Medicalgorithmics S.A.

Legal Proceedings Report • Jan 24, 2025

Report Content Subject: Medicalgorithmics S.A. Signs Contractwith US IDTF with Estimated Revenue Potential of up to PLN 46 MillionOver Two Years_#160;

Current Report No: 2 / 2025_#160;

Date: January 24, 2025_#160;

Legal Basis: Article 17(1) of the MAR Regulation -Confidential Information_#160;

Medicalgorithmics S.A., headquartered in Warsaw (the"Company"; the "Issuer"), announces that on January 24, 2025, it signeda significant agreement (the "Agreement") with a U.S.-based diagnosticcenter (IDTF, the "Partner")._#160;

The signing of this Agreement is a key step inimplementing the Company's strategy, as outlined in Current Report No.16/2023 dated June 19, 2023. The strategy aims to significantly increasethe Company's revenue and profitability (leveraging its high operationalleverage) and generate positive cash flows._#160;

The Agreement covers the provision of specificservices and the licensing of Medicalgorithmics's leading software,DeepRhythmPlatform (DRP), equipped with DeepRhythmAI (DRAI) artificialintelligence algorithms for ECG signal analysis from the Partner'sdevices. During the initial phase, the Company will integrate DRP andDRAI with the Partner's software and devices. Upon successful completionand acceptance of this integration, the Partner will utilize DRP andDRAI for ECG study analyses._#160;

The Company's remuneration (determined in USD) willdepend on the number of ECG sessions analyzed using its software eachmonth, based on a fixed rate per session depending on the type of ECGtest analyzed. The Agreement also includes a guaranteed minimum monthlypayment (in USD)._#160;

The Company estimates that the total revenues fromthe Agreement, including integration and analyzed sessions, will amountto approximately PLN 30.9 to 46.0 million (USD 7.7-11.5 million) in thefirst 24 months following integration acceptance and the commencement ofcommercial analyses. The guaranteed minimum revenue under the Agreement(covering sessions and integration) is set at PLN 6.8 million (USD 1.7million), with a guaranteed minimum monthly payment for analyzedsessions of PLN 243,000 (USD 60,800)._#160;

Medicalgorithmics estimates that average monthlyrevenue for analyzed ECG studies during the first 12 months ofcommercial cooperation may range from PLN 1.1 to 1.7 million (USD265,000-425,000). Over the subsequent 12 months, average monthly revenuemay increase to PLN 1.5 to 2.1 million (USD 362,000-515,000). Theseestimates assume the Company analyzes the Partner's full projectedvolume of ECG studies starting from the second quarter of cooperation.Actual amounts may vary depending on the number of sessions analyzed andany potential expansion of services._#160;TheCompany will also receive PLN 780,000 (approximately USD 200,000) forthe software integration, payable in two installments of PLN 392,000(USD 98,000) each_#8212;upon signing the Agreement and upon the Partner'sacceptance of the integration._#160;

The Agreement will remain in effect for 24 monthsfrom the Partner's acceptance of the completed integration. After thisperiod, the Agreement will automatically renew for subsequent one-yearterms unless the Partner provides written notice of termination at least90 days prior to the expiration date. The Agreement may be terminated byeither party with six months' notice or immediately in the event of amaterial breach, following a failed remedy period. If the Agreement isterminated within the first 12 months of commercial analyses due to thePartner's fault, the Partner will be obligated to pay the Company USD600,000. Conversely, if the Agreement is terminated due to the Company'sfault, it will be required to refund the integration fee._#160;

No additional regulatory approvals are required forthe commencement of services under the Agreement._#160;

The Agreement is governed by the laws of Delaware,USA, and includes standard provisions related to representations andwarranties, confidentiality, and indemnification, consistent withindustry standards. The liability cap for damages for each party is thegreater of: three times the Company's remuneration over the last 12months or USD 5 million, excluding cases of confidentiality breaches,fraud, willful misconduct, or gross negligence. For breaches related tocybersecurity or data protection, the liability cap is the greater of:five times the Company's remuneration over the last 12 months or USD 15million._#160;