ANNEX 1 27 The advances will be paid according to the following schedule, Following the repayment of all of the conditional advances, the subject to completion of milestones: Company may be required to make additional payments over a • €678 K received in December 2014; period of two years of up to €2.72 million (€1.15 million the first • €2,279 K received in July 2016 (1) year and €1.57 million the second year), depending on whether ; the Company reaches cumulative revenues, excluding taxes, of • €494 K to be received in the first half of 2018 (2) ; €80 million. These additional repayments should be done within • €853 K to be received in November 2018; and 15 years following the first year of reimbursement, i.e. 2037. • €986 K to be received in November 2019. The obligation to repay these amounts is based on the technical Funds received in the form of conditional advances and already and commercial success of the funded program, as determined by received in 2017 and 2016, and the corresponding accrued the revenues forecast or revenues deriving from direct or indirect interests are both recognized as non-current liabilities. exploitation of those products and results of its optogenetics technology platform. In the event Bpifrance Financement The repayment schedule for a total amount of €6,490 K of all of determines that the program is not successful, Bpifrance the conditional advances is as follows: Financement will meet with the Company to assess the impact on • €550 K on or before June 30, 2022; the repayments and the repayment schedule. • €1,000 K on or before June 30, 2023; • €1,500 K on or before June 30, 2024; NOTE 8 — RESEARCH AND DEVELOPMENT EXPENSES • €1,700 K on or before June 30, 2025; and As indicated in the accounting policies, R&D expenses are not capitalized but recorded as operating expenses. For fiscal year • €1,740 K on or before June 30, 2026. 2017, R&D expenses amounted to €17,072 K. NOTE 9 — ACCRUED EXPENSES The amount of accrued expenses is as follows: Less than More than Total gross In thousands of euros one year one year Accounts payable, accrued expenses 1,527 — 1,527 Employees, accrued expenses 452 — 452 Employees, paid vacation 157 — 157 Social organizations, accrued expenses 156 — 156 Social organizations, paid vacation 54 — 54 Social organizations, other accrued expenses 817 — 817 Government, accrued expenses 1 — 1 Payable interests 3 — 3 TOTAL 3,166 — 3,166 NOTE 10 — DEFERRED REVENUES AND GRANTS under this subsidy and will receive €282 K (€172 K in November In addition to the conditional advances as described in Note 7, 2018 and €110 K in November 2019). the Company is entitled to a non-refundable subsidy of €1,147 K This subsidy is recorded in other income in the statement of from Bpifrance Financement in connection with its development income (loss) and is spread over the duration of the corresponding of product candidates using its optogenetics technology platform. milestone. The Company has already received €865 K in December 2014 (1) The estimated amount from the initial payment schedule was €2,675 K. The costs occurred by Company amounted to a lower amount than expected, therefore the amount of this milestone was reduced accordingly. (2) The correspondent milestone was in November 2017, but the funds will be paid after the evaluation of the final report that will occur on the first half of 2018. GENSIGHT BIOLOGICS – 2017 Registration Document –253