Medigus Ltd. (NASDAQ: MDGS), a medical device company, develops, manufactures, and markets surgical endostaplers and direct vision systems for minimally invasive medical procedures or other commercial use in the United States, Europe, Asia, and internationally. It offers Medigus Ultrasonic Surgical Endostapler, an endoscopy system, which is used for the treatment of gastroesophageal reflux disease. The company also provides miniaturized video cameras for use in various medical procedures, as well as specialized industrial applications. Medigus Ltd. was founded in 1999 and is based in Omer, Israel.
On Wednesday, July 11, 2018, MDGS shares were at $2.10 (+69.35) during intra-day trading. Share volume was over 10 million compared to a daily average of 132 thousand.
On July 9, 2018, the company filed form 6-K with the following information: The Company will effect a reverse split of the Company’s ordinary shares at the ratio of 10:1, such that each ten ordinary shares, par value NIS 0.10 per share, shall be consolidated into one ordinary share, par value NIS 1.00 (the Reverse Split). The record date for determining which holders of the Company’s ordinary shares, and which holders of warrants or options to purchase ordinary shares, will have their holdings adjusted as a result of the Reverse Split will be the close of business on Friday, July 13, 2018.
Read the full 6-K filing here: https://backend.otcmarkets.com/otcapi/company/sec-filings/12853387/content/html
The company’s lead product is the Medigus Ultrasonic Surgical Endostapler, or MUSE™ system, a comprehensive endoscopic device that incorporates the latest technological advancements to deliver a more patient-friendly option for Transoral Fundoplication (TF), the procedure is intended to treat the leading cause of GERD (gastroesophageal reflux disease) — a dysfunctional valve between the esophagus and stomach.
Transoral fundoplication is an incisionless procedure intended to treat GERD. This procedure conducted with the MUSE™ system may provide eligible patients long-term, relief from troublesome reflux symptoms. The MUSE™ System combines the latest microvisual, ultrasonic and surgical stapling capabilities into one device, which allows a single physician to complete the procedure in approximately one hour. Since the MUSE procedure addresses the root cause of the disorder, it has the potential to improve the quality of life for people who suffer from reflux.
Recent Events
June 26, 2018. Medigus announced that they have entered into a development agreement with A.M. Surgical, Inc., an orthopedic company that develops and markets minimally invasive surgical devices for the upper & lower extremity surgeon. The agreement requires Medigus to develop and manufacture an integrated visualization device based on its micro ScoutCam™ technology to work with Stratos™, the A.M. Surgical product for endoscopic procedures. https://finance.yahoo.com/news/medigus-enters-orthopedic-market-development-200500874.html
April 17, 2018. Medigus announced the completion of the first MUSE procedure in Spain. The procedure was performed by Dr. Victor Aguilar at HC Marbella International Hospital. Dr. Aguilar reported that the procedure was successful, and the patient was released from the hospital. https://finance.yahoo.com/news/medigus-hc-marbella-international-hospital-200500343.html
Products
The Medigus Ultrasonic Surgical Endostapler, or MUSE™ system, is a comprehensive endoscopic device that incorporates the latest technological advancements to deliver a more patient-friendly option for Transoral Fundoplication (TF), the procedure is intended to treat the leading cause of GERD (gastroesophageal reflux disease) — a dysfunctional valve between the esophagus and stomach.
They have also developed a range of micro video cameras under their micro ScoutCam™ portfolio of products, including the micro ScoutCam 1.2, which to the best of the company’s knowledge, is the smallest in the world.
Their innovative micro cameras are suitable for both medical and industrial applications and can be customized to meet a range of needs across both applications. They design and manufacture endoscopy and micro camera systems for some of the biggest medical and industrial companies in the world.
About
The Company is a medical device company specializing in developing minimally invasive endosurgical tools and highly innovative imaging solutions. The Company is the developer of the MUSE™ system, an FDA cleared, and CE marked endoscopic device to perform Transoral Fundoplication (TF) for the treatment of GERD (gastroesophageal reflux disease), one of the most common chronic conditions in the world. In 2016, the CMS established the Category I CPT® Code of 43210 for TF procedures, such as the ones performed with MUSE, which establishes reimbursement values for physicians and hospitals. MUSE is gaining adoption in key markets around the world – it is available in world-leading healthcare institutions in the U.S., Europe and Israel. Medigus is also in the process of obtaining regulatory clearance in China.
Financial review
For the three months ended March 31, 2018:
Revenues for the three months ended March 31, 2018, were $67,000, a decrease of $47,000, or 41%, compared to $114,000 for the three months ended March 31, 2017.
Gross loss for the three months ended March 31, 2018, was $16,000, a decrease of $214,000, or 93%, compared to gross loss of $230,000 for the three months ended March 31, 2017.
Sales and marketing expenses for the three months ended March 31, 2018, were $262,000, an increase of $116,000, or 79%, compared to $146,000 for the three months ended March 31, 2017.
General and administrative expenses for the three months ended March 31, 2018, were $383,000, a decrease of $1,006,000, or 72%, compared to $1,389,000 for the three months ended March 31, 2017.
Loss for the three months ended March 31, 2018, was $1,080,000 or $0.01 per basic and diluted ordinary share, compared to approximately $2.0 million or $0.04 per basic and diluted ordinary share in the three months ended March 31, 2017.
Net cash used in operating activities was $1.3 million for the three months ended March 31, 2018, compared to net cash used in operating activities of $1.1 million for the corresponding 2017 period.
Cash and cash equivalents and short-term deposit the Company held as of March 31, 2018 were $5.0 million, compared to $6.3 million as of December 31, 2017.
Stock influences and risk factors
The commercial success of the MUSE™ system or any future product, if approved, could be a catalyst for the company shares;
They will need additional funding. If they are unable to raise capital, they will be forced to reduce or eliminate operations;
Reliance on third-party suppliers for most of the components of their products could harm the ability to meet demand for their products in a timely and cost-effective manner;
They are currently required by the FDA to refrain from using certain terms to label and market their products, which could harm their ability to market and commercialize current or future products.
Stock chart
On Wednesday, July 11, 2018, MDGS shares were at $2.11 on traded volume of 10.1 million shares. The current RSI (14) is 77.23
At $2.11, MDGS shares are trading above their 50 DMA and 200 DMA of $1.29 and $1.55 respectively.
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