S2Medical AB (publ) concluded a manufacturing agreement for Epi protect with the Company's distribution partner in Saudi Arabia, Arabian Trade House (ATH). The agreement provides an upfront sum of approximately SEK 2.2 million which can then be called from in the form of finished products or raw material for final packaging. Manufacturing will take place through ATH's manufacturing arm Arabian House for Industries (AHI).

The agreement gives AHI an exclusive right to manufacture products for the Saudi market, which may be extended to more countries in the MENA region. Furthermore, the agreement contains obligations for orders amounting to a total of SEK 14 million over the next 3 years and an increase of at least 20% per year for subsequent years in order to retain the manufacturing right. Provided that the terms of the agreement are followed, the agreement runs for over 15 years.

The manufacturing only includes final packaging of individual products from raw materials and thus does not affect knowledge about the manufacturing of the material for Epiprotect, which will continue to be protected as a company secret and manufactured at the Company's factory in Linköping. As previously mentioned, AHI's production will only be supplied to the Saudi market with a potential option for the countries in the MENA region, which, where appropriate, will be regulated in a separate agreement. Costs for setting up the local production facility will be borne by AHI.