NDRA 10-Q
ENDRA Life Sciences Inc. (NDRA)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
FOR THE QUARTERLY PERIOD ENDED
OR
COMMISSION FILE NUMBER
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| (State of incorporation) | (I.R.S. Employer Identification No.) |
(Address of principal executive office) (Zip code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Indicate by check mark whether
the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| 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. ☐
Indicate by check mark whether the registrant is a shell company
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As of August 14, 2026, there were
TABLE OF CONTENTS
i
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ENDRA Life Sciences Inc.
Condensed Consolidated Balance Sheets
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Assets | (Unaudited) | |||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| Prepaid expenses | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets | ||||||||
| Fixed assets, net | ||||||||
| Right of use assets | ||||||||
| Prepaid expenses, long term | ||||||||
| Digital Assets | ||||||||
| Other assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Lease liabilities, current portion | ||||||||
| Total Current Liabilities | ||||||||
| Long Term Debt | ||||||||
| Lease liabilities | ||||||||
| Warrant Liability | ||||||||
| Total Long Term Debt | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ Equity | ||||||||
| Series A Convertible Preferred Stock, $ | ||||||||
| Series B Convertible Preferred Stock, $ | ||||||||
| Series C Convertible Preferred Stock, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid in capital | ||||||||
| Receivable related to employee equity awards | ( | ) | - | |||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
ENDRA Life Sciences Inc.
Condensed Consolidated Statement of Operations
(Unaudited)
| Three Months Ended | Three Months Ended | Six Months Ended | Six Months Ended | |||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Operating Expenses | ||||||||||||||||
| Research and development | $ | $ | $ | $ | ||||||||||||
| Sales and marketing | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Income (Expenses) | ||||||||||||||||
| Other income (expense) | ( | ) | ||||||||||||||
| Digital asset staking compensation | - | |||||||||||||||
| Unrealized gain on change in fair value of digital assets | - | |||||||||||||||
| Realized gain on change in fair value of digital assets | - | - | ||||||||||||||
| Changes in fair value of warrant liability | ( | ) | ( | ) | ||||||||||||
| Total other income | ||||||||||||||||
| Income/(loss) from operations before income taxes | ( | ) | ( | ) | ( | ) | ||||||||||
| Provision for income taxes | - | - | ||||||||||||||
| Net Income (Loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Net income (loss) per share – basic | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Net income (loss) per share – diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||
| Weighted average common shares – basic | ||||||||||||||||
| Weighted average common shares – diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
ENDRA Life Sciences Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
Six Months Ended June 30,2025
| Series A Convertible | Series B Convertible | Additional | Total | |||||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Stock | Common stock | Paid in | Accumulated | Stockholders’ | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Common stock issued for cash | - | - | ||||||||||||||||||||||||||||||||||
| Fair value of vested stock options | - | - | - | |||||||||||||||||||||||||||||||||
| Fair value of vested restricted stock units | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
Six Months Ended June 30, 2026
| Series A Convertible | Series B Convertible | Additional | Receivable Related to Employee | Total | ||||||||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Stock | Common stock | Paid in | Equity | Accumulated | Stockholders’ | ||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Awards | Deficit | Equity | |||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||
| Common stock issued for cash - ATM | - | - | ||||||||||||||||||||||||||||||||||||||
| Common stock issued for cash - private fundraising | ||||||||||||||||||||||||||||||||||||||||
| Fair value allocated to warrants during fundraising | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||
| Fair value allocated to prefunded warrants during fundraising | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||
| Fair value of vested stock options | - | - | - | |||||||||||||||||||||||||||||||||||||
| Fair value of vested restricted stock awards | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| Fair value of vested restricted stock units | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||||
3
Three Months Ended June 30, 2025
| Series A Convertible | Series B Convertible | Additional | Total | |||||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Stock | Common stock | Paid in | Accumulated | Stockholders’ | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | - | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||
| Common stock issued for cash | - | - | ||||||||||||||||||||||||||||||||||
| Fair value of vested stock options | - | - | - | |||||||||||||||||||||||||||||||||
| Fair value of vested restricted stock units | - | - | - | |||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
Three Months Ended June 30, 2026
| Series A Convertible | Series B Convertible | Additional | Receivable related to employee | Total | ||||||||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Stock | Common stock | Paid in | equity | Accumulated | Stockholders’ | ||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | awards | Deficit | Equity | |||||||||||||||||||||||||||||||
| Balance as of March 31, 2026 | $ | - | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||
| Common stock issued for cash - ATM | - | - | ||||||||||||||||||||||||||||||||||||||
| Common stock issued for cash - private fundraising | - | - | ||||||||||||||||||||||||||||||||||||||
| Fair value allocated to warrants during fundraising | - | - | - | |||||||||||||||||||||||||||||||||||||
| Fair value allocated to prefunded warrants during fundraising | - | - | - | |||||||||||||||||||||||||||||||||||||
| Fair value of vested stock options | - | - | - | |||||||||||||||||||||||||||||||||||||
| Fair value of vested restricted stock awards | - | - | ||||||||||||||||||||||||||||||||||||||
| Fair value of vested restricted stock units | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | |||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
ENDRA Life Sciences Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Six Months | Six Months | |||||||
| Ended | Ended | |||||||
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Stock compensation expense | ||||||||
| Amortization of right of use assets | ||||||||
| Digital asset staking compensation | ( | ) | ||||||
| Unrealized gain on change in fair value of digital assets | ( | ) | ||||||
| Realized gain on change in fair value of digital assets | ( | ) | - | |||||
| Changes in fair value of warrant liability | ( | ) | ||||||
| Receivable related to employee equity awards | ( | ) | - | |||||
| Changes in operating assets and liabilities: | ||||||||
| Decrease/(increase) in prepaid expenses | ||||||||
| Increase/(decrease) in accounts payable and accrued liabilities | ( | ) | ||||||
| Increase/(decrease) in lease liability | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities | ||||||||
| Purchases of fixed assets | ( | ) | ( | ) | ||||
| Sale of Digital Assets | ||||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds from issuance of common stock for cash - ATM | ||||||||
| Proceeds from issuance of common stock for cash – Private fundraising | - | |||||||
| Net cash provided by financing activities | ||||||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash cash equivalents, and restricted cash, beginning of period | ||||||||
| Cash and cash equivalents | ||||||||
| Restricted cash | - | |||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
5
ENDRA Life Sciences Inc.
Notes to Condensed Consolidated Financial Statements
For the six months ended June 30, 2026 and 2025
(Unaudited)
Note 1 - Nature of the Business
ENDRA Life Sciences Inc. (“ENDRA” or the “Company”) is designing a medical device for accurate liver fat measurement for use in metabolic disease detection and management and GLP-1 drug eligibility and management in circumstances where other technologies are unavailable or impractical.
In 2025, the Company expanded its business strategy to include a digital asset treasury (“DAT”) initiative, managed in collaboration with Arca Investment Management (“Arca”), which seeks to optimize capital preservation and generate non-dilutive returns through investments in decentralized finance (“DeFi”) assets. This financial strategy operates in tandem with the Company’s core medical technology mission: the commercialization of the TAEUS platform via a recurring subscription model, with a specific focus on the burgeoning GLP-1 and metabolic disease markets.
ENDRA was incorporated on
Pending Merger
On June 25, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among ASP Isotopes Inc., a Delaware corporation (“ASP Isotopes”), Noble Africa LLC, a Delaware limited liability company (“Noble Africa”) and a direct, wholly-owned subsidiary of ASP Isotopes, Renergen Limited, a company incorporated under the laws of the Republic of South Africa (“Renergen”) and a direct, wholly-owned subsidiary of ASP Isotopes, the Company, and Kruger Merger Sub LLC, a Delaware limited liability company (“Merger Sub”) and a direct, wholly-owned subsidiary of the Company, pursuant to which, among other matters, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Noble Africa, with Noble Africa surviving the Merger as a direct wholly-owned subsidiary of ENDRA (“Surviving Company”).
Concurrently with the entry into the Merger Agreement,
Noble Africa entered into subscription agreements (“Subscription Agreements”) with ASP Isotopes and certain investors pursuant
to which Noble Africa agreed to sell approximately (i)
Subject to the terms and conditions of the Merger
Agreement, at the Effective Time, all of the units of Merger Sub outstanding immediately prior to the Effective Time shall be converted
into and become units of the Surviving Company (“Surviving Company Units”) and the Company shall be admitted as the sole
member of the Surviving Company as the holder of all Surviving Company Units. Additionally, at the Effective Time, (i) each Class A Unit
of Noble outstanding immediately prior to the Effective Time (other than any units of Noble held by ENDRA, Merger Sub, Noble or any of
their respective subsidiaries (the “Excluded Company Units”), which shall be automatically cancelled), by virtue of the Merger,
shall be converted into the right to receive
Immediately prior to the Effective Time, the Company shall file with
the Secretary of State of the State of Delaware an amended and restated Certificate of Incorporation (the “A&R Certificate
of Incorporation”), pursuant to which the Company will be renamed Noble Africa Inc. The A&R Certificate of Incorporation will
establish two classes of common stock, consisting of Class A common stock, par value $
6
Note 2 - Summary of Significant Accounting Policies
Use of Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Management makes estimates that affect certain accounts including deferred income tax assets, accrued expenses, fair value of equity instruments and reserves for any other commitments or contingencies. Any adjustments applied to estimates are recognized in the period in which such adjustments are determined.
Principles of Consolidation
The Company’s consolidated financial statements include all accounts of the Company and its consolidated subsidiaries and/or entities as of reporting period ending date(s) and for the reporting period(s) then ended. All inter-company balances and transactions have been eliminated.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. The balance sheet at June 30, 2026 has been derived from the audited financial statements at that date. For further information, refer to the financial statements and footnotes thereto included in the Company’s annual financial statements for the twelve months ended December 31, 2025 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2026.
Cash and Cash Equivalents
The Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit, and other highly liquid investments with maturities of one year or less, when purchased, to be cash. Cash equivalents include investments in an institutional money market fund, which invests in U.S. Treasury bills, notes and bonds, and/or repurchase agreements, backed by such obligations. Carrying value approximates fair value. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and periodically evaluates the creditworthiness of the financial institutions and has determined the credit exposure to be negligible. The Company maintains cash deposits at multiple banks to mitigate the risk associated with a failure of any specific bank.
Restricted Cash
Restricted cash consists of cash that is subject to contractual or other restrictions that limit the Company’s ability to use such funds for general operating purposes. Restricted cash is presented separately from cash and cash equivalents on the balance sheets and is classified as current or non-current based on the expected duration of the applicable restriction. The Company includes restricted cash with cash and cash equivalents when reconciling the beginning and ending amounts shown in the statements of cash flows.
In connection with the Company’s May 2026 private placement,
the Company entered into a side letter agreement with the investor that requires the Company to maintain a cash balance of at least $
Accordingly, as of June 30, 2026, approximately $
7
Capitalization of Fixed Assets
The Company capitalizes expenditures related to property and equipment, subject to a minimum rule, that have a useful life greater than one year for: (1) assets purchased; (2) existing assets that are replaced, improved or the useful lives have been extended; or (3) all land, regardless of cost. Acquisitions of new assets, additions, replacements and improvements (other than land) costing less than the minimum rule in addition to maintenance and repair costs, including any planned major maintenance activities, are expensed as incurred.
Leases
Accounting Standards Update (“ASU”)
No. 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases
with terms longer than 12 months. A modified retrospective transition approach is required for lessees for capital and operating leases
existing at, or entered into after, the beginning of the earliest period presented in the financial statements. At June 30, 2026 and
December 31, 2025, the Company recorded a right of use asset of $
Digital Assets
The Company maintains a DAT strategy under which it may acquire, hold, and deploy certain digital assets as part of its treasury and capital management activities. The Company’s digital assets consist primarily of HYPE tokens, which are recorded on the consolidated balance sheets as “Digital assets.”
Measurement of Digital Assets
Digital assets are accounted for as indefinite-lived intangible assets and, effective January 1, 2025, are measured at fair value in accordance with ASC 350-60, Intangibles—Goodwill and Other—Crypto Assets. The Company determines the fair value of its digital assets based on quoted market prices in active markets (Level 1 inputs) as of the reporting date. The Company has concluded that HYPE meets each of the six scope criteria in ASC 350-60-15-1.
Changes in the fair value of digital assets are recognized in the consolidated statements of operations within “Change in fair value of digital assets.” Realized gains and losses from the sale of digital assets are recorded as separate line items. Transaction costs associated with the acquisition or disposition of digital assets are expensed as incurred within other expenses.
Digital Asset Staking
The Company may participate in staking activities whereby it validates transactions on blockchain networks and earns rewards in the form of additional digital assets.
Digital asset staking rewards are recognized as income within “Digital asset staking compensation” in the consolidated statements of operations. Rewards are recognized when the Company obtains control of the tokens, which occurs when the tokens are credited to the Company’s custody account. Staking rewards are measured at the fair value of the digital assets received at the time they are earned.
Digital assets received from staking activities are initially recorded at fair value and subsequently included in the Company’s digital asset holdings, where they are remeasured at fair value at each reporting period.
Custody and Safeguarding
The Company utilizes third-party custodians to safeguard its digital assets. The Company recognizes digital assets on its balance sheet when it has control over the assets, including when assets are held by a custodian on the Company’s behalf.
8
Presentation
Digital assets are classified as noncurrent assets on the consolidated balance sheets unless management intends to sell them within one year. Changes in fair value and staking compensation are presented separately within other income (loss), unless otherwise required by the nature of the Company’s operations.
Revenue Recognition
ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASC Topic 606”) provides a single set of guidelines for revenue recognition to be used across all industries and requires additional disclosures. The updated guidance introduces a five-step model to achieve its core principle of the entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
Under ASC Topic 606, in order to recognize revenue, the Company is required to identify an approved contract with commitments to perform respective obligations, identify rights of each party in the transaction regarding goods to be transferred, identify the payment terms for the goods transferred, verify that the contract has commercial substance and verify that collection of substantially all consideration is probable.
Research and Development Costs
The Company follows FASB Accounting Standards
Codification (“ASC”) Subtopic 730-10, “Research and Development”. Research and development costs are charged
to the statement of operations as incurred. During the three months ended June 30, 2026 and 2025, the Company incurred $
Net Earnings (Loss) Per Common Share
The Company computes earnings per share under ASC Subtopic 260-10,
“Earnings Per Share”. Basic earnings (loss) per share is computed by dividing the net income (loss) attributable to the common
stockholders (the numerator) by the weighted average number of shares of common stock outstanding (the denominator) during the reporting
periods. Diluted loss per share is computed by increasing the denominator by the weighted average number of additional shares that could
have been outstanding from securities convertible into common stock (using the “treasury stock” method), unless their effect
on net loss per share is anti-dilutive. There were
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Options to purchase common stock | ||||||||||||||||
| Warrants to purchase common stock | ||||||||||||||||
| Shares issuable upon conversion of Series A Convertible Preferred Stock | ||||||||||||||||
| Restricted Stock Units | ||||||||||||||||
| Potential equivalent shares excluded | ||||||||||||||||
The following securities were included in the computation of diluted net earnings per share as their effect would have been dilutive for the three months ended June 30, 2026 and 2025:
| Three Months Ended | ||||||||
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Prefunded warrants | ||||||||
| Shares issuable upon conversion of Series A Convertible Preferred Stock | ||||||||
| Incremental Restricted Stock Units | ||||||||
| Potential equivalent shares excluded | ||||||||
9
Fair Value Measurements
Disclosures about fair value of financial instruments require disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value.
In accordance with ASC Topic 820, “Fair Value Measurements and Disclosures,” the Company measures certain financial instruments at fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| ● | Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; |
| ● | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| ● | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.
The Company measures certain financial assets
and liabilities at fair value on a recurring basis.
| June 30, 2026 | ||||||||||||||||
| Assets | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Digital Assets | $ | $ | $ | $ | ||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | ||||||||||||
| June 30, 2026 | ||||||||||||||||
| Assets | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Warrant liability | $ | $ | $ | $ | ||||||||||||
| Total liabilities measured at fair value | $ | $ | $ | $ | ||||||||||||
The Company’s digital assets are classified within Level 1 of the fair value hierarchy because their fair values are determined using quoted prices in active markets for identical assets.
The Company’s warrant liability is classified within Level 3 of the fair value hierarchy because its fair value is determined using valuation techniques that incorporate significant inputs that are not observable in the market.
Share-based Compensation
The Company’s 2016 Omnibus Incentive Plan
(the “Omnibus Plan”) permits the grant of stock options and other share-based awards to its employees, consultants and non-employee
members of the board of directors. Each January 1 the pool of shares available for issuance under the Omnibus Plan automatically increases
by an amount equal to the lesser of (i) the number of shares necessary such that the aggregate number of shares available under the Omnibus
Plan equals 25% of the number of fully-diluted outstanding shares on the increase date (assuming the conversion of all outstanding shares
of preferred stock and other outstanding convertible securities and exercise of all outstanding options and warrants to purchase shares)
and (ii) if the board of directors takes action to set a lower amount, the amount determined by the board. In addition, on December 9,
2025, the stockholders approved the Second Amendment to the Omnibus Plan (the “Omnibus Plan Amendment”) at the 2025 Annual
Meeting of the Company’s stockholders (the “Annual Meeting”). The Omnibus Plan Amendment increased the pool of shares
available for issuance by
10
Receivable Related to Employee Equity Awards
Amounts associated with employee tax withholding obligations arising from the issuance or settlement of equity awards are presented as a reduction of stockholders’ equity when such amounts are directly associated with the issuance of the Company’s equity securities.
The Company records share-based compensation in accordance with the provisions of the Share-based Compensation Topic of the FASB Codification. The guidance requires the use of option-pricing models that require the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option valuation model, and the resulting charge is expensed using the straight-line attribution method over the vesting period.
Stock compensation expense recognized during the period is based on the value of share-based awards that were expected to vest during the period adjusted for estimated forfeitures. The estimated fair value of grants of stock options and warrants to non-employees of the Company is charged to expense, if applicable, in the financial statements. These options vest in the same manner as the employee options granted under the stock incentive plan as described above.
Going Concern
The Company’s financial statements are prepared
using accounting principles generally accepted in the United States (“U.S. GAAP”) applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal course of business. The Company has limited commercial experience
and had a cumulative net loss from inception to June 30, 2026 of $
Recent Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which enhances disclosures about significant segment expenses and other segment items and requires certain disclosures currently required annually to be provided on an interim basis. The Company has adopted ASU 2023-07 and has included the applicable interim disclosures required by the standard. See Note 11, Segment Information.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires enhanced disclosures regarding an entity’s effective tax rate reconciliation and income taxes paid, among other changes. The amendments are effective for annual periods beginning after December 15, 2024. The Company will include the applicable disclosures required by ASU 2023-09 in its annual financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional disclosures regarding certain expense captions presented on the statement of operations, including specified categories of expenses included within those captions. The amendments are effective for public business entities for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2024-03 on its consolidated financial statement disclosures.
The FASB is also currently considering certain projects related to the accounting for digital assets, including projects addressing the accounting for transfers of crypto assets and the classification of certain digital assets as cash equivalents. The Company continues to monitor these projects and will evaluate the impact of any final accounting standards on its consolidated financial statements and related disclosures when issued.
11
Note 3 - Fixed Assets
As of June 30, 2026 and December 31, 2025, fixed assets consisted of the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Property, leasehold and capitalized software | $ | $ | ||||||
| TAEUS development and testing | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Fixed assets, net | $ | $ | ||||||
Depreciation expense for the six months ended June 30, 2026 and June
30, 2025 was $
Note 4 - Accounts Payable and Accrued Liabilities
As of June 30, 2026 and December 31, 2025, current liabilities consisted of the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Accounts payable | $ | $ | ||||||
| Payroll accrual | ||||||||
| Accrued employee benefits | ||||||||
| Accrued expenses | ||||||||
| Total accounts payable and accrued liabilities | $ | $ | ||||||
Note 5 - Capital Stock
Capital Stock
At June 30, 2026, the authorized capital of the
Company consisted of
As of June 30, 2026, there were
12
During the six months ended June 30, 2026, the
Company issued a total of
During the six months ended June 30, 2026, the
Company issued a total of
At-the-Market Equity Offering Program
On February 14, 2024, the Company entered into
a new At-The-Market Issuance Sales Agreement with Ascendiant Capital Markets LLC (the “February 2024 ATM Agreement”) to sell
shares of common stock for aggregate gross proceeds of up to $
Note 6 - Common Stock Options, Restricted Stock Units and Restricted Stock
Common Stock Options
Stock options are awarded to the Company’s
employees, consultants and non-employee members of the board of directors under the Omnibus Plan and are generally granted with an exercise
price equal to the market price of the Company’s common stock at the date of grant. There were no issuances of stock options in
the quarter ended June 30, 2026.
| Weighted | ||||||||||||
| Weighted | Average | |||||||||||
| Average | Remaining | |||||||||||
| Number of | Exercise | Contractual | ||||||||||
| Options | Price | Term (Years) | ||||||||||
| Balance outstanding at December 31, 2025 | $ | |||||||||||
| Granted | - | |||||||||||
| Exercised | - | |||||||||||
| Forfeited | - | |||||||||||
| Cancelled or expired | ( | ) | - | |||||||||
| Balance outstanding at June 30, 2026 | $ | |||||||||||
| Exercisable at June 30, 2026 | $ | |||||||||||
As of June 30, 2026, there was no aggregate intrinsic value of options outstanding and options exercisable. As of June 30, 2026, there was no unrecognized compensation cost related to stock options.
Restricted Stock Units
On June 11, 2025, the Company granted a total
of
13
On January 21, 2026, the Company granted a total
of
During the six months ended June 30, 2026, the
Company recognized $
Unrecognized stock-based compensation expense
related to these RSUs will be recognized over the remaining vesting period, which is
Restricted Common Stock
On November 30, 2023, the Company issued
Restricted Stock Awards
During the six months ended June 30, 2026, the Company issued
Note 7 - Common Stock Warrants
In June 2024, as part of a registered offering,
the Company issued pre-funded warrants to purchase up to an aggregate of
Additionally, the Series B Warrants contain an
alternative cashless exercise option whereby the holder of a Series B Warrant has the right to receive an aggregate number of shares
equal to the product of (x) the aggregate number of shares of common stock that would be issuable upon a cashless exercise of the Series
B Warrant using $
In connection with the Offering, the Company also
issued placement agent warrants (“Placement Agent Warrants” and, together with the pre-funded warrants and the Series Warrants,
the “Warrants”) to purchase up to
In October 2025, the Company entered into a securities
purchase agreement with certain accredited investors pursuant to which the Company agreed to sell and issue to such purchasers in a private
placement offering (the “2025 Private Placement”) an aggregate of
Additionally, in connection with the 2025 Private
Placement, the Company issued placement agent warrants to purchase up to
14
In May 2026, the Company entered into a securities
purchase agreement with an accredited investor pursuant to which the Company agreed to sell and issue to such purchaser in a private
placement offering (the “2026 Private Placement”) an aggregate of
Warrant Exercises
During the six months ended June 30, 2026, warrants were exercised.
The following table summarizes all warrant activity of the Company for the six months ended June 30, 2026:
| Weighted | Weighted | |||||||||||
| Average | Average | |||||||||||
| Number of | Exercise | Contractual | ||||||||||
| Warrants | Price | Term (Years) | ||||||||||
| Balance outstanding at December 31, 2025 | $ | |||||||||||
| Granted | ||||||||||||
| Exercised | - | |||||||||||
| Forfeited | - | |||||||||||
| Expired | - | |||||||||||
| Balance outstanding at June 30, 2026 | ||||||||||||
| Exercisable at June 30, 2026 | ||||||||||||
Common Stock Warrants
As described above in
“Registered Offering” (Note 7), the Company issued
Accordingly,
the Company classified the warrant instruments as a liability at fair value and adjusts the instruments to fair value each period. This
liability will be re-measured at each balance sheet date until the warrants are exercised or expire, and any change in fair value will
be recognized in the Company’s statement of operations. As of June 30, 2026 and December 31, 2025, the warrants outstanding were
15
Measurement
The Company’s warrant liability is measured at fair value on a recurring basis and is classified as a Level 3 fair value measurement within the fair value hierarchy established by ASC 820, Fair Value Measurement. The fair value hierarchy prioritizes the inputs used in valuation techniques into three levels, with Level 1 representing quoted prices in active markets for identical assets and liabilities, Level 2 representing observable inputs other than quoted market prices, and Level 3 representing significant unobservable inputs.
The Company utilizes a Black-Scholes option pricing model to estimate the fair value of the warrant liability at each reporting date. The valuation incorporates both observable market data and significant unobservable inputs. Significant assumptions utilized in the valuation include the expected volatility of the Company’s common stock, expected term, risk-free interest rate, expected dividend yield and the market value of the Company’s common stock. Expected volatility is estimated using the historical volatility of the Company’s common stock and, when appropriate, comparable public companies. The risk-free interest rate is based on U.S. Treasury securities with maturities commensurate with the expected term of the warrants. The Company assumes no expected dividends as it has not historically paid dividends and does not currently expect to pay dividends in the foreseeable future.
The Company established
the initial fair value for the warrant liability on August 20, 2024, the date the warrants were initially exercisable. Upon exercise,
the instrument is marked to its fair value upon exercise, and the shares delivered are recorded at fair value in the Company’s
statement of stockholders’ equity.
| Input | June 30, 2026 | December 31, 2025 | ||||||
| Exercise price | $ | $ | ||||||
| Stock price | $ | $ | ||||||
| Volatility | % | % | ||||||
| Discount rate | % | % | ||||||
| Expected dividend | ||||||||
| Expected life (years) | ||||||||
Because the valuation of the warrant liability requires significant management judgment and the use of unobservable inputs, the warrant liability is classified within Level 3 of the fair value hierarchy. Changes in the fair value of the warrant liability are recognized in the statements of operations in the period in which the changes occur.
The following tables present a reconciliation of changes in the Company’s Level 3 warrant liability for the three and six months ended June 30, 2026:
| Ending balance, December 31, 2025 | $ | |||
| Exercises | ||||
| Change in fair value of warrant liability | ||||
| Ending balance, March 31, 2026 | ||||
| Exercises | ||||
| Change in fair value of warrant liability | ||||
| Ending balance, June 30, 2026 | $ |
The following tables present a reconciliation of changes in the Company’s Level 3 warrant liability for the three and six months ended June 30, 2025:
| Ending balance, December 31, 2024 | $ | |||
| Exercises | ||||
| Change in fair value of warrant liability | ( | ) | ||
| Ending balance, March 31, 2025 | ||||
| Exercises | ||||
| Change in fair value of warrant liability | ( | ) | ||
| Ending balance, June 30, 2025 | $ |
16
May 2026 Private Placement Financing
On May 27, 2026, the Company entered into a Securities Purchase Agreement
with a certain investor pursuant to which the Company sold shares of common stock and pre-funded warrants to purchase shares of common
stock, together with accompanying common warrants, in a private placement transaction. Gross proceeds from the offering were approximately
$
Each pre-funded warrant entitles the holder to purchase
In connection with the offering, the Company also issued placement agent pre-funded warrants to the placement agent as compensation for services rendered in connection with the transaction. The placement agent pre-funded warrants were evaluated under ASC 718 and were determined to be equity-classified. The fair value of the placement agent warrants was recognized as an offering cost and recorded as a reduction of additional paid-in capital. Consistent with the Company’s accounting policy, the placement agent pre-funded warrants were not included in the allocation of proceeds between investor-issued instruments.
The Company evaluated the common stock, pre-funded warrants, investor common warrants and placement agent pre-funded warrants under ASC 480, ASC 718 and ASC 815-40 and concluded that each instrument qualified for equity classification. Accordingly, the proceeds received from investors were allocated between the common stock/pre-funded warrants and the investor common warrants using the relative fair value method. The fair value of the common stock and pre-funded warrants was based on the market price of the Company’s common stock on the issuance date, while the fair value of the investor common warrants was determined using the Black-Scholes option pricing model.
The Company’s valuation of the investor common warrants utilized assumptions including expected volatility, risk-free interest rates, expected term and dividend yield. Changes in these assumptions could result in materially different fair value estimates.
Note 8 - Digital Assets
The Company holds digital assets as part of its treasury strategy. As of December 31, 2025 and June 30, 2026, the Company’s digital asset holdings consist of HYPE tokens.
Accounting Policy
The Company accounts for its digital assets in accordance with ASC 350-60, Accounting for and Disclosure of Crypto Assets. Digital assets are measured at fair value monthly, with changes in fair value recognized in earnings.
Fair value is determined using observable market prices derived from active trading venues. The Company uses the market price reported in custody statements provided by Anchorage Digital Bank, the Company’s digital asset custodian.
The Company’s digital assets are classified within Level 1 of the fair value hierarchy because the fair value is based on quoted prices in active markets.
Purchases and Sales
In the fourth quarter 2025, the Company purchased
approximately
During the three months ending June 30, 2026,
the Company sold
17
Staking Activities
The Company participates in staking activities related to its HYPE holdings. Staking rewards represent additional tokens earned from participation in blockchain validation activities.
Staking rewards are recognized as income when the Company obtains control of the tokens, which occurs when the tokens are credited to the Company’s custody account. The rewards are measured at fair value at the time of receipt.
For the three months ending June 30, 2026, the
Company recognized $
Digital Asset Balance
| Tokens | $ | |||||||
| Balance at December 31, 2025 | $ | |||||||
| Cost of tokens sold | ( | ) | ( | ) | ||||
| Digital Asset staking compensation | ||||||||
| Unrealized gain/(loss) from fair value measurement | ||||||||
| Realized gain/(loss) from fair value measurement | ||||||||
| Balance at June 30, 2026 | $ | |||||||
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Digital assets at fair value | $ | $ | ||||||
The Company determines the fair value of its digital
assets based on quoted market prices in active markets (Level 1 inputs) as of the reporting date. The aggregate cost basis of digital
assets held as of June 30, 2026 was $
Note 9 - Related Party Transactions
In September 2024, the Company began using IS
Bookkeeping & Payroll, which is a division of Impact Solve, LLC (dba Impact Solutions) (“Impact Solutions”), an accounting
and chief financial officer service firm. The Company’s Chief Financial Officer works in a part-time capacity for the Company through
Impact Solutions. For the three month periods ended June 30, 2026 and June 30, 2025, Impact Solutions and IS Bookkeeping & Payroll
provided services to the Company totaling $
Note 10 - Commitments and Contingencies
Restricted Cash
In connection with the proposed merger with LHE LNG Holdings, LLC (“LHE”),
the Company entered into a side letter agreement pursuant to which the Company is required to maintain approximately $
Office Lease
Effective January 1, 2015, the Company entered
into an office lease agreement with Green Court, LLC, a Michigan limited liability company, for approximately
On March 15, 2021, the Company entered into an
amendment to the lease, adding approximately
18
On December 1, 2024, the Company entered into
an amendment to the lease, decreasing the total rentable square feet to
The Company records the lease asset and lease
liability at the present value of lease payments over the lease term. The lease typically does not provide an implicit rate; therefore,
the Company uses its estimated incremental borrowing rate at the time of lease commencement to discount the present value of lease payments.
The Company’s discount rate for operating leases at June 30, 2026 was
As of June 30, 2026, the maturities of operating lease liabilities are as follows:
| Operating | ||||
| Lease | ||||
| 2026 | ||||
| 2027 and beyond | ||||
| Total | $ | |||
| Less: amount representing interest | ( | ) | ||
| Present value of future minimum lease payments | ||||
| Less: current obligations under leases | ( | ) | ||
| Long-term lease obligations | $ | |||
For the six months ended June 30, 2026 and 2025, the Company incurred
rent expenses of $
Employment and Consulting Agreements
Alexander Tokman - Effective August 13,
2024, the Board appointed Alexander Tokman as the Company’s acting Chief Executive Officer and Chairman of the Board of Directors.
In connection with his appointment, Mr. Tokman and the Company entered into an employment agreement, dated August 13, 2024 (the “Employment
Agreement”). Mr. Tokman’s employment with the Company is “at will” and may be terminated by him or the Company
at any time and for any reason. Pursuant to the Employment Agreement, Mr. Tokman will receive an annual base salary of $
If Mr. Tokman’s employment is terminated by the Company without cause (as defined in the Omnibus Plan), if Mr. Tokman resigns for good reason (as defined in the Employment Agreement), or if Mr. Tokman’s employment ends following the hiring no later than February 13, 2026 of a replacement chief executive officer whom Mr. Tokman assists in recruiting, Mr. Tokman will be entitled to receive, subject to his execution of a standard release agreement, 12 months’ continuation of his current base salary and a lump sum payment equal to 12 months of continued healthcare coverage (or 24 months’ continuation of his current base salary and a lump sum payment equal to 24 months of continued healthcare coverage if such termination occurs within one year following a change in control). Additionally, under the Employment Agreement, Mr. Tokman is eligible to receive benefits that are substantially similar to those of the Company’s other senior executive officers.
Richard Jacroux - On August 7, 2024, the
Company’s Board of Directors appointed Richard Jacroux as Chief Financial Officer. Mr. Jacroux works in a part-time capacity for
the Company through Impact Solutions. Mr. Jacroux receives a base monthly fee of $
Litigation
From time to time the Company may become a party to litigation in the normal course of business. As of June 30, 2026, there were legal matters that management believes would have a material effect on the Company’s financial position or results of operations.
19
Note 11 - Segment Reporting
Operating segments are defined as components of
an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making
group, in deciding how to allocate resources in assessing performance. The Company has
The accounting policies of the biotech segment
are the same as those described in the summary of significant accounting policies.
To date, the Company has not generated any product revenue. The Company expects to continue to incur significant expenses and operating losses for the foreseeable future as it advances product candidates through all stages of development and clinical trials and, ultimately, seek regulatory approval.
As such, the CODM uses cash forecast models in deciding how to invest into the biotech segment. Such cash forecast models are reviewed to assess the entity-wide operating results and performance. Net loss is used to monitor budget versus actual results. Monitoring budgeted versus actual results is used in assessing performance of the segment and in establishing management’s compensation, along with cash forecast models.
The table below summarizes the significant expense categories regularly reviewed by the CODM for the three and six months ended June 30, 2026, and 2025:
| Three Months | Three Months | Six Months | Six Months | |||||||||||||
| Ended | Ended | Ended | Ended | |||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| Operating Expenses | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Research and development | $ | $ | $ | $ | ||||||||||||
| Sales and marketing | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other segment items (a) | ||||||||||||||||
| Net income/(loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Reconciliation of net loss | ||||||||||||||||
| Adjustments and reconciling items | ||||||||||||||||
| Consolidated net income/(loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
20
| Six Months | Six Months | |||||||
| Ended | Ended | |||||||
| June 30, | June 30, | |||||||
| Operating Expenses | 2026 | 2025 | ||||||
| Research and development | $ | $ | ||||||
| Sales and marketing | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other segment items (a) | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Reconciliation of net loss | ||||||||
| Adjustments and reconciling items | ||||||||
| Consolidated net loss | $ | ( | ) | $ | ( | ) | ||
| (a) |
Note 12 - Subsequent Events
The Company evaluated subsequent events through August 14, 2026, the date these consolidated financial statements were issued, and determined that there were no material subsequent events requiring adjustment to, or disclosure in, the consolidated financial statements for the six months ended June 30, 2026, other than as described below.
On July 8, 2026, the Company received written notice (the “Notice”) from The Nasdaq Stock Market LLC (“Nasdaq”) indicating that the Company had regained compliance with the minimum stockholders’ equity requirement for continued listing set forth in Nasdaq Listing Rule 5550(b)(1).
Pursuant to Nasdaq Listing Rule 5815(d)(4)(A) and the Notice, the Company is subject to a Discretionary Panel Monitor for a period of one year beginning July 1, 2026. If, during the monitoring period, Nasdaq Listing Qualifications Staff determines that the Company is again out of compliance with any Nasdaq Listing Rule, the Company will not be permitted to submit a compliance plan or be afforded an otherwise applicable cure or compliance period. Instead, Nasdaq Listing Qualifications Staff will issue a delisting determination, and the Company would have the opportunity to request a new hearing before the applicable Nasdaq Hearings Panel in accordance with Nasdaq Listing Rule 5815(d)(4)(C). There can be no assurance that the Company will maintain compliance with Nasdaq’s continued listing requirements during the monitoring period.
21
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
As used in this Quarterly Report on Form 10-Q (this “Form 10-Q”), unless the context otherwise requires, the terms “we,” “us,” “our,” “ENDRA” and the “Company” refer to ENDRA Life Sciences Inc., a Delaware corporation, and its direct and indirect subsidiaries. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our historical financial statements and related notes thereto in this Form 10-Q. This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are intended to be covered by the “safe harbor” created by those sections. 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,” “would,” “seek,” “intend,” “plan,” “estimate,” “anticipate” or other comparable terms. All statements other than statements of historical facts included in this Form 10-Q, including those regarding our strategies, prospects, financial condition, operations, costs, plans and objectives, are forward-looking statements. Examples of forward-looking statements include, among others, statements we make regarding expectations for revenues, cash flows and financial performance, the anticipated results of our development efforts and the timing for receipt of required regulatory approvals and product launches. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in, or implied by, the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: our limited commercial experience, limited cash and history of losses; our ability to obtain adequate financing to fund our business operations in the future; our ability to achieve profitability; delays and changes in regulatory requirements, policy and guidelines, including potential delays in submitting required regulatory applications or other submissions with respect to U.S. Food and Drug Administration (“FDA”) or other regulatory agency approval; our ability to obtain and maintain required CE mark certifications and secure required FDA and other governmental approvals for our Thermo-Acoustic Enhanced Ultrasound (“TAEUS”) applications; our ability to develop any commercially feasible applications based on our TAEUS technology; market acceptance of our technology; the effect of macroeconomic conditions on our business; results of our human studies, which may be negative or inconclusive; our ability to find and maintain development partners; our reliance on third parties, collaborations, strategic alliances and licensing arrangements to complete our business strategy; the amount and nature of competition in our industry; our ability to protect our intellectual property; potential changes in the healthcare industry or third-party reimbursement practices; our ability to comply with regulation by various federal, state, local and foreign governmental agencies and to maintain necessary regulatory clearances or approvals; our ability to regain compliance with Nasdaq listing standards; our ability to successfully execute on our digital asset treasury strategy; risks related to regulatory developments regarding digital assets and digital asset markets, which could adversely affect our business, financial condition, and results of operations; the volatile and unpredictable cycles in the digital asset industry; in the accounting treatment of digital assets; our dependence on our senior management team; the consummation of the Company’s proposed merger (the “Merger”) of its subsidiary with Noble Africa LLC, a wholly-owned subsidiary of ASP Isotopes, Inc. and intermediate holding Company for Renergen Limited (“Renergen”); the outcomes of various strategies and projects undertaken by Renergen; the potential impact of laws or government regulations or policies in South Africa or elsewhere; Renergen’s future capital requirements and sources and uses of cash; Renergen’s ability to obtain funding for its operations and future growth, including debt funding for Phase 2 of the Virginia Gas Project; Renergen’s reliance on the efforts of third parties; Renergen’s ability to complete Phase 1 and 2 of the Virginia Gas Project; the financial terms of any current and future commercial arrangements; Renergen’s ability to complete certain transactions and realize anticipated benefits from acquisitions and contracts; Renergen’s ability to comply with the terms of the loan and credit facilities of Renergen’s subsidiary Tetra4; the ability of Renergen and its subsidiaries to retain and hire key personnel; the volatility of LNG and liquid helium prices; Renergen’s success in discovering, estimating and developing natural gas and helium reserves; actions of competitors or regulators; limitations in the availability of, and costs of, supplies, materials, contractors and services that may delay the drilling or completion of wells or make such wells more expensive; the amount and timing of future development costs; uncertainties inherent in estimating quantities of natural gas and helium reserves and projecting future rates of production and timing of development activities; risks relating to the lack of capital available on acceptable terms to finance Renergen’s continued growth; the competitive nature of Renergen’s industry; the risk that the conditions to the closing or consummation of the proposed transactions are not satisfied, including the failure to timely obtain approval of the proposed Merger from ENDRA stockholders, if at all; the risk that the proposed financings are not completed in a timely manner, if at all; uncertainties as to the timing of the consummation of the proposed transactions and the ability of each of ENDRA and Noble to consummate the proposed transactions; risks related to ENDRA’s continued listing on Nasdaq until closing of the proposed transactions and the combined company’s ability to remain listed following the closing of the proposed transactions; the ability to obtain debt financing on terms that are favorable, or at all; the risk that Renergen does not receive funding from the U.S. DFC or Standard Bank SA or that such funding is delayed; risks related to ENDRA’s ability to correctly estimate its respective operating expenses and its respective expenses associated with the proposed transactions, as applicable, pending the closing of the proposed transactions, as well as uncertainties regarding the impact any delay in the closing would have on the anticipated cash resources of ENDRA, and other events and unanticipated spending and costs that could reduce ENDRA’s cash resources; risks related to the failure or delay in obtaining required approvals from any governmental or quasi-governmental entity necessary to consummate the proposed transactions; the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the merger agreement; the effect of the announcement or pendency of the proposed Merger on ENDRA’s or Renergen’s business relationships, operating results and business generally; costs related to the proposed Merger; risks related to the market price of ENDRA’s common stock relative to the value suggested by the proposed Merger; the outcome of any legal proceedings that may be instituted against ENDRA, Noble or any of their respective directors, managers, or officers related to the proposed transactions; costs of the proposed transactions and unexpected costs, charges or expenses resulting from the proposed transactions; changes in regulatory requirements and government incentives; risks associated with the possible failure to realize, or that it may take longer to realize than expected, certain anticipated benefits of the proposed transactions, including with respect to future financial and operating results, legislative, regulatory, political and economic developments, and those uncertainties and factors; and the risk of involvement in litigation, including securities class action litigation, that could divert the attention of the management of ENDRA or the combined company, harm the combined company’s business and may not be sufficient for insurance coverage to cover all costs and damages; and the other risks and uncertainties described in the Risk Factors section of our Annual Report on Form 10-K for the period ended December 31, 2025, as filed with the Securities and Exchange Commission (“SEC”) on March 31, 2026, and in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of this Form 10-Q. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
22
Available Information
From time to time, we use press releases, X (formerly Twitter) (@endralifesci) and LinkedIn (www.linkedin.com/company/endra-inc) to distribute material information. Our press releases and financial and other material information are routinely posted to and accessible on the Investors section of our website, www.endrainc.com. Accordingly, investors should monitor these channels, in addition to our SEC filings and public conference calls and webcasts. In addition, investors may automatically receive e-mail alerts and other information about the Company by enrolling their e-mail addresses by visiting the “Email Alerts” section of our website at investors.endrainc.com. 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.
Overview
We are developing a next-generation enhanced ultrasound technology platform—Thermo- Acoustic Enhanced Ultrasound, or TAEUS®.
Our initial focus for the development and commercialization of TAEUS is a solution for the assessment of liver fat, a key biomarker associated with metabolic diseases, including metabolic dysfunction-associated steatotic liver disease (“MASLD”) and metabolic dysfunction-associated steatohepatitis (“MASH”).
Our objective is to develop a scalable biomarker solution for metabolic disease assessment and management through a non-invasive, point- of-care approach.
We have periodically evaluated and refined our vision, purpose, and go-to-market strategy with respect to TAEUS in response to evolving market conditions and development priorities.
To support adoption across targeted market segments, we are focused on:
| ● | Leveraging artificial intelligence and machine learning models to enhance measurement accuracy accuracy and reproducibility; |
| ● | Integrating thermo-acoustic technology with conventional ultrasound to streamline workflows and reduce operator variability; and |
| ● | Reducing system size and cost to improve accessibility across care settings. |
For our go-to-market strategy, we intend to focus on serving these four markets:
| 1. | Pharmaceutical Companies and Clinical Research Organizations (“CROs”); |
| 2. | High-end Primary Care Networks (Concierge Medicine); |
| 3. | Bariatric and Metabolic Clinics; and |
| 4. | Primary and Internal Medicine Practices. |
We plan to offer a multi-year, subscription-based business model with recurring revenue, while continuing to support traditional capital equipment sales with associated service and upgrade offerings.
In 2025, the Company expanded its business strategy to include a Digital Asset Treasury (“DAT”) initiative, managed in collaboration with Arca Investment Management (“Arca”), which seeks to optimize capital preservation and generate non-dilutive returns through investments in decentralized finance (“DeFi”) assets. This financial strategy operates in tandem with the Company’s core medical technology mission: the commercialization of the TAEUS platform via a recurring subscription model, with a specific focus on the burgeoning GLP-1 and metabolic disease markets.
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Potential Merger
On June 25, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among ASP Isotopes Inc. (“ASP Isotopes”), a Delaware corporation, Noble Africa LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of ASP Isotopes (“Noble”), Renergen Limited, a company incorporated under the laws of the Republic of South Africa and a direct, wholly-owned subsidiary of ASP Isotopes (“Renergen”), the Company, and Kruger Merger Sub LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of the Company (“Merger Sub”), pursuant to which, among other matters, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Noble (the “Merger”), with Noble surviving the Merger as a direct wholly-owned subsidiary of ENDRA (the “Surviving Company”).
Concurrently with the entry into the Merger Agreement, Noble entered into subscription agreements (“Subscription Agreements”) with ASP Isotopes and certain investors pursuant to which Noble agreed to sell approximately (i) 4,594,218 Class A Units of Noble and/or pre-funded warrants to purchase Class A Units of Noble (the “Pre-Funded Warrants”) to certain institutional investors and other persons and (ii) 3,054,185 Class B Units of Noble to ASP Isotopes, at a price per unit of $6.57 (or $6.57 less the Pre-Funded Warrant exercise price of $0.0001 for the Pre-Funded Warrants), for aggregate gross proceeds to Noble of approximately $50 million (the “Noble Investment”). Pursuant to the Subscription Agreements, the Noble Investment shall close immediately prior to the Merger.
Additionally, prior to the effective time of the Merger (the “Effective Time”), ASP Isotopes will contribute all of its equity interest in Renergen to Noble in exchange for 55,500,000 of Noble’s Class B Units (the “Contribution”). The shares of Class B Common Stock (as defined below) received by ASP Isotopes upon conversion of the Class B Units in connection with the Merger will entitle ASP Isotopes to 10 votes per share on all matters submitted to a vote of the stockholders of the Company.
Subject to the terms and conditions of the Merger Agreement, at the Effective Time, all of the units of Merger Sub outstanding immediately prior to the Effective Time shall be converted into and become units of the Surviving Company (“Surviving Company Units”) and ENDRA shall be admitted as the sole member of the Surviving Company as the holder of all Surviving Company Units. Additionally, at the Effective Time, (i) each Class A Unit of Noble outstanding immediately prior to the Effective Time (other than any units of Noble held by ENDRA, Merger Sub, Noble or any of their respective subsidiaries (the “Excluded Company Units”), which shall be automatically cancelled), by virtue of the Merger, shall be converted into the right to receive one share of Class A Common Stock (as defined below), as adjusted for the Reverse Stock Split (as defined below), if applicable, (ii) each Class B Unit of Noble outstanding immediately prior to the Effective Time (other than any Excluded Company Units), by virtue of the Merger, shall be converted into the right to receive one share of Class B Common Stock (as defined below) as adjusted for the Reverse Stock Split (as defined below), if applicable and (iii) each Pre-Funded Warrant that is outstanding and unexercised immediately prior to the Effective Time, will be converted into and become a warrant to purchase Class A Common Stock, and ENDRA shall assume the terms of the Pre-Funded Warrant by which such Pre-Funded Warrant is evidenced (with changes to such documents as ASP Isotopes and ENDRA mutually agree are appropriate to reflect the substitution of the Pre-Funded Warrant by ENDRA to purchase shares of Class A Common Stock). Pursuant to the A&R Certificate of Incorporation (as defined below), at the Effective Time, each share of our common stock issued and outstanding or held as treasury stock immediately prior to the Effective Time shall, automatically and without further action by any stockholder, be reclassified as one share of Class A Common Stock.
About Renergen
Renergen is a South African energy company focused on the development and commercialization of helium and liquefied natural gas (“LNG”) resources. Through its operating platform, Renergen is positioned around the production of specialty gases and cleaner energy products that are expected to serve high-demand industrial, technology, medical, aerospace, semiconductor, and energy markets. It provides services that include:
| ● | Helium Production and Supply: Development of helium resources designed to address supply needs for a scarce, strategically important gas used in medical imaging, semiconductor manufacturing, aerospace, fiber optics, leak detection, and advanced research applications. |
| ● | Liquefied Natural Gas: Production and commercialization of LNG for customers seeking cleaner-burning energy alternatives, including applications in transportation, industrial operations, and distributed energy markets. |
| ● | Strategic Resource Development: Advancement of gas reserves that include helium concentrations intended to provide exposure to markets characterized by constrained global supply, mission-critical end uses, and growing demand from high-technology and energy-transition sectors. |
Renergen believes its resource base and operating strategy can position it to participate in attractive end markets for helium and LNG. Helium’s limited global supply, specialized logistics requirements, and use in critical applications create potential commercial opportunities for producers with scalable production and offtake capabilities. Renergen’s LNG operations are expected to complement its helium strategy by supporting monetization of natural gas resources while serving customers seeking reliable and lower-emission fuel alternatives.
The foregoing description of the proposed Merger does not purport to be complete. Please refer to the Company’s Current Report on Form 8-K, filed with the SEC on June 26, 2026.
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Financial Operations Overview
Revenue
No revenue has been generated by our TAEUS technology, which we have not commercially sold as of June 30, 2026.
Research and Development Expenses
Our research and development expenses primarily include wages, fees and equipment for the development of our TAEUS technology platform and the proposed applications. Additionally, we incur certain costs associated with the protection of our products and inventions through a combination of patents, licenses, applications and disclosures. These costs and expenses include:
| ● | employee-related expenses, such as salaries, bonuses and benefits, consultant-related expenses such as consultant fees and bonuses, stock-based compensation, overhead related expenses and travel-related expenses for our research and development personnel; |
| ● | expenses incurred under agreements with CROs, contract manufacturing organizations (“CMOs”) as well as consultants that support the implementation of our clinical and non-clinical studies; |
| ● | manufacturing and packaging costs in connection with conducting clinical trials; |
| ● | formulation, research and development expenses related to our TAEUS technology; and |
| ● | costs for sponsored research. |
We plan to incur research and development expenses for the foreseeable future as we expect to continue the development of TAEUS and pursue FDA approval of the NAFLD TAEUS system. At this time, due to the inherently unpredictable nature of clinical development and regulatory approvals, we are unable to estimate with certainty the costs we will incur and the timelines we will require in our continued development efforts.
Sales and Marketing Expenses
Sales and marketing expenses consist primarily of headcount and consulting costs, and marketing and tradeshow expenses. Currently, our marketing efforts are through our website and attendance of key industry meetings and conferences. The company has decided to limit its marketing and sales activities until after we have obtained FDA approval for the sale of the NAFLD TAEUS device.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and related expenses for our management and personnel, and professional fees, such as for accounting, consulting and legal services. We anticipate continued costs associated with being a public company, including expenses related to services associated with maintaining compliance with The Nasdaq Capital Market and SEC requirements, directors and officers insurance, increased legal and accounting costs and investor relations costs.
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Critical Accounting Policies and Estimates
Use of Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures. Management evaluates its estimates and judgments on an ongoing basis based on historical experience and other factors believed to be reasonable under the circumstances. Actual results may differ from these estimates.
Digital Assets
The Company’s accounting for digital assets requires management to make judgments regarding the recognition, measurement and presentation of its digital asset activities. The Company measures digital assets within the scope of ASC 350-60 at fair value based on quoted market prices in active markets and recognizes changes in fair value in earnings. Management also maintains records of the cost basis and disposition of digital assets and evaluates transactions involving digital assets, including staking rewards, to determine the appropriate timing and presentation of amounts recognized in the consolidated financial statements. Changes in market conditions, the availability of observable market data, or the nature of the Company’s digital asset activities could affect the amounts recognized and disclosed in future periods.
Going Concern
Management evaluates whether conditions and events, considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date the consolidated financial statements are issued. This assessment requires significant judgment regarding, among other matters, the Company’s current liquidity, expected operating expenditures, ability to raise additional capital, access to restricted cash, compliance with Nasdaq continued listing requirements, and the timing and outcome of strategic transactions. Actual results may differ from management’s assumptions and could affect the Company’s conclusions regarding its ability to continue as a going concern.
Classification of Private Placement Securities
In connection with the Company’s 2026 private placement, management evaluated the terms of the securities issued to determine their appropriate classification within stockholders’ equity, temporary equity or liabilities under applicable U.S. GAAP. This evaluation requires judgment regarding the contractual terms of the instruments, including redemption, settlement and other rights of the holders, and whether such provisions are within the Company’s control. Changes in facts or circumstances, or the interpretation of contractual provisions, could affect the classification and presentation of these instruments in future periods.
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.
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Share-based Compensation
The Company’s 2016 Omnibus Incentive Plan (the “Omnibus Plan”) permits the grant of stock options and other share-based awards to its employees, consultants and non-employee members of the board of directors. Each January 1 the pool of shares available for issuance under the Omnibus Plan automatically increases by an amount equal to the lesser of (i) the number of shares necessary such that the aggregate number of shares available under the Omnibus Plan equals 25% of the number of fully-diluted outstanding shares on the increase date (assuming the conversion of all outstanding shares of preferred stock and other outstanding convertible securities and exercise of all outstanding options and warrants to purchase shares) and (ii) if the board of directors takes action to set a lower amount, the amount determined by the board. On January 1, 2025, the pool of shares issuable under the Omnibus Plan automatically increased by 178,033. In addition, on December 9, 2025, the stockholders of ENDRA Life Sciences Inc. (the “Company”) approved the Second Amendment to the Company’s 2016 Omnibus Incentive Plan (the “Omnibus Plan Amendment”) at the 2025 Annual Meeting of the Company’s Stockholders (the “Annual Meeting”). That Amendment increased the pool of shares available for issuance by 3,200,000 shares of common stock. Due to these increases, the pool of shares issuable under the Omnibus Plan shares increased from 1,738 shares to 3,379,771 shares as of December 31, 2025. In light of the increase effected by the Omnibus Plan Amendment, no automatic increase to the pool was effected as of January 1, 2026. As of June 30, 2026, there were 3,019,525 shares of common stock remaining available for issuance under the Omnibus Plan.
The Company records share-based compensation in accordance with the provisions of the Share-based Compensation Topic of the FASB Codification. The guidance requires the use of option-pricing models that require the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option valuation model, and the resulting charge is expensed using the straight-line attribution method over the vesting period.
Stock compensation expense recognized during the period is based on the value of share-based awards that were expected to vest during the period adjusted for estimated forfeitures. The estimated fair value of grants of stock options and warrants to non-employees of the Company is charged to expense, if applicable, in the financial statements. These options vest in the same manner as the employee options granted under the stock incentive plan as described above. Accounting guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company has limited historical experience with forfeitures and were based on management’s estimates.
Recent Accounting Pronouncements
See Note 2 of the accompanying financial statements for a discussion of recently issued accounting standards.
Results of Operations
Three months ended June 30, 2026 and 2025
Revenue
We had no revenue during the three months ended June 30, 2026 and 2025.
Cost of Goods Sold
We had no cost of goods sold during the three months ended June 30, 2026 and 2025.
Research and Development
Research and development expenses were $233,665 for the three months ended June 30, 2026, as compared to $381,061 for the three months ended June 30, 2025, a decrease of $147,396, or 39%. 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 complete development of our initial TAEUS product.
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Sales and Marketing
Sales and marketing expenses were $5,813 for the three months ended June 30, 2026, as compared to $68,834 for the three months ended June 30, 2025, a decrease of $63,021, or 92%. The costs include primarily headcount and pre-selling activities for our TAEUS product line. Sales and marketing expenses decreased largely due to continued reductions in expenses resulting from our restructuring in the second quarter of 2024 and first quarter of 2026. Currently, our marketing efforts are through our website and attendance of key industry meetings.
General and Administrative
Our general and administrative expenses for the three months ended June 30, 2026 were $1,243,778, compared to $851,195 for the three months ended June 30, 2025, an increase of $392,583, or 46%. Our wage and related expenses for the three months ended June 30, 2026 were 337,240, compared to $239,866 for the three months ended June 30, 2025. Wage and related expenses in the three months ended June 30, 2026 included $228,429 of stock compensation expense related to the issuance and vesting of options and RSUs for the three months ended June 30, 2026. Our professional fees, which include legal, audit, and investor relations, for the three months ended June 30, 2026 were $721,203, compared to $413,954 for the three months ended June 30, 2025.
Other Income
Other income of $1,643,200 for the three months ended June 30, 2026 was primarily due to changes in fair value of warrant liability and digital assets. Other income was $75,178 for the three months ended June 30, 2025, an increase of $1,568,022, or 2086%, due to changes in fair value of warrant liability and digital assets. For the three months ended June 30, 2026, there were changes in fair value of warrant liability of $(66,702),changes in fair value of digital assets of $1,700,247, and digital asset staking compensation of $9,700.
Net Loss
As a result of the foregoing, for the three months ended June 30, 2026, we recorded a net income of $159,944, compared to a net loss of $1,225,912 for the three months ended June 30, 2025.
Six months ended June 30, 2026 and 2025
Revenue
We had no revenue during the six months ended June 30, 2026 and 2025.
Cost of Goods Sold
We had no cost of goods sold during the six months ended June 30, 2026 and 2025.
Research and Development
Research and development expenses were $1,010,075 for the six months ended June 30, 2026, as compared to $909,746 for the six months ended June 30, 2025, an increase of $100,329, or 11%. The costs include primarily wages, fees, equipment and third-party costs for the development of our TAEUS product line. Research and development expenses increased 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 during the first quarter.
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Sales and Marketing
Sales and marketing expenses were $10,091 for the six months ended June 30, 2026, as compared to $137,825 for the six months ended June 30, 2025, a decrease of $127,734, or 93%. 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, 2026 were $2,636,838, compared to $1,722,801 for the six months ended June 30, 2025, an increase of $914,037, or 53%. Our wage and related expenses for the six months ended June 30, 2026 were $1,116,364, compared to $482,576 for the six months ended June 30, 2025. Wage and related expenses in the six months ended June 30, 2026 included $1,116,352 of stock compensation expense related to the issuance and vesting of options and RSUs for the six months ended June 30, 2026. Our professional fees, which include legal, audit, and investor relations, for the six months ended June 30, 2026 were $1,138,434, compared to $719,815 for the six months ended June 30, 2025.
Other Income
Other income was $2,505,515 for the six months ended June 30, 2026, compared to other income of $508,130 for the six months ended June 30, 2025, an increase of $1,997,385, or 393%, due to change in fair value of digital assets and warrant liability. For the six months ended June 30, 2026, there were changes in fair value of warrant liability of $(75,559),changes in fair value of digital assets of $2,560,008, and digital asset staking compensation of $20,760.
Net Loss
As a result of the foregoing, for the six months ended June 30, 2026, we recorded a net loss of $1,151,489, compared to a net loss of $2,262,242 for the six months ended June 30, 2025.
Near-Term Liquidity and Capital Resources
We are experiencing financial and operating challenges. Since inception, we have incurred losses and expect to continue to incur losses for the foreseeable future. As of June 30, 2026, we had an accumulated deficit of $111,616,998 and had $5,539,946 in cash, approximately $3.8 million of which is subject to restrictions on use pursuant to a deposit account control agreement acceptable to the Company and LHE LNG Holdings, LLC (the “Purchaser”), an affiliate of ASP Isoptopes Inc. (as described below). 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. In the six months ended June 30, 2026, we implemented cost reduction measures, including a reduction in headcount and prioritization of development activities over clinical ones, to extend our operating runway and focus resources on product improvements and regulatory strategy for our TAEUS liver application. These actions are expected to impact the timing of certain development activities, including delaying the timing of a future De Novo submission to the FDA relating to our TAEUS liver application.
Additionally, in March 2026, we announced that the Board had initiated a process to evaluate a range of strategic alternatives, which ultimately resulted in the Company entering into the Merger Agreement.
In connection with negotiations of the Merger Agreement and, in light of the Company’s pending hearing before a Nasdaq panel regarding the Company’s deficiency in stockholders’ equity relative to the minimum $2.5 million required by Nasdaq Rules, on May 27, 2026, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with the Purchaser pursuant to which the Company agreed to sell and issue securities to the Purchaser for aggregate gross proceeds of $3.8 million (the “2026 Private Placement”). Concurrent with the entry into the Securities Purchase Agreement, the Company and the Purchaser entered into a side letter agreement (the “Side Letter Agreement”), pursuant to which the Company may be required to return all or a portion of the $3.8 million received in the 2026 Private Placement (the “Payment Obligation”). Additionally, pursuant to the Side Letter Agreement, until the earlier of the closing of the Merger or the payment of the Payment Obligation, the Company is required to maintain a cash balance equal to or greater than $3.8 million in a segregated bank account, with spending of such cash balance subject to a deposit control agreement that is mutually acceptable to the Company and the Purchaser. Please see the Company’s Current Report on Form 8-K filed with the SEC on May 28, 2026 for more details regarding the 2026 Private Placement and Side Letter Agreement.
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As of June 30, 2026, we had approximately $5.5 million in cash and cash equivalents, of which $3.8 million is restricted cash. We expect to incur significant costs in connection with the Merger, even if the Merger is ultimately not consummated, including legal and professional services costs related to filing a registration statement with the SEC and obtaining stockholder approval.
We anticipate that our cash position is sufficient to fund our operations at least through the anticipated closing of the proposed Merger. However, management believes that without the closing of the Merger, given our current cash position and forecasted negative cash flows from operating activities over the next twelve months, there is substantial doubt about our ability to continue as a going concern after the date that is one year from the date that these financial statements are issued.
If we do not consummate the Merger, we may be required to return all or a portion of the proceeds from the May 2026 Private Placement to LHE and we would need additional capital to allow us to continue to execute our clinical trials and commercialization plans through 2026 and beyond. If we do not consummate the Merger, we will consider additional potential financing options that may be available to us, including sales of our common stock through our at-the-market sales program (the “ATM Program”) with Lucid Capital Markets, LLC (“Lucid”), which are limited due to registration statement rules relating to public float. Except for the ATM Program, we have no commitments to obtain any additional funds, and there can be no assurance funds will be available in sufficient amounts or on acceptable terms. If we are unable to obtain sufficient additional financing in a timely fashion and on terms acceptable to us, our financial condition and results of operations may be materially adversely affected and we may not be able to continue operations or execute our stated commercialization plan.
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 six months ended June 30, 2026, we incurred net losses of $1,151,489 and used cash in operations of $2,047,210. In light of our cash balance as of June 30, 2026, if we do not consummate the Merger, 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 six months ended June 30, 2026, we used $2,047,210 of cash in operating activities primarily as a result of our net loss of $1,151,489, offset by share-based compensation of $1,116,355, amortization of right of use assets of 61,232, depreciation expense of $17,648, change in fair value of warrant liability of $75,559, digital asset staking compensation of $(20,760), change in fair value of digital assets of $(2,560,008) and net changes in operating assets and liabilities of $487,234.
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 six months ended June 30, 2026, we used $18,670 in investing activities related to purchases of fixed assets and received $2,685,775 in proceeds from the sale of digital intangible assets. During the six months ended June 30, 2025, we used $17,280 in investing activities related to purchases of fixed assets.
Financing Activities
During the six months ended June 30, 2026, our financing activities provided $4,157,686 in proceeds from issuances of common stock. During the six months ended June 30, 2025, our financing activities provided $1,003,218 in proceeds from issuances of common stock.
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Long-Term Liquidity
We have not completed the commercialization of any of our TAEUS technology platform applications and have reduced our headcount and R&D spending in order to conserve resources. To the extent resources allow, we would expect to continue to incur significant expenses relating to the development of our TAEUS technology for the foreseeable future in order to finalize the commercialization of our TAEUS liver product and develop further TAEUS products. In this case, we would anticipate that our expenses would increase substantially as we:
| ● | advance the engineering design and development of our TAEUS technology; |
| ● | acquire parts and build finished goods inventory of the TAEUS FLIP system; |
| ● | complete regulatory filings required for marketing approval of our NAFLD TAEUS application in the United States, including clinical studies to advance our de novo application with the FDA; |
| ● | seek to hire a small internal marketing team to engage and support channel partners and clinical customers for our NAFLD TAEUS application; |
| ● | expand marketing of our NAFLD TAEUS application; |
| ● | advance development of our other TAEUS applications; and |
| ● | add operational, financial and management information systems and personnel, including personnel to support our product development, planned commercialization efforts and our operation as a public company. |
It is possible that we will not achieve the progress that we expect because the actual costs and timing of completing the development and regulatory approvals for a new medical device are difficult to predict and are subject to substantial risks and delays. We have no committed external sources of funds except for our ATM Program with Lucid, the use of which may be limited due to registration statement rules relating to public float. Our existing cash will not be sufficient for us to complete the commercialization of our TAEUS application, or to complete the development of any other TAEUS application and we will need to raise substantial additional capital for those purposes. As a result, if we do not consummate the Merger, we will need to finance our future cash needs through public or private equity offerings, debt financings, corporate collaboration and licensing arrangements or other financing alternatives. Our forecast of our financial resources is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2025. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.
Until we can generate a sufficient amount of revenue from our TAEUS platform applications, if ever, if we do not consummate the Merger, we expect to finance future cash needs through public or private equity offerings, debt financings or corporate collaborations and licensing arrangements. Additional funds may not be available when we need them on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to cease the operation of our business. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience additional dilution, and debt financing, if available, may involve restrictive covenants. To the extent that we raise additional funds through collaborations and licensing arrangements, it may be necessary to relinquish some rights to our technologies or applications or grant licenses on terms that may not be favorable to us. We may seek to access the public or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.
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Off-Balance Sheet Transactions
At June 30, 2026, the Company did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
As a smaller reporting company, we are not required to provide the information required by this Item 3.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this Form 10-Q, management performed, with the participation of our principal executive officer and principal financial officer, an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures. Based on the evaluation, our principal executive officer and principal financial officer concluded that, as of June 30, 2026, our disclosure controls and procedures were not effective.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We identified the following material weakness as of June 30, 2026: insufficient personnel resources within the accounting function to segregate the duties over financial transaction processing and reporting.
To remediate the material weakness, management intends to implement the following measures during 2026, as the Company’s resources and financial means allow:
| ● | Add additional accounting personnel or outside consultants to properly segregate duties and to effect timely, accurate preparation of the financial statements; and |
| ● | Continue the development of adequate written accounting policies and procedures. |
The additional hiring is contingent upon our efforts to obtain additional funding and the results of our operations.
Changes in Internal Control over Financial Reporting
There were no changes to our internal control over financial reporting or in other factors that could affect these controls during the six months ended June 30, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We are not currently a party to any pending legal proceedings that we believe will have a material adverse effect on our business or financial condition. We may, however, be subject to various claims and legal actions arising in the ordinary course of business from time to time.
Item 1A. Risk Factors
In addition to the other information set forth in this report, you should carefully consider the factors discussed in this section and under “Risk Factors” in our Annual Report on Form 10-K for the period ended December 31, 2025, as filed with the Securities and Exchange Commission on March 31, 2026. These factors could materially adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by any forward-looking statements contained in this report.
Other than as set forth below, there have been no material changes to our Risk Factors as therein previously reported.
Risks Related to the Merger
The Merger is subject to conditions, including approval by ENDRA’s stockholders, that are outside the Merger parties’ control, and the Merger may not be completed.
The completion of the Merger is subject to the satisfaction or waiver of a number of conditions, many of which are outside the control of the parties. These conditions include, among others, the approval of the Merger and certain related proposals (the “ENDRA Stockholder Matters”) by our stockholders at a special meeting of our stockholders (the “ENDRA Special Meeting”), the effectiveness of the registration statement on Form S-4 registering the shares of Class A Common Stock and Class B Common Stock of the Company to be issued in connection with the Merger, the approval for listing of the Class A Common Stock and Class B Common Stock to be issued as Merger consideration on Nasdaq, the Company having an amount of cash equal to or greater than $3.8 million (as may be modified by written agreement of the parties to the Merger Agreement), the receipt by Noble Africa of the proceeds of the approximately $50 million Noble Investment, ASP Isotopes having effected the contribution of its equity interests in Renergen to Noble Africa and Noble Africa’s receipt of the written consent of the U.S. International Development Finance Corporation as required under the finance agreement with a subsidiary of Renergen. There can be no assurance that these conditions will be satisfied or waived on a timely basis, if at all, or that the Merger will be completed on the terms contemplated by the Merger Agreement or at all.
Failure to complete the Merger could adversely affect the Company and the market price of our common stock.
If the Merger is not completed, our business may be adversely affected subject to a number of risks, including that the market price of our common stock may decline to the extent that the current market price reflects an assumption that the Merger will be completed, that the parties will have incurred significant costs that must be paid regardless of whether the Merger is completed, and that management’s attention will have been diverted from ongoing business operations. Either the Company or Noble Africa may terminate the Merger Agreement if the Merger has not been completed by December 31, 2026, or upon the occurrence of certain other events, including the failure of our stockholders to approve the ENDRA Stockholder Matters at the ENDRA Special Meeting.
Pursuant to the Side Letter Agreement, if the Merger is not consummated due to any decision of the Company not to continue pursuing the Merger, the Company is obligated to pay an amount equal to the 2026 Private Placement Purchase Price less the fair market value of the shares of common stock and/or prefunded warrants purchased by the Purchaser in the 2026 Private Placement based, subject to certain exceptions, on a 10-day volume weighted average price of the shares determined at the time of such repayment.
The announcement and pendency of the Merger may disrupt our business and divert the attention of management.
The announcement and pendency of the Merger, whether or not it is completed, may have an adverse effect on our business relationships, operating results and businesses generally. Uncertainty about the effect of the Merger on employees, customers, suppliers, lenders and other third parties may impair the parties’ ability to attract, retain and motivate key personnel, to maintain relationships with customers and financing sources, and to pursue their respective business strategies. In addition, the pendency of the Merger may divert the attention of management from the parties’ day-to-day operations and the pursuit of other opportunities that could have been beneficial to the parties.
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The Company, Noble Africa and Renergen will incur significant transaction-related costs in connection with the Merger.
The Company, Noble Africa and Renergen have incurred, and expect to continue to incur, significant costs, expenses and fees in connection with the Merger and the related transactions, including financial advisory, legal, accounting, filing and printing fees. Many of these costs are payable regardless of whether the Merger is completed. These costs could adversely affect our financial condition and results of operations following the Merger, whether or not the Merger is not completed.
The Merger Agreement contains provisions that limit our ability to pursue alternative transactions.
Each of the Company, Renergen, ASP Isotopes and Noble Africa has agreed, subject to certain exceptions, not to directly or indirectly solicit, initiate or knowingly encourage alternative acquisition proposals, or to enter into discussions concerning, or provide confidential information in connection with, any unsolicited alternative acquisition proposals. The Company may furnish information and engage in discussions with a person that has made an unsolicited, bona fide written acquisition proposal only if our Board of Directors determines in good faith, after consultation with outside counsel, that the proposal would reasonably be expected to constitute a superior proposal and that failing to do so would be inconsistent with its fiduciary duties. These provisions could discourage a third party that might have an interest in an alternative transaction from proposing or pursuing such a transaction, even one that might be more favorable to our stockholders.
Lawsuits may be filed against the parties to the Merger Agreement challenging the Merger, and an adverse judgment could prevent or delay its completion.
Lawsuits may be filed against the Company, Noble Africa, Renergen, ASP Isotopes or their respective directors and officers in connection with the Merger. Such actions may seek, among other things, to enjoin the completion of the Merger. The defense or settlement of any such lawsuit or claim could delay or prevent the completion of the Merger, divert the attention of management and result in significant costs, any of which could adversely affect the business, financial condition and results of operations of the parties and the Company, and insurance may not be sufficient to cover all associated costs and damages.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Plans
None of the Company’s directors or officers
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Item 6. Exhibits
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ENDRA LIFE SCIENCES INC. | ||
| Date: August 14, 2026 | By: | /s/ Alexander Tokman |
| Alexander Tokman | ||
| Chief Executive Officer and Chairman | ||
| (Principal Executive Officer) | ||
| ENDRA LIFE SCIENCES INC. | ||
| Date: August 14, 2026 | By: | /s/ Richard Jacroux |
| Richard Jacroux | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
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