Medigus Ltd.

Kurta Law is investigating broker recommendations of Medigus Ltd. (NASDAQ: MDGS). This investment came with a high degree of risk, which made it unsuitable for many investors. The Financial Industry Regulatory Authority (FINRA) defines suitable investments as investments that fit investors’ risk tolerances. Unsuitable investment recommendations violate FINRA Rule 2111 as well as Regulation Best Interest. Regulation Best Interest also requires brokerage firms to perform their due diligence before making a recommendation. Basic due diligence would reveal the high risk associated with this investment.

If you have concerns about your broker’s recommendation, contact Kurta Law for a free case evaluation. Call (877) 600-0098 or email info@kurtalawfirm.com.

The Offering

The prospectus dated December 1, 2020, announced an offering of 7,098, 491 American Depository Shares (ADS). American Depository Shares are shares issued by a foreign company that are sold on an American exchange. Medigus is located in Israel. Each share represents 20 ordinary shares. At the time of filing the prospectus, shares of Medigus were trading on the Israeli exchange for $0.129 per share.

About Medigus

According to the prospectus, Medigus offers miniaturized imaging equipment used in surgery and surgical devices for the treatment of Gastroesophageal Reflux Disease (GERD).

Risk Factors

The prospectus identifies the following risk factors. These are only the risks Kurta Law has chosen to highlight – see the prospectus for the complete list.

Business Strategy Changes

The prospectus states that since 2019, Medigus materially changed its business model. As a result of the changes, Medigus acquired substantial stakes in several ventures. The business cannot guarantee that these strategic decisions will derive the anticipated value for their shareholders.

History of Losses

Medigus has incurred losses since it was incorporated. As of June 2020, the company had an accumulated deficit of $ 79.2 million. It describes its ability grow sales and achieve profitability as “unpredictable.”

Changing Laws

Medigus and its subsidiaries are subject to stringent and changing laws, regulations, standards, and contractual obligations related to privacy, data protection, and data security. The actual or perceived failure to comply with these obligations could harm the business.

Risks Related to Eventer and Gix

Medigus has acquired stakes in Eventer Technologies, an online event and ticketing platform, as well as Gix Internet Ltd., an ad-tech and online advertising company. Medigus is therefore also subject to all the risks associated with these two businesses.

Aegis Capital Corp. Underwriting    

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm.  

Kurta Law Can Help

Contact Kurta Law today for a free case evaluation – keep in mind that you have a limited time to file a claim. Our attorneys do not collect a fee unless we win your case. If you have any questions, call (877) 600-0098 or email info@kurtalawfirm.com.