Q4 2023 ENDRA Life Sciences Inc Earnings Call

Operator: Good day, and welcome to the ENDRA Life Sciences 4th Quarter 2023 Financial Results Conference Call. All participants will be in listen-only mode.

Good day and welcome to the Andrew Lifesciences fourth quarter 2023 financial results Conference call. All participants will be in listen only mode. So do you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2.

After today's presentation there'll be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad.

To withdraw your question. Please press Star then two.

Operator: Please note, this event is being recorded. I would now like to turn the call over to Yvonne Briggs. Please go ahead.

Please note this event is being recorded.

And now like to turn the call over to Yvonne Briggs. Please go ahead.

Yvonne Briggs: 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.

Yvonne Briggs: Thank you operator. This is the bomb breaks with L. A J good afternoon, and welcome to enjoy life Sciences fourth quarter 2023 business update and financial results Conference call earlier today, Andrew issued a press release on this topic, which is available in the investors section of entrants website.

Yvonne Briggs: 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 strategies financial condition operations costs plans and objectives.

Yvonne Briggs: These include statements regarding the company's strategies, financial condition, operations, costs, plans, and objectives, as well as the 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 statement.

Yvonne Briggs: As well as anticipated results of development and commercialization efforts.

Yvonne Briggs: 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.

Yvonne Briggs: 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 standards. 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.

Yvonne Briggs: Please refer to the company's Form 10-K for the 20th twenty-three fiscal year and subsequent SEC filings for more information about risks and uncertainties related to forward looking statements.

Yvonne Briggs: In terms of the structure of today's call Francois Michelle on Chairman and Chief Executive Officer will begin the prepared remarks, followed by Michael Thornton and dress Chief Technology Officer, Mr. Thorne will be followed by Arena Petra Kolber Senior director of Finance to review the fourth quarter financial results and then we'll.

Yvonne Briggs: Take your questions I'll now turn the call over to Francois Michelin Francois.

Francois Michelon: 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 a foundational element to achieving regulatory and commercial success; Number two, advancing our FDA de novo application for TAIS 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 activity. Number four, leveraging the rapid and positive evolution of key industry building blocks for diagnosing and treating liver disease, which strengthens 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.

Francois Michelon: Thank you Yvonne and thank you for joining us today to review <unk> fourth quarter 2023 financial results and key business developments.

Francois Michelon: 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.

Francois Michelon: Number one.

Francois Michelon: Activating new clinical partner sites in our target markets to build our body of clinical evidence at the local level, which is a foundational element to achieving regulatory and commercial success.

Francois Michelon: Number two advancing our F D. A de novo application for take us through close collaboration with the agency.

Francois Michelon: 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.

Francois Michelon: Number four leveraging the rapid and positive evolution of key industry building blocks for diagnosing and treating liver disease, which strengthened andros possession and commercial opportunity.

Francois Michelon: And number five looking beyond our current markets and technology to new opportunities to license our intellectual property.

Francois Michelon: Now I will elaborate on each of these elements.

Francois Michelon: Recently, we achieved a key milestone in one of our target markets by installing the TAIS 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 involves a clinical study comparing TAIS'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 TEUS technology's performance.

Recently, we achieved a key milestone in one of our target markets, while installing the <unk> system in the United Kingdom.

Francois Michelon: King's College hospital in London, a prestigious National Health service institution is leading the introduction of benders liver system in the U K market.

Francois Michelon: This partnership and tells a clinical study comparing tastes as liver fat assessment accuracy to MRI the recognized research standard.

Francois Michelon: The study is expected to include approximately 75 subjects and aims to provide crucial data for evaluating the <unk> Technologies' performance.

Francois Michelon: 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 open 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 trials, 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. Second, the clinical sites enable commercial traction, serving as reference sites and key markets.

Moreover, the findings will be submitted for publication in a peer reviewed medical journal.

Francois Michelon: We're excited about this collaboration as it will strengthen our base of clinical evidence and potentially opens doors to strategic opportunities within the U K has extensive national Health service network.

Francois Michelon: Mike will provide an update on Andrew is 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.

Francois Michelon: First clinical evidence from these sites supports our current and future regulatory filings and reimbursement claims.

Francois Michelon: Second the clinical sites enable commercial traction serving as reference sites in key markets. They bolster our commercial endeavors by demonstrating Andros technology in real world settings, and help us develop compelling clinical and economic value propositions in our target segments endocrinology epic.

Francois Michelon: 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. Gaining commercial traction and additional regulatory approvals for ENDRA's innovative technology 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 the value of our technology, we must further expand our pool of real-world evidence and do so at the local level.

Francois Michelon: <unk> other segments in each target market.

And third the clinical sites enable the ongoing enhancement of Andros technology through customer feedback, leading the future product improvements.

Francois Michelon: Gaining commercial traction and additional regulatory approvals for <unk> 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.

Francois Michelon: Presentations highlight impressive clinical performance of our technology compared to the MRI gold standard.

Francois Michelon: 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.

Francois Michelon: As you hear, we're accelerating these efforts by activating new sites, such as King's College in the UK, and others we'll announce in the second quarter. Clinical evidence is essential for the successful global adoption of new, innovative technologies like ENDRA. 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., Mark. 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 a 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.

Francois Michelon: As you're hearing we're accelerating these efforts by activating new sites, such as Kings College in the UK and others will announce in the second quarter.

Francois Michelon: Clinical evidence is a central for the successful global adoption of new innovative technologies like Andrews.

Francois Michelon: Looking ahead into 2024 in addition to the foundational work of building clinical evidence. We're also advancing in other key areas.

Francois Michelon: First and importantly, we are advancing our FDA regulatory submission in the U S market.

Francois Michelon: 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.

Francois Michelon: We've confirmed a meeting with the FDA to be held in the second quarter of this year to address open items and ensure predictable regulatory pathway for our technology and Mike Jordan will elaborate on this in a minute.

Francois Michelon: The second area is 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 proposition. The ENDRA team has been proactive in generating awareness for Artaeus 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. This platform enabled the sharing of unique perspectives on managing metabolic dysfunction-associated steatohepatitis, also known as MASH.

Francois Michelon: The second area is we expect to achieve commercial sales with early adopters in Europe. This year in our initial target markets of Germany, The U K and France, leveraging our CE, Mark and our growing base of clinical data from King's College, and other sites to showcase our technology.

Francois Michelon: Its clinical and economic value propositions.

Francois Michelon: In parallel to these activities the Andrew team has been proactive in generating awareness for artists technology and engaging with key stakeholders by attending major clinical conferences.

Francois Michelon: Notably at the liver meeting hosted by the American Association for the study of liver disease <unk> hosted a panel discussion with multi disciplinary key opinion leaders in herpetology endocrinology and radiology and this platform enabled the sharing of unique perspectives on met on managing.

Francois Michelon: Dysfunction associated stay out of hepatitis also known as mash.

Francois Michelon: 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, will contribute to raising awareness of Artea's 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, in alignment with our FDA initiatives, we're exploring an intriguing new opportunity in U.S. bariatric and obesity management. Because of the popularity of the GLP-1 drugs, this market is rapidly evolving from a surgery-centric approach to a broader mandate such as metabolic disease management. Our research so far indicates that the obesity management market is characterized by high patient self-pay and relative price inelasticity, with highly motivated patients who demand clinically relevant services to support their weight loss, with three to four monitoring visits per year.

Francois Michelon: Andrew its participation in industry conferences in 2023, such as the European the international liver Congress in the diabetes professional care meeting in the U K contribute to raising awareness of our <unk> technology.

Plans are in place to attend the most critical European and American conferences, this year and the cadence of visibility underscores <unk> commitment to fostering relationships with potential customers and partners highlighting our technology's potential.

The third area.

Francois Michelon: In alignment with our FDA initiatives is we're exploring and intriguing new opportunity in the U S Bariatrics and obesity management market.

Francois Michelon: Because of the popularity of the G. L. P. One drugs. This market is rapidly evolving from a surgery centric approach to a broader mandate as metabolic disease management centers.

Francois Michelon: Our research so far indicates that the obesity management market is characterized by high patient self pay and relative price inelasticity with highly motivated patients who demand clinically relevant services to support their weight loss journey with three to four monitoring visits per year.

Francois Michelon: This aligns really well with ENDRA's technology since liver fat is a key biomarker for metabolic disorders, and this potentially expands ENDRA's addressable market beyond hepatology and endocrinology and holds promise for revenue streams based on patient self-pay per schedule on a broader market base. Three crucial building blocks for diagnosing, treating, and managing liver disease are rapidly advancing, providing hope for the millions affected and opportunity for ENDRA. The first building block is that leading clinical societies have already updated their screening guidelines for fatty liver. As an example, the American Diabetes Association and the American Association for Clinical Endocrinology now recommend screening for fatty liver disease for prediabetic, diabetic, and obese patients. Those guidelines alone encompass 50% of the adult U.S. population 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

Francois Michelon: This aligns really well with Andros technology since liver fat is a key biomarker for metabolic syndrome.

Francois Michelon: And this potentially expands <unk> addressable market beyond herpetology in endocrinology and holds promise for revenue streams based on patient self pay per scan.

Francois Michelon: 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 Andrew.

Francois Michelon: The first building block is that leading clinical societies have already updated their screening guidelines for fatty liver.

As an example, the American Diabetes Association and the American Association for clinical Endocrinology, now recommend screening of fatty liver disease for pre diabetic diabetic and obese patients.

Francois Michelon: Those guidelines alone encompass 50% of the adult U S populations with either diabetes or pre diabetes and 41% of the U S population who are obese.

Francois Michelon: That's approximately 150 million people in the U S alone.

Francois Michelon: 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, and it facilitates standardized billing and documentation for insurance processes in the U.S., Europe, and other markets.

Francois Michelon: The second building block is that the World Health organization has issued a new ICD 10-C M code, specifically for fatty liver disease.

The ICD 10-C M. As 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 Andrew believes the ICD 10-K, seven six code.

Francois Michelon: ENDRA believes the ICD-10 K7-6 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. And the third building block involves the FDA's recent approval of residifra, Madrigal Pharmaceuticals' pioneering drug therapy for NASL-DASH, marking the beginning of a whole new chapter in liver disease This therapy, along with other emerging targeted treatments for liver disease, will significantly impact both health care providers, insurers, and patients. Major insurers like Blue Cross are requiring adherence to nine specific authorization criteria for res diffra, including an MRI, PDF 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 treating it.

Francois Michelon: <unk> issued specifically for the diagnosis of fatty liver represents a significant opportunity for innovation at <unk>.

Health care providers now have a more straightforward path to integrate advanced diagnostic technologies like Andrus.

Francois Michelon: And the third building block involves the Fda's recent approval of rather defer madrigal pharmaceuticals pioneering drug therapy for natural Bash, marking the beginning of a whole new chapter in liver disease management.

Francois Michelon: This therapy, along with other emerging targeted treatments for liver disease will significantly impact both health care providers insurers and patients.

Major insurers like Blue cross are requiring adherence to nine specific authorization criteria for rez differ including an MRI P. D F F liver fat exam.

Francois Michelon: Which can only be performed by the most advanced subset of the world's estimated 58000 mris.

Francois Michelon: Yeah.

Francois Michelon: This underscores the complexity of managing naphtha Nash and highlights the need for precision in diagnosing and treatment.

Francois Michelon: There's different <unk> and similar drugs will consequently drive demand for more accessible point of care diagnostic tools like Andros tests that are capable of facilitating the screening and monitoring of liver disease, which affects over 2 billion people.

Francois Michelon: Resdifra and similar drugs will consequently drive demand for more accessible point-of-care diagnostic tools, like Endrasteus, 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 Artea's platform beyond the loop by leveraging our intellectual property and engaging in strategic partnerships and outlicensing opportunities. We aim to capitalize on the potential of TEUS in new therapeutic applications. 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. 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 teosplasm. 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.

Francois Michelon: Finally.

Francois Michelon: We're actively exploring collaboration and strategic pathways to expand the applications of our <unk> platform beyond the liver.

Francois Michelon: By leveraging our intellectual property and engaging in strategic partnerships and out licensing opportunities. We aim to capitalize on the potential of tastes and new therapeutic areas.

We've engaged patent vest, our leading intellectual property advisory firm to spearhead the valuations of Andrew the IP competitive landscape analysis.

Francois Michelon: 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 <unk> platform.

Francois Michelon: 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 Andrew.

<unk> patent estate is reached an impressive 75 issued patents worldwide.

Michael Thornton: These patents safeguard key innovations that are integral to the TAIS system and reinforce our competitive edge in the market. I'll now turn the call over to Mike Thornton, our Chief Technology Officer. Thanks, Francois.

Francois Michelon: These patents safeguard key innovations that are integral to the payer system and reinforce our competitive edge in the market.

I'll now turn the call over to Mike Jordan, Our Chief Technology Officer.

Francois Michelon: Mike.

Michael Thornton: 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 requests 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.

Michael Thornton: Thanks Francois.

Fourth quarter of 2023, and we received an additional information request no resin AI from the FDA related to our 2023 de Novo submission.

Michael Thornton: Yeah I 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 cyber security.

Michael Thornton: Over the past 12 weeks, we've had a number of interactions with the FDA.

Michael Thornton: Including providing additional information and we submitted a request for an in person pre sub meeting the FDA has granted <unk> an in person meeting in the second quarter of 2024 in anticipation of that meeting and potential request for additional clinical testing Andrew has prepared a protocol for.

Michael Thornton: Proposed statistically powered multi site clinical study using the latest version of our technology.

The statistical analysis plan and I pulses or 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.

Michael Thornton: 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-submission 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 produced significant alignment and understanding related to the principles of operation of our TAS platform and a specific understanding of the tasks 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.

Michael Thornton: As part of the pre submission.

Michael Thornton: It's a pre sub meeting we plan to demonstrate the product and obtain alignment with the FDA on the final device configuration and clinical study design.

Michael Thornton: We believe that our recent interactions with FDA reviewers has produced significant alignment and understanding related to the principles of operation of our <unk> platform and a specific understanding of the tasks required for the regulatory grants of our technology.

Michael Thornton: In summary, Andrew.

Michael Thornton: <unk> believes that with close communication and alignment with the FDA regarding the device configuration and clinical study protocol design, Andrew can achieve a successful outcome.

Michael Thornton: As John mentioned, we're excited to have added Casey H, London as a clinical collaborators site earlier. This year. In addition, we recently received IRB approval for a new study comparing our tests derived fat fraction measurements, Tim or IP DFS in collaboration with the University of Michigan.

Michael Thornton: In addition, we recently received IRB approval for a new study comparing Artea's 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

Michael Thornton: That brings and gross global currently active clinical study partnerships before including Rocky Thus the University the medical College of Wisconsin, Michigan site and Kings College in the UK I'm happy to report that both the.

Michael Thornton: K C H and Michigan studies have initiated and recruited several subjects. These study sites are critical to supporting <unk> clinical validation efforts and ultimately clinical adoption of our technology.

Michael Thornton: These study sites are critical to supporting ENDRA's clinical validation efforts and ultimately the 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 at subsequent conference calls. Now, with that, I'll turn it over to Irina Pestrikova for a financial update.

Michael Thornton: The team 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.

Speaker Change: Now with that I'll turn it over to arena peso Cola for a financial update arena.

Irina Pestrikova: Thank you, Mike. I'm turning now to a 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 2020. The decrease was mainly due to lower research and development and sales and marketing. Our research and development expenses decreased year-over-year by approximately $1.6 million as we completed the development of our initial... 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 pay.

Speaker Change: Thank you Mike turning now to a 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.

Speaker Change: The decrease was mainly due to lower research and development and sales and marketing spend.

Speaker Change: Our research and development expenses decreased year over year by approximately $1.6 million as we completed the development of our initial tests blocked.

Speaker Change: Our sales and marketing expenses.

Speaker Change: <unk> by approximately 609000 dollar mainly due to the departure of our Chief commercial officer.

Speaker Change: General and administrative expenses decreased by approximately $478000, mainly due to a two year management bonus write offs and lower professional fees.

Irina Pestrikova: Our net loss in 2023 was $10.1 million, or $1.58 per share, compared with a net loss of $13.2 million, or $4.50 per share, in 2012. 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 the market equity facility and $1.1 million from the exercise. We're currently evaluating alternatives to raise capital to provide for our future. 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:

Speaker Change: Our net loss in 2023 was $10 $1 million or $1 58 per share.

Speaker Change: This compares with a net loss of $13 $2 million or $4.50 per share in 2022.

Speaker Change: Cash and cash equivalents were $2 $8 million as of December 31, 2023.

Speaker Change: And the fourth quarter the company raised $677000 in gross proceeds from the sale of common stock.

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.

Speaker Change: Now I'll turn the call back to Frank.

Frank: Thanks, Irina and Mike.

Frank: In summary for our listeners we remain committed to driving innovation and our market presence through the following five levers number one ask.

Francois Michelon: 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 a regulatory submission in the U.S. Number three, strengthening our commercial position through clinical relationships and local awareness building activities, 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 settings. On behalf of the entire ENDRA team, I want to extend our thanks to the shareholders for their continued support.

Frank: Activating new partner sites in Europe, and the U S to build our body of clinical evidence and achieve our regulatory and commercial goals.

Frank: Two continuing to engage closely with the FDA to advance our regulatory submission in the U S.

Frank: Number three strengthening our commercial position through clinical relationships and local awareness building activities.

Frank: Fourth leveraging the accelerating market developments in the detection and treatment of liver disease to strengthen <unk> position.

Frank: And fifth leveraging our intellectual property to grow beyond our current markets and clinical focus.

None: On behalf of the entire <unk> 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.

Operator: And now, operator, we're ready to open the call for questions. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.

None: We will now begin the question and answer session.

None: Ask a question you May press Star then one on your telephone keypad. If you are using a speakerphone. Please pick up your handset before pressing the keys.

Operator: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. Our first question comes from Edward Woo with Ascendant Capital. Please go ahead.

None: Anytime Youre question has been addressed and you would like to withdraw your question. Please press Star then two.

None: Our first question comes from Edward Woo with <unk> capital. Please go ahead.

Edward Moon Woo: Yeah, thank you for taking my question. Yeah. Hey guys, you know, correct us on the progress you guys are making. Uh, it looks like the FDA's deadline or decision timeframe has been pushed well past the expected 150 days. Is there any new guidance on when you think a decision may be made? Yeah, thanks for that.

None: Okay.

Edward Moon Woo: My question Yeah.

Edward Moon Woo: Yeah, Hey, guys.

Edward Moon Woo: She was on the progress you guys have.

Edward Moon Woo: It looks like the F D a.

Edward Moon Woo: Deadlines or decision time frame has been push.

Edward Moon Woo: I'll pass to expect 150 days is there any new guidance of when you think about decision may be made.

None: Yeah. Thanks for that so to be clear the 150 days, we referenced as a target from the FDA on their website in terms of review days and I Hope, we clearly emphasize that this was a part of our range and our goal by the FDA first I would say the good news is were.

Francois Michelon: 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 emphasize that this was part of a range and a goal by the FDA. First, I would say the good news is we're clearly and close to the questions that we've received from the FDA, and 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.

None: Clearly and close.

None: Communication and engaged with the FDA.

None: The fact that they've granted us a meeting to advance the discussion to demonstrate the product and review some of the clinical data is a good thing.

None: I think these things take time.

None: And before turning it over to Mike.

Michael Thornton: 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 in 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.

Francois Michelon: So I understand that 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 any other thoughts you might want to add? 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 the timing of those studies if required and, subsequently, other key events in the regulatory process. I hope that's a fair and transparent answer. That sounds good.

Can't give guidance because not all of that is within my control and so I understand we want things to happen as quickly as possible and Andrew is certainly working in that way, but.

Michael Thornton: But I think the fact that we're engaged in closely aligned with the FDA is a very good sign Mike do you have other thoughts you might want to add.

Michael Thornton: Yeah, and just to follow up on some of the comments that <unk> made in the past 12 weeks.

Michael Thornton: I mentioned, we've had several interactions with the reviewers individually and subgroups and.

Michael Thornton: The clinical study design is something specifically, we will look to discuss with them to align on our in person pre sub meeting coming up in the second quarter. Once we have that will be much better able to.

Francois Michelon: You mentioned that there's a date in the second quarter. Will you be announcing when that meeting will happen, or will you just disclose it after you have the meeting and any – Yeah, you know, these things can shift. And so it's in the second quarter.

Michael Thornton: Cash timing of those studies if required and.

Michael Thornton: So subsequently other key.

Michael Thornton: Events in the regulatory process.

None: I hope that's a fair, it's fair and transparent answer Ed.

Ed: That sounds great you mentioned, if there's a <unk> date in the second quarter will you be announcing when that meeting will happen or will you just disclosed after you have the meeting.

Ed: These things can shift and so it's in the second quarter. It is confirmed us assuming the FDA sticks to that we will 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 set it's been accepted.

Francois Michelon: It's confirmed. Assuming the FDA sticks to that, we'll have it soon. 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, the number of people attending in the second quarter, and we'll update investors afterward. 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 approval in the EU that's very different from what the FDA is requiring? Yeah, 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. Mike, could you help our listeners better understand that distinction and why it normally takes And that's even more true with new technologies.

Ed: Number of people attending in the second quarter and will update investors after that.

None: 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.

None: Yeah, It's a great question and thank you for highlighting the fact that we have a major regulatory approval a CE mark in Europe, but they are quite different and I'll.

None: I'll, let Mike speak to that that distinction, but FDA is definitely a higher bar.

None: 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.

Michael Thornton: Sure So CE clearance of medical devices, including new technologies, such as ours in novel technologies, such as ours.

Michael Thornton: As long as we focused on safety and.

Michael Thornton: Processes.

Michael Thornton: The FDA is absolutely focused on those same items.

Michael Thornton: And then it 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.

Michael Thornton: 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. As 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. I think that's one of the key pieces that differentiates it from the 510K process, which we pursued earlier. Thanks Mike, and Ed, just to add 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.

I would describe.

Michael Thornton: The pathway for most other companies now going through the process as be directed more and more through the de Novo pathway just like Andrew.

Michael Thornton: I think Francois said, we're really being treated very similarly to other similar new technologies, including ones for liver health and.

Michael Thornton: The dual pathway definitely requires clinical data that's one of the key pieces that differentiates it from the.

Michael Thornton: Slide 10-K process, which we pursued earlier.

None: Thanks, Mike and Ed just to tag on an extra bit of.

None: Reaffirming some of what we've said the CE Mark enables us to sell the product in Europe, but as I mentioned, having.

None: Body of clinical evidence from local users and each target market is the missing link and so that's clearly.

None: What we and other companies do and King's College being a good example of that.

None: We will be a source of data, we'll be able to bring our potential customers in the U K to visit that site there'll be able to see the system.

Francois Michelon: We'll be able to bring 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 and France and other markets. So the CE mark is a great starting point. I think it reflects, you know, the product quality and, combined with the clinical data that we're building, that will lead to commercialization and, in parallel, certainly the same thing will happen here in the US with the FDA. I hope that's helpful.

None: On the ground in the U K there'll be able to eventually review the data from that study and we'll do the same in Germany, and France and other markets. So.

None: The CE Mark is a great starting point I think it reflects.

None: 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.

None: I hope that's helpful.

Edward Moon Woo: Yeah, 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. 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 look forward to updating everyone with news as we progress. Thank you. Bye-bye. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

None: Yeah that was very helpful. Thank you very much for answering those questions that again I wish you guys. Good luck. Thank you. Thank you so much.

None: This concludes our question and answer session I would like to turn the conference back over to Francois for any closing remarks.

Francois: Thank you operator, and thank you to my team and to the listeners today for.

Francois: 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.

None: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.