HEM Hemostemix Inc

Hemostemix Inc. (“Hemostemix” or the “Company”) (TSXV: HEM; OTC: HMTXF) is pleased to announce that it is proceeding with its non-brokered private placement of units, as announced January 2, 2020 (the “Unit Offering”). In addition, the Company announces it is also proceeding with a non-brokered private placement of up to a maximum of $2,000,000 principal amount of secured convertible debentures (the “Debenture Offering”). Each debenture will consist of $1,000 principal amount of secured, non-transferable, convertible, redeemable debentures (the “Debentures”). The Debentures will mature on December 31, 2020 (the “Maturity Date”) and will bear interest at a rate of 12% per annum. Following the consolidation of the Company’s common shares (the “Consolidation”), the principal amount of the Debentures may be convertible, at the option of the holder, into units of the Company (“Units”) at a price of $0.10 per Unit. Each Unit will consist of one (1) post-Consolidation common share of the Company (“Common Share”) and one (1) share purchase warrant (“Warrant”). Each Warrant may be exercised by the holder to purchase one (1) Common Share from the Company at $0.12 anytime within 12 months following the conversion of the Debentures into Units. At the election of the debenture holder, 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 TSX Venture Exchange (“TSXV”) at the time of such conversion) but not less than the Unit conversion price of the Debenture.

The Debentures will be secured obligations of the Company, secured by a charge over all assets of the Company and shall rank pari passu in right of the payment of principal and interest with all other Debentures issued by the Company.

The net proceeds of the Debenture Offering, in conjunction with the net proceeds of the Unit Offering, will be used to repay J.M. Wood Investments Ltd.’s secured debt and for general working capital purposes.

As announced on January 2, 2020, the pricing of the Unit Offering is in reliance of the temporary relief measures established by the TSXV, and therefore the Offering and its pricing require approval of the TSXV having regard to the temporary relief criteria set out in the Exchange’s bulletin of April 7, 2014, (the "Temporary Relief Measures"). In order to comply with the Temporary Relief Measures, the board of directors is proposing to consolidate the Company's issued and outstanding common shares on a minimum of one new for ten old common shares, or such other consolidation ratio as the board of directors may recommend and the shareholders approve. The Consolidation will increase the Company's flexibility and competitiveness in the marketplace, and make the Company's securities more attractive to a wider audience of potential investors, thereby resulting in a more efficient market for the common shares. The Company has provided a written undertaking to the TSXV to hold a special shareholders meeting to approve the consolidation within 180 days of the completion of the Unit Offering. A follow-up news release will announce the date when the special shareholders meeting has been convened.

The Closings of the Debenture Offering and the Unit Offering are subject to a number of conditions, including receipt of all necessary corporate and regulatory approvals, including that of the TSXV.

The Debenture Offering will be completed pursuant to certain exemptions from the prospectus requirement under applicable securities laws. The Debenture Offering may be closed in one or more tranches. The Company may pay finders fees to eligible finders of up to 8% cash and up to 8% finder warrants. All of the Debentures issued, and any securities into which they may be exchanged or converted, are subject to resale restrictions imposed by applicable law or regulation, including a statutory hold period expiring four months and a day from the Closing Date of the Debenture Offering.

The Company confirms there is no material fact or material change about the issuer that has not been generally disclosed.

None of the securities issued in connection with the Offering will be registered under the United States Securities Act of 1933, as amended (the “1933 Act”), and none of them may be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act. This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities in any state where such offer, solicitation, or sale would be unlawful.

ABOUT HEMOSTEMIX

Hemostemix is a publicly traded autologous stem cell therapy company, founded in 2003. A winner of the World Economic Forum Technology Pioneer Award, the Company 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 300 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, the Company announced the results from its Phase II CLI trial abstract presentation entitled “Autologous Stem Cell Treatment for CLI Patients with No Revascularization Options: An Update of the Hemostemix ACP-01 Trial With 4.5 Year Followup” 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.

The Company 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, Interim CEO & FounderSuite 1150, 707 – 7th Avenue S.W., Calgary, Alberta T2P 3H6, 905-580-4170E-mail: tsmeenk@hemostemix.com

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 Statements

This release may contain forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “potential,” and similar expressions, or that events or conditions “will,” “would,” “may,” “could,” or “should” occur. Although Hemostemix believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward-looking statements. Forward-looking statements are based on the beliefs, estimates, and opinions of Hemostemix management on the date such statements were made. By their nature forward-looking statements are subject to known and unknown risks, uncertainties, and other factors which may cause actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the Company’s ability to fund operations and access the capital required to continue operations, the Company’s stage of development, the ability to complete its current CLI clinical trial, complete a futility analysis and the results of such, future clinical trials and results, long-term capital requirements and future developments in the Company’s markets and the markets in which it expects to compete, risks associated with its strategic alliances and the impact of entering new markets on the Company’s operations. Each factor should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. Hemostemix expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise. Additional information identifying risks and uncertainties are contained in the Company’s filing with the Canadian securities regulators, which filings are available at www.sedar.com.