Company: NDRA
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110887
Chunk: 45

Company: ENDRA Life Sciences Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 45
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 the potential application of the 1940 Act to their businesses.
For example, in an action unrelated to the Company, in February 2022, the SEC issued a cease-and-desist order under the 1940 Act to BlockFi
Lending LLC, in which the SEC alleged that BlockFi was operating as an unregistered investment company because it issued securities and
also held more than 40% of its total assets, excluding cash, in investment securities, including the loans of digital assets made by BlockFi
to institutional borrowers.

If we were deemed to be an investment company, Rule 3a-2 under the
1940 Act is a safe harbor that provides a one-year grace period for transient investment companies that have a bona fide intent to be
engaged primarily, as soon as is reasonably possible (in any event by the termination of such one-year period), in a business other than
that of investing, reinvesting, owning, holding, or trading in securities, with such intent evidenced by the company’s business
activities and an appropriate resolution of its board of directors. The grace period is available not more than once every three years
and runs from the earlier of (i) the date on which the issuer owns securities and/or cash having a value exceeding 50% of the issuer’s
total assets on either a consolidated or unconsolidated basis or (ii) the date on which the issuer owns or proposes to acquire investment
securities having a value exceeding 40% of the value of such issuer’s total assets (exclusive of U.S. government securities and
cash items) on an unconsolidated basis. Accordingly, the grace period may not be available at the time that we seek to rely on Rule 3a-2;
however, Rule 3a-2 is a safe harbor and we may rely on any exemption or exclusion from investment company status available to us under
the 1940 Act at any given time. Furthermore, reliance on Rule 3a-2, Section 3(a)(1)(C), or Rule 3a-1 could require us to take actions
to dispose of securities, limit our ability to make certain investments or enter into joint ventures, or otherwise limit or change our
service offerings and operations. If we were to be deemed an investment company in the future, restrictions imposed by the 1940 Act—including
limitations on our ability to issue different classes of stock and equity compensation to directors, officers, and employees and restrictions
on