NuGen Announces Revised Terms of Proposed Private Placement of up to $10 Million Secured Convertible Debentures

Rhea-AI Summary

NuGen Medical Devices (TSXV: NGMD) has revised the terms of its proposed $10 million private placement of secured convertible debentures. Key changes include:

1. Conversion price adjusted from $0.075 to $0.10 per Unit
2. Warrant exercise price revised from $0.12 to $0.10
3. 12% annual interest rate, payable at 5-year maturity
4. Secured by first-ranking security interest in company assets
5. Proceeds for working capital, production expansion, and order fulfillment

Sol-Millennium and Nature Health may become new Control Persons, requiring shareholder approval. They will have the right to replace three board members upon closing. The offering is subject to regulatory approvals and a four-month hold period.

Positive

• Potential to raise up to $10 million in capital
• Proceeds to be used for working capital and expansion of production
• Secured financing with first-ranking security interest
• Potential for strategic investors (Sol-Millennium and Nature Health) to become major shareholders

Negative

• Dilution of existing shareholders due to potential conversion of debentures
• Higher conversion price may reduce investor interest
• Creation of new Control Persons may alter company direction
• Significant change in board composition with three new members to be appointed by investors

Toronto, Ontario--(Newsfile Corp. - August 15, 2024) - NuGen Medical Devices Inc. (TSXV: NGMD) (the "Company" or "NuGen") a leading developer of needle-free devices to administer therapeutics subcutaneously, announces that price protection has expired for its proposed non-brokered private placement (the "Offering") of up to $10,000,000 principal amount secured convertible debentures (the "Convertible Debentures") announced on July 10, 2024. As such, the Company has revised the terms of the Offering and adjusted the conversion price of the Convertible Debentures from $0.075 to $0.10 per Unit (as defined below). The exercise price of the warrants forming part of the Units has been revised from $0.12 to $0.10 per warrant.

The Convertible Debentures shall mature on the date that is five (5) years from the closing of the Offering (the "Maturity Date") and shall bear interest at a rate of 12% per annum payable on the Maturity Date in arrears. The Convertible Debentures will be secured by a first ranking security interest in all of the present and after-acquired property and assets of the Company pursuant to a general security agreement which shall include standard default conditions customary for a transaction of this nature.

The Company intends to use the proceeds from the Offering for working capital purposes, expansion of production and fulfillment of increasing sale purchase orders globally.

At any time prior to the close of business on the last business day immediately preceding the Maturity Date, the holder shall have the right, at the holder's option, to convert all or a portion of the outstanding principal amount of the Convertible Debentures into units of the Company (the "Units") at a price of $0.10 per Unit. Each Unit shall be comprised of one common share in the capital of the Company (each, a "Common Share") and one Common Share purchase warrant exercisable at a price of $0.10 per Common Share for a period of five years from the closing of the Offering.

The issuance of the Convertible Debentures pursuant to the Offering will be (and, if applicable, the issuance of the underlying Units upon conversion of the Convertible Debentures shall be) completed on a private placement and prospectus exempt basis.

Closing of the Offering is subject to receipt of all necessary corporate and regulatory approvals, including the approval of TSX Venture Exchange (the "TSXV"). All securities issued in connection with the Offering will be subject to a hold period of four months plus a day from the date of issuance and the resale rules of applicable securities legislation.

It is anticipated that Sol-Millennium Medical HK Limited ("Sol-Millennium") and Nature Health Development (Hong Kong) Co., Limited ("Nature Health") will purchase such number of Convertible Debentures in the offering that, if and when converted into Units, would result in Sol-M and/or Nature Health each holding greater than 20% of the then issued and outstanding Common Shares thereby making Sol-M and/or Nature Health new Control Persons (as defined in the policies of the TSXV) of the Company under applicable securities laws. Pursuant to the policies of the TSXV, the creation of a new Control Person of the Company requires shareholder approval. Consequently, the Company intends to obtain shareholder approval at a special shareholder meeting to be called subsequent to the annual and special meeting to be held on August 20, 2024.

In addition upon closing of the Offering, Sol-Millennium and Nature Health will jointly have the right to replace three (3) members of the board of directors of the Company, including the chairman of the board, with its nominees.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

About NuGen

NuGen is a leading developer of needle-free devices to administer therapeutics subcutaneously. The Company is marketing and selling its next-generation InsuJet™ needle-free injection system designed to improve the lives of millions of diabetics. InsuJet™ is approved for sale in 42 countries around the world.

About Sol-Millennium

Sol-Millennium is one of the world's largest manufacturers of needles and syringes. It is vertically integrated with locations across the globe. Sol-Millennium's innovative technology helps positive patient outcomes, saves on medication, and enhances both clinician and patient experience. With an international sales team dedicated to delivering knowledge and outstanding customer service, Sol-Millennium's goal is to partner with those in healthcare, focusing on a healthier tomorrow.

About Nature Health

Nature Health and its affiliates are involved in the development, manufacturing, and sales of medical consumables, including wound care, surgical products, and infection prevention solutions. Products are sold and distributed globally through the company's hospitals, pharmacies, and e-commerce platforms.

For further information, please visit:

Websites: www.insujet.com, www.nugenmd.com, www.solm.com, and www.solm.com/insujet/

Instagram: @NuGenMD

Twitter: @NuGenMD

LinkedIn: https://www.linkedin.com/company/nugenmd/
and www.linkedin.com/company/sol-millennium-medical-group/

For further information, please contact:

Tony Di Benedetto
Executive Chairman
(416) 791-9399
tony@nugenmd.com

Ian Heynen
CEO
(416) 560-1019
ian@nugenmd.com

To arrange a media interview with NuGen, please contact:

Morna Gorman
(416) 553-1732
morna@nugenmd.com

Notice Regarding Forward-Looking Information:

Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accept responsibility for the adequacy or accuracy of this release.

This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. The forward-looking information contained herein is given as of the date hereof and the Company assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/220071

FAQ

What are the revised terms of NuGen's (NGMDF) convertible debenture offering?

NuGen has revised the conversion price to $0.10 per Unit (from $0.075) and adjusted the warrant exercise price to $0.10 (from $0.12). The debentures will mature in 5 years and bear 12% annual interest.

How much is NuGen (NGMDF) aiming to raise through this private placement?

NuGen is proposing a non-brokered private placement of up to $10,000,000 principal amount secured convertible debentures.

What will NuGen (NGMDF) use the proceeds from this offering for?

NuGen intends to use the proceeds for working capital purposes, expansion of production, and fulfillment of increasing sale purchase orders globally.

Who are the potential new Control Persons of NuGen (NGMDF) mentioned in the announcement?

Sol-Millennium Medical HK and Nature Health Development (Hong Kong) Co., may become new Control Persons of NuGen, subject to shareholder approval.