Hemostemix announces the execution of a management contractor agreement with Drive Capital. Drive will oversee and manage all aspects of a corporate reorganization of Hemostemix, including the appointment of a new Board of Directors and management team. Drive shall report directly to the new Board and will assist with the implementation of all corporate actions deemed necessary to ensure the financial sustainability of Hemostemix. The agreement has a term of two years and Drive will be compensated based on 15% of the total operating expenses over the term of the agreement and options to acquire common shares in the capital of the issuer to be granted from time to time in an amount equivalent to 7% of the client's total issued and outstanding Shares.
Hemostemix also announces it has reached an agreement with the holders of its $644,000 promissory notes and $500,000 of demand loans to convert the debts into common shares of Hemostemix at prices of $0.16 and $0.20, respectively. The conversion will result in the aggregate issuance of 6,525,000 common shares of the company. Hemostemix, along with the holder of its previously issued $1,000,000 secured convertible debenture, have approved the sale of the debenture to Drive Capital. The debenture was originally issued pursuant to a private placement which closed on September 2, 2016 (refer to the company's news release dated September 2, 2016 for details of the terms and conditions of the debenture and promissory notes).
Hemostemix also announces it will issue 200,000 common shares at a deemed price of $0.20 to Wolverton Securities and two former employees of Wolverton as final settlement of $40,000 owed pursuant to the terms of a Right of First Refusal Waiver Agreement dated April 20, 2016 between Hemostemix and Wolverton.
Hemostemix will issue a subsequent press release containing the details of the backgrounds of the incoming board of directors and management team, status of the phase II clinical trial, future financing plans, new strategic partners and to the extent not contained in this press release, additional information with respect to the conversion of the debts and sale of the debenture.
The completion of the above noted transactions are subject to the approval of TSX Venture Exchange and all other necessary regulatory approval. All common shares issued on the settlement of debts shall be subject to a statutory four month hold period from the date of issuance.
Hemostemix is a public clinical-stage biotechnology company that develops and commercializes innovative blood-derived cell therapies for medical conditions not adequately addressed by current treatments. It is the first clinical-stage biotech company to test a stem-cell therapy in an international, multicenter, phase II clinical trial for patients with critical limb ischemia (CLI), a severe form of peripheral artery disease (PAD) caused by reduced blood flow to the legs. The phase II trial targets a participant's diseased tissue with proprietary cells grown from his or her blood that can support the formation of new blood vessels. Hemostemix currently enrolls participants in the phase II trial at four sites in South Africa and two sites in Canada. The Company recently received FDA clearance to commence clinical trials in the U.S.