2012 Annual Report - Prometic - Life Science, Inc.

On December 31, 2012, the Company and the lender signed a letter of intent to extend the maturity date of the debt from July 1, 2013 to
July 1, 2014 for consideration to be mutually agreed upon within 60 days of the signing of the letter of intent. On February 20th, 2013, the
repayment terms were formally renegotiated and the Company agreed to issue to the lender 130,434 fully paid common shares and 94,340
warrants with an exercise price of $0.53 per share, exercisable for a period of two years. As per the new agreement, no cash interest was charged
to the Company for this extension. The loan was therefore reclassified as a long-term liability as at December 31, 2012. The renegotiation will
be accounted for as a debt extinguishment for accounting purposes in February 2013.
3) Loan for a principal amount of $500. The loan is secured by hypothecs of $500 granted by the Company and a subsidiary on the universality
of their movable property. On December 31, 2010, the Company and the lender signed a letter of intent to extend the payment terms of the
debt from August 21, 2011 to July 1, 2012 for consideration to be mutually agreed upon within 30 days of the signing of the letter of intent. On
January 24, 2011, the repayment terms were formally renegotiated and the Company agreed to issue to the lender 377,963 fully paid common
shares and 357,142 warrants with an exercise price of $0.14 per share, exercisable for a period of three years. As per the new agreement, no
cash interest has been charged to the Company for this extension. The loan bears no stated interest (the effective interest rate, taking into
account the shares and warrants issued as consideration for the renegotiation, is 37.50%). The renegotiation was a debt extinguishment for
accounting purposes. Consequently, the loan was derecognized and a new loan recognized at fair value, creating a loss on extinguishment
of debt in the amount of $93. The fair value of $317 was estimated using discounted future cash flows and the residual was allocated to the
warrants and shares in the amounts of $127 and $57, respectively.
On December 31, 2011, the Company and the lender signed a letter of intent to extend the maturity date of the debt from July 1, 2012 to July
1, 2013 for consideration to be mutually agreed upon within 45 days of the signing of the letter of intent. On February 2, 2012, the repayment
terms were formally renegotiated and the Company agreed to issue to the lender 480,000 fully paid common shares and 357,142 warrants with
an exercise price of $0.14 per share, exercisable for a period of three years. As per the new agreement, no cash interest was charged to the
Company for this extension. The loan bears no stated interest (the effective interest rate, taking into account the shares and warrants issued
as consideration for the renegotiation, is 37.50%). The renegotiation was a debt extinguishment for accounting purposes. Consequently, the
loan was derecognized and a new loan recognized at fair value, creating a loss on extinguishment of debt in the amount of $62. The fair value
of $319 was estimated using discounted future cash flows and the residual was allocated to the warrants and shares in the amounts of $119 and
$62, respectively. The carrying value of the loan as at December 31, 2012 was $428 ($426 as at December 31, 2011).
On December 31, 2012, the Company and the lender signed a letter of intent to extend the maturity date of the debt from July 1, 2013 to
July 1, 2014 for consideration to be mutually agreed upon within 60 days of the signing of the letter of intent. On February 20th, 2013, the
repayment terms were formally renegotiated and the Company agreed to issue to the lender 130,435 fully paid common shares and 94,339
warrants with an exercise price of $0.53 per share, exercisable for a period of two years. As per the new agreement, no cash interest was charged
to the Company for this extension. The loan was therefore reclassified as a long-term liability as at December 31, 2012. The renegotiation will
be accounted for as a debt extinguishment for accounting purposes in February 2013.
4) Non-interest bearing loans for principal amounts of $1,500, $500, $470 and $250. The loans are secured by hypothecs of $2,720 granted by
the Company and a subsidiary on the universality of their movable property.
In May 2010, ProMetic repaid an amount of $720 of the loans.
PROMETIC LIFE SCIENCES INC.
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On December 31, 2010, the Company and the lender signed a letter of intent to extend the payment terms of the two loans to July 1, 2012
for consideration to be mutually agreed upon within 30 days of the signing of the letter of intent. On January 24, 2011, the repayment terms
were formally renegotiated and the Company agreed to issue to the lender, for both loans, a total of 2,318,436 fully paid common shares and
1,428,570 warrants with an exercise price of $0.14 per share, exercisable for a period of three years. As per the new agreement, no cash interest
has been charged to the Company for this extension. The loan bears no stated interest (the effective interest rate, taking into account the
shares and warrants issued as consideration for the renegotiation, is 37.50%). The renegotiation was a debt extinguishment for accounting
purposes. Consequently, the loans were derecognized and new loans recognized at fair value, creating a loss on extinguishment of debt in the
amount of $170. The fair values of the loans in the amount of $1,266 were estimated using discounted future cash flows and the residual was
allocated to the warrants and shares in the amounts of $386 and $348, respectively.
On December 31, 2011, the Company and the lender signed a letter of intent to extend the payment terms of the debt from July 1, 2012 to July
1, 2013 for consideration to be mutually agreed upon within 45 days of the signing of the letter of intent. On February 2, 2012, the repayment
terms were formally renegotiated and the Company agreed to issue to the lender, for both loans, a total of 1,920,000 fully paid common shares
and 1,428,570 warrants with an exercise price of $0.14 per share, exercisable for a period of three years. As per the new agreement, no cash
interest was charged to the Company for this extension. The loan bears no stated interest (the effective interest rate, taking into account the
shares and warrants issued as consideration for the renegotiation, is 37.50%). The renegotiation was a debt extinguishment for accounting