ENDRA Life Sciences Inc.

Previous wording

As used in this Quarterly Report on Form 10-Q (this “Form 10-Q”), unless the context otherwise requires, the terms “we,” “us,” “our,” “ENDRA” and the “Company” refer to ENDRA Life Sciences Inc., a Delaware corporation, and its direct and indirect subsidiaries. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our historical financial statements and related notes thereto in this Form 10-Q. This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are intended to be covered by the “safe harbor” created by those sections. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as “believe,” “expect,” “may,” “will,” “should,” “could,” “would,” “seek,” “intend,” “plan,” “estimate,” “anticipate” or other comparable terms. All statements other than statements of historical facts included in this Form 10-Q, including those regarding our strategies, prospects, financial condition, operations, costs, plans and objectives, are forward-looking statements. Examples of forward-looking statements include, among others, statements we make regarding expectations for revenues, cash flows and financial performance, the anticipated results of our development efforts and the timing for receipt of required regulatory approvals and product launches. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in, or implied by, the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: our limited commercial experience, limited cash and history of losses; our ability to obtain adequate financing to fund our business operations in the future; our ability to achieve profitability; delays and changes in regulatory requirements, policy and guidelines, including potential delays in submitting required regulatory applications or other submissions with respect to U.S. Food and Drug Administration (“FDA”) or other regulatory agency app…

Excerpt shortened here; the source contains the full paragraph.

Current wording

As used in this Quarterly Report on Form 10-Q (this “Form 10-Q”), unless the context otherwise requires, the terms “we,” “us,” “our,” “ENDRA” and the “Company” refer to ENDRA Life Sciences Inc., a Delaware corporation, and its direct and indirect subsidiaries. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our historical financial statements and related notes thereto in this Form 10-Q. This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are intended to be covered by the “safe harbor” created by those sections. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as “believe,” “expect,” “may,” “will,” “should,” “could,” “would,” “seek,” “intend,” “plan,” “estimate,” “anticipate” or other comparable terms. All statements other than statements of historical facts included in this Form 10-Q, including those regarding our strategies, prospects, financial condition, operations, costs, plans and objectives, are forward-looking statements. Examples of forward-looking statements include, among others, statements we make regarding expectations for revenues, cash flows and financial performance, the anticipated results of our development efforts and the timing for receipt of required regulatory approvals and product launches. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in, or implied by, the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: our limited commercial experience, limited cash and history of losses; our ability to obtain adequate financing to fund our business operations in the future; our ability to achieve profitability; delays and changes in regulatory requirements, policy and guidelines, including potential delays in submitting required regulatory applications or other submissions with respect to U.S. Food and Drug Administration (“FDA”) or other regulatory agency app…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

The Company’s 2016 Omnibus Incentive Plan (the “Omnibus Plan”) permits the grant of stock options and other share-based awards to its employees, consultants and non-employee members of the board of directors. Each January 1 the pool of shares available for issuance under the Omnibus Plan automatically increases by an amount equal to the lesser of (i) the number of shares necessary such that the aggregate number of shares available under the Omnibus Plan equals 25% of the number of fully-diluted outstanding shares on the increase date (assuming the conversion of all outstanding shares of preferred stock and other outstanding convertible securities and exercise of all outstanding options and warrants to purchase shares) and (ii) if the board of directors takes action to set a lower amount, the amount determined by the board. On January 1, 2025, the pool of shares issuable under the Omnibus Plan automatically increased by 178,033. In addition, on December 9, 2025, the stockholders of ENDRA Life Sciences Inc. (the “Company”) approved the Second Amendment to the Company’s 2016 Omnibus Incentive Plan (the “Omnibus Plan Amendment”) at the 2025 Annual Meeting of the Company’s Stockholders (the “Annual Meeting”). That Amendment increased the pool of shares available for issuance by 3,200,000 shares of common stock. Due to these increases, the pool of shares issuable under the Omnibus Plan shares increased from 1,738 shares to 3,048,799 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 March 31, 2026. As of March 31, 2026, there were 3,019,525 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 share-based awards to its employees, consultants and non-employee members of the board of directors. Each January 1 the pool of shares available for issuance under the Omnibus Plan automatically increases by an amount equal to the lesser of (i) the number of shares necessary such that the aggregate number of shares available under the Omnibus Plan equals 25% of the number of fully-diluted outstanding shares on the increase date (assuming the conversion of all outstanding shares of preferred stock and other outstanding convertible securities and exercise of all outstanding options and warrants to purchase shares) and (ii) if the board of directors takes action to set a lower amount, the amount determined by the board. On January 1, 2025, the pool of shares issuable under the Omnibus Plan automatically increased by 178,033. In addition, on December 9, 2025, the stockholders of ENDRA Life Sciences Inc. (the “Company”) approved the Second Amendment to the Company’s 2016 Omnibus Incentive Plan (the “Omnibus Plan Amendment”) at the 2025 Annual Meeting of the Company’s Stockholders (the “Annual Meeting”). That Amendment increased the pool of shares available for issuance by 3,200,000 shares of common stock. Due to these increases, the pool of shares issuable under the Omnibus Plan shares increased from 1,738 shares to 3,379,771 shares as of December 31, 2025. In light of the increase effected by the Omnibus Plan Amendment, no automatic increase to the pool was effected as of January 1, 2026. As of June 30, 2026, there were 3,019,525 shares of common stock remaining available for issuance under the Omnibus Plan.

Previous wording

Sales and marketing expenses were $4,278 for the three months ended March 31, 2026, as compared to $68,991 for the three months ended March 31, 2025, a decrease of $64,713, or 94%. The costs include primarily headcount and pre-selling activities for our TAEUS product line. Sales and marketing expenses decreased largely due to continued reductions in expenses resulting from our restructuring in the second quarter of 2024 and first quarter of 2026. Currently, our marketing efforts are through our website and attendance of key industry meetings.

Current wording

Sales and marketing expenses were $5,813 for the three months ended June 30, 2026, as compared to $68,834 for the three months ended June 30, 2025, a decrease of $63,021, or 92%. The costs include primarily headcount and pre-selling activities for our TAEUS product line. Sales and marketing expenses decreased largely due to continued reductions in expenses resulting from our restructuring in the second quarter of 2024 and first quarter of 2026. Currently, our marketing efforts are through our website and attendance of key industry meetings.

Previous wording

Our general and administrative expenses for the three months ended March 31, 2026 were $1,393,060, compared to $871,606 for the three months ended March 31, 2025, an increase of $521,454, or 60%. Our wage and related expenses for the three months ended March 31, 2026 were $779,125, compared to $368,607 for the three months ended March 31, 2025. Wage and related expenses in the three months ended March 31, 2026 included $574,451 of stock compensation expense related to the issuance and vesting of options and RSUs for the three months ended March 31, 2026. Our professional fees, which include legal, audit, and investor relations, for the three months ended March 31, 2026 were $387,231, compared to $305,860 for the three months ended March 31, 2025.

Current wording

Our general and administrative expenses for the three months ended June 30, 2026 were $1,243,778, compared to $851,195 for the three months ended June 30, 2025, an increase of $392,583, or 46%. Our wage and related expenses for the three months ended June 30, 2026 were 337,240, compared to $239,866 for the three months ended June 30, 2025. Wage and related expenses in the three months ended June 30, 2026 included $228,429 of stock compensation expense related to the issuance and vesting of options and RSUs for the three months ended June 30, 2026. Our professional fees, which include legal, audit, and investor relations, for the three months ended June 30, 2026 were $721,203, compared to $413,954 for the three months ended June 30, 2025.

Previous wording

Other expense of $862,315 for the three months ended March 31, 2026 was primarily due to changes in fair value of warrant liability and digital assets. Other expense was $432,952 for the three months ended March 31, 2025, an increase of $429,363, or 99%, due to changes in fair value of warrant liability and digital assets. For the three months ended March 31, 2026, there were changes in fair value of warrant liability of $(8,857) and changes in fair value of digital assets of $859,761.

Current wording

Other income of $1,643,200 for the three months ended June 30, 2026 was primarily due to changes in fair value of warrant liability and digital assets. Other income was $75,178 for the three months ended June 30, 2025, an increase of $1,568,022, or 2086%, due to changes in fair value of warrant liability and digital assets. For the three months ended June 30, 2026, there were changes in fair value of warrant liability of $(66,702),changes in fair value of digital assets of $1,700,247, and digital asset staking compensation of $9,700.

Previous wording

As a result of the foregoing, for the three months ended March 31, 2026, we recorded a net loss of $1,311,433, compared to a net loss of $1,036,330 for the three months ended March 31, 2025.

Current wording

As a result of the foregoing, for the three months ended June 30, 2026, we recorded a net income of $159,944, compared to a net loss of $1,225,912 for the three months ended June 30, 2025.

Previous wording

Research and development expenses were $776,410 for the three months ended March 31, 2026, as compared to $528,685 for the three months ended March 31, 2025, an increase of $247,725, or 47%. The costs include primarily wages, fees, equipment and third-party costs for the development of our TAEUS product line. Research and development expenses increased from the prior year as we complete development of our initial TAEUS product and began focusing our spending on clinical trials and commercialization of the product that has been developed.

Current wording

Research and development expenses were $1,010,075 for the six months ended June 30, 2026, as compared to $909,746 for the six months ended June 30, 2025, an increase of $100,329, or 11%. The costs include primarily wages, fees, equipment and third-party costs for the development of our TAEUS product line. Research and development expenses increased from the prior year as we completed development of our initial TAEUS product and began focusing our spending on clinical trials and commercialization of the product that has been developed during the first quarter.

Previous wording

We are experiencing financial and operating challenges. Since inception, we have incurred losses and expect to continue to incur losses for the foreseeable future. As of March 31, 2026, we had an accumulated deficit of $111,776,942 and had $356,462 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. In the three months ended March 31, 2026, we implemented cost reduction measures, including a reduction in headcount and prioritization of development activities over clinical ones, to extend our operating runway and focus resources on product improvements and regulatory strategy for our TAEUS liver application. These actions are expected to impact the timing of certain development activities, including delaying the timing of a future De Novo submission to the FDA relating to our TAEUS liver application. Additionally, in March 2026, we announced that the Board had initiated a process to evaluate a range of strategic alternatives including, but not limited to strategic investments, mergers, business combinations, in-licensing or collaboration arrangements, asset sales, or sale or merger of the Company.

Current wording

We are experiencing financial and operating challenges. Since inception, we have incurred losses and expect to continue to incur losses for the foreseeable future. As of June 30, 2026, we had an accumulated deficit of $111,616,998 and had $5,539,946 in cash, approximately $3.8 million of which is subject to restrictions on use pursuant to a deposit account control agreement acceptable to the Company and LHE LNG Holdings, LLC (the “Purchaser”), an affiliate of ASP Isoptopes Inc. (as described below). To date we have funded our operations through private and public sales of our securities and will need to raise additional funds in order to execute on our business plan, fully commercialize our TAEUS technology, and generate revenues. In the six months ended June 30, 2026, we implemented cost reduction measures, including a reduction in headcount and prioritization of development activities over clinical ones, to extend our operating runway and focus resources on product improvements and regulatory strategy for our TAEUS liver application. These actions are expected to impact the timing of certain development activities, including delaying the timing of a future De Novo submission to the FDA relating to our TAEUS liver application.

Previous 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.

Current wording

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

Previous wording

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, 2026, we incurred net losses of $1,311,433 and used cash in operations of $1,119,650. In light of our cash balance as of March 31, 2026, we will need to raise additional capital in order to fund operations through the next twelve months, and prior to any ability to fund operations from revenue generated from the sale of our products. The financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.

Current wording

The consolidated financial statements included in this Form 10-Q have been prepared assuming we will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, during the six months ended June 30, 2026, we incurred net losses of $1,151,489 and used cash in operations of $2,047,210. In light of our cash balance as of June 30, 2026, if we do not consummate the Merger, we will need to raise additional capital in order to fund operations through the next twelve months, and prior to any ability to fund operations from revenue generated from the sale of our products. The financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.

Previous wording

During the three months ended March 31, 2026, we used $1,119,650 of cash in operating activities primarily as a result of our net loss of $1,311,433, offset by share-based compensation of $574,451, amortization of right of use assets of $30,223, depreciation expense of $9,492, change in fair value of warrant liability of $8,857, digital asset staking compensation of $(11,060), change in fair value of digital assets of $(859,761) and net changes in operating assets and liabilities of $439,581.

Current wording

During the six months ended June 30, 2026, we used $2,047,210 of cash in operating activities primarily as a result of our net loss of $1,151,489, offset by share-based compensation of $1,116,355, amortization of right of use assets of 61,232, depreciation expense of $17,648, change in fair value of warrant liability of $75,559, digital asset staking compensation of $(20,760), change in fair value of digital assets of $(2,560,008) and net changes in operating assets and liabilities of $487,234.

Previous wording

During the three months ended March 31, 2026, we received $450,000 in proceeds from the sale of digital intangible assets. During the three months ended March 31, 2025, we used $17,280 in investing activities related to purchases of fixed assets.

Current wording

During the six months ended June 30, 2026, we used $18,670 in investing activities related to purchases of fixed assets and received $2,685,775 in proceeds from the sale of digital intangible assets. During the six months ended June 30, 2025, we used $17,280 in investing activities related to purchases of fixed assets.

Previous wording

During the three months ended March 31, 2026, our financing activities provided $263,747 in proceeds from issuances of common stock. During the three months ended March 31, 2025, our financing activities provided $145,803 in proceeds from issuances of common stock.

Current wording

During the six months ended June 30, 2026, our financing activities provided $4,157,686 in proceeds from issuances of common stock. During the six months ended June 30, 2025, our financing activities provided $1,003,218 in proceeds from issuances of common stock.

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 our at-the-market offering program with Lucid Capital Markets, LLC, the use of which may be limited due to registration statement rules relating to public float. Our existing cash will not be sufficient for us to complete the commercialization of our TAEUS application, or to complete the development of any other TAEUS application and we will need to raise substantial additional capital for those purposes. As a result, we will need to finance our future cash needs through public or private equity offerings, debt financings, corporate collaboration and licensing arrangements or other financing alternatives. Our forecast of our financial resources is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2025. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.

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 our ATM Program with Lucid, the use of which may be limited due to registration statement rules relating to public float. Our existing cash will not be sufficient for us to complete the commercialization of our TAEUS application, or to complete the development of any other TAEUS application and we will need to raise substantial additional capital for those purposes. As a result, if we do not consummate the Merger, we will need to finance our future cash needs through public or private equity offerings, debt financings, corporate collaboration and licensing arrangements or other financing alternatives. Our forecast of our financial resources is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2025. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.

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 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.

Current wording

Until we can generate a sufficient amount of revenue from our TAEUS platform applications, if ever, if we do not consummate the Merger, we expect to finance future cash needs through public or private equity offerings, debt financings or corporate collaborations and licensing arrangements. Additional funds may not be available when we need them on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to cease the operation of our business. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience additional dilution, and debt financing, if available, may involve restrictive covenants. To the extent that we raise additional funds through collaborations and licensing arrangements, it may be necessary to relinquish some rights to our technologies or applications or grant licenses on terms that may not be favorable to us. We may seek to access the public or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.