Endonovo Signs Definitive Agreement to Sell SofPulse® Brand Business and IP to SofPulse Inc. for a minimum of $50 Million
Los Angeles, CA, Dec. 04, 2023 (GLOBE NEWSWIRE) -- Endonovo Therapeutics, Inc. (OTCQB: ENDV), a commercial-stage developer of wearable products for pain relief, general wellness, and wound curatives marketed under the SofPulse® brand name, announced the signing of a definitive agreement for the sale of the SofPulse® business and medical Intellectual Property (IP) to SofPulse, Inc.. ENDV is expected to receive the greater of $50 million or a price to be determined by a qualified third party's asset valuation acceptable to the Endonovo board. It was further agreed, that SofPulse, Inc. will prepare to fulfill the regulatory requirements for a NASDAQ listing following the sale's completion.
To fuel SofPulse, Inc. operations, the company aims to conduct a capital raise of up to $500,000 through a 506 offering tailored for accredited investors. At a pre-money valuation of $10 million and shares priced at $2.50 per share, the capital raise is anticipated to support further development and growth.
"The acquisition of the SofPulse® assets is a major step in the ongoing transformation of the SofPulse® brand, as we execute our strategic priorities, intensifying our focus and augments the value for all our shareholders.": commented, Ira Weisberg, President of SofPulse, Inc.
Valuation
In 2018, the ENDV-valued assets to be purchased by SofPulse, Inc. were valued at $75 million by a third-party valuation firm. As a condition of the announced sale of the SofPulse® assets, it was agreed that they would update the previous valuation with a qualified third party acceptable to both the Endonovo’s board and SofPulse, Inc., to establish the purchase price.
Upon signing of the definitive agreement, the sole ENDV board member shall receive super majority voting rights in preferred shares until the entire acquisition price is fulfilled.
Stock Issuance to Endonovo Shareholders
As consideration for the purchase from Endonovo, SofPulse Inc. shall issue $50 million in restricted stock, priced at $5.00 per share. Approximately 80% of the issuance shall be issued ENDV’s shareholders for this transaction, either as a stock dividend or through an alternative mechanism.
In addition to the stock issuance, SofPulse, Inc. has agreed to pay ENDV any additional sum assessed by a third-party valuation report (estimated to be between $50,000,000 to $100,000,000). This payment will initially be paid through a senior note which can be paid in cash or marketable securities listed on NASDAQ after the third-party evaluation concludes.
ENDV will continue the operations of its mergers and acquisitions division, its telehealth division (which SofPulse has agreed to be a customer with a five-year contract), and the further development of its non-medical device business.
Purchase Price Settlement and Capital Raise
The remaining purchase price owed to ENDV will be resolved through a secured promissory which will be convertible into NASDAQ listed marketable securities at the sole discretion of the Seller.
The transaction is anticipated to conclude on December 31, 2023, pending the customary regulatory approvals and satisfaction of other closing conditions. These include the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act.
Future Outlook and Expansion Plans
Upon acquisition, SofPulse, Inc. is set to explore an assortment of growth opportunities. The company's strategic vision encompasses numerous initiatives aimed at swift and substantial revenue expansion.
"By expanding SofPulse® VA and Department of Defense contracts through the Federal Supply Schedule, developing a comprehensive telehealth platform through Endonovo’s technology, growing both domestic and international surgical and pain management markets, alongside robust research and development strategies, SofPulse Inc. is strategically positioned to leverage the commercialization of SofPulse® brand assets and IP. Focusing on sales and marketing efforts to expand these programs and venturing into new consumer markets, SofPulse® is geared towards reaching annualized revenues of approximately $100 million by 2025. ": Weisberg concluded.
