Good day, and welcome to the ENDRA Life Sciences’ First Quarter 2019 Conference Call and Webcast. Today’s conference call is being recorded. At this time, I would like to turn the conference over to Chris Tyson, Managing Director at MZ North America, ENDRA Life Sciences’ Investor Relations firm. Sir, please go ahead.

Good afternoon. I’d like to thank you all for taking time to join us for ENDRA Life Sciences’ first quarter 2019 conference call. Your hosts today are Mr. Francois Michelon, Chief Executive Officer; as well as Mr. David Wells, the Company’s Chief Financial Officer; and Mr. Michael Thornton, the Company’s Chief Technology Officer. Francois and Michael will provide a business update, which will cover product updates and operational milestones, while David will discuss the financial results. A press release detailed on these results across the wire today and is available on the company’s website endrainc.com. Following managements prepared comments we will open the floor to questions for those of you who are dialing in for today’s call. Before we begin the formal presentation, please take note of the Safe Harbor paragraph that appears at the end of the press release covering the Company’s financial results. And that any forward-looking statements that we make only apply as of today’s date and are subject to inherent risks and uncertainties including those described in the Company’s SEC filings and should not be unduly relied upon. All statements other than statements of historical facts included in this presentation regarding our strategies, prospects, financial condition, operations, costs, plans and objectives are forward-looking statements. Examples of forward-looking statements include among others, statements we make regarding expectations for revenues, cash flows and financial performance. The anticipated results of our development and commercialization efforts and the timing for receipt of required regulatory approvals and product launches, except as otherwise required by the federal securities laws, the company disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statements. We also would refer to the company's website for more relevant industry information. At this time, I'd like to turn the call over to Francois Michelon. Francois, the floor is yours.

Thank you, Chris and welcome everyone to ENDRA Life Sciences’ first quarter 2019 conference call. I'll start by highlighting our key accomplishments thus far in 2019 and how they've advanced ENDRA's goal of bringing our Thermo Acoustic Enhanced Ultrasound, also known as TAEUS to market, with a clinical goal of helping assess and monitor the earliest stage of liver disease affecting over a billion people globally. First, we advanced our first in human feasibility study with the Robarts Institute in Canada, translating our real time learnings into our commercial TAEUS product design, building our documentation for the European Regulatory CE file application and gaining a preliminary insight into the quantitative capabilities of our technology. Second, we achieved ISO 13485 Certification reflecting a year's work to define test and train our employees on nearly 50 processes related to product development, manufacturing, quality and other key areas. The ISO certification will be an essential foundation of our CE application. Third, we grew our IP portfolio to 50 assets consisting of defined, filed, issued and license patents. Fourth, we advanced our pre-commercial activity with ENDRA Booth at two key radiology and hepatology conferences in the US and Europe and we learned some interesting takeaways, which I'll share with you shortly. And finally, looking further ahead, we kicked off an artificial intelligence collaboration with the Ladak Laboratory to enhance future TAEUS capabilities. We're digging into details about some of these accomplishments. I always believe it's important to provide some context and reaffirm ENDRA's goals and strategy, especially for new and potential investors. ENDRA's top level goals are to broaden access to better healthcare, while driving shareholder value. To achieve these goals, our strategy involves three core elements. First, introduce new point-of-care technologies that increase the utility of ultrasound. Our first implementation of the strategy…

Thanks, Francois. There's been good progress since our last earnings call, a total of 36 subjects have been scanned so far. With the aim of adding subjects with greater than 6% liver fat, the study investigators are recruiting subjects that are at higher risk for fatty liver disease. The profile of the study subjects is becoming more representative of the general population. Additional subjects are being recruited, including some from a hepatology clinic. We recently released the initial findings from the study and that has generated a lot of interest in this feasibility study and our clinical activities going forward. Before I discuss our current activities, I’ll mind all of our listeners that we are in the feasibility phase of clinical investigation with our TAEUS technology, fatty liver application. In this early phase of clinical work, our principal aim is to transition from in vitro bench top fat estimation with our TAEUS development platform to estimation of liver fat fraction in humans. This work largely focuses on understanding and addressing the challenges and collecting measurement data in human subjects, as is the norm - and it is enormously valuable to our efforts to develop a product for routine clinical use. It's very important to note that in the feasibility phase of development ENDRA staff [ph] is directly involved in the collection and processing of study data. Unlike a product evaluation where the study is independent investigator initiated, in a feasibility study ENDRA personnel collaborate with the study investigators and meet regularly to discuss interpretation of data, along with changes to the device and measurement procedure. ENDRA team members were closely with the sonographer, MRI technologist and study coordinator. As we complete our product development, our clinical studies will shift from application feasibility with a development platform to product testing with…

Our reported first quarter 2019 financial results. We did not generate any revenue for the three months ended March 31 2019, as compared to approximately $6,000 of revenue for the comparable period in 2018. There was no recognized revenue for this quarter, as we continue to wind down our preclinical Nexus 128 business in order to focus our resources on the development, testing and commercialization of our TAEUS technologies. Our operating expenses showed a small decrease to $2.7 million in the first quarter of 2019, down from $2.8 million for the same period in 2018. The decrease in operating expenses was a result of decreased sales and marketing expenses and general and administrative costs. Our net loss for the three months and in March 31, 2019 was $2.7 million or $0.37 per basic and diluted share, as compared to a net loss of $2.8 million in the first quarter of 2018, noting that approximately $300,000 of the first quarter 2019 loss was due to non-cash compensation expenses related to prior option and warrant issuances compared to approximately $380,000 of similar expenses in the prior period. Our cash balance as of March 31 2019 was approximately $3.9 million, as compared to approximately $6.5 million as of December 31 2018. During the quarter we used approximately $2.5 million in cash for operations as we finalized the development of our TAEUS province. Our spending remains on track and on budget with our internal projections. We continue to evaluate our capital needs against anticipated milestones to ensure favorable and adequate capital to support our clinical, regulatory and operational activities and we'll continue to do so as we prepare for commercialization of TAEUS in Europe and the US. As has been emphasized before, we believe the combination of our asset light operating model, clean capital structure and continued effective and efficient use of cash will position ENDRA to successfully commercialize our TAEUS liver product in the European Union as scheduled. I will now turn the call back over to Francois.

Thanks, David. As we move through the second quarter of 2019, ENDRA is positioned to deliver on key milestone for ENDRA's fatty liver application in 2019, including reporting findings on 50 subjects from our first human TAEUS feasibility study of liver fat, initiating several additional North American and European clinical studies, filing for the CE Mark in Europe this summer and the controlled launch of the TAEUS liver device in Europe in Q3 of this year. Now I'd like to open the call up to any questions. Operator, Jazz if you would kindly look at the queue. Thank you.

Thank you. Ladies and gentlemen, the floor is not open for questions. [Operator Instructions] We'll go first to Kyle Bauser with Dougherty and Company.

HI, good afternoon. Can you hear me, okay?

Yes, clearly.

Great. Great. So looking at the initial data on the 25 subjects, 61% R-squared, 3% standard error [ph] actually it seemed pretty encouraging given the small sample set coming from a healthy group of volunteers. Mike, I just want to make sure I'm understanding the results here. It's my understanding the thermo acoustic signal increases as the permittivity decreases and you know as you have more fat permittivity decreases. So it would seem to me the value proposition and the signal of TAEUS should only increase as you examine sicker patients. So to the extent you can share, I mean, is this fair and how should we think about the subsequent 25 subjects in this study?

Yeah. And I think - thanks for the question Kyle. I think you're referring to the White Paper that we posted on our website to explain you know, at a high level the physics that are involved in the signal generation process that we're using as the measurement, a surrogate measurement for liver fat content. So you're correct. The permittivity of liver and other tissues decreases with increasing fat fraction. And because we're comparing it to lean tissue that actual relevant signal increases. So that's true that as the fat fraction increases will actually detect a larger signal and be further away from the noise floor [ph]. And that's also one of the reasons why we don't expect lower than 6% to be able to stratify, that's just too close to those small signals and the noise floor of our system. And why we expect better results or better precision at higher fat fractions. So yeah, we're kind of excited to have the subjects now entering who are being recruited from clinics and the second follow up study which will be all from populations that are at high risk for fatty liver to see whether what we do on the bench top and how the physics translate to actually human studies. So it's pretty exciting time.

That's helpful. And so you know, Francois mentioned he can't necessarily just look at the BMI to know if someone has a high fat content in their liver. So you know can you remind me some of the ways here at your screening subjects so that you can bring in another 25 subjects that maybe a little bit sicker than the last 25?

Sure, so the approved protocol for the study allows for things such as amount of exercise, hours per week, alcoholic and sugary drinks consumed per week and that's about it. That's most of the biometric and sort of behavioral information we're collecting. The initial study as approved being a first time use device is to only do it on healthy volunteers. Most of the REB and health agencies like you try in new technologies on healthy subjects before going to compromise and complicated cases. So now that we've had this - we'll have this base of 50 or so healthy volunteers, the various boards that approve the protocols, feel much more comfortable than extending to clinics and patients that are actually in some form of liver care.

Got it. And then Francois you commented on several additional clinical studies over the coming months, some of which Mike mentioned. Can you just speak a little bit more about how these trials might differ from the current study underway and you know, where there'll be significant changes in the trial design or will they be more about generating in a larger sample set of data for patients instead of just healthy volunteers?

A little of - a little of all of that, Kyle. Thanks for the question. First of all, the two studies that are in final stages of legal paperwork agreement will be using a pre commercial TAEUS system which is more advanced than the feasibility study system that's in use in Canada. So that's one difference. The other element and I think you picked it up Kyle is that here in the two US sites in particular, we'll be recruiting from known liver patients. So technically people who are more prone to some form of liver disease, and if you will making it more efficient and likely that we get a distribution of fat across the spectrum. So that's the other difference. The other final element is that they'll typically be larger studies, now that we've learned a great deal with this first study and in Robarts that we're finishing up in four to six weeks. We feel confident that now with the efficiencies we can kick off these US sites and target 75 or more patients for each site. So I think we'll achieve the minimum 150 subjects comfortably before the controlled launch in Q3. And I hope that answers your question.

Yeah, I know, it does. Great. Thanks for the updates here and for taking the questions.

As always, thank you, Kyle and Dougherty and Company for your interest.

We’ll move next to Brooks O'Neil with Lake Street Financial Advisors.

Hi, Brooks. Thanks for joining.

Hi, guys. Good afternoon. Thanks for the comprehensive update. Hey I was just curious, I see you hired a woman named Amy Sitzler. She looks like a person of tremendous accomplishments. Could you just talk a little bit about how you hope to utilize her background and experience in moving your company forward?

Yeah, great question. So first of all, I'm lucky to have known Amy several years ago when we worked at GE Healthcare. Amy has a long and deep experience in engineering, program management and quality. So we couldn't ask for a better leader to come and help us manage the following things. And you can read more about her profile and background on our website. But she is really charged with managing the TAEUS liver engineering program, moving all of the elements and vendors through and meet to our timelines and assuring the quality of our business overall, which has been measured to our great satisfaction with the onsite audit and award of our ISO 13485 quality certification. So Amy has 30 years of experience in this field. She is based here in Ann Arbor where we are an interesting bit of background that we do note in her biography is that she spent five years in France and she led a 200 person global engineering team that introduced the first digital mammography product. So her skill set and experience is so perfectly suited for us and we're thrilled to have her, in addition to her speaking almost better French than I do. So that's welcome again Amy. I hope it gives you some background.

Yeah, it's great. And then last but not least, it sounds like you're very much on track for your CE Mark application around midyear, but are there any significant things you have yet to accomplish before you can submit there and hope to get CE Mark approval?

Yeah. So we're making great progress. I think the ISO certification is one of those things. Certainly the human factors that we've been deriving from the Robart study are the other element and those are coming online, I will admit they've taken a little bit longer than we wanted, but those will be a critical input to the CE application, which we'll be filing in July. So I think we're on track there. The ISO certification is not a guarantee by any means of CE approval, but it does show that we're running systems, have the documentation, all through our supply chain engineering systems and even processes here in Ann Arbor that meet the standards for CE and so that plus the documentation of human factors from Canada we’ll really complete it and we're on track. But you know, I will say, I think we probably overstepped a little bit with the human study when we kicked it off and we saw that recruitment would be a little bit easier and more efficient and I hope we've been open and transparent with our followers and our investors that it's taking a little bit more time to get that proper distribution. But the results as I've emphasized are very, very encouraging. There's a lot of headroom for continued improvement and I think all the things that Michael mentioned both in terms of expanding studies in Canada, kicking off the US sites and improving the product iteratively along the way our position us to have a very good product when we're ready to commercialize. I hope that answers your question.

It does, it definitely does. But I just want to be clear despite the fact you said you maybe overreached a little bit, you're still very much on track for this midyear application right?

Indeed, we sure are. We sure are. We suspect that assuming a normal turnaround that we would apply in July, our auditor by the way BSI is shut down for the month of June. So July was the first available day. We're likely to get CE approval in September at which point certainly we have been cultivating evaluation sites early adopters and our first tranche of commercial adopters. So that process continues in parallel. And as I also mentioned on several earlier calls, we fully plan on leveraging our CE file and documentation for a 510-K application and I think I've been transparent in terms of what we see as a typical approval cycle, which is about 150 days after submission for FDA. But you know, obviously I think that puts us into early 2020 to start ramping up the US. But you know, as all things could happen it's an average so we could get it sooner or it could be a little later. But we're on track, all the foundational elements that I mentioned, the quality systems, the human factors and the leadership to execute all of those jigsaw puzzles are in place and we're working our butts off and we're seeing these things fall into place very nicely.

Fantastic. That's great. Thanks for all that detail and keep up all the good work.

Thank you again, Brooks.

[Operator Instructions] We will go next to Ed Woo at Ascendiant Capital.

Thank you for taking my question. On R&D cost for the quarter it was – it looked like it was a little bit elevated. Do you think that this current level will be pretty comfortable going forward?

No and actually the R&D expense is about - is about what we expected, knowing that it was on its way down, you know, we've got the development done and so we can expect to see that R&D spending and overall cash burn will reduce in Q2 as we've been projecting. So Q1 really wasn't elevated. It's what we expected and we're comfortable that we're going to stay on that track.

Even with these additional studies that you’re hoping will kick off relatively soon?

Yeah, the studies - the studies are not - don't require additional development. And from a cost standpoint they are relatively inexpensive compared to the development, as well and really as a complement to the team we've really found a way to get a lot of this testing done very inexpensively compared to what the industry would otherwise expect. So I think we'll see - you know, we'll be able to enjoy a little bit of savings in Q2 and Q3 on that.

Great. And then my other question is more on the additional findings, when you guys expect to report those additional findings. Do you guys know down a specific date, other than mid [ph] this year?

So, yeah. I'll take that one. The study investigators as I mentioned have the aim of completing data collection in the next four to six weeks, with completion of analysis to follow. In addition to posting the results of - the results of the study two ClinicalTrials.gov is required by our Health Canada approval. We're looking at upcoming conferences and peer reviewed journals to target for publication. That's sort of the aim of the investigators and we obviously support the idea of presenting at conferences which is the most widely used way to present results.

And what conferences should we be aware of coming out?

Yes, so there are some NAFLD conferences and we're looking at the timings associated with that. A couple of European meetings in September that we're looking at.

Great. Thanks for clarifying that. Well, thank you for answering my questions and I wish you guys good luck. Thank you.

No problem.

There appear to be no other questions holding at this time. I'd like to turn the conference back to management for any additional or closing comments.

Thank you, operator. And thanks to everyone for joining our call today. As always, like to sincerely thank our hardworking team, our vendor, engineers, scientists, patent specialists who keep our technologies evolving, we couldn't do it without you. Lastly, if we weren't able to address all of your questions on today's call please feel free to contact our investor relations firm MZ Group, they'll be very happy to answer them and we look forward to speaking with you all on ENDRA's second quarter 2019 financial results call later this summer. Again, thanks very much. Bye-bye.+