Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
(Mark
One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the
Fiscal Year Ended December
31, 2017
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the
transition period from __________________ to
__________________
Commission
file number: 001-37969
ENDRA Life Sciences Inc.
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(Exact
Name of Registrant as Specified in Its Charter)
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Delaware
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26-0579295
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(State
or Other Jurisdiction of Incorporation or
Organization)
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(I.R.S.
Employer Identification No.)
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3600
Green Court, Suite 350, Ann Arbor, MI
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48105-1570
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(734) 335-0468
(Registrant’s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
Title of each
class
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Name of each exchange on which
registered
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Common Stock, par
value $0.0001 per share
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The NASDAQ Stock
Market LLC
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Warrants, each to
purchase one share of Common Stock
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The NASDAQ Stock
Market LLC
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Securities
registered pursuant to Section 12 (g) of the Act: None
Indicate by check
mark if the registrant is a well-known seasoned issuer, as defined
in Rule 405 of the Securities Act.
Yes
☐ No ☒
Indicate by check
mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes ☐ No
☒
Indicate by check
mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes
☒ No ☐
Indicate by check
mark whether the registrant has submitted electronically and posted
on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of
Regulation S-T during the preceding 12 months (or for
such shorter period that the registrant was required to submit and
post such files). Yes ☒ No ☐
Indicate by check
mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K.
☐
Indicate by check
mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, smaller reporting
company, or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated
filer”, “smaller reporting company” and "emerging
growth company" in Rule 12b-2 of the Exchange Act. (Check
one):
Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated
filer
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☐ (Do not check if a smaller reporting
company)
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Smaller reporting company
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☒
|
|
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Emerging
growth company
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☒
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If
an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check
mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act): Yes ☐ No ☒
The
aggregate market value of voting and non-voting common equity held
by non-affiliates of the registrant, as of June 30, 2017, was
approximately $14,831,809 based on the closing sales price of the
common stock on such date as reported on the NASDAQ Capital
Market.
As of
March 14, 2018, there were 3,923,027 shares of the
registrant’s common stock outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
None.
ENDRA LIFE SCIENCES INC.
TABLE OF CONTENTS
Amendment No. 1 to Annual Report on Form 10-K/A
Explanatory
Note
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3
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PART
III
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Item
11. Executive Compensation
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4
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PART
IV
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Item 15. Exhibits,
Financial Statements and Schedules
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8
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2
EXPLANATORY NOTE
ENDRA
Life Sciences Inc. is filing this Amendment No. 1 to Annual Report
on Form 10-K/A to amend its Annual Report on Form 10-K for the
fiscal year ended December 31, 2017 as filed with the Securities
and Exchange Commission (the “SEC”) on March 20, 2018
(the “Original Report”). The principal purposes of this
Amendment No. 1 are to include in the Summary Compensation Table
under Part III, Item 11 (i) the amounts of bonuses not yet
determined at the time of the filing of the Original Report and
(ii) the amounts of option awards granted in May 2017 in connection
with the Company’s initial public offering that were
inadvertently omitted from the Summary Compensation Table in the
Original Report. Accordingly, this Amendment No. 1 hereby amends
and restates Part III, Item 11 of the Original Report as set forth
below. In addition, as required by Rule 12b-15 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”),
this Amendment No. 1 hereby amends and restates Part IV, Item 15 of
the Original Report, adding as exhibits currently dated
certifications of the principal executive officer and the principal
financial officer.
No
attempt has been made in this Amendment No. 1 to modify or update
the other disclosures presented in the Original Report. This
Amendment No. 1 does not reflect events occurring after the filing
of the Original Report or modify or update those disclosures that
may be affected by subsequent events. Accordingly, this Amendment
No. 1 should be read in conjunction with the Original Report and
our other filings with the SEC.
As used
in this Amendment No. 1, unless the context otherwise requires, the
terms “ENDRA,” “we,” “us,”
“our,” and the “Company” refer to ENDRA
Life Sciences Inc., a Delaware corporation.
3
PART III
Item 11. Executive Compensation
Our
compensation philosophy is to offer our executive officers
compensation and benefits that are competitive and meet our goals
of attracting, retaining and motivating highly skilled management,
which is necessary to achieve our financial and strategic
objectives and create long-term value for our stockholders. We
believe the levels of compensation we provide should be
competitive, reasonable and appropriate for our business needs and
circumstances. Our board of directors uses benchmark compensation
studies in determining compensation elements and levels. The
principal elements of our executive compensation program have to
date included base salary, annual bonus opportunity and long-term
equity compensation in the form of stock options. We believe
successful long-term Company performance is more critical to
enhancing stockholder value than short-term results. For this
reason and to conserve cash and better align the interests of
management and our stockholders, we emphasize long-term
performance-based equity compensation over base annual
salaries.
The
following table sets forth information concerning the compensation
earned by the individual that served as our principal executive
officer during 2017 and our two most highly compensated executive
officers other than the individual who served as our principal
executive officer during 2017 (collectively, the “named
executive officers”):
2017 Summary Compensation Table
Name &
Position
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Fiscal
Year
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Salary
($)
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Bonus
($)
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Stock
Awards
($)(1)
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Option Awards
($)(2)
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All
Other
Compensation
($)
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Total
($)
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Francois
Michelon
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2017
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347,452
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(3)
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93,275
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-
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1,378,076
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-
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1,818,803
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Chief Executive Officer
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2016
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262,152
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-
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-
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-
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-
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262,152
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Michael
Thornton
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2017
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272,086
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(4)
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44,198
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-
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1,402,537
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-
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1,728,305
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Chief Technology Officer
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2016
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218,056
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-
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-
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-
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-
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218,056
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David R. Wells
(5)
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2017
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92,000
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10,000
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94,165
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72,907
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-
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269,072
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Chief Financial Officer
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2016
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60,000
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-
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-
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-
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-
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60,000
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(1)
The amounts shown
in this column indicate the grant date fair value of stock awards
granted in the subject year computed in accordance with FASB ASC
Topic 718. For additional information regarding the assumptions
made in calculating these amounts, see notes 2 and 6 included in
Part II, Item 8.
(2)
The amounts shown
in this column indicate the grant date fair value of option awards
granted in the subject year computed in accordance with FASB ASC
Topic 718. For additional information regarding the assumptions
made in calculating these amounts, see notes 2 and 7 included in
Part II, Item 8.
(3)
Includes a payment
for accrued salary accrued during 2016 of $53,819. Annual salary
was $250,000 per year from April 2015 to May 2017, and was raised
to $325,000 per year on May 12, 2017.
(4)
Includes a payment
for accrued salary accrued during 2016 of $51,438. Annual salary
was $200,000 per year from November 2007 to May 2017, and was
raised to $245,000 per year on May 12, 2017.
(5)
Represents fees
earned by StoryCorp Consulting (d/b/a Wells Compliance Group).
Pursuant to the consulting agreement described below, we issued
18,833 shares of our common stock valued at $94,165 in
2017.
Outstanding Equity Awards at 2017 Fiscal Year End
The
following table provides information regarding equity awards held
by the named executive officers as of December 31,
2017.
4
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Option Awards
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Name
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Number of Securities Underlying Unexercised Options (#)
Exercisable
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Number of Securities Underlying Unexercised Options (#)
Unexercisable
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Option Exercise Price ($)
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Option Expiration Date
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Francois
Michelon
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23,665
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11,833(1)
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10.01
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7/1/20
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Chief Executive Officer
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-
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307,310(2)
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5.00
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5/12/25
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-
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31,960(2)
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4.55
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5/12/25
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Michael
Thornton
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29,471
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-
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10.01
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11/1/18
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Chief Technology Officer
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-
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313,338(2)
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5.00
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5/12/25
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-
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31,960(2)
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4.55
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5/12/25
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David
Wells
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2,500
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12,500(3)
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5.00
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5/12/21
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Chief Financial Officer
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7,000
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-
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5.00
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5/12/22
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(1)
Represents unvested
portion of the options, which vest in three equal annual
installments beginning on July 1, 2016.
(2)
These
options vest in three equal annual installments beginning on May
12, 2018.
(3)
Represents unvested
portion of the options, which vest in twelve equal quarterly
installments beginning on August 12, 2017.
Employment Agreements and Change of Control Agreements
Employment Agreements
The
following is a summary of the employment arrangements with our
executive officers as currently in effect.
Francois Michelon. Effective May 12, 2017, the
Company entered into an amended and restated employment agreement
with Francois Michelon, our Chief Executive Officer and Chairman of
our board of directors. The term of the employment agreement runs
through December 31, 2019. The employment agreement provides for an
annual base salary of $325,000. Under the employment agreement, Mr.
Michelon is eligible for an annual cash bonus based upon
achievement of performance-based objectives established by our
board of directors. Pursuant to Mr. Michelon’s employment
agreement, upon the closing of our initial public offering he was
granted options to purchase 307,310 shares of common stock. The
options have an exercise price of $5.00 per share of common stock
and vest in three equal annual installments beginning on May 12,
2018. Upon termination without cause, any portion of Mr.
Michelon’s options scheduled to vest within 12 months will
automatically vest, and upon termination without cause within 12
months following a change of control, the entire unvested portion
of the option will automatically vest. Upon termination for any
other reason, the entire unvested portion of the option will
terminate.
If Mr.
Michelon’s employment is terminated by the Company without
cause, Mr. Michelon will be entitled to receive 12 months’
continuation of his current base salary and a lump sum payment
equal to 12 months of continued healthcare coverage (or 24
months’ continuation of his current base salary and a lump
sum payment equal to 24 months of continued healthcare coverage if
such termination occurs within one year following a change in
control).
5
Under
his employment agreement, Mr. Michelon is eligible to receive
benefits that are substantially similar to those of the
Company’s other senior executive officers.
Michael Thornton. Effective May 12, 2017, the
Company entered into an amended and restated employment agreement
with Michael Thornton, our Chief Technology Officer. The term of
the employment agreement runs through December 31, 2019. The
employment agreement provides for an annual base salary of
$245,000. Under the employment agreement, Mr. Thornton is eligible
for an annual cash bonus based upon achievement of
performance-based objectives established by our board of directors.
Pursuant to Mr. Thornton’s employment agreement, upon the
closing of our initial public offering he was granted options to
purchase 313,338 shares of common stock. The options have an
exercise price of $5.00 per share of common stock and vest in three
equal annual installments beginning on May 12, 2018. Upon
termination without cause, any portion of Mr. Thornton’s
option scheduled to vest within 12 months will automatically vest,
and upon termination without cause within 12 months following a
change of control, the entire unvested portion of the option will
automatically vest. Upon termination for any other reason, the
entire unvested portion of the option will terminate.
If Mr.
Thornton’s employment is terminated by the Company without
cause, Mr. Thornton will be entitled to receive 12 months’
continuation of his current base salary and a lump sum payment
equal to 12 months of continued healthcare coverage (or 24
months’ continuation of his current base salary and a lump
sum payment equal to 24 months of continued healthcare coverage if
such termination occurs within one year following a change in
control).
Under
his employment agreement, Mr. Thornton is eligible to receive
benefits that are substantially similar to those of the
Company’s other senior executive officers.
David R. Wells. On May 12, 2017, the Company entered into a
consulting agreement with StoryCorp Consulting
(“StoryCorp”), pursuant to which David Wells provides
services to the Company as its Chief Financial Officer. Pursuant to
the consulting agreement, the Company pays to StoryCorp a monthly
fee of $9,000. Additionally, pursuant to the consulting agreement,
the Company granted to Mr. Wells a stock option to purchase 15,000
shares of common stock in connection with the closing of our
initial public offering, having an exercise price per share equal
to $5.00 and vesting in twelve equal quarterly installments, and,
for so long as the consulting agreement is in place, will grant to
Mr. Wells a stock option to purchase the same number of shares of
common stock with the same terms on each annual anniversary of the
date of the consulting agreement.
Director Compensation
Effective
on May 12, 2017 the Company adopted a non-employee director
compensation policy pursuant to which our non-employee directors
receive on an annual basis a $36,000 retainer paid in cash and an
annual equity award with a value of $30,000. The equity award
consists of a stock option grant made on the first trading day
following December 31 of each year covering a number of shares of
common stock equal to $30,000 divided by the closing price of its
common stock on such date which vests in full on the one year
anniversary of grant; provided, the grants for 2017 were made
on May 12, 2017 upon the closing of the Company’s initial
public offering and each covered 6,000 shares of common
stock.
The
following table sets forth information with respect to compensation
earned by or awarded to each of our non-employee directors who
served on our board of directors during the fiscal year ended
December 31, 2017:
Name
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Paid in Cash
($)
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Option Awards
($)(1)
|
All Other
Compensation ($)
|
Total
($)
|
Anthony
DiGiandomenico
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14,129
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48,696
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-
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62,825
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Dr. Sanjiv Sam
Gambhir
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14,129
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48,696
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-
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62,825
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Michael
Harsh
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14,129
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48,696
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-
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62,825
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Alexander
Tokman
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14,129
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48,696
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-
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62,825
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6
(1)
The amounts shown
in this column indicate the grant date fair value of option awards
granted in the subject year computed in accordance with FASB ASC
Topic 718. For additional information regarding the assumptions
made in calculating these amounts, see note 7 to our audited
financial statements included herein. The following table shows the
number of shares subject to outstanding option awards held by each
non-employee director as of December 31, 2017:
Name
|
Shares subject
to
Outstanding
Stock
Option Awards
(#)
|
Anthony
DiGiandomenico
|
23,157
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Dr. Sanjiv
Sam Gambhir
|
34,893
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Michael
Harsh
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23,432
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Alexander
Tokman
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27,231
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2016 Omnibus Incentive Plan
In
September 2016, our board of directors and stockholders approved
the 2016 Omnibus Incentive Plan, which permits the grant of stock
options and shares to our employees, consultants and non-employee
members of our board of directors for up to 1,345,074 shares of
common stock.
7
PART IV
Item 15. Exhibits, Financial Statements and
Schedules
(a) The
following documents were filed as part of this Annual
Report:
1.
Financial
Statements (see “Financial Statements and Supplementary
Data” at Part II, Item 8 of the Original
Report)
2.
Financial Statement
Schedules (Schedules to the Financial Statements have been omitted
because the information required to be set forth therein is not
applicable or is shown in the accompanying Financial Statements or
notes thereto)
3.
Exhibits
The
following is a list of exhibits filed as part of this Annual
Report:
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Incorporated by Reference
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Exhibit Number
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Exhibit Description
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Filed Herewith
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Form
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Exhibit
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Filing Date
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Registration/File No.
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Fourth
Amended and Restated Certificate of Incorporation of the
Registrant
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8-K
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3.2
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05/12/17
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001-37969
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Amended
and Restated Bylaws of the Registrant
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S-1
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3.4
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11/21/16
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333-214724
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Specimen
Certificate representing shares of common stock of the
Registrant
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S-1
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4.1
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11/21/16
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333-214724
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||
Form of
Warrant Agreement and Warrant comprising a part of the
Registrant’s units issued in its 2017 initial public
offering
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S-1
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4.2
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11/21/16
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333-214724
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Form of
Underwriters’ Warrant issued to certain designees of the
underwriters in the Registrant’s 2017 initial public
offering
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S-1
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4.3
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11/21/16
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333-214724
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Form of
Convertible Promissory Note
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S-1
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4.8
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11/21/16
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333-214724
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ENDRA
Life Sciences Inc. Second Amended and Restated 2013 Stock Incentive
Plan*
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S-1
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10.1
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11/21/16
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333-214724
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Form of
Non-Qualified Stock Option Award under Second Amended and Restated
2013 Stock Incentive Plan*
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S-1
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10.2
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11/21/16
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333-214724
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Form of
Incentive Stock Option Agreement under Second Amended and Restated
2013 Stock Incentive Plan*
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S-1
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10.3
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11/21/16
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333-214724
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8
ENDRA
Life Sciences Inc. 2016 Omnibus Incentive Plan *
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S-1
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10.4
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12/06/16
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333-214724
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Form of
Stock Option Award under 2016 Omnibus Incentive Plan*
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S-1
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10.5
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12/06/16
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333-214724
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Form of
Restricted Stock Unit Award under 2016 Omnibus Incentive
Plan*
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S-1
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10.6
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12/06/16
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333-214724
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Non-Employee
Director Compensation Policy*
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S-1
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10.7
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01/20/17
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333-214724
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Form of
Indemnification Agreement by and between the Registrant and each of
its directors and executive officers*
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S-1
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10.8
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11/21/16
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333-214724
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|
Amended
and Restated Employment Agreement, dated May 12, 2017, by and
between the Registrant and Francois Michelon*
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8-K
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10.1
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05/12/17
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001-37969
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|
Amended
and Restated Employment Agreement, dated May 12, 2017, by and
between the Company and Michael Thornton*
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8-K
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10.2
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05/12/17
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001-37969
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|
Consulting
Agreement, dated May 12, 2017, by and between the Company and
StoryCorp Consulting*
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8-K
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10.3
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05/12/17
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001-37969
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|
Collaborative
Research Agreement, dated April 22, 2016, by and between the
Registrant and General Electric Company
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S-1
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10.17
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11/21/16
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333-214724
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|
Amendment
to Collaborative Research Agreement, dated April 21, 2017, by and
between the Registrant and General Electric Company
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S-1
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10.21
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05/03/17
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333-214724
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|
Amendment
2 to Collaborative Research Agreement, dated January 30, 2018, by
and between the Registrant and General Electric
Company
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8-K
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10.10
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01/30/18
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001-37969
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|
Gross
Lease, dated January 1, 2015, between the Registrant and Green
Court LLC
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S-1
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10.18
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11/21/16
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333-214724
|
9
Sublicense
Agreement, dated August 2, 2007, by and between the Registrant and
Optosonics, Inc.
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S-1
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10.19
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11/21/16
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333-214724
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|
Amendment
to Sublicense Agreement, dated January 18, 2011, by and between the
Registrant and Optosonics, Inc.
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S-1
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10.20
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11/21/16
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333-214724
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|
Master
Services Agreement, dated October 24, 2017, by and between the
Registrant and CriTech Research, Inc.
|
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10-K
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10.18
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03/20/2018
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001-37969
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|
Consulting
Agreement, dated October 31, 2017, by and between the Registrant
and StarFish Product Engineering, Inc.
|
|
10-K
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10.18
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03/20/2018
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001-37969
|
|
Subsidiaries
of the Registrant
|
|
10-K
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21.1
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03/20/2018
|
001-37969
|
|
Consent
of RBSM LLP, Independent Registered Public Accounting
Firm
|
|
10-K
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23.1
|
03/20/2018
|
001-37969
|
|
Power
of Attorney (included on signature page of Original
Report)
|
|
10-K
|
24.1
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03/20/2018
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001-37969
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|
Certification
Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the
Securities Exchange Act of 1934
|
X
|
|
|
|
|
|
Certification
Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the
Securities Exchange Act of 1934
|
X
|
|
|
|
|
|
Certification
Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
|
|
10-K
|
32.1
|
03/20/2018
|
001-37969
|
|
101.INS
|
XBRL
Instance Document
|
|
10-K
|
101.INS
|
03/20/2018
|
001-37969
|
101.SCH
|
XBRL
Taxonomy Schema
|
|
10-K
|
101.SCH
|
03/20/2018
|
001-37969
|
101.CAL
|
XBRL
Taxonomy Extension Calculation Linkbase
|
|
10-K
|
101.CAL
|
03/20/2018
|
001-37969
|
101.DEF
|
XBRL
Taxonomy Extension Definition Linkbase
|
|
10-K
|
101.DEF
|
03/20/2018
|
001-37969
|
101.LAB
|
XBRL
Taxonomy Extension Label Linkbase
|
|
10-K
|
101.LAB
|
03/20/2018
|
001-37969
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101.PRE
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XBRL
Taxonomy Extension Presentation Linkbase
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10-K
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101.PRE
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03/20/2018
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001-37969
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* Indicates management compensatory plan, contract or
arrangement.
10
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.
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ENDRA Life Sciences
Inc.
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Dated: April
13, 2018
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By:
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/s/
Francois
Michelon
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Francois
Michelon
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Chief
Executive Officer and Director
(Principal
Executive Officer)
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11