Concerned Shareholders Thank Hemostemix Inc. Shareholders for Resounding Support for Much Needed Change to Board of Directors, Provides Progress Update and Clarifies Misleading Statements

CALGARY, ALBERTA--(Marketwired - Sept. 2, 2016) -

• Momentum of support for Concerned Shareholders continues to build.
• Concerned Shareholders' worst fears confirmed by Q2 Results.
• Concerned Shareholders refute incorrect information asserted by entrenched Management of Hemostemix.
• Concerned Shareholders urge ALL shareholders to VOTE the BLUE Form to VOTE for positive CHANGE.

Barry Ullet, Bernie Troitsky, Donn Lovett, Glynn Hendry, Jed M. Wood, Jim Brown, Joseph P. Stewart, Dr. Owen Schwartz, Dr. Pierre Liemgruber, Robert Achtymichuk, Robert Sweep, Rodney Cavanagh, Rodney Risling and Todd Reinhart, shareholders (collectively, the "Concerned Shareholders") of Hemostemix Inc. ("Hemostemix" or the "Company"), wish to thank shareholders for the resounding support they have received to date. The Concerned Shareholders would also like to address the troubling Q2 Results, correct purposeful misleading information from management of the Company ("Management"), and provide an update on its progress and transition planning.

Shareholder Support For Change

In spite of Management's statement purporting to have "overwhelming" shareholder support, it is in actuality, the Concerned Shareholders who have and continue to receive the support from shareholders based on personal feedback and the votes received to date.

With the little time that was allotted to the Concerned Shareholders to communicate, given Management's tactical attempts to stifle open and constructive communication, it is clear that minority shareholders are strongly supportive of much needed changes to the board. In fact, despite Management's anti-democratic approach to fixing the record date and meeting dates, purporting to invoke new and unusual new By-Law provisions and releasing their meeting materials and second quarter financial results at the last possible moments, the Concerned Shareholders have been able to rapidly respond with clear and informative materials, which have triggered support from shareholders of all ranks, ranging from the general retail investors, many of the Company's largest shareholders and multiple former directors, officers and advisors to Hemostemix, who have been brought together by a common desire to positively change Hemostemix.

The only active resistance the Concerned Shareholders have encountered in this proxy contest is from the embattled consultant CEO who acquired his first 100 shares on June 17, 2016 for $23.00, the part-time consultant CFO (who is concurrently also the CFO of another struggling TSX Venture listed issuer) who owns zero shares and three other shareholders who have all been directors and/or officers of the Company.

Who are the true dissidents here? The true overwhelming number of shareholders of the struggling Company - or an embittered team of 5 presiding over the continuing decline led by a consultant with a token $23 investment trying to hold on to his high paying consultancy fees?

Worst Fears Confirmed by More of the Same Results

In the view of the Concerned Shareholders, the recently released Q2 Results are extremely disappointing and only confirm their worst fears about the state of the Company. In keeping with the pattern we have seen from Management, they released their mandatory filings for their second fiscal quarter of 2016 (the period ended June 30, 2016, the "Q2 Results") beginning at 4:13 p.m. on Monday August 29, 2016. That was the last possible date for filing for the Company to avoid being cease traded for a failure to file the Q2 Results. Here are some of the lowlights:

• The Company appears to be effectively insolvent. (See balance sheet on page 3 of the Q2 Financials)
  
  
• Cash position is a mere $127,267 combined with a current rate of spending of $218,624.50 per month and no active clinical trials. (See statement of cash flow on page 6 of the Q2 Financials and statement of loss on page 4)
  
  
• Current accounts payable of nearly $1,500,000, including just under $1,000,000 in trade payables and accrued expenses and over $12,000 in income taxes. (See balance sheet on page 3 of the Q2 Financials and Note 7 on page 11)
  
  
• The Company had by June 30, 2016 already built up $460,000 of loans from the existing board and shareholders to support working capital. Based on their August 11, 2016 press release regarding the Insider Loan Proposal, it appears those obligations have jumped up to $1,070,000. (See Notes 8, 13 and 14 of the Q2 Financials)
  
  
• The Q2 Results spell out that the Company will still be required to pay its former strategic partner Criterium Inc. ("Criterium") a further $2,278,657.89 (USD $1,731,780) to complete its critical Phase 2 Trial. (See Notes 4 and 12 of the Q2 Financials)
  
  
• Based on the Company's current rate of spending it appears to require a minimum of $5 million to satisfy its disclosed obligations and get back on track to obtain interim data collected for its critical Phase 2 Trial by Criterium. Management has specifically confirmed this in its Thursday press release (September 1). The Insider Loan Proposal is insufficient to cover the current accounts payable. The prior Drive Capital Proposal was designed to provide for 100% of it.
  
  
• The outrageous details of the Insider Loan Proposal to a still undisclosed supposedly "arm's length party" keep piling up:
  
  
  • Management has already agreed to up all of the Company's assets under the Insider Loan Proposal for ONLY $1 million, without ANY kind of commitment for additional funds whatsoever. (See Note 14, paragraph 2 of the Q2 Financials and page 13 of the Q2 MD&A).
    
    
  • Management has put them in a position to seize all of the Company's assets (including all of its IP) for a mere $1 million if the Company defaults.
    
    
  • This "arm's length party" will be in position to become the Company's biggest shareholder with 12,500,000 shares without any consent or approval from shareholders being sought by Management. (See page 13 of the Q2 MD&A)
    
    
  • The Concerned Shareholders confirmed that no application to the TSX Venture Exchange had been made in relation to the Insider Loan Proposal whatsoever, which prompted consideration of the matter by the Compliance and Disclosure Department of the TSX Venture Exchange. (See Note 14, paragraph 1 of the Q2 Financials)
    
    
• The Q2 Results clearly indicate that both the current CEO and CFO are mere consultant contractors, not employees of the Company, and that they are still collecting their fees despite the Company's precarious position. (See statement of loss on page 4 of the Q2 Financials and Note 13 (Related Party Balances and Transactions))
  
  

Shareholders are encouraged to read the Q2 Results for themselves including the Company's interim financial statements (the "Q2 Financials") and their interim management discussion and analysis (the "Q2 MD&A"). The alarming Q2 Results speak for themselves and it should be a concern to all shareholders if this is what Management defines as "its path to success".

Concerned Shareholders Refute Incorrect Information Asserted by Management and Board of Hemostemix

In the documents filed by Management earlier this week, there were numerous inaccuracies and misstatements aimed at misleading shareholders. Set out below are some of the Concerned Shareholders responses to issues raised by Management. Based on the Concerned Shareholders' responses, you will find it is clear that you cannot put your trust in the Management or the Board of Hemostemix.

THE FICTION Management's Numerous Inaccuracies And Misstatements		THE TRUTH Concerned Shareholders' Clarifying Truths
"The company has made great strides in bringing our landmark technology to market and are clearly on the path to success"		• Based on the Q2 Results, Hemostemix is insolvent. • Based on Hemostemix's Q2 Results, Hemostemix' critical Phase 2 Trial has been halted with the former strategic partner running the trial having terminated its agreements with Hemostemix and requiring an additional $2,278,657.89 (USD $1,731,780) to complete its work. • An ongoing string of Hemostemix directors, officers and key advisors have left the Company, some of them without having been paid and now suing the Company as a result.
"We have refreshed our best-in-class Board creating a strong balance between deep industry knowledge, international operating experience and capital markets expertise"		• The Concerned Shareholders are hardly refreshed by the impromptu addition of replacements to fill sudden mid-term resignations. Additionally, based on past trends (constant flight of directors and executives), how long will these new additions last? • The Concerned Shareholders remain particularly alarmed by one of those impromptu replacements, Angus Jenkins being thrust into the Chairman's seat. • Given the very serious concerns about the Poseidon Concepts failure, which was devastating to its many investors, the Company should be addressing Mr Jenkin's insider role within Poseidon and its many corporate failures. •The Company has not addressed these concerns regarding Mr. Jenkins and instead thrust him into the Chairman's position mere days after parachuting him into its mess.
"They have zero industry experience"		• This is patently false. • The Concerned Shareholders' nominees for the board represent a slate of highly qualified executives, investors in public and private companies, and entrepreneurs with track records of placing shareholders' interests first and creating value. • The Concerned Shareholders' nominees common denominator is running successful businesses and stewarding successful businesses at the board level • Those successful businesses include medical businesses, such as Mr. Jed Wood's involvement with OncoGen LLC, which operates Visionary Breast Care Centers in Southern California. • Further, their deep and disciplined approach melded with guidance and support from appropriate leading-edge clinical scientists and advisors seems very likely to result in a new way of doing business at Hemostemix, as opposed to "staying the course" with a group whose track record with the Company would suggest further failures will follow.
"To unlock that value, your management team is leading a number of successful clinical trials"		This statement seems more than a little confusing in light of the facts that: • the Company no longer has a service provider to operate a clinical trial, • the Company has been forced to publicly announce repeatedly that it has ceased enrolling patients in its Phase 2 Trial, and • the Company's Chief Medical Officer recently resigned and has not been replaced.
On Monday and Tuesday Management says: "We are already halfway to our interim analysis stage, which will deliver clinical efficacy data. Once the interim analysis is complete, Hemostemix will be in the driver's seat - with an ability to access capital and partner with major pharmaceutical and biotech companies" On Thursday Management says: "With funding, we expect it will take approximately nine months to have the unblended data in hand. We anticipate we need C$4MM to reach this extremely important milestone."		• Based on the Q2 Results, it has become quite evident that Criterium, the Company's former contract research organization (CRO) terminated their agreement with Hemostemix based on non-payment of fees. • It's also clear based on the Q2 Results that Criterium will require a further $2,278,657.89 (USD $1,731,780) to complete the Phase 2 Trial. • Management is desperately trying to save itself by playing with distinctions that make no difference. • As Drive Capital's due diligence had confirmed, at least $4 million was required by the Company to get to its interim analysis milestone and yet it rejected that level of support to accept a similarly structured arrangement on worse terms and a mere 25% of the money they know they need. Whose interest does that serve?
"We are on the path to success and in the process of securing the additional financing to advance these trials and monetize our technology"		• The Concerned Shareholders' perspective, which they have heard resounding support for both before and now during this proxy contest is that the marketplace has no confidence in the current CEO and the decision making for the Company that have led us to this point. • In light of this and all of the Company's turmoil, the Concerned Shareholders are shocked by this type of self-serving generic statement under the circumstances from a company that appears to be insolvent. • The shareholders generally ought to hope that the "additional financings" directed at "monetizing our technology refer to more than the Insider Loan Proposal, since as described above, all it seems to realistically set the table for is the monetizing of the technology by the enforcement of general security that is being granted to the still undisclosed "arm's length party" for a mere $1 million.
Management says about the Concerned Shareholders and Jed Wood or Drive Capital in particular: • "ACCORDING TO THE DISSIDENTS' PLAN, ALL HEMOSTEMIX ASSETS WILL BE USED AS COLLATERAL TO SECURE THEIR LOAN AND THEY WILL DECIDE IF HEMOSTEMIX GOES INTO DEFAULT AFTER AN INITIAL PAYMENT OF C$ 1 MILLION. IN ESSENCE, THE DISSIDENTS COULD SEIZE ALL HEMOSTEMIX ASSETS FOR C$ 1 MILLION" • "Drive Capital has been pushing the company to borrow money on onerous and off-market terms" • "Drive Capital appeared to be pursuing a "loan to own" scheme with the company which could have resulted in the loss of all of our intellectual property "		• As clearly described in the Concerned Shareholders' proxy circular, Drive Capital's approach was effectively the opposite of what management is alluding to now. The Concerned Shareholders were NOT interested in pursuing a course, such as the ones proposed by Management, that would have the clear and present potential of wiping out all of the shareholders' investments. • Despite this perspective, shared with current Management by Drive Capital, current Management has nevertheless aimed to pursue precisely that type of short term solution with the still undisclosed "arm's length investor" and the Insider Loan Proposal. • Management aims to discredit the Drive Capital proposal based on some of its basic concepts when it has hypocritically agreed to accept a somewhat similarly structured transaction with the biggest distinction being that it is on markedly worse economic terms than what was offered by Drive Capital. • If Management truly thinks Drive Capital has been pushing for onerous and off-market terms - a view that they strongly object to - what is that same Management group doing by rejecting that for a similar structure but with obviously inferior terms? • This behaviour and messaging is indicative of Management's desperate desire to entrench their positions for their own purposes and benefits as opposed to giving adequate regard and attention to the best interests of Hemostemix and ALL of its shareholders.
Management says about the Concerned Shareholders and Jim Brown in particular: • "Focus instead on the grey market business of medical tourism in unregulated jurisdictions" • "They want to scale back clinical trials and move our business to jurisdictions with poor regulatory oversight" • "Their agenda is to move our current program and clinical trials to Taiwan for premature commercialization" • "To give up the North American and European markets is foolish" • "To send your company to Taiwan is negligent" • "Mr. Brown is directly responsible for the failed arrangements between Hemostemix and HEMA" • "HEMA and Mr. Brown have failed to carry out their obligations under that agreement. And do not appear to be dealing in good faith. As a result, we have advised Mr. Brown that we consider HEMA in default of its obligations and the contract is void"		• These inflammatory statements all generally boil down to a perspective that is strongly held by the current CEO that for various reasons, Taiwan is "bad for business" or at least "bad for Hemostemix's business. • The Concerned Shareholders understand that the current CEO has vehemently pushed this perspective at the board level despite the contracts with Hemostemix (Asia) Corp. ("HEMA") that the same CEO negotiated for and personally signed. • As noted in the Concerned Shareholders' proxy circular, based on these agreements executed by the current CEO, HEMA has raised and invested significant resources and it is Hemostemix management that has neglected or refused to live up to its commitments under their agreements. HEMA has been for some time considering all of its possible legal remedies, which could include, but not be limited to civil litigation against Hemostemix and/or its current Management. HEMA has now retained and instructed counsel to pursue claims for breach of contract. • The current CEO's perspective on Taiwan seems more than a little "dubious" given he approved the original agreements and has now moved to revoke the opportunities they secured to explore the possible clinical trials in the former "Eastern Bloc". • Without identifying specific "Eastern Bloc countries" it is impossible to make direct comparisons to Taiwan. However, by most measures, Taiwan is a very advanced economy with a high level of medical service and expertise.
Management says about the Concerned Shareholders and Robert Achtymichuk in particular: • "…should be pointing the finger at Mr. Achtymichuk…" • "…Mr. Achtymichuk is playing both sides: He continued to bill the company for his services while working with the Dissidents in the lead up to their ambush."		• Mr. Achtymichuk agreed to join the Company at a clearly difficult and tumultuous time for it based in large part on his personal connections to and regard for many of the shareholders of Hemostemix. • Mr. Achtymichuk served Hemostemix to the best of his ability with its best interests and the interests of its shareholders squarely in mind. • Mr. Achtymichuk has never been paid by the Company for the duration of his service and is now in the process of retaining and instructing counsel to pursue claims for breach of contract and specific breaches of applicable privacy laws. Such a claim would be at least the 4th reported Management litigation claim that Hemostemix has been subject over the last 2 years.

The inaccuracies and misstatements are too numerous to list. We hope that shareholders can see from the few examples addressed above, how Management is trying to falsely lead them.

In order to preserve value and ensure that those with an economic interest in Hemostemix determine its path forward, it is critical that all shareholders support our nominees and our plan. ONLY WITH YOUR SUPPORT IN VOTING THE BLUE FORM CAN WE DEFEAT MANAGEMENT AND FINALLY PUT AN END TO THEIR SYSTEMIC DESTRUCTION OF SHAREHOLDER VALUE. EVERY VOTE IS PARAMOUNT TO MAKING THIS MUCH NEEDED CHANGE A REALITY. Again, we ask you to please ensure that you vote only the BLUE form and disregard any proxy materials received from Management to ensure meaningful change.

More Progress and Planning for Transition

The Concerned Shareholders are committed to acting in the best interests of YOUR COMPANY, with a view toward maximizing the value of Hemostemix for the benefit of ALL of the Company's shareholders. Building from that foundation, the Concerned Shareholders have:

• designed a sound strategic plan with timelines, as described in the Concerned Shareholders proxy circular, to enhance shareholder value;
  
  
• secured the support of a Professor of Medicine and Biochemistry & Molecular Biology who has agreed to help us rebuild a very strong team;
  highly qualified clinical scientists and medical professionals who have agreed to help us rebuild a very strong team;
  
  
• further developed its transition plan relating to the clinical science and biotechnology expertise required for the Company going forward, based on the consultations with a range of highly qualified clinical scientists and medical professionals with deep and specific knowledge of not only the Company's general industry (research and development of autologous cell therapies), but the Company's specific technology and clinical trials in particular;
  
  
• engaged in advanced discussions with a state-of-the-art U.S. Food and Drug Administration ("US FDA") cGMP (Current Good Manufacturing Practices) certified lab facility in the United States of America - backed by well-respected experts in the field of stem cell research and development - that would be capable of not only continuing the Phase 2 Trial, but also be in a position to promptly launch complimentary US FDA sanctioned cardiovascular trials, while utilizing the same qualified staff and medical expertise creating tremendous cost controls and value added data; and
  
  
• advanced plans to raise a minimum of $4,000,000 through a debt or convertible debt facility to stabilize the Company and fund the continuation of the collection of interim data and the Phase 2 Trial on reasonable commercial terms and with a view to involving current shareholders generally if and as permitted, whether via rights offering or otherwise. Drive Capital has agreed to underwrite or top-up this financing as necessary.
  
  

Our proposed new leadership will provide enhanced, cohesive management that will promote greater transparency, and enhance value for ALL Shareholders.

Summary and Call for Action

We have paid the full cost of seeking to change the Board of Hemostemix out of our own pockets in response to the dismissive and high-handed actions of Management following many months of decline. On the other hand, we understand that Management has engaged expensive new legal counsel and a costly proxy solicitation firm, to be paid based on the Q2 Results, with your Company's money that can be ill afforded or that they simply do not have.

This is unprecedented behaviour for a company the size of Hemostemix, which is for most intents and purposes insolvent and shows Management's desperation and hypocrisy. It is obviously easy to spend the shareholders' funds to keep your job and privileges - particularly in the case of a CEO who holds almost no shares.

Management of Hemostemix has squandered your cash and is leveraging what is left of the company to desperately keep themselves in control. They have created easily refutable arguments to support an untenable position. It is time for change.

We also note that we followed a standard practice of having our counsel deliver a letter to counsel for Hemostemix, regarding a protocol for the meeting to ensure a fair and orderly meeting. Hemostemix responded with a terse three sentence reply featuring: "The Company confirms that the Meeting will be conducted in accordance with the Company's by-laws, all other legal requirements, appropriate recognized practices and with a view to the best interests of all shareholders." Given Management's other conduct leading up to and throughout this proxy contest, we are obviously concerned with this seemingly glib and unhelpful reply. Hopefully this is not an indication that Management will seek to act in an unfair and capricious manner at the meeting.

We have heard from many shareholders who have informed us that they will attend the meeting. We would encourage all shareholders to attend the meeting and stand up for change. The meeting will be held at 2:00 P.M. (Mountain Standard time) on Thursday, September 8, 2016 at the offices of Heighington Law Firm, 730, 1015 - 4^th Street S.W., Calgary, Alberta. We hope to see you there.

We once again thank shareholders for the significant support shown so far. Although support for the Concerned Shareholders is emphatic, given Management's actions to date, shareholders should be wary of any tactics they may use to try to invalidate your vote and disenfranchise you. Therefore, shareholders who have received their BLUE forms late and have not voted yet, we urge you to continue to vote. It is important that management fully appreciate and understand the level of discontent and the strong desire for change.

Time is of the essence. Vote online or by telephone by following the instructions found in the BLUE form mailed to you. Discard Management's voting form and only the BLUE form well in advance of the impending deadline of 12:00 noon P.M. (Calgary time) on September 6, 2016. If you have already voted using management's form but wish to support the Concerned Shareholders, simply recast your vote using the BLUE form. A later dated vote will supersede a previous vote.

Questions, Requests for assistance with voting may be directed to the Concerned Shareholders' Proxy Solicitor:

Laurel Hill Advisory Group

North America

Toll Free: 1-877-452-7184

Collect Calls Outside North America: 416-304-0211

Email: assistance@laurelhill.com

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this news release are forward-looking statements. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including, without limitation, risks and uncertainties related to actions taken by the Company or shareholders in connection with the Meeting. No assurance can be given that any of the events or outcomes anticipated by any forward-looking statement will occur.