Updated information on the state sales and use tax audits conducted by the Texas Comptroller of Public Accounts
Current report no 24/2021
Legal basis: Article 17(1) of MAR – inside information
The Management Board of Medicalgorithmics S.A. (“Company”) with reference to current reports 30/2018 and 31/2018, in which the Company informed about the receipt by its subsidiary – Medi-Lynx Cardiac Monitoring LLC (“Medi-Lynx”) of the results of the state sales and use tax audit (“Audit Results”), carried out by the Texas Comptroller of Public Accounts (the “Comptroller”), informs that the case before the Comptroller has ended and the Comptroller has defended its position in the case.
Due to the negative outcome of proceeding for the Company, Medi-Lynx is analyzing possible further steps in the case, including considering the exercise its right to appeal to the District Court in Travis County, Texas. This course of action is in line with Medi-Lynx’s opinion of tax advisers on the findings of the Texas Comptroller of Public Accounts. The subject of the District Court’s decision will be the validity of the Comptroller’s claims.
In the event of a negative court ruling, Medi-Lynx will be obliged to pay the disputed tax amount in the amount of approx. USD 1.65 million, the amount relating only to the period for which the sales tax audit was carried out, i.e. from July 1, 2014 to December 31, 2017.
According to the opinion of the tax advisors, the probability of winning the case is greater than 50% and therefore the Company does not plan to create a provision for the disputed amount, both for the audited period and for the following years.
The company will inform about significant stages of the continuing dispute.