Medicalgorithmics S.A. — Legal Proceedings Report 2023

Oct 23, 2023

Subject:Notification about Medicalgorithmics S.A.'s receipt of termination ofAgreement with React_#160;

CurrentReport No: 32/2023_#160;

Date ofPreparation: October 22, 2023_#160;

Legal Basis:Art. 17 para. 1 of the MAR Regulation - confidential information.

The Board ofMedicalgorithmics S.A., headquartered in Warsaw (the _quot;Company_quot;; the_quot;Issuer_quot;), announces that on October 21, 2023, the Company received aletter notifying the termination of agreements regarding cooperationwith entities from the React Group, effective from December 31, 2023.The termination pertains to the following agreements:_#160;(i) The Additional Services Agreement thatcame into effect on June 24, 2022, entered between Cinco Reals, LLC (nowknown as React Health Holdings, LLC) (_quot;React_quot;) and the Company;_#160;(ii) The Support Agreement effective from July28, 2022, between React, Medi-Lynx Cardiac Monitoring, LLC (_quot;MediLynx_quot;)and the Company, amended by an annex to the Support and LicenseAgreement dated February 2, 2023, and the related Business SupportAgreement;_#160;(iii) TheIntellectual Property Licensing Agreement effective from July 28, 2022,entered between React, Medi-Lynx, and the Company, amended by an annex;_#160;(iv) The Support Agreement effective fromFebruary 2, 2023, between Medicomp, Inc. (_quot;Medicomp_quot;), React, and theCompany, and the related Business Support Agreement;_#160;(v)The Intellectual Property Licensing Agreement effective from February 2,2023, between React, Medicomp, and the Company (collectively referred toas _quot;Agreements with React_quot;). The termination of Agreements with React,according to the notice, will take effect on December 31, 2023. Untilthe end of Q2 2023, the React Group was the Company's sole client in theUSA generating revenue in this market. The geographical revenuestructure, detailing US revenue, was published in the consolidatedsemi-annual financial report for the first half of 2023. Moreover, thisrevenue has been decreasing progressively but remains above the minimumlevels set in the Agreements with React (refer to Current Report No.52/2022 from July 28, 2022). Additionally, the Company is in discussionsabout the potential continuation of cooperation with React from 2024.

The Boardevaluates the above situation in the context of the Company's adoptedand implemented development strategy for 2023 - 2026 and informs thatthe strategy and action plan adopted by the Issuer considered andprepared the Company for the risk of termination of the Agreements withReact in the American market associated with the termination ofexclusivity for the use of the Company's technology and a change instrategy in this market. As a result, the Board believes that the Issueris prepared for the termination of cooperation with React.

Since the secondquarter of this year, the Company has been acquiring new partners (asreported in several press releases and current reports) in anon-exclusive territorial model, alternatively offering the use of theCompany's software and AI algorithms for integration with thecontractor's infrastructure or a complete solution, i.e., the PocketECGsystem, which includes the PocketECG device and PC Client software forEKG data analysis, offering one of the highest diagnostic effectivenessavailable on the market. As a result, the Company has already signed twocontracts with new IDTF clients in the USA to use the software and AIalgorithms after integration and an agreement with another IDTF clientorganization to provide a complete PocketECG system consisting ofdevices and EKG analysis software. The client has already ordered 200devices (refer to RB 28/2023 from October 5, 2023).

Moreover, aspart of implementing the new strategy, the Company has entered into twosignificant agreements with prominent partners. According to theIssuer's published Current Report No. 30/2023 dated October 10, theCompany entered into an agreement with a NASDAQ-listed tech company,which is one of the three largest entities in the non-invasivecardiology monitoring diagnostics industry in the American market. Theagreement envisages the integration and assessment of the Company'stechnology to evaluate the possibility of entering into a partnershipagreement, and provided the integration evaluation is positive, theCompany will ensure certification of the integration with the partner'sdevice.

Furthermore, onOctober 20, the Company entered into an agreement with a publicly tradedglobal supplier of some of the best-rated arrhythmia diagnostic devices,proposing the integration of the Company's software with the partner'sdevices to conduct pilot tests to assess the efficiency and benefits ofusing the Company's software in terms of potential long-term cooperationbetween the parties for joint commercialization of cloud solutions forarrhythmia diagnostics, as informed by the Issuer in the Current ReportNo. 31/2023 dated October 20, 2023.

The Boardestimates that each of the aforementioned agreements, if they lead tothe conclusion of a long-term cooperation agreement, could besignificantly more beneficial, in terms of eventually generating higherrevenues than the Agreement with React.