10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022

OR

☐     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER 001-37969

ENDRA LIFE SCIENCES INC.

(Exact name of registrant as specified in its charter)

Delaware	26-0579295
(State of incorporation)	(I.R.S. Employer Identification No.)

3600 Green Court, Suite 350, Ann Arbor, MI 48105-1570

(Address of principal executive office) (Zip code)

(734) 335-0468

(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
Common Stock, par value $0.0001 per share	NDRA	The Nasdaq Stock Market LLC
Warrants, each to purchase one share of Common Stock	NDRAW	The Nasdaq Stock Market LLC

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. Yes ☒ No ☐

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 such files). Yes ☒ No ☐

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	☐
Non-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 (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 12, 2022, there were 63,174,455 shares of our common stock, par value $0.0001 per share, outstanding.

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets – March 31, 2022 (unaudited) and December 31, 2021	3
	Condensed Consolidated Statements of Operations – Three months ended March 31, 2022 and 2021 (unaudited)	4
	Condensed Consolidated Statements of Equity as of March 31, 2022 and 2021 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows – Three months ended March 31, 2022 and 2021 (unaudited)	6
	Notes to the Condensed Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21
Item 1.	Legal Proceedings	22
Item1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.	Defaults Upon Senior Securities	22
Item 4.	Mine Safety Disclosure	22
Item 5.	Other Information	22
Item 6.	Exhibits	23
	Signatures	24

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ENDRA Life Sciences Inc.

Condensed Consolidated Balance Sheets

	March 31,			December 31,
Assets	2022			2021
Current Assets	(Unaudited)
Cash	$	7,127,363		$	9,461,534
Prepaid expenses		1,061,406			1,348,003
Inventory		1,930,258			1,284,578
Total Current Assets		10,119,027			12,094,115
Non-Current Assets
Fixed assets, net		201,445			131,130
Right of use assets		610,234			643,413
Other assets		5,986			5,986
Total Assets	$	10,936,692		$	12,874,644
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable and accrued liabilities	$	1,220,840		$	1,411,437
Lease liabilities, current portion		137,117			132,330
Total Current Liabilities		1,357,957			1,543,767
Long Term Debt
Loans		28,484			28,484
Lease liabilities		481,618			518,147
Total Long Term Debt		510,102			546,631
Total Liabilities		1,868,059			2,090,398
Stockholders’ Equity
Series A Convertible Preferred Stock, $0.0001 par value; 10,000 shares authorized; 141,397 and 190,288 shares issued and outstanding, respectively		1			1
Series B Convertible Preferred Stock, $0.0001 par value; 1,000 shares authorized; no shares issued and outstanding		-			-
Common stock, $0.0001 par value; 80,000,000 shares authorized; 44,559,418 and 42,554,514 shares issued and outstanding, respectively		4,454			4,254
Additional paid in capital		80,604,416			79,456,938
Stock payable		8,774			13,863
Accumulated deficit		(71,549,012	)		(68,690,810	)
Total Stockholders’ Equity		9,068,633			10,784,246
Total Liabilities and Stockholders’ Equity	$	10,936,692		$	12,874,644

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 

3

ENDRA Life Sciences Inc.

Condensed Consolidated Statements of Operations

 (Unaudited)

	Three Months Ended			Three Months Ended
	March 31,			March 31,
	2022			2021
Operating Expenses
Research and development	$	1,213,022		$	1,141,486
Sales and marketing		339,903			160,935
General and administrative		1,302,344			1,273,418
Total operating expenses		2,855,269			2,575,839
Operating loss		(2,855,269	)		(2,575,839	)
Other Expenses
Gain on extinguishment of debt		-			308,600
Other expense		(2,933	)		(2,037	)
Total other (expenses)		(2,933	)		306,563
Loss from operations before income taxes		(2,858,202	)		(2,269,276	)
Provision for income taxes		-			-
Net Loss	$	(2,858,202	)	$	(2,269,276	)
Deemed dividend		-			(121,071	)
Net Loss attributable to common stockholders	$	(2,858,202	)	$	(2,390,347	)
Net loss per share – basic and diluted	$	(0.07	)	$	(0.06	)
Weighted average common shares – basic and diluted		43,054,224			37,772,515

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

ENDRA Life Sciences Inc.

Condensed Consolidated Statements of Stockholders’ Equity

 (Unaudited)

Three Months Ended March 31, 2021	Series A Convertible					Series B Convertible								Additional								Total
	Preferred Stock					Preferred Stock				Common stock				Paid in			Stock		Accumulated			Stockholders'
	Shares			Amount		Shares		Amount		Shares		Amount		Capital			Payable		Deficit			Equity
Balance as of December 31, 2020		196,794		$	1		-	$	-		34,049,704	$	3,404	$	64,493,611			10,795		(57,338,489	)		7,169,322
Series A Convertible Preferred Stock converted to common stock		(55,397	)		-		-		-		67,889		7		(7	)		-		-			-
Common stock issued for cash, net of funding costs		-			-		-		-		3,914,217		391		9,797,902			-		-			9,798,293
Common stock issued for warrant exercise		-			-		-		-		3,567,899		357		2,785,270			-		-			2,785,627
Common stock issued for option exercise		-			-		-		-		14,944		2		(2	)		-		-			-
Fair value of vested stock options		-			-		-		-		-		-		285,489			-		-			285,489
Stock payable towards preference dividend		-			-		-		-		-		-		(22,337	)		22,337		-			-
Stock payable for services		-			-		-		-		-		-					46,250		-			46,250
Stock payable towards RSU's		-			-		-		-		-		-		-			36,460		-			36,460
Deemed dividend		-			-		-		-		-		-		121,071			-		(121,071	)		-
Net loss		-			-		-		-		-		-		-			-		(2,269,276	)		(2,269,276	)
Balance as of March 31, 2021		141,397		$	1		-	$	-		41,614,653	$	4,161	$	77,460,997		$	115,842	$	(59,728,836	)	$	17,852,166

Three Months Ended March 31, 2022	Series A Convertible				Series B Convertible								Additional								Total
	Preferred Stock				Preferred Stock				Common stock				Paid in		Stock			Accumulated			Stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Payable			Deficit			Equity
Balance as of December 31, 2021		141,397	$	1		-	$	-		42,554,514	$	4,254	$	79,456,938		13,863			(68,690,810	)		10,784,246
Common stock issued for cash, net of funding costs		-		-		-		-		2,004,904		200		853,852		-			-			854,052
Fair value of vested stock options		-		-		-		-		-		-		288,537		-			-			288,537
Stock payable towards preference dividend		-		-		-		-		-		-		5,089		(5,089	)		-			-
Net loss		-		-		-		-		-		-		-		-			(2,858,202	)		(2,858,202	)
Balance as of March 31, 2022		141,397	$	1		-	$	-		44,559,418	$	4,454	$	80,604,416	$	8,774		$	(71,549,012	)	$	9,068,633

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

ENDRA Life Sciences Inc.

Condensed Consolidated Statements of Cash Flows

 (Unaudited)

	Three Months Ended			Three Months Ended
	March 31,			March 31,
	2022			2021
Cash Flows from Operating Activities
Net loss	$	(2,858,202	)	$	(2,269,276	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		19,038			31,425
Stock compensation expense including common stock issued for RSUs		288,537			321,949
Stock payable for investor relations		-			46,250
Amortization of right of use assets		33,179			17,449
Gain on extinguishment of debt		-			(308,600	)
Changes in operating assets and liabilities:
Decrease in prepaid expenses		286,597			(385,292	)
Increase in inventory		(645,680	)		(136,988	)
Decrease in accounts payable and accrued liabilities		(190,597	)		(223,532	)
Decrease in lease liability		(31,742	)		(16,868	)
Net cash used in operating activities		(3,098,870	)		(2,923,483	)
Cash Flows from Investing Activities
Purchases of fixed assets		(89,353	)		(45,000	)
Net cash used in investing activities		(89,353	)		(45,000	)
Cash Flows from Financing Activities
Proceeds from warrant exercise		-			2,785,627
Proceeds from issuance of common stock		854,052			9,798,293
Net cash provided by financing activities		854,052			12,583,920
Net increase (decrease) in cash		(2,334,171	)		9,615,437
Cash, beginning of period		9,461,534			7,227,316
Cash, end of period	$	7,127,363		$	16,842,753
Supplemental disclosures of cash items
Interest paid	$	-		$	-
Income tax paid	$	-		$	-
Supplemental disclosures of non-cash items
Deemed dividend	$	-		$	121,071
Conversion of Series A Convertible Preferred Stock	$	-		$	(7	)
Stock dividend payable	$	5,089		$	(22,337	)
Right of use asset	$	610,234		$	321,563
Lease liability	$	618,735		$	331,520

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

ENDRA Life Sciences Inc.

Notes to Condensed Consolidated Financial Statements

For the three months ended March 31, 2022 and 2021

(Unaudited)

Note 1 – Nature of the Business

ENDRA Life Sciences Inc. (“ENDRA” or the “Company”) has developed and is continuing to develop technology for increasing the capabilities of clinical diagnostic ultrasound to broaden patient access to the safe diagnosis and treatment of a number of significant medical conditions in circumstances where expensive X-ray computed tomography (“CT”) and magnetic resonance imaging (“MRI”) technology is unavailable or impractical.

ENDRA was incorporated on July 18, 2007 as a Delaware corporation.

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.

The COVID-19 pandemic has prompted governments and regulatory bodies throughout the world to issue “stay-at-home” or similar orders, and enact restrictions on the performance of “non-essential” services, public gatherings and travel.

The extent to which COVID-19 impacts the Company’s business and financial results will depend on numerous evolving factors including, but not limited to: the magnitude and duration of COVID-19, the extent to which it continues impact worldwide macroeconomic conditions, the emergence of variants of the virus and effectiveness of vaccines, access to capital markets, and governmental and business reactions to the pandemic. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 as of March 31, 2022 and through the date of the filing of this Quarterly Report on Form 10-Q. The accounting matters assessed included, but were not limited to, estimates related to the accounting for potential liabilities and accrued expenses, the assumptions utilized in valuing stock-based compensation issued for services, the realization of deferred tax assets, and assessments of impairment related to long-lived assets. The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in additional material impacts to the Company’s consolidated financial statements in future reporting periods.

Despite the Company’s efforts, the ultimate impact of COVID-19 on the Company’s business depends on factors beyond the Company’s knowledge or control, including the duration and severity of the outbreak, as well as third-party actions taken to contain its spread and mitigate its public health effects. As a result, the Company is unable to estimate the extent to which COVID-19 will negatively impact its financial results or liquidity.

Principles of Consolidation

The Company’s consolidated financial statements include all accounts of the Company and its consolidated subsidiary 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 three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The balance sheet at December 31, 2021 has been derived from the audited financial statements at that date. For further information, refer to the financial statements and footnotes thereto included in ENDRA Life Sciences Inc. annual financial statements for the twelve months ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2022.

7

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. As of March 31, 2022 and December 31, 2021, the Company had no cash equivalents. 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 credit worthiness of the financial institutions and has determined the credit exposure to be negligible.

Inventory

The Company’s inventory is stated at the lower of cost or estimated net realizable value, with cost primarily determined on a weighted-average cost basis on the first-in, first-out method. The Company periodically determines whether a reserve should be taken for devaluation or obsolescence of inventory.

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 March 31, 2022 and December 31, 2021 the Company recorded a right of use asset of $610,234 and $643,413, respectively. At March 31, 2022 and December 31, 2021 the Company recorded a lease liability of $618,735 and $650,477, respectively.

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 principal 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. The adoption of ASC Topic 606 did not have an impact on the Company’s operations or cash flows.

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 March 31, 2022 and 2021, the Company incurred $1,213,022 and $1,141,486 of expenses related to research and development costs, respectively.

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 10,564,415 and 7,848,899 potentially dilutive shares, which include outstanding common stock options, warrants, and convertible notes, as of March 31, 2022 and December 31, 2021, respectively.

8

The potential shares, which are excluded from the determination of basic and diluted net loss per share as their effect is anti-dilutive, are as follows:

	March 31, 2022		December 31, 2021
Options to purchase common stock		7,964,726		5,249,210
Warrants to purchase common stock		2,437,164		2,437,164
Shares issuable upon conversion of Series A Convertible Preferred Stock		162,525		162,525
Potential equivalent shares excluded		10,564,415		7,848,899

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 carrying amounts of the Company’s financial assets and liabilities, including cash, accounts receivable, prepaid expenses, accounts payable, accrued expenses, and other current liabilities, approximate their fair values because of the short maturity of these instruments. The fair value of notes payable and convertible notes approximates their fair values since the current interest rates and terms on these obligations are the same as prevailing market rates.

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, 2022, the pool of shares authorized for issuance under the Omnibus Plan automatically increased by 1,622,848 shares from 7,461,228 shares to 9,084,076.

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.

9

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 March 31, 2022 of $71,549,012. The Company had working capital of $8,761,070 as of March 31, 2022. The Company has not established an ongoing source of revenue sufficient to cover its operating costs and to allow it to continue as a going concern. The accompanying financial statements for the period ended March 31, 2022 have been prepared assuming the Company will continue as a going concern. Although the Company’s cash resources will likely be sufficient to meet its anticipated needs during the next twelve months, the Company will require additional financing to fund its future planned operations, including research and development and commercialization of its products.

The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable. Management’s plans to continue as a going concern include raising additional capital through sales of equity securities and borrowing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. As described further below under “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” the COVID-19 pandemic has impacted the Company’s business operations to some extent and is expected to continue to do so and, in light of the effect of such pandemic on financial markets, these impacts may include reduced access to capital. If the Company is not able to obtain the necessary additional financing on a timely basis, the Company will be required to delay, reduce the scope of, or eliminate one or more of the Company’s research and development activities or commercialization efforts or perhaps even cease the operation of its business. The ability of the Company to continue as a going concern is dependent upon its ability to successfully secure other sources of financing and attain profitable operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Recent Accounting Pronouncements

The Company considered recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC, did not or in management’s opinion will not have a material impact on the Company’s present or future consolidated financial statements.

Note 3 – Inventory

As of March 31, 2022 and December 31, 2021, inventory consisted of raw materials and subassemblies to be used in the assembly of a TAEUS system. As of March 31, 2022, the Company had no orders pending for the sale of a TAEUS system. 

As of March 31, 2022 and December 31, 2021, the Company had inventory valued at $1,930,258 and $1,284,578, respectively.

Note 4 – Fixed Assets

As of March 31, 2022 and December 31, 2021, fixed assets consisted of the following:

	March 31, 2022			December 31, 2021
Property, leasehold and capitalized software	$	694,600		$	605,248
TAEUS development and testing		107,682			107,682
Accumulated depreciation		(600,837	)		(581,800	)
Fixed assets, net	$	201,445		$	131,130

Depreciation expense for the three months ended March 31, 2022 and 2021 was $19,038 and $31,425, respectively.

10

Note 5 – Accounts Payable and Accrued Liabilities

As of March 31, 2022 and December 31, 2021, current liabilities consisted of the following:

	March 31, 2022		December 31, 2021
Accounts payable	$	833,855	$	791,052
Accrued payroll		151,322		101,459
Accrued bonuses		200,632		396,043
Accrued employee benefits		5,750		5,750
Insurance premium financing		29,281		117,133
Total	$	1,220,840	$	1,411,437

Note 6 – Bank Loans

U.S. SBA Paycheck Protection Program

In April 2020, the Company issued a U.S. Small Business Administration (“SBA”) Paycheck Protection Program Note (the “SBA Note”) to First Republic Bank (the “Lender”) for a loan in the principal amount of $308,600 (the “SBA Loan”) under the Paycheck Protection Program (“PPP”) promulgated under the Coronavirus Aid, Relief and Economic Security Act of 2020, as modified by the Paycheck Protection Program Flexibility Act of 2020.

On May 10, 2021 received notice that the SBA Loan had been forgiven in full in accordance with the terms and provisions of the PPP.

The Company did not provide any collateral or personal guarantees for the SBA Loan, nor did the Company pay any facility charge to the government or to the Lender.

Toronto-Dominion Bank Loan

On April 27, 2020, the Company entered into a commitment loan with TD Bank under the Canadian Emergency Business Account, in the principal aggregate amount of CAD 40,000, which is due and payable upon the expiration of the initial term on December 31, 2022. This note bears interest on the unpaid balance at the rate of zero percent (0%) per annum during the initial term. Under this note no interest payments are due until January 1, 2023. Under the conditions of the loan, twenty-five percent (25%) of the loan will be forgiven if seventy-five percent (75%) is repaid prior to the initial term date.

Note 7 – Capital Stock

At March 31, 2022, the authorized capital of the Company consisted of 90,000,000 shares of capital stock, comprised of 80,000,000 shares of common stock with a par value of $0.0001 per share, and 10,000,000 shares of preferred stock with a par value of $0.0001 per share. The Company has designated 10,000 shares of its preferred stock as Series A Convertible Preferred Stock (“Series A Preferred Stock”) and 1,000 shares of its preferred stock as Series B Convertible Preferred Stock (“Series B Preferred Stock”), and the remainder of 9,989,000 shares remain authorized but undesignated.

As of March 31, 2022, there were 44,559,418 shares of common stock, 141,397 shares of Series A Preferred Stock, and no shares of Series B Preferred Stock issued and outstanding, and a stock payable balance of $8,774.

During the three months ended March 31, 2022, the Company issued a total of 2,004,904 shares of its common stock in return for aggregate net proceeds of $854,052. 

During the three months ended March 31, 2021, the Company issued a total of 7,564,949 shares of its common stock, as follows:

· 67,889 shares upon the conversion of 55.397 shares of its Series A Preferred Stock;

· 3,914,217 shares in return for aggregate net proceeds of $9,798,293 from sales of common stock;

· 3,567,899 shares upon warrant exercises for an aggregate exercise price of $2,785,627; and

· 14,944 shares upon cashless option exercise.

11

At-the-Market Equity Offering Program

On June 21, 2021, the Company entered into the At-The-Market Issuance Sales Agreement with Ascendiant (the “June 2021 ATM Agreement”) to sell shares of common stock for aggregate gross proceeds of up to $20.0 million, from time to time, through an “at-the-market” equity offering program under which Ascendiant acts as sales agent. As of March 31, 2022, under the June 2021 ATM Agreement the Company has issued an aggregate of 2,677,645 shares of common stock in return for net proceeds of $1,671,725, resulting in approximately $52,295 of compensation paid to Ascendiant. During the three months ended March 31, 2022, under the June 2021 ATM Agreement the Company has issued an aggregate of 2,004,904 shares of common stock in return for net proceeds of $854,043, resulting in $26,783 of compensation paid to Ascendiant.

Note 8 – Common Stock Options

Common Stock Options

Stock options are awarded to the Company’s employees, consultants and non-employee members of the board of directors under the 2016 Omnibus Incentive Plan (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. The aggregate fair value of these stock options granted by the Company during the three months ended March 31, 2022 was determined to be $899,306 using the Black-Scholes-Merton option-pricing model based on the following assumptions: (i) volatility rate of 74% to 99%, (ii) discount rate of 0%, (iii) zero expected dividend yield, and (iv) expected life of 8-10 years. A summary of option activity under the Company’s Omnibus Plan as of March 31, 2022, and changes during the year then ended, is presented below:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)
Balance outstanding at December 31, 2021		5,249,210		$	2.21		7.42
Granted		2,756,285			0.41		9.87
Exercised		-			-		-
Forfeited		-			-		-
Cancelled or expired		(40,769	)		-		-
Balance outstanding at March 31, 2022		7,964,726		$	1.59		8.10
Exercisable at March 31, 2022		2,940,158		$	2.32		6.00

Note 9 – Common Stock Warrants

Warrant Conversions and Consent Solicitation

The following table summarizes all stock warrant activity of the Company for the three months ended March 31, 2022:

	Number of Warrants		Weighted Average Exercise Price		Weighted Average Contractual Term (Years)
Balance outstanding at December 31, 2021		2,437,164	$	5.54		0.58
Granted		-		-		-
Exercised		-		-		-
Forfeited		-		-		-
Expired		-		-		-
Balance outstanding at March 31, 2022		2,437,164	$	5.54		0.33
Exercisable at March 31, 2022		2,437,164	$	5.54		0.33

Note 10 – Commitments and Contingencies

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 3,657 rentable square feet of space, for the initial monthly rent of $5,986, which commenced on January 1, 2015 for an initial term of 60 months. On October 10, 2017 this lease was amended increasing the rentable square feet of space to 3,950 and the monthly rent to $7,798. On July 16, 2019, the Company exercised its option to extend the lease for an additional 5 years past the initial term originally expiring on December 31, 2019.

12

On March 15, 2021, the Company entered into an amendment to the lease, adding approximately 3,248 rentable square feet, increasing the initial monthly rent to $15,452 effective May 2021, and extending the term of the lease to December 31, 2025. 

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 March 31, 2022 was 10%. Lease expense is recognized on a straight-line basis over the lease term to the extent that collection is considered probable. As a result, the Company has been recognizing rents as they become payable based on the adoption of ASC Topic 842. The weighted-average remaining lease term is 3.75 years.

As of March 31, 2022, the maturities of operating lease liabilities are as follows:

	Operating Lease
2022		143,222
2023		196,721
2024		202,624
2025 and beyond		202,624
Total	$	745,191
Less: amount representing interest		(126,456	)
Present value of future minimum lease payments		618,735
Less: current obligations under leases		137,117
Long-term lease obligations	$	481,618

For the three months ended March 31, 2022 and 2021, the Company incurred rent expenses of $52,763 and $32,191, respectively.

Employment and Consulting Agreements

Francois Michelon - The Company has an employment agreement with Francois Michelon, the Company’s Chief Executive Officer and Chairman of the board of directors, dated May 12, 2017 and amended on December 27, 2019. The employment agreement provides for an annual base salary that is subject to adjustment at the board of directors’ discretion. The annual base salary in effect during the period covered by this Form 10-Q was $423,000. Under the employment agreement, Mr. Michelon is eligible for an annual cash bonus based upon achievement of performance-based objectives established by the board of directors. Upon termination without cause, any portion of Mr. Michelon’s option award scheduled to vest within 12 months will automatically vest, and upon termination without cause within 12 months following a change of control, the entire unvested portion of the option award will automatically vest. Upon termination for any other reason, the entire unvested portion of the option award will terminate.

If Mr. Michelon’s employment is terminated by the Company without cause or Mr. Michelon terminates his employment for good reason, Mr. Michelon will be entitled to receive 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).

Under his employment agreement, Mr. Michelon is eligible to receive benefits that are substantially similar to those of the Company’s other senior executive officers.

Michael Thornton - The Company has an employment agreement with Michael Thornton, the Company’s Chief Technology Officer, dated May 12, 2017 and on December 27, 2019. The employment agreement provides for an annual base salary that is subject to adjustment at the board of directors’ discretion. The annual base salary in effect during the period covered by this Form 10-Q was $324,000. Under the employment agreement, Mr. Thornton is eligible for an annual cash bonus based upon achievement of performance-based objectives established by the board of directors. Upon termination without cause, any portion of Mr. Thornton’s option award scheduled to vest within 12 months will automatically vest, and upon termination without cause within 12 months following a change of control, the entire unvested portion of the option award will automatically vest. Upon termination for any other reason, the entire unvested portion of the option award will terminate.

13

If Mr. Thornton’s employment is terminated by the Company without cause or Mr. Thornton terminates his employment for good reason, Mr. Thornton will be entitled to receive 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).

Under his employment agreement, Mr. Thornton is eligible to receive benefits that are substantially similar to those of the Company’s other senior executive officers.

Renaud Maloberti - The Company has an employment agreement with Renaud Maloberti, dated April 15, 2019, that provides for an annual base salary of $250,000 and eligibility for an annual cash bonus to be paid based on attainment of Company and individual performance objectives to be established by the Board of Directors. The annual base salary in effect during the period covered by this Form 10-Q was $296,000. The employment agreement also provides for eligibility to receive benefits substantially similar to those of the Company’s other senior executive officers. Upon termination without cause that is not the result of death or disability within 12 months following a change in control, the entire unvested portion of the award will automatically vest without any limitation upon sales. Upon termination for any other reason, the entire unvested portion of the award will terminate. If the termination is for cause, the vested portion of the award will also terminate.

Unless terminated sooner, the term of Mr. Maloberti’s employment agreement renews on a year--to--year basis. If Mr. Maloberti’s employment is terminated by the Company without cause (as defined in the 2016 Plan), Mr. Maloberti will be entitled to receive, subject to his execution of a standard release agreement, 8 months’ continuation of his current base salary and a lump sum payment equal to 8 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).

Under his employment agreement, Mr. Maloberti is eligible to receive benefits that are substantially similar to those of the Company’s other senior executive officers.

Litigation

From time to time the Company may become a party to litigation in the normal course of business. As of March 31, 2022, there were no legal matters that management believes would have a material effect on the Company’s financial position or results of operations.

Note 12 – Subsequent Events

Common Stock Issued

Subsequent to the three months ended March 31, 2022 through the date of this Quarterly Report on Form 10-Q, the Company issued a total of 18,615,037 shares of common stock in return for net proceeds of approximately $7.5 million under the June 2021 ATM Agreement.

14

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,” “seek,” “intend,” “plan,” “estimate,” “anticipate” or other comparable terms. All statements other than statements of historical facts included in this Form 10-Q 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 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; our ability to develop a commercially feasible application based on our Thermo-Acoustic Enhanced Ultrasound (“TAEUS”) technology; market acceptance of our technology; uncertainties associated with COVID-19 or coronavirus, including its possible effects on our operations; results of our human studies, which may be negative or inconclusive; our ability to find and maintain development partners; our reliance on collaborations and strategic alliances and licensing arrangements; 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; delays and changes in regulatory requirements, policy and guidelines including potential delays in submitting required regulatory applications for Food and Drug Administration (“FDA”) approval; our ability to obtain and maintain CE mark certification and secure required FDA and other governmental approvals for our TAEUS applications; our ability to comply with regulation by various federal, state, local and foreign governmental agencies and to maintain necessary regulatory clearances or approvals; 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, 2021, as filed with the SEC on March 30, 2022, 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.

Available Information

From time to time, we use press releases, 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, Twitter 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 leveraging experience with pre-clinical enhanced ultrasound devices to develop technology for increasing the capabilities of clinical diagnostic ultrasound, to broaden patient access to the safe diagnosis and treatment of a number of significant medical conditions in circumstances where expensive X-ray computed tomography (“CT”) and magnetic resonance imaging (“MRI”) technology, or other diagnostic technologies such as surgical biopsy, are unavailable or impractical. Building on our expertise in thermoacoustics, we have developed a next-generation technology platform - Thermo Acoustic Enhanced Ultrasound, or TAEUS - which is intended to enhance the capability of clinical ultrasound technology and support the diagnosis and treatment of a number of significant medical conditions that currently require the use of expensive CT or MRI imaging or where imaging is not practical using existing technology.

The first-generation TAEUS application is a standalone ultrasound accessory designed to cost-effectively quantify fat in the liver and stage progression of nonalcoholic fatty liver disease (“NAFLD”), which can otherwise only be achieved today with impractical surgical biopsies or MRI scans. Subsequent TAEUS offerings are expected to be implemented via a second generation hardware platform that can run multiple clinical software applications that we will offer TAEUS users for a one-time licensing fee - adding ongoing customer value to the TAEUS platform and a growing software revenue stream for our Company.

15

Each of our TAEUS platform applications will require regulatory approvals before we are able to sell or license the application. Based on certain factors, such as the installed base of ultrasound systems, availability of other imaging technologies, such as CT and MRI, economic strength and applicable regulatory requirements, we intend to seek initial approval of our applications for sale in the European Union and the United States, followed by China.

In March 2020, we received CE mark approval for our TAEUS FLIP (Fatty Liver Imaging Probe) System, enabling its marketing and sales in the European Union and other CE mark geographies, including the 27 EU member states.

In June 2020, we submitted a 510(k) Application to the FDA for our TAEUS FLIP System. In February 2022, we announced that we will pursue FDA approval of our TAEUS^® FLIP System through the FDA’s “de novo” process. We plan to voluntarily withdraw our 510(k) application and subsequently submit an application for de novo review, which will include additional clinical data.

Financial Operations Overview

Revenue

No revenue has been generated by our TAEUS technology, which we have not commercially sold as of March 31, 2022.

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 contract research organizations (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. In connection with the commercialization of our TAEUS applications, we are building a small sales and marketing team to train and support global ultrasound distributors, and expect to execute traditional marketing activities such as promotional materials, electronic media and participation in industry events and conferences. As of March 31, 2022, we had one full-time sales representative in the United Kingdom, two representatives in France and one in Germany. We expect to continue actively adding to our sales representation and support headcount for operations in the EU in the coming quarters, and plan to begin staffing our sales efforts in the United States once we have obtained FDA approval for the sale of the NAFLD TAEUS device in that region.

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 that our general and administrative expenses will increase in the future as we support our continued research and development activities, expand our sales and marketing operations, and continue as a public company. These increases would likely include increased costs related to the hiring of personnel, including compensation and employee-related expenses, including stock-based compensation, and fees to outside consultants, lawyers and accountants, among other expenses. Additionally, we anticipate increased 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.

16

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.

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.

Share-based Compensation

Our 2016 Omnibus Incentive Plan (as amended, the “Omnibus Plan”) permits the grant of stock options and other stock awards to our employees, consultants and non-employee members of our 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, 2022, the pool of shares issuable under the Omnibus Plan automatically increased by 1,622,848 shares from 7,461,228 shares to 9,084,076. As of March 31, 2022, there were 1,119,350 shares of common stock remaining available for issuance under the Omnibus Plan.

We record share-based compensation in accordance with the provisions of the Share-based Compensation Topic of the FASB Codification. 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 which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the common stock options, and future dividends, 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 is charged to expense, if applicable, in the financial statements.

Debt Discount and Detachable Debt-Related Warrants

The Company accounts for debt discounts originating in connection with conversion features that are embedded in certain previously outstanding notes and warrants in accordance with ASC Subtopic 470-20, Debt with Conversion and Other Options. These costs are classified on the consolidated balance sheet as a direct deduction from the debt liability. The Company amortized these costs over the term of the securities as interest expense-debt discount in the consolidated statement of operations. Debt discounts relate to the relative fair value of warrants issued in conjunction with the debt and are also recorded as a reduction to the debt balance and accreted over the expected term of the securities to interest expense.

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 March 31, 2022 and 2021

Revenue

We had no revenue during the three months ended March 31, 2022 and 2021.

Cost of Goods Sold

We had no cost of goods sold during the three months ended March 31, 2022 and 2021.

17

Research and Development

Research and development expenses were $1,213,022 for the three months ended March 31, 2022, as compared to $1,141,486 for the three months ended March 31, 2021, an increase of $71,536, or 6%. The costs include primarily wages, fees and equipment for the development of our TAEUS product line. Research and development expenses increased from the same period due to increased wage and related expenses.

Sales and Marketing

Sales and marketing expenses were $339,903 for the three months ended March 31, 2022, as compared to $160,935 for the three months ended March 31, 2021, an increase of $178,968, or 111%. The increase was primarily due to additional headcount and pre-selling activities for our TAEUS product line. 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 March 31, 2022 were $1,302,344, compared to $1,273,418 for the three months ended March 31, 2021, an increase of $28,926, or 2%. Our wage and related expenses for the three months ended March 31, 2022 were $551,312, compared to $512,787 for the three months ended March 31, 2021. Wage and related expenses in the three months ended March 31, 2022 included $45,543 for bonuses and $88,956 of stock compensation expense related to the issuance and vesting of options, compared to $52,230 for bonuses, $117,924 of stock compensation expense related to the issuance and vesting of options, for the three months ended March 31, 2021. Our professional fees, which include legal, audit, and investor relations, for the three months ended March 31, 2022 were $503,494, compared to $578,101 for the three months ended March 31, 2021.

Gain on Extinguishment of Debt

During the three months ending March 31, 2021, we received notice that the U.S. Small Business Administrative approved forgiveness of our loan received under the Paycheck Protection Program (the “PPP”) in accordance with the terms and provisions of the PPP, and recorded a gain on extinguishment of debt of $308,600.

Net Loss

As a result of the foregoing, for the three months ended March 31, 2022, we recorded a net loss of $2,858,202, compared to a net loss of $2,269,276 for the three months ended March 31, 2021.

Liquidity and Capital Resources

Since inception, we have incurred losses and expect to continue to incur losses for the foreseeable future. As of March 31, 2022, we had an accumulated deficit of $71,549,012 and had $7,127,363 in cash. To date we have funded our operations through private and public sales of our securities and will need to raise additional funds in order to execute on our business plan, fully commercialize our TAEUS technology, and generate revenues.

As of the date of this Quarterly Report, we believe that our cash on hand will be sufficient to fund our current operations into the first half of 2023. We will need additional capital by such time to allow us to continue to execute our commercialization plans. We continue to evaluate and manage our capital needs to support our clinical, regulatory and operational activities, progress EU commercialization, and prepare for U.S. commercialization upon FDA approval of our NAFLD TAEUS device. We are considering potential financing options that may be available to us, including additional sales of our common stock through our At-The-Market Issuance Sales Agreement with Ascendiant Capital Markets, LLC, dated June 21, 2021 (the “June 2021 ATM Agreement”). Except for the June 2021 ATM Agreement, 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 three months ended March 31, 2022, we incurred net losses of $2,858,202 and used cash in operations of $3,098,870. While we maintain cash balances in excess of our anticipated needs for cash for the next nine months, it is likely that we will need to raise additional capital 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.

18

Operating Activities

During the three months ended March 31, 2022, we used $3,098,870 of cash in operating activities primarily as a result of our net loss of $2,858,202, offset by share-based compensation of $288,537, depreciation expense of $19,038, amortization of right of use assets of $33,179, and net changes in operating assets and liabilities of $(581,422).

During the three months ended March 31, 2021, we used $2,923,483 of cash in operating activities primarily as a result of our net loss of $2,269,276, offset by share-based compensation of $321,949, gain on extinguishment of debt of $308,600, stock payable for investor relations of $46,250, depreciation expense of $31,425, amortization of Right of Use assets of $17,449, and net changes in operating assets and liabilities of $(762,680).

Investing Activities

During the three months ended March 31, 2022, we used $89,353 in investing activities related to purchases of equipment.

During the three months ended March 31, 2021, we used $45,000 in investing activities related to purchases of equipment.

Financing Activities

During the three months ended March 31, 2022, our financing activities provided $854,052 in proceeds from issuances of common stock.

During the three months ended March 31, 2021, our financing activities provided $12,583,920, including $9,798,293 in proceeds from issuance of common stock, and $2,785,627 in proceeds from warrant exercises.

Funding Requirements

 We have not completed the commercialization of any of our TAEUS technology platform applications. We expect to continue to incur significant expenses for the foreseeable future. We anticipate that our expenses will increase substantially as we:

● advance the engineering design and development of our NAFLD TAEUS application;

● 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;

● 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 the June 2021 ATM Agreement. We do not expect that our existing cash will be sufficient for us to complete the commercialization of our NAFLD 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, 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 the period of time through which our financial resources will be adequate to support our operations 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 period ended December 31, 2021, as filed with the SEC on March 30, 2022. 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, 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. As described below, the COVID-19 pandemic has impacted our business operations to some extent and is expected to continue to do so and, in light of the effect of such pandemic on financial markets, these impacts may include reduced access to capital. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of our research or development programs or our commercialization efforts or perhaps even 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.

19

Coronavirus (“COVID-19”) Pandemic

The COVID-19 pandemic has prompted governments and regulatory bodies throughout the world to issue “stay-at-home” or similar orders, and enact restrictions on the performance of “non-essential” services, public gatherings and travel. These restrictions and other precautionary measures have continued to varying degrees based on local COVID-19 rates and increased infections caused by variants of the coronavirus that causes COVID-19.

Beginning in March 2020, we undertook precautionary measures intended to help minimize the risk of the virus to our employees, including requiring most employees to work remotely, pausing all non-essential travel worldwide for our employees, and limiting employee attendance at industry events and in-person work-related meetings, to the extent those events and meetings are continuing. As a cash-conserving measure taken in light of the adverse economic conditions caused by the COVID-19 pandemic, in April 2020 we reduced the cash salaries of members of management by 33% for the remainder of 2020, including the salaries of our executive officers. In lieu of cash, the Company paid this portion of management salaries in the form of restricted stock units that vested over the remainder of the year. Additionally, we amended our Non-Employee Director Compensation Policy to provide that our non-employee directors’ annual retainers for the second, third and fourth fiscal quarters of 2020 would be paid in in the form of restricted stock units rather than cash. To date we do not believe these actions have had a significant negative impact on our operations. However, these actions or additional measures we may undertake may ultimately delay progress on our developmental goals or otherwise negatively affect our business. In addition, third-party actions taken to contain its spread and mitigate its public health effects of COVID-19 may negatively affect our business.

The COVID-19 pandemic has impacted our clinical trial activities. Patient visits in ongoing clinical trials have been delayed, for example, due to prioritization of hospital resources toward the COVID-19 outbreak, travel restrictions imposed by governments, and the inability to access sites for initiation and monitoring. COVID-19 has also had an effect on the business at the FDA and other health authorities by causing them to reallocate resources to addressing the pandemic, which has resulted in delays of reviews and approvals, including with respect to our NAFLD TAEUS application. Although we believe conditions are improving in both the EU and United States, allowing us to travel and attend trade shows and conferences in-person and for our clinical trials to progress, it is not certain that these improvements will persist and we be restricted from travelling or need to limit in-person meetings in the future, or our clinical trials may need to be delayed in response to adverse developments in the COVID-19 pandemic.

Nasdaq Capital Market Listing

On January 5, 2022, the Company received a notification letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, because the closing bid price for the Company’s common stock listed on Nasdaq was below $1.00 for 30 consecutive trading days, the Company no longer meets the minimum bid price requirement for continued listing on The Nasdaq Capital Market under Nasdaq Marketplace Rule 5550(a)(2), requiring a minimum bid price of $1.00 per share (the “Minimum Bid Price Requirement”).

The notification has no immediate effect on the listing of the Company’s common stock. In accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has a period of 180 calendar days from January 5, 2022, or until July 5, 2022, to regain compliance with the Minimum Bid Price Requirement. If at any time before July 5, 2022, the bid price of the Company’s common stock closes at or above $1.00 per share for a minimum of 10 consecutive business days, Nasdaq will provide written notification that the Company has achieved compliance with the Minimum Bid Price Requirement.

The notification letter also stated that in the event the Company does not regain compliance with the Minimum Bid Price Requirement by July 5, 2022, the Company may be eligible for an additional 180 calendar days to regain compliance. To qualify for this additional time, the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and would need to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary. If the Company meets these requirements, Nasdaq will inform the Company that it has been granted an additional 180 calendar days to regain compliance.

The Company intends to apply for the additional 180-day period, or until January 1, 2023, in the event it does not regain compliance with the Minimum Bid Price Requirement prior to the expiration of the first compliance period. However, if the Company is not eligible for such extension or the staff of Nasdaq (the “Staff”) determines that the Company will not be able to cure the deficiency, the Staff would notify the Company that its securities will be subject to delisting. In the event of such notification, the Company may appeal the Staff’s determination to delist its securities, but there can be no assurance the Staff would grant the Company’s request for continued listing.

If we do not regain compliance with the Bid Price Rule and maintain compliance with other rules for continued listing on the Nasdaq, our securities may be delisted. If our securities were delisted from the Nasdaq Capital Market, it could, among other things, lead to a number of negative implications, including reduced liquidity in our common stock, the loss of federal preemption of state securities laws and greater difficulty in obtaining financing.

20

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 March 31, 2022, 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 March 31, 2022: insufficient personnel resources within the accounting function to segregate the duties over financial transaction processing and reporting.

To remediate our internal control weaknesses, management intends to implement the following measures, as finances allow:

· Adding sufficient accounting personnel or outside consultants to properly segregate duties and to effect a timely, accurate preparation of the financial statements. In October 2020, we engaged a contractor to assist us with certain accounting tasks, including preparation of financial statements and periodic reports filed with the Securities and Exchange Commission.

· Upon the hiring of additional accounting personnel or outside consultants, develop and maintain adequate written accounting policies and procedures.

The additional hiring is contingent upon our efforts to obtain additional funding and the results of our operations. Management expects to secure funds in the coming fiscal year but provides no assurances that it will be able to do so.

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 three months ended March 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. However, our management is currently seeking to improve our controls and procedures in an effort to remediate the deficiency described above.

21

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 under “Risk Factors” in our Annual Report on Form 10-K for the period ended December 31, 2021, as filed with the Securities and Exchange Commission on March 30, 2022. 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. 

Item 2. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

22

Item 6. Exhibits

Exhibit Number	Description
3.1	Fourth Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on May 12, 2017)
3.2	Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on June 18, 2020).
3.3	Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.4 to the Company’s Registration Statement on Form S-1 (File No. 333-214724), as amended, originally filed on November 21, 2016)
4.1	Specimen Certificate representing shares of common stock of the Company (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 (File No. 333-214724), as amended, originally filed on November 21, 2016)
4.2	Certificate of Designations of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on December 11, 2019)
4.3	Form of Warrant issued in December 2019 Series A Convertible Preferred Stock Offering (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on December 11, 2019)
4.4	Form of Warrant issued in December 2019 Series B Convertible Preferred Stock Offering (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on December 26, 2019)
31.1	Certification of Periodic Report by Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14a and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
31.2	Certification of Periodic Report by Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14a and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
32.1	Certification of Periodic Report by Chief Executive Officer and Principal Financial Officer pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
101.INS	XBRL Instance Document (filed herewith)
101.SCH	XBRL Taxonomy Schema (filed herewith)
101.CAL	XBRL Taxonomy Extension Calculation Linkbase (filed herewith)
101.DEF	XBRL Taxonomy Extension Definition Linkbase (filed herewith)
101.LAB	XBRL Taxonomy Extension Label Linkbase (filed herewith)
101.PRE	XBRL Taxonomy Extension Presentation Linkbase (filed herewith)

* Indicates management compensatory plan, contract or arrangement.

23

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: May 12, 2022	By:	/s/ Francois Michelon
		Francois Michelon
		Chief Executive Officer and Chairman (Principal Executive Officer)

	ENDRA LIFE SCIENCES INC.
Date: May 12, 2022	By:	/s/ Irina Pestrikova
		Irina Pestrikova
		Senior Director, Finance (Principal Financial and Accounting Officer)

24

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Francois Michelon, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of ENDRA Life Sciences Inc.:
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

	ENDRA LIFE SCIENCES INC.
	(Registrant)
Date: May 12, 2022	By:	/s/ Francois Michelon
		Francois Michelon
		Chief Executive Officer and Chairman (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Irina Pestrikova, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of ENDRA Life Sciences Inc.:
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

	ENDRA LIFE SCIENCES INC.
Date: May 12, 2022	By:	/s/ Irina Pestrikova
		Irina Pestrikova
		Senior Director, Finance (Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ENDRA Life Sciences Inc. (the “Company”) on Form 10-Q for the period March 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Francois Michelon, Chief Executive Officer and Chairman of the Company, and Irina Pestrikova, Senior Director, Finance of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to ENDRA Life Sciences Inc. and will be retained by ENDRA Life Sciences Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ Francois Michelon	/s/ Irina Pestrikova
Francois Michelon	Irina Pestrikova
Chief Executive Officer and Chairman	Senior Director, Finance

XML

Cover - shares	3 Months Ended
	Mar. 31, 2022	May 12, 2022
Cover [Abstract]
Entity Registrant Name	ENDRA LIFE SCIENCES INC.
Entity Central Index Key	0001681682
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	true
Entity Current Reporting Status	Yes
Document Period End Date	Mar. 31, 2022
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2022
Entity Ex Transition Period	false
Entity Common Stock Shares Outstanding		63,174,455
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-37969
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	26-0579295
Entity Interactive Data Current	Yes
Entity Address Address Line 1	3600 Green Court
Entity Address Address Line 2	Suite 350
Entity Address City Or Town	Ann Arbor
Entity Address Postal Zip Code	48105-1570
City Area Code	734
Local Phone Number	335-0468
Security 12b Title	Common Stock, par value $0.0001 per share
Trading Symbol	NDRA
Security Exchange Name	NASDAQ
Entity Address State Or Province	MI

XML

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Current Assets
Cash	$ 7,127,363	$ 9,461,534
Prepaid Expenses	1,061,406	1,348,003
Inventory	1,930,258	1,284,578
Total Current Assets	10,119,027	12,094,115
Non-current Assets
Fixed Assets, Net	201,445	131,130
Right Of Use Assets	610,234	643,413
Other Assets	5,986	5,986
Total Assets	10,936,692	12,874,644
Current Liabilities
Accounts Payable And Accrued Liabilities	1,220,840	1,411,437
Lease Liabilities, Current Portion	137,117	132,330
Total Current Liabilities	1,357,957	1,543,767
Long Term Debt
Loans	28,484	28,484
Lease Liabilities	481,618	518,147
Total Long Term Debt	510,102	546,631
Total Liabilities	1,868,059	2,090,398
Stockholders' Equity
Common Stock, $0.0001 Par Value; 80,000,000 Shares Authorized; 44,559,418 And 42,554,514 Shares Issued And Outstanding, Respectively	4,454	4,254
Additional Paid In Capital	80,604,416	79,456,938
Stock Payable	8,774	13,863
Accumulated Deficit	(71,549,012)	(68,690,810)
Total Stockholders' Equity	9,068,633	10,784,246
Total Liabilities And Stockholders' Equity	10,936,692	12,874,644
Series A Preferred Stock
Stockholders' Equity
Preferred Stock Par Value	1	1
Series B Preferred Stock
Stockholders' Equity
Preferred Stock Par Value	$ 0	$ 0

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
Common Stock Shares, Par Value	$ 0.0001
Common Stock Shares, Authorized	80,000,000
Common Stock Shares, Issued	44,559,418
Preferred Stock Shares, Par Value	$ 0.0001
Preferred Stock Shares, Authorized	10,000,000
Series A Preferred Stock
Common Stock Shares, Par Value	$ 0.0001	$ 0.0001
Common Stock Shares, Authorized	80,000,000	80,000,000
Common Stock Shares, Issued	44,559,418	42,554,514
Common Stock Shares, Outstanding	44,559,418	42,554,514
Preferred Stock Shares, Par Value	$ 0.0001	$ 0.0001
Preferred Stock Shares, Authorized	10,000	10,000
Preferred Stock Shares, Issued	141,397	190,288
Preferred Stock Shares, Outstanding	141,397	190,288
Series B Preferred Stock
Preferred Stock Shares, Par Value	$ 0.0001	$ 0.0001
Preferred Stock Shares, Authorized	1,000	1,000
Preferred Stock Shares, Issued	0	0
Preferred Stock Shares, Outstanding	0	0

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Operating Expenses
Research And Development	$ 1,213,022	$ 1,141,486
Sales And Marketing	339,903	160,935
General And Administrative	1,302,344	1,273,418
Total Operating Expenses	2,855,269	2,575,839
Operating Loss	(2,855,269)	(2,575,839)
Other Expenses
Gain On Extinguishment Of Debt	0	308,600
Other Expense	(2,933)	(2,037)
Total Other (expenses)	(2,933)	306,563
Loss From Operations Before Income Taxes	(2,858,202)	(2,269,276)
Provision For Income Taxes	0	0
Net Loss	(2,858,202)	(2,269,276)
Deemed Dividend	0	(121,071)
Net Loss Attributable To Common Stockholders	$ (2,858,202)	$ (2,390,347)
Net Loss Per Share - Basic And Diluted	$ (0.07)	$ (0.06)
Weighted Average Common Shares - Basic And Diluted	43,054,224	37,772,515

XML

Condensed Consolidated Statements of Stockholders Equity (Unaudited) - USD ($)	Total	Common Stock [Member]	Series A Convertible Preferred Stock	Series B Convertible Preferred Stock	Additional Paid-In Capital	Stock Payable [Member]	Retained Earnings (Accumulated Deficit)
Balance, Shares at Dec. 31, 2020		34,049,704	196,794
Balance, Amount at Dec. 31, 2020	$ 7,169,322	$ 3,404	$ 1	$ 0	$ 64,493,611	$ 10,795	$ (57,338,489)
Series A Convertible Preferred Stock Converted To Common Stock, Shares		67,889	(55,397)
Series A Convertible Preferred Stock Converted To Common Stock, Amount	0	$ 7	$ 0	0	(7)	0	0
Common Stock Issued For Cash, Net Of Funding Costs, Shares		3,914,217
Common Stock Issued For Cash, Net Of Funding Costs, Amount	9,798,293	$ 391			9,797,902	0	0
Common Stock Issued For Warrant Exercise, Shares		3,567,899
Common Stock Issued For Warrant Exercise, Amount	2,785,627	$ 357	0	0	2,785,270	0	0
Common Stock Issued For Option Exercise, Shares		14,944
Common Stock Issued For Option Exercise, Amount	0	$ 2	0	0	(2)	0	0
Fair Value Of Vested Stock Options	285,489	0	0	0	285,489	0	0
Stock Payable Towards Preference Dividend	0	0	0	0	22,337	22,337	0
Stock Payable For Services	46,250	0	0	0		46,250	0
Stock Payable Towards Rsu's	36,460	0	0	0	0	36,460	0
Deemed Dividend	0	0	0	0	121,071	0	(121,071)
Net Loss	(2,269,276)	$ 0	$ 0	0	0	0	(2,269,276)
Balance, Shares at Mar. 31, 2021		41,614,653	141,397
Balance, Amount at Mar. 31, 2021	17,852,166	$ 4,161	$ 1	0	77,460,997	115,842	(59,728,836)
Balance, Shares at Dec. 31, 2021		42,554,514	141,397
Balance, Amount at Dec. 31, 2021	10,784,246	$ 4,254	$ 1	0	79,456,938	13,863	(68,690,810)
Common Stock Issued For Cash, Net Of Funding Costs, Shares		2,004,904
Common Stock Issued For Cash, Net Of Funding Costs, Amount	854,052	$ 200		0	853,852	0	0
Fair Value Of Vested Stock Options	288,537	0	0	0	288,537	0	0
Stock Payable Towards Preference Dividend		$ 0	$ 0	$ 0	5,089	5,089	0
Net Loss	(2,858,202)						(2,858,202)
Balance, Shares at Mar. 31, 2022		44,559,418	141,397
Balance, Amount at Mar. 31, 2022	$ 9,068,633	$ 4,454	$ 1		$ 80,604,416	$ 8,774	$ (71,549,012)

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash Flows From Operating Activities
Net Loss	$ (2,858,202)	$ (2,269,276)
Adjustments To Reconcile Net Loss To Net Cash Used In Operating Activities:
Depreciation And Amortization	19,038	31,425
Stock Compensation Expense Including Common Stock Issued For Rsus	288,537	321,949
Stock Payable For Investor Relations	0	46,250
Amortization Of Right Of Use Assets	33,179	17,449
Gain On Extinguishment Of Debt	0	(308,600)
Changes In Operating Assets And Liabilities:
Decrease In Prepaid Expenses	286,597	(385,292)
Increase In Inventory	(645,680)	(136,988)
Decrease In Accounts Payable And Accrued Liabilities	(190,597)	(223,532)
Decrease In Lease Liability	(31,742)	(16,868)
Net Cash Used In Operating Activities	(3,098,870)	(2,923,483)
Cash Flows From Investing Activities
Purchases Of Fixed Assets	(89,353)	(45,000)
Net Cash Used In Investing Activities	(89,353)	(45,000)
Cash Flows From Financing Activities
Proceeds From Warrant Exercise	0	2,785,627
Proceeds From Issuance Of Common Stock	854,052	9,798,293
Net Cash Provided By Financing Activities	854,052	12,583,920
Net Increase (decrease) In Cash	(2,334,171)	9,615,437
Cash, Beginning Of Period	9,461,534	7,227,316
Cash, End Of Period	7,127,363	16,842,753
Supplemental Disclosures Of Cash Items
Interest Paid	0	0
Income Tax Paid	0	0
Supplemental Disclosures Of Non-cash Items
Deemed Dividend	0	121,071
Conversion Of Series A Convertible Preferred Stock	0	(7)
Stock Dividend Payable	5,089	(22,337)
Right Of Use Asset	610,234	321,563
Lease Liability	$ 618,735	$ 331,520

XML

Nature of the Business

3 Months Ended

Mar. 31, 2022

Nature of the Business

Nature Of The Business

Note 1 – Nature of the Business

ENDRA Life Sciences Inc. (“ENDRA” or the “Company”) has developed and is continuing to develop technology for increasing the capabilities of clinical diagnostic ultrasound to broaden patient access to the safe diagnosis and treatment of a number of significant medical conditions in circumstances where expensive X-ray computed tomography (“CT”) and magnetic resonance imaging (“MRI”) technology is unavailable or impractical.

ENDRA was incorporated on July 18, 2007 as a Delaware corporation.

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2022

Summary of Significant Accounting Policies

Summary Of Significant Accounting Policies

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.

The COVID-19 pandemic has prompted governments and regulatory bodies throughout the world to issue “stay-at-home” or similar orders, and enact restrictions on the performance of “non-essential” services, public gatherings and travel.

The extent to which COVID-19 impacts the Company’s business and financial results will depend on numerous evolving factors including, but not limited to: the magnitude and duration of COVID-19, the extent to which it continues impact worldwide macroeconomic conditions, the emergence of variants of the virus and effectiveness of vaccines, access to capital markets, and governmental and business reactions to the pandemic. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 as of March 31, 2022 and through the date of the filing of this Quarterly Report on Form 10-Q. The accounting matters assessed included, but were not limited to, estimates related to the accounting for potential liabilities and accrued expenses, the assumptions utilized in valuing stock-based compensation issued for services, the realization of deferred tax assets, and assessments of impairment related to long-lived assets. The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in additional material impacts to the Company’s consolidated financial statements in future reporting periods.

Despite the Company’s efforts, the ultimate impact of COVID-19 on the Company’s business depends on factors beyond the Company’s knowledge or control, including the duration and severity of the outbreak, as well as third-party actions taken to contain its spread and mitigate its public health effects. As a result, the Company is unable to estimate the extent to which COVID-19 will negatively impact its financial results or liquidity.

Principles of Consolidation

The Company’s consolidated financial statements include all accounts of the Company and its consolidated subsidiary 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 three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The balance sheet at December 31, 2021 has been derived from the audited financial statements at that date. For further information, refer to the financial statements and footnotes thereto included in ENDRA Life Sciences Inc. annual financial statements for the twelve months ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2022.

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. As of March 31, 2022 and December 31, 2021, the Company had no cash equivalents. 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 credit worthiness of the financial institutions and has determined the credit exposure to be negligible.

Inventory

The Company’s inventory is stated at the lower of cost or estimated net realizable value, with cost primarily determined on a weighted-average cost basis on the first-in, first-out method. The Company periodically determines whether a reserve should be taken for devaluation or obsolescence of inventory.

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 March 31, 2022 and December 31, 2021 the Company recorded a right of use asset of $610,234 and $643,413, respectively. At March 31, 2022 and December 31, 2021 the Company recorded a lease liability of $618,735 and $650,477, respectively.

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 principal 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. The adoption of ASC Topic 606 did not have an impact on the Company’s operations or cash flows.

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 March 31, 2022 and 2021, the Company incurred $1,213,022 and $1,141,486 of expenses related to research and development costs, respectively.

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 10,564,415 and 7,848,899 potentially dilutive shares, which include outstanding common stock options, warrants, and convertible notes, as of March 31, 2022 and December 31, 2021, respectively.

The potential shares, which are excluded from the determination of basic and diluted net loss per share as their effect is anti-dilutive, are as follows:

	March 31, 2022		December 31, 2021
Options to purchase common stock		7,964,726		5,249,210
Warrants to purchase common stock		2,437,164		2,437,164
Shares issuable upon conversion of Series A Convertible Preferred Stock		162,525		162,525
Potential equivalent shares excluded		10,564,415		7,848,899

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 carrying amounts of the Company’s financial assets and liabilities, including cash, accounts receivable, prepaid expenses, accounts payable, accrued expenses, and other current liabilities, approximate their fair values because of the short maturity of these instruments. The fair value of notes payable and convertible notes approximates their fair values since the current interest rates and terms on these obligations are the same as prevailing market rates.

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, 2022, the pool of shares authorized for issuance under the Omnibus Plan automatically increased by 1,622,848 shares from 7,461,228 shares to 9,084,076.

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 March 31, 2022 of $71,549,012. The Company had working capital of $8,761,070 as of March 31, 2022. The Company has not established an ongoing source of revenue sufficient to cover its operating costs and to allow it to continue as a going concern. The accompanying financial statements for the period ended March 31, 2022 have been prepared assuming the Company will continue as a going concern. Although the Company’s cash resources will likely be sufficient to meet its anticipated needs during the next twelve months, the Company will require additional financing to fund its future planned operations, including research and development and commercialization of its products.

The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable. Management’s plans to continue as a going concern include raising additional capital through sales of equity securities and borrowing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. As described further below under “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” the COVID-19 pandemic has impacted the Company’s business operations to some extent and is expected to continue to do so and, in light of the effect of such pandemic on financial markets, these impacts may include reduced access to capital. If the Company is not able to obtain the necessary additional financing on a timely basis, the Company will be required to delay, reduce the scope of, or eliminate one or more of the Company’s research and development activities or commercialization efforts or perhaps even cease the operation of its business. The ability of the Company to continue as a going concern is dependent upon its ability to successfully secure other sources of financing and attain profitable operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Recent Accounting Pronouncements

The Company considered recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC, did not or in management’s opinion will not have a material impact on the Company’s present or future consolidated financial statements.

XML

Inventory

3 Months Ended

Mar. 31, 2022

Inventory

Inventory

Note 3 – Inventory

As of March 31, 2022 and December 31, 2021, inventory consisted of raw materials and subassemblies to be used in the assembly of a TAEUS system. As of March 31, 2022, the Company had no orders pending for the sale of a TAEUS system. 

As of March 31, 2022 and December 31, 2021, the Company had inventory valued at $1,930,258 and $1,284,578, respectively.

XML

Fixed Assets

3 Months Ended

Mar. 31, 2022

Fixed Assets

Fixed Assets

Note 4 – Fixed Assets

As of March 31, 2022 and December 31, 2021, fixed assets consisted of the following:

	March 31, 2022			December 31, 2021
Property, leasehold and capitalized software	$	694,600		$	605,248
TAEUS development and testing		107,682			107,682
Accumulated depreciation		(600,837	)		(581,800	)
Fixed assets, net	$	201,445		$	131,130

Depreciation expense for the three months ended March 31, 2022 and 2021 was $19,038 and $31,425, respectively.

XML

Accounts Payable and Accrued Liabilities

3 Months Ended

Mar. 31, 2022

Accounts Payable and Accrued Liabilities

Accounts Payable And Accrued Liabilities

Note 5 – Accounts Payable and Accrued Liabilities

As of March 31, 2022 and December 31, 2021, current liabilities consisted of the following:

	March 31, 2022		December 31, 2021
Accounts payable	$	833,855	$	791,052
Accrued payroll		151,322		101,459
Accrued bonuses		200,632		396,043
Accrued employee benefits		5,750		5,750
Insurance premium financing		29,281		117,133
Total	$	1,220,840	$	1,411,437

XML

Bank Loans

3 Months Ended

Mar. 31, 2022

Bank Loans

Bank Loans

Note 6 – Bank Loans

U.S. SBA Paycheck Protection Program

In April 2020, the Company issued a U.S. Small Business Administration (“SBA”) Paycheck Protection Program Note (the “SBA Note”) to First Republic Bank (the “Lender”) for a loan in the principal amount of $308,600 (the “SBA Loan”) under the Paycheck Protection Program (“PPP”) promulgated under the Coronavirus Aid, Relief and Economic Security Act of 2020, as modified by the Paycheck Protection Program Flexibility Act of 2020.

On May 10, 2021 received notice that the SBA Loan had been forgiven in full in accordance with the terms and provisions of the PPP.

The Company did not provide any collateral or personal guarantees for the SBA Loan, nor did the Company pay any facility charge to the government or to the Lender.

Toronto-Dominion Bank Loan

On April 27, 2020, the Company entered into a commitment loan with TD Bank under the Canadian Emergency Business Account, in the principal aggregate amount of CAD 40,000, which is due and payable upon the expiration of the initial term on December 31, 2022. This note bears interest on the unpaid balance at the rate of zero percent (0%) per annum during the initial term. Under this note no interest payments are due until January 1, 2023. Under the conditions of the loan, twenty-five percent (25%) of the loan will be forgiven if seventy-five percent (75%) is repaid prior to the initial term date.

XML

Capital Stock

3 Months Ended

Mar. 31, 2022

Stockholders' Equity

Capital Stock

Note 7 – Capital Stock

At March 31, 2022, the authorized capital of the Company consisted of 90,000,000 shares of capital stock, comprised of 80,000,000 shares of common stock with a par value of $0.0001 per share, and 10,000,000 shares of preferred stock with a par value of $0.0001 per share. The Company has designated 10,000 shares of its preferred stock as Series A Convertible Preferred Stock (“Series A Preferred Stock”) and 1,000 shares of its preferred stock as Series B Convertible Preferred Stock (“Series B Preferred Stock”), and the remainder of 9,989,000 shares remain authorized but undesignated.

As of March 31, 2022, there were 44,559,418 shares of common stock, 141,397 shares of Series A Preferred Stock, and no shares of Series B Preferred Stock issued and outstanding, and a stock payable balance of $8,774.

During the three months ended March 31, 2022, the Company issued a total of 2,004,904 shares of its common stock in return for aggregate net proceeds of $854,052. 

During the three months ended March 31, 2021, the Company issued a total of 7,564,949 shares of its common stock, as follows:

· 67,889 shares upon the conversion of 55.397 shares of its Series A Preferred Stock;

· 3,914,217 shares in return for aggregate net proceeds of $9,798,293 from sales of common stock;

· 3,567,899 shares upon warrant exercises for an aggregate exercise price of $2,785,627; and

· 14,944 shares upon cashless option exercise.

At-the-Market Equity Offering Program

On June 21, 2021, the Company entered into the At-The-Market Issuance Sales Agreement with Ascendiant (the “June 2021 ATM Agreement”) to sell shares of common stock for aggregate gross proceeds of up to $20.0 million, from time to time, through an “at-the-market” equity offering program under which Ascendiant acts as sales agent. As of March 31, 2022, under the June 2021 ATM Agreement the Company has issued an aggregate of 2,677,645 shares of common stock in return for net proceeds of $1,671,725, resulting in approximately $52,295 of compensation paid to Ascendiant. During the three months ended March 31, 2022, under the June 2021 ATM Agreement the Company has issued an aggregate of 2,004,904 shares of common stock in return for net proceeds of $854,043, resulting in $26,783 of compensation paid to Ascendiant.

XML

Common Stock Options

3 Months Ended

Mar. 31, 2022

Common Stock Options

Common Stock Options

Note 8 – Common Stock Options

Common Stock Options

Stock options are awarded to the Company’s employees, consultants and non-employee members of the board of directors under the 2016 Omnibus Incentive Plan (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. The aggregate fair value of these stock options granted by the Company during the three months ended March 31, 2022 was determined to be $899,306 using the Black-Scholes-Merton option-pricing model based on the following assumptions: (i) volatility rate of 74% to 99%, (ii) discount rate of 0%, (iii) zero expected dividend yield, and (iv) expected life of 8-10 years. A summary of option activity under the Company’s Omnibus Plan as of March 31, 2022, and changes during the year then ended, is presented below:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)
Balance outstanding at December 31, 2021		5,249,210		$	2.21		7.42
Granted		2,756,285			0.41		9.87
Exercised		-			-		-
Forfeited		-			-		-
Cancelled or expired		(40,769	)		-		-
Balance outstanding at March 31, 2022		7,964,726		$	1.59		8.10
Exercisable at March 31, 2022		2,940,158		$	2.32		6.00

XML

Common Stock Warrants

3 Months Ended

Mar. 31, 2022

Common Stock Warrants

Common Stock Warrants

Note 9 – Common Stock Warrants

Warrant Conversions and Consent Solicitation

The following table summarizes all stock warrant activity of the Company for the three months ended March 31, 2022:

	Number of Warrants		Weighted Average Exercise Price		Weighted Average Contractual Term (Years)
Balance outstanding at December 31, 2021		2,437,164	$	5.54		0.58
Granted		-		-		-
Exercised		-		-		-
Forfeited		-		-		-
Expired		-		-		-
Balance outstanding at March 31, 2022		2,437,164	$	5.54		0.33
Exercisable at March 31, 2022		2,437,164	$	5.54		0.33

XML

Commitments and Contingencies

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies

Commitments & Contingencies

Note 10 – Commitments and Contingencies

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 3,657 rentable square feet of space, for the initial monthly rent of $5,986, which commenced on January 1, 2015 for an initial term of 60 months. On October 10, 2017 this lease was amended increasing the rentable square feet of space to 3,950 and the monthly rent to $7,798. On July 16, 2019, the Company exercised its option to extend the lease for an additional 5 years past the initial term originally expiring on December 31, 2019.

On March 15, 2021, the Company entered into an amendment to the lease, adding approximately 3,248 rentable square feet, increasing the initial monthly rent to $15,452 effective May 2021, and extending the term of the lease to December 31, 2025. 

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 March 31, 2022 was 10%. Lease expense is recognized on a straight-line basis over the lease term to the extent that collection is considered probable. As a result, the Company has been recognizing rents as they become payable based on the adoption of ASC Topic 842. The weighted-average remaining lease term is 3.75 years.

As of March 31, 2022, the maturities of operating lease liabilities are as follows:

	Operating Lease
2022		143,222
2023		196,721
2024		202,624
2025 and beyond		202,624
Total	$	745,191
Less: amount representing interest		(126,456	)
Present value of future minimum lease payments		618,735
Less: current obligations under leases		137,117
Long-term lease obligations	$	481,618

For the three months ended March 31, 2022 and 2021, the Company incurred rent expenses of $52,763 and $32,191, respectively.

Employment and Consulting Agreements

Francois Michelon - The Company has an employment agreement with Francois Michelon, the Company’s Chief Executive Officer and Chairman of the board of directors, dated May 12, 2017 and amended on December 27, 2019. The employment agreement provides for an annual base salary that is subject to adjustment at the board of directors’ discretion. The annual base salary in effect during the period covered by this Form 10-Q was $423,000. Under the employment agreement, Mr. Michelon is eligible for an annual cash bonus based upon achievement of performance-based objectives established by the board of directors. Upon termination without cause, any portion of Mr. Michelon’s option award scheduled to vest within 12 months will automatically vest, and upon termination without cause within 12 months following a change of control, the entire unvested portion of the option award will automatically vest. Upon termination for any other reason, the entire unvested portion of the option award will terminate.

If Mr. Michelon’s employment is terminated by the Company without cause or Mr. Michelon terminates his employment for good reason, Mr. Michelon will be entitled to receive 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).

Under his employment agreement, Mr. Michelon is eligible to receive benefits that are substantially similar to those of the Company’s other senior executive officers.

Michael Thornton - The Company has an employment agreement with Michael Thornton, the Company’s Chief Technology Officer, dated May 12, 2017 and on December 27, 2019. The employment agreement provides for an annual base salary that is subject to adjustment at the board of directors’ discretion. The annual base salary in effect during the period covered by this Form 10-Q was $324,000. Under the employment agreement, Mr. Thornton is eligible for an annual cash bonus based upon achievement of performance-based objectives established by the board of directors. Upon termination without cause, any portion of Mr. Thornton’s option award scheduled to vest within 12 months will automatically vest, and upon termination without cause within 12 months following a change of control, the entire unvested portion of the option award will automatically vest. Upon termination for any other reason, the entire unvested portion of the option award will terminate.

If Mr. Thornton’s employment is terminated by the Company without cause or Mr. Thornton terminates his employment for good reason, Mr. Thornton will be entitled to receive 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).

Under his employment agreement, Mr. Thornton is eligible to receive benefits that are substantially similar to those of the Company’s other senior executive officers.

Renaud Maloberti - The Company has an employment agreement with Renaud Maloberti, dated April 15, 2019, that provides for an annual base salary of $250,000 and eligibility for an annual cash bonus to be paid based on attainment of Company and individual performance objectives to be established by the Board of Directors. The annual base salary in effect during the period covered by this Form 10-Q was $296,000. The employment agreement also provides for eligibility to receive benefits substantially similar to those of the Company’s other senior executive officers. Upon termination without cause that is not the result of death or disability within 12 months following a change in control, the entire unvested portion of the award will automatically vest without any limitation upon sales. Upon termination for any other reason, the entire unvested portion of the award will terminate. If the termination is for cause, the vested portion of the award will also terminate.

Unless terminated sooner, the term of Mr. Maloberti’s employment agreement renews on a year--to--year basis. If Mr. Maloberti’s employment is terminated by the Company without cause (as defined in the 2016 Plan), Mr. Maloberti will be entitled to receive, subject to his execution of a standard release agreement, 8 months’ continuation of his current base salary and a lump sum payment equal to 8 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).

Under his employment agreement, Mr. Maloberti is eligible to receive benefits that are substantially similar to those of the Company’s other senior executive officers.

Litigation

From time to time the Company may become a party to litigation in the normal course of business. As of March 31, 2022, there were no legal matters that management believes would have a material effect on the Company’s financial position or results of operations.

XML

Subsequent Events

3 Months Ended

Mar. 31, 2022

Subsequent Events

Subsequent Events

Note 12 – Subsequent Events

Common Stock Issued

Subsequent to the three months ended March 31, 2022 through the date of this Quarterly Report on Form 10-Q, the Company issued a total of 18,615,037 shares of common stock in return for net proceeds of approximately $7.5 million under the June 2021 ATM Agreement.

XML

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2022

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.

The COVID-19 pandemic has prompted governments and regulatory bodies throughout the world to issue “stay-at-home” or similar orders, and enact restrictions on the performance of “non-essential” services, public gatherings and travel.

The extent to which COVID-19 impacts the Company’s business and financial results will depend on numerous evolving factors including, but not limited to: the magnitude and duration of COVID-19, the extent to which it continues impact worldwide macroeconomic conditions, the emergence of variants of the virus and effectiveness of vaccines, access to capital markets, and governmental and business reactions to the pandemic. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 as of March 31, 2022 and through the date of the filing of this Quarterly Report on Form 10-Q. The accounting matters assessed included, but were not limited to, estimates related to the accounting for potential liabilities and accrued expenses, the assumptions utilized in valuing stock-based compensation issued for services, the realization of deferred tax assets, and assessments of impairment related to long-lived assets. The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in additional material impacts to the Company’s consolidated financial statements in future reporting periods.

Despite the Company’s efforts, the ultimate impact of COVID-19 on the Company’s business depends on factors beyond the Company’s knowledge or control, including the duration and severity of the outbreak, as well as third-party actions taken to contain its spread and mitigate its public health effects. As a result, the Company is unable to estimate the extent to which COVID-19 will negatively impact its financial results or liquidity.

Principles Of Consolidation

The Company’s consolidated financial statements include all accounts of the Company and its consolidated subsidiary 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 three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The balance sheet at December 31, 2021 has been derived from the audited financial statements at that date. For further information, refer to the financial statements and footnotes thereto included in ENDRA Life Sciences Inc. annual financial statements for the twelve months ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2022.

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. As of March 31, 2022 and December 31, 2021, the Company had no cash equivalents. 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 credit worthiness of the financial institutions and has determined the credit exposure to be negligible.

Inventory

The Company’s inventory is stated at the lower of cost or estimated net realizable value, with cost primarily determined on a weighted-average cost basis on the first-in, first-out method. The Company periodically determines whether a reserve should be taken for devaluation or obsolescence of inventory.

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 March 31, 2022 and December 31, 2021 the Company recorded a right of use asset of $610,234 and $643,413, respectively. At March 31, 2022 and December 31, 2021 the Company recorded a lease liability of $618,735 and $650,477, respectively.

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 principal 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. The adoption of ASC Topic 606 did not have an impact on the Company’s operations or cash flows.

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 March 31, 2022 and 2021, the Company incurred $1,213,022 and $1,141,486 of expenses related to research and development costs, respectively.

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 10,564,415 and 7,848,899 potentially dilutive shares, which include outstanding common stock options, warrants, and convertible notes, as of March 31, 2022 and December 31, 2021, respectively.

The potential shares, which are excluded from the determination of basic and diluted net loss per share as their effect is anti-dilutive, are as follows:

	March 31, 2022		December 31, 2021
Options to purchase common stock		7,964,726		5,249,210
Warrants to purchase common stock		2,437,164		2,437,164
Shares issuable upon conversion of Series A Convertible Preferred Stock		162,525		162,525
Potential equivalent shares excluded		10,564,415		7,848,899

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 carrying amounts of the Company’s financial assets and liabilities, including cash, accounts receivable, prepaid expenses, accounts payable, accrued expenses, and other current liabilities, approximate their fair values because of the short maturity of these instruments. The fair value of notes payable and convertible notes approximates their fair values since the current interest rates and terms on these obligations are the same as prevailing market rates.

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, 2022, the pool of shares authorized for issuance under the Omnibus Plan automatically increased by 1,622,848 shares from 7,461,228 shares to 9,084,076.

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 March 31, 2022 of $71,549,012. The Company had working capital of $8,761,070 as of March 31, 2022. The Company has not established an ongoing source of revenue sufficient to cover its operating costs and to allow it to continue as a going concern. The accompanying financial statements for the period ended March 31, 2022 have been prepared assuming the Company will continue as a going concern. Although the Company’s cash resources will likely be sufficient to meet its anticipated needs during the next twelve months, the Company will require additional financing to fund its future planned operations, including research and development and commercialization of its products.

The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable. Management’s plans to continue as a going concern include raising additional capital through sales of equity securities and borrowing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. As described further below under “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” the COVID-19 pandemic has impacted the Company’s business operations to some extent and is expected to continue to do so and, in light of the effect of such pandemic on financial markets, these impacts may include reduced access to capital. If the Company is not able to obtain the necessary additional financing on a timely basis, the Company will be required to delay, reduce the scope of, or eliminate one or more of the Company’s research and development activities or commercialization efforts or perhaps even cease the operation of its business. The ability of the Company to continue as a going concern is dependent upon its ability to successfully secure other sources of financing and attain profitable operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Recent Accounting Pronouncements

The Company considered recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC, did not or in management’s opinion will not have a material impact on the Company’s present or future consolidated financial statements.

XML

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2022

Summary of Significant Accounting Policies

Schedule Of Anti-dilutive Shares

	March 31, 2022		December 31, 2021
Options to purchase common stock		7,964,726		5,249,210
Warrants to purchase common stock		2,437,164		2,437,164
Shares issuable upon conversion of Series A Convertible Preferred Stock		162,525		162,525
Potential equivalent shares excluded		10,564,415		7,848,899

XML

Fixed Assets (Tables)

3 Months Ended

Mar. 31, 2022

Fixed Assets

Schedule Fixed Assets

	March 31, 2022			December 31, 2021
Property, leasehold and capitalized software	$	694,600		$	605,248
TAEUS development and testing		107,682			107,682
Accumulated depreciation		(600,837	)		(581,800	)
Fixed assets, net	$	201,445		$	131,130

XML

Accounts Payable and Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2022

Accounts Payable and Accrued Liabilities

Schedule Of Current Liabilities

	March 31, 2022		December 31, 2021
Accounts payable	$	833,855	$	791,052
Accrued payroll		151,322		101,459
Accrued bonuses		200,632		396,043
Accrued employee benefits		5,750		5,750
Insurance premium financing		29,281		117,133
Total	$	1,220,840	$	1,411,437

XML

Common Stock Options and Restricted Stock Units (RSU's) (Tables)

3 Months Ended

Mar. 31, 2022

Common Stock Options

Summary Of Stock Option Activity

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)
Balance outstanding at December 31, 2021		5,249,210		$	2.21		7.42
Granted		2,756,285			0.41		9.87
Exercised		-			-		-
Forfeited		-			-		-
Cancelled or expired		(40,769	)		-		-
Balance outstanding at March 31, 2022		7,964,726		$	1.59		8.10
Exercisable at March 31, 2022		2,940,158		$	2.32		6.00

XML

Common Stock Warrants (Tables)

3 Months Ended

Mar. 31, 2022

Common Stock Warrants (Tables)

Schedule Of Warrant Activity

	Number of Warrants		Weighted Average Exercise Price		Weighted Average Contractual Term (Years)
Balance outstanding at December 31, 2021		2,437,164	$	5.54		0.58
Granted		-		-		-
Exercised		-		-		-
Forfeited		-		-		-
Expired		-		-		-
Balance outstanding at March 31, 2022		2,437,164	$	5.54		0.33
Exercisable at March 31, 2022		2,437,164	$	5.54		0.33

XML

Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies

Schedule Of Operating Lease Liabilities Maturities

	Operating Lease
2022		143,222
2023		196,721
2024		202,624
2025 and beyond		202,624
Total	$	745,191
Less: amount representing interest		(126,456	)
Present value of future minimum lease payments		618,735
Less: current obligations under leases		137,117
Long-term lease obligations	$	481,618

XML

Summary of Significant Accounting Policies (Details) - shares	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Potential Equivalent Shares Excluded	10,564,415	7,848,899
Warrants To Purchase Common Stock
Potential Equivalent Shares Excluded	2,437,164	2,437,164
Shares Issuable upon Conversion of Series A Convertible Preferred Stock
Potential Equivalent Shares Excluded	162,525	162,525
Series A Preferred Stock
Potential Equivalent Shares Excluded	7,964,726	5,249,210

XML

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021	Jan. 01, 2022
Summary of Significant Accounting Policies
Lease Liability	$ 618,735		$ 650,477
Right Of Use Assets	610,234		$ 643,413
Research And Development	$ 1,213,022	$ 1,141,486
Anti-dilutive Shares Exluded From The Calculation Of Earnings Per Share	10,564,415		7,848,899
Shares Available For Issuance Increased Under The Omnibus Plan				1,622,848
Shares Available For Issuance Under The Omnibus Plan				7,461,228
Common Stock Shares, Authorized	80,000,000			9,084,076
Cumulative Net Loss	$ 71,549,012
Working Capital	$ 8,761,070

XML

Inventory (Details Narrative) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Inventory
Inventory	$ 1,930,258	$ 1,284,578

XML

Fixed Assets (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Fixed Assets
Property, Leasehold And Capitalized Software	$ 694,600	$ 605,248
Taeus Development And Testing	107,682	107,682
Accumulated Depreciation	(600,837)	(581,800)
Fixed Assets, Net	$ 201,445	$ 131,130

XML

Fixed Assets (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Fixed Assets
Depreciation Expense	$ 19,038	$ 31,425

XML

Accounts Payable and Accrued Liabilities (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Accounts Payable and Accrued Liabilities (Details)
Accounts Payable	$ 833,855	$ 791,052
Accrued Payroll	151,322	101,459
Accrued Bonuses	200,632	396,043
Accrued Employee Benefits	5,750	5,750
Insurance Premium Financing	29,281	117,133
Total Current Liabilities	$ 1,220,840	$ 1,411,437

XML

Bank Loans (Details Narrative)	1 Months Ended
	Apr. 27, 2020 CAD ($)	Mar. 31, 2022 USD ($)
TD Bank Loan [Member]
Principal Aggregate Amount	$ 40,000
Expiration Initial Term	Dec. 31, 2022
Initial Term Interest Rate	0.00%
Bank Loan, Description	Under this note no interest payments are due until January 1, 2023. Under the conditions of the loan, twenty-five percent (25%) of the loan will be forgiven if seventy-five percent (75%) is repaid prior to the initial term date
April 2020 [Member] | U.S. SBA Paycheck Protection Program [Member]
Loan Principal Amount		$ 308,600

XML

Capital Stock (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended
	Jun. 21, 2021	Mar. 31, 2022	Mar. 31, 2021	Jan. 01, 2022	Dec. 31, 2021
Common Stock Shares, Par Value		$ 0.0001
Common Stock Shares, Authorized		80,000,000		9,084,076
Capital Stcok		90,000,000
Common Stock Shares, Issued		44,559,418
Stock Payable, Share		$ 8,774
Total Common Stock Shares Issued		2,004,904	7,564,949
Common Stock Shares Upon Warrat Exercise, Shares			3,567,899
Common Stock Shares Upon Warrat Exercise, Amount			$ 2,785,627
Common Stock Shares Upon Cashless Option Exercise			14,944
Aggregate Gross Proceeds From Issuance Of Common Stock Shares		$ 85,405,200,000
Preferred Stock Shares, Authorized		10,000,000
Preferred Stock Shares, Par Value		$ 0.0001
Series A Preferred Stock
Common Stock Shares, Par Value		$ 0.0001			$ 0.0001
Common Stock Shares, Authorized		80,000,000			80,000,000
Common Stock Shares, Issued		44,559,418			42,554,514
Preferred Stock Shares, Authorized		10,000			10,000
Preferred Stock Shares, Par Value		$ 0.0001			$ 0.0001
Preferred Stock Shares, Issued		141,397			190,288
Conversion Of Common Stock			67,889
Preferred Stock Shares, Designated		10,000
Conversion Of Common Stock Into Preferred Stock			$ 55.397
Series B Preferred Stock
Preferred Stock Shares, Authorized		1,000			1,000
Preferred Stock Shares, Par Value		$ 0.0001			$ 0.0001
Preferred Stock Shares, Issued		0			0
Preferred Stock Shares, Designated		1,000
Preferred Stock Shares, Undesignated		9,989,000
June 2021 ATM Agreement [Member]
Common Stock Shares, Issued	2,677,645	2,004,904
Stock Based Compensation	$ 52,295	$ 26,783
Net Proceeds From Sales Of Common Stock	1,671,725	$ 854,043
Gross Proceeds From Sales Of Common Stock	$ 20,000,000

XML

Common Stock Options (Details)	3 Months Ended
	Mar. 31, 2022 $ / shares shares
Common Stock Options
Number Of Options Outstanding, Beginning | shares	5,249,210
Number Of Options Granted | shares	2,756,285
Number Of Options Exercised | shares	0
Number Of Options Cancelled Or Expired | shares	(40,769)
Number Of Options Outstanding, Ending | shares	7,964,726
Number Of Options Outstanding, Exercisable | shares	2,940,158
Weighted Average Exercise Price Outstanding, Beginning	$ 2.21
Weighted Average Exercise Price Granted	0.41
Weighted Average Exercise Price Exercised	0
Weighted Average Exercise Price Forfeited	0
Weighted Average Exercise Price Cancelled Or Expired	0
Weighted Average Exercise Price Outstanding, Ending	1.59
Weighted Average Exercise Price Outstanding, Exercisable	$ 2.32
Weighted Average Remaining Contractual Term Outstanding, Beginning	7 years 5 months 1 day
Weighted Average Remaining Contractual Term Outstanding, Granted	9 years 10 months 13 days
Weighted Average Remaining Contractual Term Outstanding, Ending	8 years 1 month 6 days
Weighted Average Remaining Contractual Term Outstanding, Exercisable	6 years

XML

Common Stock Options (Details Narrative)	3 Months Ended
	Mar. 31, 2022 USD ($)
Aggregate Fair Value Of Stock Options Granted	$ 899,306
Discount Rate	0.00%
Expected Dividend Yield	0.00%
Black-Scholes-Merton Option-Pricing Model [Member] | Minimum [Member]
Volatility Rate	74.00%
Expected Life	8 years
Black-Scholes-Merton Option-Pricing Model [Member] | Maximum [Member]
Volatility Rate	99.00%
Expected Life	10 years

XML

Common Stock Warrants (Details) - Warrants	3 Months Ended
	Mar. 31, 2022 $ / shares shares
Balance Outstanding, Beginning | shares	2,437,164
Balance Outstanding, Ending | shares	2,437,164
Granted | shares	0
Vested / Released | shares	0
Forfeited | shares	0
Expired | shares	0
Weighted Average Exercise Price Outstanding, Beginning | $ / shares	$ 5.54
Weighted Average Exercise Price Outstanding, Ending | $ / shares	5.54
Weighted Average Exercise Price Granted | $ / shares	0
Weighted Average Exercise Price Exercised | $ / shares	0
Weighted Average Exercise Price Forfeited | $ / shares	0
Weighted Average Exercise Price Expired | $ / shares	$ 0
Weighted Average Remaining Contractual Term Outstanding, Beginning	6 months 29 days
Weighted Average Remaining Contractual Term Exercised	0 years
Weighted Average Remaining Contractual Term Outstanding, Granted	0 years
Weighted Average Remaining Contractual Term Outstanding, Ending	3 months 29 days
Weighted Average Remaining Contractual Term Outstanding, Exercisable	3 months 29 days

XML

Commitments and Contingencies (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Commitments and Contingencies
2022	$ 143,222
2023	196,721
2024	202,624
2025 And Beyond	202,624
Total	745,191
Less: Amount Representing Interest	(126,456)
Present Value Of Future Minimum Lease Payments	618,735	$ 650,477
Less: Current Obligations Under Lease	137,117	132,330
Long-term Lease Obligations	$ 481,618	$ 518,147

XML

Commitments and Contingencies (Details Narrative)				1 Months Ended	3 Months Ended
	Mar. 15, 2021 USD ($) ft²	Oct. 10, 2017 USD ($) ft²	May 12, 2017 USD ($)	Apr. 15, 2019 USD ($)	Mar. 31, 2022 USD ($) ft²	Mar. 31, 2021 USD ($)
Rent Expense					$ 52,763	$ 32,191
Annual Basic Salary				$ 250,000
January 1, 2015 [Member]
Rent Space | ft²	3,248	3,950			3,657
Monthly Rent	$ 15,452	$ 7,798			$ 5,986
Rent Term		5 years			60 years
Office Lease, Description	On March 15, 2021, the Company entered into an amendment to the lease, adding approximately 3,248 rentable square feet, increasing the initial monthly rent to $15,452 effective May 2021	On October 10, 2017 this lease was amended increasing the rentable square feet of space to 3,950 and the monthly rent to $7,798. On July 16, 2019, the Company exercised its option to extend the lease for an additional 5 years past the initial term originally expiring on December 31, 2019
Expiration Date	Dec. 31, 2025
Weighted-average Remaining Lease Term					3 years 9 months
Operating Lease Discount Rate					10.00%
Employment Agreements [Member] | Francois Michelon [Member]
Annual Basic Salary			$ 423,000
Employment Agreement, Description			vest within 12 months will automatically vest, and upon termination without cause within 12 months
Description Of Employment Termination Term			to receive 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
Employment Agreements [Member] | Michael Thornton [Member]
Annual Basic Salary			$ 324,000
Employment Agreement, Description			vest within 12 months will automatically vest, and upon termination without cause within 12 months
Description Of Employment Termination Term				to 8 months of continued healthcare coverage (or 24 months’ continuation of his current base salary and a lump sum payment equal to 24 months
Employment Agreements [Member] | Renaud Maloberti [Member]
Annual Basic Salary				$ 296,000
Description Of Employment Termination Term			to receive 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	To 8 months of continued healthcare coverage (or 24 months’ continuation of his current base salary and a lump sum payment equal to 24 months

XML

Subsequent Events (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Jun. 21, 2021
Common Stock Shares, Issued	44,559,418
Proceeds From Issuance Of Common Stock	$ 854,052	$ 9,798,293
June 2021 ATM Agreement [Member]
Common Stock Shares, Issued	2,004,904		2,677,645
June 2021 ATM Agreement [Member] | Common Stock [Member]
Common Stock Shares, Issued	18,615,037
Proceeds From Issuance Of Common Stock	$ 7,500,000