Good day, and welcome to the ENDRA Life Sciences’ Third Quarter 2021 Financial Results Conference Call. Today, all participants will be in a listen-only mode. [Operator Instructions] Please note that today's event is being recorded. I would now like to turn the conference over to Yvonne Briggs at LHA. Please go ahead.

Thank you, operator. This is Yvonne Briggs with LHA, ENDRA Life Sciences’ Investor Relations firm. Good afternoon and welcome to ENDRA’s third quarter 2021 business update and financial results conference call. Earlier today, ENDRA issued a press release on this topic. And for those of you who don’t have a copy, you can access it in the Investors section of ENDRA’s website at endrainc.com. Before we begin, please note that today’s discussion will include forward-looking statements. All statements 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 otherwise required by federal securities laws, the company disclaims any obligation to update or revise any forward-looking statements. Please refer to the company’s 2020 Form 10-K and subsequent SEC filings for more information about risks and uncertainties related to forward-looking statements. In terms of the structure of today’s call, Francois Michelon, Chairman and Chief Executive Officer will begin the prepared remarks; followed by Renaud Maloberti, ENDRA’s Chief Commercial Officer; and then Irina Pestrikova, Senior Director of Finance. With that said, I will now turn the call over to Francois Michelon. Francois?

Thank you, Yvonne, and good afternoon, everyone and thanks for joining us today to discuss ENDRA’s third quarter 2021 financial results and business update. While I'd hope to have additional clarity from our discussions with the FDA on our definitive path forward, I am pleased with the progress on the activities within our control, which include accelerating our commercial channel and marketing activities, despite an uptick in COVID-19 cases in Europe, expanding our data set of clinical evidence with evaluation partners to support global commercialization efforts, securing pharmaceutical partnerships to facilitate adoption of TAEUS beyond the clinical end user market and bolstering our intellectual property portfolio to protect our technology and enhance out licensing opportunities. And finally, as a company ENDRA remains well capitalized as we continue to leverage our asset light operating model. I'll elaborate on each of these now. COVID isn't gone in Europe. In fact, according to the John Hopkins Coronavirus Center, new cases in the UK are up 10% since October, France is up 40%, and Germany has a staggering 98% increase in COVID cases since October, but ENDRA’s commercial team in Europe has been leveraging every opportunity to expand our sales and marketing efforts. Continue to conduct in-person and virtual sales visits as well as facilitate group customer demonstrations of TAEUS system, we’re possible to build a pipeline of sales leads, to drive awareness of TAEUS, continue to participate in key U.S. and European clinical conferences. And we've been building a deeper presence in country specific conferences targeting our end user clinical segments in radiology and gastrohepatology. Many clinicians and pharmaceutical companies attend these events to learn about new research and new technologies, as well as to pursue collaboration. Recently, we participated in two in-person conferences in France, and we had the opportunity to demonstrate…

Thank you, Francois, and good afternoon, everyone. Our European sales team continues to make good progress with our commercial efforts for the TAEUS system. In-person sales visits have increased as COVID-19 restriction ease in some markets and we are starting to build solid momentum with our commercial activities. We have a total of four people on our commercial team in Europe, and we expect to have a sales representative in each target country at the appropriate time. Currently, we have ENDRA representatives in the UK, France and Germany and one pan-European person. We will continue to monitor the market and remain opportunistic to add sales and marketing personnel to optimize our cost structure. Sales outreach activities include in-person visits and group demonstrations, as well as the historical video conference meetings in certain areas. Given that TAEUS is a capital equipment purchase and we are new to the market, we expect the sales cycle to be several months from an initial in-person interaction with our customers, although these vary by customers and by institution. We continue to be optimistic as the leadings are being well received with potential –positive feedback from potential customers. To supplement our direct sales effort, we are working with our partner GE Healthcare to leverage their significant install base of ultrasound clients. Our sales team has held collaborative calls with GE to coordinate sales activities and look at resources and review market feedback. GE is a highly valuable partner in imaging diagnostics, given their global market presence. As part of our global commercial strategy, we also plan to build out an indirect distribution channel in certain markets. As I have mentioned in prior calls, we signed a premier distributor of value added medical technology to a 40 TAEUS system sales commitment in Vietnam, which represents a substantial…

Thank you, Renaud. Our financial results for the third quarter of 2021 are as follows: For the quarter ended September 30, 2021, our operating expenses decreased to $2.7 million from $3.3 million for the same period in 2020. The decrease was primarily due to reduce spending for product development and investor relations. Our research and development expense decreased year-over-year by approximately $600,000 due to reduce spending for product development. Our sales and marketing expense increased by approximately $140,000 for the quarter as we began to expand our sales efforts including adding to our headcount. General and administrative costs decreased by approximately $145,000 due to reduce spending for investor relations and legal fees. Our net loss per share for the 2021 third quarter was $0.06 compared with $0.15 per share loss a year ago. We continue to maintain an asset light operating model with a conservative cost structure as we advance our commercialization initiatives. As of September 30, 2021, we have cash and cash equivalents of $11.8 million. We have a current ATM facility, which we expect to utilize on an opportunistic basis in the future. We believe we're well capitalized with a solid balance sheet to support our commercial activities in Europe as we engage with the FDA to gain clarity on the pending TAEUS 510(k) submission. Now I'll turn the call back to Francois.

Thanks very much Renaud and Irina. In summary, I'm pleased with our accomplishments today, which include accelerating our commercial channel and marketing activities despite an uptick in COVID-19 cases in Europe, starting to build our data set of clinical evidence at Rocky Vista and University of Pittsburgh with these evaluation partners that will support global commercialization efforts, securing pharmaceutical partnerships to facilitate adoption of TAEUS beyond the clinical end user market and continuing to bolster our intellectual property portfolio to protect our technology and enhance out licensing opportunities. As I mentioned in my opening remarks, our highest priorities are to secure initial sales in Europe while simultaneously working closely with the FDA to clarify definitive path forward for our U.S. regulatory clearance of the TAEUS system. So with that review of our business highlights and financial results, I'd like to open the call for questions operator.

We will now begin the question-and-answer session. [Operator Instructions]

Thanks. And operator while we're waiting for investor questions to queue online Yvonne Briggs, perhaps you’ve received some questions from investors on your side that you'd like to share.

Sure. One question we received is that GE recently announced it's splitting up into industry specific divisions with GE Healthcare being a standalone entity in 2023. Will that restructuring effect ENDRA’s agreement with GE?

Yes, I think that's a great question. And I think I'll ask Renaud to give us his thoughts because he's working with the GE teams locally in Europe closely. So Renaud, if you have some thoughts on that question, that'd be super.

Yes, sure. It's a great question. GE split will not change its relationship with ENDRA and for a number of reasons. First, ENDRA’s agreement is with GE Healthcare division, which is not a central GE corporate entity. Second, ENDRA’s agreement extends until the end of 2022. And we'll engage with GE to discuss renewal options before the GE spin of occurs. We have a good relationship with GE. So finally from a broader perspective, it's important for investors to remember that while ENDRA benefits from GE’s relationship with ultrasound equipment and customer introductions, ENDRA’s futures does not depend heavily on GE. ENDRA’s multi-channel approach involve its own direct sales people industry to partnership enabling ENDRA to not be overly dependent on a single resource for commercial success and that's the way we want it.

Great, thanks Renaud. And Yvonne, if I don't know if you have any more there.

One other one came in that you mentioned that ENDRA is actively engaged in a dialogue with the FDA. How would you characterize the tone of the conversations and what kind of questions the FDA asking?

Yes, obviously that's top of mind for many people. I mean, indeed I want to emphasize ENDRA is actively engaged in communicating with the FDA. We're certainly not sitting back waiting for FDA to make a decision. And I think that's the right place to be. We have to co-lead this and I think both parties want a successful outcome. The tone of the discussions with the FDA is collaborative certainly rigorous. And the areas of exploration include, the intended use, the technological characteristics of our system to safety and effectiveness, and naturally the scientific testing methods that we've used to demonstrate those. So I think it's rigor on the part of the FDA, which we always respect. And I think the best way for us to get this across the goal line is to respond very quickly and positively to their requests. I’d also want to point out that as I mentioned in my earlier remarks due to ENDRA’s unique technological attributes, it means the TAEUS regulatory submission is not as simple as a check the boxes application. So the review process has taken longer than we expected, but I remain very optimistic that the regulatory clearance will be granted for our TAEUS system and we're working in that capacity. So thank you, whoever asked that. Yvonne, I don't know if you have any more, otherwise we could go over to the operator’s Q&A.

Yes. Operator, can you…

Yes. The first phone question comes from Ed Woo with Ascendiant Capital. Please proceed.

Yes. Thank you for taking my question. My question, I know you mentioned on the call that you guys are actively scheduling in-person visits in Europe. What do you think, are you guys had a 100%, you think you're about half capacity or what do you think you guys in terms of ability to meet people given the COVID spread in Europe?

Yes, it's fluid and I don't want to lead with an excuse of COVID. We're all tired of it, but unfortunately it's a reality and perhaps more reality in Europe based on those numbers that I shared in the prepared remarks. So to answer your question, I don't think we're at a 100% capacity in terms of mobility certainly. But I will say our sales teams in France, Germany, the UK are seizing every opportunity to meet in-person. Whenever possible we're securing virtual commitments to demonstrate our product and trying to convert those as things change into direct visits. So at this point I don't want to put a number on capacity, but I would say certainly due to mobility issues, access to hospitals and even personal preferences by clinicians for meeting in-person versus virtually. We're not at our peak yet. And I think Renaud touched on that. I don't know Renaud if you have other opinions or thoughts that you might want to add to that.

I think, you're correct. It's hard to put a number on it, but we're doing best everything we can to make sure that we take advantage of every opportunity that is presented to us at this point.

Yes, and a couple of examples, Ed. As we want to penetrate markets of interest more deeply, we attended these two in-person clinical conferences focused on the liver in France, and we were thrilled to be able to have a booth demonstrate the product, interact directly with customers. So whenever we are able, we do that. But we also don't want to sit on our hands. We also want to leverage virtual tools and outreach in that manner. So we're trying in every way possible. Hopefully that helps answer your question Ed.

Yes, that's great. And then one last question, you mentioned that you guys are returning back to trade shows. When I ask the same questions, are trade shows back to normal or are they still kind of hit or miss in terms of what's being held in-person and how important it shows to your overall commercialization strategy?

Yes. Great question. So, let me say that, first of all, these clinical conferences are very important to ENDRA and most healthcare technology providers, because they are the meeting point for all parties involved, the providers, the clinicians, the insurers, the strategic partners. And we all go to these meetings to learn about new technology, new treatments, new research. So while the last year and a half has been, I would say a mix of virtual gradually returning to some more in-person meetings. I'm also very happy that ENDRA has been in the field physically very actively going to six to seven of these conferences globally since 2018. So we're not handicapped per se as someone who's trying to be new to the block and only able to kind of introduce ourselves virtually, all of our clinical collaboration partners, University of Pittsburgh in Europe and elsewhere, we met at these conferences. And so we're building on that momentum by continuing to participate virtually when that's the only option. And I'll give you a good example of a big meeting that was just converted. And we just came back from the American Association for Study of Liver Disease surprised everyone. That's a big U.S. meeting and it went virtual for reasons of COVID. So we participated, we have a virtual booth like everyone else there, we have someone who is present virtually. It's not a passive just website waiting for people. We are there. And as soon as someone engages with us in a chat room or via a scheduled meeting, we participate. So it's a good conduit for us. But to finally sort of close your question, Ed, RSNA, Radiological Society of North America one of the biggest conferences in the world, and certainly in the U.S. historically with 40,000 to 50,000 attendees, huge that is in-person. And we have a booth right next to our partner GE Healthcare. It's a little smaller than GE, but it's a very effective vehicle for us and we're looking forward to demonstrating a product there. So I think the world is coming back, but it seems to be two steps forward, one step back, but we're there meeting the pace every step of the way.

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

Thanks a lot, Ed.

Our next question comes from Vernon Bernardino with H.C. Wainwright. Please proceed.

Hi, Vernon

Hi, this is Ryan Johnson [ph] on behalf of Vernon.

Hey, hi, Ryan.

Hi. Could I just ask about any updates on the Rocky Vista study in particular like maybe how many patients have been screened so far or has there been any clinical workflow or performance feedback?

Yes, great questions. So we haven't disclosed a number of patients in real time that it's an independent study and we want to kind of maintain that certain independence, but the goal is 200. We started and I will say it was our first clinical study and we certainly besides just collecting performance data, our learning. And so we've learned in terms of how to train people, some of the feedback in terms of positioning our technology and some of the interface. And I'd say that that is a natural process besides just picking up pure clinical data learning objectively from clinical users in the field is an important part of what these clinical sites can contribute. And so with each one we're learning, I will say that one thing we've also learned is Rocky Vista is a deeply radiologically driven site. And so it was a naturally intuitive way for them to add this new capability to their ultrasound. University of Pittsburgh has enormous interest in this space, obviously because they're a global liver center of excellence, but they have more hepatology trained people. And so we had to adapt our training a little bit and it didn't take much longer, but we clearly were dealing with people who had less ultrasound workflow experience. And I think that informs how we train additional partners, how we train commercial customers. And so we're very happy for that along the way, but everyone remains deeply interested in this space and we're happy to participate in. Hope that's helpful Ryan.

It is. Thank you. And can I just quickly follow up with that? Do you have any loose predictions on when we can possibly expect some kind of readout or other from the study?

Yes. Fair question. So when we kick these off by design, they were except for Rocky Vista, which has 200, most of these studies that we have in Europe and the remaining in the U.S. where it's fairly small and by small, I mean, 75 patients scanned on our system and then quickly compared to MRI which we believe MRI proton density, fat fraction is the global gold standard useful research, even though it's impractical, we wanted to compare ourselves to that because it's the most accurate, albeit very expensive measurement tool. But it depends on a number of factors, Ryan. So a good example of that is, the COVID accessibility when facilities shut down or it gets swamped with other priorities that potentially delay a study not just ours. The other element that I've touched on is MRI backlogs. I think I mentioned this in prepared remarks, but because we're comparing ourselves to an MRI when the hospital has a need for the MRI for clinical patient treatment those procedures can pile up and we don't want to scan a patient on our system and then wait six weeks to scan them on an MRI because that person may have lost weight or something else may have changed in their chemistry. And so we may not get a good sort of a close read out of the two together. So in the case of UPMC, they certainly experienced some of that variability in MRIs, but I would say in a more normal time, these studies should be six to nine months in length. And the more the world returns to normal health care operations, the more you can anticipate that timeframe, these are not two to three-year studies. These are under a year, I would say, as a good rule of thumb. So certainly next year you'll start seeing those but we are supporting them. But these are independent objective studies by design. And I think that they will by virtue of their contributions, geographic location, and reputation, be very helpful to ENDRA as it builds its base of clinical evidence. Hope that's helpful, Ryan.

It is. Thank you.

Thank you. Operator, I don't know if we have anyone else, if not, we can wrap up the call.

No. We are showing no further questions at this time and this concludes the question-and-answer session. And I'd like to turn the call back over to Francois Michelon for any closing remarks.

Well, thanks. And I want to thank our investors for joining us today. We do look forward to keeping you updated on our progress. We will not limit ourselves to the quarterly calls if we have material news or updates on any of these topics, including through the very end of the year, we will gladly and proactively call a meeting or call and inform our investors. And that's definitely our plan as we go forward. And again, appreciate ENDRA, the support of our ENDRA investors. And look forward to speaking to you at the next event. Have a good evening.

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