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Acerus Announces Closing of US$11 Million Term Loan Credit Facility

October 12, 2018

TORONTO--(BUSINESS WIRE)--Oct 12, 2018--Acerus Pharmaceuticals Corporation (the “ Company ” or “ Acerus ”) (TSX:ASP) today announced that it has entered into a senior secured term loan credit facility with SWK Funding LLC (“ SWK ”) for up to US$11 million (the “ New Facility ”). An initial tranche of US$9 million of the New Facility was available at closing, with the remaining US$2 million of the New Facility becoming available upon satisfaction of certain future conditions. The New Facility replaces the CDN$5 million senior secured credit facility with Quantius Inc. entered into on December 6, 2017 (the “ Quantius Facility ”).

“SWK is a sophisticated partner, dedicated to providing debt financing to companies involved in the life sciences sector, and securing this term loan credit facility allows us to consolidate our debt with a single lender,” said Ken Yoon, Chief Financial Officer of Acerus. “Improving our access to capital and strengthening the balance sheet has been a recent strategic focus. This minimally dilutive financing both offers us improved financial flexibility in the near-term and demonstrates our ability to access various sources of capital to fund our business.”

“We are pleased to partner with Acerus to provide a minimally dilutive, flexible capital solution to help grow the Company,” commented Winston Black, CEO of SWK. “We believe in Acerus’ business model and are impressed with the depth and quality of the management team. Acerus’ commercial success in Canada, as demonstrated by the rapid market share gains for Natesto ®, coupled with its proprietary drug delivery technology, well positions the Company for a bright future.”

The New Facility bears interest at a rate per annum equal to the greater of (a) the three-month London Inter-Bank Offered Rate (“ LIBOR ”), or (b) 1.50%, with such base rate being capped at no greater than 4.25%, plus an applicable margin of 10.50%. The New Facility matures on October 11, 2023 and is interest-only for the first two years of the term. Under the terms of the agreement, the Company will have the option to prepay the loan prior to the maturity date subject to the payment of certain prepayment fees. The terms of the agreement also contain customary financial covenants. The proceeds from the New Facility will be used primarily to (i) repay the amount outstanding under the Quantius Facility, including a prepayment penalty and royalty retirement fee; (ii) retire the Endo promissory note with a payment in the amount of approximately US$860,000; and (iii) for ongoing general working capital. A copy of the credit agreement governing the New Facility will be filed under the Company’s profile on SEDAR at www.sedar.com.

As part of the transaction, SWK will receive an origination fee representing a low single digit percentage of the maximum facility amount, as well as a final payment representing a single digit percentage of the principal amount actually advanced under the facility. Acerus has also issued 5,331,563 common share purchase warrants (the “Warrants” ) to SWK as partial consideration for the New Facility. Each Warrant entitles SWK to purchase one common share of Acerus at an exercise price of CDN$0.40 per common share and expires on October 11, 2023. In certain circumstances, following the second anniversary of the issuance of the Warrants, the Company can cause SWK to exercise the Warrants prior to their expiry date if the closing price of the Company’s common shares on the TSX exceeds CDN$0.80 per share for a period of at least 21 consecutive trading days.

About Acerus Pharmaceuticals Corporation

Acerus Pharmaceuticals Corporation is a Canadian-based specialty pharmaceutical company focused on the development, manufacture, marketing and distribution of innovative, branded products that improve patient experience, with a primary focus in the field of men’s and women’s health. The Company commercializes its products via its own salesforce in Canada, and through a global network of licensed distributors in the U.S. and other territories.

Acerus’ shares trade on Toronto Stock Exchange under the symbol “ASP”. For more information, visit www.aceruspharma.com and follow us on Twitter and LinkedIn.

About SWK Holdings Corporation

SWK Holdings Corporation is a publicly traded, specialized finance company with a focus on the global healthcare sector. SWK partners with ethical product marketers and royalty holders to provide flexible financing solutions at an attractive cost of capital to create long-term value for both SWK’s business partners and its investors.

Notice Regarding Forward-Looking Information

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, and could differ materially from what is currently expected as set out above, including with respect to the use of proceeds from the New Facility and the anticipated benefits of the New Facility . For more exhaustive information on these risks and uncertainties you should refer to our annual information form dated March 20, 2018 that is available at 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.

View source version on businesswire.com:https://www.businesswire.com/news/home/20181012005230/en/

CONTACT: Acerus Pharmaceuticals Corporation

Ken Yoon, (905) 817-8288

Chief Financial Officer

kyoon@ceruspharma.com

KEYWORD: NORTH AMERICA CANADA

INDUSTRY KEYWORD: HEALTH BIOTECHNOLOGY PHARMACEUTICAL PROFESSIONAL SERVICES FINANCE

SOURCE: Acerus Pharmaceuticals Corporation

Copyright Business Wire 2018.

PUB: 10/12/2018 09:00 AM/DISC: 10/12/2018 09:01 AM

http://www.businesswire.com/news/home/20181012005230/en

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