UXN, a KONEX-listed company that produces blood glucose meters, decided to repay part of the funds obtained from its largest shareholder, SD BIOSENSOR. UXN, which is preparing for a transfer to KOSDAQ, is in urgent need of funding ahead of the development of new products, but could not prevent the withdrawal of funds by the largest shareholder. However, after both parties, who were embroiled in legal disputes over this matter, reached an agreement, UXN's stock price somewhat rebounded.
According to the Financial Supervisory Service's electronic disclosure system on the 16th, UXN announced that some of the early redemption rights (put options) for the convertible bonds issued to its largest shareholder, SD BIOSENSOR, in October 2021 have been exercised. The amount corresponds to 621,118 shares (approximately 13.5 billion won).
To raise funds at that time, UXN issued bonds to SD BIOSENSOR, and the creditor demanded repayment before the bond's maturity date. As SD BIOSENSOR exercised the BW put option, the company's equity stake in UXN decreased from 33.03% to 25.22%. The two sides agreed not to request early redemption for the remaining BW quantity over the next three years.
Earlier, SD BIOSENSOR injected 40 billion won into UXN in September 2021. The injection included convertible redeemable preference shares (RCPS) for 1,022,495 shares (at 19,560 won each) and 828,157 shares (at 21,735 won each).
However, SD BIOSENSOR unexpectedly exercised the BW put option against UXN last year, and when UXN rejected it, a payment order lawsuit worth 19.6 billion won was filed.
From SD BIOSENSOR's perspective, it was a situation in which it needed to recover funds. After both the operating profit and net profit for 2023 turned to a deficit, the company continued to face operating losses until the third quarter of last year, leading to poor performance. Cash and cash equivalents held as of the third quarter of last year were 342.6 billion won, a decrease of about 30% compared to the same period last year (482.4 billion won). Before the lawsuit, UXN's stock price was hovering in the low 12,000 won range, below the price originally contracted.
In contrast, UXN has been in a state of total capital erosion since 2022, desperately needing investment to develop its platinum-based enzyme-free continuous glucose monitoring (CGM) device called 'AGMS.' It is also reported that SD BIOSENSOR had indicated that it would not exercise the BW put option in the future. Due to the shock from the lawsuit, UXN's stock price fell, reaching a one-year low of 7,940 won on Nov. 20.
Although conflicts appeared to continue, during the recent negotiation process, UXN and SD BIOSENSOR agreed to early repay 75% of the related BW and not to claim the remaining BW put option for the next three years. The price remains the same at 21,735 won per share.
In the case of RCPS, SD BIOSENSOR agreed to convert all into common stock at a 1:1 ratio. Although the current stock price is about 60% lower than the original contract price of 19,560 won per share, it is said that this agreement allows for a potential recovery in the stock price. Indeed, the stock price recorded 11,900 won on the 16th, recovering about 50% from the low point in November last year.
As the largest shareholder seeks to recover funds, UXN is expected to need additional funds to develop AGMS. However, UXN noted that it does not need additional funding immediately. A company official stated, "We had funds to continue development conservatively until the second half of 2026 even before the BW repayment," and added, "The financial structure has improved through the recent conversion of RCPS into common stocks, and we have secured some funds because we agreed not to exercise the put options for the remaining BW."
The transfer to KOSDAQ, which has been in progress since last year, will be implemented in earnest once product approval is received in 2026. A UXN official said, "We expect interest from corporations and investors to increase following the product approval, and we will proceed cautiously over time."