Update of information on the impact of the COVID-19 coronavirus pandemic on the Company’s operations
Current Report No. 27/2020
Legal basis: Article 17(1) of MAR – inside information
The Management Board of Medicalgorithmics S.A. (“Company”), with reference to current report no. 20/2020, provides information on the impact of the COVID-19 pandemic on the operations, financial results and liquidity of the Company and the entire Capital Group.
Pursuant to the information provided in current report no. 20/2020 about the expected decrease in revenues on the US market caused primarily by the probable decrease in the number of patients using ECG tests using PocketECG technology, the Company’s Management Board informs that the Company is recording a decrease in the number of ECG monitoring sessions initiated on the US market. From March 16, 2020 to April 12, 2020 (equivalent to the following weeks of the year from 12 to 15), the Company recorded a 43% decrease in the number of monitoring sessions started compared to the same period last year. At the same time, the Management Board predicts that this negative trend may be sustained in the coming weeks. A change in the number of ECG monitoring sessions initiated will affect the number of applications for payment from insurers, while a reliable assessment of the situation will be possible only after obtaining information on the number of applications for payment from insurers in the following months, about which the Company’s Management Board will inform in monthly current reports as before.
At the same time, the Management Board of the Company informs that due to the expected decline in revenues, the subsidiary Medi-Lynx Cardiac Monitoring LLC (“Medi-Lynx”) has applied for
a preferential loan under the support of the “CARES Act” established by the US Congress. As part of the loan, Medi-Lynx obtained funds in the amount of USD 3.2 million, which, according to the “CARES Act” will be used to finance operating activities, including mainly to finance salaries. Pursuant to the provisions of the CARES Act, part of the loan, spent under certain conditions on employee remuneration, is non-returnable. The remaining part of the loan will be repaid within 24 months and bears an interest rate of 0.98% per annum.
Additionally, in order to optimally use the working time of people employed in the Medicalgorithmics Group companies, the dimensions of basic working time have been reduced, which will entail lower expenditure on remuneration. The Management Board informs that the introduced change is temporary and results from the adjustment of the demand for performed work to current market conditions.
At the same time, the Company’s Management Board underlines that the unusual nature of the current situation, as well as its dynamic development, including the introduction of regulatory regulations, it is currently impossible to determine the actual impact of the situation on the future functioning of the market, including the functioning of the entire Capital Group, including The Company, and its future financial results.
In the opinion of the Management Board, the decrease in the number of ECG monitoring sessions started is temporary, and the actions taken by companies from the Medicalgorithmics group are aimed at reducing the threat associated with a temporary decline in revenues, while maintaining the ability of companies to quickly restore their original potential.