Peter Bloch, Chief Executive Officer and Chairman of the Board, stated, “2015 was marked by tremendous progress on the corporate, operational and development fronts, and I firmly believe this progress has positioned Bionik for a breakthrough year.”
2015 and Recent Corporate Highlights
- Announced merger agreement to acquire Interactive Motion Technologies, Inc. (IMT);
- Announced partnership with IBM to develop a unique analytics system and apply sophisticated machine learning algorithms to improve the outcomes of neurological rehabilitation, beginning with the Company’s primary product, ARKE;
- Provided the first European demonstration of ARKE during a presentation at the Colloquium on Sports and People with Disabilities at l’Université de Poitiers;
- Reengineered the ARKE exoskeleton for a lighter mechanical profile and significantly improved control, adaptability, safety and electronics with improved safety features;
- Commenced production of first rehabilitation units of ARKE GEN2 in preparation for the initiation of clinical testing in rehabilitation centers in Canada;
- Named a Kairos Society’s 2015 “K50” company, honoring the next generation of entrepreneurs developing breakthrough innovations and Awarded the Nasdaq Entrepreneurial Center Resource Prize at the Kairos Global Summit;
- Commenced trading on the OTCQX® Market; and
- Completed a private placement equity financing with gross proceeds of approximately US$13.1 million.
IMT Transaction Overview
Earlier this month, Bionik announced it has entered into a definitive merger agreement to acquire Interactive Motion Technologies, Inc. (IMT), a Boston, Massachusetts-based global pioneer and leader in providing effective robotic tools for neurorehabilitation. Under the terms of the Merger Agreement, pending shareholder approval, among other conditions, IMT shareholders will receive an aggregate of 23,650,000 shares of Bionik’s common stock.
IMT’s product line includes three upper extremity clinical rehabilitation products currently on the market, a lower-body product available for research use being developed for clinical release, and an exciting new product candidate for gait in development at MIT. IMT has established a growing body of clinical data for these products. The clinical products have U.S. Food and Drug Administration (FDA) approval and are currently sold in over 20 countries, including the United States. IMT has strong data and licensed intellectual property for certain of its products including three patents with exclusivity through 2029 and 2033. In addition, IMT’s manufacturing facility is compliant with FDA regulations.
For the fiscal year ending December 31, 2015, IMT generated approximately $2 million in revenue from its three commercialized products. Bionik believes there is a significant growth opportunity with the existing and development products and is committed to executing its strategy of market expansion and revenue growth of the IMT products in 2016.
Mr. Bloch added, “We view the IMT transaction as the first important step in our growth strategy. We fully expect to continue to pursue the right opportunities that will be complementary and additive to ensure we continue to position the company for success and importantly, where we can address the many unmet needs that exist for individuals with mobility challenges.”
Bionik Product Update – ARKE, Proprietary Lower-Body Exoskeleton Overview
In the fourth quarter of 2015, Bionik commenced testing of the first rehabilitation units of ARKE GEN2, a robotic lower-body exoskeleton device that is designed to allow paraplegics as well as other wheelchair users the ability to rehabilitate through walking and other motion.
In preparation for the launch of the ARKE rehabilitation clinical validation program, Bionik commenced pre-clinical verification testing in 2015. Validation testing is expected to continue through 2016. The Company then anticipates filing for Health Canada approval and the CE mark in Europe in the first half of 2017 with the FDA following thereafter.
In February 2016, Bionik announced that it is working with IBM to develop a unique analytics system and apply sophisticated machine learning algorithms to improve the outcomes of neurological rehabilitation. Use of IBM’s cognitive computing infrastructure would enable access to the exoskeleton’s performance, patient data and results of ARKE rehabilitation from multiple sites, including rehabilitation centers, physicians’ offices, physiotherapists’ offices, patients’ homes, research centers or any other location at any time. The IBM development project for ARKE consists of three phases. Phase one will include the full backend required to capture the information needed for future use and is expected to be completed in 2016.
Upcoming Milestones Expected to Drive Value
- Close acquisition of IMT (pending closing conditions, including IMT shareholder approval);
- Commence integration of combined teams with formation of bolstered Bionik executive management team;
- Announce key appointment of Chief Commercial Officer;
- Execute strategy of market expansion and revenue growth of newly added commercial products;
- Complete phase one of the IBM development project for ARKE in 2016;
- Continue execution of growth strategy through additional licensing and acquisition transactions;
- Continue validation testing of ARKE;
- Prepare for filing for regulatory approvals of ARKE with Health Canada, the European Medicines Agency (EMA) in H1 2017 and the U.S. FDA, thereafter; and
- Continue to maintain a rigorous patent protection program for the Company’s proprietary robotic and technological intellectual property.
“We have a lot of work ahead of us and are committed to focusing on the execution of our strategy as well as the integration of Bionik and IMT as rapidly as possible upon closing. We have positioned the Company to be able to execute on additional new business opportunities that we expect will drive value over the course of 2016,” stated Mr. Bloch.
Summary of Financial Results for the Year 2015
For the year ended December 31, 2015, the Company reported a comprehensive loss of $5,569,107 resulting in a loss per share of $(0.08) compared to a comprehensive loss of $2,489,137 for the year ended December 31, 2014, resulting in a loss per share of $(0.05). The Company ended the year with $6,617,082 of cash and cash equivalents and working capital of $890,885. Excluding the non-cash warrant derivate liability, working capital would be $6,958,754.
As previously reported, in connection with the preparation of the Company’s audited financial statements for the fiscal year ended December 31, 2015, it was determined that the warrants issued to brokers and shareholders by the Company at the closings of its 2015 financing should have been originally accounted for as a derivative liability in Bionik’s audited financial statements. On March 17, 2016, Bionik restated its financial statements included in its Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2015, June 30, 2015 and September 30, 2015 to account for the warrants as a derivative liability. The audited financial statements of the Company for the fiscal year ended December 31, 2015 reflect the accounting of the warrants as a derivative liability.
“It is a management priority to ensure that strong reporting controls are in place to ensure the integrity of all disclosure to our shareholders and the markets. The restatement of our financial statements does not have an impact on our working capital or our operations as we seek to continue to build shareholder value by executing our business plan,” stated Mr. Bloch. “The fundamentals of our business, our team and the confidence in our mission to emerge as a leading robotics company focused on providing solutions for individuals with neurological disorders have never been stronger.”