Aequus Pharmaceuticals Closes $4.2 Million Private Placement Financing

VANCOUVER, Canada, November 20, 2014 – Aequus Pharmaceuticals Inc. (the “Company” or “Aequus”) is pleased to announce that it has closed a brokered private placement offering (the “Brokered Offering”) of special warrants for approximately C$3.7 million.  Cormark Securities Inc. and Clarus Securities Inc. acted as co-lead agents in the Brokered Offering for a syndicate of agents that also included Wolverton Securities Ltd. and PI Financial Corp. (collectively the “Agents”). Concurrently with the Brokered Offering, the Company also closed a non-brokered private placement offering (the “Non-Brokered Offering” and, together with the Brokered Offering, the “Offering”) of special warrants for approximately C$500,000.

Aequus has issued a total of 7,618,780 special warrants (the "Special Warrants") at a price of C$0.55 per Special Warrant (the “Issue Price”) in connection with the Offering for total gross proceeds to the Company of approximately C$4.2 million.

“We would like to thank our new and existing investors for their continued support,” stated Doug Janzen, President and Chief Executive Officer. “These funds will allow management to focus their efforts on achieving the key operational objectives and milestones of the company over the coming months.”

The Company intends to use the net proceeds from the Offering to further advance its lead program, AQS-1301, a once-weekly transdermal formulation of aripiprazole, from formulation optimization towards anticipated clinical trials required for regulatory approval. The Company intends to apply the remainder of the proceeds towards the development of earlier stage programs and for working capital and general operating expenses.

The target product profile for AQS-1301 will deliver aripiprazole steadily over a seven day period. Aripiprazole is an anti-psychotic, currently available as a once-a-day oral tablet (under the trade name Abilify ®) and as a 30-day injectable (under the trade name Maintena ®) to treat CNS disorders including Schizophrenia, Bipolar Disorder I, Major Depressive Disorder, and Irritability associated with Autistic Disorder.

Lack of adherence to anti-psychotics is a serious issue that can lead to worsening of symptoms, relapse, suicidal attempts, repeated emergency room visits or re-hospitalization, and poor functional outcomes, particularly in patients with schizophrenia. 69% of patients with poor compliance suffer a psychotic relapse compared to 18% with good compliance. Consensus guidelines suggest that interventions to improve adherence should be multifaceted, with pharmacologic modifications that could include switching patients to a long-acting anti-psychotic. Aequus believes that a once-weekly transdermal formulation of aripiprazole would provide patients with a comfortable, convenient and easy to use long-acting alternative that will promote enhanced patient compliance.

Each Special Warrant entitles the holder to acquire, upon exercise or deemed exercise and for no additional consideration, one unit (a “Unit”) consisting of one common share (“Common Share”) in the capital of the Company and one-half of one Common Share purchase warrant (each whole warrant, a “Warrant”). Each Warrant entitles the holder to acquire an additional Common Share at a purchase price of C$0.75 during the period ending 24 months from closing. The Company has a right to accelerate the exercise period of the Warrants upon meeting certain conditions.

The Company has agreed to use its best efforts to obtain, within 180 days from closing of the Offering (the “Qualification Deadline”), a receipt for a final long form prospectus qualifying the distribution of Common Shares and Warrants upon exercise or deemed exercise of the Special Warrants (the “Prospectus Qualification”), and to list its Common Shares on a stock exchange. If the Prospectus Qualification does not occur before the Qualification Deadline, each holder of Special Warrants shall be entitled to receive, without payment of additional consideration, 1.1 Units per outstanding Special Warrant.

Unless the Prospectus Qualification occurs, securities issued in connection with the Offering are subject to a hold period expiring on March 20, 2015.

In consideration for their services, the Agents received a cash commission equal to the aggregate of: (i) 6.0% of the gross proceeds of the Brokered Offering, excluding the gross proceeds from investors on a “President’s List” agreed upon by Aequus and the Agents; and (ii) 7% of the gross proceeds from investors on the President’s List. The Agents also received agents’ special warrants (“Agents’ Special Warrants”) equal to 6% of the number of Special Warrants sold in connection with the Brokered Offering. Each Agents' Special Warrant will be exercisable or deemed exercisable to acquire for no additional consideration agent warrants which will be exercisable to acquire one Unit at the Issue Price for a period of 24 months from closing.

ABOUT AEQUUS PHARMACEUTICALS INC.

Aequus Pharmaceuticals Inc. is a Vancouver-based specialty pharmaceutical company focused on enhancing delivery methods for approved drugs and select consumer products that are limited by non-compliance, high frequency dosing, first-pass metabolism side-effects, painful injections, or where the therapeutic profile can be improved by making a long-acting alternative available.

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