Aeolus Pharmaceuticals Completes Fourth Closing of Senior Convertible Debt Financing.

LAGUNA NIGUEL, Calif. -- Aeolus Pharmaceuticals, Inc. (OTCBB: AOLS) today announced that it has raised an additional $125,000 through the sale of $125,000 in aggregate principal amount of its newly issued Senior Convertible Notes and warrants to selected institutional investors. The investors have also agreed, upon the satisfaction of certain conditions by the Company, to invest another $125,000 on December 1, 2008 and have the option to invest an additional $4,000,000 at any time on or before February 1, 2010. The Company previously raised $850,000 through the sale of Senior Convertible Notes and warrants from the same institutional investors during the past three months.

The Notes bear interest at a rate of 7% per year and mature on the 30-month anniversary of their date of issuance. In addition, the Investors were granted warrants to purchase up to 2,000 shares of common stock for every $1,000 in principal amount of Notes purchased for a total of 250,000 shares. The warrants have an initial exercise price of $0.50 per share and a five year term.

The Notes are convertible, at the Investors' election, into shares of the Company's common stock, at an initial conversion price equal to $0.35 per share.

The Company expects to use the net proceeds of $120,000 that it raised today from this financing to advance the development of AEOL 10150 and for general administrative expenses and working capital.

The securities offered in this placement have not been registered under the Securities Act of 1933, as amended, or state securities laws, and cannot be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from the registration requirements. This news release is neither an offer to sell nor a solicitation of an offer to buy any of the securities discussed herein and is being issued under Rule 135c of the Securities Act of 1933, as amended.

About Aeolus Pharmaceuticals

Aeolus is developing a variety of therapeutic agents based on its proprietary small molecule catalytic antioxidants, with AEOL 10150 being the first to enter human clinical evaluation. AEOL 10150 is a patented, small molecule catalytic antioxidant that has shown the ability to scavenge a broad range of reactive oxygen species, or free radicals. As a catalytic antioxidant, AEOL 10150 mimics and thereby amplifies the body's natural enzymatic systems for eliminating these damaging compounds. Because oxygen-derived free radicals are believed to have an important role in the pathogenesis of many diseases, Aeolus' catalytic antioxidants are believed to have a broad range of potential therapeutic uses.

The statements in this press release that are not purely statements of historical fact are forward-looking statements. Such statements include, but are not limited to, those relating to Aeolus' product candidates, as well as its proprietary technologies and research programs, and the potential sale and issuance of additional notes and warrants to selected institutional investors. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Aeolus' actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements. Important factors that could cause results to differ include risks associated with uncertainties of progress and timing of clinical trials, scientific research and product development activities, difficulties or delays in development, testing, obtaining regulatory approval, the need to obtain funding for pre-clinical and clinical trials and operations, the scope and validity of intellectual property protection for Aeolus' product candidates, proprietary technologies and their uses, competition from other biopharmaceutical companies and risks related to the Company's ability to satisfy the conditions for the sale of additional notes and warrants. Certain of these factors and others are more fully described in Aeolus' filings with the Securities and Exchange Commission, including, but not limited to, Aeolus' Annual Report on Form 10-K for the year ended September 30, 2007. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.