1.2% equity seems fair if the startup already has the product built (as you said they started a year ago) and they have already raised $1.5M in funding.
A few things to keep in mind that you are likely on a vesting schedule (most startups use 4 years). So your 1.2% will vest over that term. There could likely also be a 1 year cliff involved in they are smart. Check the paperwork to verify this.
If investors are willing to put in $1.5M in a startup, they see the potential. I would not say that the startup isn't worth it if you feel they won't be the next WhatsApp or Groupon.
The key thing you should ask yourself is do you believe in the product and vision enough to stick around for a few years?
Also, if you are taking a lesser salary in order to get more equity, do ensure that the salary covers all your living expenses at the bare minimum.