Hemostemix
Announces
a $2,500,000 Lead Order and its Clinical Trial and
Litigation Updates
Calgary, Alberta, April 12,
2021-- InvestorsHub NewHemostemix Inc. ("Hemostemix"
or the "Company")
(TSXV: HEM)
(OTC:
HMTXF) (FSE:2VFO.F) is pleased to announce that
it has secured a $2,500,000 lead order from a director for
Debenture Units, and intends to raise gross proceeds of up to
$4,000,000 from the non-brokered Offerings of Units and Debenture
Units, all as discussed below. The Company is progressing with
completion of the phase II clinical trial data entry, source
document verification, and statistical
analyses. The United States District
Court for the District of Delaware has ruled Hemostemix's
claims against
Aspire and Accudata, except Count VII
(fraud),
are permitted to proceed (motions to stay and motions to dismiss
denied)
and the Company's
preliminary injunction application was also
denied.
Accudata
and Aspire must now
answer the amended complaint by Monday, April 12,
2021.
CLINICAL TRIAL UPDATE
The last
subject of the trial who was originally scheduled
to complete
the remaining follow-up visit in March is now, due to COVID-19
impacts, scheduled to complete the follow-up visit in
mid-April. The 17 clinical trial sites have completed the data
entry of 84% of the clinical trial subjects. The
source document verification process is 20% complete and the
Company is in the process of contracting several additional
clinical
resource associates to complete the source document
verifications.
$1,000,000 NON-BROKERED PRIVATE PLACEMENT
Hemostemix
is pleased
to announce
a non-brokered private placement of units ("Units")
for gross proceeds of up to $1,000,000 (the "Unit
Offering"),
subject to TSX Venture Exchange (the "Exchange")
approval. The Unit Offering consists of the issuance of an
aggregate of up to 2,000,000 Units at a price of $0.50 per Unit.
Each Unit consists of one common share in the capital of the
Company ("Common
Share")
and one transferrable Common Share purchase warrant
("Warrant"),
with each full Warrant entitling the holder to acquire one Common
Share at a price of $0.55 per Common Share for a period of 24
months from the closing of the Unit Offering, subject to the
accelerated expiry provision described as follows. If on any 10
consecutive trading days occurring after four
months and one day has elapsed
following the closing date of the Unit Offering the
weighted-average trading price of the Common
Shares as quoted on the Exchange is
greater than $0.66 per Common Share, the Company may provide notice
in writing to the holders of the Warrants by issuance of
a press release that the expiry date of the Warrants will be
accelerated to the 30th day after the date on which the Company
issues such press release. The proceeds from the Unit Offering are
expected to pay finder fees payable in connection with the closing
($80,000), clinical trial costs accounts payable ($400,000) and
general working capital ($520,000). There is no minimum aggregate
subscription amount for the Unit Offering. The Company may pay
finders fees to eligible finders of up to 8%
cash and 8% Finder Warrants. Each Finder's Warrant may be exercised
to acquire a Unit of the Unit
Offering.
The Unit Offering
will be completed pursuant to certain exemptions from the
prospectus requirements under applicable securities laws. Subject
to acceptance by the Company, in addition to other available
exemption for the Unit Offering, the Unit Offering is open to all
existing shareholders of the Company in reliance upon the
prospectus exemption described in Alberta Securities Commission
Rule 45-516 "Prospectus
Exemptions For Retail Investors And Existing Security
Holders" and
set forth in the various corresponding blanket orders and rules in
certain jurisdictions of Canada (the "Existing
Shareholder Exemption"), subject to the terms and
conditions therein. The aggregate acquisition cost to a subscriber
under the Existing Shareholder Exemption cannot exceed $15,000
unless that subscriber has obtained advice from a registered
investment dealer regarding the suitability of the investment. The
Company has fixed April 08, 2021 as the record date for the purpose
of determining existing shareholders of the Company who are
entitled to participate in the Unit Offering pursuant to the
Existing Shareholder Exemption. Subscribers purchasing Units under
the Existing Shareholder Exemption will need to represent in
writing that they meet certain requirements of the Existing
Shareholder Exemption, including that on or before the record date,
they became a shareholder of the Company and that they continue to
be a shareholder of the Company. In accordance with the
requirements of the Existing Shareholder Exemption and Investment Dealer
Exemption, the Company confirms there is no material fact or
material change related to the Company which has not been generally
disclosed.
$3,000,000 UNSECURED CONVERTIBLE DEBENTURE (CONVERTIBLE AT THE
OPTION OF HEMOSTEMIX)
Hemostemix
is also pleased
to announce
it is also proceeding with a non-brokered private placement of up
to a maximum of $3,000,000 principal amount unsecured convertible
five year
debentures (the
"Debenture
Offering"), with conversion at the option
of Hemostemix, subject to Exchange approval.
The Debenture Offering consists of an aggregate of up to 3,000
debenture units (each, a "Debenture
Unit") at
a price of $1,000 per Debenture Unit. Each Debenture Unit consists
of a $1,000 principal amount debenture as described below (each, a
"Debenture")
and 2,000 Warrants, with each such Warrant having all the terms and
conditions as described above in the Unit Offering. The Company has
a $2,500,000 lead order for the Debenture Units from a Company
director (the "Director").
Each Debenture will
consist of $1,000 principal amount of unsecured, non-transferable
Debentures. The Debentures will mature five years from the closing
date (the "Maturity
Date") and will bear
interest ("Interest")
at a rate of 6% per annum, payable quarterly in arrears in cash or
shares at the option of the Company. The principal amount of the
Debentures may be convertible, only at the option of the Company
(and not at the option of the holder), into Common Shares of the
Company ("Debenture
Shares") at a price of
$0.50 per Common Share (the "Conversion
Price"). At the election
of the Company, any accrued and unpaid Interest may be converted
into Common Shares of the Company at a conversion price equal to
the Market Price (as such term is defined in the Polices of the
Exchange at the time of such conversion) but not less than the
Conversion Price of the Debenture.
The net proceeds of
the Debenture Offering will be used to fund litigation
expenses of HEM. The first $2.5MM will be used as follows:
(i) up to $0.6MM will
be immediately available to HEM as reimbursement for past
litigation expenses; and (ii) until required by the Company for
litigation expenses, USD $1.5MM (approximately CDN$1.9MM) will be
invested in a demand loan ("Loan")
to an
arms length US company. The balance of the Debenture Offering will
be available for past or potential future litigation expenses. Any
amounts raised in excess of $2.5MM will be immediately available to
HEM as reimbursement for past litigation expenses. The Loan will
have the following key features: i) Term of 2 years;
ii) Payable on demand, in whole or in part, on 30 days notice; iii)
Interest at 8% per annum to be paid monthly; iv) Pre-payable, in
whole or in part, without penalty; v) Immediately puttable, in
whole or in part, for cash to cover upcoming litigation expenses,
at face value, to an entity controlled by the Director; and vi)
immediately assignable in whole or in part, at face value, to the
Director as payment against such Director's investment in the
Debenture Offering.
OTHER INFORMATION IN RESPECT OF THE UNIT OFFERING AND DEBENTURE
OFFERING
The closings of the
Unit Offering and the Debenture Offering (collectively, the
"Offerings")
are subject to a number of conditions, including receipt of all
necessary corporate and regulatory approvals, including Exchange
acceptance. As
such, there is no assurance that the Company will complete the
Offerings as described above or at all. It is anticipated that the
Offerings will be completed pursuant to certain exemptions from the
prospectus requirement under applicable securities laws. The
Offerings may be closed in one or more tranches. All of the Units
and Debenture Units issued pursuant to the Offerings, and any
securities into which they may be exchanged or converted, are
subject to resale restrictions imposed by applicable law or
regulation, including a statutory hold period expiring four months
and a day from the closing dates of the Offerings.
It is not
anticipated that any new insiders will be created, nor that any
change of control will occur, as a result of the
Offerings. Any participation by insiders of the Company in the
Offerings will be on the same terms as arm's length investors.
Depending on market conditions, the gross proceeds of
the Offerings could be increased or decreased. None of the
securities issued in connection with the Offerings will be
registered under the United
States Securities Act of 1933, as amended (the
"1933
Act"), and none of them
may be offered or sold in the United States absent registration or
an applicable exemption from the registration requirements of the
1933 Act. This press release shall not constitute an offer to sell
or a solicitation of an offer to buy nor shall there be any sale of
the securities in any state where such offer, solicitation, or sale
would be unlawful. The participation of
the Director or any other directors or officers of the Company in
the Offerings will constitute a "related party transaction" within
the meaning of Multilateral Instrument 61-101 -
Protection of Minority Security Holders in Special Transactions
("MI
61-101") and the policies
of the Exchange. For such
participation, the Company will be relying upon exemptions from
the formal valuation and
minority shareholder approval requirements pursuant to sections
5.5(b) and 5.7(1)(a), respectively, of MI 61-101 on the basis that
the Company is not listed on a specified stock exchange and,
that at the time the Offerings are agreed to, neither the fair
market value of the subject matter of, nor the fair
market
value of the consideration for, the transaction insofar as it
involves an interested party (within the meaning of MI
61-101) in the Offerings,
will exceed 25% of the Company's market capitalization calculated
in accordance with MI 61-101.
LITIGATION UPDATE
On March 30, 2021, the United
States District Court for the District of Delaware has denied
Aspire Health Sciences, LLC's (Aspire) Motion to Dismiss except as
to Count VII (fraud), and denied Accudata Solutions Inc.'s
(Accudata) Motion to Dismiss in its
entirety. The Court also denied Aspire's and Accudata's Motions to Stay, thereby
allowing all claims against Aspire and Accudata, except Count VII, to proceed
without further delay The
Court further
denied the Company's preliminary injunction
application. Accudata and Aspire must now answer the
amended complaint by Monday, April 12, 2021.
ABOUT HEMOSTEMIX
Hemostemix is a publicly traded autologous
stem cell therapy company. A winner of the World Economic Forum
Technology Pioneer Award, the Company developed and is
commercializing its lead product ACP-01 for the treatment of CLI,
PAD, Angina, Ischemic Cardiomyopathy, Dilated Cardiomyopathy and
other conditions of ischemia. ACP-01 has been used to treat over
300 patients, and it is the subject of a randomized,
placebo-controlled, double blind trial of its safety and efficacy
in patients with advanced critical limb ischemia who have exhausted
all other options to save their limb from amputation.
On
October 21, 2019, the Company announced the
results from its Phase II CLI trial abstract entitled "Autologous
Stem Cell Treatment for CLI Patients with No Revascularization
Options: An Update of the Hemostemix ACP-01 Trial With 4.5
Year Followup" which noted healing of ulcers
and resolution of ischemic rest pain occurred in 83% of patients,
with outcomes maintained for up to 4.5 years.
The Company owns 91
patents across five patent families titled: Regulating Stem Cells,
In Vitro Techniques for use with Stem Cells, Production from Blood
of Cells of Neural Lineage, and Automated Cell Therapy. For more
information, please visit www.hemostemix.com.
Contact: Thomas Smeenk, President, CEO
& Co-Founder
TSmeenk@Hemostemix.com
905-580-4170
Neither the TSX Venture Exchange nor its Regulation Service
Provider (as that term is defined under the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward-Looking Information: This
news release contains "forward-looking information" within the
meaning of applicable Canadian securities legislation. All
statements, other than statements of historical fact, included
herein are forward-looking information. In
particular, this news
release contains
forward-looking information in relation to: the completion of the
follow-up for Hemostemix's
ACP-01
clinical trial and the source document verification process; the
Offerings including the size of the Offerings, the potential lead
order for the Debenture Offering, potential insider participation
in the Offerings, the use of proceeds of the Offerings, the closing
of the Offerings, the potential exemptions used for the Offerings,
any potential finder's fee paid on the Offerings, the potential
accelerated expiry date of the Warrants, and the approval required
for the Offerings, including Exchange acceptance of the
Offerings;
the status of Hemostemix's
Litigation
(as defined below); and the commercialization of ACP-01.
There
can be no assurance that such forward-looking information will
prove to be accurate. Actual results and future events could differ
materially from those anticipated in such forward-looking
information. This
forward-looking information reflects Hemostemix's
current
beliefs and is based on information currently available to
Hemostemix
and
on assumptions Hemostemix
believes
are reasonable. These
assumptions include, but are not limited to: the underlying value
of Hemostemix
and
its Common Shares; market
acceptance of the Offerings; Exchange acceptance of the
Offerings; the
successful resolution of the litigation that Hemostemix
is
pursuing or defending (the "Litigation");
the results of ACP-01 research, trials, studies and analyses,
including the midpoint analysis, being equivalent to or better than
previous research, trials or studies as well as management's
expectations
of anticipated results; Hemostemix's
general
and administrative
costs remaining constant; the receipt of all required
regulatory approvals
for research, trials or studies; the level of activity, market
acceptance and market trends in the healthcare sector; the
economy
generally; consumer interest
in Hemostemix's
services
and products; competition and Hemostemix's
competitive
advantages; and Hemostemix
obtaining
satisfactory financing to fund
Hemostemix's
operations
including any research, trials or studies, and the
Litigation. Forward-looking
information is subject to known and unknown risks, uncertainties
and other factors that may cause the actual results, level of
activity, performance or achievements of Hemostemix
to
be materially different from those expressed or implied by such
forward-looking information. Such risks and other factors may
include, but are not limited to: the ability of Hemostemix
to
complete its current CLI clinical trial, complete a satisfactory
analyses and the results of such analyses and future clinical
trials; litigation
and potential litigation that Hemostemix
may
face; general business, economic, competitive, political and social
uncertainties; general capital market conditions and market prices
for securities; delay or failure to receive board or regulatory
approvals; the
actual results of future operations including
the actual results of future research, trials or
studies; competition;
changes in legislation affecting
Hemostemix;
the timing and availability of external financing on acceptable
terms; long-term capital requirements and future developments
in Hemostemix's
markets
and the markets in which it expects to compete; lack
of qualified, skilled labour
or
loss of key individuals; and risks related
to the COVID-19 pandemic including various recommendations, orders
and measures of governmental authorities to try
to limit the pandemic, including travel restrictions, border
closures, non-essential business closures, service
disruptions, quarantines, self-isolations, shelters-in-place and
social distancing, disruptions to markets, disruptions to economic
activity and financings,
disruptions to supply chains and sales channels, and a
deterioration of general economic conditions including a
possible
national or global recession or depression; the
potential impact that the COVID-19 pandemic may have on
Hemostemix
which
may include a decreased demand for the services that
Hemostemix offers;
and a deterioration of financial markets that could limit
Hemostemix's
ability
to obtain external financing. A description of additional risk
factors that may cause actual results to differ materially from
forward-looking information can be found in Hemostemix's
disclosure
documents on the SEDAR website at www.sedar.com. Although
Hemostemix
has
attempted to identify important factors that could cause actual
results to differ materially from those contained in
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or
intended. Readers
are cautioned that the foregoing list of factors is not
exhaustive. Readers
are further cautioned not to place undue reliance on
forward-looking information as there can be no assurance that the
plans, intentions or expectations upon which they are placed will
occur. Forward-looking information contained in this news release
is expressly qualified by this cautionary statement. The
forward-looking information contained in this news release
represents the expectations of Hemostemix
as
of the date of this news release and, accordingly, it is subject to
change after such date. However, Hemostemix
expressly
disclaims any intention or obligation to update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise, except as expressly
required by applicable securities law.
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