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
Report (Date of earliest event reported)
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March
26, 2020
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ENDRA Life Sciences Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-37969
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26-0579295
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(State
or other jurisdiction of incorporation
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(Commission
File Number)
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(IRS
Employer Identification No.)
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3600
Green Court, Suite 350 Ann Arbor, MI
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48105
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code
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(734)
335-0468
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(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:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common
stock, par value $0.0001 per share
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NDRA
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The
Nasdaq Stock Market LLC
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Warrants,
each to purchase one share of Common Stock
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NDRAW
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The
Nasdaq Stock Market LLC
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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.
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Exhibit No.
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Description
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Press
Release dated March 26, 2020, furnished herewith.
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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.
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ENDRA Life Sciences Inc.
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March
26, 2020
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By:
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/s/
Francois Michelon
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Name:
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Francois
Michelon
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Title:
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President
and Chief Executive Officer
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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.”
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.
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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.
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
www.endrainc.com
Media & Investor Relations Contact:
MacDougall
Amanda
Houlihan
(781)
235-3060
ENDRA Life Sciences Inc.
Consolidated Balance Sheets
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Assets
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Assets
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Cash
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$6,174,207
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$6,471,375
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Prepaid
expenses
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116,749
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145,424
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Inventory
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113,442
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59,444
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Other current
assets
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130,701
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273,315
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Total Current
Assets
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6,535,099
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6,949,558
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Other
Assets
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Fixed assets,
net
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236,251
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273,233
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Right of use
assets
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404,919
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-
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Total
Assets
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$7,176,269
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$7,222,791
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Liabilities
and Stockholders’ Equity
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Current
Liabilities:
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Accounts payable
and accrued liabilities
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$1,708,525
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$974,583
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Convertible notes
payable, net of discount
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298,069
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-
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Lease liabilities,
current portion
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66,193
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-
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Total Current
Liabilities
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2,072,787
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974,583
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Long
Term Debt:
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Lease
liabilities
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342,812
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-
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Total Long Term
Debt
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342,812
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-
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Total
Liabilities
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2,415,599
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974,583
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Stockholders’
Equity
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Series A
Convertible Preferred Stock, $0.0001 par value; 10,000 shares
authorized; 6,338.490 shares issued and outstanding
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1
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-
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Series B
Convertible Preferred Stock, $0.0001 par value; 1,000 shares
authorized; 351.711 shares issued and outstanding
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-
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-
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Common stock,
$0.0001 par value; 50,000,000 shares authorized; 8,421,401 and
7,422,642 shares issued and outstanding
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842
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742
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Additional paid in
capital
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49,933,736
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33,939,162
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Stock
payable
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43,528
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-
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Accumulated
deficit
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( 45,217,437)
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(27,691,696)
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Total
Stockholders’ Equity
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4,760,670
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6,248,208
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Total
Liabilities and Stockholders’ Equity
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$7,176,269
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$7,222,791
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ENDRA Life Sciences Inc.
Consolidated Statements of Operations
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Revenue
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$-
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$6,174
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Cost of Goods
Sold
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-
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-
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Gross
Profit
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-
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6,174
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Operating
Expenses
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Research and
development
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6,574,999
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4,722,465
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Sales and
marketing
|
412,434
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262,641
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General and
administrative
|
3,856,159
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3,752,535
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Impairment of
inventory
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-
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287,541
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Total operating
expenses
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10,843,592
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9,025,182
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Operating
loss
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(10,843,592)
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(9,019,008)
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Other
Expenses
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Amortization of
debt discount
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(2,355,469)
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(729,241)
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Other
expense
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(106,903)
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(48,012)
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Total other
expenses
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(2,462,372)
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(777,253)
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Loss from
operations before income taxes
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(13,305,964)
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(9,796,261)
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Provision for
income taxes
|
-
|
-
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Deemed
dividend related to Preferred Stock
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$( 4,219,777)
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-
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Net
Loss attributable to common stockholders
|
$( 17,525,741)
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$(9,796,261)
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Net
loss per share – basic and diluted
|
$(2.34)
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$(2.17)
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Weighted
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
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Cash
Flows from Operating Activities
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Net
loss
|
$(13,305,964)
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$(9,796,261)
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Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
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Depreciation and
amortization
|
80,577
|
68,316
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Common stock,
options and warrants issued for services
|
1,399,547
|
1,367,762
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Amortization of
debt discount
|
2,355,469
|
729,241
|
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Impairment of other
assets
|
249,256
|
-
|
|
Impairment of
inventory
|
-
|
287,541
|
|
Amortization
of right of use assets
|
34,434
|
-
|
|
Changes in
operating assets and liabilities:
|
|
|
|
Increase in
accounts receivable
|
-
|
6,850
|
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Increase in prepaid
expenses
|
28,675
|
(77,928)
|
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Decrease in lease
liability
|
(30,348)
|
-
|
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Increase in
inventory
|
(53,998)
|
(155,305)
|
|
Decrease in other
asset
|
(106,642)
|
(259,066)
|
|
Increase in
accounts payable and accrued liabilities
|
760,143
|
126,368
|
|
Net cash used in
operating activities
|
(8,588,851)
|
(7,702,481)
|
|
|
|
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Cash
Flows from Investing Activities
|
|
|
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Purchases of fixed
assets
|
(43,595)
|
(100,000)
|
|
Net cash used in
investing activities
|
(43,595)
|
(100,000)
|
|
|
|
|
|
Cash
Flows from Financing Activities
|
|
|
|
Proceeds from
senior secured convertible promissory notes, net of
fees
|
2,490,501
|
935,300
|
|
Proceeds from
issuance of Series A Convertible Preferred Stock
|
5,344,257
|
-
|
|
Proceeds from
issuance of Series B Convertible Preferred Stock
|
375,520
|
-
|
|
Proceeds from
issuance of common stock
|
125,000
|
7,736,678
|
|
Net cash provided
by financing activities
|
8,335,278
|
8,671,978
|
|
|
|
|
|
Net decrease in
cash
|
(297,168)
|
869,497
|
|
|
|
|
|
Cash, beginning of
period
|
6,471,375
|
5,601,878
|
|
|
|
|
|
Cash,
end of period
|
$6,174,207
|
$6,471,375
|
|
|
|
|
|
Supplemental disclosures of cash
items
|
|
|
|
Interest
paid
|
$-
|
$40,085
|
|
Income
tax paid
|
$-
|
$-
|
|
|
|
|
|
Supplemental disclosures of non-cash
items
|
|
|
|
Discount on
convertible notes
|
$2,490,501
|
$587,541
|
|
Conversion of
convertible notes and accrued interest
|
$140,406
|
$1,077,000
|
|
Exchange of balance
in convertible notes and accrued interest for Series A preferred
stock
|
$1,943,195
|
|
|
Deemed
Dividend
|
$4,219,777
|
|
|
Right of use
asset
|
$404,919
|
$-
|
|
Lease
liability
|
$409,005
|
$-
|