UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM 8-K
CURRENT
REPORT Pursuant
to
Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of report (Date of earliest event reported):
March 29, 2018
Bionik
Laboratories Corp.
(Exact Name
of Registrant as Specified in Its Charter)
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Delaware
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000-54717
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27-1340346
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(State or Other Jurisdiction
of Incorporation or Organization)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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483 Bay Street, N105
Toronto, ON
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M5G 2C9
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant’s Telephone Number, Including
Area Code: (416) 640-7887
(Former Name
or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (
see
General Instruction
A.2. below):
¨
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2
of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company
¨
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
¨
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Item
1.01
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Entry
Into A Material Agreement.
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On March 30, 2018, Bionik Laboratories
Corp. (“the Company”) and the holders of a majority in original aggregate principal amount of certain existing promissory
notes, in the aggregate principal amount of approximately $5,000,000, issued by the Company to certain investors (the “Investors”)
in December 2016 – December 2017 (the “Existing Notes”), agreed to amend the terms of all of the Existing Notes
and warrants issued by the Company in relation to the Existing Notes (the “Existing Warrants”). Such amendments are
evidenced, as applicable, by an Allonge to Convertible Promissory Notes, included as Exhibit 10.1 to this Current Report on Form
8-K (the “Note Allonge”), and an Allonge to Common Stock Purchase Warrant, included as Exhibit 10.2 to this Current
Report on Form 8-K (the “Warrant Allonge”, and together with the Note Allonge, the “Allonges”). The Existing
Notes were amended to revise the definition of a Qualified Financing from at least $7,000,000 to at least $2,000,000 and to provide
that the Existing Notes will be automatically converted into New Round Stock (as defined in the Existing Notes) at March 31, 2018.
The Existing Warrants were amended to provide that in the event the Company does not have sufficient authorized but unissued shares
of common stock to issue to the Investors upon an exercise of the Existing Warrants, the Existing Warrants shall not be exercisable
to the extent of such deficiency and the Company shall use its commercially reasonable efforts to seek and obtain requisite consent
to (a) effect a reverse stock split of the Company’s common stock that allows for the issuance of the shares of common stock
pursuant to the Existing Warrants without violating the authorized share number of the Company and/or (b) increase the Company’s
authorized shares of common stock.
The foregoing is a brief description of
the terms of the Allonges and is qualified in its entirety by reference to the full text of the Allonges, copies of which are included
as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K, each of which are incorporated herein by reference.
The information set forth in Item 2.03
is incorporated by reference into this Item 1.01.
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Item
2.03
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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On March 29, 2018, investors (the “Lenders”)
of the Company subscribed for convertible promissory notes and loaned to the Company an aggregate of approximately $350,000 (the
“Loans”). The Loans represent additional tranches borrowed pursuant to an up to $14,000,000 convertible note offering
(the “Offering”), for total borrowed principal through March 29, 2018 of approximately $3,211,000 (not including the
transactions contemplated by the Exchange Agreement below). All of the investors in the Offering are herein referred to as the
“2018 Investors”, and all of the convertible promissory notes subscribed for pursuant to the Offering are herein referred
to as the “2018 Notes”.
The Company intends to use the net proceeds
from the Loans for the Company’s working capital and general corporate purposes.
The Loans bear interest at a fixed rate
of 3% per month, beginning on the Issue Date (as defined in the 2018 Notes). Interest will be computed based on a 360-day year
of twelve 30-day months and will be payable, along with the principal amount, on the earlier of: (a) March 31, 2018 and (b) the
consummation of a Qualified Financing (as defined in the Notes) (the “Maturity Date”).
The 2018 Notes will be convertible into
equity of the Company upon the following events on the following terms:
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·
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On the Maturity Date without any action on the part of the Lenders, the outstanding principal and accrued and unpaid interest under the 2018 Notes will be converted into shares of New Round Stock (as defined in the 2018 Notes) based upon a fifteen percent (15%) discount to the lesser of (i) (A) the VWAP (as defined in the 2018 Notes) average of the last 30 days ending on the closing of the Qualified Financing (or, in the event of multiple closings, the lowest VWAP average of the last 30 days ending on each closing of a Qualified Financing) in the event of a Maturity Date referred to in clause (b) of the definition thereof, or (B) the VWAP average of the last 30 days before the Maturity Date in the event of a Maturity Date referred to in clause (a) of the definition thereof, and (ii) $0.18.
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·
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Upon a Change of Control transaction (as defined in the 2018 Notes) prior to the Maturity Date, the (a) outstanding principal and (b) accrued and unpaid interest under the 2018 Notes would, at the election of the holders of a majority of the outstanding principal of the notes, be either (i) payable upon demand as of the closing of such Change of Control transaction or (ii) convertible into shares of the Company’s common stock immediately prior to such Change of Control transaction at a price per share equal to the lesser of (A) the VWAP average of the last 30 days before the date of consummation of the Change of Control, or (B) the per share consideration to be received by the holders of the Company’s common stock in such Change of Control transaction.
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The 2018 Notes contain customary events
of default, which, if uncured, entitle the Lenders to accelerate the due date of the unpaid principal amount of, and all accrued
and unpaid interest on, their Notes.
As previously disclosed by the Company
in its Current Report on Form 8-K, filed with the SEC on March 14, 2018, an affiliate of Remi Gaston-Dreyfus, a director of the
Company, loaned $400,000 to the Company evidenced by a promissory note, dated March 14, 2018 (the “$400K Note”). As
of March 30, 2018, the Company and the holder of the $400K Note entered into an exchange agreement (the “Exchange Agreement”),
whereby the $400K Note was terminated and exchanged for a convertible promissory note for the same principal amount and issued
pursuant to the terms of the Offering with an issue date as of March 14, 2018. The foregoing is a brief description of the terms
of the Exchange Agreement and is qualified in its entirety by reference to the full text of the Exchange Agreement, a copy of which
is included as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated herein by reference.
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Item
3.02
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Unregistered
Sales of Equity Securities.
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The disclosure set forth above in Item
2.03 of this Current Report on Form 8-K relating to the issuance of the 2018 Notes is incorporated by reference herein. The 2018
Notes and, unless subsequently registered, the shares underlying the 2018 Notes, will be issued in reliance on the exemption from
registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), Regulation
D promulgated thereunder and/or Regulation S under the Securities Act.
Chinese Group Notes and Warrants
As previously disclosed by the Company
in its Current Report on Form 8-K, filed with the SEC on May 25, 2017, on May 23, 2017 affiliates of Ginger Capital Investment
Holding Ltd. (the “Chinese Group”) invested an aggregate of $500,000 in the Company as evidenced by convertible promissory
notes (collectively, the “Chinese Group Notes”, and together with the 2018 Notes and the Existing Note, the “Notes”).
The Chinese Group were also issued warrants by the Company in connection with the Chinese Group Notes (the “Chinese Group
Warrants”).
Conversion of Notes
As of March 31, 2018, the Existing Notes
and the Chinese Group Notes converted in accordance with their terms into an aggregate of 126,313,487 shares of the Company’s
common stock (with the conversion described below of the 2018 Notes, the “Conversion”). As of March 31, 2018, the Company
is obligated to convert the 2018 Notes in accordance with their terms into 61,037,660 shares of the Company’s common stock
(the “2018 Note Conversion Shares”). However, as of the date hereof, the Company does not currently have authorized
a sufficient number of shares of common stock to issue all of the 2018 Note Conversion Shares, and has issued an aggregate of 21,491,884
of the 2018 Note Conversion Shares. As contemplated by the terms of the 2018 Notes, the Company shall issue the remaining 39,545,776
2018 Note Conversion Shares upon the earlier of (i) a reverse stock split of the Company’s common stock that allows for the
issuance of the 2018 Note Conversion Shares without violating the authorized share number of the Company and (ii) the approval
of a proposal to increase the Company’s authorized shares of common stock at its next meeting of stockholders.
Determination of Shares Underlying Warrants
and Exercise Price Thereof
As a result of the Conversion, and in accordance
with the terms of the Existing Warrants and the Chinese Group Warrants, the aggregate number of shares of the Company’s common
stock underlying the Existing Warrants has been determined to be 16,006,322 shares, with an exercise price of $0.0625 per share,
and the aggregate number of shares of the Company’s common stock underlying the Chinese Group Warrants has been determined
to be 2,348,587 shares, with an exercise price of $0.60 per share.
In addition to the Existing Warrants and
the Chinese Group Warrants, as of March 31, 2018 there were approximately 12,749,283 shares of the Company’s common stock
underlying outstanding warrants (the “Company Warrants”) that may be issued upon future exercises of the Company Warrants.
Furthermore, as of March 31, 2018, there were approximately 1,313,745 shares of the Company’s common stock underlying outstanding
warrants issued to or as directed by certain placement agents of the Company (the “Broker Warrants”). The Company Warrants
and the Broker Warrants include price protection provisions that allow for a reduction in the exercise price thereof in the event
the Company subsequently issues common stock or options, rights, warrants or securities convertible or exchangeable for shares
of common stock at a price lower than the existing exercise price. Simultaneously, the number of shares of common stock that may
be purchased upon exercise of each of Company Warrants and Broker Warrants shall be increased based on a pre-defined formula. As
a result of the Conversion, the exercise price of the Company Warrants was decreased to $0.4868, and the number of shares of common
stock underlying the Company Warrants was increased to 32,807,327, and the exercise price of the Broker Warrants was decreased
to $0.2952, and the number of shares of common stock underlying the Broker Warrants was increased to 3,333,328.
The shares issued upon Conversion are issued
in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act, Section 3(a)(9) of the Securities
Act and/or Regulation S under the Securities Act.
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Item
5.01
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Changes
in Control of Registrant.
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The information set forth under Item 3.02
of this Current Report on Form 8-K is incorporated into this Item 5.01 by reference.
As a result of the Conversion, on March
31, 2018, the Company issued to the Investors, the Chinese Group and the 2018 Investors an aggregate of 147,805,371 shares of the
Company’s common stock, representing approximately 59% of the issued and outstanding shares of common stock and exchangeable
shares of the Company as of the date of the Conversion, which may be deemed to be a change in control of the Company. As a result
thereof, Remi Gaston-Dreyfus, a director of the Company, owns in the aggregate, directly or indirectly, 78,834,280 shares of the
Company’s common stock and exchangeable shares, representing approximately 32% of the issued and outstanding shares of common
stock and exchangeable shares of the Company, and André Auberton-Hervé, PhD, the Chairman of the Board of the Company,
owns, directly or indirectly, 12,679,436 shares of the Company’s common stock, representing approximately 5% of the issued
and outstanding shares of common stock and exchangeable shares of the Company. This does not include 39,545,776 additional shares
of common stock expected to be issued when the Company has additional authorized shares to issue the remaining 2018 Note Conversion
Shares.
The Company issued a press release on April
3, 2018 in connection with the Conversion. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein
by reference.
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Item
9.01
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Financial
Statements and Exhibits.
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SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: April 3, 2018
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BIONIK LABORATORIES CORP.
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By:
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/s/ Leslie Markow
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Name:
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Leslie Markow
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Title:
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Chief Financial Officer
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Exhibit 10.1
ALLONGE TO CONVERTIBLE PROMISSORY NOTES
Allonge (this “Allonge”)
to those certain Convertible Promissory Notes (as amended, the “Convertible Promissory Notes”) referenced hereto in
Exhibit 1
and made a part hereof, in each case from Bionik Laboratories Corp. (“Borrower”), to the Holders described
therein (the “Holders”).
WHEREAS, Section 7.6
of the Convertible Promissory Notes provides, in part, that the Note may be amended with the written consent of the Company and
the holders of a majority in original aggregate principal amount of the Note and the Related Notes (as defined in the Convertible
Promissory Notes), and that any such amendment shall be binding on all holders of the Convertible Promissory Notes, even if they
do not execute such consent, amendment or waiver.
Borrower and the undersigned
Holders, which represent a majority in original aggregate principal amount of the Note and the Related Notes, agree that each of
the Convertible Promissory Notes shall be revised as follows:
1. The
definition of “Qualified Financing” in Section 1.1 of each of the Convertible Promissory Notes shall be amended and
replaced to read as follows:
“
“Qualified
Financing”
means an equity or equity-linked round of financing of the Company in whatever form or type that raises,
between January 1, 2018 and March 31, 2018, in one or more tranches aggregate gross proceeds of a minimum of $2,000,000.”
2. Section
3.1(a) of each of the Convertible Promissory Notes shall be amended and replaced to read as follows:
(a) Conversion
upon Maturity Date.
Upon a Maturity Date event specified in clause (a) of the definition thereof, without any action on the
part of the Holder, the (i) outstanding principal, (ii) accrued and unpaid interest under the Notes and (iii) the Premium, will
be converted into shares of Common Stock based upon the lesser of (A) the lowest conversion price of New Round Stock in case there
is more than one tranche of New Round Stock or (B) twenty-five cents ($0.25).
This Allonge is intended
to be attached to and made a permanent part of the Convertible Promissory Notes.
Dated as of the 30
th
day of March, 2018.
[Remainder
of Page Intentionally left Blank; Signature Page in Counterparts Follows]
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Maker:
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BIONIK LABORATORIES CORP.
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/s/
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By:
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/s/ Eric Dusseux
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Name:
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Eric Dusseux
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Title:
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CEO
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Agreed to and consented to pursuant to
Section 7.6 of the Convertible Promissory Notes:
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Holder:
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By:
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/s/
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Name:
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Title:
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Aggregate Principal Amount
of Convertible Promissory Notes
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Exhibit 1
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RGD Investissements, as Holder
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Convertible Note
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$16,666.66
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12/23/2016
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Convertible Note
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$16,666.66
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1/24/2017
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Convertible Note
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$16,666.66
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2/17/2017
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Convertible Note
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$500,000.00
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3/28/2017
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Convertible Note
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$150,000.00
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8/14/2017
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Convertible Note
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$150,000.00
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8/29/2017
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Convertible Note
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$29,350.00
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9/14/2017
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Convertible Note
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$100,000.00
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10/2/2017
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Convertible Note
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$300,000.00
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10/17/2017
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Convertible Note
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$500,000.00
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10/30/2017
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Convertible Note
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$600,000.00
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11/27/2017
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Star SCI, as Holder
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Convertible Note
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$50,000.00
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8/14/2017
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Convertible Note
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$50,000.00
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8/28/2017
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Convertible Note
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$100,000.00
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9/14/2017
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Convertible Note
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$300,000.00
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9/28/2017
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Lombard, as Holder
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Convertible Note
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$33,333.33
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12/22/2016
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Convertible Note
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$33,333.33
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1/26/2017
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Convertible Note
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$33,333.33
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2/15/2017
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Lombard, as Holder
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Convertible Note
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$166,666.67
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12/28/2017
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Convertible Note
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$166,666.67
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1/26/2017
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Convertible Note
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$166,666.67
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2/15/2017
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Solomar SA, as Holder
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Convertible Note
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$166,666.67
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12/22/2016
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Convertible Note
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$166,666.67
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1/25/2017
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Convertible Note
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$166,666.67
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2/15/2017
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Guy Grinberg, as Holder
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Convertible Note
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$50,000.00
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1/11/2017
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ECI, as Holder
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Convertible Note
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$100,000.00
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12/22/2016
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Convertible Note
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$99,975.00
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1/26/2017
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Convertible Note
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$100,000.00
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2/16/2017
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Convertible Note
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$240,000
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9/14/017
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RREI, as Holder
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Convertible Note
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$150,000.00
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10/17/2017
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Alain Krzentowski, as Holder
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Convertible Note
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$50,000.00
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10/18/2017
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Rouillon, as Holder
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Convertible Note
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$30,000.00
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9/14/2017
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Jean-Pierre Barjon, as Holder
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Convertible Note
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$200,000.00
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12/6/2017
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Exhibit 10.2
ALLONGE TO COMMON STOCK PURCHASE WARRANT
Allonge (this “Allonge”)
to that certain Common Stock Purchase Warrant, as amended (as so amended, the “Warrant”), attached hereto as
Exhibit
1
from Bionik Laboratories Corp. (the “Company”), and issued to the undersigned (the “Holder”). Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed to those terms in the Warrant.
The Company and Holder
agree that the Warrant shall be revised as follows:
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1.
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Notwithstanding anything to the contrary in the Warrant (including any provision requiring the
reservation of sufficient shares to provide for the issuance of Common Stock thereunder), any of the offering documents to which
the Warrant was a part (including any subscription agreement and promissory note) or any other document referred to in or contemplated
by the Warrant, if and to the extent the Company does not have sufficient authorized but unissued shares of Common Stock to issue
to the Holder upon an exercise of the Warrant, the Warrant shall not be exercisable to the extent of such deficiency and the Company
shall use its commercially reasonable efforts to seek and obtain requisite consent to (a) effect a reverse stock split of the Company’s
Common Stock that allows for the issuance of the shares of Common Stock pursuant to the Warrant without violating the authorized
share number of the Company and/or (b) increase the Company’s authorized shares of Common Stock.
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Except as
expressly reflected herein, the Warrant will remain in full force and effect. This Allonge is intended to be attached to and made
a permanent part of the Warrant.
Dated as of the 30
th
day of March, 2018.
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The Company:
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BIONIK LABORATORIES CORP.
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By:
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/s/ Eric Dusseux
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Name:
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Eric Dusseux
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Title:
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CEO
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Holder:
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By:
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/s/
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Name:
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Title:
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Exhibit 10.3
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT
(this “
Agreement
”) is dated as of the 30
th
day of March, 2018 (the “Effective Date”),
by and between Bionik Laboratories Corp., a Delaware corporation (the “
Company
”), and RGD Investissements S.A.S
(the “
Holder
”).
WHEREAS, the Holder
beneficially owns and holds that certain Promissory Note, dated as of March 14, 2018, issued by the Company, in the principal amount
of $400,000 (the “$
400K Note
”); and
WHEREAS, the Holder
desires to exchange the $400K Note for one of the Company’s Convertible Promissory Notes (the “
Exchange Security
”)
pursuant to the Company’s convertible note offering of up to $14,000,000 (the “
Offering
”), and the Company
desires to issue the Exchange Security in exchange for the $400K Note, all on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in
consideration of the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Company and the Holders hereby agree as follows:
Section 1.
Exchange
.
On the Effective Date, subject to and upon the terms and conditions set forth in this Agreement, the Holder shall surrender to
the Company the $400K Note and all of the rights, covenants, agreements and obligations set forth therein or contemplated thereby,
including but not limited to any interest accrued and unpaid on the principal amount of the $400K Note (collectively, the “
Rights
”),
and, in exchange therefore, the Company shall issue to the Holder the Exchange Security, with an issue date as of March 14, 2018.
The Exchange Security shall be substantially the same as the convertible promissory notes issued by the Company pursuant to the
Offering. Upon the Effective Date, the Holder will not have any interest or title in or to the $400K Note or the Rights.
Section 2.
Ownership
and Interest
. The Holder is the record and beneficial owner of the $400K Note and the Rights, free and clear of all liens,
charges, pledges, security interests, claims, mortgages, options, encumbrances, rights of first refusal, conditions, covenants,
and other restrictions (other than any restrictions under the Securities Act of 1933, as amended, or state securities laws).
Section 3.
Applicable
Law
. This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware without regard
to its conflict of law rules.
Section 4.
Counterparts
.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile
signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if
the signature were an original, not a facsimile signature.
Section 5.
Headings
.
The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this
Agreement.
Section 6.
Severability
.
If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability
of any provision of this Agreement in any other jurisdiction.
Section 7.
Entire
Agreement; Amendments
. This Agreement and the Exchange Security supersede all other prior oral or written agreements between
the Holder, the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and
this Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Holder makes any
representation, warranty, covenant or undertaking with respect to such matters; provided, however, that all representations and
warranties contained in that certain Subscription Agreement, dated as of March 8, 2018, shall be incorporated herein. No provision
of this Agreement may be amended other than by an instrument in writing signed by the Company and the Holder. No provision hereof
may be waived other than by an instrument in writing signed by the party against whom enforcement is sought.
Section 8.
Successors
and Assigns
. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns. The Holder may not assign any of its rights hereunder without the prior written consent of the Company.
Section 9.
No Third
Party Beneficiaries
. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.
Section 10.
Further
Assurances
. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.
[Signature Pages
Follow]
IN WITNESS WHEREOF,
the parties have executed this Exchange Agreement as of the date first written above.
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BIONIK LABORATORIES CORP.
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By:
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/s/ Eric Dusseux
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Name:
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Eric Dusseux
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Title:
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CEO
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RGD INVESTISSEMENTS S.A.S
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By:
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/s/ Remi Gaston-Dreyfus
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Name:
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Remi Gaston-Dreyfus
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Title:
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CEO
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Exhibit 99.1
Bionik Laboratories Issues Letter to
Stockholders
CEO provides update on recent sales and
outlines expectations for fiscal 2019 as the Company begins to simplify its capital structure to prepare for uplisting to an accredited
exchange
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Successfully strengthened balance sheet with conversion of all long term debt into equity
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Strong commercial activities with major partnership and launch of new products
TORONTO and BOSTON (April 3, 2018) –
Bionik Laboratories Corp.
(OTCQB: BNKL) (“Bionik” or the “Company”), a global robotics company focused
on providing rehabilitation and assistive technology solutions from hospital to home for individuals with neurological and mobility
challenges, today issued the following letter to its stockholders:
Dear Bionik Stockholders:
I joined Bionik Laboratories as CEO in
September 2017, having served as a director of the Company for the previous two months. A focus on evidence-based medicine to drive
sales and marketing coupled with an innovative clinical product platform drew me to this opportunity. Over the past seven months
we made excellent progress, particularly in pursuit of our global commercialization objectives targeting hospitals and mass markets.
More specifically, during fiscal year 2018,
which ended March 31, 2018, we took a number of financial and operational steps to position the Company for meaningful growth.
Highlights from the second half of the fiscal year include:
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Taking steps to simplify and strengthen
the Company’s capital structure and balance sheet
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Launching the next-generation InMotion™
Arm
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Improving the supply chain with the outsourcing
of manufacturing
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Bolstering our management team and corporate
governance
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Expanding our global footprint with a
distribution agreement with Curexo of South Korea and shipping our first systems to them
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Capital Structure
From December 2016 through March 2018,
we were successful in raising a total of approximately $9.1 million through the issuance of convertible promissory notes, a significant
amount of which was from existing investors and two of our directors. At the close of fiscal year 2018, we strengthened our balance
sheet with the conversion of all of these notes into shares of our common stock issued, or to be issued when we have sufficient
authorized shares of common stock to do so. With the conversion, we do not need to raise funds for the purpose of paying back indebtedness,
a major impediment to finding capital to further grow our business, and will no longer have the overhang on our stock when all
of the shares underlying the promissory notes are fully issued. As of March 31, 2018, we have issued 147,805,371 shares of common
stock upon conversion, representing approximately 78.8% of the notes converted, and have a commitment to issue an additional 39,545,776
shares of common stock underlying the promissory notes as soon as we have the required authorized shares available. Further details
are described in our Form 8-K filing with the Securities and Exchange Commission on April 3, 2018.
We are now evaluating additional changes
to our capitalization to further strengthen our Company, to allow us to issue the remaining shares underlying the converted promissory
notes and to increase our stock price to the minimum required under exchange listing standards.
Review of Operations
We launched our next-generation InMotion
Arm interactive robotic system for the clinical rehabilitation of stroke survivors and those with mobility impairments due to neurological
conditions. This new generation of InMotion Arm provides a commercial product with the same innovative, active-assisted robotic
therapy clinically proven with the previous generation dedicated to R&D, but with a modern design that is smaller and sleeker
and intended to be used with a large number of patients. We have already sold and placed units of this InMotion Arm system within
rehabilitation hospitals, which includes Saint Luke’s South Hospital in Overland Park, Kansas and Bacharach Institute for Rehabilitation
in Pomona, New Jersey, along with other prestigious hospitals.
We entered into an agreement with Cogmedix
Inc. for the production our new InMotion Arm systems. Cogmedix, a wholly owned subsidiary of Coghlin Companies, Inc., is a premier
medical device development and manufacturing company based in Worcester, Massachusetts. The initial agreement is for turnkey, compliant
manufacturing, and providing the possibility to ramp-up in volume as the Company continues to receive positive feedback from the
market. Our expectations are that commercial manufacturing will be completely outsourced to Cogmedix by the middle of this calendar
year, while Bionik will maintain in-house capabilities for research and development activities.
I am delighted to report that we shipped
our first three InMotion Robotic Systems to Curexo in South Korea. We signed an agreement in early March for Curexo to be the exclusive
distributor of our systems in South Korea, while Bionik was provided exclusive rights to distribute Curexo’s Morning Walk
lower body rehabilitation technology within the United States. The two companies complement their product portfolios to offer a
comprehensive rehabilitation platform to customers in their respective markets. These shipments will be recognized as sales in
our fiscal fourth quarter and validate this agreement, which clearly is off to a robust start. We expect continued success with
Curexo this coming year.
Management and Corporate Governance
We made a number of management and corporate
governance changes over the past several months as a consequence of our restructuring. In September 2017, we appointed Remi Gaston-Dreyfus,
private investor and founder and president of RGD Investissements S.A.S, a private investment company, to the board. In January
2018, Andre-Jacques Auberton-Herve, a world class entrepreneur in the high-tech industry, was named chairman of the board, replacing
Peter Bloch who subsequently left the board. Mr. Auberton-Herve was a co-founder and CEO of Soitec SA, a publicly traded company
on the Euronext Paris stock exchange, which designs and manufactures innovative semiconductor materials.
More recently, in March 2018 we named Peter
Gerald Malone and Joseph Martin to our board of directors. Mr. Malone has extensive financial services experience and served as
chairman of Aberdeen Asia-Pacific Income Fund, a U.S. closed-end mutual fund, a Member of Parliament in the U.K. from 1983 to 1997
and as Minister of State for Health in John Major’s government from 1994 to 1997. Mr. Martin is chairman of Brooks Automation,
a global provider of automation, vacuum and instrumentation solutions, and has served on the boards of multiple publicly traded
companies including Collectors Universe, Fairchild Semiconductor, ChipPAC and Soitec. In 2000
CFO Magazine
awarded Martin
the CFO of the Year award for turnaround operations.
With these changes Bionik now has seven
directors, including three independent directors. We believe our board has the talent to provide meaningful contributions and counsel
to help guide management in the execution of our growth strategy and serve our shareholders. Our board has extensive experience
with public companies, finance, marketing and/or healthcare systems.
Fiscal Year 2019 Milestones
We are excited about our plans for the
coming fiscal year, and believe we have solidified the base upon which we will build the business. In the coming 12 months we expect
to achieve the following:
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Launch the second generation of InMotion
Hand and InMotion Wrist to rehabilitation centers and hospitals
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Continue and extend commercial development
in North America and abroad
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Further develop the InMotion robotic system
family for in-home use
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Continue development of our first lower-cost,
lower-body mobility device focused on the large and expanding market for the aging population in conjunction with Wistron Corporation,
our co-development partner
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Continue the transition to outsource all
commercial manufacturing to support the expected increase in demand for our products
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Work towards an uplisting of our common
stock to an accredited U.S. exchange
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It is a fascinating time to be working
in healthcare as the adoption of new technologies like robotics and artificial intelligence continues to grow. Bionik Laboratories
is establishing itself as a leader in clinical rehabilitation and is pushing forward aggressively to enter the consumer health
products market. On behalf of the entire Bionik management team and our board of directors, I would like to thank you for your
continued support of our company and our mission.
Sincerely,
Eric Dusseux, M.D.
Chief Executive Officer
April 3, 2018
About Bionik Laboratories
Bionik Laboratories (OTCQB: BNKL) is a
global robotics company focused on providing rehabilitation and mobility solutions to individuals with neurological and mobility
challenges from hospital to home. The Company has a portfolio of products focused on upper and lower extremity rehabilitation for
stroke and other mobility-impaired patients, including three products on the market and four products in varying stages of development.
For more information, please visit www.bioniklabs.com and
connect with us on Twitter, LinkedIn, and Facebook.
Forward-Looking Statements
Any statements contained in this press
release that do not describe historical facts may constitute forward-looking statements. Forward-looking statements, which involve
assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,”
“should,” “would,” “will,” “could,” “scheduled,” “expect,”
“anticipate,” “estimate,” “believe,” “intend,” “seek,” or “project”
or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements may include,
without limitation, statements regarding (i) the plans and objectives of management for future operations, including plans or objectives
relating to the design, development and commercialization of human exoskeletons and other robotic rehabilitation products, (ii)
a projection of income (including income/loss), earnings (including earnings/loss) per share, capital expenditures, dividends,
capital structure or other financial items, (iii) the Company’s future financial performance and success in raising capital, (iv)
the market and projected market for our existing and planned products, and success in penetrating those markets and (v) the assumptions
underlying or relating to any statement described in points (i), (ii), (iii) or (iv) above. Such forward-looking statements are
not meant to predict or guarantee actual results, performance, events or circumstances, and may not be realized because they are
based upon the Company’s current projections, plans, objectives, beliefs, expectations, estimates and assumptions, and are subject
to a number of risks and uncertainties and other influences, many of which the Company has no control. Actual results and the timing
of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of
these risks and uncertainties. Factors that may influence or contribute to the inaccuracy of the forward-looking statements or
cause actual results to differ materially from expected or desired results may include, without limitation, the Company’s inability
to obtain additional financing, the significant length of time and resources associated with the development of our products and
related insufficient cash flows and resulting illiquidity, the Company’s inability to expand the Company’s business, significant
government regulation of medical devices and the healthcare industry, lack of product diversification, volatility in the price
of the Company’s raw materials, and the Company’s failure to implement the Company’s business plans or strategies. These and other
factors are identified and described in more detail in the Company’s filings with the SEC. The Company does not undertake to update
these forward-looking statements.
Media contact:
Matt Bretzius
FischTank Marketing and PR
matt@fischtankpr.com
Investor contact:
Kim Golodetz
LHA Investor Relations
212-838-3777
Kgolodetz@lhai.com
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