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Hemostemix Inc
Symbol HEM
Shares Issued 756,811,552
Close 2020-11-27 C$ 0.01
Recent Sedar Documents

Hemostemix obtains trial data, arranges financing

2020-11-27 16:16 ET - News Release

Mr. Thomas Smeenk reports

HEMOSTEMIX ANNOUNCES POSSESSION OF ALL CLINICAL TRIAL DATA AND $2,500,000 UNIT FINANCING

Hemostemix Inc. has obtained from Medrio Inc. a copy of its entire clinical trial database that was being hosted by Medrio relating to the HS 12-01 clinical trial for ACP-01 therapy, and Medrio has denied, and will continue to deny, in perpetuity, Aspire Health Science LLC, and any of Aspire's employees, officers, agents, consultants or representatives from accessing the Hemostemix's ACP-01 clinical trial database through the Medrio platform.

"As every biotech investor knows, it is all about the data! Blinded, we will know in short order if our HS 12-01 midpoint results equal the interim clinical trial results that 83 per cent of patients followed for up to 4.5 years experienced healing of wounds and cessation of pain; or is similar to the 20 patient randomized peripheral artery disease study results after two years follow-up that of the 10 treated with ACP-01: no deaths and seven of 10 (70 per cent) limbs saved from amputation, as compared to the 10 placebo patients: two of 10 deaths and six of 10 limbs lost to amputation," stated Thomas Smeenk, chief executive officer.

"Fortunately, we have a lot of data of the efficacy of ACP," he continued. "For example, we have the clinical trial results of the 41 patients treated for cardiomyopathy that demonstrated overall ejection fraction improved significantly by 4.8 per cent plus or minus 7.5 per cent at 149 plus or minus 98 days postoperatively, increasing from 25.9 per cent plus or minus 8.6 per cent to 28.7 per cent plus or minus 9.8 per cent in dilated cardiomyopathy, and from 26.6 per cent plus or minus 5.8 per cent to 33.6 per cent plus or minus 7.8 per cent in ischemic cardiomyopathy; and, we have the results of the 106 ischemic heart disease patients on maximal medical therapy who had no option for revascularization, who experienced significant improvement in NYHA functional class which improved from 2.69 per cent plus or minus 0.56 to 1.64 per cent plus or minus 0.83, and who gained left ventricular ejection fraction at baseline 34.4 per cent plus or minus 16.4 per cent to 39.1 per cent plus or minus 15 per cent," Mr. Smeenk stated.

The Hemostemix ACP-01 clinical trial database is the product of its phase II multicentre randomized double-blind placebo-controlled clinical trial of ACP-01 in critical limb ischemia patients who have no revascularization options. Study subjects are randomized two to one to an injection of ACP-01 or a placebo into their most affected lower limb and followed for at least 26 weeks. The clinical trial is continuing.

Hemostemix has entered into a contract with a new clinical research organization which is completing the midpoint statistical analyses of the efficacy of ACP-01. On Oct. 21, 2019, Hemostemix announced the abstract and interim results presented to the 41st annual Canadian Society for Vascular Surgery meeting, which noted healing of ulcers and resolution of ischemic rest pain occurred in 83 per cent of patients studied by lead investigators at the University of British Columbia and the University of Toronto with outcomes maintained for up to 4.5 years.

As stated in previous news releases, Aspire has no licence to manufacture ACP-01, nor any manufacturing rights to Hemostemix's technology whatsoever. Aspire had no right to sublicense Hemostemix's technology whatsoever. Any sublicence would have required the approval of Hemostemix, which has never been granted by Hemostemix. The amended licence agreement previously executed by Hemostemix and Aspire is of no force and is not in effect.

$2.5-million unit financing

Hemostemix has arranged a non-brokered private placement of units for gross proceeds of up to $2.5-million, subject to TSX Venture Exchange approval. The offering consists of the issuance of up to an aggregate of 250 million units at a price of one cent per unit. Each unit consists of one common share in the capital of the company and one common share purchase warrant, with each full warrant entitling the holder to acquire one common share at a price of five cents per common share for a period of 12 months from the closing of the offering, subject to the accelerated expiry provision described herein. If on any 10 consecutive trading days occurring after four months and one day has elapsed following the closing date of the offering, the closing price of the common shares (or the closing bid, if no sales were reported on a trading day) as quoted on the TSX-V is greater than seven cents per common share, Hemostemix may provide notice in writing to the holders of the warrants by issuance of a news release that the expiry date of the warrants will be accelerated to the 30th day after the date on which Hemostemix issues such news release. Assuming the completion of the maximum offering, the proceeds from the offering are expected to be used as follows: 8 per cent cash finder fees payable in connection with the offering, filing fees in connection with the offering, legal fees in connection with the litigation against Aspire and other parties, clinical trial costs accounts payable, and general working capital.

The offering will be completed pursuant to certain exemptions from the prospectus requirements under applicable securities law including the accredited investor exemption, the close friends and business associates exemption, the investment dealer exemption, and the existing shareholder exemption described herein. The pricing of the offering is based on the temporary relief measures established by the TSX-V on April 8, 2020, and extended Sept. 16, 2020, in response to the COVID-19 pandemic. The TSX-V published the temporary relief measures to Policy 4.1 and Policy 4.3, lowering the minimum pricing from five cents to one cent per share for shares issued pursuant to a private placement when the market price of an issuer's shares is not greater than five cents. It is not anticipated that any new insiders will be created, nor that any change of control will occur, as a result of the offering. Any participation by insiders of the corporation in the offering will be on the same terms as arm's-length investors. There is no minimum subscription amount for the offering or minimum offering, but completion of the offering is subject to all regulatory approvals, including the TSX-V acceptance. Depending on market conditions, the gross proceeds of the offering could be increased or decreased. All securities issued in connection with the offering will be subject to a hold period of four months and one day from the date of closing. The offering may be closed in one or more tranches. Closing of the offering is anticipated to occur on or around Dec. 15, 2020. The company may pay finders fees to eligible finders of up to 8 per cent cash and 8 per cent finder warrants. Each finder's warrant may be exercised to acquire a unit of the offering at one cent, which may only be exercised following the one new common share for each 20 common shares consolidation (described herein).

Subject to acceptance by Hemostemix, the offering is open to all existing shareholders of the company in reliance upon the existing shareholder prospectus exemption described in Alberta Securities Commission Rule 45-516 -- Prospectus Exemptions For Retail Investors And Existing Security Holders, and as also set forth in various corresponding blanket orders and rules in the applicable provinces and territories of Canada. 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 Nov. 23, 2020, as the record date for the purpose of determining existing shareholders of the company who are entitled to participate in the 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 the investment dealer exemption described in ASC Rule 45-516, the company confirms there is no material fact or material change related to the company which has not been generally disclosed.

Litigation update

Delaware

On June 29, 2020, Hemostemix filed an action in Delaware federal court against Accudata Solutions Inc. for failing to provide a statistical analysis of Hemostemix's clinical trial data and for failing to return the clinical trial data upon demand. Hemostemix also filed an injunction application to compel Accudata to provide the statistical analysis and clinical trial data to Hemostemix pursuant to Accudata's contractual obligations.

Aspire Health Science LLC moved to intervene in this action and filed an answer to the original complaint. Oral argument on Hemostemix's preliminary injunction application against Accudata was conducted on July 15, 2020, and Hemostemix is awaiting a decision on that injunction application.

In addition, Hemostemix was granted leave to file an amended complaint to include claims against Aspire and did so on July 27, 2020. Aspire filed a motion to dismiss Hemostemix's amended complaint on Aug. 14, 2020, and Hemostemix filed a response to Aspire's motion to dismiss on Aug. 28, 2020. Accudata filed a motion to dismiss Hemostemix's amended complaint on Aug. 24, 2020, and Hemostemix filed a response to Accudata's motion to dismiss on Sept. 8, 2020. Briefing is completed and the parties await the court's ruling on both motions to dismiss.

Florida

On Jan. 28, 2020, Aspire filed an action against Hemostemix in Florida state court for declaratory relief and specific performance to enforce the amended licensing agreement among Aspire and Hemostemix which Hemostemix properly rescinded on Dec. 5, 2019, for Aspire's default. Hemostemix filed a motion to dismiss the Florida action on the basis of lack of personal jurisdiction, to challenge service of the complaint and to challenge the sufficiency of the pleading. Aspire also brought a motion for a speedy hearing.

Argument was heard on Hemostemix's motion to dismiss on June 25, 2020. On Sept. 30, 2020, the court denied Hemostemix's motion to dismiss but quashed service after finding Aspire had failed to comply with international law and perfect service of process on Hemostemix. Hemostemix has appealed to the Florida intermediate court of appeals that portion of the order denying its motion to dismiss, filing an appeal brief on Oct. 19, 2020. Aspire filed its opposition to the appeal on Nov. 25, 2020. Aspire has failed, to date, to perfect service of process on Hemostemix in Canada. Given the jurisdictional and venue challenge raised on appeal, Hemostemix has moved to stay the underlying proceeding pending a ruling on appeal.

Consolidation update

Further to the approval of the 20 for one common share consolidation that was approved at the annual general and special meeting of shareholders of Hemostemix held on May 6, 2020, Hemostemix intends to implement the consolidation prior to Dec. 31, 2020. Hemostemix will provide further information in respect of the consolidation in future news releases when the board of directors of Hemostemix has made a decision in respect of the effective date of the consolidation.

About Hemostemix Inc.

Hemostemix is a publicly traded autologous stem cell therapy company. A winner of the World Economic Forum Technology Pioneer award, Hemostemix developed and is commercializing its lead product ACP-01 for the treatment of critical limb ischemia, peripheral artery disease, angina, ischemic cardiomyopathy, dilated cardiomyopathy and other conditions of ischemia. ACP-01 has been used to treat over 500 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.

We seek Safe Harbor.

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