Here's What We Want To See Next From Endonovo Therapeutics Inc (OTCMKTS:ENDV)

Endonovo Therapeutics Inc (OTCMKTS:ENDV) is running up this week on news that it has resolved an outstanding litigation issue with an entity called Kodiak Capital Group.The litigation was rooted in a contemplated equity investment by Kodiak in Endonovo, which the latter decided (subsequent to an initial agreement being put in place) wasn't the right option going forward.Kodiak got upset at the decision, the whole thing went to court and Endonovo now has to pay $80,000 to Kodiak from sums deposited with the Court in July 2016 in connection with injunction proceedings, while Kodiak is returning to Endonovo just over 2.1 million shares of common stock. ENDV Daily ChartNo wrongdoing has been admitted and the situation is considered resolved amicably.So why is this driving the stock up?Well, it's a scenario that management alluded to earlier this year in an open letter to shareholders and it's one that has served as something of a risk factor ever since. Basically, Endonovo management decided it didn't want to give away such a large portion of the company at preclinical stage. If the outcome of the litigation was that it had to honor the initial agreement and Kodiak was able to pick up its share for what even Endonovo management has since admitted was too cheap a price, shareholders of the latter would basically be getting a bad deal on the transaction.So that's the litigation out of the way, what's next?Anybody that has been with us for a while will know that this is a stock that we have covered on the number of occasions in the past. Across much of this coverage, we have tried to make two key points.The first, that this is a company with what an incredibly disruptive technology but that, as things stand, remains under the radar and, in turn, relatively cheap.The second is that the preclinical nature of Endonovo's program makes it a risky allocation and one that is almost certainly set to be subject to considerable volatility between now and reaching a number of key milestones – human clinical trials, NASDAQ listing, all that good stuff.The recent response to the Kodiak litigation is an example of exactly that. Without too much operational activity ongoing (in terms of driving the lead development program towards commercial) markets are going to be distracted by any negative inputs to a higher degree than they might otherwise be if this was a company that was putting out research related press releases on a regular basis.What's next, then, or at least what we are looking for next, is a return to focus on the progression of Endonovo's lead development asset and a push towards some value-add catalysts. The lead program is a pre-clinical study in myocardial infarction and there are three further ongoing preclinical studies in critical limb ischemia, non-alcoholic steatohepatitis, and kidney disease.Any output from the company relating to these programs, and in particular the myocardial infarction program, has the potential to compound the current upside action we are seeing and turn the company into a real breakout stock heading into the close of 2017.There are a couple of primary risks here that should be kept in mind. First, Endonovo has been burned by markets in the past for not meeting its own operational update targets and this has resulted in the company not reporting data release targets. This adds a degree of uncertainty as to how long an investor needs to hold on to a position before a potential catalyst hits press.The second is far more of a standard risk at this end of the space – dilution. Management has said that it wants to secure some funding in line with a NASDAQ listing so as to minimize dilution for shareholders but there is a good chance we will see the company raise cash near term and its current OTC status will potentially make this unfavorable.Not prohibitive to a position, but a risk factor nonetheless.Check out our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest updates on ENDV, sign up below!Image courtesy of Brian Turner via FlickrDisclosure: We have no position in ENDV and have not been compensated for this article.