ENDRA Life Sciences Inc. Segments Disclosure
Note 13 – Segment Reporting
Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision making group, in deciding how to allocate resources in assessing performance. The Company has one reportable segment: biotech. The biotech segment consists of the development of clinical and preclinical product candidates for the development of the Company’s proprietary new enhanced thermoacoustic technology platform. The Company’s chief operating decision maker (“CODM”) is the chief executive officer.
The accounting policies of the biotech segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for the biotech segment based on net loss, which is reported on the income statement as consolidated net loss. The measure of segment assets is reported on the balance sheet as total consolidated assets.
To date, the Company has not generated any product revenue. The Company expects to continue to incur significant expenses and operating losses for the foreseeable future as it advances product candidates through all stages of development and clinical trials and, ultimately, seek regulatory approval.
As such, the CODM uses cash forecast models in deciding how to invest into the biotech segment. Such cash forecast models are reviewed to assess the entity-wide operating results and performance. Net loss is used to monitor budget versus actual results. Monitoring budgeted versus actual results is used in assessing performance of the segment and in establishing management’s compensation, along with cash forecast models.
The table below summarizes the significant expense categories regularly reviewed by the CODM for the years ended December 31, 2024, and 2023:
|
| Year Ended |
|
| Year Ended |
| ||
|
| December 31, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
Operating Expenses |
|
|
|
|
|
| ||
Research and development |
| $ | 3,190,293 |
|
| $ | 5,003,695 |
|
Sales and marketing |
|
| 571,040 |
|
|
| 820,554 |
|
General and administrative |
|
| 7,055,814 |
|
|
| 4,696,486 |
|
Total operating expenses |
|
| 10,817,147 |
|
|
| 10,520,735 |
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
| (10,817,147 | ) |
|
| (10,520,735 | ) |
Other segment items (a) |
|
| (690,800 | ) |
|
| 460,485 |
|
|
|
|
|
|
|
|
|
|
Net loss |
| $ | (11,507,947 | ) |
| $ | (10,060,250 | ) |
|
|
|
|
|
|
|
|
|
Reconciliation of net loss |
|
|
|
|
|
|
|
|
Adjustments and reconciling items |
|
| - |
|
|
| - |
|
Consolidated net loss |
| $ | (11,507,947 | ) |
| $ | (10,060,250 | ) |
(a) Other segment items included in segment loss includes warrant expense, changes in warrant liability, gain on settlement of warrant liability and interest income.
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.