Calgary, Alberta, November 27, 2020– Hemostemix Inc. (“Hemostemix” or the “Company”) (TSXV:HEM; OTC: HMTXF) is pleased to announce that (i) Hemostemix has obtained from Medrio, Inc. (“Medrio”) 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 (ii) Medrio has denied, and will continue to deny, in perpetuity, Aspire Health Science, LLC (“Aspire”), 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% 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 PAD study results after two years follow-up that of the 10 treated with ACP-01: no deaths and 7 of 10 (70%) limbs saved from amputation, as compared to the 10 placebo patients: 2 of 10 deaths and 6 of 10 limbs lost to amputation,” stated Thomas Smeenk, CEO. “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% ± 7.5% at 149 ± 98 days postoperatively, increasing from 25.9% ± 8.6% to 28.7% ± 9.8% in dilated cardiomyopathy, and from 26.6% ± 5.8% to 33.6% ± 7.8% 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% ± 0.56 to 1.64% ± 0.83 (N=32, p<0.001), and who gained left ventricular ejection fraction (LVEF <40%) at baseline 34.4% ± 16.4% to 39.1% ± 15% (N=39, p<0.05),” Smeenk stated.
The Hemostemix ACP-01 clinical trial database is the product of its Phase II multi-center randomized double-blind placebo-controlled clinical trial of ACP-01 in critical limb ischemia (CLI) patients who have no revascularization options. Study subjects are randomized 2:1 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 ongoing.
Hemostemix has entered into a contract with a new Clinical Research Organization (CRO) who is completing the midpoint statistical analyses of the efficacy of ACP-01. On October 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% 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 license to manufacture ACP-01, nor any manufacturing rights to Hemostemix’s technology whatsoever. Aspire had no right to sublicense Hemostemix’s technology whatsoever. Any sublicense would have required the approval of Hemostemix, which has never been granted by Hemostemix. The amended license agreement previously executed by Hemostemix and Aspire is of no force and is not in effect.
$2,500,000 UNIT FINANCING
Hemostemix is pleased to announce a non-brokered private placement of units (“Units”) for gross proceeds of up to $2,500,000 (the “Offering”), subject to TSX Venture Exchange (the “TSXV”) approval. The Offering consists of the issuance of up to an aggregate of 250,000,000 Units at a price of $0.01 per Unit. Each Unit consists of one common share in the capital of the Company (“Common Share”) and one Common Share purchase warrant (“Warrant”), with each full Warrant entitling the holder to acquire one Common Share at a price of $0.05 per Common Share for a period of 12 months from the closing of the 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 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 TSXV is greater than $0.07 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% 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 below. The pricing of the Offering is based on the temporary relief measures established by the TSXV on April 8, 2020, and extended September 16, 2020, in response to the COVID-19 pandemic. The TSXV published the temporary relief measures to Policy 4.1 and Policy 4.3, lowering the minimum pricing from $0.05 to $0.01 per share for shares issued pursuant to a private placement when the market price of an issuer’s shares is not greater than $0.05. 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 TSXV 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 December 15, 2020. 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 Offering at $0.01, which may only be exercised following the 1 new Common Share for each 20 Common Shares Consolidation (described below). For further details on the Offering, please contact Hemostemix at the contact information set forth below.
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 “Existing Shareholder Exemption”). 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 November 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. (“Accudata”) 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 (“Aspire”) 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 August 14, 2020 and Hemostemix filed a response to Aspire’s Motion to Dismiss on August 28, 2020. Accudata filed a Motion to Dismiss Hemostemix’s amended complaint on August 24, 2020, and Hemostemix filed a response to Accudata’s Motion to Dismiss on September 8, 2020. Briefing is completed and the parties await the Court’s ruling on both Motions to Dismiss.
Florida
On January 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 December 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 September 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 October 19, 2020. Aspire filed its opposition to the appeal on November 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 1 Common Share consolidation (the “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 December 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
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 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 October 21, 2019, Hemostemix announced the abstract and interim results presented to the 41st Annual Canadian Society for Vascular Surgery Meeting titled “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% of patients, with outcomes maintained for up to 4.5 years.
Hemostemix 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 a midpoint statistical analysis; the Offering including the size of the Offering, the use of proceeds of the Offering, the closing date for the Offering, the potential exemptions used for the Offering, any potential finder’s fee paid on the Offering, and the potential accelerated expiry date of the Warrants; the status of Hemostemix’s Litigation (as defined below), including decisions on such Litigation; further information to be provided in respect of the Consolidation, including the date by which Hemostemix intends to implement the Consolidation; 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 Offering; TSXV acceptance of the Offering; the successful resolution of the litigation that Hemostemix is pursuing or defending (the “Litigation”); the results of ACP-01 research, trials studies and analysis, 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 futility analysis and the results of such 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 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.