Here's Our Take On Endonovo Therapeutics Inc (OTCMKTS:ENDV)

Things just keep getting worse and worse for Endonovo Therapeutics Inc (OTCMKTS:ENDV). The company is down more than 75% on its April highs, and looks set for further decline as we head into the close of the US session on Friday. Mid session, the company is already down close to 15%, on no major news. Having said this, on Thursday the company jumped, meaning the current action might just be a correction of what we've already seen. Whatever the situation, it's pretty erratic behavior, which might serve up some short term, in and out opportunity.By way of a quick introduction, Endonovo is a California biotech working on what it calls bioeletronic devices for regenerative medicine. Its lead platform is called Immunotronics, and it’s a device that targets the regeneration of vital organs, with the goal of reversing (or negating) the potential for major organ failure. Pretty futuristic.It doesn’t generate any revenues from its development stage products (since its not allowed to sell them yet), and it's pretty debt laden – just short of $5 million at last count. Cash comes in pretty weak at $108K.At the end of last month, we covered Endonovo, noting that the company had found itself in a position whereby it was battling toxic financiers, and spending most of its time letting shareholders know about convertible issues. Of course, a focus on issuing convertibles and not advancing underlying fundamentals is highly toxic, but there must be something behind the raises – right?Well this month, we've got another issue, but it looks as though the company is intending to use it to pivot its operations – or at least bolster its current operations – and focus on a type of brain stimulation technology.On July 11, Endonovo gave us this:

"… (the company) has executed a binding letter of intent (LOI) to acquire Rio Grande Neurosciences, Inc. (RGN), a privately-held clinical stage developer of non-invasive Electroceuticals™ for the treatment of neuro-inflammation and central nervous system diseases and disorders."

On these terms:

"The aggregate purchase price of $21.5 million, consisting of $1.5 million in cash, approximately $15 million in Endonovo common stock, and approximately $5 million in Endonovo common stock warrants."

We also learnt that the buyout was subject to Endonovo raising additional capital. This happened on Monday. Fast forward to the end of the week, and the company announced on Friday it had entered into a funding agreement that will see it raise said capital.Great, sort of. Yet again, Endonovo is issuing convertible notes and offering shares at a discount as part of a securities purchase agreement. $1 million of the $10 million raise derives from the convertibles. The remaining $9 million comes as part of the SPA, on these terms:

"a 3% origination fee and also requires the provider to purchase shares of our stock which we will put at a price equal to 75% of the lowest bid price for our stock during the 20 trading days preceding the put notice"

The bottom line here is that, while Endonovo might be an interesting prospect based on its underlying tech, and even more so now it's picking up a bunch of new technologies as part of its Rio Grande acquisition, the company has to be careful it doesn’t dilute its shareholders to nothing. There were too many convertibles out there before the latest raise, and now things are getting out of hand. That's why the company is struggling to maintain a steady valuation, and that why its current volatility is likely to remain for the near to medium term future.If it can sort out its capital structure, there may be some interest. If not, anyone with any degree of risk aversion won’t look at the company twice.Stick with us for ENDV updates by subscribing to our newsletter below!Disclosure: We have no position in ENDV and have not been compensated for this article.