Medgenics, Inc. Announces Significant Shareholders Update

MISGAV, ISRAEL and VIENNA, VA--(Marketwire - May 04, 2011) -

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Medgenics

Medgenics, Inc. (NYSE Amex: MDGN) (NYSE Amex: MDGN.W) (AIM: MEDG) (AIM: MEDU), the company that has developed a novel technology for the sustained manufacture and delivery of therapeutic proteins continuously in patients using their own tissue, reports an update to the interests of the significant shareholders and the directors of the Company and their related parties in the common shares of par value U.S. $0.0001 each in the Company ("Common Shares"), calculated with reference to the AIM Rules for Companies. This update follows the following previously announced events: (i) the Company's 1-for-35 reverse stock-split; (ii) the Company's U.S. initial public offering (the "U.S. IPO") and the resultant issue of new Common Shares; (iii) the automatic conversion of $570,000 of outstanding debentures issued in 2009 (the "2009 Debentures") pursuant the contractual terms of such debentures as a result of the consummation of the U.S. IPO; and (iv) the automatic conversion of $4,000,000 of outstanding debentures issued in 2010 (the "2010 Debentures") pursuant the contractual terms of such debentures as a result of the consummation of the U.S. IPO. The 2009 Debentures were converted at a conversion price of $2.724 per Common Share into an aggregate 209,656 Common Shares. In addition, pursuant its contractual obligations under the 2009 Debentures, the Company issued 5-year warrants to purchase 84,702 of Common Shares at an initial exercise price of $4.99 per share in connection with the conversion of the 2009 Debentures. The 2010 Debentures converted at a conversion price of $3.405 per Common Share into an aggregate 1,198,242 Common Shares.

On the closing date of the U.S. IPO (April 13, 2011), the following directors, related parties and significant shareholders were issued Company securities in connection with the conversion of the 2009 Debentures and the 2010 Debentures: (i) Joel S. Kanter, a director of the Company, and related parties (as determined by the AIM Rules for Companies) were issued 44,139 Common Shares, together with 15,450 warrants (at an exercise price of $4.99 per Common Share), upon conversion of $120,000 of the 2009 Debentures and 74,890 Common Shares upon conversion of $250,000 of the 2010 Debentures; and (ii) Stephen D. McMurray, a director of the Company, was issued 1,840 Common Shares upon conversion of the 2009 Debentures, together with 644 warrants, upon conversion of $5,000 of the 2009 Debentures.

Taking the above events into account and including the partial over allotment taken up as announced yesterday, May 3, 2011, the Company now has a total of 9,551,567 Common Shares in issue, of which 3,122,138 (32.7%) Common Shares are not in public hands as defined by the AIM Rules for Companies. The interests of the significant shareholders and the directors of the Company and their related parties (as determined by the AIM Rules for Companies) are as follows:

                      % of
                      Issued                                         % of
                      Share                                          Issued
              Common  Capi- Instru-           Expiry  Exercise Total  Share
Name          Shares  tal   ment    Number    Date    Price    inter- Capi-
                                                               est    tal
The Executors 606,544      Warrant    32,742 31/05/2012 $5.37
 of Lord                   Warrant    21,828 04/12/2012 $5.37
 Leonard
 Steinberg's               Warrant    23,784 04/12/2012 $5.65
 estate &                  Warrant    12,857 30/01/2012 $8.75
 Steinberg                 Warrant    21,885 04/12/2016 $4.99
 family
             -------------------------------------------------------------
Total          606,554  6.4%         113,096                  719,650  7.5%


River        1,644,053     Warrant   230,359 22/09/2015 $4.54
 Charitable
 Remainder                 Warrant 1,000,000 06/04/2016 $6.00
 Unitrust
 f/b/o Isaac
 Blech
             -------------------------------------------------------------
Total        1,644,053 17.2%       1,230,357                2,874,410 30.1%


CIBC Trust     349,388     Warrant    10,714 22/09/2015 $4.54
 Company                   Warrant    12,857 30/01/2012 $8.75
 (Bahamas)                 Warrant     5,150 04/12/2016 $4.99
 Limited
 as Trustee
 of T-555(1)
             -------------------------------------------------------------
Total          349,388  3.7%          28,721                  378,109  4.0%


Platinum       205,434     Warrant    45,839 13/08/2012 $5.37
 Montaur Life              Warrant    45,839 04/12/2012 $5.37
 Sciences I
 LLC
             -------------------------------------------------------------
Total          205,434  2.2%          91,678                  297,112  3.1%




Eugene A.      190,418     Option     82,327 13/11/2012 $7.35
 Bauer                     Option     28,571 13/09/2020 $8.19
(Director)
             -------------------------------------------------------------
Total          190,418  2.0%         110,898                  301,316  3.2%


Chicago        636,975     Warrant     5,357 22/09/2015 $4.54
 Investments,              Warrant     8,352 12/04/2016 $4.99
 Inc.(1)
             -------------------------------------------------------------
Total          636,975  6.7%          13,709                  650,684  6.8%


Stephen D.      72,835     Warrant       644 12/04/2016 $4.99
 McMurray                  Options    33,052 14/11/2012 $7.35
(Director)                 Options    28,571 13/09/2020 $7.35
                           Options    12,857 05/01/2021 $6.55
             -------------------------------------------------------------
Total           72,835  0.8%          75,124                  147,959  1.5%


Joel S.      1,147,846     Warrants   15,450 04/12/2016 $4.99
 Kanter
(Director)
 & related                 Warrants   26,785 22/09/2015 $4.54
 interests(2)              Warrants   12,857 30/01/2012 $8.75
                           Warrants    2,754 13/02/2012 $8.75
                           Options    48,803 14/11/2012 $7.35
                           Options    28,571 13/09/2020 $8.19
                           Options    12,857 05/01/2021 $6.55
             -------------------------------------------------------------
Total        1,147,846 12.0%         148,077                1,295,923 13.6%


Andrew L.       35,375    Warrants   905,190 31/03/2016 $2.49
 Pearlman
(Director)                Warrants    35,922 31/03/2016 $0.0002
 & related                Options    182,806 31/03/2016 $2.49
 interests(1)             Options     91,403 14/11/2012 $7.35
             -------------------------------------------------------------
Total           35,375  0.4%       1,215,321                1,250,696 13.1%


Gary Brukardt
(Director)      31,611     Warrants   60,507 21/06/2011 $2.49
                           Options    45,701 18/09/2011 $2.49
                           Options    26,705 14/11/2012 $7.35
                           Options    28,571 13/09/2020 $8.19
                           Options    12,857 05/01/2021 $6.55
             -------------------------------------------------------------
Total           31,611  0.3%         174,341                  205,952  2.2%


Alastair Clemow
(Director)           -     Options    12,857 13/09/2020 $8.19
                           Options    12,857 05/01/2021 $6.55
             -------------------------------------------------------------
Total                -  0.0%          25,714                   25,714  0.3%


Notes
(1) For the purpose of the AIM Rules only also included within the
    interests of Joel Kanter (Director)
(2) Included within the interests of Joel Kanter are his interests in:
    i.   106,823 Common Shares held by the Kanter Family Foundation, an
         Illinois not-for-profit corporation of which Mr. Kanter is the
         President and is a Director;
    ii.  349,388 Common Shares held by CIBC Trust Company (Bahamas) Limited
         ("CIBC"). CIBC is the trustee of Settlement T-555 (the "CIBC
         Trust"). The CIBC Trust was established for the benefit of various
         descendants of (i) Helen and Henry Krakow, and (ii) Beatrice and
         Morris Kanter. Mr. Kanter is a discretionary beneficiary of the
         CIBC Trust. Sole voting and investment control of the Common
         Shares owned by the CIBC Trust is vested in CIBC as trustee of the
         CIBC Trust;
    iii. 636,975 Common Shares held by Chicago Investments, Inc. ("CII").
         CII is a majority-owned subsidiary of Chicago Holdings, Inc.
         ("CHI"). CHI is majority owned by various trusts (together the
         "Kanter Trusts") established for the benefit of various
         descendants of (i) Helen and Henry Krakow, and (ii) Beatrice and
         Morris Kanter. Joel Kanter is a discretionary beneficiary of some,
         but not all, of the Kanter Trusts. Sole voting and investment
         control of the Common Shares owned by CII is vested in Mr.
         Kanter's brother, Joshua Kanter, as President of CII; and
    iv.  6,870 Common Shares held by Chicago Private Investments, Inc
         ("CPI"). CPI is a wholly owned subsidiary of The Holding Company
         ("THC"). THC is owned by Kanter Trusts. Sole voting and investment
         control of the shares of the Company owned by CPI is vested in Mr.
         Kanter's brother, Joshua Kanter, as President of CPI.

    For the purposes of applicable U.S. securities laws and regulations,
    Mr. Kanter disclaims all beneficial and pecuniary interest to the
    Common Shares held by CII and CPI and the CIBC Trust. Such disclaimer
    does not affect Mr. Kanter's status as a discretionary beneficiary
    under the Kanter Trusts or the CIBC Trust.
(3) Including interests in 94 Common Shares held by family members and
    1,719 Common Shares held by ADP Holdings LLC, a company in which Dr.
    Pearlman is interested.