2012 Annual Report - Prometic - Life Science, Inc.

2012
During the year ended December 31, 2012, the Company issued a total of 28,499,996 shares and 6,345,451 warrants for private placements for
a total consideration of $3,135. The warrants had an exercise price of $0.18 per share and exercisable for two years. The net proceeds were
allocated to share capital and warrants (contributed surplus) based on their relative fair values. The fair value of the warrants was estimated using
the Black-Scholes option pricing model using a weighted average volatility of 93%, an expected life of two years and a weighted average risk-free
interest rate of 1.23%. As a result of these issuances, share capital was increased by an amount of $2,903 and contributed surplus was increased by
an amount of $232.
On October 15, 2012, the Company entered into a private placement agreement with a strategic investor to issue 48,147,053 common shares at an
agreed upon price of $0.204 per common share, for gross proceeds of approximately $9,822. As the share subscription was receivable at December
31, 2012, the shares were considered to be outstanding, including in the computation of the earnings (loss) per share and the diluted earnings
(loss) per share. The share subscription receivable was received and the shares issued on January 7, 2013. The shares are not freely tradable before
three years.
In February 2012, the Company issued 3,840,000 common shares following the renegotiation with its lenders to extend the payment terms of the
loans as described in note 18.
The Company also issued 2,141,608 shares for the reimbursement of principal, interest and fees related to loans from a director for a total $284
(note 18). The Company issued 1,125,000 shares for the exercise of warrants. As a result of this issuance, the share capital was increased by $191.
Finally, 731,920 shares were issued to suppliers for the payment of $87 of expenses.
Share issue expenses related to the above were $653 and were recorded as an increase of the deficit.
2011
During the first three quarters of the year 2011, the Company issued a total of 23,185,910 shares for private placements for a total consideration of
$3,355. In the fourth quarter of the year ended December 31 2011, the Company issued 13,136,362 shares and 5,261,545 warrants, with an exercise
price of $0.18 per share and exercisable for two years, resulting in gross proceeds of $1,455. The net proceeds were allocated to share capital and
warrants (contributed surplus) based on their relative fair values. The fair value of the warrants was estimated using the Black-Scholes option
pricing model using a weighted average volatility of 0.91%, an expected life of two years and a weighted average risk-free interest rate of 0.96%. As a
result of these issuances, share capital was increased by an amount of $1,247 and contributed surplus was increased by an amount of $208.
In January 2011, the Company issued 4,508,499 common shares following the renegotiation with the lenders to extend the payment terms of the
loans as described in note 18. A total of 2,098,239 shares were issued for payment of expenses in the amount of $216.
Finally, 100,000 shares were issued for a total consideration of $17, resulting from the exercise of options granted in the past
Share issue expenses related to the above were $59 and were recorded as an increase of the deficit.
b) Warrants and Rights
During the year ended December 31, 2012, 2,857,139 warrants with an estimated fair value of $949 were issued in relation to the renegotiation
of the loans and 6,345,451 warrants with an estimated fair value of $232 were issued in connection with private placements. As at December 31,
2012, the following warrants and rights to acquire shares were outstanding:
PROMETIC LIFE SCIENCES INC.
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