Hemostemix increases private placement to $3-million

Executive Summary

• Hemostemix Inc. increased the size of its previously closed non-brokered private placement from $2,969,600 to $3,000,000 following the receipt of additional subscriptions.
• The company issued 3,000,000 additional units at $0.10 per unit, with proceeds allocated to repay a discounted debt instrument and for general working capital.
• The transaction constitutes a related-party transaction under Multilateral Instrument 61-101, involving directors Peter Lacey and Loran Swanberg, and triggered an early warning report for Mr. Lacey due to his ownership exceeding 20% on a diluted basis.

Key Details

• Financing Structure: The offering was increased by issuing 3,000,000 additional units at a price of $0.10 per unit.
• Gross Proceeds: The total size of the offering is now $3,000,000 (increased from $2,969,600).
• Warrant Terms: Each unit includes one common share and one common share purchase warrant. The warrant allows the holder to acquire one additional common share at an exercise price of $0.15 for a period of 24 months from closing.
• Acceleration Clause: If the closing price of common shares on the TSX Venture Exchange exceeds a weighted average of $0.185 per share for 10 consecutive trading days (occurring after 4 months and 1 day from closing), the company may accelerate warrant expiry by 30 days via press release.
• Finder’s Fees: The company paid aggregate cash finders' fees of $100,032 and issued 1,000,320 finders' options. Each option entitles the holder to purchase one common share at $0.15, exercisable for 24 months.
• Use of Proceeds: Funds are allocated to:
  • Repayment of CD No. 1 in full at a 50% discount to face value ($1,250,000).
  • General working capital for operational expenses, including marketing and sales of VesCell.
• Related-Party Transaction: The offering is a related-party transaction under MI 61-101. Directors Peter Lacey and Loran Swanberg participated directly and indirectly. The company relied on exemptions from formal valuation and minority shareholder approval requirements as the fair market value involving significant shareholders is not more than 25% of market capitalization.
• Early Warning Report (Mr. Lacey):
  • Pre-Offering Ownership: 9,316,937 common shares (6.14% non-diluted).
  • Subscription: Mr. Lacey subscribed to 15,000,000 units.
  • Post-Offering Ownership: 24,316,937 common shares (13.40% non-diluted); 39,266,093 common shares (15.6% partially diluted, assuming all warrants and options are exercised).
• Regulatory Filing: A material change report will be filed on SEDAR+ regarding the related-party transactions. The report was not filed 21 days prior to closing due to the expedited nature of the offering and late settlement of details.

Notable Quotes

• No direct quotes from the CEO/President were included in the provided text.