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Good afternoon, and welcome to the ENDRA Life Sciences Second Quarter 2024 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Yvonne Briggs. Please go ahead.

Thank you, operator. This is Yvonne Briggs with LHA. Good afternoon and welcome to ENDRA Life Sciences’ Second Quarter 2024 Business Update and Financial Results Conference Call. Earlier today, ENDRA issued a press release on this topic, which is available in the Investors section of ENDRA’s website. Before we begin, please note that today's discussion will include forward-looking statements. All statements by management, other than statements of historical facts, including statements regarding the company's strategies, financial condition, operations, costs, plans, and objectives, as well as anticipated results of development and commercialization efforts, the timing of clinical studies, potential partnership opportunities, and expectations regarding regulatory processes, receipt of required regulatory clearances, and product launches are forward-looking statements. Except as required by federal securities laws, the company disclaims any obligation to update or revise any forward-looking statements. Please refer to the company's Form 10-K for the 2023 fiscal year and subsequent SEC filings for more information about risks and uncertainties related to forward-looking statements. In terms of the structure of today's call, Alexander Tokman, Acting Chief Executive Officer, will begin the prepared remarks, followed by Ziad Rouag, new Head of Regulatory and Clinical Affairs; and then Michael Thornton, ENDRA's Chief Technology Officer. They will be followed by Richard Jacroux, ENDRA's new CFO, to review the second quarter financial results. With that said, I will now turn it over to Alex. Alex?

Thank you, Yvonne. Good afternoon, and thank you for joining us today to discuss ENDRA’s second quarter 2024 financial results and business highlights. Before we proceed to the business update, let me address the reverse stock split and the subsequent trading of our common stock. As you know, after receiving shareholder approval earlier this month, the company authorized one for 50 reverse stock split which we announced last Friday and was effective this past Tuesday. The primary goal was to keep our share price above $1 and in turn maintain the NASDAQ listing. This plan was derailed because of an extremely high volume of exercise warrants which were issued as a part of the $8 million public offering that was completed in June. This public offering was necessary in order to keep the company operational and not to lose all the progress ENDRA made over the years. We strongly believe that this sharp decline in our stock over the past few days is completely unrelated to ENDRA business prospects. We have the intended outcome as we are trading below $1 right now. We recognize the seriousness of this situation on the company and our investors, and we will keep you apprised of our actions, as we move forward. Now let's turn our attention to the second quarter results and recent changes. I would like to start by reviewing with you six specific items we intend to do differently moving forward to become more actionable and predictable as we bring, ENDRA’s differentiating Thermoacoustic Technology to Market. These six changes include stronger operating team, relentless prioritization of our activities, new approach with FDA, enhanced go-to-market strategy for TAEUS delivery device, crystallization of our Android vision, and finally improved financial execution. Let me elaborate on each. First, we enhance our management team by two experienced operators, who have proven track record of success in transforming new technology companies. Richard Jacroux is a seasoned CFO with public and private company experience, and he well understands lean operations and restructuring. He is already working very closely with Irina, former Senior Director of Finance, to ensure a smooth transition of daily finance operations. Irina will remain as an adviser to the company moving forward. Ziad Rouag has joined us as the Head of Clinical and Regulatory Affairs. Ziad has successfully led a number of emerging medical device technology companies through regulatory process and early commercialization, and he already made a huge impact on our most recent strategy and interactions with FDA. I anticipate that both Richard and Ziad experiences will greatly benefit ENDRA, as we move forward through this critical phase for the company. Mike Thornton, our CTO, will continue to focus on product delivery as well as enhancing ENDRA's technology road map and intellectual property. Second change, after reviewing after all the priorities that we are facing, we as the new operating team are unanimous in our relentless prioritization and laser focus on the most critical deliverable for the company and is executing as statistically powered multi-center prospective clinical trial to obtain the necessary data that will allow us to successfully move forward. This clinical data is a foundational element for both regulatory and commercial success. It offers three important benefits. It allows for optimization of product design for maximum user utilization; it is a necessary piece of successful de novo application; and finally, it answers the big why as in why I as a clinician or pharmaceutical user should utilize this technology. The third change we are implementing as we will fundamentally change our FDA regulatory strategy under Ziad's leadership. We are switching from the use of retrospective data to a hypothesis-driven, statistically-powered prospective clinical trial, which is [pre-vetted] (ph) through FDA. We are, therefore expanding from a single clinical site to a multi-center trial, and we're increasing the number of subjects by an order of magnitude from 20 to about 250, which is necessary to achieve acceptable statistical power. We are now fully engaged with the FDA on establishing the consensus and trial design prior to data collection. Later in this call, Ziad will elaborate further on these changes. Fourth, we are revisiting our go-to-market strategy for the TAEUS liver device. We have more and more evidence that hepatology may not be the beachhead market we should pursue. [indiscernible] primary care and [indiscernible] segment, and believe then over the next six to 12 months as we pursue the regulatory clearance for the TAEUS liver device. Hepatology will likely to remain a market for us, but perhaps not the primary target. Fifth, or the change initiative Number 5, we are preparing changes related to ENDRA's strategic direction. We will formalize our longer-term business strategy and crystallize our vision, as in what's next after we commercialize our TAEUS liver device. How do we -- we have to answer questions such as how do we add more value to our customers beyond the liver fat test and become a metabolic disease biomarker company, which could be a lot more valuable. All of this is expected to be developed and assessed over the next 12 months. Lastly, we are focusing on improved financial stewardship. Our goal is to scrutinize every dollar we spend, and as a result, we recently conduct significant reduction of our operating expenses, and we were able to reduce them by $3 million plus, which represents approximately 26% reduction on an annualized basis, all of it without impacting the primary deliverable, which is clinical data collection in preparation for our FDA submission. Richard will elaborate on this further during the financial update. Now that I outlined what we will do differently moving forward, Ziad, Mike and Richard will now highlight for you the progress we made since Q1 conference call in three areas: clinical and regulatory, technology and IP, and financial. Ziad?

Thank you, Alex. In May of this year, we met with the FDA at the headquarters in Maryland to demonstrate live the TAEUS technology and review the clinical and statistical plans for the proposal -- proposed pivotal study. The meeting minutes from the FDA meeting confirmed alignment between ENDRA and the FDA on the final product configuration, clinical study design and regulatory pathway of a successful outcome. As part of our refocused clinical program, we are limiting initial data collection to three pilot sites, 2 US and 1 EU. These pilot trial sites were selected based on their ability to recruit patients. We have already acquired data on 25 subjects through these efforts. In terms of time tables, these will be -- there will be sequential studies, meaning the results of the pilot study will inform the design of the pivotal study. Our goal is to have all clinical work completed and the data incorporated into our de novo submission targeted for mid-2025. I've handled similar opportunities during the course of my career with complex trials and devices, including imaging studies, and I'm highly optimistic about the regulatory path we have set for the TAEUS liver device. Mike?

Thank you, Ziad. Our patent portfolio now stands at 81 issued patents globally. During the second quarter of 2024, ENDRA has issued five additional patents: three in Europe and two in China. The issued patent portfolio consists of 42 thermal acoustic device and foundational enabling technology patents, 22 patents related to estimating fat fraction, and 17 patents covering other thermal acoustic applications and nonthermal acoustic technologies. Our broad intellectual property portfolio provides protection for the TAEUS system with its novel thermoacoustic technology and the opportunity to explore licensing opportunities beyond our core focus. I'll turn the call over now to Richard.

Thank you, Mike. And it's a pleasure to be speaking with our investors in my first quarterly conference call as ENDRA's CFO. During the quarter, we raised $7.3 million in net proceeds from the sale of common stock and warrants in a public offering. As of June 30, 2024, we had cash and cash equivalents of $6.4 million. Based on our current projections, our cash runway funds the company into the first half of 2025. Turning now to a review of our financial results. For the quarter ended June 30, 2024, our total operating expenses decreased to $2.2 million from $3 million for the same period in 2023. The decrease was mainly due to declines in research and development and sales and marketing expenses. Year-over-year, R&D expenses decreased $684,000 or 49% as we shift our resources and spending from development to clinical activities. In sales and marketing, cost decreased $85,000 or 34%, as we restructured our European operations to support the company's near-term clinical study goals. General and administrative expenses increased $5,000 overall, due to the administrative cost of the fundraising, which offset decreases elsewhere. We continue to scrutinize our spending and will likely make further adjustments to our expense structure to focus on achieving our priorities as we reset our strategy. Now I'll turn the call to the operator for questions. Operator?

We will now begin the question-and-answer session. [Operator Instructions] Our first question today is from Edward Woo with Ascendiant Capital. Please go ahead.

Yes. Nice to meet you, Alexander and Richard. My question is more on, as you guys are hitting the ground running, how quickly do you think you guys will be able to get your new strategic path fully implemented? Or do you still think it makes time to kind of evaluate the situation?

Thank you for the question Ed. In terms of the next 9 months to 12 months, we have a clear priorities described that we're going to execute. So this would involve completing the clinical study, obtaining all the necessary data to prepare for regulatory submission with FDA as well as generating enough compelling data to use for promoting this technology to future customers. So in terms of -- again, this priority has been agreed upon and articulated to every employee within the company. In terms of longer vision, what happened following the introduction of TAEUS liver device, we give a sharpened pencils over the next six months to nine months, look at all the opportunities that our IP offers and determine the ups -- path going forward. One thing I can tell you for sure is that we are going to create a strategic road map that will include several critical -- several growth opportunities, some of which we will pursue organically, and some of it could be licensed to others. More on this later.

Great. And then just a final clarifying question. I wasn't sure if I heard right. Do you say that in 2025, you plan to file your FDA application? Did you give a specific time in 2025?

We haven't provided the specific guidance, I don't believe. But what I can tell you is that our goal is to complete the clinical study this year and initiate a pivotal study early next year, with the goal of submitting sometime by mid of 2025.

This concludes our question-and-answer session. I would like to turn the conference back over to Alex Tokman for any closing remarks.

Thank you. Given -- I would like to wrap this call by telling you that given that everybody feels in -- the Board and the operating team are bullish in ENDRA's technology and market opportunity. We expect that after implementing the six initiatives and changes I described earlier in this call, ENDRA's performance will improve, and we will reverse the course that the company has settled for in the past. I'm confident personally about this because I have led several successful turnarounds of medical advice and emerging technology companies for both Fortune 100 and micro caps, and I think we can do this again here. I believe the team is energized. We know what we need to accomplish in the next six months, 9 months and 12 months, and you'll see hopefully, different output from this team moving forward. Thank you. Thank you for joining us today, and we look forward to keeping you updated on our progress.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good day, and welcome to the ENDRA Life Sciences First Quarter 2024 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Yvonne Briggs. Please go ahead.

Thank you, operator. This is Yvonne Briggs with LHA. Good afternoon, and welcome to ENDRA Life Sciences' First Quarter 2024 Business Update and Financial Results Conference Call. Earlier today, ENDRA issued a press release on this topic, which is available in the Investors section of ENDRA's website. Before we begin, please note that today's discussion will include forward-looking statements. All statements by management, other than statements of historical facts, are forward-looking statements. These include statements regarding the company's strategies, financial condition, operations, costs, plans and objectives as well as anticipated results of development and commercialization efforts, the timing of clinical studies, potential partnership opportunities and expectations regarding regulatory processes, receipt of required regulatory clearances and product launches. Except as required by federal securities laws, the company disclaims any obligation to update or revise any forward-looking statements. Please refer to the company's Form 10-K for the 2023 fiscal year and subsequent SEC filings for more information about risks and uncertainties related to forward-looking statements. In terms of the structure of today's call, Francois Michelon, Chairman and Chief Executive Officer, will begin the prepared remarks; followed by Michael Thornton, ENDRA's Chief Technology Officer. Mr. Thornton will be followed by Irina Pestrikova, Senior Director of Finance, to review the first quarter financial results, and then we'll take your questions. I'll now turn the call over to Francois Michelon. Francois?

Thank you, Yvonne, and thanks for joining us today to review ENDRA's first quarter 2024 financial results and key business developments. We're advancing on our mission to revolutionize metabolic health through the practical detection and monitoring of liver disease, and we've made good progress in the following areas: first, activating new clinical research sites in target markets to build our body of clinical evidence at the local level across a range of sites, users and patient types. This clinical data is a foundational element to achieving commercial success in the future. Second, working closely with the FDA to align on clinical requirements for our TAEUS system's de novo application. A pre-submission meeting is scheduled with the FDA in suburban Washington, D.C. this quarter. Third, leveraging the accelerating market developments in the detection and treatment of liver disease to strengthen ENDRA's position. And fourth, looking beyond our current markets and technology to new opportunities to license our intellectual property. I'll elaborate on each of these elements. In the first quarter, we achieved a milestone in one of our target markets by installing the first TAEUS system in the United Kingdom. King's College Hospital in London, a prestigious National Health Service institution, is leading the introduction of ENDRA's liver system in the U.K. market. This partnership entails a clinical study comparing TAEUS' liver fat assessment accuracy versus MRI, the recognized research standard. The U.K., along with other active clinical study sites in the U.S., are crucial for generating the body of clinical data needed to support the commercial adoption of our technology across radiology, hepatology and endocrinology in global markets. The clinical abstracts we presented last year at the European Association for the Study of the Liver were a great start, highlighting the impressive clinical performance of our technology compared to the MRI gold standard. But we need to continue to expand this pool of real-world evidence to demonstrate our clinical and economic value to potential users in our target markets at the local level. In addition to the foundational work of building our clinical evidence, ENDRA is working closely with the FDA to achieve alignment on clinical requirements for our TAEUS system's de novo application. ENDRA has had several interactions with the agency since Q4 of 2023, and we've provided additional information about our technology and historical clinical testing. To advance a review process and further align expectations with the aim of ultimately achieving a successful regulatory outcome, ENDRA has scheduled an in-person pre-submission meeting with the FDA this quarter, focusing on clinical requirements. Mike will elaborate on this in a minute. On a broader market basis, key building blocks for diagnosing, treating and managing liver disease are rapidly advancing, providing hope for the millions who are affected and opportunities for companies like ENDRA. Leading clinical societies such as the American Diabetes Association and the American Association of Clinical Endocrinology have updated their guidelines and now recommends screening for fatty liver disease for prediabetic, diabetic and obese patients. That's over 100 million people in the U.S. alone who need to be evaluated, and MRI is not a practical solution for a population this large. A second building block relates to the FDA's recent approval of Rezdiffra, Madrigal Pharmaceuticals' pioneering drug therapy for NAFLD/NASH, marking the beginning of a new chapter in liver disease management. This therapy, along with other emerging targeted treatments for liver disease, will significantly impact health care providers, insurers and patients. Major insurers like Blue Cross are requiring adherence to 9 specific prescribing authorization criteria for Rezdiffra, including an MRI-PDFF liver fat quantification exam, which can only be performed by the most advanced subset of the world's MRIs. This underscores the complexity of managing this disease and highlights the need for precision in diagnosis and treatment. Rezdiffra and future drugs will consequently drive demand, we believe, for more accessible point-of-care diagnostic tools like ENDRA's TAEUS that are capable of facilitating the assessment and monitoring of liver disease affecting over 2 billion people globally. Finally, we're actively exploring collaborations and strategic pathways to expand the applications of our TAEUS platform beyond the liver. By leveraging our intellectual property and engaging in strategic partnerships and out-licensing initiatives, we aim to capitalize on the potential of our TAEUS platform in new therapeutic areas. We've engaged PatentVest, a leading intellectual property advisory firm, to spearhead ENDRA's IP valuation, competitive landscape analysis and licensing efforts. To that end, we're aggressively expanding our global intellectual property portfolio with the issuance of 8 new patents so far this year. With these additions, ENDRA's patent status reached an impressive 80 issued patents worldwide. These patents safeguard key innovations that are integral to the TAEUS system and reinforce our competitive edge in the marketplace. I'll now turn the call over to Mike Thornton for an overview of our clinical and regulatory advancements. Mike?

Thanks, Francois. Today, I'll provide an update on regulatory developments for ENDRA's TAEUS system. ENDRA has secured a valuable opportunity for an in-person pre-submission meeting in the second quarter with the FDA at their Maryland facility to prepare and submit a new de novo application. The focus of this meeting will be clinical trial design that is crucial for obtaining alignment with the FDA on our study design. We'll discuss key aspects, including the study design, study hypothesis and the statistical analysis plan. Further, we provided the FDA with a detailed description of the device and a master protocol that outlines a clinical study across multiple sites. This proposed study will cover a range of liver fat percentages mirroring the prevalence of steatotic liver disease in the U.S. population. And this pre-submission team for the upcoming meeting includes key technical staff and an experienced regulatory lead with over 20 years of first-of-a-kind medical device experience, a senior biostatistician that is familiar to the FDA and several radiology clinical experts. Why is ENDRA's approach different this time? Reflecting on our past regulatory strategies and the fast-evolving medical imaging regulatory landscape, it's clear that ENDRA's historical reliance on clinical data derived from multiple feasibility studies was insufficient for FDA's current standards. The current approach is to work hand-in-hand with the FDA through its pre-submission process to develop a prospective, statistically powered pivotal trial, whose data will be acceptable to FDA for our de novo grant. We look forward to updating you on the outcomes of our FDA meeting and the next steps in our regulatory process. With that, I'll turn it over to Irina Pestrikova for our financial update. Irina?

Thank you, Mike. Turning now to a review of our recent financial performance. For the quarter ended March 31, 2024, our operating expenses decreased to $2.8 million from $2.9 million for the same period in 2023. The decrease was mainly due to lower research and development expenses. Our research and development expenses decreased year-over-year by approximately $350,000 as we completed the development of our initial TAEUS product. Our sales and marketing expenses increased by approximately $57,000, mainly due to higher consulting fees. General and administrative expenses increased by approximately $134,000, mainly due to higher professional fees. Our net loss in the first quarter of 2024 was $2.8 million or $0.26 per share. This compares with a net loss of $2.9 million or $0.93 per share in the first quarter of 2023. Cash and cash equivalents were $1.1 million as of March 31, 2024. In the first quarter, the company raised $420,000 in gross proceeds from the sale of common stock through at the market equity facility and $77,000 from the exercise of warrants. We're focused on managing our current resources and financing opportunities to maintain the capital necessary to progress our operating plan. Now I'll turn the call back to Francois.

Thanks, Irina and Mike. In summary, we remain committed to driving innovation and our market presence through the following 4 levers: number one, leveraging clinical partner sites in Europe and the U.S. to build our base of clinical evidence and achieve successful adoption of our technology; number two, engaging closely with the FDA to advance our regulatory submission in the U.S.; number three, leveraging the accelerating market developments in the detection and treatment of liver disease to strengthen ENDRA's position; and fourth, leveraging our intellectual property to grow beyond our current markets and clinical focus. On behalf of the entire ENDRA team, once again, I extend my thanks to the shareholders for their continued support of ENDRA. And now, operator, we're ready to open the call to questions.

[Operator Instructions] The first question comes from Edward Woo from Ascendiant Capital.

My question is on Asia. I know you have the distribution in Vietnam that will go live as soon as you get FDA approval. Is there any other parts of Asia that you're possibly thinking to go into?

Thanks, Ed. Yes, great question. I think to put it in context, before I get to any specifics on Asia, as a small company, we have to focus our resources. Obviously, we're starting strongly in Europe with the CE mark. The U.K. clinical site is our anchor there. And as we've announced, we plan to carefully add more sites in our target markets, resources permitting; and then, concurrently, managed the FDA process and the 3 active sites we have in the U.S. on a pre-FDA basis to prepare the U.S. market. You're absolutely right, we've disclosed that we do have a distribution agreement in Vietnam, which is a surprisingly high-growth and high-populated market, and we're happy for that. That would go into effect upon FDA approval. And we also previously announced years ago or rather a couple of years ago, the agreement we signed with Shanghai General Hospital as a clinical study site in the PRC. So we're definitely looking at Asia. We have a few anchor points through those 2 mechanisms. Asia, obviously, is a large market where liver disease is quite prevalent. But I would say that I'd like investors to hear, first and foremost, disciplined and focus on being successful first in Europe, then in the U.S. and leveraging then carefully with all that knowledge and the base of clinical evidence that I've mentioned, which would be foundational for it all to then go to Asia. So I hope that helps answer your question.

Yes, it does. I wish you good luck with the FDA meeting. And thank you, and I wish you guys good luck.

Operator, if we don't have any other questions, I think we can wrap up the call then.

Thank you. This concludes the conference. Thank you for attending today's presentation. You may now disconnect.

Thank you, everyone.

Good day, and welcome to the ENDRA Life Sciences Fourth Quarter 2023 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the call over to Yvonne Briggs. Please go ahead.

Thank you, operator. This is Yvonne Briggs with LHA. Good afternoon, and welcome to ENDRA Life Sciences fourth quarter 2023 business update and financial results conference call. Earlier today, ENDRA issued a press release on this topic, which is available in the Investors section of ENDRA's website. Before we begin, please note that today's discussion will include forward-looking statements. All statements by management other than statements of historical facts are forward-looking statements. These include statements regarding the company's strategies, financial condition, operations, costs, plans and objectives as well as anticipated results of development and commercialization efforts. The timing of clinical studies, potential partnership opportunities and expectations regarding regulatory processes, receipt of required regulatory clearances and product launches. Except as required by federal securities laws, the company disclaims any obligation to update or revise any forward-looking statements. Please refer to the company's Form 10-K for the 2023 fiscal year and subsequent SEC filings for more information about risks and uncertainties related to forward-looking statements. In terms of the structure of today's call, Francois Michelon, Chairman and Chief Executive Officer; will begin the prepared remarks followed by Michael Thornton, ENDRA's Chief Technology Officer. Mr. Thornton will be followed by Irina Pestrikova, Senior Director of Finance, to review the fourth quarter financial results and then we'll take your questions. I'll now turn the call over to Francois Michelon. Francois?

Thank you, Yvonne, and thank you for joining us today to review ENDRA's fourth quarter 2023 financial results and key business developments. We're advancing our mission to revolutionize metabolic health through the practical detection and monitoring of liver disease. We've made significant progress in the following five areas. Number one, activating new clinical partner sites in our target markets to build our body of clinical evidence at the local level, which is the foundational element to achieving regulatory and commercial success. Number two, advancing our FDA De Novo application for TAEUS through close collaboration with the agency. Number three, strengthening our commercial position by developing new and nurturing existing relationships with clinicians as well as maintaining a steady cadence of awareness-building activities. Number four, leveraging the rapid and positive evolution of key industry building blocks for diagnosing and treating liver disease, which strengthen ENDRA's position and commercial opportunity. And number five, looking beyond our current markets and technology to new opportunities to license our intellectual property. Now I'll elaborate on each of these elements. Recently, we achieved a key milestone in one of our target markets by installing the TAEUS system in the United Kingdom. King's College Hospital in London, a prestigious national health service institution is leading the introduction of ENDRA's liver system in the UK market. This partnership entails a clinical study comparing TAEUS's liver fat assessment accuracy to MRI, the recognized research standard. The study is expected to include approximately 75 subjects and aims to provide crucial data for evaluating the TAEUS technology's performance. Moreover, the findings will be submitted for publication in a peer-reviewed medical journal. We're excited about this collaboration as it will strengthen our base of clinical evidence and potentially opens doors to strategic opportunities within the UK's extensive National Health Service network. Mike will provide an update on ENDRA's active and pending clinical sites. And these sites are crucial for generating the body of clinical evidence needed to support our business strategy in three fundamental ways. First, clinical evidence from these sites supports our current and future regulatory filings and reimbursement claims. Second, the clinical sites enable commercial traction, serving as reference sites in key markets. They bolster our commercial endeavors by demonstrating ENDRA's technology in real-world settings and help us develop compelling clinical and economic value propositions in our target segments endocrinology, hepatology and other segments in each target market. And third, the clinical sites enable the ongoing enhancement of ENDRA's technology through customer feedback leading to future product improvements. Gaining commercial traction and additional regulatory approvals for ENDRA's innovative technology hinges on continuing to build the base of clinical evidence. The clinical abstracts we presented at the European Association of Study of the Liver last year mark encouraging progress. These presentations highlight impressive clinical performance of our technology compared to the MRI gold standard. Yet, to convince potential users in our target market of our technology's value, we must further expand our pool of real-world evidence and do so at the local level. As you're hearing, we're accelerating these efforts by activating new sites such as King's College in the UK and others will announce in the second quarter. Clinical evidence is essential for the successful global adoption of new innovative technologies like ENDRA's. Looking ahead into 2024, in addition to the foundational work of building clinical evidence, we're also advancing in other key areas. First and importantly, we're advancing our FDA regulatory submission in the U.S. market. Since our De Novo submission in the third quarter of 2023, we've received an additional information request from the FDA, and we're closely engaged with the agency. We've confirmed the meeting with the FDA to be held in the second quarter of this year to address open items and ensure a predictable regulatory pathway for our technology. And Mike Thornton will elaborate on this in a minute. The second area as we expect to achieve commercial sales with early adopters in Europe this year in our initial target markets of Germany, the UK and France, leveraging our CE mark and our growing base of clinical data from King's College and other sites to showcase our technology's clinical and economic value propositions. In parallel to these activities, the ENDRA's team has been proactive in generating awareness for our TAEUS technology and engaging with key stakeholders by attending major clinical conferences. Notably, at the Liver Meeting hosted by the American Association for the Study of Liver Disease, ENDRA hosted a panel discussion with multidisciplinary key opinion leaders in hepatology, endocrinology and radiology. And this platform enabled the sharing of unique perspectives on managing Metabolic Dysfunction-Associated Steatohepatitis, also known as MASH. ENDRA's participation in eight industry conferences in 2023, such as the European International Liver Congress and the Diabetes Professional Care Meeting in the UK contribute to raising awareness of our TAEUS technology. Plans are in place to attend the most critical European and American conferences this year and the cadence of visibility underscores ENDRA's commitment to fostering relationships with potential customers and partners highlighting our technology's potential. The third area in alignment with our FDA initiatives is we're exploring an intriguing new opportunity in the U.S. bariatric and obesity management market. Because of the popularity of the GLP-1 drugs, this market is rapidly evolving from a surgery-centric approach to a broader mandate as metabolic disease management centers. Our research so far indicates that the obesity management market is characterized by high patient self-pay and relative price in elasticity with highly motivated patients who demand clinically relevant services to support their weight loss journey with three to four monitoring visits per year. This aligns really well with ENDRA's technology since liver fat is a key biomarker for metabolic syndrome. And this potentially expands ENDRA's addressable market beyond hepatology and endocrinology and holds promise for revenue streams based on patient self-pay per scan. On a broader market basis, three crucial building blocks for diagnosing, treating and managing liver disease are rapidly advancing, providing hope for the millions affected and opportunities for companies like ENDRA. The first building block is that leading clinical societies that already updated their screening guidelines for fatty liver. As an example, the American Diabetes Association and the American Association for Clinical Endocrinology now recommends screening of fatty liver disease for prediabetic, diabetic and obese patients. Those guidelines alone encompass 50% of the adult U.S. populations with either diabetes or prediabetes and 41% of the U.S. population who are obese. That's approximately 150 million people in the U.S. alone. The second building block is that the World Health Organization has issued a new ICD-10-CM code specifically for fatty liver disease. The ICD-10-CM is a global coding system that indicates a diagnosis for reimbursement purposes, and it facilitates standardized billing and documentation for insurance processes in the U.S., Europe and other markets. ENDRA believes the ICD-10 K76 code issued specifically for the diagnosis of fatty liver represents a significant opportunity for innovation. As health care providers now have a more straightforward path to integrate advanced diagnostic technologies like ENDRA's. And the third building block involves the FDA's recent approval of Rezdiffra, Madrigal Pharmaceuticals pioneering drug therapy for NAFLD/NASH, marking the beginning of a whole new chapter in liver disease management. This therapy, along with other emerging targeted treatments for liver disease will significantly impact both healthcare providers, insurers and patients. Major insurers like Blue Cross are requiring adherence to nine specific authorization criteria for Rezdiffra, including an MRI-PDFF liver fat exam which can only be performed by the most advanced subset of the world's estimated 58,000 MRIs. This underscores the complexity of managing NAFLD/NASH and highlights the need for precision in diagnosing and treatment. Rezdiffra and similar drugs will consequently drive demand for more accessible point-of-care diagnostic tools like ENDRA's TAEUS that are capable of facilitating the screening and monitoring of liver disease, which affects over 2 billion people. Finally, we're actively exploring collaborations and strategic pathways to expand the applications of our TAEUS platform beyond the liver. By leveraging our intellectual property and engaging in strategic partnerships and out-licensing opportunities. We aim to capitalize on the potential of TAEUS in new therapeutic areas. We've engaged PatentVest, a leading intellectual property advisory firm to spearhead the valuations of ENDRA's IP, competitive landscape analysis and M&A outreach efforts. This collaboration will strengthen our position in the rapidly evolving medical technology landscape and enable us to explore a new set of opportunities for the TAEUS platform. To that end, we've been aggressively expanding our global intellectual property portfolio with the issuance of 16 new patents in the U.S., China and Europe in 2023 and two patents issued so far this year. With these additions, ENDRA's patent estate has reached an impressive 75 issued patents worldwide. These patents safeguard key innovations that are integral to the TAEUS system and reinforce our competitive edge in the market. I'll now turn the call over to Mike Thornton, our Chief Technology Officer. Mike?

Thanks, Francois. In the fourth quarter of 2023, ENDRA received an additional information request known as an AI from the FDA related to our 2023 De Novo submission. The AI request included questions related to the final configuration of our system. The clinical data submitted non-clinical testing such as electrical safety and compatibility testing and cybersecurity. Over the past 12 weeks, we've had a number of interactions with the FDA, including providing additional information. And we've submitted a request for an in-person pre-sub meeting. The FDA has granted ENDRA an in-person meeting in the second quarter of 2024. In anticipation of that meeting and potential request for additional clinical testing, ENDRA has prepared a protocol for a proposed statistically powered multi-site clinical study using the latest version of our technology. The statistical analysis plan and hypothesis were based on data collected on 45 subjects, supplementing the data presented in 2023 at European Liver conferences. This additional clinical data further confirmed our product's historical performance and was provided to the FDA for the first time as part of the pre-submission. At the pre-sub meeting, we plan to demonstrate the product and obtain alignment with the FDA on the final device configuration and clinical study design. We believe that our recent interactions with FDA reviewers has produced significant alignment and understanding related to the principles of operation of our TAEUS platform and a specific understanding of the task required for the regulatory grant of our technology. In summary, ENDRA believes that with close communication and alignment with the FDA regarding the device configuration and clinical study protocol design ENDRA can achieve a successful outcome. As Francois mentioned, we're excited to have added KCH London as a clinical collaborator site earlier this year. In addition, we recently received IRB approval for a new study comparing our TAEUS derived fat fraction measurements to MRI-PDFF in collaboration with the University of Michigan. That brings ENDRA's global currently active clinical study partnerships to four, including Rocky Vista University, The Medical College of Wisconsin, the Michigan site and King's College in the UK I'm happy to report that both the KCH and Michigan studies have initiated and recruited several subjects. These study sites are critical to supporting ENDRA's clinical validation efforts and ultimately, clinical adoption of our technology. The team at ENDRA is excited about our clinical activities in 2024, and I look forward to sharing more about our progress in this area in subsequent conference calls. Now with that, I'll turn it over to Irina Pestrikova for a financial update. Irina?

Thank you, Mike. Turning now to review of our recent financial performance. For the year ended December 31, 2023, our operating expenses decreased to $10.5 million from $13.2 million for the same period in 2022. The decrease was mainly due to lower research and development and sales and marketing expenses. Our research and development expenses decreased year-over-year by approximately $1.6 million as we completed the development of our initial TAEUS product. Our sales and marketing expenses decreased by approximately $609,000 mainly due to the departure of our Chief Commercial Officer. General and administrative expenses decreased by approximately $478,000 mainly due to a two-year management bonus write-off and lower professional fees. Our net loss in 2023 was $10.1 million or $1.58 per share. This compares with a net loss of $13.2 million or $4.50 per share in 2022. Cash and cash equivalents were $2.8 million as of December 31, 2023. In the fourth quarter, the company raised $677,000 in gross proceeds from the sale of common stock through at-the-market equity facility and $1.1 million from the exercise of warrants. We're currently evaluating alternatives to raise capital to provide for our future funding needs. Now I will turn the call back to Francois.

Thanks, Irina and Mike. In summary, for our listeners, we remain committed to driving innovation and our market presence through the following five levers: number one, activating new partner sites in Europe and the U.S. to build our body of clinical evidence and achieve our regulatory and commercial goals. Number two, continuing to engage closely with the FDA to advance our regulatory submission in the U.S. Number three, strengthening our commercial position through clinical relationships and local awareness building activities. Fourth, leveraging the accelerating market developments in the detection and treatment of liver disease to strengthen ENDRA's position. And fifth, leveraging our intellectual property to grow beyond our current markets and clinical focus. On behalf of the entire ENDRA team, I want to extend our thanks to the shareholders for their continued support. And now, operator, we're ready to open the call for questions.

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Edward Woo with Ascendiant Capital. Please go ahead.

Hi, Ed.

Yes. Thank you for taking my question. Yes. Hey guys. Congratulations on the progress you guys have. It looks like the FDA deadline or decision timeframe has been pushed well past to expect 150 days. Is there any new guidance of when you think a decision may be made?

Yes. Thanks for that. So to be clear, the 150 days we referenced is a target from the FDA on their website in terms of review days. And I hope we clearly emphasized that this was part of a range and a goal by the FDA. First, I would say the good news is we're clearly in close communication and engaged with the FDA. The fact that they granted us a meeting to advance the discussion to demonstrate the product and review some of the clinical data is a good thing. I think these things take time. And before turning it over to Mike, we're doing everything we can, although we don't control the entire process, we remain confident based on the clinical data we've collected and the performance as well as the tone and the type of questions that we've received from the FDA that we will reach a positive outcome together. I cannot, however, and this is the bad news. I can't give guidance because not all of that is within my control Ed. So I understand we want things to happen as quickly as possible. And ENDRA is certainly working in that way. But I think the fact that we're engaged and closely aligned with the FDA is a very good sign. Mike, do you have other thoughts you might want to add?

Yes. And just to follow-up on some of the comments that Francois made. In the past 12 weeks, as I mentioned, we've had several interactions with the reviewers individually and at subgroups. And the clinical study design is something specifically we will look to discuss with them and align on – in our in-person pre-sub meeting coming up in the second quarter. Once we have that, we'll be much better able to forecast timing of those studies, if required and subsequently other key events in the regulatory process.

I hope that's a fair and transparent answer, Ed.

That sounds good. You mentioned that there's a date in the second quarter. Would you be announcing when that meeting will happen? Or will you just disclose after you have the meeting and any...

Yes. These things can shift. And so it's in the second quarter, it's confirmed, assuming the FDA sticks to that, we'll have it. And then we will as we always have done, even if it's out of sequence with quarterly reporting update investors on that meeting. So it's set. It's been accepted, number of people attending in the second quarter, and we'll update investors after that.

Great. And my last question is, it didn't seem like you had as many issues getting approval in the EU. Is there just something different in terms of getting the approval in the EU, that's very different from what the FDA is requiring?

Yes, it's a great question, and thank you for highlighting the fact that we have a major regulatory approval, the CE mark in Europe, but they are quite different. And I'll let Mike speak to that distinction, but FDA is definitely a higher bar. And so it's not surprising that the requirements and the timelines tend to be a little bit longer. But Mike, if you'd help our listeners better understand that distinction and why it takes normally a little bit more work to get the FDA approval.

Sure. So CE clearance of medical devices, including new technologies such as ours and novel technologies such as ours, is largely focused on safety and processes. The FDA is absolutely focused on those same items and then has a much greater scrutiny on efficacy, including clinical efficacy. And that's even more true with new technology. So since they've introduced the De Novo pathway, I would describe the pathway for most other companies now going through the process as being directed more and more through the De Novo pathway just like ENDRA is. I think Francois said we're really being treated very similarly to other similar new technologies, including ones for liver health. And the De Novo pathway definitely requires clinical data. That's one of the key pieces that differentiates it from the 510(k) process, which we pursued earlier.

Thanks Mike. And Ed, just to tag on an extra bit of reaffirming some of what we've said, the CE mark enables us to sell the product in Europe. But as I mentioned, having a body of clinical evidence from local users in each target market is the missing link. And so that's clearly what we and other companies do and King's College being a good example of that, will be a source of data. We'll be able to bring our potential customers in the UK to visit that site. They'll be able to see the system on the ground in the UK. They'll be able to eventually review the data from that study. And we'll do the same in Germany, in France and other markets. So the CE mark is a great starting point. I think it reflects the product quality. And combined with the clinical data that we're building, that will lead to commercialization. And in parallel, certainly, same thing will happen here in the U.S. with the FDA. I hope that's helpful.

Yes. That was very helpful. Thank you very much for answering those questions, and again, I wish you guys, good luck. Thank you.

Thank you so much.

This concludes our question-and-answer session. I would like to turn the conference back over to Francois for any closing remarks.

Yes. Thank you, operator. And thank you to my team and to the listeners today for listening to our progress. I'll close the call and wish everyone a good long Easter weekend, if you're celebrating Easter. And looking forward to updating everyone with news as we progress. Thank you. Bye-bye.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good day, and welcome to the ENDRA Life Sciences Third Quarter 2023 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Yvonne Briggs. Please go ahead.

Thank you, operator. This is Yvonne Briggs with LHA. Good afternoon, and welcome to ENDRA's third quarter 2023 business update and financial results conference call. Earlier today, ENDRA issued a press release on this topic, which is available in the Investors section of ENDRA's website. Before we begin, please note that today's discussion will include forward-looking statements. All statements by management other than statements of historical facts, including statements regarding the Company's strategies, financial condition, operations, costs, plans and objectives as well as anticipated results of the development and commercialization efforts, the timing of clinical studies potential partnership opportunities and expectations regarding regulatory processes, receipt of required regulatory clearances and product launches are forward-looking statements. Except as required by securities laws, the Company disclaims any obligation to update or revise any forward-looking statements. Please refer to the Company's Form 10-K for the 2022 fiscal year and subsequent SEC filings for more information about risks and uncertainties related to forward-looking statements. In terms of the structure of today's call, Francois Michelon, Chairman and Chief Executive Officer, will begin the prepared remarks followed by Michael Thornton, ENDRA's Chief Technology Officer. Mr. Thornton will be followed by Irina Pestrikova, Senior Director of Finance to review the third quarter financial results. With that said, I'll now turn the call over to Francois Michelon. Francois?

Thank you, Yvonne, and good afternoon, everyone, and thanks for joining us today to discuss ENDRA's third quarter 2023 financial results and business highlights. I'm delighted by the momentum that's building for our Thermo Acoustic Enhanced Ultrasound liver system known as TAEUS. This momentum checks a number of boxes, including clinical, regulatory and commercial along with the convergence of a number of factors that put ENDRA in the right place at the right time. We spent the last few days of the liver meeting held by the American Association for the Study of Liver Diseases where we interacted with experts in the field, clinical users, prospective customers and partners. Steatotic liver disease known as SLD is the umbrella term for a multifaceted metabolic disorder, resulting in too much fat in the liver. Anything over 5% liver fat is of clinical significance. And this fat can irritate and inflame the liver, then scar it and ultimately lead to irreversible end-stage liver disease. Steatotic liver disease is estimated to affect more than 2 billion people worldwide and is predicted to become the leading root cause of liver transplant in the U.S. by 2030. The American Association of Clinical Endocrinology and the American Diabetes Association have updated their guidelines over the past 18 months to include the screening for fatty liver in adults with obesity prediabetes and type 2 diabetes. The good news is that the new GLP-1 obesity drugs have demonstrated clinically significant reductions in liver fat and a rich pipeline of targeted therapies to treat SLD in both obese and nonobese patients is approaching commercialization with the first drug approval is expected in early 2024. This intersection of variables, a heavy public health burden, a lack of practical diagnostic tools and the near-term availability of the first treatments creates an opportunity to address the large unmet clinical need for a noninvasive, cost-effective tool to assist in identifying and monitoring patients. That's where ENDRA intends to lead. As discussed on our last conference call, we submitted the TAEUS de novo request to the FDA on August 14 of this year and since then, the submission has entered the substantive review period. The de novo submission was a significant milestone for ENDRA as this regulatory pathway should strengthen our competitive position with distinctive patent-protected capabilities as a noninvasive point-of-care tool to aid in the characterization of liver fat. We look forward to working with the FDA during the review process, and the FDA's published goal is to make a decision on a de novo request within 150 review days. Since our FDA submission, we've had our second positive clinical data set reviewed and accepted for presentation by the European Association for the Study of the Liver. These clinical abstracts are available on ENDRA's website under the tab Research and Media. The most recent abstract includes 45 subjects comparing ENDRA's TAEUS liver measurements to MRI, and we're very pleased with the results. We believe the data in these published abstracts and related presentations are crucial to building awareness of the TAEUS system and its capabilities with clinical users and to supporting commercial adoption of our new technology. The clinical data is the most critical element for getting commercial traction with clinical customers. Mike Thornton will provide more detail on our clinical data in a moment. In terms of commercial activities, we've been actively showcasing our TAEUS liver system at the key clinical conferences in hepatology, endocrinology and radiology in our target markets of the U.K., Germany, France and the U.S. We've participated in eight clinical conferences this year, including five since September, mainly the British Association for Study of the Liver, European Association for the Study of Diabetes, French Society for Hepatology, Drei Lander Treffen, which is the annual meeting of the Ultrasound Societies in Germany, Austria and Switzerland. And I've just returned with Mike Thornton from the American Association for the Study of Liver Diseases in Boston which is the preeminent liver meeting in the U.S. We also sponsored a great multidisciplinary panel discussion on liver disease while at AASLD from the perspective of a hepatologist, the liver experts and endocrinologists, the metabolic obesity and diabetes experts and a radiologist, the imaging experts. Steatotic liver disease resonates with each of these specialties and there's a growing interest in the primary care arena as well. Turning to intellectual property. We continue to bolster our portfolio and recently achieved a great new milestone of 70 issued patents with three additional patents issued during the third quarter and three more patents issued in Q4 thus far. Portfolio with 70 issued patents and no in-licensing dependencies is a remarkable achievement for a company of our size and a testament to the innovation of ENDRA and the proprietary nature of our technology. These newly issued patents protect and further differentiate ENDRA's thermal acoustic systems in areas of high unmet clinical need, such as the early detection of steatotic liver disease. The Company is also actively exploring licensing opportunities in non-core indications with outside partners to augment the value of our growing intellectual property portfolio. With that update, I'll turn the call over to Mike Thornton for more details on our clinical and regulatory progress. Michael?

Thank you, Francois. We're very pleased to have submitted a de novo request to the FDA for our TAEUS system in August and to report that our file has advanced the substantive review stage. At this point, we're engaged with the FDA in addressing their questions in a timely and complete manner to keep advancing the process. As we noted earlier, if there are any significant updates, we'll share those with shareholders as we've always done. As Francois mentioned, our clinical study activities support both our regulatory and early commercialization efforts. Our second presentation of clinical data was presented at the recent European Association for the Study of Liver diseases, Steatotic Liver Disease Summit in September. The clinical study that was presented included 45 study participant exams comparing TAEUS estimates of liver fat fraction to the established gold standard MRI measurements of liver fat fraction. The study cohort included a wide range of body size with body mass index ranging from 24 that is normal to 45, which is classified as Class III obesity. The cohort included four study participants with confirmed fibrosis. No study subjects were excluded due to high body mass index or liver fibrosis. This is a key point. Conventional quantitative ultrasoft methods are not able to accurately estimate the liver fat fraction in individuals with high body mass index and often overestimate liver fat fraction in subjects with confirmed liver fibrosis. In other words, conventional tools for the assessment of steatotic liver disease are not capable of accurately assessing the wide range of possible patient body size and medical conditions which creates an urgent market need for a device like TAEUS. The TAEUS system estimates of liver fat fraction in this study were highly correlated to MRI-PDFF scores of liver fat fraction. With a correlation co-efficient or value of 0.87. In biology and medicine, two variables are considered to be strongly correlated if the Pearson's correlation coefficient is greater than 0.8 and that a large part of the measurement variation in the gold standard measurement can be explained by the new measurement method. The sensitivity of TAEUS in detecting fatty liver disease was 95% with a specificity of 77%. The negative predictive value, which is the probability that a negative test result is correct, was 95%. Negative predictive value is an important measure of test performance because in a cost-constrained health care environment, it is often important to correctly identify healthy subjects and preclude additional costs as it is to identify those individuals with the disease. We're excited by the performance of the system and our aim is to continue to expand the collection of clinical data and to publish results from our clinical collaborations. In support of this effort, we have recently deployed a TAEUS FLIP system to a new U.S. clinical collaborator site and are scheduling a European study site deployment in the next few weeks. These new clinical study sites, along with the authorization for new studies at past clinical collaborator sites will drive our goal of obtaining several hundreds of study participant exams with our approach to estimating liver fat fraction. As Francois mentioned, we recently participated in the American Association for the Study of Liver Disease Annual Meeting in Boston, where we showcased the TAEUS system and highlighted its capabilities. Our system generated a great deal of interest from both health care providers and industry attendees. During the conference, we also hosted a panel discussion of multidisciplinary experts in the fields of hepatology, endocrinology and radiology and a discussion of the multidisciplinary nature of the diagnosis, treatment and management of metabolic-associated steatotic liver disease. The discussion highlighted the importance of liver fat fraction as a biomarker of diseases that expand beyond the liver, namely hypertension, diabetes, cardiovascular disease and the increased risk of cancer that will drive interest in our technology beyond hepatology. To further emphasize the relationship between steatotic liver disease and the complex of diseases that make up metabolic syndrome, recent GLP-1 obesity drug studies have illustrated the relationship between weight loss or reduction in liver fat fraction and cardiovascular disease risk. Overall, the discussion with clinicians and the focus on issues directly addressed by TAEUS during the panel discussion, demonstrates not only a clear market need for our system but also an awareness and urgency from practitioners, which we are hopeful will soon translate into our first sales. Now I'd like to turn the call over to Irina to review our financial results for the third quarter of 2023. Irina?

Thank you, Mike. For the quarter ended September 30, 2023, our operating expenses decreased to $3.1 million from $3.4 million for the same period in 2022. The decrease was mainly due to a decrease in research and development and sales and marketing expenses. Our research and development expenses decreased year-over-year by approximately $197,000 as we completed the development of our initial TAEUS products. Our sales and marketing expenses decreased by approximately $177,000 mainly due to the departure of our Chief Commercial Officer. General administrative expenses increased by approximately $86,000 and due to higher spending on professional fees. Net loss in the third quarter of 2023 was $3.1 million or $0.40 per share and this compares with a net loss of $3.4 million or $1.09 per share in the third quarter of 2022. Cash and cash equivalents were $3.3 million as of September 30, 2023. In the third quarter, we raised a total of $1.2 million in gross proceeds from the sale of common stock through our ATM facility. We believe our current capital position provides a runway into the first quarter of 2024 and we are currently evaluating alternatives to raise capital to provide for our future funding needs. We maintain our asset-light operating model with pretty high risk in our operations and commercial team in anticipation of future growth. As we execute our regulatory and commercial strategy for TAEUS, we plan to adjust our expense structure accordingly in support of these activities. Now I'll turn the call back to Francois.

Thanks very much, Irina and Mike. In closing, we remain very excited about the value proposition for TAEUS as a noninvasive, cost-effective tool to assess liver fat especially as the clinical community prepares for the near-term arrival of the first treatments targeting the disease, which affects 2 billion people worldwide. ENDRA's near-term focus is on the following four value-added catalysts: number one, securing the first commercial orders for our TAEUS technology in Europe, where we have the CE mark. Second, supporting the FDA through their review process with the goal of achieving a favorable de novo decision for ENDRA. Third, commercializing in the U.S. market upon FDA approval, along with our Vietnam distribution agreement that is tied to the FDA approval; and fourth, continuing to grow and diversify our base of clinical evidence at clinical study partner sites in our target markets in Europe and the U.S. to support commercial adoption of our technology. With that overview of our business and recent financial performance, I'd like to now open the call for questions. Operator?

[Operator Instructions] Our first question comes from Edward Woo with Ascendiant Capital.

Congratulations on the progress. I had a question about the de novo submission. You said that it was a target of 180 days. Does the FDA typically keep it at 180? Or is there a possibility that it could be quicker depending on the review?

Yes. It's actually -- I don't know if I misspoke or my voice wasn't clear. It's 150 days of review time and that includes everything from invasive higher risk products to lower-risk products. It's a bell curve. I don't want to get any more specific than that. But obviously, there is a possibility of being somewhere around that. I just wanted to give what's the official sort of target coming from the FDA. And I hope now that we're past the COVID distraction that burdened the FDA for quite a lot of time in '20 and '21, '22 that the agency will return to its norms in terms of review cycles. So thanks for that question. Anything else on your mind?

Yes, a follow-up. Is it a binary process where you submit the application and then you just get a response after 150 days? Or is there a back and forth that they have follow-up question, comment.

No, no, great question. And I may ask Mike to jump in here a little bit. But no, thankfully, it's not a black box. It is quite interactive. And because it is a new technology, and we're in this de novo category, there are a number of anticipated questions that we've been engaging on with the FDA, and it's quite collaborative so far in tone and cadence. Mike, I don't know if you have other ways you might want to characterize our interaction with the FDA thus far.

Yes. We've had a number of interactions with them with some questions that came from the FDA, including to cycles of rapid turnaround responses within a matter of days. So we're continuing that process.

So it's typically an iterative process until the end?

Yes, correct. And I think along the way, both parties kind of understand where they're going, address any issues, resolve any questions that may be open. But Hopefully, it's not a surprise at the end since you've been engaged along the path. So to be clear, it's not submit it and wait 150 days and get a yes, no. It's submit it, engage, address questions as we've been doing quickly and effectively and collaborate with the agency to bring this to market.

Yes, that sounds good. And congratulations, good job. And my last question is just on, as you guys get ready for hopefully a successful approval, would you talk about -- can you talk a little bit about the commercialization plans that you guys are having said, up in the U.S., can you start now or have to wait until you actually get the final approval to really step on the gas?

So a couple of things. One, our focus right now is Europe because we obviously have regulatory approval there. We have a small, cost-effective sales team in France, U.K. and Germany. And we're building our clinical study sites in those regions in each country, not only to build the base of clinical evidence as Mike referred, but also to become reference sites in each of those target markets. So our first focus, and we think our first opportunity is clearly commercially in Europe, and those are very large markets. Germany, France and the U.K. are the largest health care markets. They have a mix of public and private structures, but there's plenty of opportunity for ENDRA there. And I would say, as we get closer to an FDA decision, we would replicate some of that approach and certainly leverage anything we've learned in Europe in terms of clinical and economic value propositions that support the product. But also, I think we'll be a little bit ahead because as Mike said, we have sites in the U.S. that are currently scanning patients under what is called a IRB or Institutional Review Board protocol, which is a pre-FDA approval to use the study or use the TAEUS technology on subjects and patients. And so we're going to be building our base of clinical evidence in the U.S. ahead of getting the FDA approval, which will help us once we get the FDA approval and then we'll carefully deploy a targeted sales team probably around the reference sites that I mentioned, the clinical sites where we can use and leverage those partnerships to be references for the next wave of adopters. But clearly, the goal is to stay focused on Europe first, get the FDA approval, open up that market, leverage the clinical evidence that's being built around. And then pursue opportunities in Asia. But we have to be as focused and effective and cost-effective as possible as well. I hope that's helpful.

Yes, that was very helpful. And I wish you guys good luck.

Thank you, Ed, very much. Yes, I don't see any other questions. Thank you, operator, for facilitating that. And I very much want to thank our listeners, our investors today for joining our call. We look forward to keeping you informed of our accomplishments and to speaking with you again when we report our fourth quarter and full year financial results, and I wish you all a good evening.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good day, and welcome to the ENDRA Life Sciences Second Quarter 2023 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Yvonne Briggs. Please go ahead.

Thank you, operator. This is Yvonne Briggs with LHA. Good afternoon, and welcome to ENDRA's second quarter 2023 business update and financial results conference call. Earlier today, ENDRA issued a press release on this topic and also issued a news release announcing the submission of de novo request for its TAEUS system to the U.S. FDA, both of which are available in the Investors section of ENDRA's website. Before we begin, please note that today's discussion will include forward-looking statements. All statements by management other than statements of historical facts, including statements regarding the company's strategies, financial condition, operations, costs, plans, and objectives, as well as anticipated results of development and commercialization efforts, the timing of clinical studies, potential partnership opportunities, and expectations regarding regulatory processes, receipt of required regulatory clearances, and product launches are forward-looking statements. Except as required by federal securities laws, the company disclaims any obligation to update or revise any forward-looking statements. Please refer to the company's Form 10-K for the 2022 fiscal year, and subsequent SEC filings for more information about risks and uncertainties related to forward-looking statements. In terms of the structure of today's call, Francois Michelon, Chairman and Chief Executive Officer will begin the prepared remarks; followed by Michael Thornton, ENDRA’s Chief Technology Officer. Mr. Thornton will be followed by Irina Pestrikova, Senior Director of Finance to review the second quarter financial results. With that said, I will now turn the call over to Francois Michelon. Francois?

Thank you, Yvonne, and good afternoon, everyone and thanks for joining us today to discuss ENDRA's second quarter 2023 financial results and business highlights. As we announced earlier today, I'm extremely pleased that ENDRA submitted its de novo request to the U.S. FDA for the Thermo Acoustic Enhanced UltraSound Liver System known as TAEUS. Our de novo submission is a pivotal milestone for ENDRA, highlighting our team's commitment alongside our clinical partners to offer a non-invasive and cost-effective solution for measuring liver fat, which is the root cause of a disease affecting over 1 billion people worldwide. We see that de novo process as a gateway to establish a new regulatory standard highlighting TAEUS' groundbreaking capabilities, and we look forward to collaborating with the FDA during the review process. Gathering and analyzing the scan data along with assembling the submission itself was an enormous task, especially for a company the size of ENDRA. The process has taken a bit longer than we originally expected, but we're delighted to have made what we consider to be a first rate submission to the FDA. Mike Thornton will provide more detail on our clinical and regulatory progress shortly. But before turning over to Mike, I'd like to mention a few other highlights from the second quarter. We showcase the TAEUS liver system at two major European clinical conferences. ENDRA participated in the German Diabetes Association's 57th DDG Annual Meeting in Berlin, which underscored the role of liver health in managing type two diabetes. Additionally, the company shared study findings in a peer reviewed clinical abstract titled Thermoacoustic Assessment of Fatty Liver Disease, an Early Clinical Feasibility Study at the esteemed European Association for the Study of the Liver Congress in Vienna, commonly known as EASL. This presentation served to elevate TAEUS' profile amongst potential clinical users to support commercial adoption. At both conferences, in light of approaching commercial drug therapies targeting liver disease, we heard a lot of discussions about the clinical need for a safe and cost-effective way to a suitably identify and monitor patients for their drug response, and this is where ENDRA intends to lead. In the second quarter, we also expanded our intellectual property portfolio to 64 issued patents globally. During the second quarter, ENDRA secured four additional patents, including one in the U.S. and three in China. These newly issued patents not only reinforce ENDRA's unique position in assessing liver fat, but also open the doors for other potential applications of our thermo acoustic technology. The company is actively exploring licensing opportunities in non-core indications to augment the value of our growing IP portfolio. Finally, in May of this year, we raised approximately $4.7 million through an underwritten public offering. Management believes that ENDRA's sufficient cash to fund operations through several important milestones expected in 2023, including supporting commercial activities in Europe. Okay. Over to Mike Thornton for more detail on our clinical and regulatory progress. Mike?

Thank you, Francois. We're extremely pleased to have submitted our de novo request to the U.S. FDA for the Thermo Acoustic Enhanced UltraSound Liver System known as TAEUS. The clinical data submitted as part of our de novo application compared TAEUS estimates of liver fat fraction in 24 subjects to MRI liver fat fraction scores, also known as MRI-PDFF scores in those same subjects. The study data submitted was consistent with our study design and only included study participants where the TAEUS, UltraSound and MRI data was obtained successfully. The data was collected at a U.S. site and involved volunteers with liver fat fraction ranging from healthy, normal to severe fatty liver disease. The BMI of the subjects range from 24, which is normal to 42, which is severely obese. It is significant to note that no subjects were excluded because of high BMI or liver fibrosis. TAEUS estimates of liver fat fraction were highly correlated to MRI-PDFF scores of liver fat fraction with an R-value of 0.78. The sensitivity of the TAEUS flip system in detecting fatty liver disease was 90% with specificity of 71%. To provide some reference of performance, the sensitivity X-ray mammography in detecting breast cancer is approximately 87% with a specificity of 88%. The negative predictive value, which is the probability of a negative test being correct, was 91%. Negative predictive value is an important measure of test performance because in a low cost, in a cost constrained healthcare environment, it's often as important to correctly identify healthy subjects as it is to correctly identify those with the disease. We believe the submitted data with 24 subjects sufficiently supports our de novo application. In an additional submitted study of intra and intra operator variability, no statistical significant differences were found between operators in estimating liver fat fraction with the TAEUS flip system for either an individual with normal liver fat fraction, or an individual with moderate fatty liver disease. All operators demonstrated a highly statistically significant difference in comparing a healthy individual to an individual with moderate fatty liver disease using the TAEUS flip system. This is extremely encouraging and we're very happy to submit this data. This is an incredibly important technology milestone for ENDRA. There's a growing interest in point-of-care quantitative measures of liver fat fraction among clinicians. Quantitative attenuation and back scatter applications for estimating fat fraction are now available from several vendors of premium diagnostic ultrasound system. Although, their use is largely limited to liver imaging in radiology, the interest in these quantitative measures goes far beyond radiology. ENDRA's thermoacoustic based approach to estimating liver fat leverages unique capabilities that potentially provide four significant advantages when compared to conventional ultrasound based point-of-care approaches for assessing liver fat fracture. The first of these advantages is molecular signal contrast. Unlike ultrasound approaches that are sensitive to structural changes in tissue, both TAEUS and MRI are sensitive to chemistry when differentiating fat from lean tissue, that means that thermoacoustic signal is directly related to the accumulation of fat molecules in liver cells that underlies the progression of fatty liver disease. The second advantage of our approach is its insensitivity to fibrosis. Fibrosis is an excessive accumulation of extracellular proteins that is a common comorbidity of fatty liver disease. Fibrosis is a significant confounding factor for ultrasound based techniques and hinders their ability to estimate fat fraction accurately. In contrast, thermoacoustic signal generation is relatively insensitive to the addition of extracellular proteins to lean tissue, and thus the presence of fibrosis is largely inconsequential for thermoacoustic. In our clinical studies, we did not exclude any TAEUS exams with fibrosis. The third advantage of TAEUS is tissue depth penetration. The loss of signal in obese patients is significantly lower for thermoacoustic signals than that of conventional ultrasound for two reasons. First, the distance thermoacoustic signals travel is half the distance of that, that conventional ultrasound pulse travels. And secondly, thermoacoustic signals detected with the TAEUS flip system are much lower in frequency than the standardized three and a half megahertz transmit receive signal in conventional ultrasound approaches to estimating liver fat fraction. Thus, the difficulty to image patients large or obese patients conventional signal attenuation in ultrasound can be many orders of magnitude greater than thermoacoustic. As a result, thermoacoustic methods are potentially more effective than ultrasound based approaches to quantifying fat fraction in high BMI subjects. We excluded no subjects from our FDA submission for reasons of high BMI. And the fourth advantage of TAEUS is within image calibration. ENDRA's TAEUS approach to estimating liver fat fraction is unique in that each measurement has its own integral calibration data derived from the individual's own fat and muscle that is contained in each measure. That ensures measurement uniformity across individuals and across devices. Several other point-of-care devices in the market require periodic calibration and have varying efficacy across patient size that should not be present with the TAEUS device. In terms of next steps and timeframes for the FDA review process going forward, there are a number of elements that should be considered. First, ENDRA submitted its de novo request via the FDA's electronic submission template and resource tool known as the eSTAR, which guides applicants through the submission process with a standardized online format, ensuring the submission is complete and structured in a way that facilitates efficient review by the FDA. Second, we can expect back and forth dialogue with the FDA. The FDA's published goal is to make a decision within 150 days of submission. Investors should remember that the FDA routinely engages in interactive discussions with companies in seeking additional information or clarification. One factor that may benefit ENDRA during the review process is the FDA's familiarity with our previous 510(k) submission and our interactions in that review process that detailed our technology's principle of operation and safety profile. Naturally, ENDRA will keep investors informed of material updates as we advance through the FDA process. Now, I'd like to turn the call over to Irina to review the financial results for the second quarter of 2023. Irina?

Thank you, Mike. For the quarter ended June 30th, 2023, our operating expenses decreased to $3 million from $3.6 million for the same period in 2022. The decrease was mainly due to a decrease in research and development, and sales and marketing expenses. Our research and development expenses decreased year-over-year by approximately $450,000 as we completed the development of our initial at TAEUS product. Our sales and marketing expenses decreased by approximately $95,000 for the quarter, mainly due to the departure of our Chief Commercial Officer. General and administrative expenses decreased by approximately $35,000 due to decreased spending on professional fees. Net loss per share in the second quarter of 2023 was $0.43 per share compared with a net loss of $1.17 per share in the second quarter of 2022. Cash and cash equivalents were $4.8 million as of June 30th, 2023. During the second quarter of 2023, the company raised approximately $4.7 million in net proceeds through an underwritten public offering. We believe our current capital position provides a runway into the fourth quarter of 2023. We maintain our asset-light operating model with pretty hires in our operations and commercial team in anticipation of future growth. As we execute our regulatory and commercial strategy for TAEUS, we plan to adjust our expense structure accordingly in support of these activities. Now, I'll turn the call back to Francois.

Thanks very much Irina and Mike. In closing, during the second quarter and subsequent weeks, ENDRA has made a great amount of important progress. I couldn't be more proud of the business. As we've discussed, we submitted our FDA de novo request for the TAEUS liver application with confidence that our work will set a benchmark for a new product class. We had our first TAEUS liver clinical abstract published by the leading European Association for the study of the Liver. And third, we raise capital with long-term investors to support key milestones throughout the second half of 2023. Mike spoke about the next steps in timetable between ENDRA and the FDA, and I remind listeners that although there are various due dates in place for regulatory reviews and processes, we don't control the FDA process. However, I can assure you we'll do everything necessary to keep things moving along quickly and productively. And we, obviously, commit to keeping shareholders apprised of developments with the agency during our quarterly conference calls and to make public announcements when their material developments to report. In closing, I couldn't be more excited about the future of TAEUS and the future of ENDRA. The U.S. represents the largest market opportunity for TAEUS and we're confident that our technology's various advantages along with a price that's 150th the cost of MRI will secure a place for TAEUS in the hands of clinicians. So, with that overview, I'd like to turn the call over for questions. Operator?

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Ed Woo with Ascendiant Capital. Please go ahead.

Yeah. First off, I wanted to say congratulations for the submission today. It was very good news and wish you guys all the best in getting a quick approval. My question is, you previously had a distribution agreement in Vietnam. Is that still in place? And will you -- I think previously it was -- you'll recognize revenue as soon as you get U.S. FDA approval, is that correct?

Good question. Yeah. So, the exclusive distribution agreement with a distributor in Vietnam is in place and it takes effect and is activated by the approval -- by the FDA of our application in the U.S. That will kick off a three-year process with a commitment of 40 systems at an agreed upfront transfer price. So that is a good example of -- an important, but secondary market opportunity that is going to be directly revenue generating in addition to Europe where we're currently focused than the U.S. and then as you point out, other opportunities like Vietnam through partners.

Great. And then, my next question is how much commercialization efforts -- or can you do now in the U.S. before you get approval? Are you able to really get things up and running, or do you still have to kind of wait until you get the formal approval to do that?

Yeah. Good question. If I might, I'll sort of put it under the broader umbrella of commercialization and we expect to record our first sales in Europe before the end of the year. But it's important to understand as you're asking, that we've been putting in place a number of key elements to support a successful commercial ramp both in international markets as well as the U.S. pending the FDA clearance. First, I'd say we've been building our basic clinical market awareness by participating in key medical conferences and by hosting people in our exhibit and our booth. So, as a case in point, although we've been at EASL and focusing on Europe, we're attending and we'll have a booth at the American Association for a study of liver disease, which is the Preeminent Liver Society in the U.S. in November, being held in Boston. And second, we were delighted to have the EASL peer reviewed abstract publication and building now on our submission with the FDA, we're going to continue to build our base of clinical evidence and sharing it broadly as it comes in. So, that applies and is interesting to clinicians all over the world. We've had the abstract from EASL already translated into multiple languages and it's something that we're sharing that's on our website for U.S. customers along with everyone else. The third, and I'd say final thing is you've heard a lot this year about how we've been gaining real-world clinical user feedback and improving our system through user training, the development of active software guidance. And these are key considerations we're putting in place that are global in nature and that'll benefit customers globally, because learning how they use the product, how we should train them, how we should help them perform their job more effectively and giving them a good experience is really the bedrock of our system. If our system works only in the hands of experts that are highly supervised, that's going to be tough to kind of scale the business. And we feel like these improvements, the clinical data we've supported and built this year is going to be global -- globally valuable. So, for Europe and the U.S. as you were asking. I hope that's helpful.

Yes. That's very helpful. Thank you for the answering my questions and I wish you guys good luck. Thank you.

Thank you again, Ed.

This concludes our question-and-answer session. I would like to turn the conference back over to Francois Michelon for any closing remarks.

Great. Well, at this point, I just want to thank everyone for joining us today. A lot of work, a lot of accomplishments in the quarter through today with the FDA announcement. We look forward to keeping everyone updated on our progress and to speaking with you again on our next quarterly conference call. Have a nice evening.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.