Proxy Statement (definitive) (def 14a)

Date : 04/15/2019 @ 9:47PM
Source : Edgar (US Regulatory)
Stock : Endra Life Sciences Inc. (NDRA)
Quote : 1.66  0.01 (0.61%) @ 12:59AM
Endra Life Sciences Inc. share price Chart

Proxy Statement (definitive) (def 14a)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

________________________________________________________

SCHEDULE 14A
(Rule 14a-101)

________________________________________________________

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.    )

Filed by the Registrant S

Filed by a Party other than the Registrant £

Check the appropriate box:

£

 

Preliminary Proxy Statement

£

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a -6 (e)(2))

S

 

Definitive Proxy Statement

£

 

Definitive Additional Materials

£

 

Soliciting Material Pursuant to Rule 14a -12

ENDRA LIFE SCIENCES INC.
(Name of Registrant as Specified in its Charter)

____________________________________________________

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

S

 

No fee required.

£

 

Fee computed on table below per Exchange Act Rules 14a -6 (i)(1) and 0 -11 .

   

(1)

 

Title of each class of securities to which transaction applies: N/A

   

(2)

 

Aggregate number of securities to which transaction applies: N/A

   

(3)

 

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11
(set forth the amount on which the filing fee is calculated and state how it was determined): N/A

   

(4)

 

Proposed maximum aggregate value of transaction: N/A

   

(5)

 

Total fee paid: N/A

£

 

Fee paid previously with preliminary materials.

£

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0 -11 (a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

   

(1)

 

Amount Previously Paid: N/A

   

(2)

 

Form, Schedule or Registration Statement No.: N/A

   

(3)

 

Filing Party: N/A

   

(4)

 

Date Filed: N/A

 

3600 Green Court, Suite 350
Ann Arbor, Michigan 48105

April 15, 2019

Dear Stockholder:

You are cordially invited to attend the annual meeting of stockholders of ENDRA Life Sciences Inc. to be held at 10:00 a.m., local time, on Thursday, May 16, 2019, in the auditorium located at 3600 Green Court, Ann Arbor, Michigan.

We look forward to your attending either in person or by proxy. Further details regarding the matters to be acted upon at this meeting appear in the accompanying Notice of 2019 Annual Meeting and Proxy Statement. Please give this material your careful attention.

 

Very truly yours,

   

   

David Wells
Chief Financial Officer and Secretary

 

ENDRA Life Sciences Inc.
3600 Green Court, Suite 350
Ann Arbor, Michigan 48105

NOTICE OF 2019 ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 16, 2019

To the Stockholders of ENDRA Life Sciences Inc.:

NOTICE IS HEREBY GIVEN that the 2019 Annual Meeting of Stockholders of ENDRA Life Sciences Inc., a Delaware corporation, will be held on Thursday, May 16, 2019 at 10:00 a.m., local time, in the auditorium located at 3600 Green Court, Ann Arbor, Michigan, for the following purposes:

1.      To elect the five nominees to the Board of Directors nominated by the Board of Directors.

2.      To ratify the appointment of RBSM LLP as our independent registered public accounting firm for 2019.

3.      To transact such other business as may properly come before the annual meeting and any adjournments or postponements thereof.

Only stockholders of record at the close of business on April 3, 2019, the record date fixed by the Board of Directors, are entitled to notice of and to vote at the annual meeting and any adjournment or postponement thereof. ENDRA’s warrants do not have voting rights. If you plan to attend the annual meeting and you require directions, please call us at (734) 335 -0468 .

 

By Order of the Board of Directors,

   

   

Francois Michelon
Chief Executive Officer and Chairman

Ann Arbor, Michigan

April 15, 2019

 

i

ENDRA Life Sciences Inc.
3600 Green Court, Suite 350
Ann Arbor, Michigan 48105

PROXY STATEMENT

The Board of Directors (the “Board”) of ENDRA Life Sciences Inc. (the “Company,” “ENDRA,” “we,” “us” or “our”) is providing these materials to you in connection with ENDRA’s 2019 annual meeting of stockholders (the “2019 Annual Meeting”). The 2019 Annual Meeting will take place on Thursday, May 16, 2019, 10:00 a.m., local time, in the auditorium located at 3600 Green Court, Ann Arbor, Michigan. This proxy statement and the accompanying notice and form of proxy are being made available to stockholders on or about April 15, 2019.

GENERAL INFORMATION

Why am I receiving these materials?

You have received these proxy materials because the Board is soliciting your proxy to vote your shares at the 2019 Annual Meeting. This proxy statement includes information that we are required to provide to you under Securities and Exchange Commission (“SEC”) rules and is designed to assist you in voting your shares.

What is a proxy?

The Board is asking for your proxy. This means that you authorize persons selected by us to vote your shares at the 2019 Annual Meeting in the way that you instruct. We have designated two of our executive officers to serve as proxy holders for the 2019 Annual Meeting. All shares represented by valid proxies received before the 2019 Annual Meeting will be voted in accordance with the stockholder’s specific voting instructions.

What is included in these materials?

These materials include:

•         this proxy statement for the 2019 Annual Meeting;

•         a proxy card for the 2019 Annual Meeting; and

•         our Annual Report on Form 10 -K for the year ended December 31, 2018.

What items will be voted on at the 2019 Annual Meeting?

There are two proposals scheduled to be voted on at the 2019 Annual Meeting:

•         the election of the nominees to the Board nominated by our Board of Directors; and

•         the ratification of the Audit Committee’s appointment of RBSM LLP (“RBSM”) as our independent registered public accounting firm for the fiscal year ending December 31, 2019.

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The Board is not aware of any other matters to be brought before the meeting. If other matters are properly raised at the meeting, the proxy holders may vote any shares represented by proxy in their discretion.

What are the Board’s voting recommendations?

The Board recommends that you vote your shares:

•         FOR the nominees to the Board; and

•         FOR the ratification of the Audit Committee’s appointment of RBSM as our independent registered public accounting firm for 2019.

Who can attend the 2019 Annual Meeting?

Admission to the 2019 Annual Meeting is limited to:

•         stockholders as of the close of business on April 3, 2019 (the “record date”);

•         holders of valid proxies for the 2019 Annual Meeting; and

•         our invited guests.

Each stockholder may be asked to present valid picture identification, such as a driver’s license or passport, and proof of stock ownership as of the record date.

When is the record date and who is entitled to vote?

The Board set April 3, 2019 as the record date. All record holders of ENDRA common stock as of the close of business on that date are entitled to vote. Each share of common stock is entitled to one vote. ENDRA’s warrants do not have voting rights. As of the record date, there were outstanding 7,422,642 shares of common stock entitled to 7,422,642 votes at the 2019 Annual Meeting.

What is a stockholder of record?

A stockholder of record or registered stockholder is a stockholder whose ownership of ENDRA stock is reflected directly on the books and records of our transfer agent, Corporate Stock Transfer, Inc. If you hold stock through an account with a bank, broker or similar organization, you are considered the beneficial owner of shares held in “street name” and are not a stockholder of record. For shares held in street name, the stockholder of record is your bank, broker or similar organization. We only have access to stock ownership information for registered stockholders. If you are not a stockholder of record, we will require additional documentation to evidence your stock ownership as of the record date, such as a copy of your brokerage account statement, a letter from your broker, bank or other nominee or a copy of your notice or voting instruction card. As described below, if you are not a stockholder of record, you will not be able to vote your shares unless you have a proxy from the stockholder of record authorizing you to vote your shares.

How do I vote?

You may vote by any of the following methods:

•         In person .    Stockholders of record and beneficial stockholders with shares held in street name may vote in person at the 2019 Annual Meeting. If you hold shares in street name, you must also obtain a proxy from the stockholder of record authorizing you to vote your shares.

•         By mail .    Stockholders of record may vote by signing and returning the proxy card provided.

•         By phone or via the Internet.     You may vote by proxy, by phone or via the Internet by following the instructions provided in the accompanying proxy card or the voting instruction card provided.

•         Beneficial owners of shares held in “street name.”     You may vote by following the voting instructions provided to you by your bank or broker.

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How can I change or revoke my vote?

If you are a stockholder of record, you may change or revoke your proxy any time before it is voted at the 2019 Annual Meeting by:

•         timely delivering a properly executed, later -dated proxy;

•         delivering a written revocation of your proxy to our Secretary at our principal executive offices; or

•         voting in person at the meeting.

If you hold your shares beneficially in street name, you may change your vote by submitting new voting instructions to your bank, broker or nominee following the instructions they provide.

What happens if I do not give specific voting instructions?

Stockholders of record.     If you are a stockholder of record and you sign and return a proxy card without giving specific voting instructions, then the proxy holders will vote your shares in the manner recommended by the Board on all matters presented in this proxy statement and as the proxy holders may determine in their discretion for any other matters properly presented for a vote at the meeting.

Beneficial owners of shares held in “street name.”     If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions, the organization that holds your shares may generally vote on routine matters but cannot vote on non -routine matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non -routine matter, the organization that holds your shares will inform the inspector of election that it does not have the authority to vote on this matter with respect to your shares. This is referred to as a “broker non -vote .”

Which ballot measures are considered “routine” or “non-routine”?

The election of directors (“Proposal 1”) is considered to be a non -routine matter under applicable rules. A broker or other nominee cannot vote without instructions on non -routine matters, and therefore there may be broker non -votes on Proposal 1.

The ratification of the appointment of RBSM as our independent registered public accounting firm for 2019 (“Proposal 2”) is considered to be a routine matter under applicable rules. A broker or other nominee may generally vote on routine matters, and we do not expect there to be any broker non -votes with respect to Proposal 2.

What is the quorum for the 2019 Annual Meeting?

The presence, in person or by proxy, of the holders of not less than one -third in voting power of the outstanding shares of stock entitled to vote at the meeting is necessary for the transaction of business at the 2019 Annual Meeting. This is called a quorum.

What is the voting requirement to approve each of the proposals?

The following are the voting requirements for each proposal:

•         Proposal 1: Election of Directors .    The five nominees receiving the highest number of votes will be elected as directors.

•         Proposal 2: Ratification of Appointment of Independent Registered Public Accounting Firm .    The Audit Committee’s appointment of RBSM as our independent registered public accounting firm for 2019 will be ratified if a majority of the voting power of the voting stock present in person or represented by proxy and entitled to vote votes in favor of the proposal.

How are abstentions and broker non-votes treated?

Broker non -votes and abstentions are counted for purposes of determining whether a quorum is present at the 2019 Annual Meeting. However, broker non -votes are not counted as votes present for any non -routine proposal considered

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at the 2019 Annual Meeting and, therefore, will have no effect on the proposal regarding the election of directors. We expect no broker non -votes on the routine proposal to appoint RBSM as our independent registered public accounting firm for 2019.

Abstentions will be counted as votes present and entitled to vote on the proposals considered at the 2019 Annual Meeting and, therefore, will be counted as votes against the proposal to appoint RBSM as our independent registered public accounting firm for 2019. Abstentions will have no effect on the proposal regarding the election of directors.

Who pays for solicitation of proxies?

ENDRA is paying the cost of soliciting proxies and will reimburse brokerage firms and other custodians, nominees and fiduciaries for their reasonable out -of-pocket expenses for sending proxy materials to stockholders and obtaining their votes. In addition to soliciting the proxies by mail, certain of our directors, officers and regular employees, without compensation, may solicit proxies personally or by telephone, facsimile and email.

Where can I find the voting results of the 2019 Annual Meeting?

We will announce voting results in a Current Report on Form 8 -K filed with the SEC within four business days following the meeting.

How can I submit a proposal for the 2020 annual meeting of stockholders?

Requirements for Stockholder Proposals to Be Considered for Inclusion in the Company’s Proxy Materials.     Stockholder proposals to be considered for inclusion in the proxy statement and form of proxy relating to the 2020 annual meeting of stockholders must be received by December 16, 2019. In addition, all proposals will need to comply with Rule 14a -8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which lists the requirements for the inclusion of stockholder proposals in company -sponsored proxy materials. Stockholder proposals must be delivered to the Company’s Secretary at 3600 Green Court, Suite 350, Ann Arbor, Michigan 48105.

Requirements for Stockholder Proposals to Be Brought Before the 2020 Annual Meeting of Stockholders.     Notice of any director nomination or other proposal that you intend to present at the 2020 annual meeting of stockholders, but do not intend to have included in the proxy statement and form of proxy relating to the 2020 annual meeting of stockholders, must be delivered to the Company’s Secretary at 3600 Green Court, Suite 350, Ann Arbor, Michigan 48105 not earlier than the close of business on January 16, 2020 and not later than the close of business on February 15, 2020. In addition, your notice must set forth the information required by our bylaws with respect to each director nomination or other proposal that you intend to present at the 2020 annual meeting of stockholders.

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SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding beneficial ownership of our voting stock as of April 3, 2019 by:

•         each person or group of affiliated persons known by us to be the beneficial owner of more than 5% of any class of our voting stock;

•         each executive officer included in the Summary Compensation Table below;

•         each of our directors;

•         each person nominated to become director; and

•         all executive officers, directors and nominees as a group.

Unless otherwise noted below, the address of each person listed on the table is c/o ENDRA Life Sciences Inc. at 3600 Green Court, Suite 350, Ann Arbor, Michigan 48105. To our knowledge, each person listed below has sole voting and investment power over the shares shown as beneficially owned except to the extent jointly owned with spouses or otherwise noted below.

Beneficial ownership is determined in accordance with the rules of the SEC. The information does not necessarily indicate ownership for any other purpose. Under these rules, shares of stock which a person has the right to acquire ( i.e. , by the exercise of any option or warrant) within 60 days after April 3, 2019 are deemed to be beneficially owned and outstanding for purposes of calculating the number of shares and the percentage beneficially owned by that person. However, these shares are not deemed to be beneficially owned and outstanding for purposes of computing the percentage beneficially owned by any other person. The applicable percentage of common stock outstanding as of April 3, 2019 is based upon 7,422,642 shares outstanding on that date.

Name and Address of Beneficial Owner

 

Total Shares Beneficially Owned

 

Percentage of Common Stock Outstanding

Directors and Executive Officers

   

 

   

 

Francois Michelon

 

296,655

(1)

 

3.9

%

Michael Thornton

 

333,349

(2)

 

4.3

%

David R. Wells

 

47,183

(3)

 

*

 

Dr. Sanjiv Sam Gambhir

 

23,157

(4)

 

*

 

Michael Harsh

 

23,432

(5)

 

*

 

Alexander Tokman

 

26,729

(6)

 

*

 

Anthony DiGiandomenico

 

170,626

(7)

 

2.3

%

All directors and executive officers as a group (7 individuals)

 

921,131

 

 

11.4

%

5% or More Shareholders

   

 

   

 

ICM Asset Management, Inc.

 

561,426

(8)

 

7.6

%

____________

*        Less than one percent.

(1)      Consists of 32,497 shares of common stock, 261,678 shares of common stock issuable upon the exercise of options that are presently exercisable and 2,480 shares of common stock issuable upon the exercise of restricted warrants.

(2)      Consists of 89,750 shares of common stock, 230,199 shares of common stock issuable upon the exercise of options that are presently exercisable and 13,400 shares of common stock issuable upon the exercise of restricted warrants.

(3)      Consists of 24,786 shares of common stock, 19,917 shares of common stock issuable upon the exercise of options that are presently exercisable and 2,480 shares of common stock issuable upon the exercise of restricted warrants.

(4)      Consists of 23,157 shares of common stock issuable upon the exercise of options that are presently exercisable.

(5)      Consists of 23,432 shares of common stock issuable upon the exercise of options that are presently exercisable.

(6)      Consists of 26,729 shares of common stock issuable upon the exercise of options that are presently exercisable.

(7)      Consists of 118,149 shares of common stock, 23,157 shares of common stock issuable upon the exercise of options that are presently exercisable and 48,746 shares of common stock issuable upon the exercise of restricted warrants.

(8)      Based solely on the Schedule 13G filed on November 7, 2018 by ICM Asset Management, Inc. (“ICM”). According to the filing, shares consist of 561,426 shares of common stock owned by ICM, an investment adviser whose clients have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, such shares. James M. Simmons is the Chief Executive Officer and controlling shareholder of ICM. The address for this investor is 601 W. Main Avenue, Suite 900, Spokane, WA 99201.

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PROPOSAL 1 ELECTION OF DIRECTORS

The Company’s Board of Directors currently consists of five members. Upon the recommendation of the Corporate Governance and Nominating Committee of our Board of Directors, the Board has nominated the five current directors for election at the 2019 Annual Meeting to hold office until the next annual meeting of stockholders or until his successor is duly elected and qualified.

Shares represented by all proxies received by the Board and not marked so as to withhold authority to vote for any individual nominee will be voted FOR the election of the nominees named below. The Board knows of no reason why any nominee would be unable or unwilling to serve, but if such should be the case, proxies may be voted for the election of some other person nominated by the Board of Directors.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR THE NOMINEES LISTED BELOW

The following table sets forth the nominees to be elected at the 2019 Annual Meeting, the year such director was first elected as a director, and the positions currently held by each director with ENDRA.

Nominee’s or Director’s Name

 

Year First Became Director

 

Position with the Company

Francois Michelon

 

2015

 

Chief Executive Officer and Chairman of the Board

Anthony DiGiandomenico

 

2013

 

Director

Dr. Sanjiv Sam Gambhir

 

2008

 

Director

Michael Harsh

 

2015

 

Director

Alexander Tokman

 

2008

 

Director

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INFORMATION CONCERNING DIRECTORS AND NOMINEES FOR DIRECTOR

Set forth below is background information for each current director and nominee for director, as well as information regarding additional experience, qualifications, attributes or skills that led the Board of Directors to conclude that such director or nominee should serve on the Board.

Francois Michelon , age 53, joined ENDRA as Chief Executive Officer and Chairman of our board of directors in 2015. He has 20 years of healthcare technology experience in general management, operations, strategy and marketing across the diagnostic imaging, surgical instrument and dental sectors.

From 2012 to 2014, Mr. Michelon served as Vice President of Global Marketing for the 3i division of Biomet, Inc. (now Zimmer Biomet Holdings, Inc.), a provider of oral reconstruction technologies, where he was responsible for the upstream and downstream development of the division’s global portfolio. From 2004 to 2011, Mr. Michelon served as Group Director of Global Services and Visualization for Smith & Nephew plc’s Advanced Surgical Devices division, where he led in the B2B service and capital equipment sectors, and had responsibility over the financial performance of these as well. From 1997 to 2004, Mr. Michelon worked at GE Healthcare in a variety of global upstream and downstream marketing roles.

Mr. Michelon received an MBA from Carnegie -Mellon University and a BA in Economics from the University of Chicago. He has also earned his Six Sigma Black Belt certification.

Mr. Michelon’s extensive industry and executive experience and his intimate understanding of our business as our Chief Executive Officer, position him well to serve as a member of our board of directors.

Anthony DiGiandomenico , age 52, joined our board of directors in 2013. A co -founder of MDB Capital Group LLC, Mr. DiGiandomenico focuses on corporate finance and capital formation for growth -oriented companies. He has participated in all areas of corporate finance including private capital, public offerings, PIPEs, business consulting and strategic planning, and mergers and acquisitions.

Mr. DiGiandomenico has also worked on a wide range of transactions for growth -oriented companies in biotechnology, nutritional supplements, manufacturing and entertainment industries. Prior to forming MDB Capital Group LLC in 1997, Mr. DiGiandomenico served as President and CEO of the Digian Company, a real estate development company. Currently, Mr. DiGiandomenico serves on the board of directors of Cue Biopharma, Inc., an immunotherapy company, and Provention Bio, Inc., a clinical -stage biopharmaceutical company.

Mr. DiGiandomenico holds an MBA from the Haas School of Business at the University of California, Berkeley and a BS in Finance from the University of Colorado.

Mr. DiGiandomenico’s financial expertise, general business acumen and significant executive leadership experience position him well to make valuable contributions to our board of directors.

Dr. Sanjiv Sam Gambhir , age 56, joined our board of directors in 2008. He is the Virginia & D.K. Ludwig Professor of Cancer Research and the Chair of Radiology at Stanford University School of Medicine. He also heads the Canary Center at Stanford for Cancer Early Detection and directs the Molecular Imaging Program at Stanford (MIPS).

He received an MD/PhD from the UCLA Medical Scientist Training Program. He has many publications in the field and numerous patents pending or granted. He has developed and clinically translated several multimodality molecular imaging strategies including imaging of gene and cell therapies. He has also pioneered imaging areas such as Bioluminescence Resonance Energy Transfer (BRET), split -reporter technology, Raman imaging in vivo, Molecular Photoacoustic imaging, PET reporter genes, and novel in vitro and in vivo strategies for the early detection of cancer.

Dr. Gambhir serves on numerous academic advisory boards for universities around the world and also served as a member of the Board of Scientific Advisors of the National Cancer Institute from 2004 to 2012. He has also founded or co -founded several startups in the diagnostics space. Among his many awards are the George Von Hevesy Prize and the Paul C. Aebersold Award for outstanding achievement in basic nuclear medicine science from the Society of Nuclear Medicine, Outstanding Researcher Award from the Radiological Society of Northern America, the Distinguished Clinical Scientist Award from the Doris Duke Charitable Foundation, the Holst Medal, the Tesla Medal, and the Hounsfield Medal from Imperial College, London. He was elected to the Institute of Medicine of the U.S. National Academies in 2008.

Dr. Gambhir’s unique and extensive scientific and technical expertise positions him well to serve on our board of directors.

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Michael Harsh , age 64, joined our board of directors in 2015. He has 39 years’ experience in healthcare technology, focused on diagnostic imaging. Mr. Harsh was most recently GE Healthcare’s Vice President and Chief Technology Officer, leading its global science and technology organization and research and development teams in diagnostics, healthcare IT and life sciences.

In 2004, Mr. Harsh was named Global Technology Leader – Imaging Technologies Lab at the GE Global Research Center, where he led the research for imaging technologies across the company as well as the research associated with computer visualization/image analysis and superconducting systems. He led the Engineering division for GE Industrial and Enterprise Solutions from 2006 to 2009. Mr. Harsh was named an officer of General Electric Company in November 2006. Mr. Harsh is the co -founder of Terapede Systems, a digital x -ray detector startup, a member of the boards of directors of FloDesign Sonics, Imagion Biosystems, and EmOpti as well as a member the Radiological Society of North America (“RSNA”), Research & Education Foundation Board of Trustees. He is also a McKinsey Senior Advisor and a consultant in the medical device industry.

Mr. Harsh is a graduate of Marquette University, where he earned a bachelor’s degree in Electrical Engineering. He holds numerous U.S. patents in the field of medical imaging and instrumentation. In 2008, Mr. Harsh was elected to the American Institute for Medical and Biological Engineering College of Fellows for his significant contributions to the medical and biological engineering field.

Mr. Harsh’s extensive industry, executive and board experience position him well to serve on our board of directors.

Alexander Tokman , age 57, joined our board of directors in 2008. He has served as President, Chief Executive Officer, and a director of Microvision, Inc., a publicly traded laser beam scanning projection and imaging company, from January 2006 to December 2017.

Previously, Mr. Tokman completed a 10+ year tenure as an executive with GE Healthcare, where he led several global businesses, most recently as a General Manager of its Global Molecular Imaging and Radiopharmacy multi -technology business unit from 2003 to 2005.

Between 1995 and 2003, Mr. Tokman served in various leadership roles at GE Healthcare, where he led the definition and successful commercialization of several product segments, including PET/CT, which generated over $500 million of revenue within the first three years of its launch.

Mr. Tokman is a certified Six Sigma and Design for Six Sigma (DFSS) Black Belt and Master Black Belt and as one of General Electric Company’s Six Sigma pioneers, he drove the quality culture change across GE Healthcare in the late 1990s. From 1989 to 1995, Mr. Tokman served as development programs lead and a head of Industry and Regional Development at Tracor Applied Sciences. Mr. Tokman has both an MS and BS in Electrical Engineering from the University of Massachusetts, Dartmouth.

Mr. Tokman’s industry expertise and significant executive leadership and director experience position him well to make valuable contributions to our board of directors.

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INFORMATION CONCERNING EXECUTIVE OFFICERS

Set forth below is background information relating to our executive officers:

Name

 

Age

 

Position

Francois Michelon

 

53

 

Chief Executive Officer and Chairman

Michael Thornton

 

50

 

Chief Technology Officer

David Wells

 

56

 

Chief Financial Officer

Francois Michelon is discussed above under Information Concerning Directors and Nominees for Director.

Michael Thornton joined ENDRA as Chief Technology Officer in 2007. Prior to that, Mr. Thornton was a founder and President of Enhanced Vision Systems Corp., or EVS, a developer and supplier of medical imaging equipment to the pharmaceutical, biotech, and academic sectors.

In 2002, EVS was acquired by General Electric Company and was integrated into the Functional and Molecular Imaging business unit of GE Medical Systems (now GE Healthcare, a subsidiary of General Electric Company). Following the acquisition of EVS by GE Medical Systems, Mr. Thornton held a number of positions at GE Healthcare, including Sales Manager, Global Product Manager, and Site Leader. He was a member of the leadership team that expanded the pre -clinical imaging business to include: computed tomography, optical, and positron emission tomography imaging technologies, with global market reach. He is also a founder of Volumetrics Medical Corp., a developer and manufacturer of quality assurance devices for diagnostic imaging.

Prior to founding EVS, Mr. Thornton developed medical imaging related technologies at the Robarts Research Institute (London, Ontario, Canada) for which he obtained an MSc in Electrical Engineering from the University of Western Ontario. Mr. Thornton also holds a BASc in Electrical Engineering from the University of Toronto and is a member of the American Association of Physicists in Medicine.

David Wells became our Chief Financial Officer on an interim basis in 2014 and on a continuing basis in 2017. He possesses over 30 years of experience in finance, operations and administrative positions. While mainly focused on technology companies, Mr. Wells has also worked in the water treatment, supply -chain management, manufacturing and professional services industries.

Mr. Wells is the founder of Wells Compliance Group, a technology -based services firm supporting the financial reporting needs of publicly traded companies and privately held firms whose investor or shareholder base requires timely GAAP -compliant financial reporting. Through StoryCorp Consulting (d/b/a/ Wells Compliance Group), Mr. Wells consults with several emerging growth companies. From 2009 to 2013, he was the President, CFO and a Director of Sionix Corporation, a publicly traded water treatment company.

Mr. Wells holds an MBA from Pepperdine University and a BS in Finance and Entrepreneurship from Seattle Pacific University.

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CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS

Board Independence

The Board of Directors has determined that each of Mr. DiGiandomenico, Dr. Gambhir, Mr. Harsh and Mr. Tokman is an independent director within the meaning of the director independence standards of The NASDAQ Stock Market (“NASDAQ”). Furthermore, the Board has determined that all of the members of the Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee are independent within the meaning of the director independence standards of NASDAQ and the rules of the SEC applicable to each such committee.

Board Leadership Structure

We have a Chairman of the Board who presides at all meetings of the Board. Currently, Mr. Michelon serves as the Chairman of the Board and Chief Executive Officer. ENDRA has no fixed policy with respect to the separation of the offices of the Chairman of the Board and Chief Executive Officer. Our bylaws permit these positions to be held by the same person, and the Board believes that it is in the best interests of the Company to retain flexibility in determining whether to separate or combine the roles of Chairman and Chief Executive Officer based on our circumstances. The Board has determined that it is appropriate for Mr. Michelon to serve as both Chairman and Chief Executive Officer because combining the roles of Chairman and Chief Executive Officer: (1) enhances the alignment between the Board and management in strategic planning and execution as well as operational matters, (2) avoids the confusion over roles, responsibilities and authority that can result from separating the positions, and (3) streamlines board process in order to conserve time for the consideration of the important matters the Board needs to address. Further, four of our five current Board members have been deemed to be independent by our Board; therefore, we believe our Board structure provides sufficient independent oversight of our management. The Board has not named a lead independent director.

Communications with the Board of Directors

Security holders who wish to communicate directly with the Board, the independent directors of the Board or any individual member of the Board may do so by sending such communication by certified mail addressed to the Chairman of the Board, the entire Board of Directors, to the independent directors as a group or to the individual director or directors, in each case, c/o Secretary, ENDRA Life Sciences Inc., 3600 Green Court, Suite 350, Ann Arbor, Michigan 48105. The Secretary reviews any such security holder communication and forwards relevant communications to the addressee.

Policies Regarding Director Nomination s

The Board has delegated to its Corporate Governance and Nominating Committee responsibility for establishing membership criteria for the Board, identifying individuals qualified to become directors consistent with such criteria and recommending the director nominees.

The Corporate Governance and Nominating Committee is responsible for, among other things: (1) recommending to the Board persons to serve as members of the Board and as members of and chairpersons for the committees of the Board, (2) considering the recommendation of candidates to serve as directors submitted from the stockholders of the Company, (3) assisting the Board in evaluating the Board’s and its committees’ performance, (4) advising the Board regarding the appropriate board leadership structure for the Company, (5) reviewing and making recommendations to the Board on corporate governance and (6) reviewing the size and composition of the Board and recommending to the Board any changes it deems advisable.

The Board seeks members from diverse professional backgrounds who combine a broad spectrum of relevant industry and strategic experience and expertise that, in concert, offer us and our stockholders diversity of opinion and insight in the areas most important to us and our corporate mission. The Corporate Governance and Nominating Committee has not set specific, minimum qualifications that must be met by director candidates. Rather, in determining candidates to recommend to the Board to serve as members of the Board, the Corporate Governance and Nominating Committee will consider, among other things, whether a candidate is of the highest ethical character and shares the Company’s values and whether the candidate’s reputation, both personal and professional, in consistent with the image and reputation of the Company. In addition, nominees for director are selected to have complementary, rather than overlapping, skill sets. However, the Corporate Governance and Nominating Committee does not have a formal policy concerning the diversity of the Board.

10

Procedures for Recommendation of Director Nominees by Stockholder s

The Corporate Governance and Nominating Committee considers individuals properly recommended by stockholders in the same manner as it considers director nominees identified by other means. To submit a recommendation to the Corporate Governance and Nominating Committee for director nominee candidates, a stockholder must make such recommendation in writing and include:

•         as to the stockholder making the recommendation and the beneficial owner, if any, on whose behalf the nomination is made:

•         the name and address of such stockholder, as they appear on the Company’s books, and of such beneficial owner;

•         the class or series and number of shares of capital stock of the Company which are owned beneficially and of record by such stockholder and such beneficial owner;

•         a description of any agreement, arrangement or understanding with respect to the nomination or proposal between or among such stockholder and/or such beneficial owner, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, including, in the case of a nomination, the nominee;

•         description of all arrangements or understandings among the stockholder and the candidate and any other person or persons pursuant to which the recommendation is being made;

•         a representation that the stockholder is a holder of record of stock of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination;

•         a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which intends (a) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Company’s outstanding capital stock required to approve or adopt the proposal or elect the nominee and/or (b) otherwise to solicit proxies or votes from stockholders in support of such proposal or nomination; and

•         any other information relating to such stockholder and beneficial owner, if any, required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in an election contest pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder; and

•         as to each person whom the stockholder proposes to nominate for election as a director:

•         full biographical information concerning the director candidate, including a statement about the candidate’s qualifications;

•         all other information regarding each director candidate proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the SEC;

•         a description of all relationships between the candidate and any of the Company’s competitors, customers, suppliers, labor unions or other persons with special interests regarding the Company; and

•         such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected.

Recommendations must be sent to the Chairperson of the Corporate Governance and Nominating Committee, c/o Secretary, ENDRA Life Sciences Inc., 3600 Green Court, Suite 350, Ann Arbor, Michigan 48105. The Secretary must receive any such recommendation for nomination not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the date of the preceding year’s annual meeting of stockholders; provided, however, that with respect to a special meeting of stockholders called by us for the purpose of electing directors to the Board of Directors, the Secretary must receive any such recommendation not earlier than the

11

120 th day prior to such special meeting nor later than the later of (1) the close of business on the 90 th day prior to such special meeting or (2) the close of business on the 10 th day following the day on which a public announcement is first made regarding such special meeting. We will promptly forward any such nominations to the Corporate Governance and Nominating Committee. Once the Corporate Governance and Nominating Committee receives a recommendation for a director candidate, such candidate will be evaluated in the same manner as other candidates and a recommendation with respect to such candidate will be delivered to the Board of Directors.

Policy Governing Director Attendance at Annual Meetings of Stockholders

Each director is encouraged to attend the 2019 Annual Meeting of stockholders either in person or telephonically. All of our directors attended last year’s annual meeting either in -person or telephonically.

Code of Business Conduct and Ethics

We have in place a Code of Business Conduct and Ethics (the “Code of Ethics”) that applies to all of our directors, officers and employees. The Code of Ethics is designed to deter wrongdoing and to promote:

•         honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

•         full, fair, accurate, timely and understandable disclosure in reports and documents that we file with, or submit to, the SEC and in other public communications that we make;

•         compliance with applicable governmental laws, rules and regulations;

•         the prompt internal reporting of violations of the Code of Ethics to an appropriate person identified in the Code of Ethics; and

•         accountability for adherence to the Code of Ethics.

A current copy of the Code of Ethics is available at www.endrainc.com . A copy may also be obtained, free of charge, from us upon a request directed to ENDRA Life Sciences, Inc., 3600 Green Court, Suite 350, Ann Arbor, Michigan 48105, attention: Investor Relations. We intend to disclose any amendments to or waivers of a provision of the Code of Ethics required to be disclosed by applicable SEC rules by posting such information on our website available at www.endrainc.com and/or in our public filings with the SEC.

12

THE BOARD OF DIRECTORS AND ITS COMMITTEES

Board of Directors

Our bylaws state that the number of directors constituting the entire Board of Directors shall be determined by resolution of the Board. The Board has the authority to increase the number of directors, fill any vacancies on the Board and to decrease the number of directors. The number of directors currently fixed by our Board is five.

Our Board of Directors met four times during the year ended December 31, 2018. No director attended less than 75 percent of all meetings of the Board and applicable committee meetings in 2018 held during the period for which he was a director. The Board of Directors currently has standing Audit, Compensation and Corporate Governance and Nominating Committees. The Board and each standing committee retains the authority to engage its own advisors and consultants. Each standing committee has a charter that has been approved by the Board of Directors. A copy of each committee charter is available at www.endrainc.com . Each committee reviews the appropriateness of its charter annually or at such other intervals as such committee determines.

The following table sets forth the current members of the Audit, Compensation and Corporate Governance and Nominating Committees of the Board:

Name

 

Audit

 

Compensation

 

Corporate Governance and Nominating

Anthony DiGiandomenico

 

Chair

 

X

   

Michael Harsh

 

X

 

X

 

Chair

Alexander Tokman

 

X

 

Chair

 

X

Dr. Sanjiv Sam Gambhir

         

X

Committees

Audit Committee .    Our Audit Committee consists of Mr. DiGiandomenico, Mr. Harsh and Mr. Tokman. The Board of Directors has determined that each member of the Audit Committee is independent within the meaning of the NASDAQ director independence standards and applicable rules of the SEC for audit committee members. The Board of Directors has elected Mr. DiGiandomenico as Chairperson of the Audit Committee and has determined that he qualifies as an “audit committee financial expert” under the rules of the SEC. The Audit Committee is responsible for assisting the Board of Directors in fulfilling its oversight responsibilities with respect to financial reports and other financial information. The Audit Committee (1) reviews, monitors and reports to the Board of Directors on the adequacy of the Company’s financial reporting process and system of internal controls over financial reporting, (2) has the ultimate authority to select, evaluate and replace the independent auditor and is the ultimate authority to which the independent auditors are accountable, (3) in consultation with management, periodically reviews the adequacy of the Company’s disclosure controls and procedures and approves any significant changes thereto, (4) provides the audit committee report for inclusion in our proxy statement for our annual meeting of stockholders and (5) recommends, establishes and monitors procedures for the receipt, retention and treatment of complaints relating to accounting, internal accounting controls or auditing matters and the receipt of confidential, anonymous submissions by employees of concerns regarding questionable accounting or auditing matters. The Audit Committee met four times in 2018.

Compensation Committee .    Our Compensation Committee presently consists of Mr. DiGiandomenico, Mr. Harsh and Mr. Tokman, each of whom is a non -employee director as defined in Rule 16b -3 of the Exchange Act. The Board has also determined that each member of the Compensation Committee is also an independent director within the meaning of NASDAQ’s director independence standards. Mr. Tokman serves as Chairperson of the Compensation Committee. The Compensation Committee (1) discharges the responsibilities of the Board of Directors relating to the compensation of our directors and executive officers, (2) oversees the Company’s procedures for consideration and determination of executive and director compensation, and reviews and approves all executive compensation, and (3) administers and implements the Company’s incentive compensation plans and equity -based plans. The Compensation Committee met four times in 2018.

Corporate Governance and Nominating Committee .    Our Corporate Governance and Nominating Committee consists of Mr. Harsh, Mr. Tokman and Dr. Gambhir. The Board of Directors has determined that each member of the Corporate Governance and Nominating Committee is an independent director within the meaning of the NASDAQ

13

director independence standards and applicable rules of the SEC. Mr. Harsh serves as Chairperson of the Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee (1) recommends to the Board of Directors persons to serve as members of the Board of Directors and as members of and chairpersons for the committees of the Board of Directors, (2) considers the recommendation of candidates to serve as directors submitted from the stockholders of the Company, (3) assists the Board of Directors in evaluating the performance of the Board of Directors and the Board committees, (4) advises the Board of Directors regarding the appropriate board leadership structure for the Company, (5) reviews and makes recommendations to the Board of Directors on corporate governance and (6) reviews the size and composition of the Board of Directors and recommends to the Board of Directors any changes it deems advisable. The Corporate Governance and Nominating Committee did not meet separately from the Board of Directors in 2018 but acted by written consent.

Role of the Board of Directors in Risk Oversight

Enterprise risks are identified and prioritized by management and the Board receives periodic reports from the Company’s head of compliance regarding the most significant risks facing the Company. These risks include, without limitation, the following:

•         risks and exposures associated with strategic, financial and execution risks and other current matters that may present material risk to our operations, plans, prospects or reputation;

•         risks and exposures associated with financial matters, particularly financial reporting, tax, accounting, disclosure, internal control over financial reporting, financial policies, investment guidelines and credit and liquidity matters;

•         risks and exposures relating to corporate governance, and management and director succession planning; and

•         risks and exposures associated with leadership assessment, and compensation programs and arrangements, including incentive plans.

14

REPORT OF THE AUDIT COMMITTEE

The Audit Committee is comprised of Anthony DiGiandomenico, Michael Harsh and Alexander Tokman. None of the current or former members of the Audit Committee is an officer or employee of the Company, and the Board has determined that each member of the Audit Committee meets the independence requirements promulgated by The NASDAQ Stock Market and the SEC, including Rule 10A -3 (b)(1) under the Exchange Act.

The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal controls and the certification of the integrity and reliability of the Company’s internal controls procedures. In fulfilling its oversight responsibilities, the Audit Committee has reviewed the Company’s audited financial statements included in the Annual Report on Form 10 -K for the fiscal year ended December 31, 2018, and has discussed them with both management and RBSM LLP (“RBSM”), the Company’s independent registered public accounting firm. The Audit Committee has also discussed with the independent registered public accounting firm the matters required to be discussed by the Auditing Standard No. 1301, Communications with Audit Committees , as adopted by the Public Company Accounting Oversight Board. The Audit Committee has reviewed permitted services under rules of the SEC as currently in effect and discussed with RBSM its independence from management and the Company, including the matters in the written disclosures and the letter from the independent registered public accounting firm required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence. The Audit Committee has also considered and discussed the compatibility of non -audit services provided by RBSM with that firm’s independence.

Based on its review of the financial statements and the aforementioned discussions, the Audit Committee concluded that it would be reasonable to recommend, and on that basis did recommend, to the Board of Directors that the audited financial statements be included in the Company’s Annual Report.

Respectfully submitted by the Audit Committee.

 

THE AUDIT COMMITTEE:

   

Anthony DiGiandomenico, Chair
Michael Harsh
Alexander Tokman

15

COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS

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. The principal elements of our executive compensation program have to date included base salary 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 2018 and our two most highly compensated executive officers other than the individual who served as our Principal Executive Officer during 2018 (collectively, the “named executive officers”):

Summary Compensation Table

Name and Principal Position

 

Year

 

Salary
($)

 

Bonus
($)

 

Stock
Awards
($)
(1)

 

Option
Awards
($)
(2)

 

TOTAL
($)

Francois Michelon

 

2018

 

339,803

(3)

 

103,500

 

 

281,250

 

724,553

Chief Executive Officer

 

2017

 

347,452

(4)

 

93,275

 

 

1,378,076

 

1,818,803

Michael Thornton

 

2018

 

256,250

(5)

 

54,600

 

 

281,250

 

592,100

Chief Technology Officer

 

2017

 

281,570

(6)

 

44,198

 

 

1,402,537

 

1,728,305

David R. Wells (7)

 

2018

 

111,780

(8)

 

20,100

 

 

78,750

 

210,630

Chief Financial Officer

 

2017

 

92,000

 

 

10,000

 

94,165

 

72,907

 

269,072

____________

(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 2 to our audited financial statements included in our Annual Report on Form 10 -K for the fiscal year ended December 31, 2018.

(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 8 to our audited financial statements included in our Annual Report on Form 10 -K for the fiscal year ended December 31, 2018.

(3)      As of April 1, 2018, Mr. Michelon’s annual salary was raised from $325,000 to $345,000.

(4)      Includes a payment for 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.

(5)      As of April 1, 2018, Mr. Thornton’s annual salary was raised from $245,000 to $260,000.

(6)      Includes a payment for 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.

(7)      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.

(8)      As of June 1, 2018, StoryCorp Consulting’s monthly fee was increased from $9,000 to $9,540.

16

Outstanding Equity Awards at 2018 Fiscal Year End

The following table provides information regarding equity awards held by the named executive officers as of December 31, 2018.

 

Option Awards

Name

 

Number of Securities Underlying Unexercised Options (#) Exercisable

 

Number of Securities Underlying Unexercised Options (#) Unexercisable

 

Option
Exercise Price ($)

 

Option Expiration
Date

Francois Michelon

 

35,498

 

 

 

10.01

 

7/1/20

   

102,437

 

204,837

(1)

 

5.00

 

5/12/25

   

10,653

 

21,307

(1)

 

4.55

 

5/12/25

   

 

125,000

(2)

 

2.25

 

12/13/26

Michael Thornton

 

104,446

 

208,892

(1)

 

5.00

 

5/12/25

   

10,653

 

21,307

(1)

 

4.55

 

5/12/25

   

 

125,000

(2)

 

2.25

 

12/13/26

David Wells

 

7,500

 

7,500

(3)

 

5.00

 

5/12/21

   

7,000

 

 

 

5.00

 

5/12/22

   

 

35,000 (4)

 

 

2.25

 

12/13/22

____________

(1)      Represents unvested portion of the options, which vest in three equal annual installments beginning on May 12, 2018.

(2)      These options vest in three equal annual installments beginning on December 13, 2019.

(3)      Represents unvested portion of the options, which vest in twelve equal quarterly installments beginning on August 12, 2017.

(4)      These options vest in twelve equal quarterly installments beginning on March 13, 2019.

Equity Compensation Plan Table

The following table presents information on the Company’s equity compensation plans as of December 31, 2018. All outstanding awards relate to our common stock.

Plan Category

 

Number of Securities to Be Issued upon Exercise of Outstanding Options, Warrants and Rights
(a)

 

Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights
(b)

 

Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
(c)

Equity compensation plans approved by security holders

 

1,208,617

(1)

 

$

4.58

 

136,457

(2)

Equity compensation plans not approved by security holders

 

 

 

 

 

 

Total

 

1,208,617

 

 

$

4.58

 

136,457

 

____________

(1)      Consists of outstanding stock options exercisable for 1,208,617 shares of common stock issued under our 2016 Omnibus Incentive Plan (the “2016 Plan”), which amended and restated our Second Amended and Restated 2013 Stock Incentive Plan.

(2)      Consists of 136,457 shares of common stock available for future issuance under the 2016 Plan. On January 1, 2019, the number of shares available for future issuance automatically increased by 2,637,247 shares pursuant to the First Amendment to the 2016 Plan.

17

Employment Agreements and Change of Control Arrangements

The following is a summary of the employment arrangements with our named executive officers.

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 that is subject to adjustment at the board of directors’ discretion. Effective April 2018, the board approved an increase in Mr. Michelon’s salary to $345,000. 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 in May 2017 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).

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 that is subject to adjustment at the board of directors’ discretion. Effective April 2018, the board approved an increase in Mr. Thornton’s salary to $260,000. 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 in May 2017 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 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 paid to StoryCorp a monthly fee of $9,000. In June 2018 this monthly fee was increased to $9,540. 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. On December 13, 2018, Mr. Wells was granted a stock option to purchase an additional 35,000 shares of common stock.

18

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, 2018:

Name

 

Fees Earned
or Paid in
Cash
($)

 

Option Awards
($)
(1)

 

Total
($)

Anthony DiGiandomenico

 

36,000

 

42,493

 

78,493

Dr. Sanjiv Sam Gambhir

 

36,000

 

42,493

 

78,493

Michael Harsh

 

36,000

 

42,493

 

78,493

Alexander Tokman

 

36,000

 

42,493

 

78,493

____________

(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 8 to our audited financial statements included in our Annual Report on Form 10 -K for the fiscal year ended December 31, 2018. The following table shows the number of shares subject to outstanding option awards held by each non -employee director as of December 31, 2018:

 

Name

 

Shares Subject to Outstanding Stock Option Awards (#)

Anthony DiGiandomenico

 

23,157

Dr. Sanjiv Sam Gambhir

 

23,157

Michael Harsh

 

23,432

Alexander Tokman

 

26,729

19

PROPOSAL 2 RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board of Directors has appointed RBSM LLP (“RBSM”) as our independent registered public accounting firm for the fiscal year ending December 31, 2019. We are presenting this selection to our stockholders for ratification at the 2019 Annual Meeting.

RBSM audited our financial statements for 2018. A representative of RBSM is not expected to be present at the 2019 Annual Meeting but will be available by telephone, have an opportunity to make a statement if RBSM desires and be available to respond to appropriate questions.

The following table sets forth the aggregate fees billed or expected to be billed by RBSM for audit and non -audit services in 2018 and 2017, including “out -of-pocket ” expenses incurred in rendering these services. The nature of the services provided for each category is described following the table.

Fee Category

 

2018

 

2017

Audit Fees (1)

 

$

123,318

 

$

118,500

Audit-Related Fees

 

$

0

 

$

0

Tax Fees

 

$

6,000

 

$

5,000

Total

 

$

129,318

 

$

123,500

____________

(1)      Audit fees include fees for professional services rendered for the audit of our annual statements, quarterly reviews, consents and assistance with and review of documents filed with the SEC, including relating to our equity offerings completed in October and November 2018.

Pre-Approval Policies and Procedures

The Audit Committee has adopted a policy that requires that all services to be provided by the Company’s independent public accounting firm, including audit services and permitted non -audit services, to be pre -approved by the Audit Committee. All audit and permitted non -audit services provided by RBSM during 2018 were pre -approved by the Audit Committee.

Vote Required for Approval

Ratification of the appointment of our independent registered public accounting firm requires the affirmative vote of the holders of a majority of the voting power of the shares of stock present in person or represented by proxy and entitled to vote. If our stockholders fail to ratify the selection of RBSM as the independent registered public accounting firm for 2019, the Audit Committee will reconsider whether to retain that firm. Even if the selection is ratified, the Audit Committee may, in its discretion, direct the appointment of a different independent registered public accounting firm at any time during the year.

Board Recommendation

The Board unanimously recommends that the stockholders vote FOR ratification of the appointment of RBSM as our independent registered public accounting firm for 2019.

20

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Policy for Review of Related Person Transactions

Our Board of Directors has adopted a written policy with regard to related person transactions, which sets forth our procedures and standards for the review, approval or ratification of any transaction required to be reported in our filings with the SEC or in which one of our executive officers or directors has a direct or indirect material financial interest, with limited exceptions. Our policy is that the Corporate Governance and Nominating Committee shall review the material facts of all related person transactions (as defined in the related person transaction approval policy) and either approve or disapprove of the entry into any related person transaction. In the event that obtaining the advance approval of the Corporate Governance and Nominating Committee is not feasible, the Corporate Governance and Nominating Committee shall consider the related person transaction and, if the Corporate Governance and Nominating Committee determines it to be appropriate, may ratify the related person transaction. In determining whether to approve or ratify a related person transaction, the Corporate Governance and Nominating Committee will take into account, among other factors it deems appropriate, whether the related person transaction is on terms comparable to those available from an unaffiliated third -party under the same or similar circumstances and the extent of the related person’s interest in the transaction.

Related Person Transactions

SEC regulations define the related person transactions that require disclosure to include any transaction, arrangement or relationship in which the amount involved exceeds the lesser of $120,000 or one percent of the average of the Company’s total assets at year end for the last two completed fiscal years in which we were or are to be a participant and in which a related person had or will have a direct or indirect material interest. A related person is: (i) an executive officer, director or director nominee of the Company, (ii) a beneficial owner of more than 5% of our common stock, (iii) an immediate family member of an executive officer, director or director nominee or beneficial owner of more than 5% of our common stock, or (iv) any entity that is owned or controlled by any of the foregoing persons or in which any of the foregoing persons has a substantial ownership interest or control.

For the period from January 1, 2017 through December 31, 2018, described below are certain transactions or series of transactions between us and certain related persons.

On January 28, 2016, we issued convertible promissory notes to Sanjiv Gambhir (the “Gambhir Note”), Michael Harsh (the “Harsh Note”) and Alexander Tokman (the “Tokman Note”), each a member of our board of directors. The Gambhir Note and the Tokman Note are each in the principal sum of $20,000 and the Harsh Note is in the principal sum of $10,000. None of the notes accrue interest and all three are payable upon the earlier of (1) completion by the Company of an equity financing of $4.0 million or more and (2) the one -year anniversary of the issuance date. All outstanding amounts due under the Harsh Note, Tokman Note and Gambhir Note were paid in full on May 15, 2017.

From April 2016 through March 2017, we issued convertible promissory notes to the following related persons: (i) Francois Michelon, our Chief Executive Officer, in the principal sum of $35,000, (ii) Michael Thornton, our Chief Technology Officer, in the principal sum of $52,000, (iii) Anthony DiGiandomenico, a director of the Company, in the principal sum of $25,000, (iv) a trust beneficially owned by Robert C. Clifford, a beneficial owner of more than 5% of our common stock at the time of the transaction, in the principal sum of $19,474, (v) a trust beneficially owned by Daniel Landry, a beneficial owner of more than 5% of our common stock at the time of the transaction, in the principal sum of $25,000, (vi) Benjamin L. Padnos, a beneficial owner of more than 5% of our common stock at the time of the transaction, in the principal sums of $35,000, $54,500 and $100,000, (vii) Cynthia Padnos, an immediate family member of a beneficial owner of more than 5% of our common stock at the time of the transaction, in the principal sum of $12,096, (viii) Daniel Padnos, an immediate family member of a beneficial owner of more than 5% of our common stock at the time of the transaction, in the principal sums of $7,258 and $25,000, (ix) Jeffrey S. Padnos and Margaret M. Padnos (including trusts which they beneficially own), joint beneficial owners of more than 5% of our common stock at the time of the transaction, in the principal sums of $25,000 and $96,811, (x) Jonathan Padnos, an immediate family member of a beneficial owner of more than 5% of our common stock at the time of the transaction, in the principal sums of $17,258 and $25,000, (xi) Sivan Padnos Caspi, an immediate family member of a beneficial owner of more than 5% of our common stock at the time of the transaction, in the principal sum of $7,258, (xii) Michael Thornton, our Chief Technology Officer, in the principal sum of $20,000, and (xiii) Conal Thornton, the father of Michael Thornton, our Chief Technology Officer, in the principal sum of $20,000. Each such note accrued

21

interest at the rate of 8% per annum and was secured by all assets of the Company. Upon the election of noteholders holding a majority of the outstanding principal amount of the convertible promissory notes, all outstanding convertible promissory notes were convertible into shares of the Company’s common stock, in each case at a conversion price of $1.40 per share. Pursuant to such terms, the noteholders elected to convert all of the outstanding principal and accrued interest on the convertible promissory notes into an aggregate of 1,232,859 shares of common stock of the Company on May 12, 2017, immediately prior to the completion of our initial public offering.

On June 28, 2018, we conducted a private placement offering in which we sold $1,077,000 aggregate amount of senior secured convertible promissory notes, along with warrants excercisable for 267,113 shares of our common stock. Each promissory note bore interest at a rate of 10% per annum until maturity or conversion. Investors in the offering included (i) Mr. DiGiandomenico, a director of the Company, for $100,000, (ii) Mr. Michelon, a director and the Company’s Chief Executive Officer, for $10,000, (iii) Mr. Thornton, the Company’s Chief Technology Officer, for $50,000, and (iv) Mr. Wells, the Company’s Chief Financial Officer, for $10,000. Upon the completion of our November 2018 stock offering, the $1,027,000 aggregate principal amount of promissory notes then outstanding automatically converted at a price of $1.68 per share into an aggregate of 611,310 shares of common stock, of which 59,524 shares were issued to Mr. DiGiandomenico, 5,953 shares were issued to Mr. Michelon, 29,762 shares were issued to Mr. Thornton and 5,953 shares were issued to Mr. Wells.

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our directors, executive officers and persons who own more than ten percent of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC. Such persons are required by SEC regulations to furnish us with copies of all such filings. Based solely on our review of the copies of the reports that we received and written representations that no other reports were required, we believe that our executive officers, directors and greater than 10% stockholders complied with all applicable filing requirements on a timely basis during 2018.

OTHER BUSINESS

The Board knows of no business that will be presented for consideration at the 2019 Annual Meeting other than those items stated above. If any other business should properly come before the 2019 Annual Meeting, votes may be cast pursuant to proxies in respect to any such business in the best judgment of the person or persons acting under the proxies.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 16, 2019

The proxy statement and annual report to stockholders are available at http://investors.endrainc.com/NDRA/sec_filings .

A copy of the Company’s Annual Report for the fiscal year ended December 31, 2018 is available without charge upon written request to: Secretary, ENDRA Life Sciences Inc., 3600 Green Court, Ste. 350, Ann Arbor, Michigan 48105.

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