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 July 15, 2021, Bionik Laboratories Corp. (the
“Company”) commenced a refinancing of its existing indebtedness (the “Refinancing”) and launched a new secured
convertible promissory note offering (the “Offering”) of up to $10,000,000.
The Refinancing
Pursuant to the Refinancing, (a) a portion of
the outstanding principal and accrued and unpaid interest under the Company’s existing Term Loan and Security Agreement dated as
of February 12, 2021 (the “Term Loan Agreement”) pursuant to which, among other things, the Company may borrow up to $3,000,000
from lenders from time to time and (b) all of the outstanding principal and accrued and unpaid interest under the Company’s existing
Promissory Note in the principal amount of $2,000,000 issued on March 23, 2020 in favor of Celeste Management (the “Promissory Note”),
were used as consideration to acquire new convertible promissory notes (the “Convertible Notes”) in the Offering and, as a
result and with the option exercises described below, the Term Loan Agreement and the Promissory Note were deemed paid in full and terminated.
Accordingly, (a) an aggregate of $1,064,456.80
in outstanding principal and accrued and unpaid interest under the Term Loan Agreement was used to purchase a like amount of Convertible
Notes in the Offering and (b) an aggregate of $2,222,333.67 in outstanding principal and accrued and unpaid interest under the Promissory
Note was used to purchase a like amount of Convertible Notes in the Offering.
The remaining $642,153.61 portion of the outstanding
principal and accrued and unpaid interest under the Term Loan Agreement, which were held by (a) RGD Investissements S.A.S., an affiliate
of Remi Gaston-Dreyfus, a director of the Company, and (b) an affiliate of André-Jacques Auberton-Hervé, the Chairman of
the Board of Directors of the Company, was applied towards the purchase price to exercise outstanding options beneficially owned by Messrs.
Gaston-Dreyfus and Auberton-Hervé.
The Offering
Pursuant to the terms of the Offering, the Company
is offering for sale up to $10,000,000 in Convertible Notes to accredited investors and non-U.S. persons. As a result of the Restructuring
and new investments into the Convertible Notes, the Company issued between July 15, 2021 and July 21, 2021 an aggregate of $7,286,790.47
in principal of Convertible Notes, of which an aggregate of $4,000,000 was purchased for cash and the remainder was issued as a result
of the Restructuring.
The Company intends to use the net cash proceeds
from the Offering for the Company’s working capital and general corporate purposes.
The Convertible 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
the earlier of (the “Maturity Date”): (a) March 31, 2022 and (b) the consummation of the Offering, provided that the Company
raises in one or more tranches aggregate gross proceeds of no less than $10,000,000.
The Note 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 Lender, the outstanding principal and accrued and unpaid interest under the Note
will be converted into shares of common stock at a conversion price of $9.50 per share (the “Conversion Price”).
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·
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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 Note
would, at the election of the holders of a majority of the outstanding principal of the Convertible Notes 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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To secure the prompt payment and performance to
the holders of the Convertible Notes, the Company assigned, pledged and granted a continuing security interest in and to, and lien on,
all of its Collateral (as defined in the Convertible Note).
The Note contains customary events of default,
which, if uncured, entitle the holder of a Convertible Note to accelerate the due date of the unpaid principal amount of, and all accrued
and unpaid interest on, its Convertible Note.
The foregoing is a brief description of the subscription
of the Convertible Note and the terms of the Convertible Note and is qualified in its entirety by reference to the full text of the form
of Subscription Agreement, a copy of which is included as Exhibit 10.1 to this Current Report on Form 8-K, and the Convertible Note, the
form of which is included as Exhibit 10.2 to this Current Report on Form 8-K, each of which are incorporated herein by reference.