Appili Therapeutics Announces Closing of Public Offering of $10,250,000

Appili Therapeutics Inc. (TSXV: APLI) (the “Company” or “Appili”) is pleased to announce the closing of its previously announced public offering (the “Offering”) of units (the “Units”). The Offering was made pursuant to an agency agreement entered into between Bloom Burton Securities Inc. (the “Lead Agent”), Mackie Research Capital Corporation, Haywood Securities Inc. and Industrial Alliance Securities Inc. (together with the Lead Agent, the “Agents”) and the Company.

Pursuant to the Offering, the Company issued a total of 12,812,500 Units at a price of $0.80 per Unit for aggregate gross proceeds of $10,250,000. Each Unit is comprised of one Class A common share 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 acquire one Common Share (a “Warrant Share”) at an exercise price of CDN$1.10 per Warrant Share until February 20, 2023.

“Funds from this offering put Appili in a very solid position to keep delivering on the value-driving milestones in our pipeline,” said Dr. Armand Balboni, Chief Executive Officer of Appili. “Preparing our new asset, ATI-2307, for Phase 2 work; selecting a clinical candidate for our negamycin antibiotic program; delivering critical proof-of-concept one-year data on our ATI-1701 biothreat vaccine candidate; and working towards our first commercial product with our partner Saptalis Pharmaceuticals on ATI-1501, we are well-funded and galvanized to progress our assets against these urgent threats in the anti-infective space. We are especially pleased that this round welcomed a myriad of new shareholders to the Appili investor base, alongside the continued support of many of our long-standing shareholders.”

The Units were qualified for sale by way of a prospectus supplement dated February 14, 2020 to the short base shelf prospectus of the Company dated September 19, 2019 (collectively, the “Prospectus”). A copy of the Prospectus is available under the Company’s profile at www.sedar.com.

In connection with the Offering, the Company has paid the Agents an aggregate cash consideration of $717,500. As additional consideration, the Agents have received 896,875 broker warrants (“Broker Warrants”). Each Broker Warrant is exercisable for one Common Share (a “Broker Warrant Share”) at a price of $0.80 per Broker Warrant Share until February 20, 2022.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy the securities described herein. The securities offered have not been registered under the U.S. Securities Act, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities offered in any jurisdiction in which such offer, solicitation, or sale would be unlawful.

As partial consideration for its services in connection with the Offering, the Lead Agent received 256,545 Broker Warrants. Prior to the closing of the Offering, Bloom Burton & Co. Inc. (“Bloom Burton”), an affiliate of the Lead Agent, beneficially owned, directly and indirectly, 14,350,120 Common Shares (13,896,000 of which are held by its wholly-owned subsidiary Bloom Burton Development Corporation) and 2,200 share purchase warrants (the “IPO Broker Warrants”) exercisable into 8,491 Common Shares at a price of $1.10 per Common Share until November 21, 2020 (which are held by the Lead Agent), representing approximately 42.72% of the then issued and outstanding Common Shares on a non-diluted basis, and 42.74% of the then issued and outstanding Common Shares on a partially-diluted basis, assuming the exercise of the IPO Broker Warrants held by Bloom Burton and its affiliates only.

Immediately following closing of the Offering, Bloom Burton beneficially owns, directly or indirectly, 14,350,120 Common Shares, 2,200 IPO Broker Warrants and 256,545 Broker Warrants, representing 30.93% of the Common Shares issued and outstanding on a non-diluted basis and 31.32% of the Common Shares issued and outstanding on a partially-diluted basis, assuming the exercise of the IPO Broker Warrants and the Broker Warrants held by Bloom Burton and its affiliates only.

The Lead Agent received the Broker Warrants in the normal course of its business as a registered investment dealer. The Broker Warrants and the other securities of the Company beneficially owned, directly or indirectly, by Bloom Burton, are held for investment purposes. Bloom Burton has a long-term view of the investment and may acquire additional securities including either in the open market or through private acquisitions or sell the securities including either on the open market or through private dispositions in the future depending on market conditions, reformulation of plans and/or other relevant factors, to the extent permitted under the escrow agreement dated as of June 12, 2019 to which Bloom Burton is party.

An early warning report relating to this transaction will be filed on SEDAR under the Company’s profile at www.sedar.com. To obtain a copy of such report, please contact Sonia Yung at (416) 640-7575. Bloom Burton is a company existing under the laws of Ontario specializing in the healthcare investment industry with its head office at 65 Front Street East, Suite 300, Toronto, Ontario, M5E 1B5.

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 critical disease space. Appili has built a 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, including ATI-2307, a novel, broad spectrum, clinical-stage antifungal candidate in development for severe and difficult-to-treat invasive fungal infections; ATI-1701, a vaccine candidate for tularemia, a very serious biological weapons threat; ATI-1503, a drug discovery program aimed at generating a novel class of antibiotics with broad-spectrum activity against Gram-negative superbugs; and ATI-1501, which 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 Toronto, Ontario, Appili is pursuing worldwide opportunities in collaboration with scientific and industry commercial partners, governments and government agencies. For more information, visit www.AppiliTherapeutics.com. The head office of the Company is located at #21 – 1344 Summer St., Halifax, Nova Scotia, B3H 0A8.

Forward looking statements
This news release contains “forward-looking statements”, including with respect to the proposed use of proceeds. Wherever possible, words such as “may “, “would“, “could “, “should”, “will,” “anticipate,” “believe,” “plan,” “expect,” “intend,” “estimate,” “potential for” and similar expressions have been used to identify these forward-looking statements. These forward-looking statements reflect the current expectations of the Company’s management for future growth, results of operations, performance and business prospects and opportunities and involve significant known and unknown risks, uncertainties and assumptions, including, without limitation, those listed in the Prospectus and the other filings made by the Company with the Canadian securities regulatory authorities (which may be viewed at www.sedar.com). Should one or more of these risks or uncertainties materialize or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements may vary materially from those expressed or implied by the forward-looking statements contained in this news release. These factors should be considered carefully, and prospective investors should not place undue reliance on the forward-looking statements. The Company disclaims any intention or obligation to revise forward-looking statements whether as a result of new information, future developments or otherwise, except as required by law.

Neither the TSX 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200220005498/en/