Hemostemix Announces a $2,500,000 Lead Order and its Clinical Trial and Litigation Updates
Newsfile Corp
Calgary, Alberta--(Newsfile Corp. - April 9, 2021) - Hemostemix Inc. (TSXV: HEM) (OTC: HMTXF) ??(FSE: 2VFO) ("Hemostemix" or the "Company") 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 "UnitOffering"), 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