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Hemostemix Inc (2)
Symbol HEM
Shares Issued 56,276,894
Close 2021-05-28 C$ 0.26
Recent Sedar Documents

Hemostemix files Q1 results, talks offering order close

2021-05-31 02:25 ET - News Release

Mr. Thomas Smeenk reports

HEMOSTEMIX ANNOUNCES THE TSX VENTURE'S PRELIMINARY APPROVAL OF THE CLOSING OF A $2,500,000 CONVERTIBLE DEBENTURE AT $0.40 PER UNIT AND CORPORATE UPDATE

Hemostemix Inc. has obtained preliminary approval from the TSX Venture Exchange to close a $2.5-million convertible debenture order from a director for debenture units priced at 40 cents per unit as detailed below. On May 28, 2021, Hemostemix filed its financial statements and management's discussion and analysis for the period ended March 31, 2020, on SEDAR.

"This financing segregates the litigation risk from the equity risk and enables the company to move forward with its business plans," stated Thomas Smeenk, chief executive officer.

The non-brokered private placement is up to a maximum of $3-million principal amount unsecured convertible five-year debentures, 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 at a price of $1,000 per debenture unit. The company has preliminary approval to close a $2.5-million lead order for the debenture units from a company director. Each debenture unit consists of a $1,000 principal amount debenture as described below and 2,500 debenture warrants, with each debenture warrant entitling the holder to acquire one common share at a price of 55 cents per common share for a period of 24 months from the closing of the debenture offering, subject to the accelerated expiry provision described as follows. If, on any 10 consecutive trading days occurring after four months and one day have elapsed following the closing date of the debenture offering and the weighted-average trading price of the common shares as quoted on the exchange is greater than 66 cents per common share, the company may provide notice in writing to the holders of the debenture warrants by issuance of a news release that the expiry date of the debenture warrants will be accelerated to the 30th day after the date on which the company issues such news release.

Each debenture will consist of $1,000 principal amount of unsecured, non-transferable debentures. The debentures will mature five years from the closing date and will bear interest at a rate of 6 per cent per annum, payable quarterly in arrears in cash or common 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 at a price of 40 cents per common share. 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 policies 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 finance litigation expenses of Hemostemix. The first $2.5-million will be used as follows: (i) up to $600,000 will be immediately available to Hemostemix as reimbursement for past litigation expenses; and (ii) until required by the company for litigation expenses, $1.5-million (U.S.) (approximately $1.9-million) will be invested in a demand loan to an arm's-length U.S. company. The balance of the debenture offering will be available for past or potential future litigation expenses. Any amounts raised in excess of $2.5-million will be immediately available to Hemostemix as reimbursement for past litigation expenses. The loan will have the following key features: (i) a term of two years; (ii) payable on demand, in whole or in part, on 30 days notice; (iii) interest at 8 per cent per annum to be paid monthly; (iv) prepayable, in whole or in part, without penalty; (v) immediately puttable, in whole or in part, for cash to cover coming 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

All of the 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. The participation of the director or any other directors or officers of the company in the offerings will constitute related-party transaction within the meaning of Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions) 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 per cent of the company's market capitalization calculated in accordance with MI 61-101.

About Hemostemix Inc.

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 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.

On Oct. 21, 2019, the company announced the results from its phase 2 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 per cent of patients, with outcomes maintained for up to 4.5 years. The company owns 91 patents across five patent families.

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