Company: NDRA
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110887
Chunk: 231

Company: ENDRA Life Sciences Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part II, Item 1
Chunk 231
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 securities
laws, we acknowledge that a regulatory body or federal court may determine otherwise. Therefore, our belief, even if reasonable under
the circumstances, would not preclude legal or regulatory action based on such a finding that cryptocurrency is a “security,”
which would require us to register as an investment company under the 1940 Act.

We have also adapted our process for analyzing the U.S. federal securities
law status of cryptocurrencies over time, as guidance and case law have evolved. As part of our U.S. federal securities law analytical
process, we take into account a number of factors, including the various definitions of “security” under U.S. federal securities
laws and federal court decisions interpreting the elements of these definitions, such as the U.S. Supreme Court’s decisions in the Howey and Reves cases,
as well as court rulings, reports, orders, press releases, public statements, and speeches by the SEC Commissioners and SEC Staff providing
guidance on when a digital asset or a transaction to which a digital asset may relate may be a security for purposes of U.S. federal securities
laws. Our belief that HYPE and other blockchain-linked cryptocurrencies in which we intend to invest are not a “security”
is premised, among other reasons, on our belief that such cryptocurrencies do not meet the elements of the Howey test.
For instance, ownership of HYPE and other blockchain-linked cryptocurrencies do not convey the right to receive any interest, rewards,
or other returns. 

We acknowledge, however, that the SEC, a federal court or another relevant
entity could take a different view. The regulatory treatment of cryptocurrency is such that it has drawn significant attention from legislative
and regulatory bodies, in particular the SEC which has previously stated it deemed cryptocurrency a security. Application of securities
laws to the specific facts and circumstances of digital assets is complex and subject to change. Our belief, even if reasonable under
the circumstances, would not preclude legal or regulatory action based on a finding that cryptocurrency, or any other digital asset we
might hold is a “security.” As such, we are at risk of enforcement proceedings against us, which could result in potential
injunctions, cease-and-desist orders, fines, and penalties if cryptocurrency was determined to be a security by a regulatory body or a
court. Such developments could subject us to fines, penalties, and other damages, and adversely affect our business, results of operations,
financial condition, and prospects.

22

The emergence or