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 26, 2021, a subscriber loaned to
Bionik Laboratories Corp. (the “Company”), and the Company issued to the subscriber a secured convertible promissory note
in the principal amount of, $1,000,000, pursuant to the terms of the Company’s recently announced secured convertible promissory
note (the “Convertible Notes”) offering (the “Offering”). Pursuant to 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 Company’s previously
announced debt restructuring and investments into the Convertible Notes, the Company has issued an aggregate of approximately $8.3 million
in principal of Convertible Notes, of which an aggregate of $5,000,000 was purchased for cash and the remainder was issued as a result
of such 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 Convertible Notes contain customary events
of default, which, if uncured, entitle the holder 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.