Filed
Pursuant to Rule 424(b)(5)
Registration No. 333-229090
The information contained in this preliminary prospectus supplement
and the accompanying prospectus is not complete and may be changed.
This preliminary prospectus supplement and the accompanying
prospectus are not an offer to sell these securities and are not
soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
PRELIMINARY PROSPECTUS
SUPPLEMENT
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SUBJECT
TO COMPLETION
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DATED
DECEMBER 15, 2020
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(To the Prospectus dated February 13, 2019)
Shares
Common Stock
ENDRA Life Sciences Inc.
We are
offering shares of our common stock, par value $0.0001 per share,
pursuant to this prospectus supplement and the accompanying
prospectus. Our common stock is traded on the Nasdaq Capital Market
under the symbol “NDRA”. On December 14, 2020, the last
reported sale price of our common stock on the Nasdaq Capital
Market was $0.90 per share.
We are
an “Emerging Growth Company” as defined in the
Jumpstart Our Business Startups Act of 2012 and, as such, have
elected to comply with certain reduced public company reporting
requirements for this prospectus and future filings. See
“Prospectus Summary − Implications of Being an Emerging
Growth Company.”
Investing in our securities involves a high degree of risk. See
“Risk Factors” beginning on page S-8 of this prospectus
supplement, and under similar headings in the documents that are
incorporated by reference into this prospectus supplement for a
discussion of information that should be considered in connection
with an investment in our securities.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus supplement is truthful
or complete. Any representation to the contrary is a
criminal offense.
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Public offering
price
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$
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$
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Underwriting
discount and commissions (1)
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$
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$
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Proceeds, before
expenses, to us (2)
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$
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$
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________
(1)
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We have
also agreed to reimburse the underwriter for certain expenses
incurred by it, including a non-accountable expense allowance equal
to 1.0% of the public offering price and reimbursement of up to
$100,000 in accountable expenses. See “Underwriting”
for a description of the compensation payable by us to the
underwriter.
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(2)
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We
estimate the total expenses payable by us, excluding the
underwriting discount and commissions and the 1.0% non-accountable
expense allowance but including the reimbursement of the
underwriter’s expenses, will be approximately
$200,000.
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We have
granted the underwriter a 45-day option to purchase additional
shares of common stock in an amount up to 15% of the shares sold to
the public in this offering to cover over-allotments, if any. If
the underwriter exercises the option in full, the total
underwriting discount payable by us will be $
and the total proceeds to us, before expenses, will be
$
.
As of
the date of this prospectus supplement, the aggregate market value
of our outstanding common stock held by non-affiliates was
$22,210,734 based on 25,784,038 shares of outstanding common stock,
of which 24,678,593 shares are held by non-affiliates, and the last
reported sale price of our common stock of $0.90 per share on
December 14, 2020. Pursuant to General Instruction I.B.6 of Form
S-3, in no event will we sell securities in a public primary
offering with a value exceeding more than one-third of our public
float in any 12-month period so long as our public float remains
below $75,000,000. Following the sale of shares in this offering
and assuming the underwriter exercises in full its option to
purchase additional shares of common stock, we will have sold
securities with an aggregate market value of
$
pursuant to General Instruction 1.B.6 of Form S-3 during the 12
calendar month period that ends on and includes the date
hereof.
The
underwriter expects to deliver the shares of common stock to
investors on or about December , 2020, subject to customary closing
conditions.
ThinkEquity
a division of Fordham Financial Management, Inc.
The date of this prospectus supplement
is December , 2020
TABLE OF CONTENTS
Prospectus Supplement
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Page
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ABOUT THIS PROSPECTUS SUPPLEMENT
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S-1
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
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S-2
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PROSPECTUS SUPPLEMENT SUMMARY
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S-4
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THE OFFERING
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S-7
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RISK FACTORS
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S-8
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USE OF PROCEEDS
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S-10
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DILUTION
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S-11
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UNDERWRITING
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S-12
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LEGAL MATTERS
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S-19
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EXPERTS
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S-13
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WHERE YOU CAN FIND MORE INFORMATION
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S-13
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
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S-13
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Prospectus
ABOUT THIS PROSPECTUS
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1
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FORWARD-LOOKING STATEMENTS
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1
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THE COMPANY
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2
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RISK FACTORS
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3
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USE OF PROCEEDS
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4
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DESCRIPTION OF SECURITIES WE MAY OFFER
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4
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DESCRIPTION OF COMMON STOCK WE MAY OFFER
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4
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DESCRIPTION OF PREFERRED STOCK WE MAY OFFER
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5
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PLAN OF DISTRIBUTION
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6
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LEGAL MATTERS
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7
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EXPERTS
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7
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WHERE YOU CAN FIND MORE INFORMATION
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7
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INCORPORATION BY REFERENCE
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8
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ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement and the accompanying prospectus form
part of a registration statement on Form S-3 that we filed with the
Securities and Exchange Commission, or the “SEC,” using
a “shelf” registration process. This document contains
two parts. The first part consists of this prospectus supplement,
which provides you with specific information about this offering.
The second part, the accompanying prospectus, provides more general
information, some of which may not apply to this offering.
Generally, when we refer only to the “prospectus,” we
are referring to both parts combined together with all documents
incorporated by reference.
In this
prospectus supplement, the terms “ENDRA,”
“we,” “us,” “our” and the
“Company” refer to ENDRA
Life Sciences Inc., a Delaware corporation, and its
consolidated subsidiary. References to our “common
stock” are to the common stock of ENDRA Life Sciences
Inc.
This prospectus supplement, and the information incorporated herein
by reference, may add, update or change information in the
accompanying prospectus and in any free writing prospectuses we may
provide to you in connection with this offering. You should read
both this prospectus supplement and the accompanying prospectus
together with additional information described under the headings
“Where You Can Find More Information” and
“Incorporation of Certain Information by Reference.” If
there is any inconsistency between the information in this
prospectus supplement and the accompanying prospectus, you should
rely on the information in this prospectus supplement.
You should rely only on the information contained in or
incorporated by reference to this prospectus supplement and the
accompanying prospectus. We have not, and the underwriter has
not, authorized anyone to provide you with additional or different
information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not,
and the underwriter is not, making an offer to sell these
securities in any jurisdiction where the offer or sale is not
permitted. You should assume that the information appearing in this
prospectus supplement, the accompanying prospectus and in any free
writing prospectus we may provide to you in connection with this
offering is accurate only as of their respective dates, regardless
of time of delivery. Our business, financial condition, results of
operations and prospects may have changed since those
dates.
MARKET AND INDUSTRY DATA
Unless otherwise indicated, information contained in this
prospectus supplement, the accompanying prospectus and the
documents we incorporate by reference concerning our industry and
the markets in which we operate is based on information from
independent industry and research organizations, other third-party
sources (including industry publications, surveys and forecasts),
and management estimates. Management estimates are derived from
publicly available information released by independent industry
analysts and third-party sources, as well as data from our internal
research, and are based on assumptions made by us
upon reviewing such data and our knowledge of such industry and
markets which we believe to be reasonable. Although we believe the
data from these third-party sources is reliable, we have not
independently verified any third-party information. In addition,
projections, assumptions and estimates of the future performance of
the industry in which we operate and our future performance are
necessarily subject to uncertainty and risk due to a variety of
factors, including those described in “Risk Factors”
and “Cautionary Note Regarding Forward-Looking Statements and
Other Information Contained In This Prospectus.” These and
other factors could cause results to differ materially from those
expressed in the estimates made by the independent parties and by
us.
TRADEMARKS
We operate under a number of trademarks, including, among others,
“ENDRA” and “TAEUS,” all of which are
registered under applicable intellectual property laws. This
prospectus supplement and the accompanying prospectus contain
references to our trademarks and service marks and to those
belonging to other entities. Solely for convenience, trademarks and
trade names referred to in this prospectus may appear without
the ® or TM symbols,
but such references are not intended to indicate, in any way, that
we will not assert, to the fullest extent possible under applicable
law, our rights or the rights of the applicable licensor to these
trademarks and trade names. We do not intend our use or display of
other companies’ trade names, trademarks or service marks to
imply a relationship with, or endorsement or sponsorship of us by,
any other companies.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
Certain
information set forth in this prospectus supplement, set forth in
the accompanying prospectus or incorporated by reference herein or
therein may contain “forward-looking statements” within
the meaning of Section 27A of the Securities Act and Section 21E of
the Exchange Act, that are intended to be covered by the
“safe harbor” created by those sections.
Forward-looking statements, which are based on certain assumptions
and describe our future plans, strategies and expectations, can
generally be identified by the use of forward-looking terms such as
“believe,” “expect,” “may,”
“will,” “should,” “would,”
“could,” “seek,” “intend,”
“plan,” “goal,” “project,”
“estimate,” “anticipate,”
“strategy”, “future”, “likely”
or other comparable terms and references to future periods. All
statements other than statements of historical facts included in
this prospectus supplement and the documents incorporated by
reference 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 efforts and the timing for receipt of required
regulatory approvals and product launches.
Forward-looking
statements are neither historical facts nor assurances of future
performance. Instead, they are based only on our current beliefs,
expectations and assumptions regarding the future of our business,
future plans and strategies, projections, anticipated events and
trends, the economy and other future conditions. Because
forward-looking statements relate to the future, they are subject
to inherent uncertainties, risks and changes in circumstances that
are difficult to predict and many of which are outside of our
control. Our actual results and financial condition may differ
materially from those indicated in the forward-looking statements.
Therefore, you should not rely on any of these forward-looking
statements. Important factors that could cause our actual results
and financial condition to differ materially from those indicated
in the forward-looking statements include, among others, the
following:
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our
limited commercial experience, limited cash and history of
losses;
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our
ability to obtain adequate financing to fund our business
operations in the future;
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our
ability to achieve profitability;
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our
ability to develop a commercially feasible application based on our
Thermo-Acoustic Enhanced Ultrasound (“TAEUS”)
technology;
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market
acceptance of our technology;
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uncertainties
associated with COVID-19, or coronavirus, including its possible
effects on our operations;
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results
of our human studies, which may be negative or
inconclusive;
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our
ability to find and maintain development partners;
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our
reliance on third parties, collaborations, strategic alliances and
licensing arrangements to complete our business
strategy;
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the
amount and nature of competition in our industry;
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our
ability to protect our intellectual property;
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potential
changes in the healthcare industry or third-party reimbursement
practices;
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delays
and changes in regulatory requirements, policy and guidelines
including potential delays in obtaining required regulatory
approvals;
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our
ability to maintain CE mark certification and secure required U.S.
Food and Drug Administration (“FDA”) and other
governmental approvals for our TAEUS applications;
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our
ability to regain compliance with Nasdaq listing
standards;
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our
ability to comply with regulation by various federal, state, local
and foreign governmental agencies and to maintain necessary
regulatory clearances or approvals;
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our
dependence on our senior management team; and
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the
other risks and uncertainties described in “Risk
Factors” beginning on page S-8 of this prospectus supplement
and in Part I, Item 1A, Risk Factors of our Annual Report on Form
10-K for the fiscal year ended December 31, 2019 and in Part II,
Item 1A, Risk Factors of subsequently filed Quarterly Reports on
Form 10-Q, which are incorporated by reference in this prospectus
supplement and the accompanying prospectus.
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Any
forward-looking statement made by us in this prospectus supplement
is based only on information currently available to us and speaks
only as of the date on which it is made. We undertake no obligation
to publicly update any forward-looking statement, whether written
or oral, that may be made from time to time, whether as a result of
new information, future developments or otherwise. We anticipate
that subsequent events and developments will cause our views to
change. You should read this prospectus supplement, the
accompanying prospectus and the documents referenced herein or
therein and filed as exhibits to the registration statement, of
which this prospectus supplement is a part, completely and with the
understanding that our actual future results may be materially
different from what we expect. Our forward-looking statements do
not reflect the potential impact of any future acquisitions,
merger, dispositions, joint ventures or investments we may
undertake. We qualify all of our forward-looking statements by
these cautionary statements.
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PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights selected information contained elsewhere in
or incorporated by reference in this prospectus supplement and the
accompanying prospectus. The summary may not contain all of the
information that is important to you or that you should consider
before making an investment decision. You should carefully read
this entire prospectus supplement and the accompanying prospectus,
as well as the information to which we refer you, before deciding
whether to invest in our common stock. You should pay special
attention to the “Risk Factors” section of this
prospectus supplement to determine whether an investment in our
common stock is appropriate for you.
About ENDRA Life Sciences Inc.
We are
leveraging experience with pre-clinical enhanced ultrasound devices
to develop technology for increasing the capabilities of clinical
diagnostic ultrasound in order to broaden patient access to the
safe diagnosis and treatment of a number of significant medical
conditions in circumstances where expensive X-ray computed
tomography (“CT”) and magnetic resonance imaging
(“MRI”) technology, or other diagnostic technologies
such as surgical biopsy, are unavailable or
impractical.
In
2010, we began marketing and selling our Nexus 128 system, which
combined light-based thermoacoustics and ultrasound to address the
imaging needs of researchers studying disease models in
pre-clinical applications. Building on this expertise in
thermoacoustics, we have developed a next-generation technology
platform — Thermo Acoustic Enhanced Ultrasound, or TAEUS
— which is intended to enhance the capability of clinical
ultrasound technology and support the diagnosis and treatment of a
number of significant medical conditions that currently require the
use of expensive CT or MRI imaging or where imaging is not
practical using existing technology. We ceased production of our
Nexus 128 system as of January 1, 2019 and stopped providing
service support and parts for all existing Nexus 128 systems as of
July 1, 2019 in order to focus our resources on the development of
our TAEUS technology.
Unlike
the near-infrared light pulses used in our legacy Nexus 128 system,
our TAEUS technology uses radio frequency (“RF”) pulses
to stimulate tissues, using a small fraction (less than 1%) of the
energy that would be transmitted into the body during an MRI scan.
The use of RF energy allows our TAEUS technology to penetrate deep
into tissue, enabling the imaging of human anatomy at depths
equivalent to those of conventional ultrasound. The RF pulses are
absorbed by tissue and converted into ultrasound signals, which are
detected by an external ultrasound receiver and a digital
acquisition system that is part of the TAEUS system. The detected
ultrasound is processed into images and other forms of data using
our proprietary algorithms and displayed to complement conventional
gray-scale ultrasound images. The TAEUS imaging concept is
illustrated below:
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We
believe that our TAEUS technology has the potential to add a number
of new capabilities to conventional ultrasound and thereby enhance
the utility of both existing and new ultrasound systems and extend
the use of ultrasound technology to circumstances that either
currently require the use of expensive CT or MRI imaging systems,
where imaging is not practical using existing technology, or where
other assessment tools such as surgical biopsy are
required.
Our
TAEUS platform is not intended to replace CT or MRI systems, both
of which are versatile imaging technologies with capabilities and
uses beyond the focus of our business. However, they are also
expensive, with a CT system costing approximately $1 million and an
MRI system costing up to $3 million. In addition, and in contrast
to ultrasound systems, due to their limited number and the fact
that they are usually fixed-in-place at major medical facilities,
CT or MRI systems are frequently inaccessible to patients.
Ultrasound systems are more broadly available to patients than
either CT or MRI systems. There are an estimated one million
ultrasound systems globally in use generating over 400 million
annual diagnostic ultrasound procedures globally. Sales of
ultrasound diagnostic equipment were approximately $4.4 billion
globally in 2017 and an estimated 30,000 to 50,000 new and
replacement ultrasound systems are sold into the market annually.
Ultrasound systems are relatively inexpensive compared to CT and
MRI systems, with smaller portable ultrasound systems costing as
little as $10,000 and new cart-based ultrasound systems costing
between $75,000 and $200,000. These numbers cover all types of
diagnostic ultrasound procedures, including systems intended for
cardiology, prenatal and abdominal use. However, we do not
currently intend to address ultrasound systems focused on
applications in prenatal care, where we believe our TAEUS
technology will not substantially impact patient care. Accordingly,
we define our addressable market for one or more of our TAEUS
applications at approximately 365,000 cart-based ultrasound systems
currently in use throughout the world.
Many
ultrasound systems are designed to be moved by an operator from
room to room, or closer to patients. CT and MRI systems are
stationary systems, requiring the patient to travel to a medical
center; there are only approximately 14,000 CT systems and 12,000
MRI systems located in the United States. Ultrasound technology
does not present the same safety concerns as CT and MRI technology,
since ultrasound does not emit ionizing radiation and ultrasound
contrast agents are considered to be generally safe. The
ultrasound’s imaging capabilities, however, are more limited
compared to CT and MRI technologies, which are able to measure
tissue temperature during thermal ablation surgery or quantify fat
to diagnose early stage liver disease.
To
demonstrate the capabilities of our TAEUS platform, we have
conducted various internal ex-vivo laboratory experiments and
limited internal in-vivo large animal studies. In our ex-vivo and
in-vivo testing, we have demonstrated that the TAEUS platform has
the following capabilities and potential clinical
applications:
Tissue Composition: Our TAEUS technology enables ultrasound
to distinguish fat from lean tissue. This capability would enable
the use of TAEUS-enhanced ultrasound for the early identification,
staging and monitoring of nonalcoholic fatty liver disease, or
NAFLD, a precursor to nonalcoholic steatohepatitis
(“NASH”), liver fibrosis, cirrhosis and liver
cancer.
Temperature Monitoring: Our TAEUS technology enables
traditional ultrasound to visualize changes in tissue temperature,
in real time. This capability would enable the use of
TAEUS-enhanced ultrasound to guide thermoablative therapy, which
uses heat or cold to remove tissue, such as in the treatment of
cardiac atrial fibrillation, or removal of cancerous liver and
kidney lesions, with greater accuracy.
Vascular Imaging: Our TAEUS technology enables ultrasound to
view blood vessels from any angle, using only a saline solution
contrasting agent, unlike Doppler ultrasound, which requires
precise viewing angles. This capability would enable the use of
TAEUS-enhanced ultrasound to easily identify arterial plaque or
malformed vessels.
Tissue Perfusion: Our TAEUS technology enables ultrasound to
image blood flow at the capillary level in a region, organ or
tissue. This capability could be used to assist physicians in
characterizing microvasculature fluid flows symptomatic of damaged
tissue, such as internal bleeding from trauma, or diseased tissue,
such as certain cancers.
The
first TAEUS application we intend to commercialize is our NAFLD
TAEUS application addressing liver tissue composition. Our initial
target market for this application is the European Union. For
commercial reasons and to support our application for CE marking,
which is required before we can sell the application in the
European Union, we engaged the Centre for Imaging Technology
Commercialization, a contract research organization, to initiate
human studies through Canada-based Robarts Research Institute to
demonstrate our NAFLD TAEUS application’s ability to
distinguish fat from lean tissue. In December 2018, Robarts
Research Institute completed its initial healthy subject enrollment
and data collection of 25 subjects and received authorization from
Health Canada to expand the study to 50 subjects. In September
2019, we announced the completion and reported top-level findings
of the expanded study, which was included in our TAEUS liver device
technical file submission for device CE mark. We received CE mark
approval for our TAEUS FLIP (Fatty Liver Imaging Probe) NAFLD
application in March 2020. In June 2020, we submitted a 510(k)
Application to the FDA for our TAEUS FLIP system. We expect that
initial FDA clearance will allow us to sell the NAFLD TAEUS
application in the U.S. with general imaging claims. However, we
will need to obtain additional FDA clearances to be able to make
diagnostic claims for fatty tissue content determination.
Accordingly, to support our commercialization efforts we expect
that, following receipt of our initial FDA clearance, we will
submit one or more additional applications to the FDA, each of
which will need to include additional clinical trial data, so that
following receipt of the necessary clearances we may make those
diagnostic claims.
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After
required regulatory approvals, our TAEUS technology can be added as
an accessory to existing ultrasound systems, helping to improve
clinical decision-making on the front lines of patient care,
without requiring substantially new clinical workflows or large
capital investments. We also intend to develop TAEUS for
incorporation into new ultrasound systems manufactured by companies
such as GE Healthcare.
Because
of the large number of traditional ultrasound systems currently in
global use, we are first developing our TAEUS technology for sale
as an aftermarket accessory that works with existing ultrasound
systems. Because our TAEUS technology is designed to enhance the
utility of, not replace, conventional ultrasound, we believe
healthcare providers will be able to increase the utilization of,
and generate new revenue from, their existing ultrasound systems
once we obtain required regulatory approval for specific
applications. Based on our design work and our understanding of the
ultrasound accessory market, we intend to price our initial NAFLD
TAEUS application at a price point approximating $50,000, which may
enable purchasers to recoup their investment by performing a
relatively small number of additional ultrasound procedures. We
further believe that clinicians will be attracted to our technology
because it will enable them to perform more procedures with
existing ultrasound equipment, thereby retaining more imaging
patients in their clinics rather than referring patients out to a
regional medical center for a CT or MRI scan.
Each of
our TAEUS platform applications will require regulatory approvals
before we are able to sell or license the application. Based on
certain factors, such as the installed base of ultrasound systems,
availability of other imaging technologies, such as CT and MRI,
economic strength and applicable regulatory requirements, we are
seeking initial approval of our applications for sale in the
European Union and plan to seek additional approval in the United
States and China.
Recent Developments
Termination of September 2020 At-The-Market Issuance Sales
Agreement
In
September 2020, the Company entered into an At-The-Market Issuance
Sales Agreement (the “ATM Agreement”) with Ascendiant
Capital Markets, LLC (“Ascendiant”) to sell shares of
the Company’s common stock for aggregate gross proceeds of up
to $6.8 million, from time to time, through an at-the-market equity
offering program under which Ascendiant acted as sales agent. The
Company sold an aggregate of approximately 584,000 shares of common
stock for gross proceeds of approximately $473,000 under the ATM
Agreement. The ATM Agreement was terminated effective December 15,
2020.
General Company Information
We were
incorporated in Delaware in July 2007. Our corporate headquarters
is located at 3600 Green Court, Suite 350, Ann Arbor, Michigan
48105-1570. The telephone number of our principal executive office
is (734) 335-0468. Our website can be accessed at www.endrainc.com.
The information contained on, or that may be obtained from, our
website is not, and shall not be deemed to be, a part of this
prospectus supplement or the accompanying prospectus.
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The information below is only a summary of more detailed
information included elsewhere in this prospectus supplement and
the accompanying prospectus. This summary may not contain all the
information that is important to you or that you should consider
before making a decision to invest in our common stock. Please read
this entire prospectus supplement and the accompanying prospectus,
including the risk factors,
carefully.
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Common
stock offered by us
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shares of our common stock.
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Public offering
price
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$ per
share
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Over-allotment
option
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We have
granted the underwriter a 45-day option to purchase up
to
additional shares of common stock to cover over-allotments, if
any.
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Common stock to be
outstanding after this offering
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shares (or shares if the underwriter exercises its
over-allotment option in full). (1)(2)
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Use
of proceeds
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We intend to use
the net proceeds from this offering for working capital and other
general corporate purposes. See “Use of Proceeds” for
additional information.
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Risk
factors
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Investing
in our common stock involves significant risks. See the section
entitled “Risk Factors” beginning on page S-8 and the
other information included or incorporated by reference in this
prospectus supplement and the accompanying prospectus for a
discussion of factors you should carefully consider before deciding
to invest in shares of our common stock.
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Nasdaq
Capital Market symbol
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Our common stock is
currently listed on the Nasdaq Capital Market under the symbol
“NDRA.”
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(1)
The number of shares of our common stock to be
outstanding after this offering is based on 25,784,038
shares of common stock outstanding as
of December 14, 2020 and
excludes the following:
●
1,932,000 shares of
common stock issuable upon the exercise of outstanding warrants
issued in our initial public offering listed on the Nasdaq Capital
Market under the symbol “NDRAW,” at an exercise price
of $6.25 per share;
●
4,164,540 shares of
common stock issuable upon the exercise of outstanding unregistered
warrants, at a weighted average exercise price of $1.12 per
share;
●
218,733 shares of
common stock issuable upon the conversion of outstanding shares of
Series A Convertible Preferred Stock;
●
3,457,874 shares of
common stock issuable upon the exercise of outstanding stock
options issued pursuant to our 2016 Omnibus Incentive Plan (the
“Incentive Plan”) at a weighted average exercise price
of 2.16 per share; and
●
2,403,784 shares of
common stock reserved for future issuance under our Incentive
Plan.
(2)
Except as otherwise
indicated herein, all information in this prospectus assumes no
exercise of the underwriter’s over-allotment
option.
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RISK FACTORS
An investment in our securities involves a high degree of risk. You
should carefully consider the following risk factors and the risk
factors discussed under “Item 1A - Risk Factors”
contained in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2019 and in Part II, Item 1A, Risk Factors of
subsequently filed Quarterly Reports on Form 10-Q, which are
incorporated by reference in this prospectus supplement in their
entirety, together with all of the other information contained in
this prospectus supplement and the accompanying prospectus or
incorporated by reference in this prospectus supplement and the
accompanying prospectus.
If any of the events described in these risk factors actually
occurs, or if additional risks and uncertainties that are not
presently known to us or that we currently deem immaterial later
materialize, then our business, prospects, results of operations
and financial condition could be materially adversely
affected. In that event, the trading price of our
securities could decline, and you may lose all or part of your
investment in our securities. The risks discussed below
include forward-looking statements, and our actual results may
differ substantially from those discussed in these forward-looking
statements. See “Cautionary Note Regarding Forward-Looking
Statements.”
Risks Related to this Offering
As an investor, you may lose all of your investment.
Investing in our securities involves a high degree of risk. As an
investor, you may never recoup all, or even part, of your
investment and you may never realize any return on your investment.
You must be prepared to lose all of your investment.
Management will have broad discretion as to the use of proceeds
from this offering and may not use them effectively.
Our
management will have broad discretion as to the application of the
net proceeds from this offering and our stockholders will not have
the opportunity as part of their investment decisions to assess
whether the net proceeds are being used appropriately. You may not
agree with our decisions, and our use of the proceeds may not yield
any return on your investment. Because of the number and
variability of factors that will determine our use of the net
proceeds from this offering, their ultimate use may vary
substantially from their currently intended use. Our failure to
apply the net proceeds of this offering effectively could
compromise our ability to pursue our growth strategy and we might
not be able to yield a significant return, if any, in our
investment of these net proceeds. You will not have the opportunity
to influence our decisions on how to use our net proceeds from this
offering.
You will suffer immediate and substantial dilution in the net
tangible book value per share of the common stock that you purchase
in this offering.
Because
the offering price per share of our common stock being offered may
be higher than the book value per share of our common stock, you
may suffer substantial dilution in the net tangible book value of
the common stock you purchase in this offering. For a further
description of the dilution that investors in this offering will
experience, see “Dilution.”
Investors
in this offering will also be subject to increased dilution upon
the exercise of outstanding stock options and
warrants.
Future sales of common stock by stockholders may have an adverse
effect on the then prevailing market price of our common
stock.
Sales
of a substantial number of shares of our common stock in the public
market following this offering could cause the market price of our
common stock to decline and could impair our ability to raise
capital through the sale of additional equity securities. We cannot
predict the effect that future sales of our common stock or other
equity-related securities would have on the market price of our
common stock.
You may experience dilution as a result of future equity
offerings.
In
order to raise additional capital, we may in the future offer
additional shares of our common stock or other securities
convertible into or exchangeable for our common stock at prices
that may not be the same as the price per share in this offering.
The price per share at which we sell additional shares of our
common stock, or securities convertible or exchangeable into common
stock, in future transactions may be lower than the price per share
paid by investors in this offering.
We have not paid dividends in the past and have no immediate plans
to pay dividends.
We plan
to reinvest all of our earnings, to the extent we have earnings, in
order to further develop our technology and potential products and
to cover operating costs. We do not plan to pay any cash
dividends with respect to our securities in the foreseeable
future. We cannot assure you that we would, at any time,
generate sufficient surplus cash that would be available for
distribution to the holders of our common stock as a
dividend. Therefore, you should not expect to receive cash
dividends on the common stock we are offering.
If we fail to regain compliance with the minimum closing bid
requirement of the Nasdaq Capital Market or to satisfy other
requirements for continued listing, our common stock may be
delisted and the price of our common stock and our ability to
access the capital markets could be negatively
impacted.
Our
common stock is currently traded on the Nasdaq Capital Market. To
maintain this listing, we must satisfy Nasdaq’s continued
listing requirements, including, among other things, a minimum
closing bid price requirement of $1.00 per share
under Nasdaq Listing Rule 5550(a)(2) (the
“Bid Price Rule”).
On
April 24, 2020, we received a notification letter
from Nasdaq informing us that, for 30 consecutive
business days, the bid price of our common stock had
closed below $1.00 per share. This notice had no immediate effect
on our Nasdaq listing, and we have 180 calendar days from
July 1, 2020, or until December 28, 2020, to regain
compliance.
The
closing bid price of our common stock must be at least $1.00 per
share for a minimum of ten consecutive business days to regain
compliance with the Bid Price Rule. If by December 28, 2020 we have
not regained compliance with the Bid Price Rule, a second 180-day
compliance period may be available, provided (i) we meet the
continued listing requirement for market value of publicly held
shares and all other applicable requirements for initial listing on
Nasdaq (except for the Bid Price Rule), and (ii) we provide written
notice to Nasdaq of our intention to cure this deficiency during
the second compliance period by effecting a reverse stock split, if
necessary.
As of
the date of this prospectus supplement, we have not regained
compliance with the Bid Price Rule. Furthermore, the issuance and
sale of new shares of common stock in this offering could have the
effect of depressing the market price of our common stock,
adversely affecting our timely regaining compliance with the Bid
Price Rule. If our common stock were delisted from the Nasdaq
Capital Market, it could lead to a number of negative implications,
including, among other things, reduced liquidity in our common
stock, the loss of federal preemption of state securities laws and
greater difficulty in obtaining financing. Additionally, in the
event of delisting we would no longer be eligible to use Form S-3,
on which this offering is dependent.
USE OF PROCEEDS
We
estimate that we will receive net proceeds of approximately
$ million from this offering, or
approximately
$ million if
the underwriter exercises its over-allotment option in full, in
each case after deducting the underwriting discount and estimated
offering expenses payable by us.
We
intend to use the net proceeds of this offering for working capital
and other general corporate purposes. We have not yet determined
the amount of net proceeds to be used specifically for any
particular purposes or the timing of these expenditures.
Accordingly, our management will have significant discretion and
flexibility in applying the net proceeds from the sale of these
securities, and investors will be relying on our judgment regarding
the application of the net proceeds from this
offering.
Pending
our use of the net proceeds from this offering, we intend to
maintain the net proceeds as cash deposits or cash management
instruments, such as U.S. government securities or money market
mutual funds.
DIVIDEND POLICY
We have
not declared or paid any cash dividends on our capital stock. We
currently intend to retain any future earnings for use in the
operation of our business and do not anticipate paying any
dividends on our common stock in the foreseeable future. Any future
determination to declare dividends will be made at the discretion
of our board of directors and will depend on our financial
condition, operating results, capital requirements, general
business conditions and other factors that our board of directors
may deem relevant.
DILUTION
If you
purchase shares of common stock in this offering, you will
experience dilution to the extent of the difference between the
public offering price per share in this offering and our pro forma
net tangible book value per share immediately after this
offering.
Net
tangible book value per share represents total tangible assets less
total liabilities, divided by the number of shares of common stock
outstanding. Our historical net tangible book value as of September
30, 2020 was approximately $2.3 million, or $0.09 per share of
common stock. After giving effect to the sale of shares of our
common stock in this offering, and after deducting the underwriting
discount and estimated offering expenses payable by us, our net
tangible book value as of September 30, 2020 would have been
approximately
$
, or $ per
share of common stock. This represents an immediate increase in net
tangible book value of approximately
$
per share to existing stockholders and an immediate dilution in net
tangible book value of approximately
$
per share to investors in this offering. The following table
illustrates this dilution on a per share basis:
Public offering
price per share
|
$
|
Net tangible book
value per share as of September 30, 2020
|
$0.09
|
Increase in net
tangible book value per share attributable to this
offering
|
$
|
As adjusted
tangible book value per share, after giving effect to this
offering
|
$
|
Dilution per share
to investors in this offering
|
$
|
If the
underwriter exercises in full its option to purchase additional
shares of common stock, the net tangible book value per share after
giving effect to this offering would be approximately
$ per share, which
amount represents an immediate increase in net tangible book value
of approximately $ per
share of our common stock to existing stockholders and an immediate
dilution in net tangible book value of approximately $
per share of our common
stock to investors purchasing shares in this offering.
The
above discussion and tables are based on 25,015,710 shares of
common stock outstanding as of September 30, 2020 and exclude the
following:
●
|
An
aggregate of 583,633 shares of common stock issued subsequent to
September 30, 2020 pursuant to the ATM Agreement;
|
●
|
1,932,000
shares of common stock issuable upon the exercise of outstanding
warrants issued in our initial public offering listed on the Nasdaq
Capital Market under the symbol “NDRAW,” at an exercise
price of $6.25 per share;
|
●
|
4,164,540
shares of common stock issuable upon the exercise of outstanding
unregistered warrants, at a weighted average exercise price of
$1.12 per share;
|
●
|
218,722
shares of common stock issuable upon the conversion of outstanding
shares of Series A Convertible Preferred Stock;
|
●
|
3,457,874
shares of common stock issuable upon the exercise of outstanding
stock options issued pursuant to our 2016 Omnibus Incentive Plan
(the “Incentive Plan”) at a weighted average exercise
price of $1.12 per share;
|
●
|
247,714
shares of common stock subject to outstanding restricted stock
units issued pursuant to our Incentive Plan; and
|
●
|
2,457,784
shares of common stock reserved for future issuance under our
Incentive Plan.
|
UNDERWRITING
ThinkEquity,
a division of Fordham Financial Management, Inc., or the
underwriter, is serving as the sole underwriter of this offering.
We have entered into an underwriting agreement dated December ,
2020 with the underwriter. Subject to the terms and conditions of
the underwriting agreement, we have agreed to sell to the
underwriter, and the underwriter has agreed to purchase, at the
public offering price, less the underwriting discounts and
commissions, as set forth on the cover page of this prospectus, the
number of shares of common stock listed next to its name in the
following table:
Underwriters
|
|
ThinkEquity, a
division of Fordham Financial Management, Inc.
|
|
Total
|
|
The
underwriter is committed to purchase all shares offered by us other
than those covered by the over-allotment option described below, if
any are purchased. The obligations of the underwriter may be
terminated upon the occurrence of certain events specified in the
underwriting agreement. Furthermore, the underwriting agreement
provides that the obligations of the underwriter to pay for and
accept delivery of the shares offered by us in this prospectus are
subject to various representations and warranties and other
customary conditions specified in the underwriting agreement, such
as receipt by the underwriter of officers’ certificates and
legal opinions.
We have
agreed to indemnify the underwriter against specified liabilities,
including liabilities under the Securities Act, and to contribute
to payments the underwriter may be required to make in respect
thereof.
The
underwriter is offering the shares of common stock subject to prior
sale, when, as and if issued to and accepted by it, subject to
approval of legal matters by its counsel and other conditions
specified in the underwriting agreement. The underwriter reserves
the right to withdraw, cancel or modify offers to the public and to
reject orders in whole or in part.
We have
granted the underwriter an over-allotment option. This option,
which is exercisable for up to 45 days after the date of this
prospectus, permits the underwriter to purchase up to an aggregate
of additional shares of common stock (equal to 15% of the shares of
common stock sold in this offering) at the public offering price
per share, less underwriting discounts and commissions, solely to
cover over-allotments, if any. If the underwriter exercises this
option in whole or in part, then the underwriter will be committed,
subject to the conditions described in the underwriting agreement,
to purchase the additional shares of common stock.
Discounts, Commissions and Reimbursement
The
underwriter has advised us that it proposes to offer the shares of
common stock to the public at the initial public offering price per
share set forth on the cover page of this prospectus. The
underwriter may offer shares to securities dealers at that price
less a concession of not more than $ per share of which up to $ per
share may be reallowed to other dealers. After the initial offering
to the public, the public offering price and other selling terms
may be changed by the underwriter.
The
following table summarizes the underwriting discounts and
commissions, non-accountable underwriter’s expense allowance
and proceeds, before other expenses, to us assuming both no
exercise and full exercise by the underwriter of its over-allotment
option:
|
|
|
|
|
Offering
without
Over-Allotment
Option
|
Offering
with
Over-Allotment
Option
|
Public offering
price
|
$
|
$
|
$
|
Underwriting
discounts and commissions (7.0%)
|
$
|
$
|
$
|
Non-accountable
expense allowance (1.0%)
|
$
|
$
|
$
|
Proceeds, before
expenses, to us
|
$
|
$
|
$
|
____________
We have
also agreed to reimburse certain accountable out-of-pocket expenses
of the underwriter relating to this offering as set forth in the
underwriting agreement, up to a maximum of $100,000, including the
fees and expenses of the underwriter’s legal counsel. We have
paid an expense deposit of $35,000 to (or on behalf of) the
underwriter, which will be applied against the out-of-pocket
accountable expenses that will be paid by us to the underwriter in
connection with this offering, and will be reimbursed to us to the
extent not incurred in accordance with FINRA Rule
5110(f)(2)(C).
We
estimate that the total expenses of this offering payable by us,
not including underwriting discounts, commissions and expenses,
will be approximately $200,000.
Underwriter’s Warrants
Upon
the closing of this offering, we have agreed to issue to the
underwriter warrants to purchase a number of shares of common stock
equal in the aggregate to 4% of the total shares sold in this
public offering. The warrants will be exercisable at a per share
exercise price equal to 125% of the public offering price per share
of common stock sold in this offering. The warrants are exercisable
at any time and from time to time, in whole or in part, during the
four-and-½-year period commencing six months after the
effective date of the registration statement related to this
offering.
The
warrants and the shares of common stock underlying the warrants
have been deemed compensation by the Financial Industry Regulatory
Authority, or FINRA, and are therefore subject to a 180-day lock-up
pursuant to Rule 5110(g)(1) of FINRA. The underwriter, or permitted
assignees under such rule, may not sell, transfer, assign, pledge,
or hypothecate the warrants or the securities underlying the
warrants, nor will the underwriter engage in any hedging, short
sale, derivative, put, or call transaction that would result in the
effective economic disposition of the warrants or the underlying
shares for a period of 180 days from the offering. Additionally,
the warrants may not be sold transferred, assigned, pledged or
hypothecated for a 180-day period following the offering except to
any underwriter and selected dealer participating in this offering
and their bona fide officers or partners. The warrants will provide
for adjustment in the number and price of the warrants and the
shares of common stock underlying such warrants in the event of
recapitalization, merger, stock split or other structural
transaction.
Right of First Refusal
Until
five (5) months from the closing of this offering, subject to
certain exceptions, the underwriter shall have an irrevocable right
of first refusal to act as sole and exclusive investment banker,
sole and exclusive book-runner, sole and exclusive financial
advisor, sole and exclusive underwriter and/or sole and exclusive
placement agent, at the underwriter’s sole discretion, for
future public and private equity offerings for our company, or any
successor to or any subsidiary of our company, including all equity
linked financings, on terms customary to the underwriter. The
underwriter shall have the sole right to determine whether or not
any other broker-dealer shall have the right to participate in any
such offering and the economic terms of any such participation. The
underwriter will not have more than one opportunity to waive or
terminate the right of first refusal in consideration of any such
transaction.
Discretionary Accounts
The
underwriter does not intend to confirm sales of the securities
offered hereby to any accounts over which they have discretionary
authority.
Lock-Up Agreements
We
agreed that for a period of 60 days after the closing of this
offering we will not, without the prior written consent of the
underwriter and subject to certain exceptions, directly or
indirectly:
●
offer,
pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer
or dispose of, directly or indirectly, any shares of our capital
stock or any securities convertible into or exercisable or
exchangeable for shares of our capital stock;
●
ile or
caused to be filed any registration statement with SEC relating to
the offering of any shares of our capital or any securities
convertible into or exercisable or exchangeable for shares of our
capital stock;
●
complete any
offering of our debt securities, other than entering into a line of
credit with a traditional bank; or
●
enter
into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of
our capital stock, whether any such transaction is to be settled by
delivery of shares of capital stock or such other securities, in
cash or otherwise.
In
addition, each of our directors and officers have agreed that for a
period of (i) 3 months after the date of this prospectus without
the prior written consent of the underwriter and subject to certain
exceptions, they will not directly or indirectly:
●
offer,
issue, pledge, sell, contract to sell, grant, encumber, lend, or
otherwise transfer or dispose of, directly or indirectly, any of
our common stock or any securities convertible into or exercisable
or exchangeable for common stock, whether now owned or hereafter
acquired or with respect to which a director or officer has or
hereafter acquires the power of disposition;
●
enter
into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of
our common stock or any securities convertible into or exercisable
or exchangeable for common stock, whether any such transaction is
to be settled by delivery of shares of common stock or such other
securities, in cash or otherwise;
●
make
any demand for or exercise any right with respect to the
registration of any common stock or any securities convertible into
or exercisable or exchangeable for common stock; or
●
publicly disclose
the intention to make any offer, sale, pledge or disposition, or to
enter into any transaction, swap, hedge or other arrangement
relating to any common stock or any securities convertible into or
exercisable or exchangeable for common stock.
Notwithstanding the foregoing, these lock-up agreements permit
transfers of shares of common stock pursuant to certain
Rule 10b5-1 plans of our directors and officers that
were in effect prior to the date of the applicable lock-up
agreement and provide for other limited
exceptions.
Electronic Offer, Sale and Distribution of Securities
A
prospectus in electronic format may be made available on the
websites maintained by the underwriter or selling group members.
The underwriter may agree to allocate a number of securities to
selling group members for sale to its online brokerage account
holders. Internet distributions will be allocated by the
underwriter and selling group members that will make internet
distributions on the same basis as other allocations. Other than
the prospectus in electronic format, the information on these
websites is not part of, nor incorporated by reference into, this
prospectus or the registration statement of which this prospectus
forms a part, has not been approved or endorsed by us, and should
not be relied upon by investors.
Stabilization
In
connection with this offering, the underwriter may engage in
stabilizing transactions, over-allotment transactions,
syndicate-covering transactions, penalty bids and purchases to
cover positions created by short sales.
Stabilizing
transactions permit bids to purchase shares so long as the
stabilizing bids do not exceed a specified maximum, and are engaged
in for the purpose of preventing or retarding a decline in the
market price of the shares while this offering is in
progress.
Over-allotment
transactions involve sales by the underwriter of shares in excess
of the number of shares the underwriter is obligated to purchase.
This creates a syndicate short position which may be either a
covered short position or a naked short position. In a covered
short position, the number of shares over-allotted by the
underwriter is not greater than the number of shares that they may
purchase in the over-allotment option. In a naked short position,
the number of shares involved is greater than the number of shares
in the over-allotment option. The underwriter may close out any
short position by exercising its over-allotment option and/or
purchasing shares in the open market.
Syndicate
covering transactions involve purchases of shares in the open
market after the distribution has been completed in order to cover
syndicate short positions. In determining the source of shares to
close out the short position, the underwriter will consider, among
other things, the price of shares available for purchase in the
open market as compared with the price at which it may purchase
shares through exercise of the over-allotment option. If the
underwriter sells more shares than could be covered by exercise of
the over-allotment option and, therefore, have a naked short
position, the position can be closed out only by buying shares in
the open market. A naked short position is more likely to be
created if the underwriter is concerned that after pricing there
could be downward pressure on the price of the shares in the open
market that could adversely affect investors who purchase in this
offering.
Penalty
bids permit the underwriter to reclaim a selling concession from a
syndicate member when the shares originally sold by that syndicate
member are purchased in stabilizing or syndicate covering
transactions to cover syndicate short positions.
These
stabilizing transactions, syndicate covering transactions and
penalty bids may have the effect of raising or maintaining the
market price of our shares of common stock or preventing or
retarding a decline in the market price of our shares of common
stock. As a result, the price of our common stock in the open
market may be higher than it would otherwise be in the absence of
these transactions. Neither we nor the underwriter makes any
representation or prediction as to the effect that the transactions
described above may have on the price of our common stock. These
transactions may be effected in the over-the-counter market or
otherwise and, if commenced, may be discontinued at any
time.
Passive Market Making
In
connection with this offering, the underwriter and selling group
members may engage in passive market making transactions in our
common stock on the Nasdaq Capital Market in accordance with Rule
103 of Regulation M under the Exchange Act, during a period before
the commencement of offers or sales of the securities and extending
through the completion of the distribution. A passive market maker
must display its bid at a price not in excess of the highest
independent bid of that security. However, if all independent bids
are lowered below the passive market maker’s bid, then that
bid must then be lowered when specified purchase limits are
exceeded
Other Relationships
The
underwriter and its affiliates may in the future provide various
investment banking, commercial banking and other financial services
for us and our affiliates for which they may in the future receive
customary fees.
Offer Restrictions Outside The United States
Other
than in the United States, no action has been taken by us or the
underwriter that would permit a public offering of the securities
offered by this prospectus in any jurisdiction where action for
that purpose is required. The securities offered by this prospectus
may not be offered or sold, directly or indirectly, nor may this
prospectus or any other offering material or advertisements in
connection with the offer and sale of any such securities be
distributed or published in any jurisdiction, except under
circumstances that will result in compliance with the applicable
rules and regulations of that jurisdiction. Persons into whose
possession this prospectus comes are advised to inform themselves
about and to observe any restrictions relating to this offering and
the distribution of this prospectus. This prospectus does not
constitute an offer to sell or a solicitation of an offer to buy
any securities offered by this prospectus in any jurisdiction in
which such an offer or a solicitation is unlawful.
Australia
This
prospectus is not a disclosure document under Chapter 6D of the
Australian Corporations Act, has not been lodged with the
Australian Securities and Investments Commission and does not
purport to include the information required of a disclosure
document under Chapter 6D of the Australian Corporations Act.
Accordingly, (i) the offer of the securities under this prospectus
is only made to persons to whom it is lawful to offer the
securities without disclosure under Chapter 6D of the Australian
Corporations Act under one or more exemptions set out in section
708 of the Australian Corporations Act, (ii) this prospectus is
made available in Australia only to those persons as set forth in
clause (i) above, and (iii) the offeree must be sent a notice
stating in substance that by accepting this offer, the offeree
represents that the offeree is such a person as set forth in clause
(i) above, and, unless permitted under the Australian Corporations
Act, agrees not to sell or offer for sale within Australia any of
the securities sold to the offeree within 12months after its
transfer to the offeree under this prospectus.
China
The
information in this document does not constitute a public offer of
the securities, whether by way of sale or subscription, in the
People’s Republic of China (excluding, for purposes of this
paragraph, Hong Kong Special Administrative Region, Macau Special
Administrative Region and Taiwan). The securities may not be
offered or sold directly or indirectly in the PRC to legal or
natural persons other than directly to “qualified domestic
institutional investors.”
European Economic Area — Belgium, Germany, Luxembourg and
Netherlands
The
information in this document has been prepared on the basis that
all offers of securities will be made pursuant to an exemption
under the Directive 2003/71/EC, or the Prospectus Directive, as
implemented in Member States of the European Economic Area, or a
Relevant Member State, from the requirement to produce a prospectus
for offers of securities.
An
offer to the public of securities has not been made, and may not be
made, in a Relevant Member State except pursuant to one of the
following exemptions under the Prospectus Directive as implemented
in that Relevant Member State:
●
to
legal entities that are authorized or regulated to operate in the
financial markets or, if not so authorized or regulated, whose
corporate purpose is solely to invest in securities;
●
to any
legal entity that has two or more of (i) an average of at least 250
employees during its last fiscal year; (ii) a total balance sheet
of more than €43,000,000 (as shown on its last annual
unconsolidated or consolidated financial statements) and (iii) an
annual net turnover of more than €50,000,000 (as shown on its
last annual unconsolidated or consolidated financial
statements);
●
to
fewer than 100 natural or legal persons (other than qualified
investors within the meaning of Article 2(1)(e) of the Prospectus
Directive) subject to obtaining the prior consent of our company or
any underwriter for any such offer; or
●
in any
other circumstances falling within Article 3(2) of the Prospectus
Directive, provided that no such offer of securities shall result
in a requirement for the publication by us of a prospectus pursuant
to Article 3 of the Prospectus Directive.
France
This
document is not being distributed in the context of a public
offering of financial securities (offre au public de titres
financiers) in France within the meaning of Article L.411-1 of the
French Monetary and Financial Code (Code monétaire et
financier) and Articles 211-1 et seq. of the General Regulation of
the French Autorité des marchés financiers, or AMF. The
securities have not been offered or sold and will not be offered or
sold, directly or indirectly, to the public in France.
This
document and any other offering material relating to the securities
have not been, and will not be, submitted to the AMF for approval
in France and, accordingly, may not be distributed or caused to
distributed, directly or indirectly, to the public in
France.
Such
offers, sales and distributions have been and shall only be made in
France to (i) qualified investors (investisseurs qualifiés)
acting for their own account, as defined in and in accordance with
Articles L.411-2-II-2° and D.411-1 to D.411-3, D. 744-1,
D.754-1 and D.764-1 of the French Monetary and Financial Code and
any implementing regulation and/or (ii) a restricted number of
non-qualified investors (cercle restreint d’investisseurs)
acting for their own account, as defined in and in accordance with
Articles L.411-2-II-2° and D.411-4, D.744-1, D.754-1 and
D.764-1 of the French Monetary and Financial Code and any
implementing regulation.
Pursuant
to Article 211-3 of the General Regulation of the AMF, investors in
France are informed that the securities cannot be distributed
(directly or indirectly) to the public by the investors otherwise
than in accordance with Articles L.411-1, L.411-2, L.412-1 and
L.621-8 to L.621-8-3 of the French Monetary and Financial
Code.
Ireland
The
information in this document does not constitute a prospectus under
any Irish laws or regulations and this document has not been filed
with or approved by any Irish regulatory authority as the
information has not been prepared in the context of a public
offering of securities in Ireland within the meaning of the Irish
Prospectus (Directive 2003/71/EC) Regulations 2005, or the
Prospectus Regulations. The securities have not been offered or
sold, and will not be offered, sold or delivered directly or
indirectly in Ireland by way of a public offering, except to (i)
qualified investors as defined in Regulation 2(l) of the Prospectus
Regulations and (ii) fewer than 100 natural or legal persons who
are not qualified investors.
Israel
The
securities offered by this prospectus have not been approved or
disapproved by the Israeli Securities Authority, or the ISA, nor
have such securities been registered for sale in Israel. The shares
may not be offered or sold, directly or indirectly, to the public
in Israel, absent the publication of a prospectus. The ISA has not
issued permits, approvals or licenses in connection with this
offering or publishing the prospectus; nor has it authenticated the
details included herein, confirmed their reliability or
completeness, or rendered an opinion as to the quality of the
securities being offered. Any resale in Israel, directly or
indirectly, to the public of the securities offered by this
prospectus is subject to restrictions on transferability and must
be effected only in compliance with the Israeli securities laws and
regulations.
Italy
The
offering of the securities in the Republic of Italy has not been
authorized by the Italian Securities and Exchange Commission
(Commissione Nazionale per le Societ-$$-Aga e la Borsa), or CONSOB,
pursuant to the Italian securities legislation and, accordingly, no
offering material relating to the securities may be distributed in
Italy and such securities may not be offered or sold in Italy in a
public offer within the meaning of Article 1.1(t) of Legislative
Decree No. 58 of 24 February 1998, or Decree No.58, other
than:
●
to
Italian qualified investors, or Qualified Investors, as defined in
Article 100 of Decree no.58 by reference to Article 34-ter of
CONSOB Regulation no. 11971 of 14 May 1999, or Regulation no.
1197l, as amended; and
●
in
other circumstances that are exempt from the rules on public offer
pursuant to Article 100 of Decree No. 58 and Article 34-ter of
Regulation No. 11971 as amended.
Any
offer, sale or delivery of the securities or distribution of any
offer document relating to the securities in Italy (excluding
placements where a Qualified Investor solicits an offer from the
issuer) under the paragraphs above must be:
●
made by investment
firms, banks or financial intermediaries permitted to conduct such
activities in Italy in accordance with Legislative Decree No. 385
of 1 September 1993 (as amended), Decree No.58, CONSOB Regulation
No. 16190 of 29 October 2007 and any other applicable laws;
and
●
in compliance with
all relevant Italian securities, tax and exchange controls and any
other applicable laws.
Any
subsequent distribution of the securities in Italy must be made in
compliance with the public offer and prospectus requirement rules
provided under Decree No. 58 and the Regulation No. 11971 as
amended, unless an exception from those rules applies. Failure to
comply with such rules may result in the sale of such securities
being declared null and void and in the liability of the entity
transferring the securities for any damages suffered by the
investors.
Japan
The
securities have not been and will not be registered under Article4,
paragraph 1 of the Financial Instruments and Exchange Law of Japan
(Law No. 25 of 1948), as amended, or the FIEL, pursuant to an
exemption from the registration requirements applicable to a
private placement of securities to Qualified Institutional
Investors (as defined in and in accordance with Article2, paragraph
3 of the FIEL and the regulations promulgated thereunder).
Accordingly, the securities may not be offered or sold, directly or
indirectly, in Japan or to, or for the benefit of, any resident of
Japan other than Qualified Institutional Investors. Any Qualified
Institutional Investor who acquires securities may not resell them
to any person in Japan that is not a Qualified Institutional
Investor, and acquisition by any such person of securities is
conditional upon the execution of an agreement to that
effect.
Portugal
This
document is not being distributed in the context of a public offer
of financial securities (oferta pública de valores
mobiliários) in Portugal, within the meaning of Article 109 of
the Portuguese Securities Code (Código dos Valores
Mobiliários). The securities have not been offered or sold and
will not be offered or sold, directly or indirectly, to the public
in Portugal. This document and any other offering material relating
to the securities have not been, and will not be, submitted to the
Portuguese Securities Market Commission (Comissăo do Mercado de Valores
Mobiliários) for approval in Portugal and, accordingly, may
not be distributed or caused to distributed, directly or
indirectly, to the public in Portugal, other than under
circumstances that are deemed not to qualify as a public offer
under the Portuguese Securities Code. Such offers, sales and
distributions of securities in Portugal are limited to persons who
are “qualified investors” (as defined in the Portuguese
Securities Code). Only such investors may receive this document and
they may not distribute it or the information contained in it to
any other person.
Sweden
This
document has not been, and will not be, registered with or approved
by Finansinspektionen (the Swedish Financial Supervisory
Authority). Accordingly, this document may not be made available,
nor may the securities be offered for sale in Sweden, other than
under circumstances that are deemed not to require a prospectus
under the Swedish Financial Instruments Trading Act (1991:980) (Sw.
lag (1991:980) om handel med finansiella instrument). Any offering
of securities in Sweden is limited to persons who are
“qualified investors” (as defined in the Financial
Instruments Trading Act). Only such investors may receive this
document and they may not distribute it or the information
contained in it to any other person.
Switzerland
The
securities may not be publicly offered in Switzerland and will not
be listed on the SIX Swiss Exchange, or SIX, or on any other stock
exchange or regulated trading facility in Switzerland. This
document has been prepared without regard to the disclosure
standards for issuance prospectuses under art. 652a or art. 1156 of
the Swiss Code of Obligations or the disclosure standards for
listing prospectuses under art. 27 ff. of the SIX Listing Rules or
the listing rules of any other stock exchange or regulated trading
facility in Switzerland. Neither this document nor any other
offering material relating to the securities may be publicly
distributed or otherwise made publicly available in
Switzerland.
Neither
this document nor any other offering material relating to the
securities have been or will be filed with or approved by any Swiss
regulatory authority. In particular, this document will not be
filed with, and the offer of securities will not be supervised by,
the Swiss Financial Market Supervisory Authority.
This
document is personal to the recipient only and not for general
circulation in Switzerland.
United Arab Emirates
Neither
this document nor the securities have been approved, disapproved or
passed on in any way by the Central Bank of the United Arab
Emirates or any other governmental authority in the United Arab
Emirates, nor have we received authorization or licensing from the
Central Bank of the United Arab Emirates or any other governmental
authority in the United Arab Emirates to market or sell the
securities within the United Arab Emirates. This document does not
constitute and may not be used for the purpose of an offer or
invitation. No services relating to the securities, including the
receipt of applications and/or the allotment or redemption of such
shares, may be rendered within the United Arab Emirates by
us.
No
offer or invitation to subscribe for securities is valid or
permitted in the Dubai International Financial Centre.
United Kingdom
Neither
the information in this document nor any other document relating to
the offer has been delivered for approval to the Financial Services
Authority in the United Kingdom and no prospectus (within the
meaning of section 85 of the Financial Services and Markets Act
2000, as amended, or FSMA) has been published or is intended to be
published in respect of the securities. This document is issued on
a confidential basis to “qualified investors” (within
the meaning of section 86(7) of FSMA) in the United Kingdom, and
the securities may not be offered or sold in the United Kingdom by
means of this document, any accompanying letter or any other
document, except in circumstances which do not require the
publication of a prospectus pursuant to section 86(1) FSMA. This
document should not be distributed, published or reproduced, in
whole or in part, nor may its contents be disclosed by recipients
to any other person in the United Kingdom.
Any
invitation or inducement to engage in investment activity (within
the meaning of section 21 of FSMA) received in connection with the
issue or sale of the securities has only been communicated or
caused to be communicated and will only be communicated or caused
to be communicated in the United Kingdom in circumstances in which
section 21(1) of FSMA does not apply to us.
In the
United Kingdom, this document is being distributed only to, and is
directed at, persons (i) who have professional experience in
matters relating to investments falling within Article 19(5)
(investment professionals) of the Financial Services and Markets
Act 2000 (Financial Promotions) Order 2005, or FPO, (ii) who fall
within the categories of persons referred to in Article 49(2)(a) to
(d) (high net worth companies, unincorporated associations, etc.)
of the FPO or (iii) to whom it may otherwise be lawfully
communicated (together “relevant persons”). The
investments to which this document relates are available only to,
and any invitation, offer or agreement to purchase will be engaged
in only with, relevant persons. Any person who is not a relevant
person should not act or rely on this document or any of its
contents.
Canada
The
securities may be sold in Canada only to purchasers purchasing, or
deemed to be purchasing, as principal that are accredited
investors, as defined in National Instrument 45-106 Prospectus
Exemptions or subsection 73.3(1) of the Securities Act (Ontario),
and are permitted clients, as defined in National Instrument 31-103
Registration Requirements, Exemptions and Ongoing Registrant
Obligations. Any resale of the securities must be made in
accordance with an exemption from, or in a transaction not subject
to, the prospectus requirements of applicable securities laws.
Securities legislation in certain provinces or territories of
Canada may provide a purchaser with remedies for rescission or
damages if this prospectus (including any amendment thereto)
contains a misrepresentation, provided that the remedies for
rescission or damages are exercised by the purchaser within the
time limit prescribed by the securities legislation of the
purchaser’s province or territory. The purchaser should refer
to any applicable provisions of the securities legislation of the
purchaser’s province or territory for particulars of these
rights or consult with a legal advisor. Pursuant to section 3A.3 of
National Instrument 33-105 Underwriting Conflicts (NI 33-105), the
underwriter is not required to comply with the disclosure
requirements of NI33-105 regarding underwriter conflicts of
interest in connection with this offering.
LEGAL MATTERS
K&L
Gates LLP, Charlotte, North Carolina, will pass upon certain legal
matters relating to this offering. Sichenzia Ross Ference LLP, New
York, New York, is counsel for the underwriter in connection with
certain legal matters related to this offering.
EXPERTS
The
financial statements of ENDRA Life Sciences Inc. as of December 31,
2019 and December 31, 2018 included in the Annual Report on Form
10-K for the year ended December 31, 2019 have been audited by RBSM
LLP, independent registered public accounting firm, as stated in
their report, which is incorporated herein by reference. We have
incorporated these financial statements by reference in reliance
upon the report of RBSM LLP, given upon their authority as experts
in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file
annual reports, quarterly reports, current reports, proxy
statements and other information with the SEC. Our SEC filings are
and will become available to the public over the Internet at the
SEC’s website at www.sec.gov. You can also find our public
filings on our website at www.cuebiopharma.com. Our website and the
information contained therein or connected thereto are not part of
this prospectus supplement or the accompanying
prospectus.
We have
filed with the SEC a registration statement on Form S-3 under the
Securities Act with respect to the shares of common stock being
offered by this prospectus supplement. This prospectus supplement
and the accompanying prospectus are a part of that registration
statement but do not contain all of the information set forth in
the registration statement or the exhibits to the registration
statement. For further information with respect to us and the
shares we are offering pursuant to this prospectus supplement, you
should refer to the registration statement and its exhibits.
Statements contained in this prospectus supplement as to the
contents of any contract, agreement or other document referred to
are not necessarily complete, and you should refer to the copy of
that contract or other documents filed as an exhibit to the
registration statement. You may read or obtain a copy of the
registration statement at the SEC’s website referred to
above.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate by reference”
information from other documents that we file with it, which means
that we can disclose important information to you by referring you
to those documents. The information incorporated by reference is
considered to be part of this prospectus supplement and the
accompanying prospectus. Information in this prospectus supplement
supersedes information incorporated by reference that we filed with
the SEC prior to the date of this prospectus
supplement.
We incorporate by reference the documents and reports listed
below:
●
|
our
annual report on Form 10-K for the fiscal year ended December 31,
2019 filed with the SEC on March 26, 2020;
|
●
|
our
quarterly reports on Form 10-Q for the quarterly periods ended
March 31, 2020, June 30, 2020 and September 30, 2020, which were
filed with the SEC on May 14, 2020, August 14, 2020 and
November 16, 2020;
|
●
|
our
Current Reports on Form 8-K filed with the SEC on January 15, 2020,
March 10, 2020, March 27, 2020, April 3, 2020, April 13, 2020,
April 27, 2020, June 18, 2020, July 22, 2020, August 21, 2020,
September 24, 2020, September 25, 2020 and December 15, 2020 (in
each case, other than any information furnished rather than
filed);
|
●
|
the
information specifically incorporated by reference into our Annual
Report on Form 10-K for the fiscal year ended December 31, 2019
from our definitive proxy statement on Schedule 14A (other than
information furnished rather than filed), filed with the SEC on
April 29, 2020; and
|
●
|
the
description of our common stock contained in our Registration
Statement on Form 8-A (File No. 001-37969) filed with the SEC
on December 16, 2016, including any amendment or reports filed
for the purpose of updating such description.
|
All
documents we file with the SEC pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act, except as to any portion of any
report or documents that is not deemed filed under such provisions,
on or after the date of this prospectus supplement until the
termination of this offering shall be deemed incorporated by
reference in this prospectus supplement and the accompanying
prospectus and to be a part of this prospectus supplement from the
date of filing of those documents.
We will
furnish without charge to you, on written or oral request, a copy
of any or all of the documents incorporated by reference, including
exhibits to these documents. You should direct any requests for
documents to ENDRA Life Sciences Inc., 3600 Green Court, Suite 350,
Ann Arbor, Michigan 48105; Telephone: (734) 335-0468. Copies of the
above reports may also be accessed from our website at
www.endrainc.com. The information contained on, or that may be
obtained from, our website is not, and shall not be deemed to be, a
part of this prospectus supplement or the accompanying
prospectus.
We have
authorized no one to provide you with any information that differs
from that contained in this prospectus supplement, the accompanying
prospectus or incorporated by reference herein or therein.
Accordingly, you should not rely on any information that is not
contained in this prospectus supplement or the accompanying
prospectus or incorporated by reference herein or therein. You
should not assume that the information in this prospectus
supplement is accurate as of any date other than the date of the
front cover of this prospectus supplement.
Any
statement contained in a document incorporated or deemed to be
incorporated by reference in this prospectus supplement will be
deemed modified, superseded or replaced for purposes of this
prospectus supplement to the extent that a statement contained in
this prospectus supplement or any other subsequently filed document
that is deemed to be incorporated by reference into this prospectus
supplement modifies, supersedes or replaces such
statement.
Filed Pursuant to
Rule 424(b)(3)
Registration No.
333-229090
ENDRA
Life Sciences Inc.
Prospectus
$20,000,000
Common
Stock
Preferred
Stock
Debt
Securities
Warrants
Units
This prospectus relates to common stock,
preferred stock, debt securities and warrants that ENDRA Life
Sciences Inc. may sell from time to time in one or more offerings
on terms to be determined at the time of sale. We will provide
specific terms of these securities in supplements to this
prospectus. You should read this prospectus and any supplement
carefully before you invest. This prospectus may not be used to
offer and sell securities unless accompanied by a prospectus
supplement for those securities.
These securities
may be sold directly by us, through dealers or agents designated
from time to time, to or through underwriters or through a
combination of these methods. See “Plan of
Distribution” in this prospectus. We may also describe the
plan of distribution for any particular offering of these
securities in any applicable prospectus supplement. If any agents,
underwriters or dealers are involved in the sale of any securities
in respect of which this prospectus is being delivered, we will
disclose their names and the nature of our arrangements with them
in a prospectus supplement. The net proceeds we expect to receive
from any such sale will also be included in a prospectus
supplement.
Our common stock
trades on the Nasdaq Capital Market under the symbol
“NDRA.” On December 27, 2018, the last reported sale
price for our Common Stock was $1.78 per share. Warrants issued in
our May 2017 initial public offering are traded on the Nasdaq
Capital Market under the symbol “NDRAW.”
We are an
“Emerging Growth Company” as defined in the Jumpstart
Our Business Startups Act of 2012 and, as such, have elected to
comply with certain reduced public company reporting requirements
for this prospectus and future filings. See “Prospectus
Summary − Implications of Being an Emerging Growth
Company.”
INVESTING
IN OUR SECURITIES INVOLVES RISKS. YOU SHOULD REVIEW CAREFULLY THE
RISKS AND UNCERTAINTIES DESCRIBED UNDER THE HEADING “RISK
FACTORS” CONTAINED IN THE APPLICABLE PROSPECTUS SUPPLEMENT
AND ANY RELATED FREE WRITING PROSPECTUS, AND UNDER SIMILAR HEADINGS
IN OTHER DOCUMENTS THAT ARE INCORPORATED BY REFERENCE INTO THIS
PROSPECTUS OR ANY SUCH PROSPECTUS SUPPLEMENT. SEE “RISK
FACTORS” ON PAGE 3 OF THIS PROSPECTUS.
Neither
the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
The date of this
prospectus is February 13, 2019.
Table
of Contents
Page
ABOUT
THIS PROSPECTUS
|
1
|
FORWARD-LOOKING
STATEMENTS
|
1
|
THE
COMPANY
|
2
|
RISK
FACTORS
|
3
|
USE
OF PROCEEDS
|
3
|
DESCRIPTION
OF SECURITIES WE MAY OFFER
|
3
|
DESCRIPTION
OF COMMON STOCK WE MAY OFFER
|
4
|
DESCRIPTION
OF PREFERRED STOCK WE MAY OFFER
|
4
|
DESCRIPTION
OF DEBT SECURITIES WE MAY OFFER
|
5
|
DESCRIPTION
OF WARRANTS WE MAY OFFER
|
13
|
DESCRIPTION
OF UNITS WE MAY OFFER
|
14
|
PLAN
OF DISTRIBUTION
|
15
|
LEGAL
MATTERS
|
16
|
EXPERTS
|
16
|
WHERE
YOU CAN FIND MORE INFORMATION
|
16
|
INCORPORATION
BY REFERENCE
|
16
|
This prospectus is
part of a registration statement on Form S-3 that we filed with the
Securities and Exchange Commission, or the SEC, utilizing a
“shelf” registration process. Under this shelf process,
we may from time to time sell any combination of securities
described in this prospectus in one or more offerings.
This prospectus
provides you with a general description of the securities we may
offer. Each time we sell securities under this shelf registration
process, we will provide a prospectus supplement that will contain
specific information about the terms of the securities being
offered. That prospectus supplement may include a discussion of any
risk factors or other special consideration that apply to those
securities. The prospectus supplement may also add, update or
change information contained in this prospectus. If there is any
inconsistency between the information in this prospectus and a
prospectus supplement, you should rely on the information in that
prospectus supplement. You should read both this prospectus and any
applicable prospectus supplement together with additional
information described below under the headings “Where You Can
Find More Information” and “Incorporation by
Reference.”
When acquiring any
securities discussed in this prospectus, you should rely on the
information provided in this prospectus and the prospectus
supplement, including the information incorporated by reference.
Neither we, nor any underwriters or agents, have authorized anyone
to provide you with different information. We are not offering the
securities in any state where such an offer is prohibited. You
should not assume that the information in this prospectus, any
prospectus supplement, or any document incorporated by reference,
is truthful or complete at any date other than the date mentioned
on the cover page of those documents. You should also carefully
review the section entitled “Risk Factors”, which
highlights certain risks associated with an investment in our
securities, to determine whether an investment in our securities is
appropriate for you.
Unless otherwise
stated or the context requires otherwise, references to
“ENDRA”, the “Company,” “we,”
“us” or “our” are to ENDRA Life Sciences
Inc and its subsidiaries.
FORWARD-LOOKING STATEMENTS
Certain information
set forth in this prospectus or incorporated by reference in this
prospectus may contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended
(the “Securities Act”), and Section 21E of the Exchange
Act, that are intended to be covered by the “safe
harbor” created by those sections. Forward-looking
statements, which are based on certain assumptions and describe our
future plans, strategies and expectations, can generally be
identified by the use of forward-looking terms such as
“believe,” “expect,” “may,”
“will,” “should,” “would,”
“could,” “seek,” “intend,”
“plan,” “estimate,” “goal,”
“anticipate,” “project” or other comparable
terms. All statements other than statements of historical facts
included in this prospectus 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 efforts and the timing for receipt of
required regulatory approvals and product launches.
Forward-looking
statements are neither historical facts nor assurances of future
performance. Instead, they are based only on our current beliefs,
expectations and assumptions regarding the future of our business,
future plans and strategies, projections, anticipated events and
trends, the economy and other future conditions. Because
forward-looking statements relate to the future, they are subject
to inherent uncertainties, risks and changes in circumstances that
are difficult to predict and many of which are outside our control.
Our actual results and financial condition may differ materially
from those in the forward-looking statements. Therefore, you should
not rely on any of these forward-looking statements. Important
factors that could cause our actual results and financial condition
to differ materially from those indicated in the forward-looking
statements include, among others, the following:
●
our limited
commercial experience, limited cash and history of
losses;
●
our ability to
obtain adequate financing to fund our business operations in the
future;
●
our ability to
achieve profitability;
●
our ability to
develop a commercially feasible application based on our TAEUS
technology;
●
market acceptance
of our technology;
●
results of our
human studies, which may be negative or inconclusive;
●
our ability to find
and maintain development partners;
●
our reliance on
collaborations and strategic alliances and licensing
arrangements;
●
the amount and
nature of competition in our industry;
●
our ability to
protect our intellectual property;
●
potential changes
in the healthcare industry or third-party reimbursement
practices;
●
delays and changes
in regulatory requirements, policy and guidelines including
potential delays in submitting required regulatory applications for
CE mark certification or FDA approval;
●
our ability to
obtain CE mark certification and secure required FDA and other
governmental approvals for our TAEUS applications;
●
our ability to
comply with regulation by various federal, state, local and foreign
governmental agencies and to maintain necessary regulatory
clearances or approvals; and
●
the other risks and
uncertainties described in the Risk Factors and in
Management’s Discussion and Analysis of Financial Condition
and Results of Operations sections of this prospectus.
We urge you to
consider those risks and uncertainties in evaluating our
forward-looking statements. All subsequent written and oral
forward-looking statements attributable to us or to persons acting
on our behalf are expressly qualified in their entirety by the
applicable cautionary statements. We further caution readers not to
place undue reliance upon any such forward-looking statements,
which speak only as of the date made. Except as otherwise required
by the federal securities laws, we undertake no obligation to
publicly update any forward-looking statement, whether written or
oral, that may be made from time to time, whether as a result of
new information, future developments or otherwise.
We are leveraging
experience with pre-clinical enhanced ultrasound devices to develop
technology for increasing the capabilities of clinical diagnostic
ultrasound, to broaden patient access to the safe diagnosis and
treatment of a number of significant medical conditions in
circumstances where expensive X-ray computed tomography
(“CT”) and magnetic resonance imaging
(“MRI”) technology is unavailable or
impractical.
In 2010, we began
marketing and selling our Nexus 128 system, which combined
light-based thermoacoustics and ultrasound to address the imaging
needs of researchers studying disease models in pre-clinical
applications. Building on this expertise in thermoacoustics, we
have developed a next-generation technology platform — Thermo
Acoustic Enhanced Ultrasound, or TAEUS — which is intended to
enhance the capability of clinical ultrasound technology and
support the diagnosis and treatment of a number of significant
medical conditions that currently require the use of expensive CT
or MRI imaging or where imaging is not practical using existing
technology.
Implications
of Being an Emerging Growth Company
We are an
“emerging growth company,” as defined in the Jumpstart
Our Business Startups Act of 2012, or the JOBS Act, and, for as
long as we continue to be an “emerging growth company,”
we may choose to take advantage of exemptions from various
reporting requirements applicable to other public companies but not
to “emerging growth companies,” including, but not
limited to, not being required to comply with the auditor
attestation requirements of Section 404 of the Sarbanes-Oxley Act
of 2002, reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, and
exemptions from the requirements of holding a nonbinding advisory
vote on executive compensation and stockholder approval of any
golden parachute payments not previously approved. We could be an
“emerging growth company” until December 31, 2022, or
until the earliest of (i) the last day of the first fiscal year in
which our annual gross revenues exceed $1.07 billion, (ii) the date
that we become a “large accelerated filer” as defined
in Rule 12b-2 under the Securities Exchange Act of 1934, as
amended, which would occur if the market value of our common stock
that is held by non-affiliates exceeds $700 million as of the last
business day of our most recently completed second fiscal quarter,
or (iii) the date on which we have issued more than $1 billion in
non-convertible debt during the preceding three-year period. We are
choosing to “opt out” of the extended transition
periods available under the JOBS Act for complying with new or
revised accounting standards, but intend to take advantage of the
other exemptions discussed above.
We are also
currently considered a “smaller reporting company,”
which generally means that we have a public float of less than $250
million. If we are still considered a “smaller reporting
company” at such time as we cease to be an “emerging
growth company,” we will be subject to increased disclosure
requirements. However, the disclosure requirements will still be
less than they would be if we were not considered either an
“emerging growth company” or a “smaller reporting
company.” Specifically, similar to “emerging growth
companies,” “smaller reporting companies” are
able to provide simplified executive compensation disclosures in
their filings; are exempt from the provisions of Section 404(b) of
the Sarbanes-Oxley Act requiring that independent registered public
accounting firms provide an attestation report on the effectiveness
of internal control over financial reporting; and have certain
other decreased disclosure obligations in their Securities and
Exchange Commission, or SEC, filings, including, among other
things, being required to provide only two years of audited
financial statements in annual reports.
Corporate
Information
We were
incorporated in Delaware in July 2007 and have a wholly-owned
subsidiary, ENDRA Life Sciences Canada Inc. Our corporate
headquarters is located at 3600 Green Court, Suite 350, Ann Arbor,
Michigan 48105-1570. Our website can be accessed at
www.endrainc.com. The telephone number of our principal
executive office is (734)
335-0468. The information contained on, or that may be
obtained from, our website is not, and shall not be deemed to be, a
part of this prospectus.
Investing in our
securities involves a high degree of risk. You should carefully
consider the risk factors described in our Annual Report on Form
10-K for our most recent fiscal year (together with any material
changes thereto contained in subsequent filed Quarterly Reports on
Form 10-Q) and those contained in our other filings with the SEC,
which are incorporated by reference in this prospectus and any
accompanying prospectus supplement.
The prospectus
supplement applicable to each type or series of securities we offer
may contain a discussion of risks applicable to the particular
types of securities that we are offering under that prospectus
supplement. Prior to making a decision about investing in our
securities, you should carefully consider the specific factors
discussed under the caption “Risk Factors” in the
applicable prospectus supplement, together with all of the other
information contained in the prospectus supplement or appearing or
incorporated by reference in this prospectus. These risks could
materially affect our business, results of operations or financial
condition and cause the value of our securities to decline. You
could lose all or part of your investment.
We currently intend
to use the estimated net proceeds from the sale of these securities
for working capital and general corporate purposes, including to
fund our product development efforts and to fund our
commercialization activities for our TAEUS technology. Accordingly,
our management will have significant discretion and flexibility in
applying the net proceeds from the sale of these securities. Our
plans to use the estimated net proceeds from the sale of these
securities may change, and if they do, we will update this
information in a prospectus supplement.
DESCRIPTION OF SECURITIES WE MAY
OFFER
We may issue from
time to time, in one or more offerings, the following
securities:
●
shares of common
stock;
●
shares of preferred
stock;
●
debt securities,
which may include senior debt securities, subordinated debt
securities and senior subordinated debt securities;
●
warrants for the
purchase of debt securities, preferred stock or common stock;
and
●
units consisting of
two or more of the foregoing.
Set forth below is
a description of the common stock and preferred stock that may be
offered under this prospectus. We will set forth in the applicable
prospectus supplement and/or free writing prospectus a description
of the debt securities and warrants that may be offered under this
prospectus. The terms of the offering of our common stock,
preferred stock or any such other securities, the initial offering
price and the net proceeds to us will be contained in the
prospectus supplement, and other offering material, relating to
such offer.
We may sell the
securities being offered pursuant to this prospectus directly to
purchasers, to or through underwriters, through dealers or agents,
or through a combination of such methods. The prospectus supplement
with respect to the securities being offered will set forth the
terms of the offering of those securities, including the names of
any such underwriters, dealers or agents, the purchase price, the
net proceeds to us, any underwriting discounts and other items
constituting underwriters’ compensation, the initial public
offering price, any discounts or concessions allowed or reallowed
or paid to dealers and any securities exchanges on which such
securities may be listed.
DESCRIPTION OF COMMON STOCK WE MAY
OFFER
The following
summary description of our common stock is based on the provisions
of our certificate of incorporation and bylaws, and the applicable
provisions of the General Corporation Law of the State of Delaware.
This information may not be complete in all respects and is
qualified entirely by reference to the provisions of our Fourth
Amended and Restated Certificate of Incorporation (the
“Certificate of Incorporation”), and our amended and
restated bylaws (the “Bylaws”) and the General
Corporation Law of the State of Delaware. For information on how to
obtain copies of our Certificate of Incorporation and Bylaws, see
the discussion below under the heading “Where You Can Find
More Information.”
We may offer our
common stock issuable upon the conversion of debt securities or
preferred stock and upon the exercise of warrants.
Authorized
Capital
We currently have
authority to issue 50,000,000 shares of our common stock, par value
of $0.0001 per share.
As of December 28, 2018, 7,422,642 shares of our common stock were
issued and outstanding, held of record by 32 stockholders. Our
authorized but unissued shares of common stock are available for
issuance without further action by our stockholders, unless such
action is required by applicable law or the rules of any stock
exchange or automated quotation system on which our securities may
be listed or traded.
Voting
Rights
Each holder of our
common stock is entitled to one vote for each such share
outstanding in the holder’s name. No holder of
common stock is entitled to cumulate votes in voting for
directors.
Dividend
and Liquidation Rights
The holders of
outstanding shares of our common stock are entitled to such
dividends as may be declared by our board of directors out of funds
legally available for such purpose. The shares of our common stock
are neither redeemable nor convertible. Holders of our common stock
have no preemptive or subscription rights to purchase any of our
securities. In the event of our liquidation, dissolution or winding
up, the holders of our common stock are entitled to receive pro
rata our assets, which are legally available for distribution,
after payments of all debts and other liabilities. All
of the outstanding shares of our common stock are fully paid and
non-assessable.
We have never paid
any cash dividends on our common stock.
Our shares of
common stock are listed on the Nasdaq Capital Market under the
symbol “NDRA.”
DESCRIPTION OF PREFERRED STOCK WE MAY
OFFER
This section
describes the general terms and provisions of the preferred stock
we may offer. This information may not be complete in all respects
and is qualified entirely by reference to our Certificate of
Incorporation, with respect to each series of preferred stock. The
specific terms of any series will be described in a prospectus
supplement. Those terms may differ from the terms discussed below.
Any series of preferred stock we issue will be governed by our
Certificate of Incorporation and by the certificate of designations
relating to that series. We will file the certificate of
designations with the SEC and incorporate it by reference as an
exhibit to our registration statement at or before the time we
issue any preferred stock of that series.
Authorized
Preferred Stock
Our Certificate of
Incorporation authorizes us to issue 10,000,000 shares of preferred
stock, par value $0.0001 per share. As of December 28,
2018, we had no shares of preferred stock issued and outstanding.
Our authorized but unissued shares of preferred stock are available
for issuance without further action by our stockholders, unless
such action is required by applicable law or the rules of any stock
exchange or automated quotation system on which our securities may
be listed or traded.
Our board of
directors has the authority to issue preferred stock in one or more
series and to fix the designations, powers, rights, preferences,
qualifications, limitations and restrictions thereof. These
designations, powers, rights and preferences could include voting
rights, dividend rights, dissolution rights, conversion rights,
exchange rights, redemption rights, liquidation preferences, and
the number of shares constituting any series or the designation of
such series, any or all of which may be greater than the rights of
common stock. The issuance of preferred stock could adversely
affect the voting power of holders of common stock and the
likelihood that such holders will receive dividend payments and
payments upon liquidation. In addition, the issuance of preferred
stock could have the effect of delaying, deferring or preventing
change in our control or other corporate action. No shares of our
preferred stock are currently issued and outstanding.
Specific
Terms of a Series of Preferred Stock
The preferred stock
we may offer will be issued in one or more series. A prospectus
supplement will discuss the following features of the series of
preferred stock to which it relates:
●
the designations
and stated value per share;
●
the number of
shares offered;
●
the amount of
liquidation preference per share;
●
the public offering
price at which the preferred stock will be issued;
●
the dividend rate,
the method of its calculation, the dates on which dividends would
be paid and the dates, if any, from which dividends would
cumulate;
●
any redemption or
sinking fund provisions;
●
any conversion or
exchange rights; and
●
any additional
voting, dividend, liquidation, redemption, sinking fund and other
rights, preferences, privileges, limitations and
restrictions.
DESCRIPTION OF DEBT SECURITIES WE MAY
OFFER
General
The debt securities
that we may issue will constitute debentures, notes, bonds or other
evidences of indebtedness of ENDRA, to be issued in one or more
series, which may include senior debt securities, subordinated debt
securities and senior subordinated debt securities. The particular
terms of any series of debt securities we offer, including the
extent to which the general terms set forth below may be applicable
to a particular series, will be described in a prospectus
supplement relating to such series.
Debt securities
that we may issue will be issued under an indenture between us and
a trustee qualified to act as such under the Trust Indenture Act of
1939. We have filed the form of the indenture as an exhibit to the
registration statement of which this prospectus is a part. When we
refer to the “indenture” in this prospectus, we are
referring to the indenture under which the debt securities are
issued as supplemented by any supplemental indenture applicable to
the debt securities. We will provide the name of the trustee in any
prospectus supplement related to the issuance of debt securities,
and we will also provide certain other information related to the
trustee, including describing any relationship we have with the
trustee, in such prospectus supplement.
THE FOLLOWING
DESCRIPTION IS A SUMMARY OF THE MATERIAL PROVISIONS OF THE
INDENTURE. IT DOES NOT RESTATE THE INDENTURE IN ITS ENTIRETY. THE
INDENTURE IS GOVERNED BY THE TRUST INDENTURE ACT OF 1939. THE TERMS
OF THE DEBT SECURITIES INCLUDE THOSE STATED IN THE INDENTURE AND
THOSE MADE PART OF THE INDENTURE BY REFERENCE TO THE TRUST
INDENTURE ACT. WE URGE YOU TO READ THE INDENTURE BECAUSE IT, AND
NOT THIS DESCRIPTION, DEFINES YOUR RIGHTS AS A HOLDER OF THE DEBT
SECURITIES.
Information
You Will Find in the Prospectus Supplement
The indenture
provides that we may issue debt securities from time to time in one
or more series and that we may denominate the debt securities and
make them payable in foreign currencies. The indenture does not
limit the aggregate principal amount of debt securities that can be
issued thereunder. The prospectus supplement for a series of debt
securities will provide information relating to the terms of the
series of debt securities being offered, which may
include:
●
the title and
denominations of the debt securities of the series;
●
any limit on the
aggregate principal amount of the debt securities of the
series;
●
the date or dates
on which the principal and premium, if any, with respect to the
debt securities of the series are payable or the method of
determination thereof;
●
the rate or rates,
which may be fixed or variable, at which the debt securities of the
series shall bear interest, if any, or the method of calculating
and/or resetting such rate or rates of interest;
●
the dates from
which such interest shall accrue or the method by which such dates
shall be determined and the duration of the extensions and the
basis upon which interest shall be calculated;
●
the interest
payment dates for the series of debt securities or the method by
which such dates will be determined, the terms of any deferral of
interest and any right of ours to extend the interest payment
periods;
●
the place or places
where the principal and interest on the series of debt securities
will be payable;
●
the terms and
conditions upon which debt securities of the series may be
redeemed, in whole or in part, at our option or
otherwise;
●
our obligation, if
any, to redeem, purchase, or repay debt securities of the series
pursuant to any sinking fund or other specified event or at the
option of the holders and the terms of any such redemption,
purchase, or repayment;
●
the terms, if any,
upon which the debt securities of the series may be convertible
into or exchanged for other securities, including, among other
things, the initial conversion or exchange price or rate and the
conversion or exchange period;
●
if the amount of
principal, premium, if any, or interest with respect to the debt
securities of the series may be determined with reference to an
index or formula, the manner in which such amounts will be
determined;
●
if any payments on
the debt securities of the series are to be made in a currency or
currencies (or by reference to an index or formula) other than that
in which such securities are denominated or designated to be
payable, the currency or currencies (or index or formula) in which
such payments are to be made and the terms and conditions of such
payments;
●
any changes or
additions to the provisions of the indenture dealing with
defeasance, including any additional covenants that may be subject
to our covenant defeasance option;
●
the currency or
currencies in which payment of the principal and premium, if any,
and interest with respect to debt securities of the series will be
payable, or in which the debt securities of the series shall be
denominated, and the particular provisions applicable thereto in
accordance with the indenture;
●
the portion of the
principal amount of debt securities of the series which will be
payable upon declaration of acceleration or provable in bankruptcy
or the method by which such portion or amount shall be
determined;
●
whether the debt
securities of the series will be secured or guaranteed and, if so,
on what terms;
●
any addition to or
change in the events of default with respect to the debt securities
of the series;
●
the identity of any
trustees, authenticating or paying agents, transfer agents or
registrars;
●
the applicability
of, and any addition to or change in, the covenants currently set
forth in the indenture;
●
the subordination,
ranking or priority, if any, of the debt securities of the series
and terms of the subordination;
●
any other terms of
the debt securities of the series which are not prohibited by the
indenture; and
Holders of debt
securities may present debt securities for exchange in the manner,
at the places, and subject to the restrictions set forth in the
debt securities, the indenture, and the prospectus supplement. We
will provide these services without charge, other than any tax or
other governmental charge payable in connection therewith, but
subject to the limitations provided in the indenture, any board
resolution establishing such debt securities and any applicable
indenture supplement.
Senior
Debt
We may issue senior
debt securities under the indenture. Unless otherwise set forth in
the applicable indenture supplement and described in a prospectus
supplement, the senior debt securities will be senior unsecured
obligations, ranking equally with all of our existing and future
senior unsecured debt. The senior debt securities will be senior to
all of our subordinated debt and junior to any secured debt we may
incur as to the assets securing such debt.
Subordinated
Debt
We may issue
subordinated debt securities under the indenture. These
subordinated debt securities will be subordinate and junior in
right of payment, to the extent and in the manner set forth in the
indenture and any applicable indenture supplement, to all of our
senior indebtedness.
If this prospectus
is being delivered in connection with a series of subordinated debt
securities, the accompanying prospectus supplement or the
information incorporated by reference will set forth the
approximate amount of senior indebtedness outstanding as of the end
of the most recent fiscal quarter.
Senior
Subordinated Debt
We may issue senior
subordinated debt securities under the indenture. These senior
subordinated debt securities will be, to the extent and in the
manner set forth in the applicable indenture supplement,
subordinate and junior in right of payment to all of our
“senior indebtedness” and senior to our other
subordinated debt. See the discussions above under
“—Senior Debt” and “—Subordinated
Debt” for a more detailed explanation of our senior and
subordinated indebtedness.
Interest
Rate
Debt securities
that bear interest will do so at a fixed rate or a variable rate.
We may sell, at a discount below the stated principal amount, any
debt securities which bear no interest or which bear interest at a
rate that at the time of issuance is below the prevailing market
rate. The relevant prospectus supplement will describe the special
United States federal income tax considerations applicable
to:
●
any discounted debt
securities; and
●
any debt securities
issued at par which are treated as having been issued at a discount
for United States federal income tax purposes.
Registered
Global Securities
We may issue
registered debt securities of a series in the form of one or more
fully registered global securities. We will deposit the registered
global security with a depository or with a nominee for a
depository identified in the prospectus supplement relating to such
series. The global security or global securities will represent and
will be in a denomination or aggregate denominations equal to the
portion of the aggregate principal amount of outstanding registered
debt securities of the series to be represented by the registered
global security or securities. Unless it is exchanged in whole or
in part for debt securities in definitive registered form, a
registered global security may not be transferred, except as a
whole in three cases:
●
by the depository
for the registered global security to a nominee of the
depository;
●
by a nominee of the
depository to the depository or another nominee of the depository;
and
●
by the depository
or any nominee to a successor of the depository or a nominee of the
successor.
The prospectus
supplement relating to a series of debt securities will describe
the specific terms of the depository arrangement concerning any
portion of that series of debt securities to be represented by a
registered global security. We anticipate that the following
provisions will generally apply to all depository
arrangements.
Upon the issuance
of a registered global security, the depository will credit, on its
book-entry registration and transfer system, the principal amounts
of the debt securities represented by the registered global
security to the accounts of persons that have accounts with the
depository. These persons are referred to as
“participants.” Any underwriters, agents or dealers
participating in the distribution of debt securities represented by
the registered global security will designate the accounts to be
credited. Only participants or persons that hold interests through
participants will be able to beneficially own interests in a
registered global security. The depository for a global security
will maintain records of beneficial ownership interests in a
registered global security for participants. Participants or
persons that hold through participants will maintain records of
beneficial ownership interests in a global security for persons
other than participants. These records will be the only means to
transfer beneficial ownership in a registered global
security.
The laws of some
states may require that specified purchasers of securities take
physical delivery of the securities in definitive form. These laws
may limit the ability of those persons to own, transfer or pledge
beneficial interests in global securities.
So long as the
depository, or its nominee, is the registered owner of a registered
global security, the depository or its nominee will be considered
the sole owner or holder of the debt securities represented by the
registered global security for all purposes under the indenture.
Except as set forth below, owners of beneficial interests in a
registered global security:
●
may not have the
debt securities represented by a registered global security
registered in their names;
●
will not receive or
be entitled to receive physical delivery of debt securities
represented by a registered global security in definitive form;
and
●
will not be
considered the owners or holders of debt securities represented by
a registered global security under the indenture.
Accordingly, each
person owning a beneficial interest in a registered global security
must rely on the procedures of the depository for the registered
global security and, if the person is not a participant, on the
procedures of the participant through which the person owns its
interests, to exercise any rights of a holder under the indenture
applicable to the registered global security.
We understand that,
under existing industry practices, if we request any action of
holders, or if an owner of a beneficial interest in a registered
global security desires to give or take any action which a holder
is entitled to give or take under the indenture, the depository for
the registered global security would authorize the participants
holding the relevant beneficial interests to give or take the
action, and the participants would authorize beneficial owners
owning through the participants to give or take the action or would
otherwise act upon the instructions of beneficial owners holding
through them.
Payment
of Interest on and Principal of Registered Global
Securities
We will make
principal, premium, if any, and interest payments on debt
securities represented by a registered global security registered
in the name of a depository or its nominee to the depository or its
nominee as the registered owner of the registered global security.
None of ENDRA, the trustee, or any paying agent for debt securities
represented by a registered global security will have any
responsibility or liability for:
●
any aspect of the
records relating to, or payments made on account of, beneficial
ownership interests in such registered global
security;
●
maintaining,
supervising, or reviewing any records relating to beneficial
ownership interests;
●
the payments to
beneficial owners of the global security of amounts paid to the
depository or its nominee; or
●
any other matter
relating to the actions and practices of the depository, its
nominee or any of its participants.
We expect that the
depository, upon receipt of any payment of principal, premium or
interest in respect of the global security, will immediately credit
participants’ accounts with payments in amounts proportionate
to their beneficial interests in the principal amount of a
registered global security as shown on the depository’s
records. We also expect that payments by participants to owners of
beneficial interests in a registered global security held through
participants will be governed by standing instructions and
customary practices. This is currently the case with the securities
held for the accounts of customers registered in “street
name.” Such payments will be the responsibility of
participants.
Exchange
of Registered Global Securities
We may issue debt
securities in definitive form in exchange for the registered global
security if both of the following occur:
●
the depository for
any debt securities represented by a registered global security is
at any time unwilling or unable to continue as depository or ceases
to be a clearing agency registered under the Exchange Act;
and
●
we do not appoint a
successor depository within 90 days.
In addition, we
may, at any time, determine not to have any of the debt securities
of a series represented by one or more registered global
securities. In this event, we will issue debt securities of that
series in definitive form in exchange for all of the registered
global security or securities representing those debt
securities.
Covenants
by ENDRA
The indenture
includes covenants by us, including among other things that we will
make all payments of principal and interest at the times and places
required. The supplemental indenture establishing each series of
debt securities may contain additional covenants, including
covenants which could restrict our right to incur additional
indebtedness or liens and to take certain actions with respect to
our businesses and assets.
Events
of Default
Unless otherwise
indicated in the applicable prospectus supplement, the following
will be events of default under the indenture with respect to each
series of debt securities issued under the indenture:
●
failure to pay when
due any interest on any debt security of that series, continued for
30 days;
●
failure to pay when
due the principal of, or premium, if any, on, any debt security of
that series;
●
failure to perform
any other covenant or agreement of ours under the indenture or the
supplemental indenture with respect to that series or the debt
securities of that series, continued for 90 days after written
notice to us by the trustee or holders of at least 25% in aggregate
principal amount of the outstanding debt securities of the series
to which the covenant or agreement relates;
●
certain events of
bankruptcy, insolvency or similar proceedings affecting us;
and
●
any other event of
default specified in any supplemental indenture under which such
series of debt securities is issued.
Except as to
certain events of bankruptcy, insolvency or similar proceedings
affecting us and except as provided in the applicable prospectus
supplement, if any event of default shall occur and be continuing
with respect to any series of debt securities under the indenture,
either the trustee or the holders of at least 25% in aggregate
principal amount of outstanding debt securities of such series may
accelerate the maturity of all debt securities of such series. Upon
certain events of bankruptcy, insolvency or similar proceedings
affecting us, the principal, premium, if any, and interest on all
debt securities of each series shall be immediately due and
payable.
After any such
acceleration, but before a judgment or decree based on acceleration
has been obtained by the trustee, the holders of a majority in
aggregate principal amount of each affected series of debt
securities may waive all defaults with respect to such series and
rescind and annul such acceleration if all events of default, other
than the non-payment of accelerated principal, have been cured,
waived or otherwise remedied.
No holder of any
debt securities will have any right to institute any proceeding
with respect to the indenture or for any remedy under the
indenture, unless such holder shall have previously given to the
trustee written notice of a continuing event of default and the
holders of at least 25% in aggregate principal amount of the
outstanding debt securities of the relevant series shall have made
written request and offered indemnity satisfactory to the trustee
to institute such proceeding as trustee, and the trustee shall not
have received from the holders of a majority in aggregate principal
amount of the outstanding debt securities of such series a
direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days. However, such
limitations do not apply to a suit instituted by a holder of a debt
security for enforcement of payment of the principal of and
premium, if any, or interest on such debt security on or after the
respective due dates expressed in such debt security.
Supplemental
Indentures
We and the trustee
may, at any time and from time to time, without prior notice to or
consent of any holders of debt securities, enter into one or more
indentures supplemental to the indenture, among other
things:
●
to add guarantees
to or secure any series of debt securities;
●
to provide for the
succession of another person pursuant to the provisions of the
indenture relating to consolidations, mergers and sales of assets
and the assumption by such successor of our covenants, agreements,
and obligations, or to otherwise comply with the provisions of the
indenture relating to consolidations, mergers, and sales of
assets;
●
to surrender any
right or power conferred upon us under the indenture or to add to
our covenants further covenants, restrictions, conditions or
provisions for the protection of the holders of all or any series
of debt securities;
●
to cure any
ambiguity or to correct or supplement any provision contained in
the indenture, in any supplemental indenture or in any debt
securities that may be defective or inconsistent with any other
provision contained therein;
●
to modify or amend
the indenture in such a manner as to permit the qualification of
the indenture or any supplemental indenture under the Trust
Indenture Act;
●
to add to or change
any of the provisions of the indenture to supplement any of the
provisions of the indenture in order to permit the defeasance and
discharge of any series of debt securities pursuant to the
indenture, so long as any such action does not adversely affect the
interests of the holders of debt securities of any series in any
material respect;
●
to add to, change,
or eliminate any of the provisions of the indenture with respect to
one or more series of debt securities, so long as any such
addition, change or elimination shall not apply to any debt
securities of any series created prior to the execution of such
supplemental indenture and entitled to the benefit of such
provision;
●
to evidence and
provide for the acceptance of appointment by a successor or
separate trustee; and
●
to establish the
form or terms of debt securities of any series and to make any
change that does not adversely affect the interests of the holders
of debt securities.
With the consent of
the holders of at least a majority in principal amount of debt
securities of each series affected by such supplemental indenture
(each series voting as one class), we and the trustee may enter
into one or more supplemental indentures for the purpose of adding
any provisions to or changing in any manner or eliminating any of
the provisions of the indenture or modifying in any manner the
rights of the holders of debt securities of each such
series.
Notwithstanding our
rights and the rights of the trustee to enter into one or more
supplemental indentures with the consent of the holders of debt
securities of the affected series as described above, no such
supplemental indenture shall, without the consent of the holder of
each outstanding debt security of the affected series, among other
things:
●
change the final
maturity of the principal of, or any installment of interest on,
any debt securities;
●
reduce the
principal amount of any debt securities or the rate of interest on
any debt securities;
●
change the currency
in which any debt securities are payable;
●
impair the right of
the holders to conduct a proceeding for any remedy available to the
trustee;
●
reduce the
percentage in principal amount of any series of debt securities
whose holders must consent to an amendment or supplemental
indenture;
●
modify the ranking
or priority of the securities; or
●
reduce any premium
payable upon the redemption of any debt securities.
Satisfaction
and Discharge of the Indenture; Defeasance
Except to the
extent set forth in a supplemental indenture with respect to any
series of debt securities, we, at our election, may discharge the
indenture and the indenture shall generally cease to be of any
further effect with respect to that series of debt securities if
(a) we have delivered to the trustee for cancellation all debt
securities of that series (with certain limited exceptions) or
(b) all debt securities of that series not previously
delivered to the trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one
year or are to be called for redemption within one year, and we
have deposited with the trustee the entire amount sufficient to pay
at maturity or upon redemption all such debt
securities.
In addition, we
have a “legal defeasance option” (pursuant to which we
may terminate, with respect to the debt securities of a particular
series, all of our obligations under such debt securities and the
indenture with respect to such debt securities) and a
“covenant defeasance option” (pursuant to which we may
terminate, with respect to the debt securities of a particular
series, our obligations with respect to such debt securities under
certain specified covenants contained in the indenture). If we
exercise our legal defeasance option with respect to a series of
debt securities, payment of such debt securities may not be
accelerated because of an event of default. If we exercise our
covenant defeasance option with respect to a series of debt
securities, payment of such debt securities may not be accelerated
because of an event of default related to the specified
covenants.
We may exercise our
legal defeasance option or our covenant defeasance option with
respect to the debt securities of a series only if we irrevocably
deposit in trust with the trustee cash or U.S. government
obligations (as defined in the indenture) for the payment of
principal, premium, if any, and interest with respect to such debt
securities to maturity or redemption, as the case may be. In
addition, to exercise either of our defeasance options, we must
comply with certain other conditions, including the delivery to the
trustee of an opinion of counsel to the effect that the holders of
debt securities of such series will not recognize income, gain or
loss for Federal income tax purposes as a result of such defeasance
and will be subject to Federal income tax on the same amounts, in
the same manner and at the same times as would have been the case
if such defeasance had not occurred (and, in the case of legal
defeasance only, such opinion of counsel must be based on a ruling
from the Internal Revenue Service or other change in applicable
Federal income tax law).
The trustee will
hold in trust the cash or U.S. government obligations deposited
with it as described above and will apply the deposited cash and
the proceeds from deposited U.S. government obligations to the
payment of principal, premium, if any, and interest with respect to
the debt securities of the defeased series.
Mergers,
Consolidations and Certain Sales of Assets
We may
not:
●
consolidate with or
merge into any other person or entity or permit any other person or
entity to consolidate with or merge into us in a transaction in
which we are not the surviving entity, or
●
transfer, lease or
dispose of all or substantially all of our assets to any other
person or entity,
unless:
o
the resulting,
surviving or transferee entity shall be a corporation organized and
existing under the laws of the United States or any state thereof
and such resulting, surviving or transferee entity shall expressly
assume, by supplemental indenture, executed and delivered in form
satisfactory to the trustee, all of our obligations under the debt
securities and the indenture;
o
immediately after
giving effect to such transaction (and treating any indebtedness
which becomes an obligation of the resulting, surviving or
transferee entity as a result of such transaction as having been
incurred by such entity at the time of such transaction), no
default or event of default would occur or be continuing;
and
o
we shall have
delivered to the trustee an officers’ certificate and an
opinion of counsel, each stating that such consolidation, merger or
transfer and such supplemental indenture (if any) comply with the
indenture.
The phrase
“substantially all” of our assets will likely be
interpreted under applicable state law and will be dependent upon
particular facts and circumstances. As a result, there may be a
degree of uncertainty in ascertaining whether a sale or transfer of
“substantially all” of our assets has
occurred.
Governing
Law
The indenture and
the debt securities will be governed by the laws of the State of
New York.
No
Personal Liability of Directors, Officers, Employees and
Stockholders
No director,
officer, incorporator or stockholder of ENDRA, as such, shall have
any liability for any obligations of ENDRA under the debt
securities or the indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation, solely by
reason of his, her, or its status as director, officer,
incorporator or stockholder of ENDRA. By accepting a debt security,
each holder waives and releases all such liability, but only such
liability. The waiver and release are part of the consideration for
issuance of the debt securities. Nevertheless, such waiver may not
be effective to waive liabilities under the federal securities laws
and it has been the view of the SEC that such a waiver is against
public policy.
Conversion
or Exchange Rights
Any debt securities
offered hereby may be convertible into or exchangeable for shares
of our equity or other securities. The terms and conditions of such
conversion or exchange will be set forth in the applicable
prospectus supplement. Such terms may include, among others, the
following:
●
the conversion or
exchange price;
●
the conversion or
exchange period;
●
provisions
regarding our ability or that of the holder to convert or exchange
the debt securities;
●
events requiring
adjustment to the conversion or exchange price; and
●
provisions
affecting conversion or exchange in the event of our redemption of
such debt securities.
Concerning
the Trustee
The indenture
provides that there may be more than one trustee with respect to
one or more series of debt securities. If there are different
trustees for different series of debt securities, each trustee will
be a trustee of a trust under a supplemental indenture separate and
apart from the trust administered by any other trustee under such
indenture. Except as otherwise indicated in this prospectus or any
prospectus supplement, any action permitted to be taken by a
trustee may be taken by the trustee only with respect to the one or
more series of debt securities for which it is the trustee under an
indenture. Any trustee under the indenture or a supplemental
indenture may resign or be removed with respect to one or more
series of debt securities. All payments of principal of, premium,
if any, and interest on, and all registration, transfer, exchange
authentication and delivery (including authentication and delivery
on original issuance of the debt securities) of, the debt
securities of a series will be effected by the trustee with respect
to such series at an office designated by the trustee.
The indenture
contains limitations on the right of the trustee, should it become
a creditor of ENDRA, to obtain payment of claims in certain cases
or to realize on certain property received in respect of any such
claim as security or otherwise. If the trustee acquires an interest
that conflicts with any duties with respect to the debt securities,
the trustee is required to either resign or eliminate such
conflicting interest to the extent and in the manner provided by
the indenture.
DESCRIPTION OF WARRANTS WE MAY OFFER
We may issue
warrants for the purchase of debt securities, preferred stock or
common stock. Warrants may be issued independently or together with
debt securities, preferred stock or common stock and may be
attached to or separate from any offered securities. Any issue of
warrants will be governed by the terms of the applicable form of
warrant and any related warrant agreement which we will file with
the SEC and they will be incorporated by reference to the
registration statement of which this prospectus is a part on or
before the time we issue any warrants.
The particular
terms of any issue of warrants will be described in the prospectus
supplement relating to the issue. Those terms may
include:
●
the title of such
warrants;
●
the aggregate
number of such warrants;
●
the price or prices
at which such warrants will be issued;
●
the currency or
currencies (including composite currencies) in which the price of
such warrants may be payable;
●
the terms of the
securities purchasable upon exercise of such warrants and the
procedures and conditions relating to the exercise of such
warrants;
●
the price at which
the securities purchasable upon exercise of such warrants may be
purchased;
●
the date on which
the right to exercise such warrants will commence and the date on
which such right shall expire;
●
any provisions for
adjustment of the number or amount of securities receivable upon
exercise of the warrants or the exercise price of the
warrants;
●
if applicable, the
minimum or maximum amount of such warrants that may be exercised at
any one time;
●
if applicable, the
designation and terms of the securities with which such warrants
are issued and the number of such warrants issued with each such
security;
●
if applicable, the
date on and after which such warrants and the related securities
will be separately transferable;
●
information with
respect to book-entry procedures, if any; and
●
any other terms of
such warrants, including terms, procedures and limitations relating
to the exchange or exercise of such warrants.
The prospectus
supplement relating to any warrants to purchase equity securities
may also include, if applicable, a discussion of certain U.S.
federal income tax and ERISA considerations.
Warrants for the
purchase of preferred stock and common stock will be offered and
exercisable for U.S. dollars only.
Each warrant will
entitle its holder to purchase the principal amount of debt
securities or the number of shares of preferred stock or common
stock at the exercise price set forth in, or calculable as set
forth in, the applicable prospectus supplement.
After the close of
business on the expiration date, unexercised warrants will become
void. We will specify the place or places where, and the manner in
which, warrants may be exercised in the applicable prospectus
supplement.
Prior to the
exercise of any warrants to purchase debt securities, preferred
stock or common stock, holders of the warrants will not have any of
the rights of holders of the debt securities, preferred stock or
common stock purchasable upon exercise.
As of December 28,
2018, warrants to purchase a total of 2,575,833 shares of common
stock at a weighted average exercise price of $6.40 per share were
outstanding. Warrants to purchase total of 1,932,000 shares of
common stock that were issued as part of the units issued in our
initial public offering, which expire in May 2022 and have an
exercise price of $6.25 per share. Warrants to purchase a total of
154,560 shares of common stock issued to the underwriters in our
initial public offering also expire in May 2022 and have an
exercise price of $6.25 per share. Warrants to purchase a total of
118,737 shares of common stock expire in May 2020 and have an
exercise price of $20.03 per share. Warrants to purchase a total of
10,000 shares of common stock expire in May 2020 and have an
exercise price of $5.50 per share. Warrants to purchase a total of
20,000 shares of common stock expire in November 2020 and have an
exercise price of $4.49 per share. Warrants to
purchase a total of 20,000 shares of common stock expire in January
2021 and have an exercise price of $5.50 per share. Warrants to
purchase a total of 320,536 shares of common stock expire in June
2021 and have an exercise price of $2.52 per share.
DESCRIPTION OF UNITS WE MAY OFFER
We may issue units
consisting of any combination of the other types of securities
offered under this prospectus in one or more series. We may
evidence each series of units by unit certificates that we will
issue under a separate agreement. We may enter into unit agreements
with a unit agent. Each unit agent will be a bank or trust company
that we select. We will indicate the name and address of the unit
agent in the applicable prospectus supplement relating to a
particular series of units.
The following
description, together with the additional information included in
any applicable prospectus supplement, summarizes the general
features of the units that we may offer under this prospectus. You
should read any prospectus supplement and any free writing
prospectus that we may authorize to be provided to you related to
the series of units being offered, as well as the complete unit
agreements that contain the terms of the units. Specific unit
agreements will contain additional important terms and provisions
and we will file as an exhibit to the registration statement of
which this prospectus is a part, or will incorporate by reference
from another report that we file with the SEC, the form of each
unit agreement relating to units offered under this
prospectus.
If we offer any
units, certain terms of that series of units will be described in
the applicable prospectus supplement, including, without
limitation, the following, as applicable:
●
the title of the
series of units;
●
identification and
description of the separate constituent securities comprising the
units;
●
the price or prices
at which the units will be issued;
●
the date, if any,
on and after which the constituent securities comprising the units
will be separately transferable;
●
a discussion of
certain United States federal income tax considerations applicable
to the units; and
●
any other terms of
the units and their constituent securities.
We may sell the
securities offered by this prospectus to one or more underwriters
or dealers for public offering, through agents, directly to
purchasers or through a combination of any such methods of sale.
The name of any such underwriters, dealers or agents involved
in the offer and sale of the securities, the amounts underwritten
and the nature of its obligation to take the securities will be
specified in the applicable prospectus supplement. We have
reserved the right to sell the securities directly to investors on
our own behalf in those jurisdictions where we are authorized to do
so. The sale of the securities may be effected in
transactions (a) on any national or international securities
exchange or quotation service on which the securities may be listed
or quoted at the time of sale, (b) in the over-the-counter market,
(c) in transactions otherwise than on such exchanges or in the
over-the-counter market or (d) through the writing of
options.
We and our agents
and underwriters may offer and sell the securities at a fixed price
or prices that may be changed, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or
at negotiated prices. The securities may be offered on an
exchange, which will be disclosed in the applicable prospectus
supplement. We may, from time to time, authorize dealers,
acting as our agents, to offer and sell the securities upon such
terms and conditions as set forth in the applicable prospectus
supplement.
If we use
underwriters to sell securities, we will enter into an underwriting
agreement with them at the time of the sale to them. In
connection with the sale of the securities, underwriters may
receive compensation from us in the form of underwriting discounts
or commissions and may also receive commissions from purchasers of
the securities for whom they may act as agent. Any
underwriting compensation paid by us to underwriters or agents in
connection with the offering of the securities, and any discounts,
concessions or commissions allowed by underwriters to participating
dealers, will be set forth in the applicable prospectus supplement
to the extent required by applicable law. Underwriters may
sell the securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions or
commissions from the underwriters or commissions (which may be
changed from time to time) from the purchasers for whom they may
act as agents.
Dealers and agents
participating in the distribution of the securities may be deemed
to be underwriters, and any discounts and commissions received by
them and any profit realized by them on resale of the securities
may be deemed to be underwriting discounts and commissions under
the Securities Act. Unless otherwise indicated in the
applicable prospectus supplement, an agent will be acting on a best
efforts basis and a dealer will purchase debt securities as a
principal, and may then resell the debt securities at varying
prices to be determined by the dealer.
If so indicated in
the prospectus supplement, we will authorize underwriters, dealers
or agents to solicit offers by certain specified institutions to
purchase offered securities from us at the public offering price
set forth in the prospectus supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in
the future. Such contracts will be subject to any conditions
set forth in the applicable prospectus supplement and the
prospectus supplement will set forth the commission payable for
solicitation of such contracts. The underwriters and other
persons soliciting such contracts will have no responsibility for
the validity or performance of any such contracts.
Underwriters,
dealers and agents may be entitled, under agreements entered into
with us, to indemnification against and contribution towards
certain civil liabilities, including any liabilities under the
Securities Act.
To facilitate the
offering of securities, certain persons participating in the
offering may engage in transactions that stabilize, maintain, or
otherwise affect the price of the securities. These may
include over-allotment, stabilization, syndicate short covering
transactions and penalty bids. Over-allotment involves sales
in excess of the offering size, which creates a short position.
Stabilizing transactions involve bids to purchase the
underlying security so long as the stabilizing bids do not exceed a
specified maximum. Syndicate short covering transactions
involve purchases of securities in the open market after the
distribution has been completed in order to cover syndicate short
positions. Penalty bids permit the underwriters to reclaim
selling concessions from dealers when the securities originally
sold by the dealers are purchased in covering transactions to cover
syndicate short positions. These transactions may cause the
price of the securities sold in an offering to be higher than it
would otherwise be. These transactions, if commenced, may be
discontinued by the underwriters at any time.
Any securities
other than our common stock issued hereunder may be new issues of
securities with no established trading market. Any
underwriters or agents to or through whom such securities are sold
for public offering and sale may make a market in such securities,
but such underwriters or agents will not be obligated to do so and
may discontinue any market making at any time without notice.
No assurance can be given as to the liquidity of the trading
market for any such securities. The amount of expenses
expected to be incurred by us in connection with any issuance of
securities will be set forth in the applicable prospectus
supplement. Certain of the underwriters, dealers or agents
and their associates may engage in transactions with, and perform
services for, us and certain of our affiliates in the ordinary
course of business.
During such time as
we may be engaged in a distribution of the securities covered by
this prospectus we are required to comply with Regulation M
promulgated under the Exchange Act. With certain exceptions,
Regulation M precludes us, any affiliated purchasers, and any
broker-dealer or other person who participates in such distribution
from bidding for or purchasing, or attempting to induce any person
to bid for or purchase, any security which is the subject of the
distribution until the entire distribution is complete.
Regulation M also restricts bids or purchases made in order
to stabilize the price of a security in connection with the
distribution of that security. All of the foregoing may
affect the marketability of our shares of common
stock.
The validity and
legality of the securities offered hereby and certain other legal
matters will be passed upon for the Company by K&L Gates LLP,
Charlotte, North Carolina.
RBSM LLP,
independent registered public accounting firm, has audited our
financial statements included in our Annual Report on Form 10-K for
the year ended December 31, 2017, which is incorporated by
reference into this prospectus and elsewhere in the registration
statement of which this prospectus is a part. Our financial
statements are incorporated by reference in reliance on RBSM
LLP’s report, given on their authority as experts in
accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual,
quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission (the
“SEC”). You can inspect and copy these reports, proxy
statements and other information at the SEC’s Public
Reference Room at 100 F Street, N.E., Washington, D. C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on
the Public Reference Room. The SEC also maintains a web site that
contains reports, proxy and information statements and other
information regarding issuers, such as ENDRA Life Sciences Inc.
(www.sec.gov). Our web site is located at www.endrainc.com. The
information contained on, or that may be obtained from, our website
is not, and shall not be deemed to be, a part of this
prospectus.
We will provide,
upon written or oral request, without charge to you, including any
beneficial owner to whom this prospectus is delivered, a copy of
any or all of the documents incorporated herein by reference other
than the exhibits to those documents, unless the exhibits are
specifically incorporated by reference into the information that
this prospectus incorporates. You should direct a request for
copies to ENDRA Life Sciences Inc., 3600 Green Court, Suite 350,
Ann Arbor, Michigan 48105; Telephone: (734) 335-0468.
INCORPORATION BY REFERENCE
The SEC allows us
to “incorporate by reference” information from other
documents that we file with it, which means that we can disclose
important information to you by referring you to those documents.
The information incorporated by reference is considered to be part
of this prospectus. Information in this prospectus supersedes
information incorporated by reference that we filed with the SEC
prior to the date of this prospectus.
We incorporate by
reference into this prospectus and the registration statement of
which this prospectus is a part the information or documents listed
below that we have filed with the SEC:
●
Annual Report on
Form 10-K for the fiscal year ended December 31, 2017 filed with
the SEC on March 20, 2018 (as amended by Form 10-K/A filed with the
SEC on April 13, 2018);
●
Quarterly Reports
on Form 10-Q for the quarter ended March 30, 2018 filed with the
SEC on May 15, 2018, the quarter ended June 30, 2018 filed with the
SEC on August 13, 2018 and the quarter ended September 30, 2018
filed with the SEC on November 5, 2018;
●
Current Reports on
Form 8-K filed with the SEC on February 5, 2018, March 29, 2018 (as
amended by Form 8-K/A filed on April 13, 2018), June 15, 2018; July
2, 2018, August 17, 2018, October 16, 2018 and November 13,
2018;
●
Definitive Proxy
Statement on Schedule 14A related to our 2018 Annual Meeting of
Stockholders, filed with the SEC on May 10, 2018; and
●
The description of
the Company’s Common Stock contained in the Company’s
Registration Statement on Form 8-A (File No. 001-37969) filed with
the SEC on December 16, 2016 pursuant to Section 12(g) of the
Exchange Act on December 26, 2000, including any amendment or
reports filed for the purpose of updating such
description.
We also incorporate
by reference any future filings (other than current reports
furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits
filed on such form that are related to such items unless such Form
8-K expressly provides to the contrary) made with the SEC pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act,
including those made on or after the date of the initial filing of
the registration statement of which this prospectus is a part and
prior to effectiveness of such registration statement, until we
file a post-effective amendment that indicates the termination of
the offering of the Securities made by this prospectus and will
become a part of this prospectus from the date that such documents
are filed with the SEC. Information in such future filings updates
and supplements the information provided in this prospectus. Any
statements in any such future filings will automatically be deemed
to modify and supersede any information in any document we
previously filed with the SEC that is incorporated or deemed to be
incorporated herein by reference to the extent that statements in
the later filed document modify or replace such earlier
statements.
We will furnish
without charge to you, on written or oral request, a copy of any or
all of the documents incorporated by reference, including exhibits
to these documents. You should direct any requests for documents to
ENDRA Life Sciences Inc., 3600 Green Court, Suite 350, Ann Arbor,
Michigan 48105; Telephone: (734) 335-0468. Copies of the above
reports may also be accessed from our web site at www.endrainc.com. We have authorized no
one to provide you with any information that differs from that
contained in this prospectus. Accordingly, you should not rely on
any information that is not contained in this prospectus. You
should not assume that the information in this prospectus is
accurate as of any date other than the date of the front cover of
this prospectus.
Any statement
contained in a document incorporated or deemed to be incorporated
by reference in this prospectus will be deemed to be modified or
superseded for purposes of this prospectus to the extent that a
statement contained in this prospectus or in any other subsequently
filed document which also is or is deemed to be incorporated by
reference in this prospectus modifies or supersedes that statement.
Any statement that is modified or superseded will not constitute a
part of this prospectus, except as modified or
superseded.
ENDRA
Life Sciences Inc.
$20,000,000
Common
Stock
Preferred
Stock
Debt
Securities
Warrants
Units
PROSPECTUS
February
13, 2019
Shares of Common Stock
ThinkEquity
a division of Fordham Financial Management, Inc.
December , 2020