Blackfalds, AB (pcJ News Briefs) – Hemostemix Inc. (TSX-V: HEM) has reached an agreement with Wood Capital Ltd., a Barbados-based private equity investment firm controlled by lake Wood, on a non-brokered senior secured debt financing of CDN $4,400,000 in one or more tranches.
The agreement with Wood Capital also contemplates that Hemostemix is to complete a non-brokered or brokered private placement or placements of a minimum of $4,000,000 up to a maximum of $8,000,000 on terms substantially similar to the conversion privileges in respect of the Secured Debt Financing.
On January 25, 2107, Wood Capital made its initial investment in Hemostemix, acquiring a $1,000,000 convertible debenture (convertible into units at $0.16 per unit) for approximately 11.17% interest, on an as-converted and partially diluted basis.
Wood Capital is expected to advance to the company $1,000,000 as a bridge loan on or about April 13, 2017 and $2,400,000 as a bridge refinancing loan on or about April 28, 2017. The remaining $1,000,000 will be advanced to the company once all necessary shareholder and regulatory approvals having been obtained in respect of the conversion privileges in respect of the Loan.
The loan is subject to 12% interest per annum, to be accrued and calculated monthly. The Loan is to be secured by one or more general security agreements and such other reasonable security against the assets of the company as Wood Capital requires.
Subject to regulatory and shareholder approval, each holder of notes and accumulated interest relating to the loan shall be entitled to convert each note at a conversion price of $0.05 per unit. Each unit is consisting of one common share and one half of one share purchase warrant. Each whole warrant shall entitle the holder to acquire one share upon payment of $0.25 within 24 months from the later of (a) the secured credit closing date and (b) the private placement closing date, subject to accelerated expiry.
“This financing is a very exciting development for Hemostemix. Not only will this arrangement provide for the consolidation and rationalization of our currently multi-layered secured credit in the immediate term, it also provides a backstop to support and leverage our efforts to secure longer-term, larger, more sustainable financing,” said Angus Jenkins, Chair of Hemostemix.
“This arrangement should provide the Company with enough resources to rebuild its management team, support the Phase 2 Trial to the point of having interim data and analysis and to generally execute on a longer-term business plan,” added Kyle Makofka, Chief Restructuring Officer.
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 2 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 2 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.
photo credit: Hemostemix