ENDRA Life Sciences Inc (NDRA) 2024 Q2 法說會逐字稿

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)

下午好，歡迎參加 ENDRA 生命科學 2024 年第二季財務業績電話會議。所有參與者將處於僅聽模式。（操作員說明）

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

請注意，此事件正在被記錄。我現在想把會議交給伊馮·布里格斯。請繼續。

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.

謝謝你，接線生。我是 LHA 的伊馮布里格斯 (Yvonne Briggs)。下午好，歡迎參加 ENDRA Life Sciences 2024 年第二季業務更新與財務業績電話會議。今天早些時候，ENDRA 發布了有關此主題的新聞稿，可在 ENDRA 網站的投資者部分查看該新聞稿。

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.

在我們開始之前，請注意，今天的討論將包括前瞻性陳述。除歷史事實陳述外，管理層的所有陳述，包括有關公司策略、財務狀況、營運、成本、計劃和目標的陳述，以及開發和商業化工作的預期結果、臨床研究的時間表、潛在合作夥伴關係有關監管流程、取得所需監管許可以及產品發布的機會和期望均為前瞻性陳述。

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.

除聯邦證券法要求外，該公司不承擔更新或修改任何前瞻性聲明的義務。請參閱該公司 2023 財年的 10-K 表格以及隨後向 SEC 提交的文件，以了解有關前瞻性陳述相關風險和不確定性的更多資訊。

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.

就今天電話會議的結構而言，代理首席執行官 Alexander Tokman 將開始準備好的講話，隨後是新任監管和臨床事務主管 Ziad Rouag，然後是 ENDRA 首席技術官 Michael Thornton。ENDRA 新任財務長 Richard Jacroux 隨後將審查第二季的財務表現。

With that said, I will now turn it over to Alex. Alex?

話雖如此，我現在將其交給亞歷克斯。亞歷克斯？

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.

謝謝你，伊馮。下午好，感謝您今天加入我們討論 ENDRA 2024 年第二季財務業績和業務亮點。在我們進行業務更新之前，讓我先談談反向股票分割和普通股的後續交易。如您所知，在本月初獲得股東批准後，公司授權進行 50 次反向股票分割，我們上週五宣布了這項計劃，並於上週二生效。

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.

主要目標是將我們的股價保持在 1 美元以上，從而維持在納斯達克的上市地位。由於作為 6 月完成的 800 萬美元公開發行的一部分而發行的行權證數量極高，該計劃被擱置。為了保持公司的營運並且不失去 ENDRA 多年來取得的所有進展，此次公開募股是必要的。我們堅信，過去幾天我們庫存的大幅下跌與 ENDRA 業務前景完全無關。

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.

我們已經達到了預期的結果，因為我們目前的交易價格低於 1 美元。我們認識到這種情況對公司和投資者的嚴重性，隨著我們的前進，我們將隨時向您通報我們的行動。

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.

現在讓我們把注意力轉向第二季的業績和最近的變化。我想先與您一起回顧我們打算採取不同的六項具體措施，以便在我們將 ENDRA 的差異化熱聲技術推向市場時變得更具可操作性和可預測性。

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.

這六項變更包括更強大的營運團隊、堅持不懈地確定我們的活動優先順序、與 FDA 合作的新方法、增強 TAEUS 輸送設備的上市策略、明確我們的 Android 願景以及最終改善的財務執行力。

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.

讓我詳細說明每一個。首先，我們透過兩名經驗豐富的營運商來增強我們的管理團隊，他們在改造新科技公司方面擁有成功的記錄。Richard Jacroux 是一位經驗豐富的財務官，擁有上市公司和私人公司的經驗，他非常了解精益營運和重組。他已經與前高級財務總監伊琳娜（Irina）密切合作，以確保日常財務運營的順利過渡。伊琳娜 (Irina) 將繼續擔任公司未來的顧問。

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.

Ziad Rouag 加入我們，擔任臨床和監管事務主管。Ziad 成功領導了許多新興醫療器材技術公司透過監管流程和早期商業化，他已經對我們最近的策略以及與 FDA 的互動產生了巨大影響。

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.

我預計，隨著我們在公司的這一關鍵階段向前邁進，Richard 和 Ziad 的經驗都將使 ENDRA 受益匪淺。我們的技術長 Mike Thornton 將繼續專注於產品交付以及增強 ENDRA 的技術路線圖和智慧財產權。

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.

第二個變化是，在審查了我們面臨的所有優先事項之後，我們作為新的營運團隊一致一致地堅持不懈地確定優先順序，並專注於公司最關鍵的可交付成果，並正在執行統計支持的多中心前瞻性臨床試驗，以獲取必要的數據，使我們能夠成功地前進。

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.

此臨床數據是監管和商業成功的基礎要素。它提供了三個重要的好處。它可以優化產品設計，以實現最大的用戶利用率，這是成功的從頭開始應用的必要組成部分，最後，它回答了為什麼我作為臨床醫生或製藥用戶應該使用這項技術的重要原因。

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 (inaudible) through FDA.

我們正在實施的第三個變革是，我們將從根本上改變 Ziad 領導下的 FDA 監管策略。我們正在從使用回顧性數據轉向假設驅動、統計支持的前瞻性臨床試驗，這是透過 FDA 進行的（聽不清楚）。

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.

因此，我們正在從單一臨床中心擴展到多中心試驗，並將受試者數量增加一個數量級，從 20 人增加到約 250 人，這是獲得可接受的統計功效所必需的。

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.

我們現在正在與 FDA 充分合作，在數據收集之前建立共識和試驗設計。稍後在本次電話會議中，齊亞德將進一步詳細闡述這些變化。第四，我們正在重新審視 TAEUS 肝臟設備的上市策略。

We have more and more evidence that hepatology may not be the beachhead market we should pursue. (technical difficulty) primary care and (technical difficulty) 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 five, we are preparing changes related to ENDRA's strategic direction.

我們有越來越多的證據表明肝病學可能不是我們應該追求的灘頭市場。 （技術難度）初級保健和（技術難度）部分，並相信在接下來的 6 到 12 個月內，我們將尋求 TAEUS 肝臟裝置的監管許可。肝病學可能仍然是我們的一個市場，但也許不是主要目標。第五，即變革舉措第五，我們正在準備與 ENDRA 策略方向相關的變革。

We will formalize our longer-term business strategy and crystallize our vision, as in what's next after we commercialize our TAEUS liver device.

我們將正式製定我們的長期業務策略並具體化我們的願景，就像我們將 TAEUS 肝臟設備商業化後的下一步一樣。

How do 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.

我們必須如何回答這樣的問題：除了肝臟脂肪測試之外，我們如何為客戶增加更多價值，並成為一家代謝疾病生物標記公司，這可能更有價值。

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.

所有這些預計將在未來 12 個月內開發和評估。最後，我們專注於改善財務管理。我們的目標是仔細審查我們花費的每一美元，因此，我們最近大幅削減了營運支出，我們能夠減少 300 萬美元以上，按年計算減少約 26%，全部為它不會影響主要交付成果，即為我們向FDA 提交做準備的臨床數據收集。理查德將在財務更新中進一步闡述這一點。

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?

現在我概述了我們未來將採取哪些不同的做法，Ziad、Mike 和 Richard 現在將為您重點介紹自第一季電話會議以來我們在臨床和監管、技術和智慧財產權以及財務三個領域取得的進展。齊亞德？

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.

謝謝你，亞歷克斯。今年 5 月，我們在馬裡蘭州總部與 FDA 會面，現場展示了 TAEUS 技術，並審查了擬議的關鍵研究提案的臨床和統計計劃。FDA 會議紀要證實了 ENDRA 和 FDA 在最終產品配置、臨床研究設計和成功結果的監管途徑方面的一致性。

As part of our refocused clinical program, we are limiting initial data collection to three pilot sites, two 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.

作為我們重新調整臨床計劃的一部分，我們將初始資料收集限制在三個試點地點，即兩個美國和一個歐盟。這些試點試驗地點的選擇是根據其招募患者的能力。透過這些努力，我們已經獲得了 25 個科目的數據。就時間表而言，將進行連續研究，這意味著試點研究的結果將為關鍵研究的設計提供資訊。我們的目標是完成所有臨床工作，並將數據納入 2025 年中期的 de novo 提交中。

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?

在我的職業生涯中，我透過複雜的試驗和設備（包括影像研究）處理過類似的機會，我對我們為 TAEUS 肝臟設備設定的監管路徑非常樂觀。麥克風？

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.

謝謝你，齊亞德。我們的專利組合目前在全球擁有 81 項已授權專利。2024 年第二季度，ENDRA 又頒發了五項專利，其中三項在歐洲，兩項在中國。已發布的專利組合包括 42 項熱聲設備和基礎支援技術專利、22 項與估計脂肪分數相關的專利以及 17 項涵蓋其他熱聲應用和非熱聲技術的專利。

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.

我們廣泛的智慧財產權組合以其新穎的熱聲技術為 TAEUS 系統提供保護，並提供探索我們核心重點之外的授權機會的機會。我現在把電話轉給理查。

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.

謝謝你，麥克。我很高興能在作為 ENDRA 財務長的第一次季度電話會議上與我們的投資者交談。本季度，我們透過公開發行普通股和認股權證籌集了 730 萬美元的淨收益。截至 2024 年 6 月 30 日，我們擁有現金及現金等價物 640 萬美元。根據我們目前的預測，我們的現金跑道將為公司提供資金到 2025 年上半年。

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.

現在回顧我們的財務表現。截至 2024 年 6 月 30 日的季度，我們的總營運費用從 2023 年同期的 300 萬美元減少至 220 萬美元。減少的主要原因是研發以及銷售和行銷費用的下降。隨著我們將資源和支出從開發轉向臨床活動，研發費用比去年同期減少了 684,000 美元，即 49%。

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.

在銷售和行銷方面，我們重組了歐洲業務以支持公司的近期臨床研究目標，因此成本下降了 85,000 美元，即 34%。由於籌款的管理費用，一般和行政費用總共增加了 5,000 美元，抵消了其他方面的減少。我們將繼續審查我們的支出，並可能進一步調整我們的支出結構，以便在重新調整策略時專注於實現我們的優先事項。

Now I'll turn the call to the operator for questions. Operator?

現在我將把電話轉給接線員詢問問題。操作員？

(Operator Instructions)

（操作員說明）

Edward Woo from Ascendiant Capital

Ascendian Capital的Edward Woo

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?

是的。很高興認識你們，亞歷山大和理查德。我的問題是，當你們開始行動時，你們認為你們能夠多快地全面實施新的策略路徑？或者您仍然認為現在有時間評估一下情況嗎？

Thank you for the question Ed. In terms of the next nine 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.

謝謝你的提問。就接下來的 9 個月到 12 個月而言，我們有明確的優先事項，我們將要執行。因此，這將涉及完成臨床研究、獲取所有必要的數據以準備向 FDA 提交監管申請，以及產生足夠令人信服的數據以用於向未來客戶推廣該技術。

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.

因此，再次強調，這項優先事項已被商定並明確傳達給公司內的每位員工。就長遠的眼光而言，在引入TAEUS 肝臟裝置後發生了什麼，我們在接下來的六個月到九個月內提供了一支削尖的鉛筆，著眼於我們的IP 提供的所有機會並確定前進的道路。我可以肯定地告訴你的一件事是，我們將製定一個策略路線圖，其中包括幾個關鍵的成長機會，其中一些我們將有機地追求，其中一些可以授權給其他人。稍後會詳細介紹這一點。

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?

偉大的。然後是最後一個澄清問題。我不確定我聽得對不對。你說你打算在2025年提交FDA申請嗎？你有給出2025年的具體時間嗎？

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.

我們沒有提供具體的指導，我不相信。但我可以告訴你的是，我們的目標是今年完成臨床研究，並在明年初啟動一項關鍵研究，目標是在 2025 年中期某個時候提交。

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

我們的問答環節到此結束。我想將會議轉回亞歷克斯·托克曼（Alex Tokman）發表閉幕詞。

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.

謝謝。鑑於每個人都認為董事會和營運團隊看好 ENDRA 的技術和市場機會，我想在結束這次電話會議時告訴大家。我們預計，在實施我先前在本次電話會議中描述的六項措施和變革後，ENDRA 的業績將會改善，我們將扭轉該公司過去所採取的方針。

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, nine months and 12 months, and you'll see hopefully, different output from this team moving forward. Thank you.

我個人對此充滿信心，因為我已經領導了財富 100 強和微型股醫療諮詢和新興技術公司的多次成功轉型，我認為我們可以在這裡再次做到這一點。我相信團隊充滿活力。我們知道在接下來的 6 個月、9 個月和 12 個月內我們需要完成什麼，並且您將有望看到這個團隊向前邁進的不同成果。謝謝。

Thank you for joining us today, and we look forward to keeping you updated on our progress.

感謝您今天加入我們，我們期待向您通報我們的最新進展。

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

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。