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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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From June 3, 2020 through June 9, 2020,
investors (the “Lenders”) subscribed for convertible promissory notes (the “Notes”) and loaned to Bionik
Laboratories Corp. (the “Company”) an aggregate of approximately $1,302,500 (the “Loan”). The Loan represent
the second tranche borrowed pursuant to the Company’s convertible note offering for up to $7,000,000 (formerly $3,000,000
or up to $7,000,000 if oversubscribed) gross proceeds (the “Offering”). The Notes were issued commencing June 8, 2020.
The Company intends to use the net proceeds
from the Loan for the Company’s working capital and general corporate purposes.
The Notes bear interest at a fixed rate
of 1% per month, computed based on a 360-day year of twelve 30-day months and will be payable, along with the principal amount,
on March 31, 2021 (the “Maturity Date”).
The Notes will be convertible into equity
of the Company upon the following events on the following terms:
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On the Maturity Date, the outstanding
principal and accrued and unpaid interest under the Notes will be converted into shares of common stock at a conversion price of
$9.50 (the “Conversion Price”).
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Upon a change of control transaction prior
to the Maturity Date, the outstanding principal and accrued and unpaid interest under the Notes would, at the election of the holders
of a majority of the outstanding principal of the loans under the Offering, 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 (x) the Conversion Price, or (y) the per share consideration
to be received by the holders of the common stock in such change of control transaction.
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The Notes contain customary events of
default, which, if uncured, entitle each Lender to accelerate the due date of the unpaid principal amount of, and all accrued
and unpaid interest on, its Note.
Under certain circumstances, in the event
the Notes convert into common stock and the Company raises capital through the sale of common stock for cash during the period
ending on the three year anniversary of the conversion date of the Note, and the price per share thereof (the “Offering Price”)
minus 20% is less than the Conversion Price, then in such event the Company shall issue to each Lender additional shares of common
stock equal to the number of conversion shares such Lender would have received upon conversion if the conversion price was a price
equal to a 20% discount to the Offering Price, less the number of shares actually issued on or as of the Maturity Date.
To secure the prompt payment and performance
to the Lenders of the obligations under the Notes, the Company granted to the Lenders a continuing security interest in and to,
and lien on, all of its collateral.
Also on June 3, 2020, the Company entered
into an Allonge #2 (the “Allonge #2”) that further amended the terms of the Company’s existing convertible promissory
note dated September 26, 2019, as amended by that Allonge #1 dated as of March 30, 2020 (as so amended, the “Convertible
Promissory Note”), held by Celeste Management. The Allonge #2 amended the maturity date of the Convertible Promissory Note
to March 31, 2021, and further amended the anti-dilution provision of the Convertible Promissory Note to grant the same anti-dilution
terms as the Notes set forth above. No other material changes were made to the Convertible Promissory Note.
The foregoing is a brief description of
the subscription of the Notes, the terms of the Notes and the Allonge #2, and is qualified in its entirety by reference to the
full text of the form of Subscription Agreement, the form of the Note and the Allonge #2, which are included as Exhibits 10.1,
10.2 and 10.3, respectively, to this Current Report on Form 8-K and which is incorporated herein by reference.