Medgenics, Inc.
('Medgenics' or the 'Company')
17 December 2008
Medgenics is pleased to announce that it is implementing a warrant repricing
programme (the "Programme" or "Transaction") to encourage the exercise of existing
warrants provided that such exercise is completed by 30 January 2009. The Programme,
which allows existing warrant holders to exercise warrants on advantageous terms,
follows on from the Company's announcement of positive key early results from its
Phase I/II Clinical Trial of EPODURE as presented at a major medical congress in
November 2008. This Programme aims to strengthen the Company's cash position to
support its operations and its business development activities while increasing the
share base and reducing the number of outstanding warrants.
To encourage existing warrant holders to exercise their warrants for cash before
30 January 2009, the following terms will be offered:
1. Reduced Exercise Price : $0.0375/share (2.5 pence/share) or the current
exercise price, whichever is lower; and
2. Bonus Warrants: for every one dollar ($1.00) or 0.667 GBP paid for
exercise of warrants during this program, a new bonus warrant to purchase three
(3) shares of common stock in the Company of $0.0001 par value per share
("Common Shares"), which will be immediately exercisable for three (3) years at
an exercise price $0.25 per share, will be issued. For example, a total
exercise price of $10,000 will result in a bonus warrant for 30,000 Common
Shares at an exercise price of $0.25 per share.
The exercise price of any warrants that are not exercised before 30 January 2009 will
revert to the original price as stated in the warrant prior to this incentive programme.
The current warrants outstanding in the Company are as follows:
Warrant Date of No. of Exercise Expiry Date
Type Issue Common Price per
Shares Common
Share
RS 31.03.06 15,680,818 US $0.0005 31.03.11
RS 31.03.06 36,481,902 US $0.071 31.03.11
RW 31.03.06 1,609,325 US $0.000005 31.03.11
X 31.03.06 4,278,298 US $0.071 24.03.10
X 2.01.06 533,183 US $0.071 2.01.11
W 31.03.06 26,809,141 US $0.071 31.03.11
W 10.04.06 1,026,792 US $0.071 10.04.11
W 14.06.06 1,069,575 US $0.071 14.06.11
W 23.10.06 21,094,940 US $0.117 23.10.11
W 9.02.07 705,919 US $0.071 31.03.11
W 13.03.07 2,042,887 US $0.071 31.03.11
W 13.03.06 2,117,758 US $0.071 21.06.11
W 31.05.07 1,329,310 US $0.071 31.05.12
W 13.08.07 654,580 US $0.164 13.08.12
W 17.08.07 369,773 US $0.164 17.08.12
W 4.12.08 1,067,287 US $0.164 4.12.12
W 4.12.08 192,523 7.8p 4.12.12
W 4.12.08 6,563,398 US $0.194 4.12.12
W 4.12.08 458,308 9.22p 4.12.12
W 4.12.08 570,992 10p 4.12.12
Platinum 13.03.07 1,909,619 US $0.164 31.03.11
Platinum 4.12.08 1,604,362 US $0.164 4.12.12
Platinum 4.12.08 23,183 10p 4.12.12
Total 128,193,873
The current number and details of warrants held (both directly and indirectly)
by the Directors are as follows:
Name Warrant Number Issue Expiry Exercise Discount Discount Discount
name date date price price per US$
US$ US$ warrant
US$
Lord Leonard W 4,832,423 4/12/07 4/12/12 0.194 0.0375 0.1565 756,274
Steinberg W 1,145,964 31/5/12 31/5/07 0.164 0.0375 0.1265 144,525
W 763,997 4/12/07 4/12/12 0.164 0.0375 0.1265 96,646
------------------------------------------------------------------------
6,742,384 997,445
Andrew RS 31,681,652 31/3/06 31/3/11 0.071 0.0375 0.0335 1,057,195
Pearlman RW 1,260,451 31/3/06 31/3/11 0.000005 0.0375 0.00 -
------------------------------------------------------------------------
32,942,103 1,057,195
Joel W 7,059,192 31/3/06 31/3/11 0.071 0.0375 0.0335 235,560
Kanter W 1,069,575 23/10/06 23/10/11 0.117 0.0375 0.0795 84,891
W 857,007 23/10/06 23/10/11 0.117 0.0375 0.0795 68,020
RW 197,914 31/3/06 31/3/11 0.000005 0.0375 0.00 -
RS 14,080,734 31/3/06 31/3/11 0.023634 0.0375 0.00 -
------------------------------------------------------------------------
23,264,422 388,471
Gary Brukardt W 2,117,758 13/3/06 13/3/11 0.071 0.0375 0.0335 70,668
Stephen W 1,069,575 14/6/06 14/6/11 0.071 0.0375 0.0335 35,691
McMurray
Eugene RS 3,000,156 31/3/06 31/3/11 0.071 0.0375 0.0335 100,505
Bauer
------------------------------------------------------------------------
Total 66,136,241 2,549,469
========================================================================
Joel Kanter and Lord Leonard Steinberg have stated that, as a result of this incentive
programme, they will exercise warrants at the reduced exercise price of $0.0375
to an aggregate value of US$150,000 each. The remaining directors (the "Independent
Directors") have decided not to exercise their warrants as a result of the Programme
so that they are able to remain independent in their assessment of whether the
Transaction is in the interest of all shareholders of the Company.
In view of the interests and intended exercise of warrants at the reduced price
by Joel Kanter and Lord Leonard Steinberg, this Transaction is deemed to be a related
party transaction under the AIM rules and therefore Joel Kanter and Lord Leonard
Steinberg are precluded, in accordance with the AIM rules, from expressing an opinion
that the Transaction is fair and reasonable insofar as the shareholders are concerned.
The Independent Directors consider, having consulted with Blomfield Corporate
Finance Limited, the Company's nominated adviser, that the terms of the Transaction are
fair and reasonable insofar as the Company's shareholders are concerned.
The Independent Directors make this assessment based on the rationale for the
Programme and in particular the Company's cash flow requirements, the
current share price and lack of availability at this time of alternative viable
short-term fund-raising methods especially given the current economic climate.
The Company anticipates that the exercise of warrants between this announcement
and 30 January 2009 will have a positive impact on the Company, both in terms of cash
flow and in reducing the total number of outstanding warrants.
Warrant holders will be required to execute certain documents and make certain
representations in order to participate in the warrant repricing program.
Further details regarding the program and the procedures to exercise the
warrants have been posted to Warrant Holders and are also available on the
Company's website (www.medgenics.com).
On 13 November 2008, 18,271,007 Common Shares which are no longer subject to
restrictions on transfer under the US Securities Act began trading under the
ISIN US58436Q1040 and the TIDM (ticker) MEDU. These unrestricted securities may
generally be sold to any purchaser, regardless of their nationality and is
capable of being held and transferred within CREST.
The Company is pleased to announce that, further to the announcement on 12
November 2008, the application for these shares Common Shares to be settled
within CREST was formally submitted to Euroclear on 9 December 2008 and CREST
settlement is expected to be enabled on Thursday 18 December 2008.
The Common Shares will not themselves be admitted to CREST but, instead, a
depository service provider approved by the Company will issue depository
interests ("DIs") representing the underlying unrestricted Common Shares, which
will be transferred to the DI provider and held on trust for the holders of
the DIs. The DIs themselves are independent securities constituted under
English law, which may be held and transferred within the CREST system. CREST
is a voluntary system and holders of unrestricted Common Shares who wish to
retain share certificates shall be able to do so.
For further information, contact:
Medgenics, Inc. Phone: +972 4 902 8900
Dr. Andrew L. Pearlman
Grayling Global (Financial PR, UK) Phone: +44 207 255 5406
Jonathan Shillington jonathan.shillington@uk.grayling.com
Alistair Scott
Blomfield Corporate Finance Limited (Nominated Adviser) Phone: +44 207 489 4500
James Pinner
Alan MacKenzie
SVS Securities plc (Broker) Phone: +44 207 638 5600
Peter Manfield
Ian Callaway
United States contacts:
Grayling Global (Investor Relations) Phone: +1 646 284 8472
Leslie Wolf-Creutzfeldt lwolf-creutzfeldt@hfgcg.com
Grayling Global (Media Relations) Phone: +1 646 284 9455
Ivette Almeida ialmeida@hfgcg.com
NOTES TO EDITORS:
Medgenics, Inc. is a clinical-stage biopharmaceutical company developing its
unique tissue-based Biopump platform technology to provide sustained-action
protein therapy for the treatment of a range of chronic diseases.
Medgenics currently has two products in development based on this technology:
* EPODURE - producing erythropoietin (EPO) to treat anemia
* INFRADURE - producing interferon-alpha (IFN-a) to treat hepatitis C
The Company has demonstrated proof of principle of the Biopump treatment
procedure in a clinical trial using a short-acting version of EPODURE in anemic
subjects. The Company announced positive initial results in its Phase I/II
clinical trial for its long-acting version of EPODURE, designed to produce and
deliver a therapeutic dose of EPO steadily for three to six months or more,
which commenced in August 2008. The Company plans to follow with a clinical
trial of INFRADURE in 2009.
Medgenics intends to develop its innovative products and bring them to market
via multiple strategic partnerships with major pharmaceutical and/or medical
device companies, starting with EPODURE and INFRADURE.
Beyond these, Medgenics plans to develop and/or out-license a pipeline of future
Biopump products targeting the large and rapidly growing global protein therapy
market, which is forecast to reach US $87 billion by 2010. Other potential areas
include multiple sclerosis (interferon-a), haemophilia (Factor XIII), paediatric
growth hormone deficiency (human growth hormone) and diabetes (insulin).
Founded in 2000, Medgenics is a US-incorporated company with major operations in
Misgav, Israel. Medgenics was admitted to AIM in December 2007 and currently
trades under two separate lines on the AIM market; the Reg.S restricted
securities trade under the TIDM (AIM: MEDG) and the unrestricted securities
trade under the TIDM (AIM:MEDU).
www.medgenics.com
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements, which include all statements
other than statements of historical fact, including (without limitation) those
regarding the Company's financial position, business strategy, plans and
objectives of management for future operations. These statements relate to
future events, prospects, developments and strategies. Forward-looking
statements are sometimes identified by their use of the terms and phrases such
as "estimate," "project," "intend," "forecast," "anticipate," "plan," "planning,
"expect," "believe," "will," "will likely," "should," "could," "would," "may" or
the negative of such terms and other comparable terminology. All such forward-
looking statements are based on current expectations and are subject to risks
and uncertainties. Should any of these risks or uncertainties materialize, or
should any of the Company's assumptions prove incorrect, actual results may
differ materially from those included within these forward-looking statements.
Accordingly, no undue reliance should be placed on these forward-looking
statements, which speak only as of the date made. The Company expressly
disclaims any obligation or undertaking to disseminate any updates or revisions
to any forward-looking statements contained herein to reflect any change in the
Company's expectations with regard thereto or any change in events, conditions
or circumstances on which any such statements are based. As a result of these
factors, the events described in the forward-looking statements contained in
this release may not occur.
-END-
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