ENDRA Life Sciences (NASDAQ: NDRA) faces Nasdaq equity notice after Q1 loss
ENDRA Life Sciences Inc. reported a Q1 2026 net loss of $1,311,433, wider than $1,036,330 a year earlier, as operating expenses rose to $2,173,748 on higher research, general and administrative, and share-based compensation costs.
Cash fell to $356,462 with negative working capital of $298,774, while digital assets increased in value to $2,430,781, generating realized and unrealized gains plus staking income. The company has an accumulated deficit of $111,776,942 and discloses substantial doubt about its ability to continue as a going concern.
Management is pursuing cost reductions, potential equity financing, and strategic alternatives. After quarter-end, Nasdaq notified ENDRA that its stockholders’ equity no longer meets the exchange’s minimum requirement, creating a delisting risk if compliance is not regained.
Positive
- None.
Negative
- Going-concern uncertainty and low liquidity: Cash was only $356,462 with negative working capital of $298,774 and an accumulated deficit of $111,776,942, and the company states substantial doubt about its ability to continue as a going concern without new financing.
- Nasdaq minimum equity deficiency: Nasdaq notified ENDRA on April 20, 2026 that stockholders’ equity of $2,260,120 no longer satisfies the Minimum Stockholders’ Equity Requirement, creating a risk of delisting if compliance is not regained.
Insights
Going-concern risk rises as cash stays tight and Nasdaq flags equity shortfall.
ENDRA Life Sciences ended Q1 2026 with only $356,462 in cash against a quarterly net loss of $1,311,433. Operating expenses reached $2,173,748, driven by higher R&D and $574,451 of stock-based compensation, while there is still no product revenue.
The balance sheet shows negative working capital of $298,774 and an accumulated deficit of $111,776,942. Management explicitly notes substantial doubt about continuing as a going concern and is relying on additional capital raises, strategic alternatives, and its Digital Asset Treasury, which held $2,430,781 at quarter-end.
On April 20, 2026, Nasdaq staff issued a notice that stockholders’ equity of $2,260,120 no longer meets the minimum equity requirement, putting the listing at risk pending a hearing. Future filings describing capital raises, digital asset sales, or a strategic transaction will be key to understanding whether ENDRA stabilizes its liquidity and maintains its Nasdaq listing.
Key Figures
Key Terms
Digital Asset Treasury financial
Thermo-Acoustic Enhanced Ultrasound technical
going concern financial
Nasdaq Listing Rules regulatory
restricted stock units financial
Earnings Snapshot
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
FOR THE QUARTERLY PERIOD ENDED
OR
COMMISSION FILE NUMBER
| (Exact name of registrant as specified in its charter) |
| (State of incorporation) | (I.R.S. Employer Identification No.) |
(Address of principal executive office) (Zip code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Indicate by check mark whether
the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of May 15, 2026, there were
TABLE OF CONTENTS
| Page | ||
| PART I - FINANCIAL INFORMATION | 1 | |
| Item 1. | Condensed Consolidated Financial Statements (unaudited) | 1 |
| Condensed Consolidated Balance Sheets - March 31, 2026 (unaudited) and December 31, 2025 | 1 | |
| Condensed Consolidated Statements of Operations - Three months Ended March 31, 2026 and 2025 (unaudited) | 2 | |
| Condensed Consolidated Statements of Stockholders’ Equity – Three months Ended March 31, 2026 and 2025 (unaudited) | 3 | |
| Condensed Consolidated Statements of Cash Flows - Three months Ended March 31, 2026 and 2025 (unaudited) | 4 | |
| Notes to the Condensed Consolidated Financial Statements (unaudited) | 5 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 17 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 24 |
| Item 4. | Controls and Procedures | 24 |
| PART II – OTHER INFORMATION | 25 | |
| Item 1. | Legal Proceedings | 25 |
| Item1A. | Risk Factors | 25 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 25 |
| Item 3. | Defaults Upon Senior Securities | 25 |
| Item 4. | Mine Safety Disclosure | 25 |
| Item 5. | Other Information | 25 |
| Item 6. | Exhibits | 25 |
| Signatures | 26 | |
i
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ENDRA Life Sciences Inc.
Condensed Consolidated Balance Sheets
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets | ||||||||
| Fixed assets, net | ||||||||
| Right of use assets | ||||||||
| Prepaid expenses, long term | - | |||||||
| Digital Assets | ||||||||
| Other assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Lease liabilities, current portion | ||||||||
| Total Current Liabilities | ||||||||
| Long Term Debt | ||||||||
| Lease liabilities | ||||||||
| Warrant Liability | ||||||||
| Total Long Term Debt | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies | - | - | ||||||
| Stockholders’ Equity | ||||||||
| Series A Convertible Preferred Stock, $ | - | - | ||||||
| Series B Convertible Preferred Stock, $ | - | - | ||||||
| Series C Convertible Preferred Stock, $ | - | - | ||||||
| Common stock, $ | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
ENDRA Life Sciences Inc.
Condensed Consolidated Statement of Operations
(Unaudited)
| Three Months Ended | Three Months Ended | |||||||
| March 31, | March 31, | |||||||
| 2026 | 2025 | |||||||
| Operating Expenses | ||||||||
| Research and development | $ | $ | ||||||
| Sales and marketing | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other (expenses) income | ||||||||
| Other income | ||||||||
| Digital asset staking compensation | - | |||||||
| Unrealized gain on change in fair value of digital assets | - | |||||||
| Realized gain on change in fair value of digital assets | ||||||||
| Changes in fair value of warrant liability | ( | ) | ||||||
| Total other (expenses) income | ||||||||
| Loss from operations before income taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | - | - | ||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Net loss per share – basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted average common shares – basic and diluted | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
ENDRA Life Sciences Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
Three Months Ended March 31, 2025
| Series A Convertible | Series B Convertible | Additional | Total | |||||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Stock | Common stock | Paid in | Accumulated | Stockholders’ | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | - | - | $ | - | $ | | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Common stock issued for cash | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Fair value of vested common stock | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Fair value of vested stock options | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | - | - | $ | - | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||
Three Months Ended March 31, 2026
| Series A Convertible | Series B Convertible | Additional | Total | |||||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Stock | Common stock | Paid in | Accumulated | Stockholders’ | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | - | - | $ | - | $ | | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Common stock issued for cash | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Fair value of vested stock options | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Fair value of vested restricted stock awards | ||||||||||||||||||||||||||||||||||||
| Fair value of vested restricted stock units | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance as of March 31, 2026 | $ | - | - | $ | - | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
ENDRA Life Sciences Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Three Months Ended | Three Months Ended | |||||||
| March 31, | March 31, | |||||||
| 2026 | 2025 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Stock compensation expense | ||||||||
| Amortization of right of use assets | ||||||||
| Digital asset staking compensation | ( | ) | - | |||||
| Unrealized gain on change in fair value of digital assets | ( | ) | - | |||||
| Realized gain on change in fair value of digital assets | ( | ) | ||||||
| Changes in fair value of warrant liability | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Decrease/(increase) in prepaid expenses | ||||||||
| Increase/(decrease) in accounts payable and accrued liabilities | ( | ) | ||||||
| Increase/(decrease) in lease liability | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities | ||||||||
| Purchases of fixed assets | - | ( | ) | |||||
| Sale of Digital Intangible Assets | - | |||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds from issuance of common stock for cash | ||||||||
| Net cash provided by financing activities | ||||||||
| Net increase (decrease) in cash | ( | ) | ( | ) | ||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Supplemental disclosures of cash items | ||||||||
| Interest paid | $ | $ | ||||||
| Income tax paid | $ | - | $ | - | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
4
ENDRA Life Sciences Inc.
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2026 and 2025
(Unaudited)
Note 1 - Nature of the Business
ENDRA Life Sciences Inc. (“ENDRA” or the “Company”) is designing a medical device for accurate liver fat measurement for use in metabolic disease detection and management and GLP-1 drug eligibility and management in circumstances where other technologies are unavailable or impractical.
In 2025, the Company expanded its business strategy to include a digital asset treasury (“DAT”) initiative, managed in collaboration with Arca Investment Management (“Arca”), which seeks to optimize capital preservation and generate non-dilutive returns through investments in decentralized finance (“DeFi”) assets. This financial strategy operates in tandem with the Company’s core medical technology mission: the commercialization of the TAEUS platform via a recurring subscription model, with a specific focus on the burgeoning GLP-1 and metabolic disease markets.
ENDRA was incorporated on
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 inventory reserve, deferred income tax assets, accrued expenses, fair value of equity instruments and reserves for any other commitments or contingencies. Any adjustments applied to estimates are recognized in the period in which such adjustments are determined.
Principles of Consolidation
The Company’s consolidated financial statements include all accounts of the Company and its consolidated subsidiaries and/or entities as of reporting period ending date(s) and for the reporting period(s) then ended. All inter-company balances and transactions have been eliminated.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. The balance sheet at March 31, 2026 has been derived from the audited financial statements at that date. For further information, refer to the financial statements and footnotes thereto included in the Company’s annual financial statements for the twelve months ended December 31, 2025 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2026.
Cash and Cash Equivalents
The Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit, and other highly liquid investments with maturities of one year or less, when purchased, to be cash. Cash equivalents include investments in an institutional money market fund, which invests in U.S. Treasury bills, notes and bonds, and/or repurchase agreements, backed by such obligations. Carrying value approximates fair value. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and periodically evaluates the creditworthiness of the financial institutions and has determined the credit exposure to be negligible. The Company maintains cash deposits at multiple banks to mitigate the risk associated with a failure of any specific bank.
5
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, 2026 and December
31, 2025, the Company recorded a right of use asset of $
Digital Assets
The Company maintains a DAT strategy under which it may acquire, hold, and deploy certain digital assets as part of its treasury and capital management activities. The Company’s digital assets consist primarily of HYPE tokens, which are recorded on the consolidated balance sheets as “Digital assets.”
Measurement of Digital Assets
Digital assets are accounted for as indefinite-lived intangible assets and, effective January 1, 2025, are measured at fair value in accordance with ASC 350-60, Intangibles—Goodwill and Other—Crypto Assets. The Company determines the fair value of its digital assets based on quoted market prices in active markets (Level 1 inputs) as of the reporting date.
Changes in the fair value of digital assets are recognized in the consolidated statements of operations within “Change in fair value of digital assets.” Realized gains and losses from the sale of digital assets are also recorded within this line item. Transaction costs associated with the acquisition or disposition of digital assets are expensed as incurred within operating expenses.
Digital Asset Staking
The Company may participate in staking activities whereby it validates transactions on blockchain networks and earns rewards in the form of additional digital assets.
Digital asset staking rewards are recognized as revenue within “Digital asset staking compensation” in the consolidated statements of operations when the Company has (i) performed the required validation services, (ii) earned the right to receive the rewards, and (iii) the amount can be reasonably estimated. Staking rewards are measured at the fair value of the digital assets received at the time they are earned.
Digital assets received from staking activities are initially recorded at fair value and subsequently included in the Company’s digital asset holdings, where they are remeasured at fair value at each reporting period.
Custody and Safeguarding
The Company utilizes third-party custodians to safeguard its digital assets. The Company recognizes digital assets on its balance sheet when it has control over the assets, including when assets are held by a custodian on the Company’s behalf.
6
Presentation
Digital assets are classified as noncurrent assets on the consolidated balance sheets unless management intends to sell them within one year. Changes in fair value and staking compensation are presented separately within operating income (loss), unless otherwise required by the nature of the Company’s operations.
Revenue Recognition
ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASC Topic 606”) provides a single set of guidelines for revenue recognition to be used across all industries and requires additional disclosures. The updated guidance introduces a five-step model to achieve its core principle of the entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
Under ASC Topic 606, in order to recognize revenue, the Company is required to identify an approved contract with commitments to perform respective obligations, identify rights of each party in the transaction regarding goods to be transferred, identify the payment terms for the goods transferred, verify that the contract has commercial substance and verify that collection of substantially all consideration is probable.
Research and Development Costs
The Company follows FASB Accounting Standards
Codification (“ASC”) Subtopic 730-10, “Research and Development”. Research and development costs are charged to
the statement of operations as incurred. During the three months ended March 31, 2026 and 2025, the Company incurred $
Net Earnings (Loss) Per Common Share
The Company computes earnings per share under
ASC Subtopic 260-10, “Earnings Per Share”. Basic earnings (loss) per share is computed by dividing the net income (loss) attributable
to the common stockholders (the numerator) by the weighted average number of shares of common stock outstanding (the denominator) during
the reporting periods. Diluted loss per share is computed by increasing the denominator by the weighted average number of additional shares
that could have been outstanding from securities convertible into common stock (using the “treasury stock” method), unless
their effect on net loss per share is anti-dilutive.
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Options to purchase common stock | ||||||||
| Warrants to purchase common stock | ||||||||
| Shares issuable upon conversion of Series A Convertible Preferred Stock | ||||||||
| Restricted Stock Units | ||||||||
| Restricted Stock Awards | - | |||||||
| Potential equivalent shares excluded | ||||||||
7
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. In addition, on December 9,
2025, the stockholders approved the Second Amendment to the Omnibus Plan (the “Omnibus Plan Amendment”) at the 2025 Annual
Meeting of the Company’s stockholders (the “Annual Meeting”). The Omnibus Plan Amendment increased the pool of shares
available for issuance by
8
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, 2026 of $
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, and determined that such pronouncements did not or in management’s opinion will not have a material impact on the Company’s present or future consolidated financial statements.
Note 4 - Fixed Assets
As of March 31, 2026 and December 31, 2025, fixed assets consisted of the following:
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Property, leasehold and capitalized software | $ | $ | ||||||
| TAEUS development and testing | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Fixed assets, net | $ | $ | ||||||
Depreciation expense for the three months ended March 31, 2026 and
March 31, 2025 was $
9
Note 5 - Accounts Payable and Accrued Liabilities
As of March 31, 2026 and December 31, 2025, current liabilities consisted of the following:
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Accounts payable | $ | $ | ||||||
| Payroll accrual | ||||||||
| Accrued employee benefits | ||||||||
| Accrued expenses | ||||||||
| Total | $ | $ | ||||||
Note 6 - Capital Stock
Capital Stock
At March 31, 2026, the authorized capital of the
Company consisted of
As of March 31, 2026, there were
During the three months ended March 31, 2026,
the Company issued a total of
At-the-Market Equity Offering Program
On February 14, 2024, the Company entered into
a new At-The-Market Issuance Sales Agreement with Ascendiant (the “February 2024 ATM Agreement”) to sell shares of common
stock for aggregate gross proceeds of up to $
10
Note 7 - Common Stock Options, Restricted Stock Units and Restricted Stock
Common Stock Options
Stock options are awarded to the Company’s
employees, consultants and non-employee members of the board of directors under the Omnibus Plan and are generally granted with an exercise
price equal to the market price of the Company’s common stock at the date of grant. There were no issuances of stock options in
the quarter ended March 31, 2026.
| Weighted | ||||||||||||
| Weighted | Average | |||||||||||
| Average | Remaining | |||||||||||
| Number of | Exercise | Contractual | ||||||||||
| Options | Price | Term (Years) | ||||||||||
| Balance outstanding at December 31, 2025 | $ | |||||||||||
| Granted | - | - | - | |||||||||
| Exercised | - | - | - | |||||||||
| Forfeited | - | - | - | |||||||||
| Cancelled or expired | ( | ) | - | |||||||||
| Balance outstanding at March 31, 2026 | $ | |||||||||||
| Exercisable at March 31, 2026 | $ | |||||||||||
Restricted Stock Units
On June 11, 2025, the Company granted a total
of
On January 21, 2026, the Company granted a total
of
During the three months ended March 31, 2026,
the Company recognized $
Unrecognized stock-based compensation expense
related to these RSUs will be recognized over the remaining vesting period, which is
Restricted Common Stock
On November 30, 2023, the Company issued
11
Note 8 - Common Stock Warrants
In June 2024, as part of a registered offering,
the Company issued pre-funded warrants to purchase up to an aggregate of
Additionally, the Series B Warrants contain an
alternative cashless exercise option whereby the holder of a Series B Warrant has the right to receive an aggregate number of shares equal
to the product of (x) the aggregate number of shares of common stock that would be issuable upon a cashless exercise of the Series B Warrant
using $
In connection with the Offering, the Company also
issued placement agent warrants (“Placement Agent Warrants” and, together with the pre-funded warrants and the Series Warrants,
the “Warrants”) to purchase up to
In connection with the 2025 Private Placement,
the Company also issued placement agent warrants to purchase up to
Warrant Exercises
During the three months ended March 31, 2026, no warrants were exercised.
The following table summarizes all warrant activity of the Company for the three months ended March 31, 2026:
| Weighted | Weighted | |||||||||||
| Average | Average | |||||||||||
| Number of | Exercise | Contractual | ||||||||||
| Warrants | Price | Term (Years) | ||||||||||
| Balance outstanding at December 31, 2025 | $ | |||||||||||
| Granted | - | - | - | |||||||||
| Exercised | - | - | - | |||||||||
| Forfeited | - | - | - | |||||||||
| Expired | - | - | - | |||||||||
| Balance outstanding at March 31, 2026 | $ | |||||||||||
| Exercisable at March 31, 2026 | $ | |||||||||||
Common Stock Warrants
During the three months ended March 31, 2026 and
2025, the Company recognized a (loss) gain of $(
12
Measurement
The Company established the initial fair value
for the warrant liability on August 20, 2024, the date the warrants were initially exercisable. Upon exercise, the instrument is marked
to its fair value upon exercise, and the shares delivered are recorded at fair value in the Company’s statement of stockholders’
equity.
| March 31, | December 31, | |||
| Input | 2026 | 2025 | ||
| Exercise Price | $ | $ | ||
| Stock Price | $ | $ | ||
| Volatility | ||||
| Discount Rate | ||||
| Expected Dividend | - | - | ||
| Expected Life (Years) |
Note 9 - Digital Assets
The Company holds digital assets as part of its treasury strategy. As of December 31, 2025 and March 31, 2026, the Company’s digital asset holdings consist of HYPE tokens.
Accounting Policy
The Company accounts for its digital assets in accordance with ASC 350-60, Accounting for and Disclosure of Crypto Assets. Digital assets are measured at fair value each reporting period, with changes in fair value recognized in earnings.
Fair value is determined using observable market prices derived from active trading venues. The Company uses the market price reported in custody statements provided by Anchorage Digital Bank, the Company’s digital asset custodian.
The Company’s digital assets are classified within Level 1 of the fair value hierarchy because the fair value is based on quoted prices in active markets.
Purchases and Sales
In the fourth quarter 2025, the Company purchased approximately
During the quarter ending March 31, 2026, the Company sold
Staking Activities
The Company participates in staking activities related to its HYPE holdings. Staking rewards represent additional tokens earned from participation in blockchain validation activities.
Staking rewards are recognized as income when the Company obtains control of the tokens, which occurs when the tokens are credited to the Company’s custody account. The rewards are measured at fair value at the time of receipt.
For the quarter ended March 31, 2026, the Company recognized $
13
Digital Asset Balance
| Tokens | $ | |||||||
| Balance at December 31, 2025 | $ | |||||||
| Cost of tokens sold | ( | ) | ( | ) | ||||
| Digital Asset staking compensation | ||||||||
| Unrealized gain/(loss) from fair value measurement | ||||||||
| Balance at March 31, 2026 | $ | |||||||
| March 31, 2026 | December 31, 2025 | |||||||
| Digital assets at fair value | $ | $ | ||||||
The Company determines the fair value of its digital assets based on
quoted market prices in active markets (Level 1 inputs) as of the reporting date. The aggregate cost basis of digital assets held as of
March 31, 2026 was $
Note 10 - Related Party Transactions
In September 2024, the Company began using IS
Bookkeeping & Payroll, which is a division of Impact Solve, LLC (dba Impact Solutions) (“Impact Solutions”), an accounting
and chief financial officer service firm. The Company’s Chief Financial Officer works in a part-time capacity for the Company through
Impact Solutions. For the three month periods ended March 31, 2026 and March 31, 2025, Impact Solutions and IS Bookkeeping & Payroll
provided services to the Company totaling $
Note 11 - 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
On March 15, 2021, the Company entered into an
amendment to the lease, adding approximately
On December 1, 2024, the Company entered into
an amendment to the lease, decreasing the total rentable square feet to
The Company records the lease asset and lease
liability at the present value of lease payments over the lease term. The lease typically does not provide an implicit rate; therefore,
the Company uses its estimated incremental borrowing rate at the time of lease commencement to discount the present value of lease payments.
The Company’s discount rate for operating leases at March 31, 2026 was
As of March 31, 2026, the maturities of operating lease liabilities are as follows:
| Operating | ||||
| Lease | ||||
| 2026 | ||||
| 2027 and beyond | ||||
| Total | $ | |||
| Less: amount representing interest | ( | ) | ||
| Present value of future minimum lease payments | ||||
| Less: current obligations under leases | ( | ) | ||
| Long-term lease obligations | $ | |||
14
For the three months ended March 31, 2026 and 2025, the Company incurred
rent expenses of $
Employment and Consulting Agreements
Alexander Tokman - Effective August 13,
2024, the Board appointed Alexander Tokman as the Company’s acting Chief Executive Officer and Chairman of the Board of Directors.
In connection with his appointment, Mr. Tokman and the Company entered into an employment agreement, dated August 13, 2024 (the “Employment
Agreement”). Mr. Tokman’s employment with the Company is “at will” and may be terminated by him or the Company
at any time and for any reason. Pursuant to the Employment Agreement, Mr. Tokman will receive an annual base salary of $
If Mr. Tokman’s employment is terminated by the Company without cause (as defined in the Omnibus Plan), if Mr. Tokman resigns for good reason (as defined in the Employment Agreement), or if Mr. Tokman’s employment ends following the hiring no later than February 13, 2026 of a replacement chief executive officer whom Mr. Tokman assists in recruiting, Mr. Tokman will be entitled to receive, subject to his execution of a standard release agreement, 12 months’ continuation of his current base salary and a lump sum payment equal to 12 months of continued healthcare coverage (or 24 months’ continuation of his current base salary and a lump sum payment equal to 24 months of continued healthcare coverage if such termination occurs within one year following a change in control). Additionally, under the Employment Agreement, Mr. Tokman is eligible to receive benefits that are substantially similar to those of the Company’s other senior executive officers.
Richard Jacroux - On August 7, 2024, the
Company’s Board of Directors appointed Richard Jacroux as Chief Financial Officer. Mr. Jacroux works in a part-time capacity for
the Company through Impact Solutions. Mr. Jacroux receives a base monthly fee of $
Litigation
From time to time the Company may become a party to litigation in the normal course of business. As of March 31, 2026, 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 - Segment Reporting
Operating segments are defined as components of
an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making
group, in deciding how to allocate resources in assessing performance. The Company has
The accounting policies of the biotech segment
are the same as those described in the summary of significant accounting policies.
To date, the Company has not generated any product revenue. The Company expects to continue to incur significant expenses and operating losses for the foreseeable future as it advances product candidates through all stages of development and clinical trials and, ultimately, seek regulatory approval.
15
As such, the CODM uses cash forecast models in deciding how to invest into the biotech segment. Such cash forecast models are reviewed to assess the entity-wide operating results and performance. Net loss is used to monitor budget versus actual results. Monitoring budgeted versus actual results is used in assessing performance of the segment and in establishing management’s compensation, along with cash forecast models.
The table below summarizes the significant expense categories regularly reviewed by the CODM for the three months ended March 31, 2026, and 2025:
| Three Months | Three Months | |||||||
| Ended | Ended | |||||||
| March 31, | March 31, | |||||||
| Operating Expenses | 2026 | 2025 | ||||||
| Research and development | $ | $ | ||||||
| Sales and marketing | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other segment items (a) | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Reconciliation of net loss | ||||||||
| Adjustments and reconciling items | - | - | ||||||
| Consolidated net loss | $ | ( | ) | $ | ( | ) | ||
| (a) |
Note 13 - Subsequent Events
The Company has assessed operations through, May 15, 2026, the filing date of this Quarterly Report on Form 10-Q and determined that there were no material subsequent events requiring adjustment to, or disclosure in, our consolidated financial statements for the three months ended March 31, 2026, other than the following:
On April 20, 2026, The Nasdaq Stock Market LLC (“Nasdaq”)
Listing Qualifications Staff (the “Staff”) issued a letter to the Company indicating that, because the Company’s
stockholders’ equity as reported in its Annual Report on Form 10-K for the year ended December 31, 2025 was $
The Company intends to take all reasonable measures available to regain compliance under the Nasdaq Listing Rules and remain listed on Nasdaq. The Company is currently evaluating its available options to resolve the deficiency and regain compliance with the Minimum Stockholders’ Equity Requirement. However, there can be no assurance that the Company will be able to regain compliance with the Minimum Stockholders’ Equity Requirement, maintain compliance with the other Nasdaq listing requirements or be successful in appealing the delisting determination.
Subsequent to March 31, 2026, the Company sold digital assets for aggregate
proceeds of approximately $
16
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
As used in this Quarterly Report on Form 10-Q (this “Form 10-Q”), unless the context otherwise requires, the terms “we,” “us,” “our,” “ENDRA” and the “Company” refer to ENDRA Life Sciences Inc., a Delaware corporation, and its direct and indirect subsidiaries. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our historical financial statements and related notes thereto in this Form 10-Q. This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are intended to be covered by the “safe harbor” created by those sections. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as “believe,” “expect,” “may,” “will,” “should,” “could,” “would,” “seek,” “intend,” “plan,” “estimate,” “anticipate” or other comparable terms. All statements other than statements of historical facts included in this Form 10-Q, including those regarding our strategies, prospects, financial condition, operations, costs, plans and objectives, are forward-looking statements. Examples of forward-looking statements include, among others, statements we make regarding expectations for revenues, cash flows and financial performance, the anticipated results of our development efforts and the timing for receipt of required regulatory approvals and product launches. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in, or implied by, the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: our limited commercial experience, limited cash and history of losses; our ability to obtain adequate financing to fund our business operations in the future; our ability to achieve profitability; delays and changes in regulatory requirements, policy and guidelines, including potential delays in submitting required regulatory applications or other submissions with respect to U.S. Food and Drug Administration (“FDA”) or other regulatory agency approval; our ability to obtain and maintain required CE mark certifications and secure required FDA and other governmental approvals for our Thermo-Acoustic Enhanced Ultrasound (“TAEUS”) applications; our ability to develop any commercially feasible applications based on our TAEUS technology; market acceptance of our technology; the effect of macroeconomic conditions on our business; results of our human studies, which may be negative or inconclusive; our ability to find and maintain development partners; our reliance on third parties, collaborations, strategic alliances and licensing arrangements to complete our business strategy; the amount and nature of competition in our industry; our ability to protect our intellectual property; potential changes in the healthcare industry or third-party reimbursement practices; our ability to comply with regulation by various federal, state, local and foreign governmental agencies and to maintain necessary regulatory clearances or approvals; our ability to regain compliance with Nasdaq listing standards; our ability to successfully execute on our digital asset treasury strategy; risks related to regulatory developments regarding digital assets and digital asset markets, which could adversely affect our business, financial condition, and results of operations; the volatile and unpredictable cycles in the digital asset industry; in the accounting treatment of digital assets; our dependence on our senior management team; and the other risks and uncertainties described in the Risk Factors section of our Annual Report on Form 10-K for the period ended December 31, 2025, as filed with the Securities and Exchange Commission (“SEC”) on March 31, 2026, and in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of this Form 10-Q. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
Available Information
From time to time, we use press releases, X (formerly Twitter) (@endralifesci) and LinkedIn (www.linkedin.com/company/endra-inc) to distribute material information. Our press releases and financial and other material information are routinely posted to and accessible on the Investors section of our website, www.endrainc.com. Accordingly, investors should monitor these channels, in addition to our SEC filings and public conference calls and webcasts. In addition, investors may automatically receive e-mail alerts and other information about the Company by enrolling their e-mail addresses by visiting the “Email Alerts” section of our website at investors.endrainc.com. Information that is contained in and can be accessed through our website, X posts and LinkedIn are not incorporated into, and do not form a part of, this Quarterly Report or any other report or document we file with the SEC.
17
Overview
We are developing a next-generation enhanced ultrasound technology platform—Thermo- Acoustic Enhanced Ultrasound, or TAEUS®.
Our initial focus for the development and commercialization of TAEUS is a solution for the assessment of liver fat, a key biomarker associated with metabolic diseases, including metabolic dysfunction-associated steatotic liver disease (“MASLD”) and metabolic dysfunction-associated steatohepatitis (“MASH”).
Our objective is to develop a scalable biomarker solution for metabolic disease assessment and management through a non-invasive, point- of-care approach.
We have periodically evaluated and refined our vision, purpose, and go-to-market strategy with respect to TAEUS in response to evolving market conditions and development priorities.
To support adoption across targeted market segments, we are focused on:
| ● | Leveraging artificial intelligence and machine learning models to enhance measurement accuracy accuracy and reproducibility; |
| ● | Integrating thermo-acoustic technology with conventional ultrasound to streamline workflows and reduce operator variability; and |
| ● | Reducing system size and cost to improve accessibility across care settings. |
For our go-to-market strategy, we intend to focus on serving these four markets:
| 1. | Pharmaceutical Companies and Clinical Research Organizations (“CROs”); |
| 2. | High-end Primary Care Networks (Concierge Medicine); |
| 3. | Bariatric and Metabolic Clinics; and |
| 4. | Primary and Internal Medicine Practices. |
We plan to offer a multi-year, subscription-based business model with recurring revenue, while continuing to support traditional capital equipment sales with associated service and upgrade offerings.
In 2025, the Company expanded its business strategy to include a Digital Asset Treasury (“DAT”) initiative, managed in collaboration with Arca Investment Management (“Arca”), which seeks to optimize capital preservation and generate non-dilutive returns through investments in decentralized finance (“DeFi”) assets. This financial strategy operates in tandem with the Company’s core medical technology mission: the commercialization of the TAEUS platform via a recurring subscription model, with a specific focus on the burgeoning GLP-1 and metabolic disease markets.
18
Financial Operations Overview
Revenue
No revenue has been generated by our TAEUS technology, which we have not commercially sold as of March 31, 2026.
Research and Development Expenses
Our research and development expenses primarily include wages, fees and equipment for the development of our TAEUS technology platform and the proposed applications. Additionally, we incur certain costs associated with the protection of our products and inventions through a combination of patents, licenses, applications and disclosures. These costs and expenses include:
| ● | employee-related expenses, such as salaries, bonuses and benefits, consultant-related expenses such as consultant fees and bonuses, stock-based compensation, overhead related expenses and travel-related expenses for our research and development personnel; |
| ● | expenses incurred under agreements with CROs, contract manufacturing organizations (“CMOs”) as well as consultants that support the implementation of our clinical and non-clinical studies; |
| ● | manufacturing and packaging costs in connection with conducting clinical trials; |
| ● | formulation, research and development expenses related to our TAEUS technology; and |
| ● | costs for sponsored research. |
We plan to incur research and development expenses for the foreseeable future as we expect to continue the development of TAEUS and pursue FDA approval of the NAFLD TAEUS system. At this time, due to the inherently unpredictable nature of clinical development and regulatory approvals, we are unable to estimate with certainty the costs we will incur and the timelines we will require in our continued development efforts.
Sales and Marketing Expenses
Sales and marketing expenses consist primarily of headcount and consulting costs, and marketing and tradeshow expenses. Currently, our marketing efforts are through our website and attendance of key industry meetings and conferences. The company has decided to limit its marketing and sales activities until after we have obtained FDA approval for the sale of the NAFLD TAEUS device.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and related expenses for our management and personnel, and professional fees, such as for accounting, consulting and legal services. We anticipate continued costs associated with being a public company, including expenses related to services associated with maintaining compliance with The Nasdaq Capital Market and SEC requirements, directors and officers insurance, increased legal and accounting costs and investor relations costs.
19
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.
Warrant Liability
The Company accounts for the liability classified warrants in accordance with the guidance contained in ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging. Such guidance provides criteria for instruments do not meet the criteria for equity treatment thereunder. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations.
Share-based Compensation
The Company’s 2016 Omnibus Incentive Plan (the “Omnibus Plan”) permits the grant of stock options and other share-based awards to its employees, consultants and non-employee members of the board of directors. Each January 1 the pool of shares available for issuance under the Omnibus Plan automatically increases by an amount equal to the lesser of (i) the number of shares necessary such that the aggregate number of shares available under the Omnibus Plan equals 25% of the number of fully-diluted outstanding shares on the increase date (assuming the conversion of all outstanding shares of preferred stock and other outstanding convertible securities and exercise of all outstanding options and warrants to purchase shares) and (ii) if the board of directors takes action to set a lower amount, the amount determined by the board. On January 1, 2025, the pool of shares issuable under the Omnibus Plan automatically increased by 178,033. In addition, on December 9, 2025, the stockholders of ENDRA Life Sciences Inc. (the “Company”) approved the Second Amendment to the Company’s 2016 Omnibus Incentive Plan (the “Omnibus Plan Amendment”) at the 2025 Annual Meeting of the Company’s Stockholders (the “Annual Meeting”). That Amendment increased the pool of shares available for issuance by 3,200,000 shares of common stock. Due to these increases, the pool of shares issuable under the Omnibus Plan shares increased from 1,738 shares to 3,048,799 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.
The Company records share-based compensation in accordance with the provisions of the Share-based Compensation Topic of the FASB Codification. The guidance requires the use of option-pricing models that require the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option valuation model, and the resulting charge is expensed using the straight-line attribution method over the vesting period.
Stock compensation expense recognized during the period is based on the value of share-based awards that were expected to vest during the period adjusted for estimated forfeitures. The estimated fair value of grants of stock options and warrants to non-employees of the Company is charged to expense, if applicable, in the financial statements. These options vest in the same manner as the employee options granted under the stock incentive plan as described above. Accounting guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company has limited historical experience with forfeitures and were based on management’s estimates.
20
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, 2026 and 2025
Revenue
We had no revenue during the three months ended March 31, 2026 and 2025.
Cost of Goods Sold
We had no cost of goods sold during the three months ended March 31, 2026 and 2025.
Research and Development
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.
Sales and Marketing
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.
General and Administrative
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.
Other Income
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.
Net Loss
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.
21
Near-Term Liquidity and Capital Resources
We are experiencing financial and operating challenges. Since inception, we have incurred losses and expect to continue to incur losses for the foreseeable future. As of 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.
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.
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.
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.
Operating Activities
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.
Investing Activities
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.
Financing Activities
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.
22
Long-Term Liquidity
We have not completed the commercialization of any of our TAEUS technology platform applications and have reduced our headcount and R&D spending in order to conserve resources. To the extent resources allow, we would expect to continue to incur significant expenses relating to the development of our TAEUS technology for the foreseeable future in order to finalize the commercialization of our TAEUS liver product and develop further TAEUS products. In this case, we would anticipate that our expenses would increase substantially as we:
| ● | advance the engineering design and development of our TAEUS technology; |
| ● | acquire parts and build finished goods inventory of the TAEUS FLIP system; |
| ● | complete regulatory filings required for marketing approval of our NAFLD TAEUS application in the United States, including clinical studies to advance our de novo application with the FDA; |
| ● | seek to hire a small internal marketing team to engage and support channel partners and clinical customers for our NAFLD TAEUS application; |
| ● | expand marketing of our NAFLD TAEUS application; |
| ● | advance development of our other TAEUS applications; and |
| ● | add operational, financial and management information systems and personnel, including personnel to support our product development, planned commercialization efforts and our operation as a public company. |
It is possible that we will not achieve the progress that we expect because the actual costs and timing of completing the development and regulatory approvals for a new medical device are difficult to predict and are subject to substantial risks and delays. We have no committed external sources of funds except for our 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.
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.
23
Off-Balance Sheet Transactions
At March 31, 2026, the Company did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
As a smaller reporting company, we are not required to provide the information required by this Item 3.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this Form 10-Q, management performed, with the participation of our principal executive officer and principal financial officer, an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures. Based on the evaluation, our principal executive officer and principal financial officer concluded that, as of March 31, 2026, our disclosure controls and procedures were not effective.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We identified the following material weakness as of March 31, 2026: insufficient personnel resources within the accounting function to segregate the duties over financial transaction processing and reporting.
To remediate the material weakness, management intends to implement the following measures during 2026, as the Company’s resources and financial means allow:
| ● | Add additional accounting personnel or outside consultants to properly segregate duties and to effect timely, accurate preparation of the financial statements; and |
| ● | Continue the development of adequate written accounting policies and procedures. |
The additional hiring is contingent upon our efforts to obtain additional funding and the results of our operations.
Changes in Internal Control over Financial Reporting
There were no changes to our internal control over financial reporting or in other factors that could affect these controls during the three months ended March 31, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We are not currently a party to any pending legal proceedings that we believe will have a material adverse effect on our business or financial condition. We may, however, be subject to various claims and legal actions arising in the ordinary course of business from time to time.
Item 1A. Risk Factors
In addition to the other information set forth in this report, you should carefully consider the factors discussed in this section and under “Risk Factors” in our Annual Report on Form 10-K for the period ended December 31, 2025, as filed with the Securities and Exchange Commission on March 31, 2026. These factors could materially adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by any forward-looking statements contained in this report.
There have been no material changes to our Risk Factors as therein previously reported.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Plans
None of the Company’s directors or officers
Item 6. Exhibits
| Exhibit | ||
| Number | Description | |
| 3.1 | Fourth Amended and Restated Certificate of Incorporation of the Company, as amended [Restated for SEC filing purposes only] (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed on March 31, 2026) | |
| 3.2 | 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) | |
| 31.1 | Certification of Periodic Report by Principal 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 Principal 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) | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ENDRA LIFE SCIENCES INC. | ||
| Date: May 15, 2026 | By: | /s/ Alexander Tokman |
| Alexander Tokman | ||
| Chief Executive Officer and Chairman | ||
| (Principal Executive Officer) | ||
| ENDRA LIFE SCIENCES INC. | ||
| Date: May 15, 2026 | By: | /s/ Richard Jacroux |
| Richard Jacroux | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
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