MDGS Medigus

Medigus Ltd. Announces 2019 Financial Results

Medigus Ltd. Announces 2019 Financial Results

OMER, Israel, April 21, 2020 (GLOBE NEWSWIRE) -- Medigus Ltd. (“Medigus” or the “Company”) (NASDAQ: MDGS) (TASE: MDGS), a medical device company developing minimally invasive endo-surgical tools and an innovator in direct visualization technology, today announced its financial results for the year ended December 31, 2019 and reported that the Company’s annual report on Form 20-F, containing audited consolidated financial statements for the year ended December 31, 2019 was filed with the Securities and Exchange Commission on April 21, 2020.

For the year ended December 31, 2019, the Company reported IFRS loss of $14,178,000 and non-IFRS loss of $3,963,000.

Recent Highlights:

  • In June 3, 2019, the Company announced the signing of a $3,000,000 agreement with Golden Grand for the know-how licensing and sale of goods for Medigus Ultrasonic Surgical Endostapler (MUSE™) system in China, Hong Kong, Taiwan and Macao.



  • On June 19, 2019, the Company signed an agreement with Algomizer Ltd. and its wholly-owned subsidiary Linkury Ltd. for an investment of approximately $5 million in the Algomizer group. The investment was subject to certain pre-conditions, which were met at September 3, 2019.



  • On December 30, 2019 the Company consummated a securities exchange agreement with Intellisense Solutions Inc., a Nevada corporation (Intellisense), and as a result the Company assigned, transferred and delivered 100% of its holdings in ScoutCam to Intellisense, in exchange for (i) common stock representing 60% of Intellisense’s issued and outstanding share capital as of the closing, and (ii) in the event ScoutCam achieves $33,000,000 in aggregate sales within the first three (3) years immediately following the closing, the Company will receive additional shares of Intellisense’s common stock representing 10% of its outstanding share capital as of the closing. Simultaneous with the closing, Intellisense consummated a financing transaction in the aggregate amount of $3.3 million (gross) based on a company post-money valuation of $13.3 million.



  • On February 18, 2020, the Company purchased 2,284,865 shares of Matomy, representing 2.32% of its issued and outstanding share capital. On March 24, 2020 the Company completed an additional purchase of 22,326,246 shares of Matomy, raising the Company’s aggregated holding in Matomy to 24.99% of Matomy’s issued and outstanding share capital.

Financial Results:

  • Revenues for the year ended December 31, 2019 were $273,000, a decrease of 37% compared to the year ended December 31, 2018.



  • Research and development expenses for the year ended December 31, 2019 were $609,000, a decrease of 66% compared to the year ended December 31, 2018. The decrease was primarily due to the decision of the Company to cease the MUSE™ operation.



  • Sales and marketing expenses for the year ended December 31, 2019 were $326,000, a decrease of 76% compared to the year ended December 31, 2018. The decrease was primarily due to the decision to abandon the strategy to commercialize the MUSE™ system.



  • General and administrative expenses for the year ended December 31, 2019 were $3,081,000, a decrease of 8% compared to the year ended December 31, 2018.



  • IFRS loss for the year ended December 31, 2019 was $14,178,000, compared to IFRS loss of $6,598,000 for the year ended December 31, 2018. The increase is attributed mainly to a listing expense, and partially offset by the decrease in research and development expenses, decrease in sales and marketing expenses and decrease in general and administrative expenses.



  • Non-IFRS loss for the year ended December 31, 2019 was $3,963,000, compared to Non-IFRS loss of $6,589,000 for the year ended December 31, 2018. The decrease is attributed mainly to the decrease in research and development expenses, decrease in sales and marketing expenses and decrease in general and administrative expenses.



  • Non-IFRS results exclude the effect of stock-based compensation expenses, revaluation of warrants at fair value and listing expenses.
 Year ended

December 31,
 
(thousands of U.S. dollars)2019  2018 
IFRS Results     
Loss for the year$(14,178) $(6,598)
Non-IFRS Results       
Loss for the year$(3,963) $(6,589)
        

Balance Sheet Highlights:

  • Cash and short-term deposits as of December 31, 2019 amounted to $7 million, compared to $10.6 million as of December 31, 2018.



  • The investment in Algomizer group as of December 31, 2019 amounted to $4.8 million.



  • IFRS equity as of December 31, 2019 amounted to $8.1 million, compared to $8.1 million as of December 31, 2018.



  • Non-IFRS equity as of December 31, 2019 amounted to $18.1 million, compared to $7.9 million as of December 31, 2018.

A reconciliation between IFRS equity results and non-IFRS equity results is provided bellow, following the financial statements presented as part of this release.

Use of Non-IFRS Financial Results

In addition to disclosing financial results in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board, this press release contains non-IFRS financial measures of net loss for the periods presented that exclude the effect of share-based compensation expenses, non-cash listing expenses and the revaluation of warrants at fair value. The Company’s management believes the non-IFRS financial information provided in this release is useful to investors’ understanding and assessment of the Company’s ongoing operations. Management also uses both IFRS and non-IFRS information in evaluating and operating its business internally, and as such, deemed it important to provide this information to the investors. The non-IFRS financial measures disclosed by the Company should not be considered in isolation, or as a substitute for, or superior to, financial measures calculated in accordance with IFRS, and the financial results calculated in accordance with IFRS and reconciliations to those financial statements should be carefully evaluated. Investors are encouraged to review the reconciliations of these non-IFRS measures to their most directly comparable IFRS financial measures provided in the financial statement tables herein.

The Company’s Annual Report on Form 20-F is available through the Securities and Exchange Commission’s website () as well as via the Medigus website (). Shareholders may receive a hard copy of the annual report free of charge upon request to the Company.

About Medigus

Medigus is traded on the Nasdaq Capital Market and the TASE (Tel Aviv Stock Exchange). To learn more about the Company’s advanced technology, please visit

Cautionary Note Regarding Forward Looking Statements

This press release may contain statements that are “Forward-Looking Statements,” which are based upon the current estimates, assumptions and expectations of the Company’s management and its knowledge of the relevant market. The Company has tried, where possible, to identify such information and statements by using words such as “anticipate,” “believe,” “envision,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” “contemplate” and other similar expressions and derivations thereof in connection with any discussion of future events, trends or prospects or future operating or financial performance, although not all forward-looking statements contain these identifying words. These forward-looking statements represent Medigus’ expectations or beliefs concerning future events, and it is possible that the results described in this press release will not be achieved. By their nature, Forward-Looking Statements involve known and unknown risks, uncertainties and other factors which may cause future results of the company’s activity to differ significantly from the content and implications of such statements. Other risk factors affecting the Company are discussed in detail in the Company’s filings with the Securities and Exchange Commission. Forward-Looking Statements are pertinent only as of the date on which they are made, and the Company undertakes no obligation to update or revise any Forward-Looking Statements, whether as a result of new information, future developments or otherwise. Neither the Company nor its shareholders, officers and employees, shall be liable for any action and the results of any action taken by any person based on the information contained herein, including without limitation the purchase or sale of Company securities. Nothing in this press release should be deemed to be medical or other advice of any kind.

Contact (for media only)

Tatiana Yosef

Chief Financial Officer



MEDIGUS LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

 December 31,
 2019 2018
 USD in thousands
  
Assets   
    
CURRENT ASSETS:   
Cash and cash equivalents7,036 10,625
Short-term deposit- -
Accounts receivables – trade22 24
Inventory900 81
Other current assets321 404
 8,279 11,134
    
NON-CURRENT ASSETS:   
Inventory- -
Property and equipment, net137 105
Right-of-use assets, net153 -
Investments accounted for using the equity method1,149 -
Financial assets at fair value through profit or loss3,616 -
 5,055 105
    
TOTAL ASSETS13,334 11,239
    

MEDIGUS LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

 December 31, 
 2019  2018 
 USD in thousands 
Liabilities and equity     
      
CURRENT LIABILITIES:     
Accounts payables - trade75  190 
Lease liabilities119  - 
Warrants at fair value1,459  1,601 
Contract liability502  231 
Accrued compensation expenses607  588 
Other current liabilities603  353 
 3,365  2,963 
      
NON-CURRENT LIABILITIES:     
Lease liabilities33  - 
Contract liability1,800  118 
Retirement benefit obligation, net5  79 
 1,838  197 
      
TOTAL LIABILITIES5,203  3,160 
      
EQUITY:     
Share capital – ordinary shares of NIS 1.00 par value22,802  20,924 
Share premium47,873  48,942 
Other capital reserves12,492  692 
Warrants197  - 
Accumulated deficit(76,657) (62,479)
Equity attributable to owners of Medigus Ltd.6,707  8,079 
Non-controlling interests1,424  - 
 8,131  8,079 
      
TOTAL LIABILITIES AND EQUITY13,334  11,239 
      

MEDIGUS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF LOSS

 Year Ended

December 31,
 
 2019  2018 
 USD in thousands 
      
REVENUES:     
PRODUCTS188  219 
SERVICES85  217 
 273  436 
      
COST OF REVENUES:     
PRODUCTS370  164 
SERVICES85  115 
INVENTORY IMPAIRMENT-  328 
 455  607 
      
GROSS LOSS(182) (171)
RESEARCH AND DEVELOPMENT EXPENSES609  1,809 
SALES AND MARKETING EXPENSES326  1,354 
GENERAL AND ADMINISTRATIVE EXPENSES3,081  3,338 
NET CHANGE IN FAIR VALUE OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS92  - 
SHARE OF NET LOSS OF ASSOCIATE ACCOUNTED FOR USING THE EQUITY METHOD(216) - 
LISTING EXPENSE(10,098) - 
OPERATING LOSS(14,420) (6,672)
      
CHANGES IN FAIR VALUE OF WARRANTS ISSUED TO INVESTORS142  148 
FINANCIAL INCOME (EXPENSES) IN RESPECT OF DEPOSITS, BANK COMMISSIONS AND EXCHANGE DIFFERENCES, NET99  (54)
FINANCING INCOME (EXPENSES), NET241  94 
      
LOSS BEFORE TAXES ON INCOME(14,179) (6,578)
TAXES BENEFIT (TAXES ON INCOME)1  (20)
LOSS FOR THE YEAR(14,178) (6,598)
      

MEDIGUS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 For the year ended

December 31,
 
 2019  2018 
 USD in thousands 
CASH FLOWS FROM OPERATING ACTIVITIES:     
CASH FLOWS USED IN OPERATIONS (see Appendix)(2,757) (4,253)
Interest received75  42 
Interest paid(5) - 
Income tax paid(8) (11)
Net cash flow used in operating activities(2,695) (4,222)
      
CASH FLOWS FROM INVESTING ACTIVITIES:     
Payments for purchase of property and equipment(62) (11)
Payment for acquisition of associate and financial assets at fair value through profit or loss(4,057) - 
Investment in short-term deposits-  - 
Withdrawal of short-term deposits-  3,498 
Net cash flow generated from (used in) investing activities(4,119) 3,487 
      
CASH FLOWS FROM FINANCING ACTIVITIES:     
Transaction with non-controlling interest3,202  - 
Principal elements of lease liability(46) - 
Proceeds from issuance of shares and warrants and from exercise of warrants, net of issuances costs-  8,634 
Net cash flow generated from financing activities3,156  8,634 
      
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS(3,658) 7,899 
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR10,625  2,828 
GAINS (LOSSES) FROM EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS69  (102)
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF YEAR7,036  10,625 
      

MEDIGUS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  

APPENDIX TO THE STATEMENTS OF CASH FLOWS:

 For the year ended

December 31,
 
 2019  2018 
 USD in thousands 
NET CASH USED IN OPERATIONS:     
Loss for the year before taxes on income(14,179) (6,578)
Adjustment in respect of:     
Depreciation75  42 
Net change in the fair value of financial assets at fair value through profit or loss(92) - 
Changes in fair value of warrants issued to investors(142) (148)
Loss (gain) from exchange differences on cash and cash equivalents(69) 102 
Share of losses of associate company216  - 
Retirement benefit obligation, net(74) 14 
Interest expenses5  - 
Inventory impairment-  328 
Issuance expenses which were attributed to the warrants classified as a financial liability and charged directly to profit or loss-  1,565 
Listing expenses10,098    
Revaluation of and exchange differences on short-term deposits-  - 
Interest received(75) (42)
Stock-based compensation in connection with options granted to employees and service providers259  157 
      
CHANGES IN OPERATING ASSET AND LIABILITY ITEMS:     
Decrease (increase) in accounts receivable - trade2  (6)
Decrease (increase) in other current assets83  (101)
Increase (decrease) in accounts payables - trade(115) - 
Increase (decrease) in accrued compensation expenses29  73 
Increase (decrease) in contract liability1,953  170 
Increase (decrease) in other current liabilities88  153 
Decrease (increase) in inventory(819) 18 
NET CASH USED IN OPERATIONS(2,757) (4,253)
      

MEDIGUS LTD.

SUPPLEMENTAL RECONCILIATION OF IFRS TO NON-IFRS EQUITY

U.S. dollars in thousands

 As of

December 31,

2019
  As of

December 31,

2018
 
IFRS equity8,131  8,079 
Revaluation of warrants at fair value(142) (148)
Listing expenses10,098  - 
Non-IFRS equity18,087  7,931 
      

MEDIGUS LTD.

SUPPLEMENTAL RECONCILIATION OF IFRS TO NON-IFRS RESULTS

U.S. dollars in thousands

 Year ended

December 31
 
 2019  2018 
IFRS operating loss(14,420) (6,672)
Stock-based compensation259  157 
Listing expenses10,098  - 
Non-IFRS operating loss(4,063) (6,515)
      
IFRS Financing income, net241  94 
Revaluation of warrants at fair value(142) (148)
      
Non-IFRS Financing income (expenses), net99  (54)
      
IFRS loss for the year(14,178) (6,598)
Stock-based compensation expenses259  157 
Listing expenses10,098  - 
Revaluation of warrants at fair value(142) (148)
Non-IFRS net loss(3,963) (6,589)
      
EN
21/04/2020

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