TORONTO, ONTARIO--(Marketwired - Aug. 29, 2016) -
- Warns shareholders the dissident nominees will put their investment at risk.
- Encourages shareholders to vote their WHITE proxy FOR the current experienced board with a proven plan to create value.
Hemostemix Inc. ("Hemostemix") (TSX VENTURE:HEM)(OTCQX:HMTXF) today released a letter to shareholders highlighting the benefits of voting in favour of the current experienced, trusted board and encourages shareholders to vote their WHITE proxy to stay the course. The letter confirms that the dissidents' proposed changes to the board are not in the best interests of all shareholders, and reminds them they may revoke a blue proxy by completing and delivering their white form of proxy. Hemostemix has engaged Norton Rose Fulbright Canada LLP as their legal advisor and Kingsdale Shareholder Services as their strategic advisor and proxy solicitation agent.
Dear Fellow Hemostemix Shareholder:
We are writing to seek your support for YOUR Company, Hemostemix Inc. A group of self-interested dissident shareholders (the Dissidents) with no industry experience are attempting to ambush shareholders at the company's annual meeting, seize control of Hemostemix' intellectual property and take over your Board.
In order to grab control of Hemostemix, the Dissidents have made unfounded accusations and provided misleading information about your company and management.
Here are the facts:
- The company has made great strides in bringing our landmark technology to market and are clearly on the path to success
- We have refreshed our best-in-class Board creating a strong balance between deep industry knowledge, international operating experience and capital markets expertise
- The Dissidents have ambushed the company and embarked on a costly and disruptive campaign, that will only result in value destruction
- The Dissident nominees will put your investment in Hemostemix at risk. They have zero industry experience or familiarity with the biotechnology sector as demonstrated by their uninformed agenda. Their self-interested agenda will unwind the progress the company has achieved and shift its focus to dubious medical practices.
Now is not the time to risk the future of Hemostemix and our valuable intellectual property to unproven, inexperienced Dissidents with a self-interested agenda premised on dubious medical practices. Only our STRENGHTENED Board and EXPERIENCED Management Team have a CLEAR STRATEGY that WILL lead to the creation of SHAREHOLDER VALUE.
Our vision is to build a leading world-class biotech company. The Dissidents' agenda is dangerous - they want to scale back clinical trials and move our business to jurisdictions with poor regulatory oversight. We cannot allow these unknown and inexperienced opportunists to attack your company and destroy its future.
VOTE THE WHITE PROXY TO SUPPORT YOUR COMPANY'S TRUSTED BOARD AND ENSURE THAT THE PROGRESS WE HAVE ACHIEVED IN BRINGING OUR LANDMARK TECHNOLOGY TO MARKET IS NOT LOST!
EXPERIENCED BOARD WITH A PROVEN PLAN TO CREATE VALUE
Our strengthened Board includes extensive biotechnology, pharma, capital markets and legal expertise. Our Life Science Board Members each have unprecedented relevant experience in the healthcare sector; have been involved in the treatment of over 1,000 patients with cell therapies and have a proven track record of success.
Our performance has consistently kept pace with our peers while building a strong foundation for future growth. We have now reached the tipping point of our development process to create even more value for all shareholders. To unlock that value, your management team is leading a number of successful clinical trials. Led by our CEO, Dr. Elmar Burchardt, and members of our Board, we have already achieved significant milestones:
- Critical Regulatory Approvals. Our success in Canada, South Africa and our FDA approval to commence clinical trials in the United States is the direct result of our management team's experience and the significant amount of groundwork already completed.
- Implementation of Phase 2 Clinical Trials. Hemostemix has received clearance to initiate our Phase 2 clinical trial with several leading US institutions.
- More Clinical Trial Sites. The number of trial sites was increased from one to six.
- More Efficiency. We have implemented over 3,000 changes to the original protocol and reduced the number of required subjects from over 200 to 95, while substantially increasing the statistical power of the clinical trial. The changes implemented have dramatically increased the speed at which we can enroll patients.
- Data Analytics. 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
- Achieved Industry Low Operating Cost. Hemostemix is already operating with the lowest budget of any cell therapy company that is conducting international Phase 2 clinical studies, and we have plans to further reduce our operating costs with low cost/high volume centres. We are currently in late stage discussions to open up clinical trial activities in former Eastern Bloc countries with large numbers of eligible patients that could further reduce our operating costs.
We are on the path to success and in the process of securing the additional financing to advance these trials and monetize our technology. To date, management and key shareholders have invested over $1.2MM of their own capital in non-interest bearing loans to ensure success.
The KEY to realizing this success and to unlock the VALUE is to stay the course.
THE DISSIDENTS' AGENDA WILL PUT YOUR INVESTMENT AT RISK
The Dissidents want to hijack your company and use its intellectual property for their purposes. They will derail Hemostemix off our path to success and focus instead on the grey market business of medical tourism in unregulated jurisdictions. It is short-sighted, alarming and destructive.
ACCORDING TO THE DISSIDENTS' PLAN, ALL HEMOSTEMIX ASSETS WILL BE USED AS COLLATERAL TO SECURE THEIR LOAN AND THEY WILL DECIDE IF HEMOSTEMIX GOES INTO DEFAULT AFTER AN INTIAL PAYMENT OF C$ 1 MILLION. IN ESSENCE, THE DISSIDENTS COULD SEIZE ALL HEMOSTEMIX ASSETS FOR C$ 1 MILLION.
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.
The Dissidents have NO experience in developing drugs or medical devices - they do not have the knowledge, understanding or the skills needed to take this technology to the next level. What they do have is a track record of orchestrating hostile takeovers. Their involvement will undermine our strategic discussions with pharma and biotech partners and its future.
Shareholders will not benefit by abandoning our successful work or by placing our technology into the hands of a self-interested few without any experience or any track record and no concept of how to move it forward will not result in value to shareholders.
The Dissidents cannot be trusted, look at their past:
- Jed Wood, member of the Dissidents and proposed director, controls Drive Capital. It is no coincidence that 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. We rejected Drive Capital's proposal. This time consuming and costly proxy battle is the next step in Mr. Wood's attempt to take control of the company.
- Mr. Jim Brown is listed as a member of the Dissidents, and is president and CEO of Hemostemix Asia ("HEMA"), which is not affiliated with Hemostemix Inc. 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. Mr. Brown has responded by threatening to sue the company - Brown is an adversary of the company and not a viable candidate to lead it.
- Mr. Robert Achtymichuk is a member of the Dissidents and a former Hemostemix' Vice President of Business Development. While the Dissidents are critical of Hemostemix' poor disclosure, corporate governance and unsuccessful attempts to raise funds, they should be pointing the finger at Mr. Achtymichuk, who was responsible for these initiatives. And, 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.
With NO plan, NO biotechnology experience and NO control premium offered to Hemostemix shareholders during this critical stage in the company's development, the Dissidents' proposed changes to the Board are NOT in the best interests of Hemostemix and its shareholders.
Vote your WHITE proxy FOR your BOARD
Regardless of how many shares you own or whether you plan to attend the upcoming meeting on September 8, 2016 or not, it is imperative that you vote your WHITE proxy.
You may vote your WHITE proxy by internet or telephone, or by signing, dating, and returning the enclosed WHITE proxy by fax to Kingsdale Shareholder Services at 1-866-545-5580 or 416-867-2271. Only your later-dated proxy will count.
Shareholders are urged to vote their WHITE proxy FOR Hemostemix' current Board of Directors prior to the proxy cut-off at 2:00 p.m. (MDT) on September 6, 2016.
You may revoke a blue proxy already given by completing and delivering your WHITE form of proxy. The later dated WHITE form of proxy revokes any and all prior proxies given by you in connection with the Meeting.
If you have any questions, please contact Kingsdale Shareholder Services at 1-888-518-6832 toll-free in North America, or 416-867-2272 outside North America or by email at firstname.lastname@example.org.
On behalf of the entire Board and management, we would like to thank you for your continued support of Hemostemix, as we move forward with the execution of our strategy to drive Hemostemix in the right direction.
(signed) "Angus Jenkins"
Angus Jenkins, Chairman of the Board of Directors
ABOUT HEMOSTEMIX INC.
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 are capable of supporting the formation of new blood vessels. The company recently received FDA clearance to commence clinical trials in the United States.
Hemostemix Inc. is traded on the TSX Venture Exchange under the trading symbol HEM and on the OTCQX® Best Market under the trading symbol HMTXF. For more information, visit hemostemix.com or email email@example.com.
Neither the TSX Venture Exchange Inc. 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.
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. 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.