Medicalgorithmics and the company’s largest shareholder, BioFund Capital Management LLC, have signed a loan agreement worth up to $3 million. The initiation of this financing ensures the implementation of the company’s strategy for 2023-2026 and expands growth opportunities, particularly in the context of progress in commercializing the platform for analyzing multi-day ECG recordings with proprietary AI algorithms. The disbursement of the first two tranches, totaling $1 million, will take place by the end of 2024.
“The launch of the financing aligns with the financial assumptions of our development strategy and provides the necessary funding to carry out key initiatives crucial for the growth of our flagship products. This will allow us to continue our planned development projects and ensure full financial security to reach cash-flow break-even, expected in the second half of 2025. The milestones we have achieved lately, such as obtaining the CE certification for VCAST technology and the certification of the DeepRhythm Platform in the U.S. and Canada, have opened new opportunities as planned, enabling us to enhance our competitive advantages through ongoing commercialization in the global market. In this context, the ability to utilize these funds is extremely valuable for the company” – commented Maciej Gamrot, CFO of Medicalgorithmics.
The financing from BioFund Capital Management LLC, in the form of a loan worth up to $3 million, will be executed in four tranches. The first two – each worth $0.5 million – will be disbursed by the end of this year. The next two, each worth $1 million, are planned for March and May 2025. Their release will depend on the company reaching a specified cash balance across all bank accounts of the company’s group subsidiaries.
“The launch of the loan confirms the financial resources of Medicalgorithmics and represents the fulfillment of the provisions of the investment agreement and the financial assumptions of the development strategy, while also confirming the support of the company’s main shareholder. This allows us to fully uphold our commitment to signing a significant client in the U.S. by the end of this year and achieving cash-flow break-even, expected in the second half of 2025”, added Maciej Gamrot.
The new loan agreement, signed on November 29, stipulates that Medicalgorithmics will repay the loan of up to $3 million in 24 installments, with the first payment scheduled for October 31, 2025. The loan will bear a fixed interest rate of 18.5%, and BioFund will receive a 3% commission on newly generated revenues. The loan is secured by the company’s declaration of voluntary submission to enforcement under Article 777 § 1 point 5 of the Polish Civil Code. This agreement replaces the loan line agreement signed in June of this year with BioFund.
According to the development strategy announced in June 2023, developed with the involvement of Medicalgorithmics’ main shareholder, BioFund Capital Management LLC, the company has shifted its business model. It has moved away from offering solely a closed cardiac diagnostic system tied to its own heart monitoring devices. The new strategy focuses on selling a platform for multi-day ECG recordings analysis using proprietary artificial intelligence algorithms as a standalone product, as well as integrating with partners’ devices and IT systems. Medicalgorithmics’ software can be licensed by clients, and the company generates revenue through various fee models, including those based on the number of ECG data analyses performed.