Appili Therapeutics Announces Closing of Public Offering of $4,500,000

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

HALIFAX, Nova Scotia, May 26, 2022 – Appili Therapeutics Inc. (TSX: APLI) (the “Company” or “Appili”) announced the closing of its previously announced public offering (the “Offering”) of units (the “Units”). The Offering was made pursuant to an agency agreement, as amended, entered into between the Company, Bloom Burton Securities Inc. (the “Lead Agent”) and Leede Jones Gable Inc. (collectively with the Lead Agent, the “Agents”).


Pursuant to the Offering, the Company issued a total of 50,000,000 Units at a price of $0.09 per Unit for aggregate gross proceeds of $4,500,000. 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 $0.15 per Warrant Share until May 26, 2027.


“We are grateful for the support of our shareholders who recognize, as we do, the public health threat posed by infectious diseases and the value of developing new medicines to treat or prevent infections” said Dr. Armand Balboni, Chief Executive Officer, Appili Therapeutics. “With this new funding and the support of our partners, we will continue to advance our diversified pipeline which includes multiple clinical stage therapies and potentially three priority review voucher eligible programs, including ATI-1701, our US Department of Defense supported biodefense vaccine candidate for the prevention of tularemia.”


The Units were qualified for sale by way of a prospectus supplement dated May 20, 2022 to the short base shelf prospectus of the Company dated May 16, 2022 (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 $315,000. As additional consideration, the Agents have received 3,500,000 broker warrants (“Broker Warrants”). Each Broker Warrant is exercisable for one Common Share (a “Broker Warrant Share”) at a price of $0.095 per Broker Warrant Share until May 26, 2024.


The net proceeds of the Offering will be used primarily for working capital purposes and to fund the development of certain product candidates of the Company as further set out in the Prospectus.


The securities described herein 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 each such term is defined in Regulation S under the U.S. Securities Act), except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the Corporation’s securities to, or for the account or benefit of, persons in the United States or U.S. Persons.


As partial consideration for its services in connection with the Offering, the Lead Agent received 1,189,579 Broker Warrants. Prior to the closing of the Offering, the Lead Agent together with Bloom Burton & Co. Inc. and Bloom Burton Development Corporation (collectively, “Bloom Burton”), each an affiliate of the Lead Agent, beneficially owned, directly and indirectly, an aggregate of 14,358,611 Common Shares, 280,777 share purchase warrants (the “First Previously Held Broker Warrants”) exercisable into 280,777 Common Shares at a price of $1.20 per Common Share until June 10, 2022, 128,674 share purchase warrants (the ”Second Previously Held Broker Warrants”) exercisable into 128,674 Common Shares at a price of $0.83 per Common Share until October 14, 2023, representing approximately 20.15% of the then issued and outstanding Common Shares on a non-diluted basis, and 20.60% of the then issued and outstanding Common Shares on a partially-diluted basis, assuming the exercise of the First and Second Previously Held Broker Warrants held by Bloom Burton and its affiliates only.


Immediately following closing of the Offering, Bloom Burton beneficially owns, directly or indirectly, 14,358,611 Common Shares, 280,777 First Previously Held Broker Warrants, 128,674 Second Previously Held Broker Warrants and 1,189,579 Broker Warrants, representing 11.84% of the Common Shares issued and outstanding on a non-diluted basis and 12.99% of the Common Shares issued and outstanding on a partially-diluted basis, assuming the exercise of the First Previously Held Broker Warrants, Second Previously Held Broker Warrants and the Broker Warrants held by Bloom Burton 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.


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 or at compliance@bloomburton.com. 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.


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About Appili Therapeutics

Appili Therapeutics is an infectious disease biopharmaceutical company that is purposefully built, portfolio-driven, and people-focused to fulfill its mission of solving life-threatening infections. By systematically identifying urgent infections with unmet needs, Appili’s goal is to strategically develop a pipeline of novel therapies to prevent deaths and improve lives. The Company is currently advancing a diverse range of anti-infectives, including a broad-spectrum antifungal, a vaccine candidate to eliminate a serious biological weapon threat, a topical antiparasitic product for the treatment of a disfiguring disease, and two novel antibiotic programs. Led by a proven management team, Appili is at the epicenter of the global fight against infection. For more information, visit www.AppiliTherapeutics.com.


Forward looking statements

This news release contains “forward-looking statements”, including with respect to the use of proceeds and filing of the Lead Agent’s early warning report. 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 annual information form of the Company dated June 23, 2021, 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.


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Media Contact:

Danielle Raabe/APCO Worldwide

T: 1-646-717-9915

E: DRaabe@apcoworldwide.com


Investor Relations Contact:

Stéphane Paquette; Vice President, Corporate Development

Appili Therapeutics

E: Info@AppiliTherapeutics.com