MEDGENICS CLOSES FIRST SERIES OF FUND RAISING
June 22 2009 - 7:29AM
UK Regulatory
TIDMMEDG
RNS Number : 2776U
Medgenics Inc
22 June 2009
Medgenics, Inc.
('Medgenics' or the 'Company')
Medgenics closes first series of fund raising
22 June 2009
The Board of Directors of Medgenics is pleased to announce that, pursuant to the
passing of resolutions proposed in the Company's 12 May 2009 request for Written
Consent to Stockholders and as anticipated in its announcement on 16 June 2009,
the Company has now closed the first series of the proposed fund raising. The
Company is, therefore, please to announce that it has raised US $265,000 in
gross proceeds through the issuance of new convertible debentures (the
"Debentures"). The Company is continuing the fund raising, seeking to raise up
to US $5 million, which amount may be increased up to aggregate US $7 million
upon the mutual agreement of the Board of Directors and the Company's lead
placement agent.
US $140,000 of the Debentures issued in this first series of the fund raising
was taken up by entities connected with Joel Kanter and by Lord Leonard
Steinberg, Directors of the Company.
The Debentures are not redeemable by the Company, are unsecured, mature on the
second anniversary of the date of issuance and accrue interest at a rate of 10%
per annum. In the event of default under the Debentures, the interest rate shall
increase 2% per month for every month the Debentures are in default to a maximum
of 18% per annum. According to the terms of the Debentures, they will
automatically convert into Common Shares, together with the issuance of a
significant amount of warrants to the Debenture holders upon conversion of the
Debentures, if the Company completes a qualified transaction, such as a public
offering of securities in the U.S. or certain merger or acquisition
transactions. Such warrants will be immediately exercisable upon issuance and
shall expire five years from the date of issuance. The exercise price under the
warrants shall be 110% of the pricing in the applicable qualified transaction.
On the assumptions that: the conversion price of the Debentures is US $0.07; the
full conversion of US $265,000 in principal amount of Debentures; no conversion
of accrued interest and issuance of 10% broker warrants as commission (the
"Assumptions"), the conversion in full of the Debentures will give rise to the
issuance of 3,785,714 new Common Shares, equivalent to approximately 3 per cent
of the outstanding Common Shares as enlarged by such issue. Based on the
Assumptions, the maximum number of Common Shares to be issued on exercise in
full of the warrants issued under these arrangements to investors will be
1,325,000 Common Shares, which would result in an additional US $102,025 in
proceeds to the Company upon payment of the exercise price. It should be noted,
however, that there can be no assurance that the actual conversion price will
not be less or greater than the assumed $0.07 conversion price or that the other
Assumptions will, ultimately, prove to be correct.
Commenting on the closing of the first series of fund raising, Dr. Andrew
Pearlman, CEO of Medgenics commented:
"We are very pleased to have continuing Stockholder support for this fund
raising process, as well as a new investor, and we now hope that, despite these
still difficult market conditions, we will be able to complete the rest of this
fund raising series. We believe completion of the fund raising will enable us to
pursue our ongoing Clinical Trial and to promote the success of the Company for
the benefit of its Stockholders in the long run and we look forward to
continuing to update Stockholders with new developments in the near future."
For further information, contact:
Medgenics, Inc. +972 4 902 8900
Dr. Andrew L. Pearlman
Blomfield Corporate Finance (Nominated adviser) +44 207 489 4500
James Pinner or
Alan MacKenzie
SVS Securities plc (Broker) +44 207 638 5600
Ian Callaway
Grayling Global +44 207 255 5406
Jonathan Shillington or
Alistair Scott
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's ongoing Phase I/II clinical trial for EPODURE in anemic patients
continues to demonstrate proof of concept of the Biopump. Designed to produce
and deliver a therapeutic dose of EPO steadily for up to six months or more,
EPODURE Biopumps are already maintaining effective anemia treatment for more
than seven months in earliest patients in the ongoing study, even with low dose
administered.
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.
Medgenics plans to raise the requisite funds during 2009 to enable it to follow
the current trial of EPODURE with a Phase IIb clinical trial in the US starting
in 2010, and in addition, to commence a Phase I/II trial of INFRADURE in
Hepatitis-C patients in Israel also during 2010.
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-ß), hemophilia (Factor VIII), pediatric
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 the London AIM in December 2007 (AIM:
MEDG and 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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