Medigus Enters E-Commerce Brands Marketing on Amazon Marketplace

Rhea-AI Summary

Medigus Ltd. (NASDAQ:MDGS) has signed a definitive agreement to acquire a controlling interest in Smart Repair Pro, Inc. and Purex, Inc., both e-commerce companies on Amazon Marketplace. Medigus will invest $1,250,000, pay $150,000 in cash, and issue $500,000 in restricted ADSs, with the potential for additional milestone payments of $750,000. The companies aim for a revenue of approximately $3 million in 2020, with a net profit margin of about 35%. The deal is subject to customary closing conditions.

Positive

• Medigus is expanding into e-commerce, diversifying its business.
• Projected revenues for the acquired companies are approximately $3 million for 2020.
• The deal includes a potential 35% net profit margin, enhancing financial prospects.

Negative

• Investment of $1,250,000 may strain Medigus' cash reserves.
• Shareholders face potential dilution from issuance of restricted ADSs.
• Reliance on future performance of acquired companies introduces uncertainty.

Medigus Signs a definitive agreement to acquire a controlling interest of two companies which operate as sellers of three brands on Amazon Marketplace

OMER, Israel, Oct. 09, 2020 (GLOBE NEWSWIRE) -- Medigus Ltd. (NASDAQ:MDGS) (TASE:MDGS), MDGS), a technology company engaged in advanced medical solutions and innovative internet technologies, today announced its entry into e-commerce business by signing a definitive agreement to acquire a controlling interest in Smart Repair Pro, Inc. and Purex, Inc., two data-driven e-commerce companies, operating on the Amazon Marketplace. According to the agreement, Medigus will hold 50.01% of the issued and outstanding share capital of each of the companies, acquired through a combination of a cash investment in the companies, and an acquisition of additional shares from the companies’ current shareholders in consideration for restricted ADSs of Medigus and a cash component. Medigus shall invest $1,250,000 in the Companies, pay $150,000 in cash consideration to the current shareholders and shall issue $500,000 worth of restricted ADSs of Medigus to the current shareholders of such companies, with the value of restricted ADSs to be subject to downward adjustment based on the companies’ 2020 results. In addition, the companies’ current shareholders shall be entitled to additional milestone allotments of up to an aggregate $750,000 in restricted ADSs subject to the companies’ achievement of certain milestones throughout 2021. The closing of the transactions contemplated in the definitive agreements are subject to customary closing conditions.

Liron Carmel, CEO of Medigus, said “Medigus continue to expand its internet activities and strengthen its footprint in the e-commerce world. We believe that the e-commerce field will continue to evolve and wish to be well positioned with leading brands and technologies to facilitate our operations".

The two companies currently manage three successful brands on the Amazon Marketplace, offering a variety of products. According to initial information provided to Medigus, the companies’ revenues target for 2020 is approximately $3 million with net profit of approximately 35%.

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 www.medigus.com.

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, due to inter alia the spread of COVID-19 as well as the restriction deriving therefrom. Nothing in the description herein should be understood or construed as an announcement of the closing of the Medigus acquisition of shares from the companies’ current shareholders, actual investment in the companies or the issuance of shares of the companies pursuant to such investment. 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
+972-8-6466-880
ir@medigus.com  

FAQ

What is Medigus' recent acquisition in e-commerce?

Medigus has signed an agreement to acquire a controlling interest in Smart Repair Pro, Inc. and Purex, Inc., both operating on Amazon Marketplace.

What is the total investment made by Medigus for the acquisition?

Medigus will invest $1,250,000 in addition to $150,000 in cash and $500,000 in restricted ADSs.

What are the projected revenues of the acquired companies for 2020?

The acquired companies expect to generate approximately $3 million in revenue for 2020.

What is the net profit margin expected from the acquisition?

The expected net profit margin from the acquired companies is approximately 35%.

Are there any risks associated with Medigus' acquisition?

Investment may strain Medigus' cash reserves, and shareholders could face dilution from new restricted ADSs.