NEW YORK, May 04, 2022 (GLOBE NEWSWIRE) -- Diamond Equity Research, a leading equity research firm with a focus on small capitalization public companies has released update note on Medigus Limited (NASDAQ: MDGS). The update note includes information on the Medigus’ financial results, management commentary, recent developments, outlook, risks, and our revised valuation estimates.
The update note is available here. Highlights from the note include:
- Investment in Deep Tech - In line with the company’s strategy to invest in the industries of the future, Medigus recently announced that it has entered into an agreement to invest in ABI Energy Ltd. (ABI), a deep-tech company developing technology driven-solutions to optimize and improve fluid transportation including the global water, oil, and gas pipeline transportation infrastructure. The goal of ABI’s products is to reduce pump energy consumption by up to 25% in the water, oil, and gas industries. The company invested $300,000 in cash and issued $400,000 worth of its ADRs and currently holds a 19.17% stake in the company.
- Strong momentum continues - Medigus has displayed strong momentum across its three divisions. Gix Internet, a global MarTech solutions provider in which the company holds an approximately 41.56% stake reported revenue growth of approximately 19% year-over-year surpassing the $45 million for the full year ended December 31, 2021. Medigus expects to own a controlling stake by the end of this year significantly contributing to revenues and the balance sheet. The company's recent investment into drone technology is also yielding results in the form of partnerships with global automotive manufacturers. Polyrizon Ltd., Medigus’s healthcare investment presented pre-clinical data demonstrating that its Capture and Contain (C&C™) technology, PL-15 product candidate, has demonstrated the potential to reduce the infection rates of the highly transmissible coronavirus Omicron variant BA.1 in a cell culture assay.
- Robust financial performance - The company reported robust financial performance for the year ended 2021. The consolidated revenue was $10.12 million including the $2.4 million received in lieu of know-how licensing and sale of goods relating to the MUSE system. Revenue from Eventer and Jeff’s Brands amounted to $1.18 million and $6.51 million respectively. The company has a healthy financial position with negligible debt and a cash balance of $24.02 million. The current cash position provides a cushion to the current operating cash burn rate of $5 to $6 million, while allowing management to increase its holding in the underlying companies or look for other emerging investments.
- Valuation - We have updated our financial model adjusting for a minority stake in ABI energy Ltd. Rolling over our valuation approach yielded a per-share value of $3.27 or $78.06 million contingent on successful execution by the company. The company displayed robust financial performance, driven by growth in the online technologies segment. Given the unique high-risk-reward opportunity, we view MDGS as a suitable investment for institutional and high-risk-tolerant retail investors.
About Medigus Limited
Incorporated in the State of Israel in 1999, Medigus is a technology-oriented company involved in developing innovative solutions for large-scale market applications. The company operates under the broader market segments of online technologies, electric vehicles & micro-mobility, and healthcare.
For more information, visit https://medigus.com/
About Diamond Equity Research
Diamond Equity Research is a leading equity research and corporate access firm focused on small capitalization companies. Diamond Equity Research is an approved sell-side provider on major institutional investor platforms including Factset, Morningstar, and Thomson One.
For more information, visit https://www.diamondequityresearch.com
Disclosures:
Diamond Equity Research LLC is being compensated by Redchip Companies Inc. on behalf of Medigus Ltd for producing research materials regarding Medigus Ltd., and its securities, which is meant to subsidize the high cost of creating the report and monitoring the security, however, the views in the report reflect that of Diamond Equity Research. All payments are received upfront and are billed for an annual or semi-annual research engagement. As of 05/04/2022, the Redchip Companies Inc. had paid us $27,000 for our company sponsored research services on behalf of Medigus Ltd, which commenced 01/21/22 and is billed annually. Diamond Equity Research LLC may be compensated for non-research related services, including presenting at Diamond Equity Research investment conferences, press releases and other additional services. The non-research related service cost is dependent on the company, but usually do not exceed $5,000. The Redchip Companies Inc. on behalf of Medigus Ltd has paid us $2,500 for non-research related services as of 05/04/22 consisting of presenting at an investment conference. Issuers are not required to engage us for these additional services. Additional fees may have accrued since then. Although Diamond Equity Research company sponsored reports are based on publicly available information and although no investment recommendations are made within our company sponsored research reports, given the small capitalization nature of the companies we cover we have adopted an internal trading procedure around the public companies by whom we are engaged, with investors able to find such policy on our website public disclosures page. Statements within this report may constitute forward-looking statements, these statements involve many risk factors and general uncertainties around the business, industry, and macroeconomic environment. Investors need to be aware of the high degree of risk in small capitalization equities including the complete loss of their investment. Investors can find various risk factors in the initiation report and in the respective SEC filings for Medigus Ltd.
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