Imagin Medical Acquires enCAGE Coil Precision Ablation System for Prostate Cancer

Imagin Medical Inc., a urologic oncology company, announces:

1.    the acquisition of the enCAGE Coil™ Precision Ablation System for Prostate Cancer from TROD Medical NV, a Belgian company,

2.    further to its press release of August 26, 2021, the closing of the previously announced convertible note, and

3.    the opening of a new $7.25M Convertible Note to support the above-mentioned acquisition and the product’s development.

Prostate ablation is a procedure used to treat prostate cancer. During a prostate ablation procedure, energy (such as heat, cold, lasers, or chemicals) is used to kill the cancer cells. The energy may also destroy some of the surrounding normal prostate tissue.

The enCAGE Coil device is a disposable focal therapy precision ablation device for prostate cancer that delivers bipolar radiofrequency energy through a distinctive “coil” electrode during a minimally invasive office-based procedure. The system allows the surgeon to pre-set precise ablation margins to target only the cancerous tissue, addressing the limitations of other forms of thermal ablation technologies for prostate cancer that risk damaging adjacent structures e.g., the erectile nerves that control urinary and sexual function.

The device has FDA 510(k) approval and has been used in 51 patients, including 20 patients who participated in a Phase II Trial, with results published in The Journal of Urology, April 2021. Dr. Clement Orczyk, Lead of Prostate Cancer Focal Therapy Program, UCL Hospitals in London, England, an Investigator for the trial and first author of the publication, commented “this technology is the most versatile and promising of the many I’ve evaluated for performing focal therapy of prostate cancer with accuracy and safety”. Imagin will be refining the device based on this experience for commercialization.

By acquiring the enCAGE Coil, Imagin is strengthening its position as a urologic oncology company and expanding its portfolio of products to address prostate cancer. With close to 250,000 new cases diagnosed each year, prostate cancer is the most prevalent cancer among men after skin cancer and the second leading cause of cancer deaths among men. The enCAGE Coil™ device joins Imagin’s lead product, the i/Blue™ Imaging System for bladder cancer, building out a best-in-class pipeline for the diagnosis and treatment of urologic cancers. “As a Urologist who has cared for patients with cancer over a 25-year career as a Professor and Urological Oncologic surgeon, I have a deep knowledge of the field and of the needs of patients with prostate and bladder cancer,” said Dr. Kevin Slawin, Chairman of the Board of Imagin. “Our growing focus on bringing best-in-class technologies to patients in an outpatient setting is the culmination of my thoughts over my career as a leader in the field of Urologic Oncology on how to best care for these patients.”

The aggregate cost to acquire the enCAGE Coil is US$2,500,000; which will be paid over time as certain developmental milestones are met.

1. The initial payment, on closing, will be US$350,000 and US$150,000 of Imagin shares (based on a 10-day average price as of the date of closing). Of this, US$200,000 and all of the shares will be held in escrow pending transfer of all intellectual property to Imagin.
2. The first milestone payment of US$500,000 will be made upon receipt of FDA 510(k) approval to the next trial phase or modification, through the payment of cash or issuance of Imagin shares, at Imagin’s election.
3. The second milestone payment of US$1,000,000 will be made upon receipt of FDA de novo approval, through the payment of cash or issuance of Imagin shares, at Imagin’s election.
4. The third milestone payment of US$250,000 will be made upon achieving sales of 1,000 BPH (Benign Prostate Hyperplasia) cases following 510(k) approval, through the payment of cash or issuance of Imagin shares, at Imagin’s election.
5. The fourth and final milestone payment of US$250,000 will be made upon achieving sales of 500 BPH (Benign Prostate Hyperplasia) cases following de novo approval, through the payment of cash or issuance of Imagin shares, at Imagin’s election.

All share issuances will be based on a 10 day average price as of the time of issuance.

Concurrent with this acquisition, Imagin has opened a new convertible note offering totaling US $7.25 million to support the clinical development of the enCAGE Coil™ technology. The Convertible Note is being led by Rapha Capital BioVentures Fund I, LP (RCBVFI), managed by Rapha Capital and Dr. Slawin, M.D., and Bigger Capital, and has the following terms:

1. The principal will be advanced in multiple tranches with an initial tranche of US$750,000 upon closing, followed by multiple tranches for the remaining US$6.5 million.
2. The principal will bear interest at the rate of 10% per annum, payable on maturity or conversion.
3. The principal and interest will be fully secured against the assets of the Company.
4. The note will mature 24 months following the date of issue, unless earlier repurchased or converted.
5. The principal and interest will automatically convert into common shares of the Company (“Shares”) at US$0.40 per Share, upon Imagin completing an equity financing of at least US$2 million.
6. Note purchasers will receive an aggregate 50,750,000 warrants (2.8X coverage) to acquire Shares of Imagin, exercisable at US $0.40 per Share for five years from the date of issue.

“We are excited to add the enCAGE Coil to Imagin’s portfolio as we build our pipeline of products,” said Jim Hutchens, President and CEO of Imagin. “This additional funding will support on-going product development and the Company’s progress in bringing our products through the FDA approval process.”

All securities issued in connection with the offering will be subject to a statutory hold period of four months plus one day from the date of issuance in accordance with applicable securities legislation

The Company’s lead product, the i/Blue™ Imaging System, uses state of the art technology that improves the utility of blue light imaging for visualizing bladder cancer. The i/Blue System contains a patented dual-view camera head that uses sophisticated optical filters to split the image into white light and blue light channels to display simultaneous, side-by-side white and blue light images on the monitor in real time without the need to toggle between the two images. The i/Blue System is designed to work with most endoscopes on the market, providing a more practical, cost-effective device that will make blue light cystoscopy more accessible to hospitals and patients.

The enCAGE Coil™ is a disposable focal therapy precision ablation device for prostate cancer that delivers bipolar radiofrequency energy through a distinctive coil electrode during minimally invasive office-based surgery. The system allows precise pre-set targeting of the cancer, avoiding total removal of the prostate and damage to the adjacent erectile nerves. The enCAGE coil addresses the limitations of other forms of prostate cancer treatment, including surgery, radiation and current focal therapy technologies, that lack the ability to precisely target only the cancer cells, risking damage to the remainder of the prostate and surrounding erectile nerves that can cause impaired urinary and sexual function.