Medgenics, Inc. Announces Significant Shareholders Update

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

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.