Current report no: 6/2023
Legal basis: Article 17 (1) of the MAR Regulation – confidential information
The Management Board of Medicalgorithmics S.A., headquartered in Warsaw, Poland (the “Company”; the “Issuer”), announces an agreement (the “Amending Agreement”) was made with React Health Holdings, LLC (“React Health”) and its affiliate Medi-Lynx Cardiac Monitoring, LLC (“Medi-Lynx”) on February 2, 2023, which amends the support agreement and license agreement with Medi-Lynx – an agreement which the Issuer announced in Current Report No. 52/2022.
In addition, on February 2, 2023, the Issuer has signed a support agreement and a license agreement governing the parties’ cooperation with React Health and its affiliate, Medicomp Inc. (“Medicomp”). The provisions of the new agreements with Medicomp, including the financial terms, are analogous to the provisions of the support and license agreements with Medi-Lynx, as described below, as set forth in the Amending Agreement.
The Amending Agreement provides that the exclusive licensing of the Company’s intellectual property by Medi-Lynx and React Health and the exclusive right of these entities to sell, market and distribute the Company’s products and services in the U.S. will expire as of February 28, 2023.
This is an important milestone of the implementation of the Company’s sales development strategy in the US market described in current report 72/2022. Starting from March 1, 2023, the Company will be authorized to provide products and services to other entities in the U.S. territory, which will make it possible to acquire new distributors in the market.
The Company has declared it will not grant others an exclusive right to distribute and provide products and services in the U.S. territory within two years from the date of the Medi-Lynx membership interest purchase agreement, i.e. until July 28, 2024, unless the other party earlier terminates the support agreement.
Under the Amended Agreement, beginning on March 31, 2023, the termination period of the support agreement by its parties is reduced to 60 days.
The Amended License Agreement provides for termination of the license after two months, instead of two years, from the onset of termination events indicated in the agreement, subject to exceptions provided for in the license agreement entered into with Medicomp. i.e. termination of operations or insolvency of the Company within the two-year period.
Other provisions of the Medi-Lynx support and license agreements, and those entered into with Medicomp including those relating to the revenues received by the Company described in current report No. 52/2022, have not changed materially.
Payments to the Company under the support agreement and license agreements are still guaranteed by React Health.
Under the Amending Agreement, the parties agreed the support agreement and license agreement entered into with Medi-Lynx would be terminated upon the actual termination of Medi-Lynx’s monitoring services following transferring of that business to Medicomp. Therefore, going forward, the Issuer will continue to cooperate with Medicomp by offering support and licensing services under the new support and license agreements.