Aequus Announces Filing of Prospectus Supplement and an Update to Previously Announced Public Offering of Convertible Debenture Units

Apr 26, 2019

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

VANCOUVER, British Columbia, April 26, 2019 – Aequus Pharmaceuticals Inc. (the “Company”) (TSX-V: AQS) (OTCQB:AQSZF) is pleased to announce that it has filed a prospectus supplement (the “Prospectus Supplement”) to its short form base shelf prospectus dated August 15, 2017 (the “Base Shelf Prospectus”) relating to its previously announced marketed public offering of convertible debenture units of the Company (each, a “Debenture Unit”) at a price of $1,000 per Debenture Unit for gross proceeds of up to $3 million (the “Offering”). The Prospectus Supplement was filed with the securities regulatory authorities in each of the provinces of British Columbia, Alberta, Manitoba, Saskatchewan and Ontario.

The confirmed terms of the Offering are that each Debenture Unit will consist of a 9.5% unsecured convertible debenture (each, a “Convertible Debenture”) with a maturity of 36 months from the date of issuance (the “Maturity Date”) and 2,380 common share purchase warrants (each, a “Warrant”), exercisable for 36 months from the date of issuance. Each Warrant shall entitle the holder thereof to purchase one common share in the capital of the Company (each, a “Common Share” and collectively, the “Common Shares”) at an exercise price equal to $0.22 (the “Exercise Price”), at any time up to 36 months following Closing of the Offering.

The principal amount of each Convertible Debenture (the “Principal Amount”) will be convertible, for no additional consideration, into Common Shares at a conversion price of $0.21 (the “Conversion Price”) at the option of the holder at any time prior to the earlier of: (i) the close of business on the Maturity Date; and (ii) the business day immediately preceding the date specified by the Company for redemption of the Convertible Debentures upon a change of control.

The Company may force the conversion of the principal amount of the then outstanding Convertible Debentures (the “Mandatory Conversion”) at the Conversion Price on not more than 60 days' and not less than 30 days' notice should the daily volume weighted average trading price of the Common Shares be greater than $0.32 for the consecutive 20 trading days preceding the notice, subject to the Mandatory Conversion being permitted under the policies of the TSX Venture Exchange (the “TSXV”).

The Offering is being led by Mackie Research Capital Corporation as the lead agent and sole bookrunner (the “Agent”) pursuant to the terms and conditions of an agency agreement dated April 25, 2019 between the Agent and the Company. The Company has agreed to: (a) pay a cash commission to the Agent equal to 7.0% of the gross proceeds of the Offering; and (b) issue to the Agent non-transferable broker warrants (the “Broker Warrants”) to purchase such number of Common Shares (collectively, the “Broker Shares”) as is equal to 7.0% of: (i) the number of Common Shares issuable upon conversion of the Convertible Debentures sold under the Offering (based on a conversion price of $0.21 per Common Share) and (ii) the number of Common Shares issuable upon exercise of the Warrants sold under the Offering, bearing the same exercise price and term as the Warrants. The aggregate amount of cash commission paid and number of Broker Warrants issued shall include any additional Debenture Units issued upon exercise of the Over-Allotment Option (as defined herein).

The net proceeds received by the Company from the Offering are intended to be used for regulatory applications and, launch of the recently announced Medicom products, investments in the medical cannabis space, initiation of the Trokendi clinical study, working capital and general corporate purposes.

The Company will also grant the Agents an option (the “Over-Allotment Option”) to cover over-allotments and for market stabilization purposes, exercisable at any time up to 30 days subsequent to the closing of the Offering, to increase the size of the Offering by up to 15% in Debenture Units on the same terms and conditions of the Offering, exercisable in whole or in part.

The closing of the Offering is currently expected to be on or about May 2, 2019 and will be subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals including the approval of the TSXV. The Company has applied to list the Convertible Debentures, Warrants and common shares issuable upon conversion of the Convertible Debentures and exercise of the Warrants on the TSXV, subject to such securities meeting the listing requirements of the TSXV.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

ABOUT AEQUUS PHARMACEUTICALS INC.

Aequus Pharmaceuticals Inc. (TSX-V:AQS) (OTCQB:AQSZF) is a growing specialty pharmaceutical company focused on developing and commercializing high quality, differentiated products. Aequus has grown its pipeline to include several commercial products in ophthalmology and transplant, and a development stage pipeline in neurology and psychiatry with a goal of addressing the need for improved medication adherence through enhanced delivery systems. As a complement to its focus in neurology, our most recent addition to the development pipeline was a long-acting form of medical cannabis, where there is a high need for a consistent, predictable and pharmaceutical-grade delivery of products for patients. Aequus intends to commercialize its internal programs in Canada alongside its current portfolio of marketed established medicines and will look to form strategic partnerships that would maximize the reach of its product candidates worldwide. Aequus plans to build on its Canadian commercial platform through the launch of additional products that are either created internally or brought in through an acquisition or license; remaining focused on highly specialized therapeutic areas. For further information, please visit www.aequuspharma.ca

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FORWARD-LOOKING STATEMENT DISCLAIMER

This release may contain forward-looking statements or forward-looking information under applicable Canadian securities legislation that may not be based on historical fact, including, without limitation, statements containing the words “believe”, “may”, “plan”, “will”, “estimate”, “continue”, “anticipate”, “intend”, “expect”, “potential” and similar expressions. Forward- looking statements are necessarily based on estimates and assumptions made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as the factors we believe are appropriate. Forward-looking statements include but are not limited to statements relating to: the implementation of our business model and strategic plans; revenue growth trends into the future; expected timing for product launches; the Company’s expected revenues; the regulatory approval of its products; the Company’s ability to attract international partners; and ongoing discussions with and the Company’s ability to secure potential partners to further grow our product portfolio. Such statements reflect our current views with respect to future events and are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Aequus, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements. In making the forward looking statements included in this release, the Company has made various material assumptions, including, but not limited to: obtaining regulatory approvals; general business and economic conditions; the Company’s ability to successfully out license or sell its current products and in-license and develop new products; the assumption that the Company’s current good relationships with third parties will be maintained; the availability of financing on reasonable terms; the Company’s ability to attract and retain skilled staff; market competition; the products and technology offered by the Company’s competitors; the impact of the coronavirus (COVID-19) on the Company’s operations; and the Company’s ability to protect patents and proprietary rights. In evaluating forward looking statements, current and prospective shareholders should specifically consider various factors set out herein and under the heading “Risk Factors” in the Company’s Annual Information Form dated April 30, 2021, a copy of which is available on Aequus’ profile on the SEDAR website at www.sedar.com, and as otherwise disclosed from time to time on Aequus’ SEDAR profile. Should one or more of these risks or uncertainties, or a risk that is not currently known to us materialize, or should assumptions underlying those forward-looking statements prove incorrect, actual results may vary materially from those described herein. These forward-looking statements are made as of the date of this release and we do not intend, and do not assume any obligation, to update these forward-looking statements, except as required by applicable securities laws. Investors are cautioned that forward-looking statements are not guarantees of future performance and are inherently uncertain. Accordingly, investors are cautioned not to put undue reliance on forward looking statements.

Aequus Contact Information
‍investors@aequuspharma.ca
604-336-7906