Current reports

Commencement of negotiations regarding the acquisition of the Company’s shares

Current report no. 41/2021

Date: 25/10/2021

Legal basis: Art. 17 (1) MAR

Management Board of Medicalgorithmics S.A. (The “Company”) informs that today it has made a decision to start negotiations regarding the acquisition of the Company’s shares.

The decision of the Management Board results from the fact that on October 25, 2021 the Company received a preliminary, non-binding offer to acquire the Company’s shares in the increased share capital by Mr. Rafał Brzoska (“Investor”) (“Non-binding Offer”).

The non-binding offer concerns the transaction of taking up new shares entitling to 50% of votes at the General Meeting of the Company, directly by the Investor or through an entity indicated by him (“Transaction”). As part of the Non-Binding Offer, the Investor proposes to grant the Company a secured loan of up to USD 20,000,000, paid in tranches, converted into Company shares entitling to 50% of votes at the Company’s General Meeting. The loan would be secured with shares in Medi-Lynx Cardiac Monitoring, LLC and intellectual property rights, including industrial property rights, of the Company’s capital group. The implementation of the Transaction depends on the fulfillment of certain conditions, including from a satisfactory result of due diligence or obtaining the consent of the corporate bodies of the Company and the Office of Competition and Consumer Protection for the acquisition of the Company’s shares. According to the estimates of the parties, the implementation of the next stage, i.e. due diligence, will take about 4-6 weeks.

The Management Board of the Company indicates that the valuation indicated in the Non-Binding Offer is the Investor’s valuation and as of today the Management Board does not verify its grounds or the validity of the indicated amount. The investor made a reservation that the valuation presented in the Non-Binding Offer may be properly adjusted in the event of verification and analysis of information and data at a later stage of the process and will be reflected in the binding offer.

The Management Board points out that the Non-Binding Offer and the Management Board’s decision to start negotiations do not constitute a legally binding obligation of the parties to perform the Transaction or conclude any agreements, in particular to conduct talks. Either party may withdraw from further participation in the process. At the same time, the Investor assures that he intends to act to increase the value of the Company for all its shareholders.

The Management Board indicates that the commencement of negotiations with the Investor is an implementation of the Management Board’s announcements indicated in RB 33/2021 regarding the parallel continuation of the review of the strategic options available to the Company. In particular, the commencement of negotiations does not result in, as at the date of publication of this report, abandoning the intention to implement the Management Board’s plans to obtain capital from the issue of series H shares or seeking potential investors who could acquire the Company’s bonds. The final decision as to the sources of financing will depend on the market conditions, the results of negotiations with the investor or the cost of available financing, and will be made in accordance with the best interests of the Company and its shareholders.

The Company will inform about the next stages of the Transaction in the next current reports