Acerus Pharmaceuticals Corporation announced that it and its wholly-owned subsidiary, Acerus Pharmaceuticals USA, LLC (collectively with the Company, the Borrowers), have entered into a USD 2 million secured loan agreement with First Generation Capital Inc. Funds under the Loan Agreement will be made available to the Borrowers by way of one or more advances under the Loan Agreement. The CompanyÆs other subsidiaries are guarantors under the Loan Agreement. The Loan Agreement bears interest at a rate of 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, USD 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: upon the sale of any collateral other than in the ordinary course, upon the sale of any equity interests; upon the incurrence of subsequent indebtedness; and 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 CompanyÆs 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.