In last trading session, the stock price of Endonovo Therapeutics Inc (OTCMKTS:ENDV) gained 3% to close the day at $0.515. The gains came at a share volume of 149,152 compared to average share volume of 288,322. ENDV registered sharp losses of over 34% on last Tuesday, which brought down the stock price all the way to $0.45 per share. Investors weren’t much scared by the sharp drop-off as the stock was able to recoup its losses in following trading sessions.
Trading at $0.515, Endonovo stock has a market capitalization of close to $51 million. Here it is important to analyze if such a valuation is justified? As per the last annual report for FY2015 filed earlier in this month, the company had cash of $41,473. The total current assets came in at $44,373 while total current liabilities amounted to $7.5 million. Endonovo reported revenue of $4,625 on net loss of $5.08 million.
The financial report can hardly be stated as promising. Less than 4 months ago, the company had limited cash, nearly non-existent revenues and substantial net loss that is over five times higher than what the firm posted for 2014. Additionally, last year the company issued almost 13.5 million shares through the conversion of notes priced at $0.04. At the close of December 2015. Endonovo reported $383,000 worth of convertible notes as outstanding in the annual report.
In March, Endonovo stated that they had repurchased $154,000 in convertible notes. At the same time, the company released new convertible notes so as to support its financial resources. Since the start of this year, it raised $302,000 via the sale of a convertible note. Moreover, it received $376,000 from ten investors in private placements. This appears to be contradictory measures when on one hand Endonovo express its goal to preserve shareholder value and on the other hand issuing new convertible notes.