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Hemostemix Inc
Symbol HEM
Shares Issued 756,811,552
Close 2020-12-18 C$ 0.015
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Hemostemix closes financing, arranges new offering

2020-12-18 16:09 ET - News Release

Mr. Thomas Smeenk reports

HEMOSTEMIX ANNOUNCES CLOSING OF EXISTING PRIVATE PLACEMENT AND ANNOUNCES A NEW PRIVATE PLACEMENT

Hemostemix Inc. has closed its previously announced non-brokered private placement of units for gross proceeds of $1,272,117.04. The offering consisted of the issuance of an aggregate of 127,211,704 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 sales price of the common shares (or the closing bid, if no sales were reported on a trading day) as quoted on the TSX Venture Exchange is greater than seven cents 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.

Proceeds from the offering are expected to be used to pay finder fees payable in connection with the closing ($40,180), current filing, regulatory and legal fees ($51,747.60), accrued legal expenses ($400,000), clinical trial costs ($344,000), repayment of bridge loan ($152,000) and the balance to be used for general working capital purposes ($284,189.40).

In connection with the offering, the company has received final approval from the exchange. All securities issuable pursuant to the offering are subject to a four-month-and-one-day hold period from the date of issuance in accordance with applicable Canadian securities laws.

The participation of three directors in the offering constitutes a related party transaction within the meaning of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions and the policies of the TSX-V. The company is relying upon the 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, at the time the offering was 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 offering, exceeds 25 per cent of the company's market capitalization calculated in accordance with MI 61-101.

New private placement

The company will raise up to an additional $2.75-million by way of a non-brokered private placement of units at 1.5 cents each. Each unit of the offering comprises one common share and one share purchase warrant. Each warrant will entitle the holder to acquire one additional share in the capital of the company at a price of five cents per warrant for a period of one year from the date the units are issued 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 sales price of the common shares (or the closing bid, if no sales were reported on a trading day) as quoted on the TSX Venture Exchange is greater than seven cents 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 existing shareholder exemption and investment dealer exemption

The offering will be made available to existing shareholders of the company who, as of the close of business on Dec. 18, 2020, held common shares of the company (and who continue to hold such common shares as of the closing date), pursuant to the prospectus exemption set out in Alberta Securities Commission Rule 45-513 -- Prospectus Exemption for Distribution to Existing Security Holders and in similar instruments in other jurisdictions in Canada. The existing shareholder exemption limits a shareholder to a maximum investment of $15,000 in a 12-month period unless the shareholder has obtained advice regarding the suitability of the investment and, if the shareholder is resident in a jurisdiction of Canada, that advice has been obtained from a person that is registered as an investment dealer in the jurisdiction. If the company receives subscriptions from investors relying on the existing shareholder exemption exceeding the maximum amount of the financing, the company intends to adjust the subscriptions received on a pro rata basis.

The company has also made the offering available to certain subscribers pursuant to the investment dealer exemption. In accordance with the requirements of the investment dealer exemption, the company confirms that there is no material fact or material change about the company that has not been generally disclosed.

The offering is subject to all necessary regulatory approvals including acceptance from the exchange. All securities issued in connection with the offering will be subject to a four-month hold period from the closing date under applicable Canadian securities laws, in addition to such other restrictions as may apply under applicable securities laws of jurisdictions outside Canada.

About Hemostemix Inc.

Hemostemix is a publicly traded autologous stem cell therapy company, founded in 2003. 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 Oct. 21, 2019, the company announced the results from its phase 2 CLI trial abstract presentation entitled "Autologous Stem Cell Treatment for CLI Patients with No Revascularization Options: An Update of the Hemostemix ACP-01 Trial With 4.5 Year Follow-up," which noted healing of ulcers and resolution of ischemic rest pain occurred in 83 per cent 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.

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