Medigus Announces Second Quarter 2016 Financial Results

OMER, Israel, August 31, 2016 — Medigus Ltd. (NASDAQ: MDGS) (TASE: MDGS), a medical device company developing minimally invasive endosurgical tools and a leader in direct visualization technology, today announced financial results for the second quarter ended June 30, 2016.

“We continue to advance our vision of delivering an effective, minimally-invasive treatment option for GERD and remain focused on increasing physician awareness of our MUSE technology, which we believe addresses the unmet need in GERD care,” said Chris Rowland, CEO of Medigus. “In China, we plan to initiate a clinical study which will serve as the basis for MUSE regulatory clearance with the China Food and Drug Administration. Thirteen physicians at seven hospitals have been trained on MUSE, and we anticipate this trial commencing in the fourth quarter of this year.”

Recent Highlights:
• In June, Medigus globally launched the seventh generation of MUSE, which includes updates that offer physicians enhanced usability through an improved ultrasound algorithm, a redesigned distal tip and enhanced software.
• In July, Johns Hopkins Hospital, an integrated global health enterprise and one of the leading health care systems in the United States, provided Medigus with an initial purchase order for the MUSE system for a system console and endoscopic device.
• The company is focusing its sales activities on key accounts in the U.S. and Europe.
• Medigus recently implemented a cost reduction program aimed at lowering operating expenses and reducing its cash burn rate.

Financial Results for the Second Quarter 2016:
• Revenues for the three months ended June 30, 2016, were $98,000, an increase of 9%, compared to the three months ended June 30, 2015.
• Research and development expenses for the three months ended June 30, 2016, were $1,103,000, an increase of 2%, compared to the three months ended June 30, 2015.
• Sales and marketing expenses for the three months ended June 30, 2016, were $748,000, a decrease of 5%, compared to the three months ended June 30, 2015.
• General and administrative expenses for the three months ended June 30, 2016, were $903,000, an increase of 39%, compared to the three months ended June 30, 2015. The increase resulted primarily from an increase in professional expenses in connection with IP litigation (for more information see note 6a to our financial statements) and increase in salary costs attributed primarily to the strengthening of management.
• Operating loss for the three months ended June 30, 2016, was $2.7 million, compared to $2.5 million in the three months ended June 30, 2015.
• Net cash used in operating activities was $2.9 million for the three months ended June 30, 2016, compared to net cash used in operating activities of $2.5 million for the corresponding 2015 period.
• As August 31, 2016, Medigus had approximately $3.2 million in cash and cash equivalents.

For detailed financial statements, please follow the link: http://www.medigus.com/investor-relations/financial-reports.