Current Report No: 8/2024
Date: May 20, 2024
Legal Basis: Article 17(1) of the MAR Regulation – Confidential Information
The Management Board of Medicalgorithmics S.A., based in Warsaw (the “Company”; the “Issuer”), informs that the Company has estimated the value of recurring, average monthly revenues solely from ECG data analysis services from the portfolio of contracts with three diagnostic centers (IDTFs) in the USA at USD 110.1 thousand per month (approximately PLN 440 thousand at an exchange rate of USD/PLN 4.0), which the Management considers a realistic and even conservative scenario.
The published value of estimated revenues of USD 110.1 thousand per month was calculated as an average for the next 12 months (from May 2024 to April 2025) for the three clients in the USA who started commercial use of the Company’s AI algorithm software between February 1 of this year and the date of this report’s publication.
This value includes the Company’s estimated sales growth from these contracts (not contractually guaranteed). Additionally, during this period, the Company generated approximately PLN 740 thousand in revenues from the sale of Pocket IV devices, which, being non-recurring, were not included in the above estimates. Including them would significantly increase this value; however, these devices will generate significant future revenues from ECG analysis services.
This value marks a significant milestone in achieving the Company’s goal of rebuilding software services sales in the US market to the level of Q4 2023, amounting to an average of PLN 0.9 million per month. The Company has achieved 49% of this goal in terms of the average 12-month value of ECG analysis service sales (excluding device sales).
Additionally, the first revenues from these clients were achieved in February this year, and the invoiced revenues in April this year from the two contracts launched by that time amounted to approximately USD 81.0 thousand (approximately PLN 320.0 thousand), which represents 36% of the goal.
The total value of ECG analysis services and Pocket IV device sales in the USA in Q1 2024 amounted to PLN 1.2 million (including PLN 740 thousand from Pocket IV device sales) and originated entirely from contracts launched this quarter under the new strategy of offering ECG analysis services through the Company’s AI software using third-party or in-house devices, in a non-exclusive model in the USA.
In line with its goals, the Company maintains the objective of launching at least two contracts per quarter (from the USA or the global market).
This assumption allows us to estimate that, by achieving the average revenues and the number of new clients assumed in this report, the Company will achieve the goal of rebuilding sales in the US market to Q4 2023 levels no later than the turn of Q3 and Q4 of this year. Additionally, the Company expects further non-recurring equipment orders, which will accelerate the achievement of this goal.
The Company will inform, through current reports, about further progress and milestones in executing the strategy and achieving the goal of rebuilding sales in the US market to Q4 2023 levels and reaching the threshold of generating positive cash flows, including:
a) significant changes in the estimated average monthly value of the contract portfolio,
b) the commercial launches of additional contract portfolios, and
c) the acquisition of individual significant contracts.