Echoiq Ltd Lines Up A$20M Pro Medicus Backing for US AI Heart Tech
Echo IQ secures up to A$20 million strategic backing from imaging giant Pro Medicus
Echo IQ (ASX: EIQ) has executed a binding Heads of Agreement with Pro Medicus Limited (ASX: PME), establishing the framework for a strategic investment of up to A$20 million and a proposed US commercial partnership for its AI-powered cardiac diagnostic technology.
The agreement represents a major validation event for the Sydney-based medical technology firm. Pro Medicus is widely regarded as one of Australia’s most successful healthcare technology companies and a global leader in enterprise medical imaging software.
Under the agreement, the proposed investment would begin with an initial A$10 million through secured convertible notes, followed by an option for Pro Medicus to invest a further A$10 million tranche conditional on FDA clearance of EchoSolv HF.
Importantly, the strategic investment and reseller arrangement remain “subject to the finalisation of definitive legal documentation and other conditions.” Funds have not yet been received and definitive agreements have not been signed. Echo IQ noted that transaction completion is expected “in the coming weeks,” and stated it is now “fully funded to support US commercialisation activities.”
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Breaking down the deal — two-tranche investment and US reseller pathway
The investment structure
The proposed investment is structured across two tranches, each linked to a distinct stage of Echo IQ’s commercial progression.
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Tranche 1: An initial A$10 million, raised through the issue of 10,000,000 secured convertible notes with a face value of A$1 each.
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Tranche 2: A further A$10 million via an additional 10,000,000 notes, conditional on prior issue of Initial Notes and FDA clearance for Echo IQ’s heart failure algorithm.
A key risk for investors to note is that Pro Medicus is not obliged to invest the second tranche even if FDA clearance is achieved. The right to subscribe applies within the 12-month period immediately following clearance.
Echo IQ stated the structure “aligns future investment with one of Echo IQ’s most significant potential value catalysts” while providing additional balance sheet strength to support its growing pipeline of US commercialisation activities.
A potential gateway to the US health system
Beyond capital, the agreement establishes a commercial framework under which Pro Medicus would become a proposed reseller of EchoSolv throughout the United States, subject to entry into definitive agreements.
This pathway could provide Echo IQ with access to Pro Medicus’ extensive network of leading US health systems, academic medical centres and enterprise healthcare customers via its Visage platform. For over 30 years, Pro Medicus has built a track record of deploying enterprise-scale imaging software across demanding US clinical environments.
Echo IQ believes this aspect of the proposed partnership has the potential to be highly strategic, offering an additional route to commercial adoption through Pro Medicus’ established customer relationships.
The Pro Medicus reseller pathway sits alongside an existing Mayo Clinic distribution agreement that already covers Mayo hospitals and more than 80 external partner institutions, giving Echo IQ multiple potential routes into the US enterprise health system market ahead of FDA clearance.
Convertible note terms at a glance
The key commercial terms of the proposed secured convertible notes are summarised below.
| Term | Detail |
|---|---|
| Noteholder | Pro Medicus Limited |
| Securities | Secured unlisted convertible notes (secured over all assets; specific security over aortic stenosis and heart failure algorithms) |
| Initial subscription | 10,000,000 Notes @ A$1 face value (A$10M) |
| Second tranche | Additional 10,000,000 Notes @ A$1, available within 12 months following FDA clearance of HF algorithm |
| Maturity | 24 months from issue |
| Interest | 12.5% p.a. compounding daily, payable at maturity or upon mandatory redemption |
| Conversion price | Lower of A$1.05 (Valuation Cap) or 5-day VWAP, subject to floor price |
| Options | 0.75 unlisted options per Note, exercise price A$1.35, expiring 24 months from issue |
Several structural points are relevant for shareholders:
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The issue does not require shareholder approval, as it relies on the company’s available placement capacity under ASX Listing Rule 7.1.
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Terms were negotiated at arm’s length with a sophisticated counterparty independent of the company.
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While the notes benefit from security granted by the EIQ group, the company has not agreed to issue ‘collateral shares’ to noteholders.
Investors should note that conversion of the notes may result in dilution to existing shareholders. The terms of conversion remain subject to finalisation in the definitive documentation.
Why AI-powered cardiac diagnostics matters
Echo IQ uses AI-driven technology and proprietary software to support cardiologist decision-making. Its EchoSolv platform is designed to assist in detecting cardiovascular disease, including aortic stenosis and heart failure.
The United States represents the world’s largest healthcare market, making it a central focus for medical technology firms seeking scale. Yet adoption in the US depends heavily on reimbursement frameworks. Favourable CPT coding and coverage from Medicare, Medicaid and commercial insurers are critical to whether health systems will procure and deploy new technology.
Partnering with an established imaging platform offers a potential route to accelerate adoption. The growing clinical relevance of AI in cardiovascular care underpins the rationale for both parties combining their respective strengths.
The Mount Sinai Health System deployment of EchoSolv AS, announced in April 2026, illustrates the kind of high-profile reference site relationships Echo IQ has been building as it positions EchoSolv for broader US adoption across enterprise health networks.
What this means for the investment case
The agreement strengthens Echo IQ’s commercial narrative across three dimensions.
CEO Commentary
“The execution of this binding Heads of Agreement with Pro Medicus represents a transformational milestone for Echo IQ and a significant validation of both our technology and long-term commercial strategy, while also providing exceptional financial flexibility to accelerate our commercialisation activities in the US,” said Dustin Haines, Chief Executive Officer.
Validation is the first pillar. Backing from one of Australia’s most successful healthcare technology companies lends weight to claims around EchoSolv’s clinical utility and commercial potential.
Capital is the second. The proposed investment offers balance sheet strength to seek to accelerate US commercialisation, with the company stating it is now fully funded to support these activities.
Distribution is the third. Should definitive reseller agreements be executed, Echo IQ could gain access to Pro Medicus’ enterprise customer network, a potential pathway to broader adoption across the US market.
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What happens next
Several near-term milestones will determine how the arrangement progresses.
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Finalisation of definitive legal documentation, with completion expected “in the coming weeks.”
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The EchoSolv HF FDA submission remains on track, with an outcome expected “in the near term.”
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FDA clearance would unlock Pro Medicus’ option to invest the second A$10 million tranche, though it is under no obligation to do so.
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Progression of US commercialisation activities under the proposed partnership.
The transaction remains conditional on the finalisation of definitive agreements and regulatory outcomes. As the company has stated, there can be no assurance that any agreement will be reached, and the second tranche depends on an FDA decision that remains subject to regulatory review.
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