ENDRA Life Sciences Inc.

Previous wording

Sales and marketing expenses consist primarily of headcount and consulting costs, and marketing and tradeshow expenses. Currently, our sales and marketing efforts are primarily business development - generating awareness through meetings with research institutions, our website and attendance of key industry meetings and conferences. As of December 31, 2024, we had a full-time sales engineer in France and a part-time, contracted, business development executive in Germany. Upon FDA approval, we will expand our sales & marketing efforts, primarily by adding a direct sales force and related expenses and costs.

Current wording

Sales and marketing expenses consist primarily of headcount and consulting costs. We have significantly reduced our sales and marketing expenses as part of our cost reduction measures. In the event we obtain FDA approval of our TAEUS liver device, we will seek to expand our sales & marketing efforts, primarily by adding a direct sales force and related expenses and costs.

Previous wording

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. In 2024, general and administrative expenses also included a $2.4 million inventory reserve discussed further in Results of Operations.

Current wording

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.

Previous wording

Excluding this one-time charge, 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 continued costs associated with being a public company, including expenses related to services associated with maintaining compliance with The Nasdaq Capital Market and SEC requirements, directors and officers insurance, increased legal and accounting costs and investor relations costs.

Current wording

We anticipate continued costs associated with being a public company, including expenses related to services associated with maintaining compliance with The Nasdaq Capital Market and SEC requirements, directors and officers insurance, increased legal and accounting costs and investor relations costs.

Previous wording

Management makes estimates that affect certain accounts including inventory reserve, deferred income tax assets, accrued expenses, fair value of equity instruments, warrant liability and reserves for any other commitments or contingencies. Any adjustments applied to estimates are recognized in the period in which such adjustments are determined.

Current wording

Management makes estimates that affect certain accounts including deferred income tax assets, accrued expenses, fair value of equity instruments, warrant liability and reserves for any other commitments or contingencies. Any adjustments applied to estimates are recognized in the period in which such adjustments are determined.

Previous wording

The Company’s 2016 Omnibus Incentive Plan (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, 2025, the pool of shares issuable under the Omnibus Plan automatically increased by 178,033 shares from 1,738 shares to 179,474 shares. As of December 31, 2024, prior to such increase, there were 1,441 shares of common stock remaining available for issuance under the Omnibus Plan.

Current wording

The Company’s 2016 Omnibus Incentive Plan (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. In addition, on December 9, 2025, the stockholders approved the Second Amendment to the Omnibus Plan (the “Omnibus Plan Amendment The Omnibus Plan Amendment increased the pool of shares available for issuance by 3,200,000 shares of common stock. Due to these increases, the pool of shares issuable under the Omnibus Plan shares increased from 1,738 shares to 3,048,799 shares as of December 31, 2025. In light of the increase effected by the Omnibus Plan Amendment, no automatic increase to the pool was effected as of January 1, 2026.

Previous wording

Research and development expenses were $3,190,293 for the year ended December 31, 2024, as compared to $5,003,695 for the year ended December 31, 2023, a decrease of $1,813,402 or 36%. The costs include primarily wages, fees, consultants, contractors and equipment for the development of our TAEUS product line. Research and development expenses decreased from the prior year as we completed development of our initial TAEUS product and began focusing our spending on ensuring the clinical trials.

Current wording

Research and development expenses were $1,849,996 for the year ended December 31, 2025, as compared to $3,190,293 for the year ended December 31, 2024, a decrease of $1,340,297 or 42%. The costs include primarily wages, fees, consultants, contractors and equipment for the development of our TAEUS product line. Research and development expenses decreased from the prior year as we completed development of our initial TAEUS product and began focusing our spending on small trials to test our results.

Previous wording

Sales and marketing expenses were $571,040 for the year ended December 31, 2024, as compared to $820,554 for the year ended December 31, 2023, a decrease of $249,514, or 30%. The costs include primarily headcount and pre-selling activities for our TAEUS product line. Sales and marketing expenses decreased largely due to the reduction of Sales & Marketing personnel until the clinical trials are complete.

Current wording

Sales and marketing expenses were $189,470 for the year ended December 31, 2025, as compared to $571,040 for the year ended December 31, 2024, a decrease of $381,570, or 67%. The costs include primarily headcount and pre-selling activities for our TAEUS product line. Sales and marketing expenses decreased largely due to the reduction of Sales & Marketing personnel until the clinical trials are complete.

Previous wording

Our general and administrative expenses for the year ended December 31, 2024 were $7,055,814, compared to $4,696,486 for the year ended December 31, 2023, an increase of $2,359,328, or 50%.

Current wording

Our general and administrative expenses for the year ended December 31, 2025 were $3,723,635, compared to $7,055,814 for the year ended December 31, 2024, a decrease of $3,332,179, or 47%.

Previous wording

The primary driver of this increase was our inventory reserve. In 2024, in connection with a strategic shift under the direction of our new management team, we determined that we needed to redesign our TAEUS liver system to require less space, be simpler to use and be more cost effective. As a result, we performed a thorough assessment of the valuation of inventory as of December 31, 2024 and determined to record a non-cash charge to reserve against all inventory, as it may not be usable in connection with our redesigned system. This reserve totaled $2,525,179 as of December 31, 2024. Our reserve was $138,045 as of December 31, 2023.

Current wording

The primary driver of this decrease was our inventory reserve. In 2024, in connection with a strategic shift under the direction of our new management team, we determined that we needed to redesign our TAEUS liver system to require less space, be simpler to use and be more cost effective. As a result, we performed a thorough assessment of the valuation of inventory as of December 31, 2024 and determined to record a non-cash charge to reserve against all inventory, as it may not be usable in connection with our redesigned system. This reserve totaled $2,525,179 as of December 31, 2024. Our reserve was $0 as of December 31, 2025.

Previous wording

Also included in general and administrative expenses for the years ended December 31, 2024 and 2023 were wages and related expenses of $1,365,860 and $1,554,670, respectively, and professional fees of $2,177,046 and $1,980,464, respectively.

Current wording

Also included in general and administrative expenses for the years ended December 31, 2025 and 2024 were wages and related expenses of $1,197,556 and $1,365,860, respectively, and professional fees of $1,728,107 and $2,177,046, respectively.

Previous wording

Other expenses were $690,800 for the year ended December 31, 2024 primarily driven by non-cash warrant expense, changes in fair value of warrant liability and gain on settlement on warrant exercise.

Current wording

For the year ended December 31, 2024, we had other expense of $690,800 primarily driven by non-cash warrant expense, changes in fair value of warrant liability and gain on settlement on warrant exercise.

Previous wording

As a result of the foregoing, for the year ended December 31, 2024, we recorded a net loss of $11,507,947, compared to a net loss of $10,060,250 for the year ended December 31, 2023.

Current wording

As a result of the foregoing, for the year ended December 31, 2025, we recorded a net loss of $7,027,410, compared to a net loss of $11,507,947 for the year ended December 31, 2024.

Previous wording

Since inception, we have incurred losses and expect to continue to incur losses for the foreseeable future. As of December 31, 2024, we had an accumulated deficit of $103,438,099 and had $3,229,480 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. If we are unable to obtain adequate financing or financings in the near term on terms satisfactory to us, or at all, we may be forced to undertake additional measures, which may include delaying or reducing our product development programs and commercialization efforts, materially curtailing or eliminating our operations, selling or disposing of our rights or assets, pursuing sale or other strategic transactions, or undergoing restructuring or insolvency proceedings.

Current wording

If we are unable to obtain adequate financing or financings in the near term or if the strategic alternatives review process does not result in any transaction or other strategic outcome, we will be forced to undertake additional measures, which may include materially curtailing or eliminating our operations, or undergoing restructuring or insolvency proceedings.

Previous wording

We need additional capital to allow us to continue to execute our clinical trials and commercialization plans through the 2025 and beyond. We are considering potential financing options that may be available to us, including sales of our common stock through our at-the-market sales program (the “ATM Program”) with Ascendiant Capital Markets, LLC. Except for the ATM Program, we have no commitments to obtain any additional funds, and there can be no assurance funds will be available in sufficient amounts or on acceptable terms. If we are unable to obtain sufficient additional financing in a timely fashion and on terms acceptable to us, our financial condition and results of operations may be materially adversely affected and we may not be able to continue operations or execute our stated commercialization plan.

Current wording

We need additional capital to allow us to continue to execute our clinical trials and commercialization plans through 2026 and beyond. We are considering potential financing options that may be available to us, including sales of our common stock through our at-the-market sales program (the “ATM Program”) with Lucid Capital Markets, LLC, which are limited due to registration statement rules relating to public float. Except for the ATM Program, we have no commitments to obtain any additional funds, and there can be no assurance funds will be available in sufficient amounts or on acceptable terms. If we are unable to obtain sufficient additional financing in a timely fashion and on terms acceptable to us, our financial condition and results of operations may be materially adversely affected and we may not be able to continue operations or execute our stated commercialization plan.

Previous wording

The consolidated financial statements included in this Form 10-K 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 year ended December 31, 2024, we incurred net losses of $11,507,947 and used cash in operations of $7,400,547. In light of our cash balance as of December 31, 2024, we will need to raise additional capital in order to fund operations through the next twelve months. The financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.

Current wording

The consolidated financial statements included in this Form 10-K 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 year ended December 31, 2025, we incurred net losses of $7,027,410 and used cash in operations of $5,182,558. In light of our cash balance as of December 31, 2025, we will need to raise additional capital in order to fund operations through the next twelve months. The financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.

Previous wording

During the year ended December 31, 2023, we used $9,548,775 of cash in operating activities primarily as a result of our net loss of $10,060,250, offset by share-based compensation of $996,430, amortization of right of use assets of $151,725, inventory reserve of $138,045, depreciation expense of $123,726, fixed assets write-off of $24,868, and net changes in operating assets and liabilities of $(923,319).

Current wording

During the year ended December 31, 2025, we used $5,182,558 of cash in operating activities primarily as a result of our net loss of $7,027,410, offset by share-based compensation of $329,409, change in fair value of warrant liability of ($319,537), fair value of vested advisory warrants of $665,030, digital asset staking compensation of ($5,121), changes in fair value of digital assets of $995,161, amortization of right of use assets of $113,249, depreciation expense of $44,045, and net changes in operating assets and liabilities of $22,616.

Previous wording

During the year ended December 31, 2024, we used $7,400,547 of cash in operating activities primarily as a result of our net loss of $11,507,947, offset by a non-cash charge for inventory reserve of $2,387,134, share-based compensation of $571,924, the net effect of warrants of $799,284 (which includes warrant expense of $7,323,685, changes in fair value of warrant liability of ($3,447,737) and gain on settlement on warrant exercise of ($3,076,664)), amortization of right of use assets of 159,683, depreciation expense of $46,489, fixed assets write-off of $8,808, and net changes in operating assets and liabilities of $134,079.

Current wording

During the year ended December 31, 2024, we used $7,400,547 of cash in operating activities primarily as a result of our net loss of $11,507,947, offset by a non-cash charge for inventory reserve of $2,387,134, share-based compensation of $571,924, the net effect of warrants of $799,284 (which includes warrant expense of $7,323,685, changes in fair value of warrant liability of ($3,447,737) and gain on settlement on warrant exercise of ($3,076,664)), amortization of right of use assets of $159,683, depreciation expense of $46,489, fixed assets write-off of $8,808, and net changes in operating assets and liabilities of $134,079.

Previous wording

During the year ended December 31, 2023, we used $33,844 in investing activities related to purchases of fixed assets, and received $9,163 in proceeds from sale of fixed assets.

Current wording

During the year ended December 31, 2025, we used $17,280 in investing activities related to purchases of fixed assets, and purchased $3,000,000 of digital intangible assets.

Previous wording

During the year ended December 31, 2023, our financing activities provided $6,483,393 in proceeds from issuances of common stock and warrants, $1,014,859 in proceeds from warrant exercises and $20,053 in proceeds from issuances of common stock warrants.

Current wording

During the year ended December 31, 2025, our financing activities provided $4,514,482 in proceeds from fundraising activities, $1,218,241 in proceeds from issuances of common stock for cash.

Previous wording

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 may increase as we:

Current wording

We have not completed the commercialization of any of our TAEUS technology platform applications. To the extent we continue the development and commercialization of our TAEUS technology, we would expect to continue to incur significant expenses for the foreseeable future. We anticipate that our expenses may increase as we:

Previous wording

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 February 2024 ATM Agreement, the use of which is limited due to registration statement rules relating to public float. We do not expect that our existing cash will be sufficient for us to complete the commercialization of our TAEUS application or to complete the development of any other TAEUS application and we will need to raise 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 this Annual Report on Form 10-K. 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.

Current wording

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 ATM Program, the use of which is limited due to registration statement rules relating to public float. We do not expect that our existing cash will be sufficient for us to complete the commercialization of our TAEUS application or to complete the development of any other TAEUS application and we will need to raise 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 this Annual Report on Form 10-K. 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.

Previous wording

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. 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.

Current wording

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. If adequate funds are not available, we may be required to cease the operation of our business. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience additional dilution, and debt financing, if available, may involve restrictive covenants. To the extent that we raise additional funds through collaborations and licensing arrangements, it may be necessary to relinquish some rights to our technologies or applications or grant licenses on terms that may not be favorable to us. We may seek to access the public or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time. As described above under “Near-Term Liquidity and Capital Resources,” the Board initiated a process to review strategic alternatives for the Company.