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Medgenics Inc (MEDG)

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Monday 03 March, 2014

Medgenics Inc

Proposed Cancellation Admission to Trading on AIM

RNS Number : 3130B
Medgenics Inc
03 March 2014
 



                                                                    

 

 

 

Press Release

3 March 2014

 

Medgenics, Inc. Announces Proposed Cancellation of

Admission to Trading on AIM

 

Medgenics, Inc. (NYSE MKT: MDGN and AIM: MEDU, MEDG) (the Company), the developer of Biopump(TM) a novel technology for the sustained production and delivery of therapeutic proteins in patients using ex-vivo gene therapy and their own tissue for the treatment of rare and orphan diseases, today announced that it has filed preliminary proxy materials with the U.S. Securities and Exchange Commission (SEC) in connection with the Company's Annual Meeting of Stockholders on 8 April 2014, which, among other proposals, seeks stockholder approval for the cancellation of the admission of its common stock for trading on the London Stock Exchange's Alternative Investment Market (AIM).  If stockholders approve the cancellation of admission to trading on AIM, it is anticipated that the last day of trading on AIM will be 15 April 2014, and the effective date of cancellation will be 16 April 2014.

Background

The Company's shares of common stock have been admitted to trading on AIM, since December 2007. Unlike certain other U.S. and foreign exchanges, the AIM Rules for Companies do not require companies to maintain a minimum number of publicly traded shares outstanding at any given time, nor do they require companies to maintain a minimum market capitalization. The Company sought admission to the public market during the early stages of its development by listing shares of its common stock on AIM. In April 2011, the Company completed the initial public offering of its common stock in the United States. At that time, the Company's common stock also became listed on the NYSE MKT (previously known as the NYSE Amex). The Company's Board of Directors unanimously considers the cancellation of admission of its common stock to trading on AIM to be in the best interests of the Company and its stockholders as a whole.

 

Reasons for the Cancellation of Admission to AIM

The Company's Board of Directors has identified the following reasons for the proposed cancellation, which it considers to be in the long-term best interests of the Company:

 

The high costs of maintaining the AIM listing. The Company estimates that the annual costs of maintaining a listing on AIM exceed $250,000, and these costs are in addition to the similarly high costs of U.S. securities regulatory and other requirements for maintaining a listing in the United States.

 

Trading on AIM has been limited. The trading of the Company's common stock on AIM has been very limited. A diminishing percentage of the total number of shares of the Company's outstanding common stock is listed on AIM, decreasing from 24% at the end of 2012 to 17% as of 21 February 2014. In addition, based upon information available to the Company, the trading volume of shares of the Company's common stock on AIM averaged less than 1,400 shares per day in 2013, compared to approximately 65,700 shares per day on the NYSE MKT. The Company believes that these numbers indicate that an effective market has not been created on AIM for the trading of its common stock.

 

The need to maintain appropriate liquidity of the Company's common stock. With the listing of the Company's common stock on the NYSE MKT, the Company's Board of Directors is concerned that there may not be enough liquidity for its common stock to support trading on two exchanges. The Board of Directors believes it is in the best interests of the Company and its stockholders to consolidate the trading of its common stock onto one exchange.

 

The operational and legal difficulties of being subject to two different regulatory regimes in two different countries, in order to maintain listings on both AIM and the NYSE MKT. The Company is required to comply with the regulatory, reporting and corporate governance requirements of two exchanges, whose requirements are sometimes different and/or conflicting. In addition, the Company's auditors are required to review its financial statements from the perspective of both the SEC and AIM, and the Company must make filings both with the SEC and on AIM relating to financial statements and other matters. The Board of Directors believes that it is in the best interests of the Company and its stockholders to remove the requirement of compliance with two different regulatory regimes, and that compliance with the requirements of the SEC and the NYSE MKT would continue to provide stockholders with appropriate protections with respect to regulatory, reporting and corporate governance matters.

 

The management time taken up with the AIM listing. The Company currently has a very small management team, and this small team is managing multiple programs both in the United States and outside the United States for the development and regulatory approval of the Company's Biopump Platform Technology. The ongoing regulatory requirements associated with the Company's securities listings in two countries are diverting management time and attention which could more usefully be deployed on Company operations.

 

Access to capital. The Company believes that accessing additional capital will likely be more efficient on a U.S. exchange, or through private offerings, than on AIM.

 

Effects of the Cancellation of Admission to AIM

If the proposal for cancellation of admission to AIM is approved by the Company's stockholders, the last day of trading of the Company's common stock on AIM is expected to be 15 April 2014, with the cancellation of admission to trading on AIM becoming effective from 7:00 a.m. (London time) on 16 April 2014. Following the cancellation, there will be no market facility in the United Kingdom for dealing in the Company's common stock or depository interests derived from its common stock. Stockholders and current holders of depository interests wishing to publicly trade their shares will need to do so through the NYSE MKT.

 

Following the cancellation of admission to AIM, the Company would continue to be subject to the SEC's reporting obligations, and the Company intends to maintain the listing of its common stock on the NYSE MKT. The Company intends to continue to keep stockholders informed of its financial and operational performance through the required filings with the SEC, as well as updates in press releases and on the Company's website at http://www.medgenics.com.

 

Following the cancellation of admission to AIM, all shares of the Company's common stock that are entered on the register maintained by Capita Registrars in Jersey will be placed on the Company's U.S. share register. In addition, the CREST depository interest facility will be terminated following cancellation of admission to trading on AIM; the shares held in such facility will be withdrawn, re-materialised and placed on the Company's U.S. share register; and the ISIN for the securities previously held in the CREST system will be disabled and expire. Either Capita Registrars or Corporate Stock Transfer, the Company's U.S. transfer agent and registrar, will send out transmittal letters to all stockholders whose shares were previously entered on the share register maintained by Capita Registrars and all holders of depository interests in CREST providing them with further information regarding the transfer of their shares to the Company's U.S. share register.

 

Vote Required

The AIM Rules for Companies provide that the affirmative vote at a general meeting of the company of at least 75% of the votes cast will be required for approval of the cancellation. Accordingly, assuming a quorum is present, the approval of the cancellation of the admission of the Company's common stock to trading on AIM requires the affirmative vote of at least 75% of the votes cast, in person or by proxy, at the annual meeting. Abstentions will have no effect on this proposal, but will be counted when determining whether there is a quorum present at the Annual Meeting of Stockholders.

Expected timetable of principal events

Filing of preliminary proxy materials with the SEC                             29 February 2014

Mailing of definitive proxy materials to                                                11 March 2014

stockholders of record

 

Annual Meeting of Stockholders of Medgenics, Inc.                           8 April 2014

 

Last day of dealings of shares of AIM and in CREST                        15 April 2014

 

Proposed cancellation of admission to trading on AIM                      16 April 2014

 

 

 

Each of the times and dates in the above timetable is subject to change. If any of the above times and/or dates change, the revised times and dates will be notified to the Company's stockholders by an announcement through a regulatory information service.

 

Additional Information

This press release is not a solicitation of stockholders or their votes with respect to any of the proposals contained in the preliminary proxy materials. Medgenics, Inc. urges investors to review the proxy statement and other information filed with the SEC because they contain important information regarding the matters to be voted on at the annual meeting. These documents are available without charge on the SEC website at www.sec.gov. A free copy of the preliminary proxy statement may also be obtained on the Company's website at www.medgenics.com.

This announcement is being made pursuant to the London Stock Exchange's AIM Rules for Companies admitted to trading on the AIM market.

 

About Medgenics

Medgenics is developing and commercializing Biopump™, a proprietary platform for the sustained production and delivery of therapeutic proteins using ex-vivo gene therapy and the patient's own tissue for the treatment of orphan and rare diseases.  For more information, visit the Company's website at www.medgenics.com

 

Forward-looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and as that term is defined in the Private Securities Litigation Reform Act of 1995, which include all statements other than statements of historical fact, including (without limitation) those regarding the Company's financial position, its development and business strategy, its product candidates and the plans and objectives of management for future operations. The Company intends that such forward-looking statements be subject to the safe harbors created by such laws. 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.

 

For further information, contact:

Medgenics, Inc.

John Leaman, CFO

[email protected]

 


Abchurch Communications

Joanne Shears / Jamie Hooper / Harriet Rae

[email protected]

 

Phone: +44 207 398 7718

Oriel Securities (NOMAD & Broker)

Jonathan Senior / Giles Balleny

 

Phone: +44 207 710 7617


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This information is provided by RNS
The company news service from the London Stock Exchange
 
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