Appili Therapeutics Announces Filing of Prospectus Supplement and Proposed Concurrent Private Placement

Appili Therapeutics Inc. (TSXV:APLI) (the “Company” or “Appili”) announced today that it has filed a prospectus supplement to its base shelf prospectus dated September 19, 2019 (collectively, the “Prospectus Supplement”) in connection with its previously announced overnight marketed offering of equity securities (the "Public Offering"). The Prospectus Supplement was filed in each Province of Canada (other than Quebec) and a copy of the Prospectus Supplement will be available under the Company’s profile at www.sedar.com.

Concurrently with the filing of the Prospectus Supplement, the Company has entered into an agency agreement with a syndicate of agents led by Bloom Burton Securities Inc. (the “Lead Agent”) and including Mackie Research Capital Corporation, Industrial Alliance Securities Inc., Haywood Securities Inc. and Richardson GMP Limited (collectively with the Lead Agent, the “Agents”) governing the issuance, on a best efforts agency basis, of 11,250,000units of the Company ("Units") at a price of C$1.20per Unit (the “Offering Price”) for gross proceeds of C$13,500,000. Each Unit is comprised of one Class A common share of the Company (a "Common Share") and one-half (1/2) of one Common Share purchase warrant (each whole warrant, a "Warrant"). Each Warrant is exercisable at a price of C$1.50and entitles the holder thereof to acquire one Common Share for a period of 3 years following the date of the closing of the Public Offering (the “Closing Date”). The Company has also granted the Agents an over-allotment option to offer for sale that number of additional Units equal to 15% of the Units sold under the Public Offering and/or additional Warrants equal to 15% of the number of Warrants sold under the Public Offering (in each case excluding the over-allotment option), exercisable at any time up to 30 days after the Closing Date.

In connection with the Public Offering, the Agents will be paid a cash commission equal to 7.0% of the gross proceeds of the Public Offering (including any Units sold pursuant to the exercise of the over-allotment option, but not including any Units sold to purchasers on a president’s list to be agreed to by the Company and the Lead Agent (the “Purchaser’s List”)) and will be issued that number of non-transferable broker warrants (“Broker Warrants”) equal to 7.0% of the number of Units sold in the Public Offering (including any Units sold pursuant to the exercise of the over-allotment option, but excluding Units sold to President’s List purchasers). Each Broker Warrant will be exercisable to acquire one Common Share at the Offering Price for a period of 24 months from the Closing Date.

The Company also announced the proposed issuance of an aggregate of approximately 1,200,000 Units, on a non-brokered private placement basis, at the Offering Price for gross proceeds of approximately $1,440,000 (the “Concurrent Private Placement”). No fees or commissions will be payable to the Agents in connection with the Concurrent Private Placement.

The net proceeds of the Public Offering will be used primarily towards funding planned research and development activities for the clinical trial sponsored by the Company evaluating FUJIFILM Toyama Chemical Inc.’s (FFTC) drug favipiravir in long-term care facilities as a potential preventative measure against COVID-19. Net proceeds of the Public Offering will also be used to fund development costs for the Company’s other product candidates, including the ATI-2307 antifungal program, the ATI-1701 tularemia vaccine program and the antibiotic ATI-1503 program, as well as for working capital and general corporate purposes. Details as to the specific allocation of the proceeds are disclosed in the Prospectus Supplement.

The net proceeds of the Concurrent Private Placement are expected to be used to fund other research and development activities, business development activities, general and administrative expenses and for general working capital purposes.

The Company expects to close the Public Offering and the Concurrent Private Placement on or about June 10, 2020. The Public Offering and the Concurrent Private Placement are subject to the satisfaction of certain customary closing conditions, including, but not limited to, the receipt of all necessary regulatory and stock exchange approvals (including, for certainty, the approval of the TSX Venture Exchange (the “TSXV”)).

This news release does not provide full disclosure of all material facts relating to the Units. Investors should read the Prospectus Supplement for disclosure of those facts, including applicable risk factors, before making an investment decision.

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 United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or applicable state securities laws, and may not be offered or sold to, or for the account or benefit of, persons in the United States or U.S. persons (as both such terms are defined in Regulation S promulgated under the U.S. Securities Act) absent registration or an applicable exemption from such 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.

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. In addition, the Company is also testing FUJIFILM Toyama Chemical Inc.’s drug favipiravir for the prevention of COVID-19 as a potential prophylaxis treatment. 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.

Forward looking statements

This news release contains “forward-looking statements”, including with respect to expected closing of the Public Offering, the Concurrent Private Placement and 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 Supplement 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.

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