Aequus Pharmaceuticals: Completes C$2.5M Equity Financing

News
August 6, 2020

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

VANCOUVER, BC, Aug. 6, 2020 /CNW/ - Aequus Pharmaceuticals Inc. (TSX-V: AQS) (OTCQB: AQSZF) ("Aequus" or the "Company"), a specialty pharmaceutical company with a focus on developing, advancing and promoting differentiated products, is pleased to announce that today it has closed its previously announced "best efforts" public offering of units ("Units") of the Company (the "Offering"). Pursuant to the Offering, Aequus issued 31,250,000 Units at a price of $0.08 per Unit for aggregate gross proceeds of $2,500,000.

Each Unit is comprised of one common share in the capital of the Company (a "Common Share") and one-half of one common share purchase warrant of the Company (each whole common share purchase warrant, a "Warrant"). Each Warrant entitles the holder thereof to purchase one Common Share at an exercise price of C$0.12 per Common Share for a period of thirty-six (36) months following the closing date of the Offering, being August 6, 2020 (the "Closing Date"). The Warrants include an acceleration provision, exercisable at the Company's option, if the Company's daily volume weighted average share price is greater than C$0.20 for ten consecutive trading days.

The Units were issued pursuant to an agency agreement (the "Agency Agreement") between the Company and Cormark Securities Inc. (the "Agent"). In accordance with the Agency Agreement, the Agent received: (i) a cash commission equal to 5% of the aggregate gross proceeds of the Offering; and (ii) broker warrants (the "Compensation Warrants") equal to 5% of the aggregate number of Units issued and sold under the Offering. Each Compensation Warrant entitles the Agent to purchase one Unit at a price of $0.08 per Unit for a period of 36 months following the Closing Date, with each Unit consisting of one Common Share and one-half of one common share purchase warrant (each whole common share ‎purchase warrant, a "Broker Warrant") of the Company. Each Broker Warrant will entitle the holder thereof to acquire one Common Share at an exercise price of $0.12 per Common Share‎ until the date which is 36 months following the Closing Date, subject to adjustment and/or acceleration in certain events.

The Offering was completed in each of the provinces of British Columbia, Alberta, Manitoba and Ontario pursuant to a prospectus supplement to the Company's base shelf prospectus dated September 16, 2019 (the "Prospectus Supplement") and in other jurisdictions on a private placement basis.

Aequus intends to use the net proceeds of the Offering to purchase inventory for the launch of the Evolve® line of preservative free dry eye products, associated marketing and commercialization costs, regulatory application costs for a preservative-free prescription glaucoma product and general corporate and working capital purposes.

Doug Janzen, Chairman and Chief Executive Officer, Ann Fehr, Chief Financial Officer, and Stuart Fowler, a director of Aequus, have purchased 3,125,000 Units, 125,000 Units and 625,000 Units, respectively, under the Offering. The issuance of Units to these individuals under the Offering constitutes a related-party transaction under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). These transactions are exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to sections 5.5(a) and 5.7(1)(a) of MI 61-101 as neither the fair market value of any securities issued to, nor the consideration paid by, such individuals would exceed 25.0% of the Company's market capitalization. The Company did not file a material change report 21 days prior to the closing of the Offering, which the Company deemed reasonable in the circumstances in order to complete the Offering in a timely manner.

Copies of the Prospectus Supplement and Agency Agreement relating to the Units are available under the Company's profile on SEDAR at www.sedar.com.

This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein in the United States or in any other jurisdiction. The Units and securities underlying the Units have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and accordingly, may not be offered or sold to, or for the account or benefit of, persons in the United States or "U.S. persons" as such term is defined in Regulation S promulgated under the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom.

About Aequus Pharmaceuticals

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 sales and marketing efforts to include several commercial products in ophthalmology and transplant. 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.

Forward-Looking Statements:

This release contains forward-looking statements or forward-looking information under applicable Canadian securities legislation that may not be based on historical fact. 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 in this release include but are not limited to statements relating to the intended use of the net proceeds of the Offering by Aequus. 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 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 the market for Aequus' common shares and the fulfillment of the conditions to the Offering. In evaluating forward-looking statements, current and prospective shareholders should specifically consider various factors set out under the heading "Risk Factors" in the Company's Annual Information Form dated April 28, 2020, 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.

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

SOURCE Aequus Pharmaceuticals Inc.

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