| Impairment of other<br>assets | 249,256 |
| Impairment of<br>inventory | - |
| Amortization<br>of right of use assets | 34,434 |
| Changes in<br>operating assets and liabilities: | |
| Increase in<br>accounts receivable | - |
| Increase in prepaid<br>expenses | 28,675 |
| Decrease in lease<br>liability | (30,348) |
| Increase in<br>inventory | (53,998) |
| Decrease in other<br>asset | (106,642) |
| Increase in<br>accounts payable and accrued liabilities | 760,143 |
| Net cash used in<br>operating activities | (8,588,851) |
| Cash<br>Flows from Investing Activities | |
| Purchases of fixed<br>assets | (43,595) |
| Net cash used in<br>investing activities | (43,595) |
| Cash<br>Flows from Financing Activities | |
| Proceeds from<br>senior secured convertible promissory notes, net of<br>fees | 2,490,501 |
| Proceeds from<br>issuance of Series A Convertible Preferred Stock | 5,344,257 |
| Proceeds from<br>issuance of Series B Convertible Preferred Stock | 375,520 |
| Proceeds from<br>issuance of common stock | 125,000 |
| Net cash provided<br>by financing activities | 8,335,278 |
| Net decrease in<br>cash | (297,168) |
| Cash, beginning of<br>period | 6,471,375 |
| Cash,<br>end of period | 6,174,207 |
| Supplemental disclosures of cash<br>items | |
| Interest<br>paid | - |
| Income<br>tax paid | - |
| Supplemental disclosures of non-cash<br>items | |
| Discount on<br>convertible notes | 2,490,501 |
| Conversion of<br>convertible notes and accrued interest | 140,406 |
| Exchange of balance<br>in convertible notes and accrued interest for Series A preferred<br>stock | 1,943,195 |
| Deemed<br>Dividend | 4,219,777 |
| Right of use<br>asset | 404,919 |
| Lease<br>liability | 409,005 |
All values are in US Dollars.
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