5. Loan facility

On October 23, 2013, AQXP Canada entered into a term loan facility with Silicon Valley Bank (“SVB”) for up to $4 million, of which $2.5 million was received on October 30, 2013 and a further $1.5 million is available to AQXP Canada through December 31, 2014 upon AQXP Canada receiving certain agreed-upon Phase 2 top-line data results from its Chronic Obstructive Pulmonary Disorder (“COPD”) or Bladder Pain Syndrome/Interstitial Cystitis (“BPS/IC”) clinical trials. Aquinox USA is a guarantor of AQXP Canada’s obligations under the term loan facility. In addition to principal, interest and other related payments due to SVB, Aquinox USA and AQXP Canada issued SVB warrants at $10.56 per warrant to purchase 11,363 shares of Series C preferred stock and a corresponding number of Canadian special voting shares of AQXP Canada. Following the completion of the IPO, the warrants are exercisable for 11,363 shares of common stock. These warrants expire in 2023.

The term loan has an interest rate of 5.25% and is collateralized by AQXP Canada’s assets, excluding intellectual property, but including all proceeds thereof. The term loan principal is repayable in monthly installments approximately $83,000 commencing October 2014 and the loan has a maturity date of March 2017. AQXP Canada may voluntarily repay the term loan at any time.

On March 28, 2014, AQXP Canada made a cash payment of $2,609,844 to fully repay the amount outstanding under the term loan facility. The repayment was accounted for as an extinguishment of debt and the loss on extinguishment of $213,511 along with the prepayment penalty, repayment fee and accrued interest were recorded within bank charges and financing costs.


	AMOUNT
BALANCE—January 1, 2013	$	—
Bank loan cash received - October 30, 2013		2,500,000
Warrant discount		(226,255	)
Financing costs		12,744

BALANCE—December 31, 2013		2,286,489
Accrued interest		9,844
Accretion of warrant discount		213,511
Repayment fee and penalty		100,000
Repayment of bank loan and interest		(2,609,844	)

BALANCE—March 31, 2014	$	—



	MARCH 31, 2014		DECEMBER 31, 2013
Short-term portion of bank loan	$	—	$	250,000
Long-term portion of bank loan		—		2,036,489

	$	—	$	2,286,489