Current Report No: 2/2025
Date: January 24, 2025.
Legal Basis: Article 17(1) of the MAR Regulation – Confidential Information
Medicalgorithmics S.A., headquartered in Warsaw (the “Company”; the “Issuer”), announces that on January 24, 2025, it signed a significant agreement (the “Agreement”) with a U.S.-based diagnostic center (IDTF, the “Partner”).
The signing of this Agreement is a key step in implementing the Company’s strategy, as outlined in Current Report No. 16/2023 dated June 19, 2023. The strategy aims to significantly increase the Company’s revenue and profitability (leveraging its high operational leverage) and generate positive cash flows.
The Agreement covers the provision of specific services and the licensing of Medicalgorithmics’s leading software, DeepRhythmPlatform (DRP), equipped with DeepRhythmAI (DRAI) artificial intelligence algorithms for ECG signal analysis from the Partner’s devices. During the initial phase, the Company will integrate DRP and DRAI with the Partner’s software and devices. Upon successful completion and acceptance of this integration, the Partner will utilize DRP and DRAI for ECG study analyses.
The Company’s remuneration (determined in USD) will depend on the number of ECG sessions analyzed using its software each month, based on a fixed rate per session depending on the type of ECG test analyzed. The Agreement also includes a guaranteed minimum monthly payment (in USD).
The Company estimates that the total revenues from the Agreement, including integration and analyzed sessions, will amount to approximately PLN 30.9 to 46.0 million (USD 7.7–11.5 million) in the first 24 months following integration acceptance and the commencement of commercial analyses. The guaranteed minimum revenue under the Agreement (covering sessions and integration) is set at PLN 6.8 million (USD 1.7 million), with a guaranteed minimum monthly payment for analyzed sessions of PLN 243,000 (USD 60,800).
Medicalgorithmics estimates that average monthly revenue for analyzed ECG studies during the first 12 months of commercial cooperation may range from PLN 1.1 to 1.7 million (USD 265,000–425,000). Over the subsequent 12 months, average monthly revenue may increase to PLN 1.5 to 2.1 million (USD 362,000–515,000). These estimates assume the Company analyzes the Partner’s full projected volume of ECG studies starting from the second quarter of cooperation. Actual amounts may vary depending on the number of sessions analyzed and any potential expansion of services.
The Company will also receive PLN 780,000 (approximately USD 200,000) for the software integration, payable in two installments of PLN 392,000 (USD 98,000) each—upon signing the Agreement and upon the Partner’s acceptance of the integration.
The Agreement will remain in effect for 24 months from the Partner’s acceptance of the completed integration. After this period, the Agreement will automatically renew for subsequent one-year terms unless the Partner provides written notice of termination at least 90 days prior to the expiration date. The Agreement may be terminated by either party with six months’ notice or immediately in the event of a material breach, following a failed remedy period. If the Agreement is terminated within the first 12 months of commercial analyses due to the Partner’s fault, the Partner will be obligated to pay the Company USD 600,000. Conversely, if the Agreement is terminated due to the Company’s fault, it will be required to refund the integration fee.
No additional regulatory approvals are required for the commencement of services under the Agreement.
The Agreement is governed by the laws of Delaware, USA, and includes standard provisions related to representations and warranties, confidentiality, and indemnification, consistent with industry standards. The liability cap for damages for each party is the greater of: three times the Company’s remuneration over the last 12 months or USD 5 million, excluding cases of confidentiality breaches, fraud, willful misconduct, or gross negligence. For breaches related to cybersecurity or data protection, the liability cap is the greater of: five times the Company’s remuneration over the last 12 months or USD 15 million.
All USD values have been converted to PLN for the purposes of this report using an exchange rate of 4.00 PLN/USD.