Escalon Announces the Refinancing of its Debt

Escalon Medical Corp. ESMC announced the refinancing of its debt in connection with the acquisition of certain assets of Biocode Hycel. On December 31, 2008 Drew Scientific, Inc. acquired certain assets of Biocode for $5,900,000 plus acquisition costs of approximately $300,000. The sales price was payable in cash of approximately $324,000 and $5,865,000 in debt from Drew. The seller-provided financing was collateralized by certain assets of Biocode. Biocode assets were vertically integrated into the Company's clinical diagnostics business. The seller-provided financing was guaranteed by the Company and required payment over four years. Under the terms of the debt refinancing, the Company will pay the balance of the seller provided financing of $3,375,000 Euros by the sum per month in euros having an exchange value of $50,000 United States Dollars as of the date of payment. Interest will remain unchanged and will accrue on the outstanding amount of the purchase price at an interest rate of 7% per year on the basis of the actual days elapsed and a 365 day year. Upon the sixtieth month after this Amendment, the Company has agreed to pay the balance of the outstanding amount in euros in full in one payment. The refinancing will reduce the current portion of our long-term debt from approximately $2,600,000 to $600,000.