Aequus Pharmaceuticals Inc.

A copy of this preliminary short form prospectus has been filed with the securities regulatory authorities in each of the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, and Ontario, but has not yet become final for the purpose of the sale of securities. Information contained in this preliminary short form prospectus may not be complete and may have to be amended. The securities may not be sold until a receipt for the short form prospectus is obtained from the securities regulatory authorities.

This preliminary short form prospectus is a base shelf prospectus. This preliminary short form prospectus has been filed under legislation in each of the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, and Ontario, that permits certain information about these securities to be determined after this prospectus has become final and that permits the omission from this prospectus of that information. The legislation requires the delivery to purchasers of a prospectus supplement containing the omitted information within a specified period of time after agreeing to purchase any of these securities.

No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This preliminary short form prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities.

Information has been incorporated by reference in this preliminary short form base shelf prospectus from documents filed with securities commissions or similar authorities in each of the provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. Copies of the documents incorporated herein by reference may be obtained on request without charge from the Chief Financial Officer of Aequus Pharmaceuticals Inc. at Suite 2820 – 200 Granville Street, Vancouver, British Columbia, Canada, V6C 1S4, telephone: (604) 336-7906, and are also available electronically at www.sedar.com.

The securities offered 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 may not be offered or sold within the “United States” or, if applicable, to, or for the account or benefit of, “U.S. persons” (as such terms are defined in Regulation S under the U.S. Securities Act) except in transactions exempt from the registration requirements of the U.S. Securities Act and applicable state laws. This preliminary short form prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of these securities within the United States. See “Plan of Distribution.”

PRELIMINARY SHORT FORM BASE SHELF PROSPECTUS

New Issue and/or Secondary Offering

October 15, 2021

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$20,000,000

Common Shares Preferred Shares Debt Securities Subscription Receipts Units Warrants

This prospectus relates to the offering for sale from time to time, during the 25-month period that this prospectus, including any amendments hereto, remains effective, of the securities of Aequus Pharmaceuticals Inc. (the “ Company ” or “ Aequus ”) listed above in one or more series, issuances or sales of outstanding securities, with a total offering price of such securities, in the aggregate, of up to $20,000,000. The securities may be sold by the Company and/or certain of the Company’s security holders (“ Selling Securityholders ”, and each a “ Selling Securityholder ”). The securities may be offered separately or together, in amounts, at prices and on terms to be determined based on market conditions at the time of the sale and set forth in an accompanying prospectus supplement.

The common shares of the Company (the “ Common Shares ”) are listed for trading on the TSX Venture Exchange (the “ TSX-V ”) under the trading symbol “AQS”. On October 14, 2021, the last trading day prior to the date hereof, the closing price of the Common Shares on the TSX-V was $0.12. Unless otherwise specified in an applicable prospectus supplement, our Preferred Shares (as defined herein), debt securities, subscription receipts, units and warrants will not be listed on any securities or stock exchange or on any automated dealer quotation system. There is currently no market through which these securities, other than our Common Shares, may be sold and purchasers may not be able to resell such securities purchased under this short form prospectus. This may affect the pricing of

our securities, other than our Common Shares, in the secondary market, the transparency and availability of trading prices, the liquidity of these securities and the extent of issuer regulation. See “ Risk Factors ”.

No underwriter or agent has been involved in the preparation of this prospectus or performed any review of the contents of this prospectus.

All applicable information permitted under securities legislation to be omitted from this prospectus that has been so omitted will be contained in one or more prospectus supplements that will be delivered to purchasers together with this prospectus. Each prospectus supplement will be incorporated by reference into this prospectus for the purposes of securities legislation as of the date of the prospectus supplement and only for the purposes of the distribution of the securities to which the prospectus supplement pertains. You should read this prospectus and any applicable prospectus supplement carefully before you invest in any securities issued pursuant to this prospectus. Aequus’ securities may be sold pursuant to this prospectus through underwriters or dealers or directly or through agents designated from time to time at amounts and prices and other terms determined by the Company or any Selling Securityholder from time to time, or by the Company or any Selling Securityholder directly pursuant to applicable statutory exemptions. In connection with any underwritten offering of securities, the underwriters may over-allot or effect transactions which stabilize or maintain the market price of the securities offered. Such transactions, if commenced, may discontinue at any time. See “ Plan of Distribution ”. A prospectus supplement will set out the names of any underwriters, dealers or agents involved in the sale of our securities, the amounts, if any, to be purchased by underwriters, the plan of distribution for such securities, including the anticipated net proceeds to the Company or any Selling Securityholder from the sale of such securities, the amounts and prices at which such securities are sold and, if applicable, the compensation of such underwriters, dealers or agents.

Investment in the securities being offered is highly speculative and involves significant risks that you should consider before purchasing such securities. You should carefully review the risks outlined in this prospectus (including any prospectus supplement) and in the documents incorporated by reference as well as the information under the heading “ Cautionary Note Regarding Forward-Looking Statements ” and consider such risks and information in connection with an investment in the securities. See “ Risk Factors ”.

Our head office is located at Suite 2820 – 200 Granville Street, Vancouver, British Columbia, Canada, V6C 1S4 and our registered office is located at Suite 2600, Three Bentall Centre, 595 Burrard Street, Vancouver, British Columbia, Canada, V7X 1L3.

Investors should rely only on the information contained in or incorporated by reference into this prospectus and any applicable prospectus supplement. We have not authorized anyone to provide investors with different information. Information contained on our website shall not be deemed to be a part of this prospectus (including any applicable prospectus supplement) or incorporated by reference and should not be relied upon by prospective investors for the purpose of determining whether to invest in the securities. We will not make an offer of these securities in any jurisdiction where the offer or sale is not permitted. Investors should not assume that the information contained in this prospectus is accurate as of any date other than the date on the face page of this prospectus, the date of any applicable prospectus supplement, or the date of any documents incorporated by reference herein.

ABOUT THIS PROSPECTUS .................................................................................................................................................................. 1 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS .................................................................................. 1 DOCUMENTS INCORPORATED BY REFERENCE ............................................................................................................................. 5 THE COMPANY ....................................................................................................................................................................................... 6 RISK FACTORS ....................................................................................................................................................................................... 7 USE OF PROCEEDS ................................................................................................................................................................................ 9 CONSOLIDATED CAPITALIZATION ................................................................................................................................................. 10 PRIOR SALES ........................................................................................................................................................................................ 10 TRADING PRICE AND VOLUME ........................................................................................................................................................ 10 EARNINGS COVERAGE ....................................................................................................................................................................... 11 DESCRIPTION OF SHARE CAPITAL .................................................................................................................................................. 11 DESCRIPTION OF DEBT SECURITIES............................................................................................................................................... 11 DESCRIPTION OF WARRANTS .......................................................................................................................................................... 15 DESCRIPTION OF UNITS ..................................................................................................................................................................... 17 DESCRIPTION OF SUBSCRIPTION RECEIPTS ................................................................................................................................. 17 CERTAIN INCOME TAX CONSIDERATIONS ................................................................................................................................... 19 PLAN OF DISTRIBUTION .................................................................................................................................................................... 20 SELLING SECURITYHOLDERS .......................................................................................................................................................... 21 LEGAL MATTERS ................................................................................................................................................................................. 21 AUDITORS, REGISTRAR AND TRANSFER AGENT ........................................................................................................................ 21 WHERE YOU CAN FIND MORE INFORMATION ............................................................................................................................. 21 STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION ...................................................................................................... 21 CERTIFICATE OF AEQUUS PHARMACEUTICALS INC. .............................................................................................................. C-1

ABOUT THIS PROSPECTUS

You should rely only on the information contained or incorporated by reference in this prospectus or any applicable prospectus supplement. We have not authorized anyone to provide you with different or additional information. If anyone provides you with different or additional information, you should not rely on it. We are not making an offer to sell or seeking an offer to buy the securities offered pursuant to this prospectus in any jurisdiction where the offer or sale is not permitted. You should assume that the information contained in this prospectus or any applicable prospectus supplement is accurate only as of the date on the front of those documents and that information contained in any document incorporated by reference is accurate only as of the date of that document, regardless of the time of delivery of this prospectus or any applicable prospectus supplement or of any sale of our securities pursuant thereto. Our business, financial condition, results of operations and prospects may have changed since those dates.

This prospectus and any applicable prospectus supplement include references to trade names and trade-marks of other companies, which trade names and trade-marks are the property of their respective owners.

Statistical information and other data relating to the pharmaceutical and biotechnology industry included in this prospectus and any applicable prospectus supplement are derived from industry reports published by industry analysts, industry associations and/or independent consulting and data compilation organizations. Market data and industry forecasts used throughout this prospectus and any applicable prospectus supplement were obtained from various publicly available sources. Although we believe that these independent sources are generally reliable, the accuracy and completeness of such information is not guaranteed and has not been independently verified.

In this prospectus and any prospectus supplement, unless otherwise indicated, all dollar amounts and references to “C$” or “$” are to Canadian dollars and references to “U.S.$” or “US$” are to U.S. dollars.

In this prospectus and in any prospectus supplement, unless the context otherwise requires, references to “we”, “us”, “our” or similar terms, as well as references to “Aequus” or the “Company”, refer to Aequus Pharmaceuticals Inc. together with our subsidiary, Aequus Pharma (Canada) Ltd. (“ Aequus Canada ”).

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus and the documents incorporated by reference herein, contain “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian and U.S. securities legislation (collectively herein referred to as “ forward-looking statements ”). Forward-looking statements may include, but are not limited to, information with respect to:

our ability to obtain funding for our operations, including funding for research and commercial activities;
our ability to promote and market third-party products and the anticipated timing thereof, including our ability to successfully market tacrolimus immediate-release (“ Tacrolimus IR ”), Vistitan™ (“ Vistitan ”) and Evolve™ (“ Evolve ”) in Canada;
the expected benefits of Tacrolimus IR, Vistitan, Evolve and REV-0100;
our estimates of the size and characteristics of the potential markets for Tacrolimus IR, Vistitan, Evolve and our internal product candidates;
our business model and strategic plans;
our ability to achieve profitability;
our ability to establish and maintain relationships with collaborators with acceptable development, regulatory and commercialization expertise and the benefits to be derived from such collaborative efforts;
whether we will be able to extend our current commercial relationships with third-party collaborators;
our ability to expand commercial relationships with third-party collaborators to include additional products;
whether our third-party collaborators will maintain their intellectual property rights in the technology we license;
the manufacturing capacity of third-party manufacturers for our product candidates;
the implementation of our business model and strategic plans;
our ability to develop and commercialize product candidates;
our commercialization, marketing and manufacturing capabilities and strategy;
our ability to leverage internal capabilities and know-how;
our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others;

our expectations regarding federal, provincial and foreign regulatory requirements;
whether we will receive, and the timing and costs of obtaining, a development and commercial partner for our product candidates;
whether we will receive, and the timing and costs of obtaining, regulatory approvals in the United States, Canada, the European Union and other jurisdictions;
the therapeutic benefits, effectiveness and safety of our product candidates;
the accuracy of our estimates of the size and characteristics of the markets that may be addressed by our products and product candidates;
the rate and degree of market acceptance and clinical utility of our future products, if any;
whether our e-commerce and digital technology platform will result in greater access to or benefit eyecare professionals;
the timing of, and our ability and our collaborators’ ability, if any, to obtain and maintain regulatory approvals for our product candidates;
our expectations regarding market risk, including interest rate changes and foreign currency fluctuations;
our ability to engage and retain the employees or consultants required to grow our business;
the compensation that is expected to be paid to employees and consultants of the Company;
our future financial performance, projected expenditures and ability to make investments;
our expectations regarding the use of proceeds from the Company’s investments, including investments in reVision and REV-0100;
developments relating to our competitors and our industry, including the success of competing therapies that are or become available; and
estimates of our expenses, future revenue, capital requirements and our needs for additional financing.
our ability to advance product candidates into, and successfully complete, clinical trials;
our ability to recruit sufficient numbers of patients for our future clinical trials;

Wherever possible, words such as “plans”, “expects”, “projects”, “assumes”, “budgeted”, “strategy”, “scheduled”, “estimates”, “forecasts”, “anticipates”, “believes”, “intends”, “modeled” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative forms of any of these terms and similar expressions, have been used to identify forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance are not statements of historical fact and may be forward-looking statements. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation, risks related to:

Aequus having a limited history of generating revenue by promoting third-party products;
Aequus currently generating revenue from a limited number of promotional or distribution services agreements;
Aequus being subject to potential product liability claims relating to third-party products it markets;
Aequus having continued access to skilled contractors and consultants;
Aequus having incurred operating losses since its inception and expecting to incur losses for the foreseeable future;
Aequus raising additional capital, which may restrict operations or cause dilution to Aequus’ existing shareholders;
Aequus having a history of negative operating cash flow, which may continue into the future;
Aequus having a limited history of marketing drug products produced by third parties;
 Aequus’ third-party products potentially being subject to sales quotas and additional regulatory approvals;
third-party products not achieving market acceptability;
third parties that Aequus is reliant upon not meeting their commitments with respect to their products;
Aequus not having reached profitability to date and the risk that the Company may never become profitable;
Aequus being unable to complete the development or commercialization of its product candidates or obtain their regulatory approval if it fails to obtain the necessary capital to fund its operations;
Aequus’ business to date and future viability being hard for investors to evaluate due to Aequus having a limited history with marketed drug products produced by third parties;
Aequus not having obtained regulatory approval in any country for any of its internal product candidates;
Aequus never having submitted, and the potential that it may never be able to submit, an investigational new drug application (“ NDA ”) in the United States for any of its internal product candidates;
Aequus potentially being required to abandon development of a product if clinical trials are not successful;

Aequus conducting clinical trials in sites outside the U.S. and the potential that the United States Food and Drug Administration (the “ FDA ”) may not accept such data;
regulatory approval of Aequus’ products being delayed or unobtainable if additional time or studies are required;
regulatory approval or sales being affected if Aequus’ product candidates or promoted third-party products cause adverse effects;
the commercial success of Aequus’ product candidates being substantially dependent on forming a third party partnership;
the difficulty of profitably selling Aequus’ product candidates or promoted third-party products if their coverage and reimbursement is limited;
Aequus’ potential international business relationships adversely affecting its business;
Aequus’ sales and marketing infrastructure potentially being unable to generate enough revenue to cover commercial expenses;
developments relating to our competitors and our industry, including the success of competing therapies that are or become available;
potential legislation increasing the difficulty and cost for Aequus to obtain marketing approval of and to commercialize product candidates;
third party coverage, reimbursement, cost containment initiatives and treatment guidelines potentially constraining Aequus’ future revenue;
Aequus’ reliance on third party manufacturing for their clinical and commercial supply;
Aequus’ future collaboration arrangements potentially adversely affecting the development and commercialization of Aequus’ product candidates;
Aequus being subject to extensive regulatory review and potentially expensive ongoing obligations even if marketing approval for its product candidates is obtained;
Aequus’ product candidates being subject to labeling and other restrictions;
Aequus being subject to penalties if it fails to comply with regulatory requirements or experiencing unanticipated problems with its product candidates;
adverse effects on Aequus’ business if Aequus fails to obtain FDA or Health Canada approval for any proposed product candidates;
Aequus’ relationships with physicians, customers and payors being subject to various laws and regulations, which could expose Aequus to various adverse consequences that could diminish profits and future earnings;
Aequus potentially not being able to protect its proprietary technology in the marketplace;
Aequus’ intellectual property portfolio being comprised of pending patent applications, which may turn out to be unsuccessful or limited in scope;
Aequus potentially not being able to enforce its intellectual property rights throughout the world;
patent reform legislation in the U.S. increasing the uncertainty and cost of prosecuting and defending patents;
obtaining and maintaining patent protection being contingent on ongoing compliance with various requirements imposed by governmental patent agencies;
Aequus or its consultants or contractors potentially infringing, or facing claims it infringed on third party intellectual property rights, including know-how or trade secrets;
Aequus potentially being unable to adequately prevent disclosure of trade secrets and other proprietary information;
potential lawsuits relating to infringement of intellectual property rights, which could be costly, time consuming and adversely impact the price of Common Shares;
potential intellectual property disputes distracting Aequus’ personnel and causing diversion of substantial resources;
Aequus’ growth and profitability being contingent on successfully maintaining and building additional third party partnerships or commercializing its internal products;
Aequus being unable to license or acquire additional product candidates or technologies from third parties;
Aequus’ business activities potentially being adversely impacted by the recent outbreak of the novel coronavirus (COVID-19);
successful implementation of Aequus’ business strategy being dependent on attracting and retaining highly qualified personnel;
potential product liability lawsuits being brought against Aequus and any liabilities incurred potentially limiting commercialization of product candidates;
any potential benefits of the collaboration with reVision (as defined below), Medicom (as defined below), Sandoz Canada Inc., or any further strategic alliances that Aequus enters into not being realized;
Aequus’ business being affected by macroeconomic conditions;

Aequus incurring significant costs and devoting substantial time to compliance initiatives;
potential business interruptions delaying development of Aequus’ product candidates and disrupting sales;
Aequus’ business and operations suffering in the event of system failures;
Aequus’ business potentially being significantly harmed by misconduct perpetrated by non-arm’s length parties;
the directors and officers of Aequus being subject to conflicts of interest;
future sales or issuances of Aequus’ securities causing the market price of Aequus’ equity securities to decline;
fluctuations in the market price for the Company’s securities;
risks relating to the dilution of the Company’s securities;
uncertainties relating to the actual use of proceeds;
 Aequus potentially being subject to securities litigation, which is expensive and could divert management attention;
Aequus’ existing shareholders, officers and directors being able to exert significant control over matters submitted to Aequus’ shareholders for approval due to their substantial equity ownership;
potential future sales of Common Shares by existing shareholders causing the Common Share price to decline;
Aequus not being required to make representations relating to the establishment and maintenance of disclosure controls and procedures and internal control over financial reporting due to its status as a venture issuer;
Aequus never having paid, and not anticipating paying, dividends on its Common Shares;
the price of Common Shares potentially declining due to equity research analysts publishing negatively about Aequus’ business, or not publishing about Aequus’ business at all; and
anti-takeover provisions in Aequus constating documents potentially discouraging third parties from making takeover bids that could benefit Aequus’ shareholders.

This list is not exhaustive of the factors that may affect any of our forward-looking statements. Although we have attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Forward-looking statements involve statements about the future and are inherently uncertain, and our actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in this prospectus under the heading “ Risk Factors ” and elsewhere in this prospectus and the documents incorporated, or deemed to be incorporated, by reference, including those set out in the AIF (as defined below) under the heading “ Risk Factors ”. Our forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made. In connection with the forward-looking statements contained in this prospectus and the documents incorporated, or deemed to be incorporated, by reference, we have made certain assumptions about our business, including (i) obtaining positive results of clinical trials; (ii) obtaining regulatory approvals; (iii) the market acceptability of our third-party products; (iv) general business and economic conditions; (v) the Company’s ability to successfully out-license or sell its current products and in-license and develop new products; (vi) the assumption that our current good relationships with our manufacturers and other third parties will be maintained; (vii) the availability of financing on reasonable terms; (viii) the Company’s ability to attract and retain skilled staff; (ix) market competition; (x) the products and technology offered by the Company’s competitors; (xi) the Company’s ability to protect patents and proprietary rights; and (xii) the Company’s ability to integrate acquired or licensed products into the Company’s existing pipeline and sales infrastructure. We have also assumed that no significant events will occur outside of our normal course of business, including no government restrictions or otherwise related to a response to COVID-19 and any resulting potential impact on the Company’s operations. Although we believe that the assumptions inherent in the forward-looking statements are reasonable as of the date of this prospectus, forward-looking statements are not guarantees of future performance and, accordingly, undue reliance should not be put on such statements due to the inherent uncertainty therein. For the reasons set forth above, prospective investors should not place undue reliance on forward-looking statements.

Forward-looking statements are accurate only as of the date those statements are made. Except as required by applicable law, we assume no obligation to update or to publicly announce the results of any change to any forward-looking statement contained or incorporated by reference herein to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward-looking statements. If we update any one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. You should not place undue importance on forward-looking statements and should not rely upon these statements as of any other date. Any forward-looking statements contained herein are expressly qualified by this cautionary statement.

DOCUMENTS INCORPORATED BY REFERENCE

Information has been incorporated by reference in this prospectus from documents filed with the securities commissions or similar authorities in each of the provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario.

Copies of the documents incorporated herein by reference may be obtained on request without charge from the Chief Financial Officer of Aequus Pharmaceuticals Inc. Suite 2820 – 200 Granville Street, Vancouver, British Columbia, Canada, V6C 1S4, telephone: (604) 336-7906 or by accessing the disclosure documents through the Internet on the Canadian System for Electronic Document Analysis and Retrieval (“ SEDAR ”), at www.sedar.com.

The following documents, filed with the securities commissions or similar regulatory authorities in certain provinces of Canada are specifically incorporated by reference into, and form an integral part of, this prospectus:

our annual information form for the fiscal year ended December 31, 2020, dated as of April 30, 2021 (the “ AIF ”);
our audited annual consolidated financial statements for the fiscal years ended December 31, 2020 and 2019, together with the notes thereto and the auditor’s reports thereon;
our management’s discussion and analysis of our financial condition and results of operations for the fiscal year ended December 31, 2020;
our unaudited condensed consolidated interim financial statements for the six months ended June 30, 2021 and 2020;
our management’s discussion and analysis of our financial condition and results of operations for the six months ended June 30, 2021;
our management information circular dated June 8, 2021, distributed in connection with our annual general meeting of shareholders held on July 15, 2021;
our material change report dated March 8, 2021, announcing the closing of a non-brokered private placement of units of the Company to Marc Lustig, a director of the Company, for aggregate gross proceeds of $1,000,000.

Any documents of the type described in Section 11.1 of Form 44-101F1 – Short Form Prospectus to National Instrument 44-101 – Short Form Prospectus Distributions (“ NI 44-101 ”) filed by the Company with a securities commission or similar authority in any province of Canada subsequent to the date of this prospectus and prior to the expiry of this prospectus, or the completion of the issuance of securities pursuant hereto, will be deemed to be incorporated by reference into this prospectus.

Any template version of any “marketing materials” (as such term is defined in NI 44-101) filed after the date of a prospectus supplement and before the termination of the distribution of the securities offered pursuant to such prospectus supplement (together with this prospectus) is deemed to be incorporated by reference in such prospectus supplement.

A prospectus supplement containing the specific terms of any offering of our securities will be delivered to purchasers of our securities together with this prospectus and will be deemed to be incorporated by reference in this prospectus as of the date of the prospectus supplement and only for the purposes of the offering of our securities to which that prospectus supplement pertains.

Any statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference in this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein, in any prospectus supplement hereto or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement is not to be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of material fact or an omission to state a material fact that is required to be stated or is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

Upon our filing of a new annual information form and the related annual financial statements and management’s discussion and analysis with applicable securities regulatory authorities during the duration of this prospectus, the previous annual information form, the

previous annual financial statements and management’s discussion and analysis and all interim financial statements, supplemental information, material change reports and information circulars filed prior to the commencement of our financial year in which the new annual information form is filed will be deemed no longer to be incorporated into this prospectus for purposes of future offers and sales of our securities under this prospectus. Upon interim consolidated financial statements and the accompanying management’s discussion and analysis and material change report being filed by us with the applicable securities regulatory authorities during the duration of this prospectus, all interim consolidated financial statements and the accompanying management’s discussion and analysis filed prior to the new interim consolidated financial statements shall be deemed no longer to be incorporated into this prospectus for purposes of future offers and sales of securities under this prospectus.

References to our website in any documents that are incorporated by reference into this prospectus do not incorporate by reference the information on such website into this prospectus, and we disclaim any such incorporation by reference.

THE COMPANY

Name, Address and Incorporation

The Company was incorporated under the name “Aequus Pharmaceuticals Inc.” pursuant to the Business Corporations Act (British Columbia) (the “ BCBCA ”) on January 3, 2013. The Company’s registered and records office is located at Suite 2600, 595 Burrard Street, Vancouver, British Columbia, Canada V7X 1L3 and its head office is located at 2820 – 200 Granville Street, Vancouver, British Columbia, Canada V6C 1S4.

On July 28, 2015, the Company acquired all of the issued and outstanding securities of TeOra Health Ltd. (“ TeOra ”), a company incorporated under the BCBCA. Subsequent to the acquisition, TeOra changed its name to Aequus Pharma (Canada) Ltd. Aequus Canada is the Company’s only subsidiary.

Business of the Company

Overview

Aequus is a specialty pharmaceutical company, with a focus on commercializing value-add products in specialty therapeutic areas in the Canadian market. Aequus’ sales force currently markets third party products for which the Company receives revenues based on agreed upon percentages of net sales and licensed products where Aequus books sales revenues. The Company continues to build its pipeline in ophthalmology and has recently added a number of near-commercial stage products through in-licensing agreements.

Our commercial infrastructure is Canadian-based, with specialty sales representatives currently promoting two specialty medicines to physicians and two over-the-counter (“ OTC ”) products to eye care professionals.

Our commercial programs are supported and validated by insights from patients, physicians and payers to ensure there is a realizable benefit for them from our work in advancing these products. Aequus’ management team has a proven track record of successfully managing the required clinical development, regulatory approval processes and marketing of products either directly or through collaborations. We continue to leverage our internal capabilities and know-how to execute an efficient commercial strategy and development plan to drive shareholder value.

Growth Strategy

Aequus is a revenue-generating, specialty pharmaceutical company with commercial activities in Canada. Aequus looks to leverage its core capabilities, commercial infrastructure and existing product portfolio to continue on the Company’s current growth trajectory. The Company’s near-term growth strategy includes the following key components:

progressive build-out of the Company’s commercial platform, including leveraging its specialty sales force in Canada to enable Aequus to continue to in-license and sell high-value, branded products to professionals in Canada; and
advance near commercial stage programs through Health Canada required studies.

Aequus has entered into an Exclusive Right of First Negotiation Agreement with reVision Therapeutics, Inc. (“ reVision ”) for exclusive rights to negotiate a commercial and development agreement for the North American rights of REV-0100, a potential therapy for

patients with Stargardt disease that is designed to bind and clear a toxic lipid called lipofuscin (the “ reVision Option Agreement ”). The Company continues to be committed to launching and advancing new ophthalmology products.

Aequus has launched promotional activities for four third-party products in the Canadian market. Aequus is also finalizing the Health Canada application for its fifth commercial product, a preservative-free prescription product for glaucoma. In July 2019, Aequus announced a deal with Medicom Healthcare Ltd. (“ Medicom ”) for five additional ophthalmology products for Canada. Two of these products recently launched after achieving Health Canada approval and a third product with final information is expected to be submitted to Health Canada in the third quarter of 2021.

Aequus expects to continue to make select investments aimed at expanding and improving the efficiency of its sales channel in Canada through a combination of in-licensing and the acquisition of high-quality, differentiated products in specialty therapeutic areas.

The addition of an e-commerce eyecare site and associated digital technology is expected to allow for the rapid build out of the eye care professional channel for Aequus. With patient-facing material and dedicated professional-only material and resources, Canadian professionals can get all their product, transaction and information customized for their needs. The platform can be linked to other ordering websites or with minor integration, can ship direct to patient with professional approval for OTC products. Professionals will be able to utilize Aequus eyecare e-commerce to serve patients and capture product revenue in office or share in future affiliate product sales with Aequus.

Recent Developments

On August 17, 2021, the Company entered into the reVision Option Agreement, pursuant to the terms of which, the Company made an initial US$400,000 equity investment in reVision, through its open convertible note offering related to REV-0100. Funds from the initial investment are intended to fund a pre-clinical toxicology study for REV-0100, which will begin in the near term. Clinical trials with Stargardt patients are expected to start in late 2021 or early 2022.

On August 25, 2021, the Company announced that Dr. Robert K. Koenekoop MD, MSc, PhD, FRCS(C), FARVO, had joined Aequus as a medical and clinical consultant on inherited retinal diseases, specifically to support the Company’s collaboration with reVision for REV-0100.

RISK FACTORS

Investing in our securities involves a high degree of risk. In addition to the other information included, or incorporated by reference in this prospectus or any applicable prospectus supplement, you should carefully consider the risks described below before purchasing our securities. If any of the following risks actually occur, our business, financial condition and results of operations could materially suffer. As a result, the trading price of our securities, including our Common Shares, could decline, and you might lose all or part of your investment. The risks set out below are not the only risks we face; risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition and results of operations. You should also refer to the other information set forth or incorporated by reference in this prospectus or any applicable prospectus supplement, including our consolidated financial statements and related notes and our AIF. Before investing, prospective purchasers of securities should carefully consider the information contained or incorporated by reference in this prospectus.

Risks Related to the Securities of the Company

Future sales or issuances of debt or equity securities could decrease the value of any existing Common Shares, dilute investors’ voting power, reduce our earnings per share and make future sales of our equity securities more difficult.

We may sell additional equity securities in subsequent offerings (including through the sale of securities convertible into equity securities) and may issue additional equity securities to finance operations, acquisitions or other projects. We cannot predict the size of future issuances of equity securities or the size and terms of future issuances of debt instruments or other securities convertible into equity securities or the effect, if any, that future issuances and sales of our securities will have on the market price of our Common Shares. Any transaction involving the issuance of previously authorized but unissued Common Shares, or securities convertible into Common Shares, would result in dilution, possibly substantial, to securityholders. Exercises of presently outstanding share options may also result in dilution to securityholders.

Our board of directors (the “ Board ”) has the authority to authorize certain offers and sales of additional securities without the vote of, or prior notice to, our shareholders. Based on the need for additional capital to fund expected expenditures and growth, it is likely that we

will issue additional securities to provide such capital. Such additional issuances may involve the issuance of a significant number of our Common Shares at prices less than the current market price for the Common Shares.

Sales of substantial amounts of our securities, or the availability of such securities for sale, could adversely affect the prevailing market prices for our securities and dilute investors’ earnings per share. A decline in the market prices of our securities could impair our ability to raise additional capital through the sale of securities should we desire to do so. Sales of our Common Shares by shareholders might also make it more difficult for us to sell equity securities at a time and price that we deem appropriate.

Our Common Share price has experienced volatility and may be subject to fluctuation in the future based on market conditions.

Our Common Shares are listed and posted for trading on the TSX-V. An investment in the Company’s securities is highly speculative. The market prices for the securities of pharmaceutical companies, including our own, have historically been highly volatile. The market has from time to time experienced significant price and volume fluctuations that are unrelated to the financial performance or prospects of any particular company. In addition, because of the nature of our business, certain factors such as our announcements, competition from new therapeutic products or technological innovations, governmental regulations, fluctuations in our operating results, results of clinical trials, public concern regarding the safety of drugs generally, general market conductions, developments in patent and proprietary rights, the Company’s financial condition or results of operations as reflected in our quarterly and annual financial statements, our operating performance and the performance of competitors and other similar companies, changes in earnings estimates or recommendations by research analysts who track our securities or securities of other companies in the life sciences sector, general market conditions, announcements relating to litigation, the arrival or departure of key personnel and the factors listed under the heading “ Cautionary Note Regarding Forward-Looking Statements ” can have an adverse impact on the market price of our Common Shares.

Any negative change in the public’s perception of our prospects could cause the price of our securities, including the price of our Common Shares, to decrease dramatically. Furthermore, any negative change in the public’s perception of the prospects of life sciences companies in general could depress the price of our securities, including the price of our Common Shares, regardless of our results. In the past, following declines in the market price of a company’s securities, securities class-action litigation often has been instituted against the company. Litigation of this type, if instituted, could result in substantial costs and a diversion of our management’s attention and resources.

We will have broad discretion over the use of the net proceeds of an offering of our securities and we may not use these proceeds in a manner desired by our shareholders.

While detailed information regarding the use of proceeds from the sale of our securities will be described in the applicable prospectus supplement, the Company will have broad discretion over the use of the net proceeds from an offering by the Company of its securities. Because of the number and variability of factors that will determine the Company’s use of such proceeds, the Company’s ultimate use might vary substantially from its planned use. You may not agree with how the Company allocates or spends the proceeds from an offering of its securities. Aequus may pursue acquisitions, collaborations or other opportunities that do not result in an increase in the market value of its securities, including the market value of its Common Shares, and that may increase its losses. The Company will not receive any proceeds from any sale of securities by any Selling Securityholder.

We have a history of negative operating cash flow and may continue to experience negative operating cash flow.

The Company has had negative operating cash flow for every financial reporting period since its inception on January 3, 2013. Aequus anticipates that it will continue to have negative operating cash flow until such time, if at all, it acquires additional commercial stage products, has profitable sales of its third-party commercial products, Tacrolimus IR, Vistitan and Evolve or that profitable commercial production is achieved with Aequus’ other internal product candidates. To the extent that Aequus has negative operating cash flow in future periods, Aequus may need to allocate a portion of its cash reserves to fund such negative cash flow. The Company may also be required to raise additional funds through the issuance of equity or debt securities. There can be no assurance that additional capital or other types of financing will be available when needed or that these financings will be on terms favourable to the Company.

We do not intend to pay dividends in the foreseeable future.

No dividends on the Common Shares have been paid by the Company to date. The Company does not intend to declare or pay any cash dividends in the foreseeable future. Payment of any future dividends will be at the discretion of the Board, after taking into account a

multitude of factors appropriate in the circumstances, including the Company’s operating results, financial condition and current and anticipated cash needs.

There is no assurance of a sufficient liquid trading market for the Company’s Common Shares in the future.

Shareholders of the Company may be unable to sell significant quantities of Common Shares into the public trading markets without a significant reduction in the price of their Common Shares, or at all. There can be no assurance that there will be sufficient liquidity of the Company’s Common Shares on the trading market, and that the Company will continue to meet the listing requirements of the TSX-V or achieve listing on any other public listing exchange.

The Company has outstanding convertible debentures, which, if exercised, could cause dilution to existing shareholders.

The Company has issued convertible debentures convertible into Common Shares. The conversion of the convertible debentures and the subsequent resale of such Common Shares in the public market could adversely affect the prevailing market price and the Company’s ability to raise equity capital in the future at a time and price which it deems appropriate. The Company may also enter into commitments in the future which would require the issuance of additional Common Shares. Any share issuances from the Company’s treasury will result in immediate dilution to existing shareholders’ percentage interest in the Company.

The Company has outstanding warrants, which, if exercised, could cause dilution to existing shareholders.

The Company has warrants issued consisting of Common Shares issuable upon the exercise of warrants. The exercise of warrants and the subsequent resale of such Common Shares in the public market could adversely affect the prevailing market price and the Company’s ability to raise equity capital in the future at a time and price which it deems appropriate. The Company may also enter into commitments in the future which would require the issuance of additional Common Shares and the Company may grant additional share purchase warrants or stock options. Any share issuances from the Company’s treasury will result in immediate dilution to existing Shareholders’ percentage interest in the Company.

There is currently no market through which our securities, other than our Common Shares, may be sold.

There is currently no market through which our securities, other than our Common Shares, may be sold and, unless otherwise specified in the applicable prospectus supplement, our Preferred Shares, debt securities, subscription receipts, units or warrants will not be listed on any securities or stock exchange or any automated dealer quotation system. As a consequence, purchasers may not be able to resell Preferred Shares, debt securities, subscription receipts, units or warrants purchased under this prospectus. This may affect the pricing of our securities, other than our Common Shares, in the secondary market, the transparency and availability of trading prices, the liquidity of these securities and the extent of issuer regulation. There can be no assurance that an active trading market for our securities, other than our Common Shares, will develop or, if developed, that any such market, including for our Common Shares, will be sustained.

The debt securities will be unsecured and will rank equally in right of payment with all of our future unsecured debt.

Unless otherwise indicated in the applicable prospectus supplement, the debt securities will be unsecured and will rank equally in right of payment with all of our other existing and future unsecured debt. The debt securities will be effectively subordinated to all of our existing and future secured debt to the extent of the assets securing such debt. If we are involved in any bankruptcy, dissolution, liquidation or reorganization, the secured debt holders would, to the extent of the value of the assets securing the secured debt, be paid before the holders of unsecured debt securities, including the debt securities. In that event, a holder of debt securities may not be able to recover any principal or interest due to it under the debt securities. See “ Description of Debt Securities ”.

USE OF PROCEEDS

Unless we otherwise indicate in a prospectus supplement relating to a particular offering, we currently intend to use the net proceeds from the sale of our securities for working capital requirements, general corporate purposes and the advancement of our business objectives outlined above under “ Aequus’ Business Strategy ”.

In order to raise additional funds to finance future growth opportunities, we may, from time to time, issue securities (including debt securities). More detailed information regarding the use of proceeds from the sale of securities, including any determinable milestones at the applicable time, will be described in a prospectus supplement. We may also, from time to time, issue securities otherwise than pursuant to a prospectus supplement to this prospectus.

By the nature of its business as a pre-clinical pharmaceutical company, the Company had negative operating cash flow for its most recent interim financial period and financial year. To the extent the Company has negative cashflows in future periods, the Company may use a portion of its general working capital to fund such negative cash flow. See “ Risk Factors ”.

The Company will not receive any proceeds from any sale of securities by any Selling Securityholder.

CONSOLIDATED CAPITALIZATION

Since June 30, 2021, the date of our financial statements for the most recently completed financial period, there have been no material changes in our consolidated share and loan capital.

Information relating to any issuances of our Common Shares within the previous 12-month period will be provided as required in a prospectus supplement under the heading “ Prior Sales ”.

PRIOR SALES

This table sets out particulars of the Common Shares and securities exercisable for or exchangeable into Common Shares issued within the 12 months prior to the date of this prospectus.

Date of Issuance/Grant October 13, 2020 December 8, 2020 February 26, 2021 April 1, 2021 April 1, 2021	Type of Security Stock Options(1) Stock Options(2) Units(3) Common Shares(4) Common Shares(5)	Number of Securities Issued 500,000 1,445,000 6,666,666 317,000 12,343,750	Issue/Exercise Price
			$0.12 $0.105 $0.15 $0.22 $0.12

Notes

(1) Options granted to certain consultants of the Company pursuant to the Company’s amended and restated stock option plan (the “ Option Plan ”) dated July 29, 2019, exercisable for a term of two years.
(2) Options granted to certain directors, officers and employees of the Company pursuant to the Option Plan, exercisable for a term of eight years. (3) Issued in connection with the Company’s February 26, 2021, private placement of 6,666,666 units at a price of $0.15 per unit to Marc Lustig, a director of the Company, for aggregate gross proceeds of $1,000,000. Each unit was composed of one Common Share and one-half of one non-transferable Common Share purchase warrant with an exercise price of $0.25 until February 26, 2023.
(4) Issued in connection with the exercise of 317,000 Common Share purchase warrants of the Company at an exercise price of $0.22 per share for net proceeds of $69,740.
(5) Issued in connection with the exercise of 12,343,750 Common Share purchase warrants of the Company at an exercise price of $0.12 per share for net proceeds of $1,481,250.

TRADING PRICE AND VOLUME

The Company’s Common Shares are listed and posted for trading on the TSX-V under the symbol “AQS”. The following table sets forth the reported intraday high and low prices and the trading volume for the Common Shares as reported on the TSX-V for the 12-month period prior to the date of this prospectus.

Month October 2020 November 2020 December 2020 January 2021 February 2021 March 2021	Monthly High Price(C$) 0.14 0.125 0.12 0.165 0.275 0.29	Monthly Low Price(C$) 0.095 0.09 0.09 0.095 0.145 0.185	Monthly Volume
			2,984,743 1,551,788 3,037,116 7,942,916 22,520,495 17,800,128

Month April 2021 May 2021 June 2021 July 2021 August 2021 September 2021 October 2021(1)	Monthly High Price(C$) 0.235 0.19 0.16 0.13 0.16 0.145 0.12	Monthly Low Price(C$) 0.17 0.145 0.1 0.11 0.105 0.11 0.115	Monthly Volume
			3,578,271 2,380,204 2,799,577 742,187 1,371,037 1,912,447 273,922

Notes:

(1) From October 1, 2021 to October 14, 2021, the last trading day prior to the date of this prospectus.

EARNINGS COVERAGE

If we offer debt securities having a term to maturity in excess of one year under this prospectus and any applicable prospectus supplement, the applicable prospectus supplement will include earnings coverage ratios giving effect to the issuance of such securities.

DESCRIPTION OF SHARE CAPITAL

As of the date of this prospectus, the authorized capital of the Company consisted of an unlimited number of Common Shares without par value and an unlimited number of Class A Preferred shares (the “ Preferred Shares ”) without par value. As of the date of this prospectus, 132,634,431 Common Shares and no Preferred Shares are issued and outstanding.

Common Shares

Each Common Share entitles the holder thereof to one vote at any meeting of our shareholders. The holders of Common Shares are entitled to receive if, as and when declared by the Board, dividends in such amounts as shall be determined by the Board. After the holders of Preferred Shares have first received from the property and assets of the Company the amount they are entitled to, the holders of Common Shares have the right to receive the Company’s remaining property and assets in the event of a liquidation, dissolution or winding-up, whether voluntary or involuntary. The Common Shares do not carry any pre-emptive, subscription, redemption or conversion rights, nor do they contain any sinking or purchase fund provisions.

Preferred Shares

We may issue our Preferred Shares from time to time in one or more series. The terms of each series of Preferred Shares, including the number of shares, the designation, rights, preferences, privileges, priorities, restrictions, conditions and limitations, will be determined at the time of creation of each such series by our Board, without shareholder approval, provided that all preferred shares will rank equally within their class as to dividends and distributions in the event of our dissolution, liquidation or winding-up. The Preferred Shares are entitled to priority over the Common Shares with respect to the distribution of assets of the Company in the event of any liquidation, dissolution or winding up of the Company’s affairs, whether voluntary or involuntary. Each Preferred Share entitles the holder thereof to one vote at any meeting of Aequus shareholders.

Dividend Policy

We have not paid any dividends to date on our Common Shares. We do not currently expect to declare or pay any cash dividends on our Common Shares for the foreseeable future. Payment of any future dividends will be at the discretion of the Board after taking into account a multitude of factors, including the Company’s operating results, financial condition and current and anticipated cash needs.

DESCRIPTION OF DEBT SECURITIES

The following description of the terms of debt securities sets forth certain general terms and provisions of debt securities in respect of which a prospectus supplement may be filed. The particular terms and provisions of debt securities offered by any prospectus supplement, and the extent to which the general terms and provisions described below may apply thereto, will be described in the

prospectus supplement filed in respect of such debt securities. Prospective investors should rely on information in the applicable prospectus supplement if it is different from the following information.

Debt securities may be offered separately or in combination with one or more other securities of the Company. The Company may, from time to time, issue debt securities and incur additional indebtedness other than through the issue of debt securities pursuant to this prospectus.

The debt securities will be issued under one or more indentures (each, a “ Trust Indenture ”), in each case between the Company and a financial institution or trust company organized under the laws of Canada or any province thereof and authorized to carry on business as a trustee (each, a “ Trustee ”).

The following description sets forth certain general terms and provisions of the debt securities and is not intended to be complete. The particular terms and provisions of the debt securities and a description of how the general terms and provisions described below may apply to the debt securities will be included in the applicable prospectus supplement. The following description is subject to the detailed provisions of the applicable Trust Indenture. Accordingly, reference should also be made to the applicable Trust Indenture, a copy of which will be filed by the Company with the securities commissions or similar regulatory authorities in applicable Canadian offering jurisdictions, after it has been entered into, and will be available electronically at www.sedar.com.

General

The applicable Trust Indenture will not limit the aggregate principal amount of debt securities that may be issued under such Trust Indenture and will not limit the amount of other indebtedness that the Company may incur. The applicable Trust Indenture will provide that the Company may issue debt securities from time to time in one or more series and may be denominated and payable in U.S. dollars, Canadian dollars or any foreign currency. Unless otherwise indicated in the applicable prospectus supplement, the debt securities will be unsecured obligations of the Company.

The Company may specify a maximum aggregate principal amount for the debt securities of any series and, unless otherwise provided in the applicable prospectus supplement, a series of debt securities may be reopened for issuance of additional debt securities of such series. The applicable Trust Indenture will also permit the Company to increase the principal amount of any series of the debt securities previously issued and to issue that increased principal amount.

Any prospectus supplement for debt securities supplementing this prospectus will contain the specific terms and other information with respect to the debt securities being offered thereby, including, but not limited to, the following:

the designation, aggregate principal amount and authorized denominations of such debt securities;
the percentage of principal amount at which the debt securities will be issued;
whether payment on the debt securities will be senior or subordinated to other liabilities or obligations of the Company;
whether the payment of the debt securities will be guaranteed by any other person;
the date or dates, or the methods by which such dates will be determined or extended, on which the Company may issue the debt securities and the date or dates, or the methods by which such dates will be determined or extended, on which the Company will pay the principal and any premium on the debt securities and the portion (if less than the principal amount) of debt securities to be payable upon a declaration of acceleration of maturity;
whether the debt securities will bear interest, the interest rate (whether fixed or variable) or the method of determining the interest rate, the date from which interest will accrue, the dates on which the Company will pay interest and the record dates for interest payments, or the methods by which such dates will be determined or extended;
the place or places the Company will pay principal, premium, if any, and interest, if any, and the place or places where debt securities can be presented for registration of transfer or exchange;
whether and under what circumstances the Company will be required to pay any additional amounts for withholding or deduction for Canadian taxes with respect to the debt securities, and whether and on what terms the Company will have the option to redeem the debt securities rather than pay the additional amounts;
whether the Company will be obligated to redeem or repurchase the debt securities pursuant to any sinking or purchase fund or other provisions, or at the option of a holder, and the terms and conditions of such redemption;
whether the Company may redeem the debt securities at its option and the terms and conditions of any such redemption;
the denominations in which the Company will issue any registered and unregistered debt securities;

the currency or currency units for which debt securities may be purchased and the currency or currency units in which the principal and any interest is payable (in either case, if other than Canadian dollars) or if payments on the debt securities will be made by delivery of Common Shares or other property;
whether payments on the debt securities will be payable with reference to any index or formula;
if applicable, the ability of the Company to satisfy all or a portion of any redemption of the debt securities, any payment of any interest on such debt securities or any repayment of the principal owing upon the maturity of such debt securities through the issuance of securities of the Company or of any other entity, and any restriction(s) on the persons to whom such securities may be issued;
whether the debt securities will be issued as global securities (defined below) and, if so, the identity of the depositary for the global securities;
whether the debt securities will be issued as unregistered securities (with or without coupons), registered securities or both;
the periods within which and the terms and conditions, if any, upon which the Company may redeem the debt securities prior to maturity and the price or prices of which, and the currency or currency units in which, the debt securities are payable;
any events of default or covenants applicable to the debt securities;
any terms under which debt securities may be defeased, whether at or prior to maturity;
whether the holders of any series of debt securities have special rights if specified events occur;
any mandatory or optional redemption or sinking fund or analogous provisions;
the terms, if any, for any conversion or exchange of the debt securities for any other securities;
rights, if any, on a change of control;
provisions as to modification, amendment or variation of any rights or terms attaching to the debt securities;
the Trustee under the Trust Indenture pursuant to which the debt securities are to be issued;
whether the Company will undertake to list the debt securities of the series on any securities exchange or automated interdealer quotation system; and
any other terms, conditions, rights and preferences (or limitations on such rights and preferences) including covenants and events of default which apply solely to a particular series of the debt securities being offered which do not apply generally to other debt securities, or any covenants or events of default generally applicable to the debt securities which do not apply to a particular series of the debt securities.

The Company reserves the right to include in a prospectus supplement specific terms pertaining to the debt securities which are not within the options and parameters set forth in this prospectus. In addition, to the extent that any particular terms of the debt securities described in a prospectus supplement differ from any of the terms described in this prospectus, the description of such terms set forth in this prospectus shall be deemed to have been superseded by the description of such differing terms set forth in such prospectus supplement with respect to such debt securities.

Unless stated otherwise in the applicable prospectus supplement, no holder of debt securities will have the right to require the Company to repurchase the debt securities and there will be no increase in the interest rate if the Company becomes involved in a highly leveraged transaction or has a change of control.

The Company may issue debt securities bearing no interest or interest at a rate below the prevailing market rate at the time of issuance, and offer and sell these securities at a discount below their stated principal amount. The Company may also sell any of the debt securities for a foreign currency or currency unit, and payments on the debt securities may be payable in a foreign currency or currency unit. In any of these cases, the Company will describe certain Canadian federal income tax consequences and other special considerations in the applicable prospectus supplement.

Unless otherwise indicated in the applicable prospectus supplement, the Company may issue debt securities with terms different from those of debt securities previously issued and, without the consent of the holders thereof, reopen a previous issue of a series of debt securities and issue additional debt securities of such series.

Ranking and Other Indebtedness

Unless otherwise indicated in an applicable prospectus supplement, the debt securities will be direct unsecured obligations of the Company. The debt securities will be senior or subordinated indebtedness of the Company as described in the applicable prospectus supplement. If the debt securities are senior indebtedness, they will rank equally and rateably with all other unsecured indebtedness of the Company from time to time issued and outstanding which is not subordinated. If the debt securities are subordinated indebtedness, they will be subordinated to senior indebtedness of the Company as described in the applicable prospectus supplement, and they will

rank equally and rateably with other subordinated indebtedness of the Company from time to time issued and outstanding as described in the applicable prospectus supplement. The Company reserves the right to specify in a prospectus supplement whether a particular series of subordinated debt securities is subordinated to any other series of subordinated debt securities.

The Board may establish the extent and manner, if any, to which payment on or in respect of a series of debt securities will be senior or will be subordinated to the prior payment of our other liabilities and obligations and whether the payment of principal, premium, if any, and interest, if any, will be guaranteed by any other person and the nature and priority of any security.

Registration of Debt Securities

Debt Securities in Book Entry Form

Unless otherwise indicated in an applicable prospectus supplement, debt securities of any series may be issued in whole or in part in the form of one or more global securities (“ Global Securities ”) registered in the name of a designated clearing agency (a “ Depositary ”) or its nominee and held by or on behalf of the Depositary in accordance with the terms of the applicable Trust Indenture. The specific terms of the depositary arrangement with respect to any portion of a series of debt securities to be represented by a Global Security will, to the extent not described herein, be described in the prospectus supplement relating to such series. The Company anticipates that the provisions described in this section will apply to all depositary arrangements.

Upon the issuance of a Global Security, the Depositary or its nominee will credit, in its book-entry and registration system, the respective principal amounts of the debt securities represented by the Global Security to the accounts of such participants that have accounts with the Depositary or its nominee (“ Participants ”). Such accounts are typically designated by the underwriters, dealers or agents participating in the distribution of the debt securities or by the Company if such debt securities are offered and sold directly by the Company. Ownership of beneficial interests in a Global Security will be limited to Participants or persons that may hold beneficial interests through Participants. With respect to the interests of Participants, ownership of beneficial interests in a Global Security will be shown on, and the transfer of that ownership will be effected only through records maintained by the Depositary or its nominee. With respect to the interests of persons other than Participants, ownership of beneficial interests in a Global Security will be shown on, and the transfer of that ownership will be effected only through records maintained by Participants or persons that hold through Participants.

So long as the Depositary for a Global Security, or its nominee, is the registered owner of such Global Security, such Depositary or such nominee, as the case may be, will be considered the sole owner or holder of the debt securities represented by such Global Security for all purposes under the applicable Trust Indenture and payments of principal, premium, if any, and interest, if any, on the debt securities represented by a Global Security will be made by the Company to the Depositary or its nominee. The Company expects that the Depositary or its nominee, upon receipt of any payment of principal, premium, if any, or interest, if any, will credit Participants’ accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the Global Security as shown on the records of such Depositary or its nominee. The Company also expects that payments by Participants to owners of beneficial interests in a Global Security held through such Participants will be governed by standing instructions and customary practices and will be the responsibility of such Participants.

Conveyance of notices and other communications by the Depositary to direct Participants, by direct Participants to indirect Participants and by direct and indirect Participants to beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial owners of debt securities may wish to take certain steps to augment transmission to them of notices of significant events with respect to the debt securities, such as redemptions, tenders, defaults and proposed amendments to the Trust Indenture.

Owners of beneficial interests in a Global Security will not be entitled to have the debt securities represented by such Global Security registered in their names, will not receive or be entitled to receive physical delivery of such debt securities in certificated non-book-entry form, and will not be considered the owners or holders thereof under the applicable Trust Indenture, and the ability of a holder to pledge a debt security or otherwise take action with respect to such holder’s interest in a debt security (other than through a Participant) may be limited due to the lack of a physical certificate.

No Global Security may be exchanged in whole or in part for debt securities registered, and no transfer of a Global Security in whole or in part may be registered, in the name of any person other than the Depositary for such Global Security or any nominee of such Depositary unless: (i) the Depositary is no longer willing or able to discharge properly its responsibilities as depositary and the Company is unable to locate a qualified successor; (ii) the Company at its option elects, or is required by law, to terminate the book-entry system

through the Depositary or the book-entry system ceases to exist; or (iii) if provided for in the Trust Indenture, after the occurrence of an event of default thereunder (provided the Trustee has not waived the event of default in accordance with the terms of the Trust Indenture), Participants acting on behalf of beneficial holders representing, in aggregate, a threshold percentage of the aggregate principal amount of the debt securities then outstanding advise the Depositary in writing that the continuation of a book-entry system through the Depositary is no longer in their best interest.

If one of the foregoing events occurs, such Global Security shall be exchanged for certificated non-book-entry debt securities of the same series in an aggregate principal amount equal to the principal amount of such Global Security and registered in such names and denominations as the Depositary may direct.

The Company, any underwriters, dealers or agents and any Trustee identified in an accompanying prospectus supplement, as applicable, will not have any liability or responsibility for (i) records maintained by the Depositary relating to beneficial ownership interests in the debt securities held by the Depositary or the book-entry accounts maintained by the Depositary, (ii) maintaining, supervising or reviewing any records relating to any such beneficial ownership interests, or (iii) any advice or representation made by or with respect to the Depositary and contained in this prospectus or in any prospectus supplement or Trust Indenture with respect to the rules and regulations of the Depositary or at the direction of Depositary Participants.

Unless otherwise stated in the applicable prospectus supplement, CDS Clearing and Depository Services Inc. or its successor will act as Depositary for any debt securities represented by a Global Security.

Debt Securities in Certificated Form

A series of the debt securities may be issued in definitive form, solely as registered securities, solely as unregistered securities or as both registered securities and unregistered securities. Unless otherwise indicated in the applicable prospectus supplement, unregistered securities will have interest coupons attached.

In the event that the debt securities are issued in certificated non-book-entry form, and unless otherwise indicated in the applicable prospectus supplement, payment of principal, premium, if any, and interest, if any, on the debt securities (other than a Global Security) will be made at the office or agency of the Trustee or, at the option of the Company, by the Company by way of cheque mailed or delivered to the address of the person entitled at the address appearing in the security register of the Trustee or electronic funds wire or other transmission to an account of the person entitled to receive such payments. Unless otherwise indicated in the applicable prospectus supplement, payment of interest, if any, will be made to the persons in whose name the debt securities are registered at the close of business on the day or days specified by the Company.

At the option of the holder of debt securities, registered securities of any series will be exchangeable for other registered securities of the same series, of any authorized denomination and of a like aggregate principal amount and tenor. If, but only if, provided in an applicable prospectus supplement, unregistered securities (with all unmatured coupons, except as provided below, and all matured coupons in default) of any series may be exchanged for registered securities of the same series, of any authorized denominations and of a like aggregate principal amount and tenor. In such event, unregistered securities surrendered in a permitted exchange for registered securities between a regular record date or a special record date and the relevant date for payment of interest shall be surrendered without the coupon relating to such date for payment of interest, and interest will not be payable on such date for payment of interest in respect of the registered security issued in exchange for such unregistered security, but will be payable only to the holder of such coupon when due in accordance with the terms of the Trust Indenture. Unless otherwise specified in an applicable prospectus supplement, unregistered securities will not be issued in exchange for registered securities.

The applicable prospectus supplement may indicate the places to register a transfer of the debt securities in definitive form. Except for certain restrictions to be set forth in the Trust Indenture, no service charge will be payable by the holder for any registration of transfer or exchange of the debt securities in definitive form, but the Company may, in certain instances, require a sum sufficient to cover any tax or other governmental charges payable in connection with these transactions.

DESCRIPTION OF WARRANTS

General

This section describes the general terms that will apply to any warrants for the purchase of Common Shares, or equity warrants, or for the purchase of debt securities, or debt warrants.

Warrants may be issued independently or together with other securities, and warrants sold with other securities may be attached to or separate from the other securities. Warrants will be issued under one or more warrant agency agreements to be entered into by the Company and with one or more financial institutions or trust companies acting as warrant agent.

The Company will deliver an undertaking to the securities regulatory authority in each of the provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario that it will not distribute warrants that, according to the aforementioned terms as described in the applicable prospectus supplement for warrants supplementing this prospectus, are “novel” specified derivatives within the meaning of Canadian securities legislation, separately to any member of the public in Canada, unless the offering is in connection with and forms part of the consideration for an acquisition or merger transaction or unless such prospectus supplement containing the specific terms of the warrants to be distributed separately is first approved by or on behalf of the securities commissions or similar regulatory authorities in each of the provinces of Canada where the warrants will be distributed.

This summary of some of the provisions of the warrants is not complete. The statements made in this prospectus relating to any warrant agreement and warrants to be issued under this prospectus are summaries of certain anticipated provisions thereof and do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all provisions of the applicable warrant agreement. You should refer to the warrant indenture or warrant agency agreement relating to the specific warrants being offered for the complete terms of the warrants. A copy of any warrant indenture or warrant agency agreement relating to an offering or warrants will be filed by the Company with the securities commissions or similar regulatory authorities in applicable Canadian offering jurisdictions, after it has been entered into, and will be available electronically at www.sedar.com.

The applicable prospectus supplement relating to any warrants that we offer will describe the particular terms of those warrants and include specific terms relating to the offering.

Original purchasers of warrants (if offered separately) will have a contractual right of rescission against the Company in respect of the exercise of such warrant. The contractual right of rescission will entitle such original purchasers to receive, upon surrender of the underlying securities acquired upon exercise of the warrant, the total of the amount paid on original purchase of the warrant and the amount paid upon exercise, in the event that this prospectus (as supplemented or amended) contains a misrepresentation, provided that: (i) the exercise takes place within 180 days of the date of the purchase of the warrant under the applicable prospectus supplement; and (ii) the right of rescission is exercised within 180 days of the date of purchase of the warrant under the applicable prospectus supplement. This contractual right of rescission will be consistent with the statutory right of rescission described under section 131 of the Securities Act (British Columbia), and is in addition to any other right or remedy available to original purchasers under section 131 of the Securities Act (British Columbia) or otherwise at law.

In an offering of warrants, or other convertible securities, original purchasers are cautioned that the statutory right of action for damages for a misrepresentation contained in the prospectus is limited, in certain provincial and territorial securities legislation, to the price at which the warrants, or other convertible securities, are offered to the public under the prospectus offering. This means that, under the securities legislation of certain provinces, if the purchaser pays additional amounts upon conversion, exchange or exercise of such securities, those amounts may not be recoverable under the statutory right of action for damages that applies in those provinces. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province for the particulars of these rights, or consult with a legal advisor.

Equity Warrants

The particular terms of each issue of equity warrants will be described in the applicable prospectus supplement. This description will include, where applicable:

the designation and aggregate number of equity warrants;
the price at which the equity warrants will be offered;
the currency or currencies in which the equity warrants will be offered;
the date on which the right to exercise the equity warrants will commence and the date on which the right will expire;
the number of Common Shares that may be purchased upon exercise of each equity warrant and the price at which and currency or currencies in which the Common Shares may be purchased upon exercise of each equity warrant;
the terms of any provisions allowing or providing for adjustments in (i) the number and/or class of Common Shares that may be purchased, (ii) the exercise price per Common Share or (iii) the expiry of the equity warrants;
whether the Company will issue fractional shares;

whether the Company has applied to list the equity warrants or the underlying shares on a securities exchange or automated interdealer quotation system;
the designation and terms of any securities with which the equity warrants will be offered, if any, and the number of the equity warrants that will be offered with each security;
the date or dates, if any, on or after which the equity warrants and the related securities will be transferable separately;
whether the equity warrants will be subject to redemption or call and, if so, the terms of such redemption or call provisions;
material Canadian federal income tax consequences of owning the equity warrants; and
any other material terms or conditions of the equity warrants.

Debt Warrants

The particular terms of each issue of debt warrants will be described in the related prospectus supplement. This description will include, where applicable:

the designation and aggregate number of debt warrants;
the price at which the debt warrants will be offered;
the currency or currencies in which the debt warrants will be offered;
the designation and terms of any securities with which the debt warrants are being offered, if any, and the number of the debt warrants that will be offered with each security;
the date or dates, if any, on or after which the debt warrants and the related securities will be transferable separately;
the principal amount of debt securities that may be purchased upon exercise of each debt warrant and the price at which and currency or currencies in which that principal amount of debt securities may be purchased upon exercise of each debt warrant;
the date on which the right to exercise the debt warrants will commence and the date on which the right will expire;
the minimum or maximum amount of debt warrants that may be exercised at any one time;
whether the debt warrants will be subject to redemption or call, and, if so, the terms of such redemption or call provisions;
material Canadian federal income tax consequences of owning the debt warrants; and
any other material terms or conditions of the debt warrants.

Prior to the exercise of their warrants, holders of warrants will not have any of the rights of holders of the securities subject to the warrants.

DESCRIPTION OF UNITS

Aequus may issue units, which may consist of one or more Common Shares, warrants or any combination of securities as is specified in the relevant prospectus supplement. In addition, the relevant prospectus supplement relating to an offering of units will describe all material terms of any units offered, including, as applicable:

the designation and aggregate number of units being offered;
the price at which the units will be offered;
the designation, number and terms of the securities comprising the units and any agreement governing the units;
the date or dates, if any, on or after which the securities comprising the units will be transferable separately;
whether the Company will apply to list the units on a securities exchange or automated interdealer quotation system;
material Canadian federal income tax consequences of owning the units, including how the purchase price paid for the units will be allocated among the securities comprising the units; and
any other material terms or conditions of the units.

DESCRIPTION OF SUBSCRIPTION RECEIPTS

Aequus may issue subscription receipts separately or in combination with one or more other securities. The subscription receipts will entitle holders thereof to receive, upon satisfaction of certain release conditions and for no additional consideration, Common Shares, warrants or any combination thereof. Subscription receipts will be issued pursuant to one or more subscription receipt agreements (each, a “ Subscription Receipt Agreement ”), each to be entered into between the Company and an escrow agent (the “ Escrow Agent ”) that will be named in the relevant prospectus supplement. Each Escrow Agent will be a financial institution organized under the laws of Canada or a province thereof and authorized to carry on business as a trustee. If underwriters or agents are used in the sale of any

subscription receipts, one or more of such underwriters or agents may also be a party to the Subscription Receipt Agreement governing the subscription receipts sold to or through such underwriter or agent.

The following description sets forth certain general terms and provisions of subscription receipts that may be issued hereunder and is not intended to be complete. The statements made in this prospectus relating to any Subscription Receipt Agreement and subscription receipts to be issued thereunder are summaries of certain anticipated provisions thereof and are subject to, and are qualified in their entirety by reference to, all provisions of the applicable Subscription Receipt Agreement. Prospective investors should refer to the Subscription Receipt Agreement relating to the specific subscription receipts being offered for the complete terms of the subscription receipts. Aequus will file a copy of any Subscription Receipt Agreement relating to an offering of subscription receipts with the securities commissions or similar regulatory authorities in applicable Canadian offering jurisdictions, after it has been entered into, and such Subscription Receipt Agreement will be available electronically at www.sedar.com.

General

The prospectus supplement and the Subscription Receipt Agreement for any subscription receipts that the Company may offer will describe the specific terms of the subscription receipts offered. This description may include, but may not be limited to, any of the following, if applicable:

the designation and aggregate number of subscription receipts being offered;
the price at which the subscription receipts will be offered;
the designation, number and terms of the Common Shares, warrants or a combination thereof to be received by the holders of subscription receipts upon satisfaction of the release conditions, and any procedures that will result in the adjustment of those numbers;
the conditions (the “ Release Conditions ”) that must be met in order for holders of subscription receipts to receive, for no additional consideration, the Common Shares, warrants or a combination thereof;
the procedures for the issuance and delivery of the Common Shares, warrants or a combination thereof to holders of subscription receipts upon satisfaction of the Release Conditions;
whether any payments will be made to holders of subscription receipts upon delivery of the Common Shares, warrants or a combination thereof upon satisfaction of the Release Conditions;
the identity of the Escrow Agent;
the terms and conditions under which the Escrow Agent will hold all or a portion of the gross proceeds from the sale of subscription receipts, together with interest and income earned thereon (collectively, the “ Escrowed Funds ”), pending satisfaction of the Release Conditions;
the terms and conditions pursuant to which the Escrow Agent will hold Common Shares, warrants or a combination thereof pending satisfaction of the Release Conditions;
the terms and conditions under which the Escrow Agent will release all or a portion of the Escrowed Funds to the Company upon satisfaction of the Release Conditions;
if the subscription receipts are sold to or through underwriters or agents, the terms and conditions under which the Escrow Agent will release a portion of the Escrowed Funds to such underwriters or agents in payment of all or a portion of their fees or commissions in connection with the sale of the subscription receipts;
procedures for the refund by the Escrow Agent to holders of subscription receipts of all or a portion of the subscription price of their subscription receipts, plus any pro rata entitlement to interest earned or income generated on such amount, if the Release Conditions are not satisfied;
any contractual right of rescission to be granted to initial purchasers of subscription receipts in the event that this prospectus, the prospectus supplement under which subscription receipts are issued or any amendment hereto or thereto contains a misrepresentation;
any entitlement of Aequus to purchase the subscription receipts in the open market by private agreement or otherwise;
whether the Company will issue the subscription receipts as global securities and, if so, the identity of the depository for the global securities;
whether the Company will issue the subscription receipts as bearer securities, as registered securities or both;
provisions as to modification, amendment or variation of the Subscription Receipt Agreement or any rights or terms of the subscription receipts, including upon any subdivision, consolidation, reclassification or other material change of the Common Shares, warrants or other Aequus securities, any other reorganization, amalgamation, merger or sale of all or substantially all of the Company’s assets or any distribution of property or rights to all or substantially all of the holders of Common Shares;

whether the Company will apply to list the subscription receipts on a securities exchange or automated interdealer quotation system;
material Canadian federal income tax consequences of owning the subscription receipts; and
any other material terms or conditions of the subscription receipts.

Original purchasers of subscription receipts will have a contractual right of rescission against the Company in respect of the conversion of the subscription receipt. The contractual right of rescission will entitle such original purchasers to receive the amount paid on original purchase of the subscription receipt upon surrender of the underlying securities gained thereby, in the event that this prospectus (as supplemented or amended) contains a misrepresentation, provided that: (i) the conversion takes place within 180 days of the date of the purchase of the subscription receipt under this prospectus; and (ii) the right of rescission is exercised within 180 days of the date of purchase of the subscription receipt under this prospectus. This contractual right of rescission will be consistent with the statutory right of rescission described under section 131 of the Securities Act (British Columbia), and is in addition to any other right or remedy available to original purchasers under section 131 of the Securities Act (British Columbia) or otherwise at law.

Rights of Holders of Subscription Receipts Prior to Satisfaction of Release Conditions

The holders of subscription receipts will not be, and will not have the rights of, shareholders of Aequus. Holders of subscription receipts are entitled only to receive Common Shares, warrants or a combination thereof on exchange of their subscription receipts, plus any cash payments, all as provided for under the Subscription Receipt Agreement and only once the Release Conditions have been satisfied. If the Release Conditions are not satisfied, holders of subscription receipts shall be entitled to a refund of all or a portion of the subscription price thereof and all or a portion of the pro rata share of interest earned or income generated thereon, as provided in the Subscription Receipt Agreement.

Escrow

The Subscription Receipt Agreement will provide that the Escrowed Funds will be held in escrow by the Escrow Agent, and such Escrowed Funds will be released to the Company (and, if the subscription receipts are sold to or through underwriters or agents, a portion of the Escrowed Funds may be released to such underwriters or agents in payment of all or a portion of their fees in connection with the sale of the subscription receipts) at the time and under the terms specified by the Subscription Receipt Agreement. If the Release Conditions are not satisfied, holders of subscription receipts will receive a refund of all or a portion of the subscription price for their subscription receipts, plus their pro rata entitlement to interest earned or income generated on such amount, if provided for in the Subscription Receipt Agreement, in accordance with the terms of the Subscription Receipt Agreement. Common Shares or warrants may be held in escrow by the Escrow Agent and will be released to the holders of subscription receipts following satisfaction of the Release Conditions at the time and under the terms specified in the Subscription Receipt Agreement.

Modifications

The Subscription Receipt Agreement will specify the terms upon which modifications and alterations to the subscription receipts issued thereunder may be made by way of a resolution of holders of subscription receipts at a meeting of such holders or consent in writing from such holders. The number of holders of subscription receipts required to pass such a resolution or execute such a written consent will be specified in the Subscription Receipt Agreement.

The Subscription Receipt Agreement will also specify that the Company may amend any Subscription Receipt Agreement and the subscription receipts, without the consent of the holders of the subscription receipts, to cure any ambiguity, to cure, correct or supplement any defective or inconsistent provision, or in any other manner that will not materially and adversely affect the interests of the holders of outstanding subscription receipts or as otherwise specified in the Subscription Receipt Agreement.

The foregoing summary of certain of the principal provisions of the securities is a summary of anticipated terms and conditions only and is qualified in its entirety by the description in the applicable prospectus supplement under which any securities are being offered.

CERTAIN INCOME TAX CONSIDERATIONS

The applicable prospectus supplement may describe certain Canadian federal income tax consequences to an investor who is a non-resident of Canada or to an investor who is a resident of Canada of acquiring, owning and disposing of any of our securities offered

thereunder. The applicable prospectus supplement may also describe certain U.S. federal income tax consequences of the acquisition, ownership and disposition of any of our securities offered thereunder by an initial investor who is a U.S. person (within the meaning of the U.S. Internal Revenue Code of 1986), including, to the extent applicable, such consequences relating to debt securities payable in a currency other than the U.S. dollar, issued at an original issue discount for U.S. federal income tax purposes or containing early redemption provisions or other special items. Investors should read the tax discussion in any prospectus supplement with respect to a particular offering and consult their own tax advisors with respect to their own particular circumstances.

PLAN OF DISTRIBUTION

The Company or any Selling Securityholder may sell securities offered by this prospectus for cash or other consideration (i) to or through underwriters, dealers, placement agents or other intermediaries, (ii) directly to one or more purchasers or (iii) in connection with acquisitions of assets or shares or another entity or company.

Each prospectus supplement with respect to our securities being offered will set forth the terms of the offering, including:

the person offering the securities (the Company and/or any Selling Securityholder(s));
the name or names of any underwriters, dealers or other placement agents;
the number and the purchase price of, and form of consideration for, the securities;
the proceeds to the Company or any Selling Securityholder from such sale; and
any commissions, fees, discounts and other items constituting underwriters’, dealers’ or agents’ compensation.

Our securities may be sold, from time to time, in one or more transactions at a fixed price or prices which may be changed or at market prices prevailing at the time of sale, at prices related to such prevailing market price or at negotiated prices, including sales in transactions that are deemed to be “at the market distributions” as defined in National Instrument 44-102 - Shelf Distributions , including sales made directly on the TSX-V or other existing trading markets for the securities. The prices at which the securities may be offered may vary as between purchasers and during the period of distribution. If, in connection with the offering of securities at a fixed price or prices, the underwriters have made a bona fide effort to sell all of the securities at the initial offering price fixed in the applicable prospectus supplement, the public offering price may be decreased and thereafter further changed, from time to time, to an amount not greater than the initial offering price fixed in such prospectus supplement, in which case the compensation realized by the underwriters will be decreased by the amount that the aggregate price paid by purchasers for the securities is less than the gross proceeds paid by the underwriters to the Company or any Selling Securityholder.

Only underwriters named in the prospectus supplement are deemed to be underwriters in connection with our securities offered by that prospectus supplement.

The Company or any Selling Securityholder may agree to pay the underwriters or agents a commission for various services relating to the issue and sale of any securities offered hereby. Where the Company pays such commission, it will be paid out of the general corporate funds of the Company. Where any Selling Securityholder pays such commission, the source of such commission will be set out in the applicable prospectus supplement.

Under agreements which may be entered into by us and any Selling Securityholder, underwriters, dealers and agents who participate in the distribution of our securities may be entitled to indemnification by us against certain liabilities, including liabilities under the U.S. Securities Act and applicable Canadian securities legislation, or to contribution with respect to payments which such underwriters, dealers or agents may be required to make in respect thereof. The underwriters, dealers and agents with whom we enter into agreements may be customers of, engage in transactions with, or perform services for, us in the ordinary course of business.

No underwriter or dealer involved in an “at the market distribution” as defined under applicable Canadian securities legislation, no affiliate of such underwriter or dealer and no person acting jointly or in concert with such underwriter or dealer has over-allotted, or will over-allot, our securities in connection with an offering of our securities or effect any other transactions that are intended to stabilize the market price of our securities.

In connection with any offering of our securities, other than an “at the market distribution”, the underwriters may over-allot or effect transactions which stabilize or maintain the market price of our securities offered at a level above that which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time.

The securities have not been and will not be registered under the U.S. Securities Act or any state securities laws and may not be offered, sold or delivered to, or for the account or benefit of, a person in the “United States” or, as applicable, a “U.S. person” (as such terms are defined in Regulation S under the U.S. Securities Act), except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state laws. Each underwriter or agent for any offering of securities pursuant to this prospectus will agree that it will not offer, sell or deliver such securities to, or for the account of benefit of, a person in the United States, or, as applicable, a U.S. person except in certain transactions exempt from the registration requirements of the U.S. Securities Act and in compliance with applicable state securities laws.

SELLING SECURITYHOLDERS

Securities may be sold under this prospectus by way of a secondary offering by one or more Selling Securityholders. The terms under which such securities will be offered by Selling Securityholders will be described, as required under applicable securities laws, in the applicable prospectus supplement.

LEGAL MATTERS

Certain legal matters related to our securities offered by this prospectus will be passed upon on our behalf by Blake, Cassels & Graydon LLP, with respect to matters of Canadian law. The partners and associates of Blake, Cassels & Graydon LLP as a group beneficially own, directly or indirectly, less than one percent of the outstanding securities of the Company.

AUDITORS, REGISTRAR AND TRANSFER AGENT

The auditor of the Company is Dale Matheson Carr-Hilton LaBonte LLP, Chartered Professional Accountants, at its offices located at #1500-1140 W Pender Street, Vancouver, British Columbia, V6E 4G1. Dale Matheson Carr-Hilton LaBonte LLP is independent from the Company within the meaning of the Rules of Professional Conduct of the Chartered Professional Accountants of British Columbia.

The transfer agent and registrar for the Common Shares in Canada is Computershare Investor Services Inc. at its principal offices in Vancouver, British Columbia.

WHERE YOU CAN FIND MORE INFORMATION

We are required to file with the securities commission or authority in each of the provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario, annual and quarterly reports, material change reports and other information.

You may read any document we file with or furnish to the securities commissions and authorities of the provinces British Columbia, Alberta, Saskatchewan, Manitoba and Ontario, through SEDAR at www.sedar.com.

STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION

Securities legislation in certain of the provinces of Canada provides purchasers with the right to withdraw from an agreement to purchase securities. This right may be exercised within two business days after receipt or deemed receipt of a prospectus or a prospectus supplement relating to the securities purchased by a purchaser and any amendments thereto. In several of the provinces, the securities legislation further provides a purchaser with remedies for rescission or, in some jurisdictions, revision of the price or damages if the prospectus or a prospectus supplement relating to the securities purchased by a purchaser and any amendments thereto contain a misrepresentation or is not delivered to the purchaser, provided that the remedies for recession, revision of the price or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province for the particulars of these rights or consult with a legal advisor.

In an offering of warrants, subscription receipts or other convertible, exchangeable or exercisable securities, investors are cautioned that the statutory right of action for damages for a misrepresentation contained in the prospectus is limited, in certain provincial securities legislation, to the price at which the warrants, or other convertible, exchangeable or exercisable securities, are offered to the public under the prospectus offering. This means that, under the securities legislation of certain provinces, if the purchaser pays additional amounts upon conversion, exchange or exercise of such securities, those amounts may not be recoverable under the statutory right of action for damages that applies in those provinces. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province for the particulars of this right of action for damages, or consult with a legal advisor.

CERTIFICATE OF AEQUUS PHARMACEUTICALS INC.

Dated: October 15, 2021

This preliminary short form prospectus, together with the documents incorporated in this prospectus by reference, constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by the securities legislation of each of the provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario.

(Signed) “ Doug Janzen ” Chief Executive Officer

(Signed) “ Ann Fehr ” Chief Financial Officer

ON BEHALF OF THE BOARD OF DIRECTORS

(Signed) “ Anne Stevens ” Director

(Signed) “ Chris Clark ” Director

C-1

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Aequus Pharmaceuticals Inc. — Capital/Financing Update 2021

47254_rns_2021-10-15_c16f880f-2a18-480a-89fd-928dfc53c4bd.pdf

PRELIMINARY SHORT FORM BASE SHELF PROSPECTUS

New Issue and/or Secondary Offering

October 15, 2021