ASP Acerus Pharmaceuticals Corporation

Acerus Pharmaceuticals Corporation (the “Company” or “Acerus”) (TSX: ASP; OTCQB: ASPCF) today announced that it and its wholly-owned subsidiary, Acerus Pharmaceuticals USA, LLC (collectively with the Company, the “Borrowers”), have entered into a US$2 million secured loan agreement (the “Loan Agreement”) with First Generation Capital Inc. (“First Generation”), a company affiliated with the Chairman of the Board of Directors of Acerus.1 Funds under the Loan Agreement will be made available to the Borrowers by way of one or more advances under the Loan Agreement. The Company’s other subsidiaries are guarantors under the Loan Agreement.

The Loan Agreement bears interest at a rate of eight percent (8%) per annum, subject to the approval of the Toronto Stock Exchange (the “TSX”). The Loan Agreement is repayable in full on December 31, 2024. The proceeds of the loan will be used by the Company to fund ordinary course working capital and for other general corporate purposes.

The Loan Agreement is supplementary to the secured loan facility entered into with First Generation on April 30, 2021 (the “Loan Facility”) which has been amended on several occasions to increase the amount available to the Company. At December 21, 2022, US$47,945,000 of principal was outstanding under the Loan Facility and it is fully-drawn.

Under the Loan Agreement, the Borrowers are required to make mandatory prepayments upon the occurrence of certain events including: (i) upon the sale of any collateral other than in the ordinary course, (ii) upon the sale of any equity interests; (iii) upon the incurrence of subsequent indebtedness; and (iv) upon the receipt of any insurance proceeds. The net proceeds (excluding certain fees and expenses) from any of these events would be required to be applied by the Borrowers towards repayment of the indebtedness owing under the Loan Agreement and/or the Loan Facility, as more particularly set out in the Loan Agreement.

The Company’s previously announced strategic review of capital and business alternatives is still underway. The Company has implemented additional cash conservation measures, including, without limitation, laying off its US sales force and not replacing staff who have since left the Company.

With the proceeds under the Loan Agreement, and absent additional financing being secured, management anticipates that the Company will run out of cash approximately around the end of January 2023. These circumstances create material uncertainties that cast doubt as to the ability of the Company to meet its obligations as they come due.

As noted above, First Generation is an entity affiliated with the Chairman of the Board of Directors of Acerus and it owns approximately 90% of the issued and outstanding common shares of the Company. In light of First Generation’s relationship to the Chairman of the Board of Directors of Acerus, the independent members of the Board of Directors met separately to consider and discuss the Loan Agreement. Following the review of such independent members of the Board of Directors, it was unanimously determined that entering into the Loan Agreement was in the best interests of Acerus.

The Loan Agreement triggers the requirement for shareholder approval pursuant to Part V of the TSX Company Manual (the “Manual”), unless an exemption is applicable, because Acerus is a “non-exempt” issuer for purposes of Part V of the Manual, First Generation is an insider of the Company, and the interest payable pursuant to the Loan Agreement together with the interest paid pursuant to the Loan Facility within the past 6 months, in aggregate, is greater than 10% of the Company’s current market capitalization. The Company has applied to the TSX pursuant to Section 604(f) of the Manual for an exemption from the shareholder approval requirement on the basis that First Generation owns approximately 90% of the issued and outstanding common shares of the Company. Listed issuers relying on this exemption are required to issue a press release at least ten business days in advance of the closing of the transaction. If the Company’s application is approved by the TSX, then the Loan Agreement will commence bearing interest at the rate of 8% per annum.

About Acerus

Acerus Pharmaceuticals Corporation is a specialty pharmaceutical company focused on the commercialization and development of innovative prescription products that improve patient experience, with a primary focus in the field of men’s health. The Company commercializes its products via its own salesforce in the United States and Canada, and through a global network of licensed distributors in other territories.

Acerus’ shares trade on TSX under the symbol ASP and on OTCQB under the symbol ASPCF. For more information, visit www.aceruspharma.com and follow us on Twitter and LinkedIn.

Notice regarding forward-looking statements

Information in this press release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Implicit in this information are assumptions regarding our future operational results. These assumptions, although considered reasonable by the company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual performance of the company is subject to a number of risks and uncertainties, including the anticipated benefits of the Loan Agreement and the Company’s ability to meet its obligations under the Loan Agreement and the Loan Facility, and could differ materially from what is currently expected as set out above. For more exhaustive information on these risks and uncertainties you should refer to our annual information form dated March 14, 2022 that is available on www.sedar.com. Forward-looking information contained in this press release is based on our current estimates, expectations and projections, which we believe are reasonable as of the current date. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.

(1) A material change report was not filed at least 21 days prior to the entering into of the amendment to the Loan Facility from First Generation as the terms and conditions of such arrangements were not yet finalized at such time.

Company ContactNaveed ManzoorChief Financial Officerir@aceruspharma.com