Hemostemix closes $2.96-million private placement

Executive Summary

• Hemostemix Inc. closed a non-brokered private placement raising gross proceeds of $2,969,600 from the sale of 29,696,000 units at $0.10 per unit.
• The transaction is classified as a related party transaction under Multilateral Instrument 61-101, with directors Peter Lacey and Loran Swanberg participating. Proceeds are designated for the repayment of a discounted debt instrument (CD No. 1) and general working capital for the marketing and sales of VesCell.
• Concurrently, the company granted 3.87 million stock options to directors, officers, employees, and consultants at an exercise price of $0.13, and disclosed an early warning report indicating Director Peter Lacey’s ownership increased to 13.40% on a non-diluted basis.

Key Details

• Financing Structure:
  • Gross Proceeds: $2,969,600.
  • Units Sold: 29,696,000 units.
  • Price Per Unit: $0.10.
  • Composition: Each unit consists of one common share and one common share purchase warrant.
  • Warrant Terms: Each warrant allows the holder to acquire one common share at an exercise price of $0.15.
  • Warrant Expiry: Two years from the closing date.
  • Warrant Accelerator: If the closing sales price of common shares exceeds a weighted average of $0.185 for 10 consecutive trading days (occurring after 4 months and 1 day post-closing), the company may accelerate the warrant expiry to 30 days following a press release notice.
• Finder’s Fees:
  • Cash Fees: Approximately $97,600 paid to eligible finders.
  • Equity Fees: 976,000 finders' options issued, exercisable at $0.15 per share within 24 months.
• Use of Proceeds:
  • Repayment of CD No. 1 in full at a 50% discount to face value ($1.25 million).
  • General working capital for operational expenses, specifically marketing and sales of VesCell.
• Related Party Transaction Details (MI 61-101):
  • Participants: Directors Peter Lacey and Loran Swanberg participated directly and indirectly.
  • Exemptions: The company relied on exemptions from formal valuation (Section 5.5(a) and (b)) and minority shareholder approval (Section 5.7(1)(a)) because the fair market value involving significant shareholders did not exceed 25% of the company's market capitalization.
  • Board Approval: Approved by the board, including disinterested directors. No special committee was established.
  • Regulatory Filing: A material change report was filed on SEDAR+ (noted as filed after the 21-day window due to expedited closing).
• Early Warning Report (Director Peter Lacey):
  • Pre-Transaction Ownership: 9,316,937 common shares (6.14% on a partially diluted basis).
  • Subscription: Subscribed to 15,000,000 units in this offering.
  • Post-Transaction Ownership: 24,316,937 common shares, representing 13.40% of issued and outstanding shares on a non-diluted basis and 15.6% on a partially diluted basis (assuming all warrants and options are exercised).
• Stock Option Grant:
  • Total Options Granted: 3,870,000 options.
  • Exercise Price: $0.13 per common share.
  • Expiry Date: July 23, 2030.
  • Recipients: 2,290,000 options granted to directors and officers; the remainder to employees and consultants.
  • Total Outstanding: 18,111,694 options issued and outstanding post-issuance.
  • Exemptions: Relied on MI 61-101 Sections 5.5(b) and 5.7(a) for exemptions from formal valuation and minority approval requirements as the value did not exceed 25% of market capitalization.

Notable Quotes

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