Current reports

Estimation of decrease in the revenues of the Issuer’s subsidiary, Medi-Lynx Cardiac Monitoring, LLC due to discussions with MultiPlan, Inc.

Current Report No. 5/2019

Date: 1 March 2019

Legal basis: Article 17(1) of MAR – inside information

The Management Board of Medicalgorithmics S.A. (“Company” “Issuer”) hereby notifies that as a result of discussion between the Issuer’s subsidiary, Medi-Lynx Cardiac Monitoring, LLC (“Medi-Lynx”) and MultiPlan, Inc. (“MultiPlan”), the Company identified the demands of the insurers using Multiplan to price certain Medi-Lynx claims and is able to estimate the financial impact of the inside information disclosed in the current report no. 4/2019 dated March 1, 2019.

The Company estimates that the necessary changes to the reimbursement rates will cause a significant decrease in Medi-Lynx’s revenues collected from private insurers using Multiplan so far. The Company estimates that the said decrease may be app. 8.4 mln USD per year, assuming volumes of sales from 2018.

In accordance with the adopted and pursued business strategy of Medicalgorithmics Capital Group (the “Group”), the Company expects that lower reimbursement rates will accelerate the process of changing the business model from the out-of-network model into in-network model, (i.e. entering into long-term agreements directly with private insurers), thus hopefully providing access to additional customers and allowing the Company to pursue its growth strategy. The Company plans to hopefully restore the lost revenues by increasing the volumes of sales and optimizing operating costs of Medi-Lynx. Implementation of this strategy started in 2018 when the new CEO of Medi-Lynx was appointed and the sales structures in the Group were reorganized.