CHARLOTTESVILLE, Va., April 03, 2017 (GLOBE NEWSWIRE) -- Diffusion Pharmaceuticals Inc. (NASDAQ:DFFN), a
clinical stage biotechnology company focused on the development of novel small molecule therapeutics for cancer and other
hypoxia-related diseases, today announced that it entered into subscription agreements for the sale of an aggregate of 4,558,030
shares of its Series A convertible preferred stock in a private offering for gross proceeds of approximately $9.2 million, prior to
deducting placement agent fees and estimated expenses payable by Diffusion. The closing is the second and final closing of
Diffusion’s previously announced private placement. The private placement was oversubscribed as the original raise targeted
$15.0 million. Together with the shares issued at and gross proceeds from the initial closing, Diffusion issued an aggregate of
12,395,053 shares of Series A convertible preferred stock for aggregate gross proceeds of approximately $25.0 million in the
private placement.
The Series A convertible preferred stock is initially convertible into one share of the Diffusion’s common stock
at a conversion price equal to the purchase price of $2.02 per share. In addition, each investor received a 5-year warrant to
purchase one share of common stock for each share of Series A preferred stock purchased by such investor at an exercise price equal
to $2.22, subject to adjustment thereunder. Maxim Merchant Capital acted as the Company’s placement agent in the Private
Placement.
Important Information for Investors and Shareholders
This announcement is neither an offer to sell, nor a solicitation of an offer to buy, any of these
securities and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such offer, solicitation
or sale is unlawful. THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES UNLESS THE SECURITIES
ARE REGISTERED UNDER THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS, OR AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS IS AVAILABLE. THESE SECURITIES ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.
About Diffusion Pharmaceuticals Inc.
Diffusion Pharmaceuticals Inc. is a clinical stage biotechnology company focused on extending the life expectancy of cancer
patients by improving the effectiveness of current standard of care treatments including radiation therapy and chemotherapy. The
Diffusion technology is a paradigm shift in the approach to the treatment of cancer and other diseases involving hypoxia, or oxygen
deprivation, in that it facilitates the diffusion of oxygen into hypoxic tissue. Diffusion is developing its lead drug, trans
sodium crocetinate (TSC), for use in the many cancer types in which tumor hypoxia (oxygen deprivation) is known to diminish the
effectiveness of current treatments. TSC targets the cancer's hypoxic micro-environment, re-oxygenating treatment-resistant tissue
and making the cancer cells more vulnerable to the therapeutic effects of treatments such as radiation therapy and chemotherapy,
without the apparent addition of any serious side effects.
A Phase 2 clinical program, completed in the second quarter of 2015, evaluated 59 patients with newly diagnosed
glioblastoma multiforme (GBM). This open label, historically controlled study demonstrated a favorable safety and efficacy profile
for TSC combined with standard of care. A strong efficacy signal was seen in the subset of inoperable patients, where survival of
TSC-treated patients at two years was increased by 380% over the controls. The U.S. Food and Drug Administration has provided
guidance on the design of a Phase 3 trial in newly diagnosed GBM. Additional planned studies may include a Phase 2 trial in
pancreatic cancer and a study in brain metastases. Due to its novel mechanism of action, TSC has safely re-oxygenated a range of
tumor types in preclinical and clinical studies. Diffusion believes its therapeutic potential is not limited to specific tumors,
thereby making it potentially useful to improve standard of care treatments of other life-threatening cancers. The Company also
believes that TSC has potential application in other indications involving hypoxia, such as stroke and neurodegenerative
diseases.
Forward-Looking Statements
To the extent any statements made in or in connection with this news release deal with information that are not historical
facts, these are forward-looking statements under the Private Securities Litigation Reform Act of 1995. Such statements include
statements that are not historical in nature, including those that utilize terminology such as "would," "will," "plans,"
"possibility," "potential," "future," "expects," "anticipates," "believes," "intends," "continue," "continue," “estimates,”
“targets,” “projects,” “intends,” other words or expressions of similar meaning, derivations of such words or expressions and the
use of future dates. Forward-looking statements by their nature address matters that are, to different degrees, uncertain and
involve both known and unknown risks. These uncertainties and risks may cause Diffusion's actual results to be materially different
than those expressed in or implied by such forward-looking statements. Particular uncertainties and risks include the factors
discussed in Diffusion’s public filings, including the risk factors including in Diffusion’s most recent Annual Report on Form
10-K. All forward-looking statements in this news release speak only as of the date of this news release and are based on
Diffusion’s management's current beliefs and expectations. Investors, potential investors and other reads are urged to consider
these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such
forward-looking statements. Diffusion undertakes no obligation to update or revise any forward-looking statement, whether as
a result of new information, future events or otherwise after the date of this release, except as required by applicable
law.
Diffusion Pharmaceuticals Contacts David Kalergis Chief Executive Officer Diffusion Pharmaceuticals Inc. (434) 220-0718 dkalergis@diffusionpharma.com Stephanie Carrington ICR Inc. (646) 277-1282 Stephanie.Carrington@icrinc.com
