Appili Therapeutics Announces Closing of $3.6 Million Special Warrant Private Placement and Filing of Preliminary Prospectus

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

HALIFAX, Nova Scotia--()--Appili Therapeutics Inc. ("Appili" or the "Company") is pleased to announce the closing of its private placement offering (the "Brokered Offering") of special warrants (the "Special Warrants") for aggregate gross proceeds of $1,944,282, and with a concurrent non-brokered private placement offering (the “Non-Brokered Offering” and together with the Brokered Offering, the “Offering”) pursuant to which the Company raised aggregate gross proceeds of $1,642,532, the Company has closed on total gross proceeds of $3,586,813. Mackie Research Capital Corp, as Lead Agent and together with Echelon Wealth Partners Inc. and Bloom Burton Securities Inc. (collectively and together with the Lead Agent, the "Agents") acted as the agents in connection with the Brokered Offering.

“As we prepare for our next phase of growth, financial strength and careful stewardship of our resources remain incredibly important to Appili,” said Kimberly Stephens, Chief Financial Officer of Appili. “As we pursue additional pipeline assets and continue with the process of taking Appili public on the TSX Venture Exchange (the “TSXV”), we are grateful for the continued support of our investor base and look forward to additional opportunities to drive value to our shareholders and, ultimately, to patients.”

Pursuant to the Offering, the Company issued an aggregate of 843,956 Special Warrants in multiple tranches, at a price of $4.25 per Special Warrant. Each Special Warrant is automatically exercisable, for no additional consideration, for one common share of the Company (the "Underlying Share") on the date that is two business days following the earlier of: (i) November 21, 2019 and (ii) the date (the “Qualification Date”) that is the later of (A) the date on which the Company obtains receipt from the applicable securities regulatory authorities (the "Securities Commissions") for a (final) prospectus qualifying distribution of the Underlying Shares, and (B) the date on which the Underlying Shares are approved for listing on the TSXV or another stock exchange mutually agreed upon by the Company and the Agents.

Kevin Sullivan, CEO of Appili Therapeutics, commented, “Our business model allows us to pursue a broad range of infectious disease pipeline assets, which places us in the unique position of being able to maximize the capital efficiency of our drug development programs. We have secured $19.1 million in non-dilutive funding from a range of sources that has further bolstered our disciplined approach to building out our pipeline. The $3.6 million from this round of financing is an important component of our growth plans and we look forward to working with our partners – with the ongoing support of our shareholders – to advance our novel programs toward fruition.”

The net proceeds from the Offering will be used for the research and development of Appili’s current anti-infective pipeline of products, working capital, and general corporate purposes.

The Company is also pleased to announce that, in accordance with the terms of the Offering, the Company has filed a preliminary long form prospectus (the “Preliminary Prospectus”) with the securities commissions in each of the provinces of British Columbia, Alberta, Manitoba, Ontario, Quebec and Nova Scotia qualifying the distribution of the Underlying Shares. The Preliminary Prospectus contains important information relating to the Company, the Offering and the Underlying Shares and is still subject to completion or amendment. For more information, readers are advised to consult the Preliminary Prospectus, including the risk factors described therein. A copy of the Preliminary Prospectus is available under the Company’s profile on SEDAR at www.sedar.com.

In connection with the Brokered Offering, the Agents received a cash commission equal to 8% of the aggregate gross proceeds of the Brokered Offering and an aggregate of 34,597 compensation warrants (the "Compensation Warrants"). Each Compensation Warrant entitles the holder thereof to acquire one common share of the Company at a price of $4.25 per share until November 21, 2020, subject to adjustment in certain events.

In addition, in connection with the Non-Brokered Offering, the Company paid finder fees of $131,403 and issued an aggregate of 30,918 finder warrants (the “Finder Warrants”) to certain finders in connection with closing of the Non-Brokered Offering. Each Finder Warrant entitles the holder thereof to acquire one common share of the Company at a price of $4.25 per share until November 21, 2020, subject to adjustment in certain events.

There will not be any sale or any acceptance of an offer to buy the Special Warrants pursuant to the Preliminary Prospectus. No securities regulatory authority has either approved or disapproved the content of this release.

This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful, including any of the securities in the United States of America. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act") or any state securities laws and may not be offered or sold within the United States or to, or for account or benefit of, U.S. Persons (as defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration requirements is available.

About Appili Therapeutics

Appili Therapeutics, Inc. was founded to advance the global fight against infectious disease by matching clearly-defined patient needs with drug development programs that provide solutions to existing challenges patients, doctors, and society face in this challenging disease space. Appili has built pipeline of assets designed to address a broad range of significant unmet medical needs in the infectious disease landscape. This diverse pipeline aims to address some of the most urgent threats in global public health. Via an in-licensing program, Appili acquired the rights to ATI-1701, a vaccine for tularemia, being developed to mitigate the risks of a very serious biological weapons threat. ATI-1503 is a drug discovery program aimed at generating negamycin analogue candidates, which are a novel class of antibiotics with broad-spectrum activity against Gram-negative superbugs. ATI-1501 employs Appili’s proprietary, taste-masked, oral-suspension technology with metronidazole for the growing number of patients with difficulty swallowing. Headquartered in Halifax, Nova Scotia, with offices in Mississauga, Ontario, Appili is pursuing worldwide opportunities in collaboration with science and industry commercial partners, governments and government agencies. For more information, visit www.AppiliTherapeutics.com.

Certain information in this press release may contain forward-looking statements. Such statements include, but are not limited to the proposed use of proceeds and the Company’s intention to list its common shares on the TSXV. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict including the risk that the Company may not be able to obtain a receipt for a final prospectus qualifying the distribution of the Underlying Shares, the risk that the Company may not be able to secure a listing on the TSXV or another stock exchange mutually acceptable to the Company and the Agents and certain other risk factors set out under the heading “Risk Factors” in the Preliminary Prospectus. Actual results might differ materially from results suggested in any forward-looking statements. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements unless and until required by securities laws applicable to the Company.

Neither the Toronto Venture Exchange, nor its regulation services provider (as that term is defined in the policies of the exchange), accepts responsibility for the adequacy or accuracy of this release.

Contacts

Media Relations:
Andrea Cohen, Sam Brown Inc.
O: (917) 209-7163
E: andreacohen@sambrown.com

Investor Relations:
Kimberly Stephens, CFO
Appili Therapeutics
E: info@appilitherapeutics.com

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Contacts

Media Relations:
Andrea Cohen, Sam Brown Inc.
O: (917) 209-7163
E: andreacohen@sambrown.com

Investor Relations:
Kimberly Stephens, CFO
Appili Therapeutics
E: info@appilitherapeutics.com