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?.

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?.

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..