Table of ~~February 13, 2018, 55,885,279 shares of Common Stock, par value $0.001 per share.~~

BIONIK LABORATORIES CORP.

~~FORM 10-Q~~TABLE OF CONTENTS

~~INDEX~~

	~~Page~~
PART I – FINANCIAL INFORMATION
Item 1. Interim Financial Statements
~~Item 1.~~Condensed Consolidated Balance Sheets as of September 30, 2022 and March 31, 2022	2
Condensed Consolidated Statements of Operations for the three and six month periods ended September 30, 2022 and 2021	3
Condensed Consolidated Statements of Comprehensive Loss for the three and six month periods ended September 30, 2022 and 2021	4
Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2022 and 2021	5
Notes to Condensed Consolidated Financial Statements	1 6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	20 14
Item 3. Quantitative and Qualitative Disclosures ~~About~~about Market Risk	25 23
Item 4. Controls and Procedures	26 24
PART II – OTHER INFORMATION
~~PART II - OTHER INFORMATION~~

Item 1. Legal Proceedings	26 25
Item 1A. Risk Factors	26 25
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	26 25
Item 3. Defaults Upon Senior Securities	26 25
Item 4. Mine Safety Disclosures	26 25
Item 5. Other Information	26 25
Item 6. Exhibits	26
SIGNATURES
~~SIGNATURES~~	27 28

Table of Contents~~PART I – FINANCIAL INFORMATION~~

Part I—Financial Information

Item 1. Interim Financial Statements

~~UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS~~

~~December 31, 2017 and 2016~~

~~Index~~

	~~Page~~
~~Unaudited Condensed Consolidated Interim Financial Statements~~	1

~~Condensed Consolidated Interim Balance Sheets as at December 31, 2017 (Unaudited) and March 31, 2017~~	2

~~Condensed Consolidated Interim Statements of Operations and Comprehensive Loss (Unaudited) for the three and nine month Periods ended December 31, 2017 and 2016~~	3

~~Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity (Deficiency) for the nine month period ended December 31, 2017 and year ended March 31, 2017 (Unaudited)~~	4

~~Condensed Consolidated Interim Statements of Cash Flows for the nine month periods ended December 31, 2017 and 2016 (Unaudited)~~	5

~~Notes to Condensed Consolidated Interim Financial Statements (Unaudited)~~	~~6-19~~

Bionik Laboratories Corp.

Condensed Consolidated ~~Interim~~ Balance Sheets

~~(Amounts expressed in US Dollars)~~


	(unaudited)		March 31,
	September 30, 2022		2022
Assets
Current assets
Cash and cash equivalents	$	397,746	$	1,991,377
Accounts receivable		581,459		274,844
Prepaid expenses and other current assets		902,976		1,127,362
Inventories		1,350,559		1,191,020
Total current assets		3,232,740		4,584,603
Equipment (Note 3)		188,763		91,234
Other assets		7,929		—
Operating lease right-of-use assets, non-current (Note 9)		265,070		—
Tradenames and Trademarks (Note 2)		36,000		—
Goodwill (Note 2)		99,552		—
Total assets	$	3,830,054	$	4,675,837

Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	351,824	$	305,095
Accrued liabilities		1,206,645		873,030
Operating leases, current		19,869		—
Deferred revenue, current portion		453,383		313,854
Total current liabilities		2,031,721		1,491,979
Operating leases, non-current (Note 9)		245,953		—
Deferred revenue, net of current portion		258,479		256,646
Convertible notes (Note 5)		770,883		—
Total liabilities		3,307,036		1,748,625
Commitments and contingencies (Note 10)
Stockholders’ Equity
Preferred stock, $0.001 par value; Authorized 5,000,000; Authorized and Issued-1 Special voting preferred stock, $0.001 par value		—		—
Common stock, $0.001 par value; Authorized – 13,000,000; Issued 6,768,162 and 111,392 Exchangeable Shares (March 31, 2022– 6,767,114 and 112,440 Exchangeable Shares)		6,879		6,879
Additional paid-in capital		98,401,923		98,294,558
Accumulated deficit		(97,915,842)		(95,402,321)
Accumulated other comprehensive income		30,058		28,096
Total stockholders’ equity		523,018		2,927,212
Total liabilities and stockholders’ equity	$	3,830,054	$	4,675,837

As at
December 31,
2017
(Unaudited)
$

As at
March 31,
2017
(Note 2)
$

Assets
Current
Cash and cash equivalents 998,661 543,650
Accounts receivable, net of allowance for doubtful accounts of $16,349 (March 31, 2017 - $10,000) 306,572 383,903
Prepaid expenses and other receivables (Note 5) 145,044 228,047
Inventories (Note 6) 302,414 228,249
Due from related parties (Note 9(a)) 19,374 18,731
Total Current Assets 1,772,065 1,402,580
Equipment (Note 7) 174,997 227,421
Technology and other assets (Note 4) 4,783,704 5,030,624
Goodwill (Note 4) 22,308,275 22,308,275
Total Assets 29,039,041 28,968,900
Liabilities and Shareholders’ Deficiency
Current
Accounts Payable (Notes 9(b)) 794,875 784,771
Accrued liabilities (Notes 3, 8 and 9(b)) 1,868,225 1,228,657
Customer advances 800 121,562
Demand Notes Payable (Note 8(a)) 50,000 330,600
Promissory Notes payable (Note 8(b)) - 236,548
Convertible Loans Payable (Note 8(d), (e) and (f)) 7,079,852 2,017,488
Short term loan (Note 8(c)) 400,000 -
Deferred revenue 113,801 98,624
Total Current Liabilities 10,307,553 4,818,250
Shareholders’ Equity
Preferred Stock, par value $0.001; Authorized 10,000,000 Special Voting Preferred Stock, par
value $0.001; Authorized; Issued and outstanding - 1 (March 31, 2017 – 1) - -
Common Shares, par value $0.001; Authorized - 250,000,000 (March 31, 2017 – 150,000,000);
Issued and outstanding 55,885,279 and 45,909,336 Exchangeable Shares (March 31, 2017 –
48,885,107 and 47,909,336 Exchangeable Shares) (Note 10) 101,794 96,794
Additional paid in capital 48,081,670 45,088,171
Shares to be issued (Note 10) 60,000 -
Deficit (29,554,125 ) (21,076,464 )
Accumulated other comprehensive income 42,149 42,149
Total Shareholders’ Equity 18,731,488 24,150,650
Total Liabilities and Shareholders’ Equity 29,039,041 28,968,900

~~Going Concern (Note 1)~~

~~Commitments and Contingencies (Note 13)~~

~~Subsequent Events (Note 15)~~

The accompanying notes are an integral part of these ~~unaudited~~ condensed consolidated ~~interim~~ financial statements.

Table of Contents

Bionik Laboratories Corp.

Condensed Consolidated ~~Interim~~ Statements of Operations ~~and Comprehensive Loss for the three and nine months periods ended December 31, 2017 and 2016~~

(unaudited)

~~(Amounts expressed in U.S. Dollars)~~


	Three months ended September 30,				Six months ended September 30,
	2022		2021		2022		2021
Revenues, net	$	486,205	$	227,905	$	729,034	$	899,188
Cost of revenues		188,647		80,922		263,828		211,429
Gross Profit		297,558		146,983		465,206		687,759

Operating expenses
Sales and marketing		496,350		438,957		1,058,460		768,430
Research and development		225,878		85,085		603,983		266,052
General and administrative		686,542		664,523		1,287,275		1,496,744
Total operating expenses		1,408,770		1,188,565		2,949,718		2,531,226

Loss from operations		(1,111,212)		(1,041,582)		(2,484,512)		(1,843,467)
Interest expense, net		17,417		225,184		22,240		327,480
Other expense (income), net		759		1,223		6,769		(452,046)
Total other expense (income)		18,176		226,407		29,009		(124,566)
Net loss	$	(1,129,388)	$	(1,267,989)	$	(2,513,521)	$	(1,718,901)
Loss per share - basic and diluted	$	(0.16)	$	(0.22)	$	(0.37)	$	(0.30)
Weighted average number of shares outstanding – basic and diluted		6,879,554		5,855,512		6,879,554		5,779,076

Three months
ended
Dec. 31, 2017 Nine months
ended
Dec. 31, 2017 Three months
ended
Dec. 31, 2016 Nine months
ended
Dec. 31, 2016
$ $ $ $
(Note 2) (Note 2)
Sales 260,960 570,327 372,426 553,900
Cost of Sales 88,357 177,482 334,786 405,680
Gross Margin 172,603 392,845 37,640 148,220

Operating expenses
Sales and marketing 432,260 1,313,077 377,046 646,509
Research and development 546,350 1,947,659 571,671 1,803,234
General and administrative 783,784 2,916,917 409,669 2,291,136
Share compensation expense (Note 11) 271,001 1,284,257 227,540 651,630
Convertible debt accretion (Note 8) 216,302 290,375 - -
Amortization (Note 4) 76,985 246,920 - -
Depreciation (Note 7) 21,234 69,606 24,028 57,781
Total operating expenses 2,347,916 8,068,811 1,609,954 5,450,290

Other expenses (income)
Foreign Exchange (11,485 ) 102,671 - -
Interest expense (Note 8) 416,990 657,350 13,808 23,839
Other income (59 ) 649 (4,363 ) (410,877 )
Total other expenses (income) 405,446 760,670 9,445 (387,038 )

Net loss and comprehensive loss for the period (2,580,759 ) (8,436,636 ) (1,581,759 ) (4,915,032 )

Loss per share – basic (0.03 ) $ (0.08 ) (0.02 ) (0.05 )
Loss per share – diluted (0.03 ) $ (0.08 ) $ (0.02 ) $ (0.05 )

Weighted average number of shares outstanding – basic 101,794,615 99,335,514 96,362,541 90,286,864
Weighted average number of shares outstanding – diluted 101,794,615 99,335,514 96,362,541 90,286,864

The accompanying notes are an integral part of these ~~unaudited~~ condensed consolidated ~~interim~~ financial ~~statements~~statements.

Table of Contents

Bionik Laboratories Corp.

Condensed Consolidated ~~Interim~~ Statements of ~~Changes in Shareholders’ Equity (Deficiency) for the nine month period ended December 31, 2017 and the year ended March 31, 2017~~ Comprehensive Loss

(unaudited)

~~(Amounts expressed in US Dollars)~~


	Three Months Ended September 30,				Six Months Ended September 30,
	2022		2021		2022		2021
Net loss	$	(1,129,388)	$	(1,267,989)	$	(2,513,521)	$	(1,718,901)

Other comprehensive loss components:
Cumulative translation adjustment		675		(6,447)		1,962		(14,245)

Total other comprehensive loss		675		(6,447)		1,962		(14,245)

Comprehensive loss	$	(1,128,663)	$	(1,274,436)	$	(2,511,559)		(1,733,146)

Special Voting
Preferred Stock Common Stock (1) Additional
Paid
Shares
to
be
Comprehensive
Shares Amount Shares Amount in Capital Issued Deficit Income Total
$

(Note 2)

$
(Note 2)

$
(Note 2)
$
$
(Note 2)
$
$
(Note 2)

Balance, March 31, 2016 1 - 72,591,292 72,591 18,292,173 - (13,007,062 ) 42,149 5,399,851
Shares issued to acquire IMT - - 23,650,000 23,650 23,153,350 - - - 23,177,000
Share compensation acquired - - - - 2,582,890 - - - 2,582,890
Options exercised - - 110,096 110 18,056 - - - 18,166
Cashless exercise of warrants - - 51,249 51 (51 ) - - - -
Warrants exercised - - 174,759 175 40,020 - - - 40,195
Share compensation expense - - 217,047 217 1,001,733 - - - 1,001,950
Net loss for the year - - - - - - (8,069,402 ) - (8,069,402 )
Balance, March 31, 2017 1 - 96,794,443 96,794 45,088,171 - (21,076,464 ) 42,149 24,150,650
Warrants exercised - - 5,000,172 5,000 1,120,038 - - - 1,125,038
Share compensation expense - - - - 1,284,257 - - - 1,284,257
Fair value of warrants on convertible loans - - - - 548,179 - - - 548,179
Warrant down round feature (Note 12) - - - - 41,025 - (41,025 ) - -
Shares to be issued - - - - - 60,000 - - 60,000
Net loss for the period - - - - - - (8,436,636 ) - (8,436,636 )
Balance, December 31, 2017 1 - 101,794,615 101,794 48,081,670 60,000 (29,544,125 ) 42,149 18,731,488

The accompanying notes are an integral part of these ~~unaudited condensed~~ consolidated ~~interim~~ financial ~~statements~~statements.

~~(1) Includes exchangeable shares~~

Table of Contents

Bionik Laboratories Corp.

Condensed Consolidated ~~Interim~~ Statements of Cash Flows ~~for the nine months periods ended December 31, 2017 and 2016~~

(unaudited)

~~(Amounts expressed in U.S. Dollars)~~


	Six months ended		Six months ended
	September 30, 2022		September 30, 2021
Operating activities:
Net loss	$	(2,513,521)	$	(1,718,901)
Reconciliation of net loss to net cash from operating activities:
Depreciation and amortization		23,739		59,039
Interest expense		20,883		325,361
Share based compensation expense		107,365		115,419
Extinguishment of debt		—		(459,912)
Issuance of common shares in lieu of services		—		33,000
Changes in non-cash working capital items
Accounts receivable		(306,616)		380,435
Prepaid expenses and other current assets		223,482		131,130
Net book value of demonstration inventory sold		—		16,248
Inventories		(201,360)		(96,708)
Accounts payable		47,335		(76,009)
Accrued liabilities		340,029		11,974
Other noncurrent liability		(277)		—
Deferred revenue		141,361		(96,874)
Net cash used in operating activities		(2,117,580)		(1,375,798)
Investing activities:
Acquisition, (Note 2)		(215,000)		—
Other non-current assets		(7,177)
Net cash used in investing activities		(222,177)		—
Financing activities:
Proceeds from convertible loans		750,000		5,000,000
Proceeds from PPP loan		—		—
Proceeds from term loan		—		550,000
Net cash provided by financing activities		750,000		5,550,000
Effect of exchange rate changes on cash and cash equivalents		(3,874)		(7,887)
Net increase (decrease) in cash and cash equivalents		(1,593,631)		4,166,315
Cash and cash equivalents, beginning of the period		1,991,377		608,348
Cash and cash equivalents, end of the period	$	397,746	$	4,774,663

Supplemental noncash activities:
Conversion of term loans into option exercises	$	—	$	642,153
Conversion of demand loans into convertible notes	$	—	$	3,286,791
Subsidiary purchase of fixed assets	$	50,185	$	—

Nine months Nine months
ended ended
December 31, December 31,
2017 2016
$ $
(Note 2)
Operating activities
Net loss for the period (8,436,636 ) (4,915,032 )
Adjustment for items not affecting cash
Depreciation 69,606 57,781
Amortization 246,920 -
Interest expense 640,168 23,839
Share based compensation expense 1,284,257 592,130
Convertible debt accretion 290,375 -
Shares issued for services 60,000 59,500
Allowance for doubtful accounts (16,349 ) -
(5,861,659 ) (4,181,782 )
Changes in non-cash working capital items
Accounts receivable 93,680 (247,359 )
Prepaid expenses and other receivables 83,003 95,562
Due from related parties (643 ) 532
Inventories (74,165 ) (120,894 )
Accounts payable 10,104 (720,573 )
Accrued liabilities 639,568 (492,047 )
Customer advances (120,762 ) 28,000
Deferred revenue 15,177 97,615
Net cash used in operating activities (5,215,697 ) (5,540,946 )
Investing activities
Acquisition of equipment (17,182 ) (9,827 )
Net cash used in investing activities (17,182 ) (9,827 )
Financing activities
Proceeds from convertible loans 4,699,975 483,333
Proceeds on exercise of warrants 1,125,038 -
Repayment of Promissory note principal (200,000 ) -
Repayment of Promissory note interest (49,505 ) -
Repayment of Demand notes principal (208,359 ) -
Repayment of Demand notes interest (79,259 ) -
Proceeds from short term loan 400,000 -
Cash acquired on acquisition - 266,635
Net cash provided by financing activities 5,687,890 749,968
Net decrease in cash and cash equivalents for the period 455,011 (4,800,805 )
Cash and cash equivalents, beginning of period 543,650 5,381,757
Cash and cash equivalents, end of period 998,661 580,952

Supplemental Information:
Assets acquired and liabilities assumed as at April 21, 2016:
Current assets, including cash of $266,635 478,843
Equipment 59,749
Intangible assets 5,580,704
Goodwill 22,308,275
Accounts payable (241,299 )
Accrued liabilities (361,029 )
Customer deposits (86,487 )
Demand notes payable (324,894 )
Promissory Notes payable (217,808 )
Bionik advance (1,436,164 )
Non-cash consideration 25,759,890

~~Interest paid or settled (Note 8(a) and (b))~~

The accompanying notes are an integral part of these ~~unaudited~~ condensed consolidated ~~interim~~ financial statements.

Table of Contents

BIONIK LABORATORIES CORP.

NOTES TO CONDENSED CONSOLIDATED ~~INTERIM~~ FINANCIAL STATEMENTS

For the ~~three~~three- and ~~nine~~six- month periods ~~ended December 31, 2017~~ending September 30, 2022 and ~~2016~~ 2021

(unaudited)

~~(Amounts expressed in U.S. Dollars)~~

~~NATURE OF OPERATIONS AND GOING CONCERN~~

1.Interim Condensed Consolidated Financial Statements

The ~~Company and its Operations~~

Bionik Laboratories Corp. (the “Company” or “Bionik”) was incorporated on January 8, 2010 in the State of Colorado as Strategic Dental Management Corp. On July 16, 2013 the Company changed its name to Drywave Technologies Inc. (“Drywave”) and its state of incorporation from Colorado to Delaware. Effective February 13, 2015, the Company changed its name to Bionik Laboratories Corp. and reduced the authorized number of shares of common stock from 200,000,000 to 150,000,000. Concurrently, the Company implemented a 1-for-0.831105 reverse stock split of the common stock, which had previously been approved on September 24, 2014.

On February 26, 2015, the Company entered into a Share Exchange Agreement and related transactions whereby it acquired Bionik Laboratories Inc., a Canadian Corporation (“Bionik Canada”). Bionik Canada issued 50,000,000 Exchangeable Shares, representing a 3.14 exchange ratio, for 100% of the then outstanding common shares of Bionik Canada (the “Merger”). The Exchangeable Shares are exchangeable at the option of the holder, each into one share of the common stock of the Company. In addition the Company issued one Special Preferred Voting Share (the “Special Preferred Share”) (Note 10).

As a result of the shareholders of Bionik Canada having a controlling interest in the Company subsequent to the Merger, for accounting purposes the Merger does not constitute a business combination. The transaction has been accounted for as a recapitalization of the Company with Bionik Canada being the accounting acquirer even though the legal acquirer is Bionik, accordingly, the historic financial statements of Bionik Canada are presented as the comparative balances for the period prior to the Merger.

~~References to the Company refer to the Company and its wholly owned subsidiaries, Bionik Acquisition Inc. and Bionik Canada. References to Drywave relate to the Company prior to the Merger.~~

On April 21, 2016, the Company acquired all of the outstanding shares and, accordingly, all assets and liabilities of Interactive Motion Technologies, Inc. (“IMT”), a Boston, Massachusetts-based global pioneer and leader in providing effective robotic products for neurorehabilitation, pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) dated March 1, 2016, with IMT, Hermano Igo Krebs, and Bionik Mergerco Inc., a Massachusetts corporation and the Company’s wholly owned subsidiary (“Bionik Mergeco”). The merger agreement provided for the merger of Bionik Mergerco with and into IMT, with IMT surviving the merger as the Company’s wholly owned subsidiary. In return for acquiring IMT, IMT shareholders received an aggregate of 23,650,000 shares of the Company’s common stock.

Bionik Laboratories Corp. is a 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 individuals, including three products in the market and four products in varying stages of development. The InMotion Systems - the InMotion ARM, In Motion Wrist, InMotion Hand – are designed to provide intelligent, adaptive therapy in a manner that has been clinically verified to maximize neuro-recovery. Bionik also has a lower-body exoskeleton - the ARKE - designed to allow paraplegics as well as other wheelchair users the ability to rehabilitate through walking. The Company is developing with a partner a lower body product based on some of the ARKE technology, which should allow certain individuals to walk better, who have limited mobility. This product is expected to be launched in the consumer home market.

~~The~~accompanying unaudited interim condensed consolidated ~~interim financial statements consolidate the Company and its wholly owned subsidiaries Bionik Canada, Bionik Acquisition Inc. and Bionik, Inc. (the former IMT) since its acquisition on April 21, 2016.~~

~~These unaudited condensed consolidated interim~~ financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim information and pursuant to the rules and regulations of ~~America~~the Securities and Exchange Commission (the “SEC”) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. It is recommended that these financial statements be read in conjunction with the consolidated financial statements and related notes that appear in the Annual Report on Form 10-K of Bionik Laboratories Corp. (“~~US GAAP”~~Bionik” or the “Company”)~~, which contemplates continuation~~ for the fiscal year ended March 31, 2022 filed with the SEC on June 9, 2022. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as ~~a going concern, which assumes~~of September 30, 2022, and its results of operations for the ~~realization~~three and six months ended September 30, 2022 and 2021, and cash flows for the six months ended September 30, 2022 and 2021. The condensed consolidated balance sheet at March 31, 2022 was derived from audited annual financial statements, but does not contain all of the footnote disclosures from the annual financial statements. Results of operations for the three and six months ended September 30, 2022 are not necessarily indicative of the results for the year ending March 31, 2023 or any period thereafter.

Management Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and ~~satisfaction~~expenses and related disclosures at the date of the financial statements during the reporting period. Significant estimates are used for, but are not limited to, revenue recognition, allowance for doubtful accounts, inventory reserves, research and development accruals, deferred tax assets, liabilities and ~~commitments~~valuation allowances, and fair value of stock options. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 as of September 30, 2022 and through the date of this report filing. On an ongoing basis, management evaluates its estimates and actual results could differ from those estimates.

All adjustments, consisting only of normal ~~course of business.~~recurring items, considered necessary for fair presentation have been included in these consolidated financial statements.

~~The Company’s principal offices are located at 483 Bay Street, N105, Toronto, Ontario, Canada M5G 2C9 and its U.S. address is 80 Coolidge Hill Road, Watertown, MA. USA 02472.~~

Going Concern

~~As at December 31, 2017,~~At September 30, 2022, cash and cash equivalents were $0.4 million. At September 30, 2022, the Company had a working capital ~~deficit~~surplus of ~~$8,535,488 (March~~$1.2 million and at March 31, ~~2017 - $3,415,670)~~2022, the Company had a working capital surplus of $3.1 million. At September 30, 2022 and anMarch 31, 2022, the Company has accumulated ~~deficit~~deficits of ~~$29,554,125 (March 31, 2017 - $21,076,464)~~$97.9 million and ~~the~~$95.4 million, respectively. The Company has incurred a net loss and comprehensive loss ~~of ($8,436,636)~~ for the ~~nine~~three months ~~period~~ ended ~~December 31, 2017 (December 31, 2016 – $(4,915,032)).~~September 30, 2022 and 2021 of $1.1 million and $1.3 million, respectively, and for the six months ended September 30, 2022 and 2021 of $2.5 million and $1.7 million, respectively.

The Company’s future funding requirements depend on a number of factors, including the rate of market acceptance of its current and future products and the resources the Company devotes to developing and supporting the same. There is no certainty that the Company will be successful in generating sufficient cash flow from operations or achieving and maintaining profitable operations in the future to enable it to meet its obligations as they come due and consequently continue as a going concern.

The Company will require additional financing ~~this year~~ to fund its operations and overall growth strategy, and it is currently working on securing this funding through ~~the issuance of convertible promissory notes,~~ corporate collaborations, public or private equity offerings or debt financings. Sales of additional equity ~~or equity linked~~ securities by the Company would result in the dilution of the interests of existing stockholders. There can be no assurance that financing will be available when required. In the event that the necessary additional financing is not obtained, the Company would reduce its discretionary overhead costs ~~substantial~~substantially or otherwise curtail operations.

Table of Contents

~~BIONIK LABORATORIES CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS~~

~~For the three and nine month periods ended December 31, 2017 and 2016 (unaudited)~~

~~(Amounts expressed in U.S. Dollars)~~

~~NATURE OF OPERATIONS AND GOING CONCERN (continued)~~

The Company ~~expects the forgoing, or a combination thereof,~~is continuing its efforts to raise additional funds to meet the Company’s anticipated cash requirements for the next 12 months; however, these conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying ~~condensed~~ consolidated ~~interim~~ financial statements do not include any adjustments to reflect the possible future effects on recoverability and ~~reclassification~~classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

2.Business Combination

On September 7, 2022, the Company completed the acquisition of the assets of Dearman & Dearman PT LLC (“Dearman LLC”), a physical therapy practice, for a cash purchase price of $215,000. The Company intends to rebrand the newly acquired physical therapy clinic (“Tower Aquatic”) as a specialized neuro-recovery center which will showcase Bionik’s technology and solutions by providing treatment to patients with stroke, brain and spinal cord injuries, among its current service offerings.

The ~~condensed consolidated interim financial statements do not include any adjustments related~~acquisition qualified for purchase accounting treatment under Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, whereby the purchase price was provisionally allocated to the ~~recoverability~~assets acquired and ~~classification of the recorded asset amounts or the amounts and classification of~~ liabilities ~~that might be necessary should the Company be unable to continue as a going concern. All adjustments, consisting only of normal recurring items, considered necessary for~~assumed based upon their estimated fair ~~presentation have been included in these condensed consolidated interim financial statements.~~

~~CHANGE IN ACCOUNTING POLICY~~

~~The FASB issued ASU No. 2017-11,~~Earnings Per Share (Topic 260) Distinguishing Liabilities From Equity (Topic 480) Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments With Down Round Features II Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests With a Scope Exception~~, allows a financial instrument with a down-round feature to no longer automatically be classified as a liability solely based~~values on the ~~existence~~acquisition date of ~~the down-round provision. The update also means the instrument would not have to be accounted for as a derivative and be subject to an updated fair value measurement each reporting period.~~September 7, 2022:


	Tower Aquatic
	Acquisition
Total consideration paid	$	215,000

Estimated fair value of assets acquired:
Property and Equipment		79,448
ROU Asset		267,429
Lease Liability		(267,429)
Tradename and Trademarks, net		36,000
Goodwill		99,552
	$	215,000

On consideration of the above factors, the Company elected to early adopt ASU 2017-11 on July 1, 2017, the ASU is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other organizations, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.

The early adoption allows the Company to reduce the cost and complexity of updating the fair value measurement each reporting period and eliminate the unnecessary volatility in reported earnings created by the revaluation when the Company’s shares’ value changes.

The Company ~~presented~~incurred $28,000 of acquisition-related costs to complete the ~~change~~transaction including legal, valuation and closing fees. These expenses are included in ~~accounting policy through~~ the ~~retrospective application~~Condensed Consolidated Statements of ~~the new accounting principle to all prior periods, as described in ASU No. 250-10-45-5, Accounting Changes and Error Corrections.~~

~~The following financial statement line items~~Operations for ~~the periods indicated were affected by the change in accounting principle.~~

~~Income statement~~

Three months period ended December Nine months period ended December
2016 2016
As As
originally Effect of originally Effect of
reported As adjusted change reported As adjusted change
Sales $ 372,426 $ 372,426 $ - $ 553,900 $ 553,900 $ -
Cost of Sales 334,786 334,786 - 405,680 405,680 -
Total operating expenses 1,609,954 1,609,954 - 5,450,290 5,450,290 -
Total other expenses (761,896 ) 9,445 (771,341 ) (2,897,426 ) (387,038 ) 2,510,388
Net income (loss) and comprehensive loss for the period (810,418 ) (1,581,759 ) (771,341 ) (2,404,644 ) (4,915,032 ) (2,510,388 )
Net income (loss) per share (0.01 ) (0.02 ) (0.01 ) (0.03 ) (0.05 ) (0.02 )

~~BIONIK LABORATORIES CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS~~

~~For~~ the three and ~~nine month periods~~six months ended ~~December 31, 2017~~September 30, 2022 as general and ~~2016 (unaudited)~~

~~(Amounts expressed~~administrative operating expenses. The Relief from Royalty Method was relied upon to value the Trade Names and Trademarks. Because of the licensing appeal of this asset, the benefit of ownership as the “relief” from the royalty expense was estimated, that would be incurred in ~~U.S. Dollars)~~

~~Balance sheet~~

As at March 31, 2017
As
originally Effect of
reported As adjusted change
Current assets $ 1,402,580 $ 1,402,580 $ -
Capital assets 227,421 227,421 -
Intangible assets 27,338,899 27,338,899 -
Total assets 28,968,900 28,968,900 -
Warrant derivative liability 959,600 - (959,600 )
Other current liabilities 4,818,205 4,818,250 45
Total liabilities 5,777,805 4,818,250 (959,555 )
Common stock 96,794 96,794 -
Additional paid in capital 38,640,706 45,088,171 6,447,465
Retained earnings (15,588,554 ) (21,076,464 ) (5,487,910 )
Accumulated other comprehensive income 42,149 42,149 -
Total shareholders' equity 23,191,095 24,150,650 959,555
Total liabilities and shareholders' equity 28,968,900 29,968,900 -

~~The change in retained earnings consists~~the absence of ~~a change in net loss~~ownership. Unaudited proforma consolidated financial information for the ~~year ended~~acquisition have not been included as this acquisition is not significant.

3. Balance Sheet Accounts

Prepaid Expenses and Other Current Assets


	September 30,		March 31,
	2022		2022
Prepaid inventory	$	709,502	$	956,743
Prepaid insurance		130,792		77,553
Other prepaid expenses		62,682		93,066
	$	902,976	$	1,127,362

Table of Contents

Equipment

Equipment consisted of the following at September 30, 2022 and March 31, ~~2017, changing from $3,936,574 to $8,069,402, a net change of $4,132,828. The remainder~~2022:


	September 30, 2022						March 31, 2022
	Accumulated						Accumulated
	Cost		Depreciation		Net		Cost		Depreciation		Net
Computers and electronics	$	315,837	$	307,504	$	8,333	$	315,837	$	305,420	$	10,417
Furniture and fixtures		36,795		36,795		—		36,795		36,795		—
Demonstration equipment		168,111		108,950		59,161		168,691		87,874		80,817
Equipment		130,563		88,742		41,821		88,742		88,742		—
Leasehold Improvements		79,448		—		79,448		—		—		—
Tools and parts		11,422		11,422		—		11,422		11,422		—
Assets under capital lease		68,453		68,453		—		68,453		68,453		—
	$	810,629	$	621,866	$	188,763	$	689,940	$	598,706	$	91,234

Depreciation expense for the three months ended September 30, 2022 and September 30, 2021 was $12,000 and $11,000, respectively. Depreciation expense for the six months ended September 30, 2022 and September 30, 2020 was $24,000 and $20,000, respectively.

Accrued Liabilities

Accrued liabilities consist of the ~~change included in the $5,487,910 noted above relates to periods prior to~~following at September 30, 2022 and March 31, ~~2016.~~2022:


	September 30,		March 31,
	2022		2022
Accrued personnel costs	$	177,948	$	115,992
Accrued director fees		640,834		480,672
Accrued commissions		6,168		22,924
Accrued professional fees		77,525		81,100
Accrued warranty costs		18,548		8,885
Accrued other		285,622		163,457
	$	1,206,645	$	873,030

~~Statement of cash flows~~

As at December 31, 2016
As originally Effect of
reported As adjusted change
Net loss for the period $ (2,404,644 ) $ (4,915,032 ) $ (2,510,388 )
Adjustment for items not affecting cash
Depreciation 57,781 57,781
Interest expense 23,839 23,839
Share-based compensation expense 592,130 592,130
Shares issued for service 59,500 59,500
Change in fair value of warrant derivative liability (2,510,388 ) - 2,510,388
Change in non-cash working capital items (1,359,164 ) (1,359,164 )
Net cash used in operating activities (5,540,946 ) (5,540,946 ) -
Net cash used in investing activities (9,827 ) (9,827 ) -
Net cash provided by financing activities 749,968 749,968 -
Net decrease in cash and cash equivalents for the period (4,800,805 ) (4,800,805 ) -
Cash and cash equivalents, beginning of period 5,381,757 5,381,757 -
Cash and cash equivalents, end of period 580,952 580,952 -

~~BIONIK LABORATORIES CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS~~

~~For the three and nine month periods ended December 31, 2017 and 2016 (unaudited)~~

~~(Amounts expressed in U.S. Dollars)~~

~~SIGNIFICANT ACCOUNTING POLICIES~~

~~Unaudited Condensed Consolidated Interim Financial Statements~~

These unaudited condensed consolidated interim financial statements have been prepared on the same basis as the annual audited financial statements of the Company and should be read in conjunction with those annual audited financial statements filed on Form 10-K for the year ended March 31, 2017. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.

~~Newly Adopted and Recently Issued Accounting Pronouncements~~

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The accounting standard is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017. For a public entity, early adoption is not permitted. The impact on the condensed consolidated interim financial statements of adopting ASU 2014-09 will be assessed by management.

In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes,” which requires that deferred tax liabilities and assets be classified on our Consolidated Balance Sheets as noncurrent based on an analysis of each taxpaying component within a jurisdiction. ASU No. 2015-17 is effective for the fiscal year commencing after December 15, 2017. The Company does not anticipate that the adoption of ASU No. 2015-17 will have a material effect on the condensed consolidated interim financial position or the consolidated results of operations.

In January 2016, the FASB issued ASU No. 2016-01 “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”. The updates makes several modifications to Subtopic 825-10, including the elimination of the available-for-sale classification of equity investments, and it requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in operations. The update is effective for fiscal years beginning after December 2017. The Company is still assessing the impact that the adoption of ASU 2016-01 will have on the condensed consolidated interim financial position and the consolidated results of operations.

In February 2016, the FASB issued ASU 2016-02, “Leases”. This update requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The new guidance will also require additional disclosure about the amount, timing and uncertainty of cash flows arising from leases. The provisions of this update are effective for annual and interim periods beginning after December 15, 2018. The Company is still assessing the impact that the adoption of ASU 2016-02 will have on the condensed consolidated interim financial position and the consolidated results of operations.

In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting”. Several aspects of the accounting for share-based payment award transaction are simplified, including (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The amendments are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company has adopted this policy during the period and there was no impact on the condensed consolidated interim financial statements.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments”. This ASU provides eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for the fiscal year commencing after December 15, 2017. The Company is still assessing the impact that the adoption of ASU 2016-15 will have on the condensed consolidated interim statement of cash flows.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations: Clarifying the definition of a Business” which amends the current definition of a business. Under ASU 2017-01, to be considered a business, an acquisition would have to include an input and a substantive process that together significantly contributes to the ability to create outputs. ASU 2017-01 further states that when substantially all of the fair value of gross assets acquitted is concentrated in a single asset (or a group of similar assets), the assets acquired would not represent a business. The new guidance also narrows the definition of the term “outputs” to be consistent with how it described in Topic 606, Revenue from Contracts with Customers. The changes to the definition of a business will likely result in more acquisitions being accounted for as asset acquisitions. ASU 2017-01 is effective for acquisitions commencing on or after June 30, 2019, with early adoption permitted. Adoption of this guidance will be applied prospectively on or after the effective date.

In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other” ASU 2017-04 simplifies the accounting for goodwill impairment by eliminating Step 2 of the current goodwill impairment test, which required a hypothetical purchase price allocation. Goodwill impairment will now be the amount by which the reporting unit’s carrying value exceeds its fair value, limited to the carrying value of the goodwill. ASU 2017-04 is effective for financial statements issued for fiscal years, and interim periods beginning after December 15, 2019.

In September 2017, the FASB issued ASU 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842)”. ASU 2017-13 amends the early adoption date option for certain companies related to the adoption of ASU 2014-09 and ASU 2016-02. The Company is not early adopting this standard; however, we are currently assessing the impact that the eventual adoption of this standard will have on the Company.

~~BIONIK LABORATORIES CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS~~

~~For the three and nine month periods ended December 31, 2017 and 2016 (unaudited)~~

~~(Amounts expressed in U.S. Dollars)~~

~~SIGNIFICANT ACCOUNTING POLICIES (continued)~~

~~Revenue Recognition~~

The Company recognizes revenue from product sales when persuasive evidence of an agreement with customer exists, products are shipped or title passes pursuant to the terms of the agreement, the amount due from the customer is fixed or determinable, collectability is reasonably assured, and there are no significant future performance obligation. Deposits are carried as liabilities until the requirements for revenue recognition are met.

~~Warranty Reserve and Deferred Warranty Revenue~~

The Company provides a one-year warranty as part of its normal sales offering. When products are sold, the Company provides warranty reserves, which, based on the historical experience of the Company are sufficient to cover warranty claims. Accrued warranty ~~reserves~~costs are included in accrued liabilities on the condensed consolidated interim balance ~~sheet~~sheets and amounted to ~~$64,957~~$19,000 at ~~December 31, 2017~~September 30, 2022 and$9,000 at March 31, ~~2017. The Company also sells extended warranties~~2022.

4. Inventories

Bionik states all inventories at the lower of cost or ~~additional periods beyond the standard warranty. Extended warranty revenue is deferred and recognized as revenue over the extended warranty period. The Company recognized $Nil~~net realizable value, determined on a first-in, first-out method. Inventory includes finished goods at actual costs from its outsourced manufacturing partners.


	September 30,		March 31,
	2022		2022
Finished goods		1,168,277		1,083,718
Raw Materials		182,282		107,302
	$	1,350,559	$	1,191,020

Table of expense related to the change in warranty reserves and warranty costs incurred and recorded as an expense in cost of goods sold during the three and nine month period ended December 31, 2017 (December 31, 2016 - $15,355 and $30,732, respectively).Contents

5.Notes Payable & PPP Loans

Convertible Loan – Acquisition Loan

~~Foreign Currency Translation~~

~~The functional currency of~~On September 2, 2022, the Company ~~and its wholly owned subsidiaries is the U.S. dollar. Transactions denominated in~~borrowed $250,000 (the “Acquisition Loan”) from an affiliate of Remi Gaston-Dreyfus, a ~~currency other than the functional currency are recorded on initial recognition at the exchange rate at the date~~director of the transaction. After initial recognition, monetary assets and liabilities denominated in foreign currency are translated at the end of each reporting period into the functional currency at the exchange rate at that date. Exchange differences are recognized in profit or loss. Non-monetary assets and liabilities measured at cost are translated at the exchange rate at the date of the transaction.

~~Fair Value of Financial Instruments~~

ASC Topic 820 defines fair value, establishes a framework for measuring fair value, and expand disclosures about fair value measurements. Included in the ASC Topic 820 framework is a three level valuation inputs hierarchy with Level 1 being inputs and transactions that can be effectively fully observed by market participants spanning to Level 3 where estimates are unobservable by market participants outside of the Company and must be estimated using assumptions developed by the Company. The ~~Company discloses the lowest level input significant~~Acquisition Loan is evidenced by a Secured Convertible Promissory Note (the “Acquisition Note”) and is further subject to ~~each category of asset or liability valued within the scope of ASC Topic 820 and the valuation method as exchange, income or use.~~a related Collateral Pledge Agreement. The Company ~~uses inputs which are as observable as possible and~~used the ~~methods most applicable~~proceeds from the Acquisition Loan to finance the ~~specific situation of each company or valued item.~~

The carrying amounts reported in the balance sheets for cash and cash equivalents, accounts receivable, other receivables, accounts payable and accrued liabilities, due from related parties, demand notes payable, promissory notes payable, convertible notes payable, and short-term loans approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. Per ASC Topic 820 framework these are considered Level 2 inputs where inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full termacquisition of the assets ~~or liabilities.~~

of Dearman LLC and pay related costs and expenses. See Note 2, above. The Company’s policy is to recognize transfers into and out of Level 3 as of the date of the event or change in the circumstances that caused the transfer. There were no such transfers during the period.

~~BIONIK LABORATORIES CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS~~

~~For the three and nine month periods ended December 31, 2017 and 2016 (unaudited)~~

~~(Amounts expressed in U.S. Dollars)~~

~~ACQUISITION~~

On April 21, 2016, the Company acquired 100% of the common and preferred shares of IMT, through a transaction where Bionik Mergerco merged with and into IMT, with IMT surviving the merger as a wholly owned subsidiary of Bionik. Bionik issued an aggregate of 23,650,000 shares of Company Common Stock in exchange for all shares of IMT Common Stock and IMT Preferred Stock outstanding immediately prior to April 21, 2016. All shares have been issued at March 31, 2017.

Bionik also assumed each of the 3,895,000 options to acquire IMT Common Stock granted under IMT’s equity incentive plan or otherwise issued by IMT. These options were exchanged for purchase of an aggregate of 3,000,000 shares of Company Common Stock, of which 1,000,000 have an exercise price of $0.25. 1,000,000 have an exercise price of $0.95 and 1,000,000 have an exercise price of $1.05. Stock compensation expense on vested options of $2,582,890 was recorded on the options exchanged and this amount is included in the acquisition equation.

As a result of the acquisition of IMT, the Company acquired assets including three licensed patents, two license agreements, three FDA listed products, an FDA inspected manufacturing facility, extensive clinical and sales data, and international distributors. The Company retained an independent valuator to determine the purchase price allocation, which reflects the allocation of assets and goodwill. The following sets forth the purchase price allocation based on management’s best estimates of fair value, including a summary of major classes of consideration transferred and the recognized amounts of assets acquired and liabilities assumed at the acquisition date.

	~~As at~~
	~~April 21, 2016~~
	$
~~Fair value of 23,650,000 shares of common stock (a)~~		~~23,177,000~~
~~Fair value of vested stock options (b)~~		~~2,582,890~~
~~Allocation of purchase price:~~		~~25,759,890~~
~~Cash and cash equivalents~~		~~266,635~~
~~Accounts receivable~~		~~6,490~~
~~Inventories~~		~~188,879~~
~~Prepaid expenses and other current assets~~		~~16,839~~
~~Equipment~~		~~59,749~~
~~Liabilities assumed:~~
~~Accounts payable~~		~~(241,299~~	)
~~Accrued liabilities~~		~~(361,029~~	)
~~Customer deposits~~		~~(86,487~~	)
~~Demand notes payable~~		~~(324,894~~	)
~~Promissory notes payable~~		~~(217,808~~	)
~~Bionik advance (c)~~		~~(1,436,164~~	)
~~Net assets acquired~~		~~(2,129,089~~	)
~~Patents and exclusive License Agreement~~		~~1,306,031~~
~~Trademark~~		~~2,505,907~~
~~Customer relationships~~		~~1,431,680~~
~~Non compete agreement~~		~~61,366~~
~~Assembled Workforce~~		~~275,720~~
~~Goodwill~~		~~22,308,275~~
		~~25,759,890~~

~~(a)~~

~~The fair value of common stock was based on $0.98, which was the closing market price of the Company’s common stock on April 21, 2016.~~

~~(b)~~

The fair value of the vested stock options was determined using the Black Scholes option pricing model with the following key assumptions: a risk free rate of 1.59%, dividend and forfeiture rates of 0% and expected volatility of 114% which is consistent with the Company’s assumptions (Note 11).

~~(c)~~

Included in the net assets acquired was a loan issued to IMT in the amount of $300,000 under normal commercial terms. The loan carried an interest rate of 6% and were secured by all the assets of IMT subject to a $200,000 subordination to a third party financial services company, which was released in April 2016.

~~BIONIK LABORATORIES CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS~~

~~For the three and nine month periods ended December 31, 2017 and 2016 (unaudited)~~

~~(Amounts expressed in U.S. Dollars)~~

~~ACQUISITION (continued)~~

The schedule below reflects the intangible assets acquired in the IMT acquisition and the assets amortization period and expense for the three and nine months period ended December 31, 2017 and the year ended March 31, 2017:

Amortization
Value acquired Expense
March
31, 2017 Value at
March
31, 2017 3 Months
Expense
December
31, 2017 9 Months
Expense
December
31, 2017 Value at
December
31, 2017
Intangible assets acquired period (years) $ $ $ $ $ $
Patents and exclusive License Agreement 9.74 1,306,031 126,375 1,179,656 33,522 100,604 1,079,052
Trademark Indefinite 2,505,907 - 2,505,907 - - 2,505,907
Customer relationships 10 1,431,680 134,931 1,296,749 35,792 107,414 1,189,335
Non compete agreement 2 61,366 28,918 32,448 7,671 23,038 9,410
Assembled Workforce 1 275,720 259,856 15,864 - 15,864 -
5,580,704 550,080 5,030,624 76,985 246,920 4,783,704

~~PREPAID EXPENSES AND OTHER RECEIVABLES~~

December 31,
2017

March 31,
2017

$ $
Prepaid expenses and sundry receivables 52,221 68,484
Prepaid insurance 70,165 136,896
Sales taxes receivable (i) 22,658 22,667
145,044 228,047

~~(i) Represents net harmonized sales taxes (HST) input tax credits receivable from the Government of Canada.~~

~~INVENTORIES~~

December 31,
2017

March 31,
2017

$ $
Raw materials 264,334 119,985
Work in progress 14,283 108,264
Finished Goods 23,797 -
302,414 228,249

~~EQUIPMENT~~

~~Equipment consisted of the following as at December 31, 2017 and March 31, 2017:~~

December 31, 2017 March 31, 2017
Accumulated Accumulated
Cost Depreciation Net Cost Depreciation Net
$ $ $ $ $ $
Computers and electronics 252,120 219,288 32,832 250,538 204,258 46,280
Furniture and fixtures 36,795 27,598 9,197 36,795 26,096 10,699
Demonstration equipment 200,186 92,539 107,647 184,586 44,420 140,166
Manufacturing equipment 88,742 85,509 3,233 88,742 84,982 3,760
Tools and parts 11,422 5,447 5,975 11,422 4,472 6,950
Assets under capital lease 23,019 6,906 16,113 23,019 3,453 19,566
612,284 437,287 174,997 595,102 367,681 227,421

Equipment is recorded at cost less accumulated depreciation. Depreciation expense during the three and nine months period ended December 31, 2017 was $21,234 and $69,606 (December 31, 2016 - $24,028 and $57,781).

~~BIONIK LABORATORIES CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS~~

~~For the three and nine month periods ended December 31, 2017 and 2016 (unaudited)~~

~~(Expressed in U.S. Dollars)~~

~~NOTES PAYABLE~~

~~(a) Demand Notes payable~~

The Company repaid on December 31, 2017, all outstanding demand notes payable (“Notes”) except Notes in the aggregate principal amount of $50,000, which was deferred to June 30, 2018 acquired from IMT on April 21, 2016.

Balance, March 31, 2017 330,600
Accrued interest 7,018
Repayment of principal (208,359 )
Repayment of interest (79,259 )
Balance, December 31, 2017 $ 50,000

Interest expense incurred on the Notes totaled $2,309 and $7,018 for the three months and nine months periods ended December 31, 2017 (December 31, 2016 - $2,367 and $3,467), which is included in accrued liabilities.

~~(b) Promissory Notes payable~~

~~In February 2014, the Company borrowed $200,000 from an existing investor under the terms of a secured promissory note (“Promissory Note”). The Promissory~~Acquisition Note ~~bore~~bears interest at a simple interest rate equal to 10% per annum and interest is payable quarterly. Interest expenses incurred on the Promissory Note totaled $3,059 and $12,957 for the three and none months ended December 31, 2017 (December 31, 2016 - $5,041 and $13,973). The Promissory Note was paid in full during the quarter.

~~Balance, March 31, 2017~~		~~236,548~~
~~Accrued interest~~		~~12,957~~
~~Repayment of principal~~		~~(200,000~~	)
~~Repayment of interest~~		~~(49,505~~	)
~~Balance, December 31, 2017~~	$	-

~~(c) Short term Loan~~

In December 2017, a company controlled by a Board member made a short-term loan to the Company of $400,000 with interest at 1.5% per month. Interest expenses incurred on the loan totaled $2,400 for the three and nine months ended December 31, 2017 (December 31, 2016 - $Nil and $Nil). The Company repaid this loan with interest of $3,200 in January 2018.

~~(d) Convertible Loans Payable~~

In December 2016, several shareholders of the Company agreed to advance the Company $1,500,000 of convertible notes in three tranches: $500,000 upon origination of the convertible loans and $500,000 on each of January 15, 2017 and February 15, 2017. A further $500,000 was advanced in March 2017 to bring the total of these convertible loans to approximately $2,000,000. The convertible loans bore interest at 6% until the original due date of March 31, 2017 and $17,488 was accrued and expensed as interest on these loans for the year ended March 31, 2017.

The convertible loans contain the following terms: convertible at the option of the holder at the price of the equity financing or payable on demand upon the completion of an equity financing greater than $5,000,000; automatically convertible at the price of the equity financing upon completion of an equity financing between $3,500,000 and $5,000,000; if no such equity financing is completed by November 15, 2017, then the loans shall become secured by a general security agreement over all assets of the Company; and, upon a change in control would either be payable on demand or convertible at the lesser of a price per share equal to that received by the parties in the change in control transaction or the market price of the shares. These conversion features were analyzed and determined to be contingent conversion features, accordingly, until the triggering event no beneficial conversion feature is recognized.

~~On August 14, 2017, the Company entered into an amendment to these convertible loans, whereby the interest was changed to~~ a fixed rate of ~~12% per year from April 1, 2017 to August 14, 2017, and 3%~~1% per month, ~~from August 14, 2017 to maturity, which was extended to~~computed based on a 360-day year of twelve 30-day months and will be payable, along with the ~~earlier~~principal amount, on the two year anniversary of ~~March 31, 2018 or consummation~~the Issue Date (the “Maturity Date”).

The Acquisition Note will be convertible into equity of ~~a qualified financing. The conversion feature was modified to contain~~the Company upon the following events on the following terms: ~~upon~~(a) On the ~~consummation of an equity or equity-linked round of with an aggregate gross proceeds of $7,000,000, without any action on part of the Holder,~~Acquisition Loan Maturity Date, the outstanding principal and accrued and unpaid interest ~~and premium amount equal to (25%) of~~under the ~~principal amount less the accrued and unpaid interest,~~Acquisition Note will be converted into shares of ~~new~~common stock at a conversion price equal to the closing price of the Company’s common stock on the Acquisition Loan Maturity Date; and (b) Upon the consummation of the next equity or equity linked round ~~stock~~of financing of the Company for cash proceeds (the “Qualified Financing”), the outstanding principal and accrued and unpaid interest under the Acquisition Note will be converted into the securities (or units of securities if more than one security are sold as a unit) issued by the Company in one or more tranches in the context of the Qualified Financing, based upon the ~~lesser of (a) the lowest~~ issuance (or conversion) price of ~~new round stock in case there is more than one tranche of new round stock or (b) ($0.25).~~such securities.

Interest expense associated with the Acquisition Loan for the three and six months ended September 30, 2022 was $2,417. There was no interest expense associated with the Acquisition Loan for the three and six months ended September 30, 2021.

~~Further,~~Convertible Loan – Working Capital Loan

Between June 9, 2022, and June 10, 2022, the Company issued ~~warrants to these debt holders amounting to 20%~~convertible promissory notes (the “Working Capital Notes”) and borrowed an aggregate of $500,000 from an affiliate of Mr. Gaston-Dreyfus ($200,000); an affiliate of André-Jacques Auberton-Hervé, the Chairman of the ~~aggregate principal~~Board of the convertible loans divided by the exercise price, which would be determined as the lowest of a new round stock in a qualified financing, the average volume weighted average price for the sixty trading days prior to January 31, 2018 or $0.25. The warrants have a term of five years.

~~BIONIK LABORATORIES CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS~~

~~For the three and nine month periods ended December 31, 2017 and 2016 (unaudited)~~

~~(Amounts expressed in U.S. Dollars)~~

~~NOTES PAYABLE (Continued)~~

An additional $2,999,975 was received from these shareholders during the nine months ended December 31, 2017 for a total of $4,999,975. For the three months and nine months ended December 31, 2017, an additional $381,429 and $587,699 of interest was accrued and expensed on these convertible loans.

The Company has recognized a discount against the convertible loans for the relative fair value of the warrants and is accreting the discount using the effective interest rate method. The assumptions used in valuing the warrants using the binomial valuation model were as follows: exercise price of $0.25, volatility of 114%, risk-free interest rate of 1.91% and a term of five years.

~~The Company evaluated the fair value of the warrants attached to the convertible notes as $548,178 and recorded $290,375 of warrant accretion expense in the nine month period ended December 31, 2017.~~

Balance, March 31, 2017 2,017,488
Additional principal investment 2,999,975
Fair value of warrants (548,178 )
Accretion expense 290,375
Accrued Interest 587,699
Balance, December 31, 2017 $ 5,347,359

(e) In May 2017, the Company’s Chinese joint venture partners loaned the Company $500,000 at an interest rate of 8% convertible into the Company’s common shares upon a capital raise (“Qualified Financing”) where gross proceeds exceed $3,000,000 at the lesser of $0.50 and the quotient of the outstanding balance on the conversion date by the price of the Qualified Financing. Additionally, the holders are entitled to warrants equaling 25% of the number of conversion shares to be issued at conversion. During the three and nine months ended December 31, 2017, $10,082 and $23,693 of interest was accrued and expensed on these convertible loans.

Balance, March 31, 2017 -
Additional principal investment 500,000
Accrued Interest 23,693
Balance, December 31, 2017 $ 523,693

~~(f) In December 2017, investors~~Directors of the Company ~~advanced funds under a new convertible loan offering. These convertible loans~~($100,000); and an existing investor and shareholder of the Company ($200,000). The Company used the net proceeds from the Working Capital Notes for the Company’s working capital and general corporate purposes. The Working Capital Notes bear interest at a fixed rate of 3%1% per month, ~~until~~computed based on a 360-day year of twelve 30-day months and will be payable, along with the ~~earlie~~principal amount, in shares on the two-year anniversary of the issue date (the “Working Capital Loan Maturity Date”).

The Working Capital Notes will be convertible into equity of the Company upon the following events on the following terms: (a) ~~January 31, 2018~~On the Working Capital Loan Maturity Date without any action on the part of the Holders, the outstanding principal and accrued and unpaid interest under the Working Capital Notes will be converted into shares of common stock at a conversion price equal to the closing price of the Company’s common stock on the Working Capital Loan Maturity Date and (b) upon the consummation of ~~a qualified~~the next equity or equity linked round of financing ~~defined as gross~~of the Company for cash proceeds ~~of no less than $7,000,000 and up to $14,000,000 raised in one or more tranches. On the maturity date,~~(the “Qualified Financing”), without any action on the part of the Holder, the outstanding principal and accrued and unpaid interest under the ~~notes~~Working Capital Notes will be converted into ~~shares~~the securities (or units of ~~new round stock~~securities if more than one security are sold as a unit) issued by the Company in one or more tranches in the context of the Qualified Financing, based upon ~~a (15%) discount to~~ the ~~lesser~~issuance (or conversion) price of (i) (A) the VWAP 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).such securities.

~~$1,200,000 was received from~~Interest expense associated with these ~~investors during the nine months ended December 31, 2017 and $8,800 of interest was accrued and expensed on these convertible~~ loans for the three ~~months~~ and ~~nine~~six months ended ~~December~~September 30, 2022 was $15,000 and $18,466, respectively. There was no interest expense associated with these loans for the three and six months ended September 30, 2021.

Refinancing Loan

During the year ended March 31, ~~2017.~~

Balance, March 31, 2017 -
Additional principal investment 1,200,000
Accrued Interest 8,800
Balance, December 31, 2017 $ 1,208,800

~~RELATED PARTY TRANSACTIONS AND BALANCES~~

~~a) Due from related parties~~

As2022, the Company commenced a refinancing of ~~December 31, 2017, there was an outstanding loan~~its existing indebtedness and launched a new secured convertible promissory note offering of up to $10.0 million (the “2021 Offering”). Pursuant to the ~~Chief Technology Officer and director~~terms of the 2021 Offering, the Company offered for ~~$19,374 (March 31, 2017 - $18,731).~~sale up to $10.0 million in convertible promissory notes (the “2021 Notes”) to accredited investors and non-U.S. persons. As a result, the Company issued an aggregate of $8.3 million in principal of 2021 Notes of which an aggregate of $5.0 million was purchased for cash and the remainder was issued as a result of consolidating existing debt.

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Under the Company’s then-existing term loan and security agreement as well as the existing shareholder loan as mentioned below, a portion of the outstanding principal and unpaid interest were used as consideration to acquire 2021 Notes in the 2021 Offering and, as a result and with the option exercises described below, the term loan agreement and the existing shareholder loan were deemed paid in full and terminated. Accordingly, an aggregate of $1.1 million in outstanding principal and accrued unpaid interest under the term loan agreement was used to purchase a like amount of 2021 Notes in the 2021 Offering and an aggregate of $2.2 million in outstanding principal and accrued and unpaid interest under the shareholder loan was used to purchase a like amount of 2021 Notes in the 2021 Offering. The remaining $0.6 million of the outstanding principal and accrued and unpaid interest under the term loan ~~has~~agreement was applied towards the purchase price to exercise outstanding options of certain debtholders.

Pursuant to the terms of the 2021 Offering, the Company issued an aggregate of $5.0 million in principal of additional 2021 Notes, which was purchased for cash. The Company used the net cash proceeds from the 2021 Offering for the Company’s working capital requirements. The 2021 Notes bore interest at a fixed rate of 1% per month, computed based on a 360-day year of twelve 30-day months and would be payable, along with the ~~Canada Revenue Agency’s prescribed rate for such advances~~principal amount, on the earlier of: (a) March 31, 2022 and ~~is denominated in Canadian dollars. During~~(b) the ~~nine months ended December 31, 2017,~~consummation of the 2021 Offering, provided that the Company ~~accrued interest receivable~~raises in one or more tranches aggregate gross proceeds of no less than $10,000,000.

On March 31, 2022 the ~~amount of ($649) (March 31, 2017 - $707). The remaining fluctuation in the balance from the prior year is due to changes in foreign exchange.~~

~~b) Accounts payable and accrued liabilities~~

As at December 31, 2017, $89,141 (March 31, 2017 - $Nil) was owing to the CEO of the Company; $47,307 (March 31, 2017 - $Nil to the former CTO) was owing to the Chief Technology Officer; $16,592 (March 31, 2017 – $Nil) was owing to the Chief Financial Officer, $97,500 (March 31, 2017 – $97,500) was owing to the Chief Commercialization Officer, and $639,375 (March 31, 2017 – $4,135) was owing to the former CEO and current Chairman of the Board, all related to business, compensation and severance expenses, all of which are included in accounts payable or accrued liabilities.

~~BIONIK LABORATORIES CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS~~

~~For the three and nine month periods ended December 31, 2017 and 2016 (unaudited)~~

~~(Amounts expressed in U.S. Dollars)~~

~~RELATED PARTY TRANSACTIONS AND BALANCES (Continued)~~

In connection with the acquisition of IMT, the Company acquired a license agreement dated June 8, 2009, pursuant to which the Company pays the licensors an aggregate royalty of 1% of sales based on patent #8,613,6391. No sales2021 Notes were ~~made, as the technology under this patent has not been commercialized. One of the licensors is a founder of IMT and a former officer and director of the Company.~~

As at the effective date of the merger pursuant to the Merger Agreement, a former officer and director received an aggregate of 5,190,376 shares of the Company in return for his ownership of IMT securities, in addition to his IMT options which were as of the effective date of the merger exercisable for an aggregate of 360,231converted into 946,194 shares of common stock of the ~~Company.~~Company in accordance with their terms.

There was no interest expense associated with the 2021 Notes for the three and six months ended September 30, 2022. Interest expense associated with the 2021 Notes for the three and six months ended September 30, 2021 was $0.2 million.

Shareholder Loans

On March 23, 2020, the Company received a $2.0 million loan from an existing shareholder. The promissory note evidencing the loan bore interest at a fixed rate of 1% per month and had a maturity date of the earlier of (i) March 31, 2022 and (ii) the date of receipt of a minimum of $5.0 million from a “Subsequent Financing.” The accrued interest was payable in cash commencing on June 30, 2021 for the previous quarter. Half of the interest accrued during the first three payment dates (3-month, 6-month and 9-month anniversaries of the issue date), was rolled into the term loan and security agreement as mentioned above. The remaining half of the interest accrued was to be paid upon the maturity date. As noted above, this debt was consolidated into the Company’s 2021 notes and this loan converted into shares of the common stock of the Company on March 31, 2022.

On February 24, 2021, and in addition to the shareholder loan above, the Company entered into a term loan and security agreement dated February 12, 2021 where Bionik may borrow up to $3.0 million from lenders from time to time. Pursuant to the terms of the agreement, the loan bore interest at a fixed rate of 1% per month. The principal amount and interest on the loan would be due and payable on the earlier of (i) February 12, 2023 and (ii) the date of receipt by the Company of a minimum of $3.0 million in equity. As of March 31, 2021, the Company has taken out $1.0 million against this term loan. As noted above, on July 15, 2021, this indebtedness was consolidated into the Company’s 2021 Notes, pursuant to which an aggregate of $3.3 million in outstanding principal and accrued unpaid interest was used to purchase a like amount of 2021 Notes in the 2021 Offering. The remaining $0.6 million of the outstanding principal and accrued and unpaid interest was applied towards the purchase price to exercise options held by the debtholders.

There was no interest expense associated with these loans for the three and six months ended September 30, 2022. Interest expense associated with these loans for the three and six months ended September 30, 2021 was $18,000 and $0.1 million, respectively.

Paycheck Protection Program Loan

In May 2020, the Company signed a promissory note for $0.5 million pursuant to the federal Paycheck Protection Program under the Coronavirus Aid, Relief and Economic Security Act, which is administered by the U.S. Small Business Administration. The loan is unsecured, bears interest of 1% per annum and a deferment period of 6 months. The loan is to be used primarily for payroll related costs, lease, and utility payments. The Company had applied for forgiveness and as such forgiveness was granted in May 2021. The forgiveness of the PPP loan is recorded in the statement of operations as other income for the six months ended September 30, 2021.

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6. Stockholders’ Equity

Common Stock Authorized


	September 30, 2022			March 31, 2022
	Number of shares	$		Number of shares	$
Exchangeable Shares
Balance beginning of period	112,440	$	113	112,440	$	113
Converted into common shares	(1,048)		(1)	—		—
Balance at end of period	111,392		112	112,440		113
Common Shares
Balance at beginning of the period	6,767,114		6,766	5,589,375		5,589
Shares issued on conversion of loans (a)	—		—	947,602		947
Shares issued for in lieu of services (b)	—		—	50,000		50
Options exercised in conjunction with 2021 Notes (c)	—		—	180,137		180
Exchangeable shares converted into common shares	1,048		1	—		—
Balance at end of the period	6,768,162		6,767	6,767,114		6,766
Total Shares	6,879,554	$	6,879	6,879,554	$	6,879

~~10.~~

(a)

~~SHARE CAPITAL~~

During the year ended March 31, 2022, the Company issued 1,408 shares of the Company’s common stock to existing noteholders pursuant to the terms of their convertible notes purchased in 2020. Additionally, on March 31, 2022, the 2021 notes were converted into 946,194 shares of common stock of the Company as discussed in Note 4 above.

December 31, 2017 March 31, 2017
Number of Number of
shares $ shares $
Exchangeable Shares:
Balance beginning of period/year 47,909,336 47,910 50,000,000 50,000
Converted into common shares (2,000,000 ) (2,000 ) (2,090,664 ) (2,090 )
Balance at the end of period/year 45,909,336 45,910 47,909,336 47,910
Common Shares
Balance at beginning of the period 48,885,107 48,884 22,591,292 22,591
Shares issued on acquisition (Note 3) - - 23,650,000 23,650
Shares issued to exchangeable shares 2,000,000 2,000 2,090,664 2,090
Shares issued for services - - 217,047 217
Options exercised - - 110,096 110
Warrants exercise (a) 5,000,172 5,000 174,759 175
Cashless exercise of warrants - - 51,249 51
Balance at end of the period 55,885,279 55,884 48,885,107 48,884
TOTAL COMMON SHARES 101,794,615 101,794 96,794,443 96,794

~~(a)~~

(b)

During the ~~nine month period~~year ended ~~December~~March 31, ~~2017,~~2022, the Company ~~consummated an offer~~issued 50,000 shares for expenses to ~~amend and exercise to its warrant holders, enabling them to exercise their outstanding warrants for $0.25 per share, and as a result, 5,000,172 common~~support the Company’s investor relations strategy. The shares were ~~issued for net proceeds~~valued based on the trading price of ~~$1,125,038 (Note 12).~~the Company’s common stock on the issuance date.

~~(b)~~

(c)

~~During~~

With the ~~nine month period ended December 31, 2016, 51,249 common shares~~2021 Notes as discussed in Note 4 above, in July 2021, $0.6 million of the outstanding principal and accrued and unpaid interest under the term loan agreement was applied towards the purchase price to exercise 180,137 outstanding options of certain debtholders. The outstanding options were ~~issued as a result of a cashless exercise of 262,045 warrants with an~~valued based on the predetermined exercise price of ~~$0.80. Under~~ the ~~terms of the warrant agreement the value of the warrants on exercise is attributed to the shares on exercise and the Company has recognized a value of $43,562.~~stock options.

~~(c)~~

The Company has a commitment to issue 250,000 common shares to a consultant during the nine months ended December 31, 2017 and recognized $60,000 as compensation expense in general and administrative investor related services. The Company issued 70,000 common shares during the nine months period ended December 31, 2016 for consulting services and recognized $59,500 of share compensation expense.

Special Voting Preferred Share

In ~~connection with the Merger (Note 1), on~~ February ~~26,~~ 2015, the Company entered into a voting and exchange trust agreement (the “Trust Agreement”). Pursuant to the Trust Agreement, the Company issued one ~~share of the~~ Special Voting Preferred ~~Stock, par value $0.001 per share, of the Company (the Special Voting Preferred Share”)~~Share to ~~the~~a Trustee, and the parties created a trust for the Trustee to hold the Special Voting Preferred Share for the benefit of the holders of the Exchangeable Shares ~~(the “Beneficiaries”). Pursuant to the Trust Agreement, the Beneficiaries have voting rights in the Company equivalent to what they would have had, had they received shares~~ of ~~common stock in the same amount as the Exchangeable Shares held by the Beneficiaries.~~

~~In connection with the Merger and the Trust Agreement, effective February 20, 2015, the Company filed~~ a ~~certificate of designation~~subsidiary of the Special Voting Preferred Share (the “Special Voting Certificate of Designation”) with the Delaware Secretary of State. Pursuant to the Special Voting Certificate of Designation, one share of the Company’s blank check preferred stock was designated as the Special Voting Preferred Share.Company. The Special Voting Preferred Share entitles the Trustee to exercise the number of votes equal to the number of ~~exchangeable~~Exchangeable Shares outstanding on a one-for-one basis during the term of the Trust Agreement.

The Special Voting Preferred Share is not entitled to receive any dividends or to receive any assets of the Company upon liquidation and is not convertible into shares of common ~~shares~~stock of the Company.

The voting rights of the Special Voting Preferred Share will terminate pursuant to and in accordance with the Trust ~~Agreement. The~~Agreement and the Special Voting Preferred Share will be automatically ~~cancelled at such time as no Exchangeable Shares are held by a Beneficiary.~~cancelled.

~~BIONIK LABORATORIES CORP.~~7. Stock-Based Compensation

~~NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS~~

~~For~~Total stock-based compensation expense for the three months ended September 30, 2022 and ~~nine month periods~~September 30, 2021 was $55,000 and $20,000, respectively. Total stock-based compensation expense for the six months ended ~~December 31, 2017~~September 30, 2022 and ~~2016 (unaudited)~~September 30, 2021 was $0.1 million for both periods.

~~(Amounts expressed in U.S. Dollars)~~

~~11.~~

~~STOCK OPTIONS~~

Bionik did not grant stock options during the six months ended September 30, 2022 and September 30, 2021.

The ~~purpose of~~Company uses the ~~Company’s equity incentive plan, is~~Black-Scholes option pricing model to ~~attract, retain and motivate persons of training, experience and leadership to~~determine the Company, including their directors, officers and employees, and to advance the interests of the Company by providing such persons with the opportunity, through share options, to acquire an increased proprietary interest in the Company.

Options or other securities may be granted in respect of authorized and unissued shares, provided that the aggregate number of shares reserved for issuance upon the exercise of all options or other securities granted under the Plan shall not exceed 15% of the shares of common stock and Exchangeable Shares issued and outstanding (determined as of January 1 of each year). Optioned shares in respect of which options are not exercised shall be available for subsequent options.

~~On November 24, 2015, the Company granted 650,000 options granted to employees that vest over three years at the anniversary date. The~~estimated grant date fair ~~value~~values for stock-based awards. The Black-Scholes option pricing model requires the input of various subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The Company’s assumptions do not include an estimated forfeiture rate.

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Option-pricing models require the input of various subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. As it relates to grants previously issued, Bionik’s estimated expected stock price volatility is based on past grants that have been made. Bionik’s expected term of options granted was derived from looking at the Company’s exercise history of its awards granted. The risk-free rate for the expected term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.

As of September 30, 2022 the total unrecognized compensation cost related to outstanding stock options expected to vest was $694,384. During the year ended March 31, 2016, 250,000 options were cancelled and in the three and nine months ended December 31, 2017, $35,609 and $106,828 in share compensation expense was recognized.

~~On December 14, 2015,~~$0.2 million, which the Company ~~granted 2,495,000 options~~expects to ~~employees, directors and consultants that vest~~recognize over ~~three years at the anniversary date. The grant date fair value~~a weighted-average period of the options was $1,260,437. During the years ended March 31, 2016 and 2017, 25,000 options and 40,000 options, respectively, were cancelled, and in the first nine months ended December 31, 2017, 351,667 options were cancelled. On September 1, 2017, 666,667 options that were to vest equally December 14, 2017 and 2018 immediately vested. In the three and nine months ended December 31, 2017 $45,396 and $450,690 in compensation was recognized.2 years.

On April 21, 2016, the Company granted 3,000,000 stock options to employees of Bionik, Inc., the Company’s wholly-owned subsidiary (formerly IMT) in exchange for 3,895,000 options that existed before the Company purchased IMT of which 1,000,000 have an exercise price of $0.25, 1,000,000 have an exercise price of $0.95 and 1,000,000 have an exercise price of $1.05. The grant date fair value of vested options was $2,582,890 and has been recorded as part of the acquisition equation (Note 3). For options that have not yet vested, share compensation expense in the first three months and the nine months ended December 31, 2017 was $10,169 and $30,508 was recognized.

On April 26, 2016, the Company granted 250,000 options to an employee with an exercise price of $1.00 that vests over three years at the anniversary date. The grant date fair value was $213,750. During the three and nine months ended December 31, 2017, $17,813 and $53,438 was recognized as share compensation expense.

On August 8, 2016, the Company granted 750,000 options to an employee with an exercise price of $1.00 that vests over three years at the anniversary date. The grant date fair value was $652,068. During the three months and nine months ended December 31, 2017 $54,339 and $163,017 of share compensation expense was recognized.

On February 6, 2017, the Company granted 400,000 options to an employee with an exercise price of $0.70 that vests over three years at the anniversary date. The grant date fair value was $245,200. Share compensation expense was recognized for the three and nine months ended December 31, 2017 of $20,433 and $61,300 was recognized.

On February 13, 2017, the Company granted 250,000 options to a consultant with an exercise price of $0.68 that vests over one and one-half years, every six months. The grant date fair value was $148,750. During the three months and nine months ended December 31 2017, $12,390 and $37,188 of share compensation expense was recognized.

~~BIONIK LABORATORIES CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS~~

~~For the three and nine month periods ended December 31, 2017 and 2016 (unaudited)~~

~~(Amounts expressed in U.S. Dollars)~~

~~11.~~

~~STOCK OPTIONS (Continued)~~

On August 3, 2017, 1,500,000 options at $0.21 to an executive officer, which vest equally over three future years. In addition, this executive officer was also granted up to 500,000 additional performance options based on meeting sales targets for the years ending March 31, 2018 and 2019. The performance options will vest at market price if the performance objectives are met. This grant had a grant date fair value of $387,209 and a share compensation expense of $22,639 and $37,370 was recognized for the three and nine months ended December 31, 2017. These options were valued using the Black-Scholes model and the following inputs: expected life of 7 years, expected volatility 114% and a risk-free rate of 1.73%.

On September 1, 2017, the Company granted 12,215,354 options at $0.161 equally to an executive officer and a consultant. 2,035,892 options have vested and 50% of the remaining options vest on performance being met and 50% vest annually over 5 years. The grant date fair value was $1,832,304 and $38,173 and $343,919 is the current expenses for the three and nine months ended December 31, 2017. These options were valued using the Black-Scholes model and the following inputs: expected life of 10 years, expected volatility 114% and a risk-free rate of 1.91%.

During the three and nine months ended December 31, 2017, the Company recorded $271,001 and $1,284,257 in share-based compensation related to the vesting of stock options (December 31, 2016 - $227,540 and $592,130).

~~The following is a summary of stock options outstanding and exercisable as of December 31, 2017:~~

Exercise Price ($) Number of Options Expiry Date Exercisable Options
0.165 264,230 April 1, 2021 264,230
0.23 97,514 June 20, 2021 97,514
0.23 1,981,728 July 1, 2021 1,981,728
0.23 204,471 February 17, 2022 204,471
1.22 400,000 November 24, 2022 266,667
1.00 2,078,333 December 14, 2022 1,803,333
0.95 111,937 March 28, 2023 111,937
1.05 433,027 March 28, 2023 433,027
1.00 250,000 April 26, 2023 83,333
1.00 750,000 August 8, 2023 250,000
0.70 400,000 February 6, 2024 -
0.68 250,000 February 13, 2024 166,667
0.95 31,620 March 3, 2024 31,620
1.05 122,324 March 3, 2024 122,324
0.95 15,810 March 14, 2024 15,810
1.05 61,162 March 14, 2024 61,162
0.95 82,213 September 30, 2024 82,213
1.05 318,042 September 30, 2024 318,042
0.95 7,431 June 2, 2025 7,431
1.05 28,747 June 2, 2025 28,747
0.25 906,077 July 28, 2025 906,077
0.95 671,859 July 29, 2025 671,859
0.25 66,298 December 30, 2025 49,160
0.95 49,160 December 30, 2025 27,261
0.21 2,000,000 August 3, 2024 -
0.161 12,215,354 September 1, 2027 2,035,892
23,797,337 10,025,505

The weighted-average remaining contractual term of the outstanding options was 7.76 (March 31, 2017 – 5.12) and for the options that are exercisable the weighted average was 6.23 (March 31, 2017 – 6.02)

~~BIONIK LABORATORIES CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS~~

~~For the three and nine month periods ended December 31, 2017 and 2016 (unaudited)~~

~~(Amounts expressed in U.S. Dollars)~~

~~12.~~

~~WARRANTS~~

8.Warrants

The following is a continuity schedule of the Company’s common share purchase warrants:

Number of
Warrants Weighted-
Average
Exercise Price
($)
Outstanding and exercisable, March 31, 2015 10,823,450 1.35
Issued 7,225,625 1.35
Exercised (148,787 ) (0.80 )
Outstanding and exercisable, March 31, 2016 17,900,288 1.35
Exercised (262,045 ) (0.80 )
Outstanding and exercisable, March 31, 2017 17,638,243 1.35
Exercised (5,000,172 ) 0.25
Dilution warrants issued to $0.80 warrant holders 83,752 0.749
Dilution warrants issued to $1.40 warrant holders 941,191 1.2933
Outstanding at December 31, 2017 13,663,014 1.241


		Weighted
		Average
	Number of	Exercise
	Warrants	Price
Outstanding and exercisable, March 31, 2021	122,367	$	19.69
Expired	(42,684)	$	(9.38)
Outstanding and exercisable, March 31, 2022	79,683	$	25.22
Expired	(64,025)		(9.38)
Outstanding and exercisable September 30, 2022	15,658	$	90.00

During the nine month period ended December 31, 2017, the Company consummated an offer to amend and exercise its then outstanding warrants, enabling the holders of the warrants to exercise such warrants for $0.25 per share. The Company received net proceeds of $1,125,038. In addition due to an anti-dilution clause in the warrant agreements for such outstanding warrants an additional 83,752 warrants were issued to the $0.80 warrant holders and 941,191 warrants were issued to the $1.40 warrant holders. Furthermore, as a result of the anti-dilution clause, the exercise price of the warrants changed from $0.80 to $0.749 and from $1.40 to $1.2933 as a result of this transaction. The Company measured the effects of the triggered anti-dilution clause using the binomial tree model and recorded a loss of $41,025 against retained earnings.

~~The Company issued 400,014 warrants exercisable at $0.25 for four years expiring June 27, 2020 to the firm who facilitated the warrant offer.~~

~~During the year ended March 31, 2017 a warrant holder exercised 262,045 warrants on a cashless basis based on the terms of the warrant agreement and received 51,249 shares of common stock.~~

~~During the year ended March 31, 2016, a warrant holder exercised 148,787 warrants on a cashless basis based on the terms of the warrant agreement and was issued 45,508 shares of common stock.~~

~~Common share purchase warrants~~

The following is a summary of common share purchase warrants outstanding ~~after the warrant offer to amend and exercise the additional warrant issue and the re-pricing of the warrants~~ as of ~~December 31, 2017:~~September 30, 2022.

Exercise
Price ($) Number of
Warrants Expiry Date
1.2933 5,873,289 February 26, 2019
1.2933 1,229,040 March 27, 2019
1.2933 328,166 March 31, 2019
1.2933 2,544,240 April 21, 2019
1.2933 1,201,164 May 27, 2019
1.2933 1,173,370 June 30, 2019
0.7490 1,313,745 February 26, 2019
13,663,014


Exercise	Number of
Price ($)	Warrants	Expiry Date
90.00	15,658	March 31, 2023

The weighted-average remaining contractual term of the outstanding warrants was ~~1.27 (March 31, 2017 – 1.77).~~0.5 years.

9. Leases

The ~~exercise price~~Company has an operating lease for the Tower Aquatic clinic. The Company determines if an arrangement is a lease at the inception of a contract. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term and ~~number~~operating lease liabilities represent net present value of ~~underlying shares~~the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and operating lease liabilities are recognized at commencement date based on the net present value of the fixed lease payments over the lease term. The Company’s lease terms include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. As the Company’s operating lease does not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Operating fixed lease expense is recognized on a straight-line basis over the lease term.

In accordance with ~~respect~~ASC 842, the Company records on its consolidated balance sheet leases with a term greater than 12 months. The Company has elected, in compliance with current accounting standards, not to record leases with an initial term of 12 months or less in the ~~original $0.80 and~~consolidated balance sheet. ASC 842 requires the ~~$1.40 warrants are expected~~separation of the fixed lease components from the variable lease components. The Company has elected the practical expedient to account for separate lease components of a contract as a single lease cost thus causing all fixed payments to be ~~further adjusted pursuant to~~capitalized. Non-lease and variable cost components are not included in the ~~anti-dilution provisions therein, as a result~~measurement of the ~~issuance~~right-of-use assets or operating lease liabilities.

Operating lease cost and variable lease cost were $3,000 and $1,000, respectively for the both the three- and six-month periods ending September 30, 2022. There was no operating lease cost and variable lease cost for the three- and six-month period ending September 30, 2021.

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The aggregate future lease payments for the ~~convertible promissory notes~~Company’s operating lease of September 30, 2022 were as follows:


Fiscal Year	Amount
2023 (excluding the six months ended September 30, 2022)	$	17,903
2024		36,989
2025		38,202
2026		38,202
2027		38,202
Thereafter		178,274
Total Lease Payments	$	347,772
Less Imputed Interest		81,950
Total operating lease liabilities	$	265,822

10.Commitments and warrants in 2016, 2017 and 2018. The anti-dilution provisions in these warrants are not able to be computed until the convertible promissory notes are converted, and the underlying shares can be determined in accordance with the terms thereunder.Contingencies

~~BIONIK LABORATORIES CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS~~

~~For the three and nine month periods ended December 31, 2017 and 2016 (unaudited)~~

~~(Amounts expressed in U.S. Dollars)~~

~~13.~~

~~COMMITMENTS AND CONTINGENCIES~~

Contingencies

From time to time, the Company may be involved in a variety of claims, suits, investigations and proceedings arising in the ordinary course of our business, collections claims, breach of contract claims, labor and employment claims, tax and other matters. Although claims, suits, investigations and proceedings are inherently uncertain and their results cannot be predicted with certainty, the Company believes that the resolution of current pending matters will not have a material adverse effect on its business, financial position, results of operations or cash flow. Regardless of the outcome, litigation can have an adverse impact on the Company because of legal costs, diversion of management resources and other factors.

Commitments

On February 25, 2015, 262,904 common shares were issued to two former lenders connected with a $241,185 loan received and repaid during fiscal 2013. The common shares were valued at $210,323 based on the value of the concurrent private placement, and recorded in stock-based compensation on the consolidated statement of operations and comprehensive loss. As part of the consideration for the initial loan the former Chief Technology Officer and the new Chief Technology Officer had transferred 314,560 common shares to the lenders. For contributing the common shares to the lenders, the Company intends to reimburse the former Chief Technology Officer and the new Chief Technology Officer 320,000 common shares, each. As at December 31, 2017 and March 31, 2017, these shares have not yet been issued.

~~14.~~●

~~RISK MANAGEMENT~~On February 25, 2015, 1,753 common shares were issued to two former lenders connected with a $0.2 million loan received and repaid during fiscal 2013. The common shares were valued at $210,323 based on the value of the concurrent private placement and recorded in stock-based compensation on the consolidated statement of operations and comprehensive loss. As part of the consideration for the initial loan, the Company’s then-CTO and COO had transferred 2,098 common shares to the lenders. For contributing the common shares to the lenders, the Company intends to reimburse the former CTO and COO 2,134 common shares. As of September 30, 2022 these shares have not yet been issued.

The Company’s cash balances are maintained in two banks in Canada and a Canadian Bank subsidiary in the US. US Bank Deposits held in banks in Canada are insured up to $100,000 CAD per depositor for each bank by The Canada Deposit Insurance Corporation, a federal crown corporation. Actual balances at times may exceed these limits.

~~Interest Rate Risk~~

Interest rate risk is the risk that the value of a financial instrument might be adversely affected by a change in the interest rates. The Company has minimal exposure to fluctuations in the market interest rate. In seeking to minimize the risks from interest rate fluctuation the Company manages exposure through its normal operating and financing activities.

~~Liquidity Risk~~

Liquidity risk is the risk that the Company will incur difficulties meeting its financial obligations, as they are due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due. Accounts payable and accrued liabilities are due within the current operating period. The Company has funded its operations through the issuance of capital stock, convertible debt and loans in addition to grants and investment tax credits received from the Government of Canada.

~~15.~~●

~~SUBSEQUENT EVENTS~~In connection with the Company’s April 2016 acquisition of Interactive Motion Technologies, Inc. the Company acquired a license agreement dated September 8, 2009, with a former director as a co-licensor, pursuant to which the Company is obligated to pay the former director and co-licensor an aggregate royalty of 1% of sales based on patent #8,613,691 Dynamic Lower Limb Rehabilitation Robotic Apparatus and Method of Rehabilitating Human Gait). No sales have been made, as the technology under this patent has not been commercialized.

~~(a) Subsequent~~11.Recent Accounting Pronouncements

Accounting Standards Update 2020-06—Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity: simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted earnings per share (EPS) calculation in certain areas. The amendments in this Update are effective for public business entities that meet the definition of an SEC filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December ~~31, 2017,~~15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company ~~received an additional $606,400 from~~is currently evaluating the ~~lenders under~~impact the ~~new terms~~adoption of ASU 2020-06 will have on the ~~loans described in note 8(f).~~Company’s consolidated financial statements and related disclosures.

(b) Subsequent to December 31, 2017, the Company issued 3,640,000 options at $0.155 to employees of the Company. The options will vest over three years - 1/3 on January 24, 2019, 1/3 on January 24, 2020 and 1/3 on January 24, 2021.

~~(c) Subsequent to December 31, 2017, the Company received a short term loan of $500,000 due March 31, 2018 with interest of 1.5% per month from one of its directors.~~

Table of Contents~~Item 2~~

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~Forward-looking~~Forward-Looking Statements

This Quarterly Report on Form 10-Q contains statements ~~reflecting~~that involve substantial risks and uncertainties and that reflect assumptions, expectations, projections, intentions, or beliefs about future events that are intended as “forward-looking statements”. All statements included or incorporated by reference in this Quarterly Report on Form 10-Q, other than statements of historical fact, that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are ~~forward-looking~~forward- looking statements. These statements appear in ~~a number of~~several places, including, but not limited to in this “Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations.”~~Operations”. These statements represent our reasonable judgment of the future based on various factors and using numerous assumptions and are subject to known and unknown risks, uncertainties and other factors that could cause our actual results and financial position to differ materially from those contemplated by the statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts, and use words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “may,” “will”, “should,” “plan,” “project” and other words of similar meaning. ~~In particular, these~~These forward-looking statements include, ~~but are not limited to,~~among other things, statements ~~relating to the following:~~

about:

·●

~~Projected operating or financial results, including anticipated cash flows used in operations;~~Our ability to successfully raise capital for ongoing operations and other business purposes;

·●

~~Expectations regarding capital expenditures;~~our ability to identify and penetrate new markets for our products, technology and services;

·●

Our ~~beliefs~~ability to successfully identify, acquire, fund and ~~assumptions relating to~~operate specialized neuro-recovery physical therapy clinics as part of our ~~liquidity position, including~~ newly launches business initiative;

●

our estimates regarding expenses, future revenues, capital requirements and needs for additional funding;

●

our ability to obtain ~~additional financing.~~and maintain regulatory clearances;

Any or all of our forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and other factors including, among others:

·●

~~The loss of~~our sales and marketing capabilities and strategy in the United States and internationally;

●

our ability to retain key management personnel on whom we depend;

·●

~~Our ability to operate~~ our ~~business efficiently, manage capital expenditures and costs (including general and administrative expenses) and obtain financing when required; and~~

~~Our~~ expectations with respect to our acquisition ~~activity.~~activity;

●

our intellectual property portfolio; and

●

our ability to innovate, develop and commercialize new products, technologies and services.

~~In addition, there~~We may ~~be other factors that~~not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could ~~cause our actual results to be~~differ materially ~~different~~ from the ~~results referenced~~plans, intentions and expectations disclosed in the forward-looking statements ~~some of which are~~we make. We have included important factors in the cautionary statements included in this Quarterly Report ~~on Form 10-Q, including~~and in our other public filings with the Securities and Exchange Commission, or the SEC, that could cause actual results or events to differ materially from the forward-looking statements that we make.

You should read this ~~“Management’s~~Quarterly Report and the documents that we have filed as exhibits to this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect. It is routine for internal projections and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations are made as of the date of this Quarterly Report and may change prior to the end of each quarter or the year. While we may elect to update forward-looking statements at some point in the future, we do not undertake any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.

The following discussion should be read in conjunction with, and is qualified in its entirety by, the condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report and the consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations.” Many of these factors will be important~~Operations in ~~determining~~ our actual future results. Consequently, no forward-looking statement can be guaranteed. Our actual future results may vary materially from those expressed or implied in any forward-looking statements. All forward-looking statements contained in this Quarterly Report on Form 10-Q are qualified in their entirety by this cautionary statement. Forward-looking statements speak only as of the date they are made, and we disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q, except as otherwise required by applicable law.

~~This discussion and analysis should be read in conjunction with the accompanying condensed consolidated interim financial statements and related notes and the Company’s~~ Annual Report on

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Form 10-K ~~for the year ended March 31, 2017 as~~ filed with the ~~Securities~~SEC on June 9, 2022. Historical results and ~~Exchange Commission.~~

percentage relationships among any amounts in the financial statements are not necessarily indicative of trends in operating results for any future periods. The discussion and analysis of the financial condition and results of operations are based upon the financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. On an on-going basis we review our estimates and assumptions. The estimates were based on historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results are likely to differ from those estimates under different assumptions or conditions, but we do not believe such differences will materially affect our financial position or results of operations. Bionik, Inc.’s (IMT) operations are included since its acquisition on April 21, 2016 to December 31, 2017.States.

~~Nature of~~ Company

Overview

Bionik Laboratories Corp. is a robotics company ~~focused on~~ providing ~~rehabilitation and mobility~~neurological functional recovery solutions to improve the quality of life of millions of people with functional or mobility impairments by combining artificial intelligence, innovative technology and data solutions to help individuals regain mobility, enhance autonomy, and regain self-esteem.

The Company uses artificial intelligence and machine learning technologies to make rehabilitation methods and processes smarter and more intuitive to deliver greater recovery for patients with neurological or mobility impairments. These technologies allow large amounts of data to be collected and ~~mobility challenges from hospital~~processed in real-time, enabling appropriately challenging and individualized therapy during every treatment session. This is the foundation of the InMotion therapy. The Company’s rehabilitation therapy robots are built on an artificial intelligence platform, measuring the position, the speed, and the acceleration of the patients’ arm 200 times per second. The artificial intelligence platform is designed to ~~home. The~~adapt in real time to the patient’s needs and progress while providing quantifiable feedback of a patient’s progress and performance, in a way that the Company believes a trained clinician cannot.

Based on this foundational work, the Company has a portfolio of products and solutions focused on upper ~~and lower~~ extremity rehabilitation for stroke and other ~~mobility impair~~mobility-impaired individuals, including ~~three products~~InMotion robots currently in the ~~market~~market. Additionally, our software platform, InMotion Connect, which is providing the ability for hospital management to access remotely to management dashboards presenting the utilization data of each of their InMotion robotic devices and ~~four products~~their robotic devices productivity. Customized reporting capabilities in ~~varying stages~~the platform focus on facility and organization measurement dashboards to support effective decision making for clinicians and for hospital management.

On September 7, 2022, the Company acquired Tower Aquatic, described further below, which is the first step in our planned national strategic rollout of ~~development.~~rehabilitation clinics. The Company intends to rebrand the newly acquired physical therapy clinic as a specialized neuro-recovery center that will showcase and provide continued accessibility to Bionik’s technology and solutions by providing treatment to patients with stroke, brain and spinal cord injuries. The Company plans to acquire a network of neuro recovery centers which will enable us to provide more patients with access to Bionik’s InMotion ~~Systems -~~systems.

Currently, we receive revenues from the sale of our InMotion robots to our customers both in the U.S. and internationally and the operation of our newly acquired rehabilitation center. We also record revenues associated with our extended warranties that customers will purchase with the sale of our InMotion robots as well as from the sale of the InMotion ~~ARM, In Motion Wrist,~~Connect hardware and the subscription fees associated with the utilization of the InMotion ~~Hand – are designed~~Connect Pulse solution in the U.S.

We currently sell our products directly or can introduce customers to ~~provide intelligent, adaptive therapy~~a third-party finance company to lease at a monthly fee over the term or other fee structure for our products to hospitals, clinics, distribution companies and/or buying groups that supply those rehabilitation facilities.

Our strategic business focus is on the following key areas:

●

Continuing to expand our distribution channels and commercial footprint in the United States and internationally with an increase in sales and marketing initiatives;

●

Continue to improve our data strategy and enhance our InMotion Connect software with solutions that serve clinical rehabilitation providers and their patients;

●

Continue to seek out opportunities to enhance our product offering and potentially introduce new technologies; and

●

Continue to seek out and acquire rehabilitation centers to showcase the Company’s technology and solutions with the goal of building a network of Bionik branded neuro recovery centers which is the catalyst to our data gathering.

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We believe our business provides a platform for growth. We continue to make investments in ~~a manner~~our enhancements of our existing products and the future development of new products.

We currently hold an intellectual property portfolio that ~~has been clinically verified to maximize neuro-recovery. Bionik also has a lower-body exoskeleton under development - the ARKE - designed to allow paraplegics~~includes 5 issued U.S. patents and 3 U.S. pending patent applications, as well as other ~~wheelchair users the ability~~patents under development. We may file provisional patent applications from time to ~~rehabilitate through walking. Bionik is developing with a partner, a lower body product based on some~~time, and may, where deemed advisable pursue non-provisional patent applications within 12 months of the ~~ARKE technology which should allow certain individuals~~filing date of such provisional patent applications. Additionally, we hold exclusive licenses to three additional patents.

Business Developments

In December 2018, we entered into a Sale of Goods Agreement (the “Agreement”) with ~~limited mobility to walk better. This product is expected to be launched in the consumer home market.~~

The Company acquired its in-market FDA listed products on April 21, 2016, when it acquired all of the outstanding shares and, accordingly, all assets and liabilities of IMT, a Boston, Massachusetts-based global pioneer and leader in providing effective robotic products for neurorehabilitation,CHC Management Services, LLC, or Kindred, pursuant to ~~an Agreement and Plan~~which, among other things, Kindred agreed to purchase from us in a first phase a minimum of Merger, dated March 1, 2016, with IMT, Hermano Igo Krebs, and Bionik Mergerco Inc., a Massachusetts corporation and the Company’s wholly owned subsidiary. The merger agreement provided for the merger of Bionik Mergerco with and into IMT, with IMT surviving the merger as its wholly-owned subsidiary. As consideration, IMT shareholders received an aggregate of 23,650,000 shares21 of the Company’s ~~common stock.~~

~~Through the acquisition~~InMotion ARM Interactive Therapy Systems – a minimum of ~~IMT, Bionik has added the portfolio focused on upper~~one for each of Kindred’s existing and ~~lower extremity~~soon-to-open affiliated inpatient rehabilitation ~~of stroke patients. Our product~~hospitals and development pipeline now includes three FDA listed upper extremity clinical rehabilitation products; a lower body product InMotion AnkleBot is being developed for clinical trials, as well as other potential new development product candidates. In addition, our development team has begun improvements to our current products that are on the market to be more competitive. We plan to develop other biomechatronic solutions, including consumer-level medical assistive and rehabilitative products, through internal research and development and we maysimilar facilities described in the ~~future further augment our product portfolio through technology acquisition opportunities.~~

~~The~~Agreement, and in a second phase a minimum of one InMotion ARM ~~InMotion ARM/HAND, and InMotion Wrist have been characterized as Class II medical devices by~~Interactive Therapy System for each similar future facility of Kindred, during the U.S. Food and Drug Administration (“FDA”) and are listed with the FDA to market and sell in the United States. The products have also been sold in over 20 other countries. In addition to these in-market products, the InMotion AnkleBot is a development candidate, and we are also developing the InMotion Home, which is an upper extremity product that allows the patient to extend their therapy for as long as needed while rehabilitating at home. This is being developed on the same design platform as the InMotion clinical products. Allfour-year minimum term of the ~~above products are designed to provide intelligent, patient-adaptive therapy in a manner that has been clinically verified to maximize neuro- recovery.~~

~~Two hundred and fifty~~Agreement. As of ~~our clinical robotics products for stroke~~June 30, 2022, 30 InMotion robots have been sold in ~~over 20 countries, including~~total to Kindred.

During 2021, we implemented a machine learning prototype predictive model for the ~~United States.~~classification of the level of responsiveness of the InMotion therapy outcomes. This solution was developed with Bitstrapped, a Toronto-based data engineering firm specializing in machine learning infrastructure through their partnership with Google Cloud Platform. This prototype enables us to continually train the model on anonymized data collected in real-time with InMotion Connect in rehabilitation facilities and track improvements in performance. We continue to move this strategy forward by working with our team of data scientists to analyze the data we currently have and start making correlations with the intent to enhance the patient experience. This approach will continue to advance and develop as funds permit.

On July 15, 2021, we commenced a ~~growing body of clinical data for our products. In addition, our Massachusetts-base manufacturing facility is compliant with ISO-13485 and FDA regulations.~~

~~Bionik Laboratories Corp. was incorporated on January 8, 2010 in the State of Colorado. At the time~~refinancing of our ~~incorporation the name of our company was Strategic Dental Management Corp. On July 16, 2013, we changed our name from Strategic Dental Management Corp. to Drywave Technologies, Inc.~~existing indebtedness and changed our state of incorporation from Colorado to Delaware. Effective February 13, 2015, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Articles of Incorporation whereby, among other things, we changed our name to Bionik Laboratories Corp.

~~The Acquisition Transaction~~

On February 26, 2015, we entered into an Investment Agreement with Bionik Acquisition Inc. (the “Investment Agreement”), a company existing under the laws of Canada, and our wholly owned subsidiary (“Acquireco”), and Bionik Laboratories, Inc. (“Bionik Canada”), a company incorporated on March 24, 2011 under the Canada Business Corporations Act, whereby we acquired 100 Class 1 common shares of Bionik Canada representing 100% of the outstanding Class 1 common shares of Bionik Canada, taking into account the Exchangeable Share Transaction (as defined below) (the “Acquisition Transaction”). After giving effect to the Acquisition Transaction, we commenced operations through Bionik Canada.

Immediately prior to the closing of the Acquisition Transaction, we transferred all of the business, properties, assets, operations and goodwill of the Company (other than cash and cash equivalents), and liabilities as of March 6, 2013, to our then-existing wholly owned subsidiary, Strategic Dental Alliance, Inc., a Colorado corporation (“Strategic Dental Alliance”), and then transferred all of the capital stock of Strategic Dental Alliance to Brian E. Ray, a former officer and existing director (through March 20, 2015) and Jon Lundgreen, a former officer and director, pursuant to a Spin-Off Agreement (the “Spin-Off Agreement”). Also as of immediately prior to the closing of the Acquisition Transaction and the First Closing, we entered into an Assignment and Assumption Agreement with Tungsten 74 LLC, pursuant to which Tungsten 74 LLC assumed all of our remaining liabilities through the closing of the Acquisition Transaction (the “Assignment and Assumption Agreement”). Accordingly, as of the closing of the Acquisition Transaction and the First Closing, we had no assets or liabilities.

~~As a condition of the closing of the Acquisition Transaction, Bionik Canada created~~launched a new ~~class~~secured convertible promissory note offering of ~~exchangeable shares (the “Exchangeable Shares”), which were issued~~up to ~~the existing common shareholders of Bionik Canada in exchange for all of their outstanding common shares, all of which were cancelled (the “Exchangeable Share Transaction”).~~

Pursuant to the rights and privileges of the Exchangeable Shares, the holders of such Exchangeable Shares maintain the right to (i) receive dividends equal to, and paid concurrently with, dividends paid by the Company to the holders of Common Stock; (ii) vote, through the Trustee’s voting of the Special Voting Preferred Stock (as defined herein) on all matters that the holders of Common Stock are entitled to vote upon; and (iii) receive shares of Common Stock upon the liquidation or insolvency of the Company upon the redemption of such Exchangeable Shares by Acquireco.

~~As part of the Exchangeable Share Transaction, we entered into the following agreements, each dated February 26, 2015:~~

~~Voting and Exchange Trust Agreement (the “Trust Agreement”) with Bionik Canada and Computershare Trust Company of Canada (the “Trustee”); and~~

~~Support Agreement (the “Support Agreement”) with Acquireco and Bionik Canada.~~

$10.0 million. Pursuant to the terms of the ~~Trust Agreement, the parties created a trust~~offering, we were offering for ~~the benefit of its beneficiaries, which are the holders of the Exchangeable Shares, enabling the Trustee~~sale up to ~~exercise the voting rights of such holders until such time as they choose~~$10.0 million in convertible notes to ~~redeem their Exchangeable Shares for shares of the Common Stock of the Company,~~accredited investors and ~~allowing the Trustee to hold certain exchange rights in respect of the Exchangeable Shares.~~

non-U.S. persons. As a ~~condition of the Trust Agreement and prior to the execution thereof,~~result, we filed a Certificate of Designation with the Delaware Secretary of State, effective February 20, 2015, designating a class of our preferred shares as The Special Voting Preferred Stock (the “Special Voting Preferred Stock”) and issued ~~one share of the Special Voting Preferred Stock to the Trustee.~~

The Special Voting Preferred Stock entitles the Trustee to exercise the number of votes equal to the number of Exchangeable Shares outstanding on a one-for-one basis during the term of the Trust Agreement. The Trust Agreement further sets out the terms and conditions under which holders of the Exchangeable Shares are entitled to instruct the Trustee as to how to vote during any stockholder meetings of our company.

Pursuant to the terms of the Trust Agreement, we granted the Trustee the right to require our Company to purchase the Exchangeable Shares from any beneficiary upon the occurrence of certain events including in the event that we are bankrupt, insolvent or our business is wound up. The Trust Agreement continues to remain in force until the earliest of the following events: (i) no outstanding Exchangeable Shares are held by any beneficiary under the Trust Agreement; and (ii) each of Bionik Canada and us elects to terminate the Trust Agreement in writing and the termination is approved by the beneficiaries.

Pursuant to the terms of the Support Agreement, we agreed to certain covenants while the Exchangeable Shares were outstanding, including: (i) not to declare or pay any dividends on our common stock unless simultaneously declaring the equivalent dividend for the holders of the Exchangeable Shares, (ii) advising Bionik Canada in advance of any dividend declaration by our company, (iii) ensure that the record date for any dividend or other distribution declared on the shares of the Company is not less than seven days after the declaration date of such dividend or other distribution; (iv) taking all actions reasonably necessary to enable Bionik Canada to pay and otherwise perform its obligations with respect to the issued and outstanding Exchangeable Shares, (iv) to ensure that shares of the Company are delivered to holders of Exchangeable Shares upon exercise of certain redemption rights set out in the agreement and in the rights and restrictions of the Exchangeable Shares, and (v) reserving for issuance and keeping available from our authorized common stock such number of shares as may be equal to: (A) the number of Exchangeable Shares issued and outstanding from time to time; and (B) the number of Exchangeable Shares issuable upon the exercise of all rights to acquire Exchangeable Shares from time to time.

The Support Agreement also outlines certain restrictions on our ability to issue any dividends, rights, options or warrants to all or substantially all of our stockholders during the term of the agreement unless the economic equivalent is provided to the holders of Exchangeable Shares. The Support Agreement is governed by the laws of the Province of Ontario.

~~Between the closing of the Acquisition Transaction and June 30, 2015, we sold in a series of closing~~ an aggregate of ~~16,408,250 units (the “Units”)~~$8.3 million in principal of convertible notes of which an aggregate of $5.0 million was purchased for ~~gross proceeds of $13,126,600 in a private placement offering (the “Offering”). Each Unit consisted of one share of common stock, par value $0.001 per share (the “Common Stock”)~~cash and ~~a four year warrant (the “Warrant”) to purchase one share of Common Stock at an initial exercise price of $1.40 per share.~~

~~In addition,~~ the ~~placement agent in the Offering and its sub-agents were~~remainder was issued ~~10% warrant coverage for all Units sold in the Offering, exercisable at $0.80 per share for a period of 4 years.~~

~~Significant Accounting Policies and Estimates~~

The discussion and analysis of the financial condition and results of operations are based upon the condensed consolidated interim financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. On an on-going basis we review our estimates and assumptions. The estimates were based on historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results are likely to differ from those estimates under different assumptions or conditions, but we do not believe such differences will materially affect our financial position or results of operations.

~~Results of Operations~~

~~From the inception of Bionik Canada on March 24, 2011 through to December 31, 2017, we have generated a deficit of $29,554,125.~~

~~We expect to incur additional operating losses during this quarter and through March 31, 2018 and beyond, principally~~ as a result of consolidating existing debt. All of these convertible notes were converted on March 31, 2022, into 946,194 shares of our ~~continuing research~~common stock.

Between June 9, 2022, and ~~development, building~~June 10, 2022, we issued convertible promissory notes and borrowed an aggregate of $500,000 from an affiliate of Remi Gaston-Dreyfus, a director ($200,000); an affiliate of André-Jacques Auberton-Hervé, the ~~sales~~Chairman of the Board of Directors ($100,000); and ~~marketing team,~~an existing investor and shareholder ($200,000).

On September 7, 2022, the Company completed the acquisition of the assets of Dearman & Dearman PT LLC (which is doing business as Tower Aquatic & Sports Physical Therapy), a physical therapy practice, for a cash purchase price of $215,000. In relation to such acquisition, on September 2, 2022, we issued a convertible promissory note and borrowed an aggregate of $250,000 from an affiliate of Mr. Gaston-Dreyfus to finance the acquisition of such assets and pay related costs and expenses.

Covid-19 Pandemic

As a result of extended shutdowns of businesses around the world due to the COVID-19 pandemic, we have seen a slowdown in our business as most of the capital expenditure programs of the healthcare facilities that make up our customer base have been put on hold or has been significantly curtailed. This, along with our typically long sales ~~cycles~~cycle, has adversely affected our ability to generate revenues dating back to the beginning of the pandemic in 2020. As a result, we took steps to address the decrease in revenue, including the following:

●

On May 6, 2020, our U.S. subsidiary received funding in the original principal amount of $0.5 million pursuant to the federal Paycheck Protection Program under the Coronavirus Aid, Relief and Economic Security Act, which is administered by the U.S. Small Business Administration. The loan was funded by Bank of America, N.A. pursuant to the terms of a Promissory Note dated as of May 1, 2020. We have used the proceeds from this funding for eligible purposes, including to retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments. We applied for forgiveness of this debt with the SBA and as of May 23, 2021, have received forgiveness of the loan and all interest.

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●

Our Canada operations secured $84,000 of government financial relief under the Canadian Emergency Wage Subsidy (CEWS), which is available monthly until June 2021, which was used to return the salaries of many of our Canadian non-management employees back to their full amount.

●

The Company has reduced working on its research and development projects to focus on the further enhancements of InMotion Connect^TM, to provide the ability for hospital management to access remotely to management dashboards presenting the utilization data of each of their InMotion robotic devices and their InMotion robotic devices productivity, as well as the artificial intelligence and machine learning analysis based on the data collected by InMotion Connect.

The global outbreak of the COVID-19 coronavirus continues to evolve. The extent to which COVID-19 may continue to impact our business will depend on future developments, which are highly uncertain and ~~general~~cannot be predicted with confidence, such as the duration of the pandemic, the emergence of new variants, travel restrictions and ~~administrative costs predominantly associated with being a public company.~~social distancing in the U.S. and other countries, business closures or business disruptions and the effectiveness of actions taken in the U.S. and other countries to contain and treat the disease.

Results of Operations

~~Our~~Three Months Ended September 30, 2022 and 2021

The following table contains selected statement of operations data, which serve as the basis of the discussion of our results of operations ~~are presented~~ for the three ~~and nine~~ months ended ~~December 31, 2017 with comparatives~~September 30, 2022 and 2021, respectively:


	Three Months Ended
	September 30,
	2022				2021
			As a % of				As a % of
			Total				Total		$		%
	Amount		Revenues		Amount		Revenues		Change		Change
Revenues, net	$	486,205	100	%	$	227,905	100	%	$	258,300	113	%
Cost of revenues		188,647	39			80,922	36			107,725	133
Gross profit		297,558	61			146,983	64			150,575	102
Operating expenses
Sales and marketing		496,350	102			438,957	193			57,393	13
Research and development		225,878	46			85,085	37			140,793	165
General and administrative		686,542	141			664,523	292			22,019	3
Total operating expenses		1,408,770	290			1,188,565	522			220,205	19
Loss from operations		(1,111,212)	(229)			(1,041,582)	(457)			(69,630)	(7)
Interest expense, net		17,417	4			225,184	99			(207,767)	(92)
Other expense, net		759	0			1,223	1			(464)	(38)
Total other expense (income)		18,176	4			226,407	99			(208,231)	(92)
Net loss	$	(1,129,388)	(232)	%	$	(1,267,989)	(556)	%	$	138,601	11	%

Revenues

Total revenues for the three ~~and nine~~ months ended ~~December 31, 2016.~~

~~Sales~~

~~The Company recorded revenue~~September 30, 2022 increased by $0.3 million, or 113%, to $0.5 million, as compared to revenues of ~~$260,960 and $570,327~~$0.2 million for the three ~~and nine~~ months ended ~~December 31, 2017 compared~~September 30, 2021.


	Three Months Ended
	September 30,
					$		%
	2022		2021		Change		Change
Product	$	359,850	$	129,676	$	230,174	177	%
Subscriptions		63,750		58,000		5,750	10
Service, extended warranty & other		62,605		40,229		22,376	55
Total revenues	$	486,205	$	227,905	$	258,300	113	%

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The change in total revenues was attributable to ~~$372,426 and $553,900 for~~ the three and nine months ended December 31, 2016. The increase in the revenues results from our growing sales team starting to deliver on a significant pipeline of opportunities, which we hope will continue in the future.following factors:

●

Product revenue increased by $0.2 million due to an increase in the number of units shipped. In the 2022 period, three units were shipped as direct sales as compared to two sales in the 2021 period, both of which were through our distributor model.

●

Subscription revenue grew by $6,000, or 10%, as we had more subscriptions in the 2022 period as compared to the 2021 period.

●

Our service, extended warranty and other revenues increased primarily due to more units under warranty and revenue from our clinic in the current period.

Cost of ~~sales~~Revenues


	Three Months Ended
	September 30,
							$		%
	2022			2021			Change		Change
Cost of revenues	$	188,647		$	80,922		$	107,725	133	%
Cost of revenues (as a percentage of total revenues)		39	%		36	%

~~The Company recorded~~Total cost of ~~sales of $88,357 and $177,482~~revenues increased $0.1 million, or 133%, to $0.2 million for the ~~three and nine months ended December 31, 2017,~~2022 period, as compared to ~~$334,786 and $405,680~~$0.1 million for the ~~three and nine months ended December 31, 2016.~~2021 period. The ~~decrease in cost of good sold results from lower unit sales as well as a $43,009 inventory write-off~~increase is primarily associated with selling more units in the 2022 period ~~ended December 31, 2016.~~

~~Operating Expenses~~

~~Total operating expenses for the three and nine months ended December 31, 2017 was $2,347,916 and $8,068,811~~as compared to ~~$1,609,954~~the 2021 period.

Sales and ~~$5,450,290 for the three and nine months ended December 31, 2016, as further detailed below.~~Marketing


	Three Months Ended
	September 30,
							$		%
	2022			2021			Change		Change
Sales and marketing	$	496,350		$	438,957		$	57,393	13	%
Sales and marketing (as a percentage of total revenues)		102	%		193	%

Sales and marketing expenses increased $0.1 million, or 13%, to $0.5 million for the ~~three and nine months ended December 31, 2017 was $432,260 and $1,313,077~~2022 period, as compared to $0.4 million for the ~~three and nine months ended December 31, 2016 of $377,046 and $646,509.~~2021 period. The ~~sales~~increase was due to higher consulting, personnel related expenses and marketing ~~team was expanded starting in August 2016,~~expenses related to our commercial initiatives to grow our sales pipeline.

Research and January through February 2017 with the addition of five sales and marketing employees, including a Chief Commercialization Officer and marketing and sales support to support the launch of the new InMotion V2 product in the fall of 2017. Prior years expenses included two sales employees and their expenses since the acquisition of IMT on April 21, 2016.Development


	Three Months Ended
	September 30,
							$		%
	2022			2021			Change		Change
Research and development	$	225,878		$	85,085		$	140,793	165	%
Research and development (as a percentage of total revenues)		46	%		37	%

Research and development expenses increased $0.1 million, or 165%, to $0.2 million for the 2022 period, as compared to $0.1 million for the 2021 period. The increase was due to an increase in consulting expenses and personnel expenses related to our research and development initiatives, regulatory and quality initiatives.

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General and Administrative


	Three Months Ended
	September 30,
							$		%
	2022			2021			Change		Change
General and administrative	$	686,542		$	664,523		$	22,019	3	%
General and administrative (as a percentage of total revenues)		141	%		292	%

General and administrative expenses increased $22,000, or 3%, to $0.69 million for the 2022 period, as compared to $0.67 million for the 2021 period. In the 2022 period our general and administrative costs remain in line with the 2021 period.

Interest Expense, net


	Three Months Ended
	September 30,
							$		%
	2022			2021			Change		Change
Interest expense, net	$	17,417		$	225,184		$	(207,767)	(92)	%
Interest expense, net (as a percentage of total revenues)		4	%		99	%

The interest expense for the three ~~and nine months ended December 31, 2017 were $546,350 and $1,947,659~~month period ending September 30, 2022 decreased by $0.2 million due to less debt outstanding during the 2022 period than in the 2021 period.

Other expense (income), net


	Three Months Ended
	September 30,
							$		%
	2022			2021			Change		Change
Other expense, net	$	759		$	1,223		$	(464)	(38)	%
Other expense, net (as a percentage of total revenues)		0	%		1	%

Other expense decreased by $500, or 38%, for the 2022 period as compared to the ~~three~~2021 period. Other expense consists primarily of the foreign currency impact of changes in the exchange rate between the Canadian dollar and ~~nine~~the US dollar. In the 2022 period our other expenses remain in line with the 2021 period.

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Six Months Ended September 30, 2022 and 2021

The following table contains selected statement of operations data, which serve as the basis of the discussion of our results of operations for the six months ended ~~December 31, 2016~~September 30, 2022 and 2021, respectively:


	Six Months Ended
	September 30,
	2022				2021
			As a % of				As a % of
			Total				Total		$		%
	Amount		Revenues			Amount	Revenues		Change		Change
Revenues, net	$	729,034	100	%	$	899,188	100	%	$	(170,154)	(19)	%
Cost of revenues		263,828	36			211,429	24			52,399	25
Gross profit		465,206	64			687,759	76			(222,553)	(32)
Operating expenses
Sales and marketing		1,058,460	145			768,430	85			290,030	38
Research and development		603,983	83			266,052	30			337,931	127
General and administrative		1,287,275	177			1,496,744	166			(209,469)	(14)
Total operating expenses		2,949,718	405			2,531,226	282			418,492	17
Loss from operations		(2,484,512)	(341)			(1,843,467)	(205)			(641,045)	(35)
Interest expense, net		22,240	3			327,480	36			(305,240)	(93)
Other expense (income), net		6,769	1			(452,046)	(50)			485,815	101
Total other expense (income)		22,009	4			(124,566)	(14)			153,575	123
Net loss	$	(2,513,521)	(345)	%	$	(1,718,901)	(191)	%	$	(794,620)	(46)	%

Revenues

Total revenues for the six months ended September 30, 2022 decreased by $0.2 million, or 19%, to $0.7 million, as compared to revenues of ~~$571,671 and $1,803,234.~~$0.9 million for the six months ended September 30, 2021.


	Six Months Ended
	September 30,
					$		%
	2022		2021		Change		Change
Product	$	489,525	$	692,814	$	(203,289)	(29)	%
Subscriptions		126,000		112,750		13,250	12
Service, extended warranty & other		113,509		93,624		19,885	21
Total revenues	$	729,034	$	899,188	$	(170,154)	(19)	%

The change in total revenues was attributable to a number of factors:

●

Product revenue decreased by $0.2 million due to 5 units being shipped in the six months ended September 30, 2022 as compared to 7 units in the six month period ended September 30, 2021.

●

Subscription revenue grew by $13,000, or 12%, as we had more subscriptions in the 2022 period as compared to the 2021 period.

●

Our service, extended warranty and other revenues increased due primarily to more units under warranty and revenue from our clinic in the current period.

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Cost of Revenues


	Six Months Ended
	September 30,
							$		%
	2022			2021			Change		Change
Cost of revenues	$	263,828		$	211,429		$	52,399	25	%
Cost of revenues (as a percentage of total revenues)		36	%		24	%

Total cost of revenues increased $0.1 million, or 25%, to $0.3 million for the 2022 period, as compared to $0.2 million for the 2021 period. The increase was primarily associated with selling certain demonstration inventory in the 2021 period which has a lower cost associated with it.

Sales and Marketing


	Six Months Ended
	September 30,
							$		%
	2022			2021			Change		Change
Sales and marketing	$	1,058,460		$	768,430		$	290,030	38	%
Sales and marketing (as a percentage of total revenues)		145	%		85	%

Sales and marketing expenses increased $0.3 million, or 38%, to $1.1 million for the ~~nine months ended December 31, 2017~~2022 period, as compared to ~~December 31, 2016, primarily relates~~$0.8 million for the 2021 period. The increase was due to ~~additional~~higher consulting, personnel related expenses and marketing expenses related to our commercial initiatives to grow our sales pipeline.

Research and Development


	Six Months Ended
	September 30,
							$		%
	2022			2021			Change		Change
Research and development	$	603,983		$	266,052		$	337,931	127	%
Research and development (as a percentage of total revenues)		83	%		30	%

Research and development expenses increased $0.3 million, or 127%, to $0.6 million for the 2022 period, as compared to $0.3 million for the 2021 period. The increase was due to an increase in consulting expenses and ~~prototyping~~personnel expenses related to our research and development, regulatory and quality initiatives.

General and Administrative


	Six Months Ended
	September 30,
							$		%
	2022			2021			Change		Change
General and administrative	$	1,287,275		$	1,496,744		$	(209,469)	(14)	%
General and administrative (as a percentage of total revenues)		177	%		166	%

General and administrative expenses decreased $0.2 million, or 14%, to $1.3 million for the 2022 period, as compared to $1.5 million for the 2021 period. Corporate overhead costs ~~for~~decreased by $0.2 million as we reduced our ~~new product development projects.~~

~~For the three and nine months ended December 31, 2017, we incurred~~ general and administrative ~~expenses~~costs to align to the needs of ~~$783,784 and $2,916,917, compared to general and administrative expenses~~the business.

Table of ~~$409,669 and $2,291,136~~Contents

Interest Expense, net


	Six Months Ended
	September 30,
							$		%
	2022			2021			Change		Change
Interest expense, net	$	22,240		$	327,480		$	(305,240)	(93)	%
Interest expense, net (as a percentage of total revenues)		3	%		36	%

The interest expense for the ~~three and nine months ended December 31, 2016. The increase in these expenses is primarily~~six month period ending September 30, 2022 decreased by $0.3 million due to ~~public company related expenses,~~less debt outstanding during the ~~addition of a new employee and a consultant, increased compensation to our new CEO who started September 1, 2017 as well as~~2022 period than in the ~~amounts owing to the former CEO of the Company. The expenses~~2021 period.

Other (income), net


	Six Months Ended
	September 30,
							$		%
	2022			2021			Change		Change
Other expense (income), net	$	6,769		$	(452,046)		$	458,815	(101)	%
Other expense (income), net (as a percentage of total revenues)		1	%		(50)	%

Other expense (income) for the ~~three and nine month~~six-month period ended December 31, 2016 include the expenses related to the IMT acquisition in 2016. In addition, the previous year’s costs included cost of our former Chief Operating Officer; this position was reallocated to research and development in the current fiscal year.

For the three and nine months ended December 31, 2017, the Company recorded $271,001 and $1,284,257 in share-based compensation expense compared to $227,540 and $651,630 for the three and nine months ended December 31, 2016,ending September 30, 2022 decreased by approximately $0.5 million due to the ~~increase in options issued in 2017 over 2016.~~

For the three and nine months ended December 31, 2017, the Company recorded $216,302 and $290,375 as warrant accretion expense compared to $Nil for the three and nine months ended December 31, 2016 due to the amortizationextinguishment of the ~~fair value of warrants related to~~PPP loan associated with the ~~convertible notes.~~forgiveness from the federal government.

~~Other Expenses~~

For the three and nine months ended December 31, 2017, we incurred interest expenses of $416,990 and $657,350 compared to interest expenses of $13,808 and $23,839 for the three and nine months ended December 31, 2016. The increase in interest expense relates to the Company having more high interest bearing debt during the three and nine month period ended December 31, 2017 when compared to December 31, 2016.

Some of the Company’s outstanding warrants include price protection provisions that allow for a reduction in the exercise price of the warrants 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 exercise price of the outstanding warrants, subject to certain important exceptions. Simultaneously, due to an anti-dilution clause, the number of shares of common stock that may be purchased upon exercise of each of these outstanding warrants shall be increased based on a pre-defined formula.

~~The adaptation of the FASB issued, ASU No. 2017-11,~~Earnings Per Share (Topic 260) Distinguishing Liabilities From Equity (Topic 480) Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments With Down Round Features II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instrument of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests With a Scope Exception, allows a financial instrument with a down-round feature to no longer automatically be classified as a liability solely based on the existence of the down-round provision. The update means the instrument does not have to be accounted for as a derivative and be subject to an updated fair value measurement each reporting period. The Company has adopted ASU No.2017-11 in the quarter ended December 31, 2017.

~~Other Income~~

For the three and nine months ended December 31, 2017, we had other expense of $59 and other income of $649 compared to other income of $4,363 and $410,877 for the three and nine months ended December 31,2016. Prior year higher amounts are related to refundable scientific tax credits that the Company is no longer eligible for.

~~Comprehensive Loss~~

Comprehensive loss for the three and nine months ended December 31, 2017 amounted to $(2,580,759) and $(8,436,636) resulting in a loss per share of $(0.03) and $(0.08), compared to a loss of ($1,581,759) and ($4,915,032) for the three and nine months ended December 31, 2016, as adjusted resulting in a loss per share of $(0.02) and loss per share of $(0.05).

Liquidity and Capital Resources

We have funded operations through the issuance of capital stock, loans, grants, and investment tax credits and forgivable loans received from the Government of Canada. The Company raised in its 2015 private offering net proceeds of $11,341,397. Since 2015, the Company also obtained funds through additional government tax credits, incurring new convertible indebtedness totaling $6,699,975, short term loan of $400,000U.S. and ~~raising $1,125,038 in June 2017 from its warrant solicitation.~~Canada governments. We require cash to pay our operating expenses, including research and development activities, fund working capital needs and make capital expenditures. At ~~December 31, 2017, the Company had~~September 30, 2022, our cash and cash equivalents ~~of $998,661.~~

were $0.4 million. Our cash and cash equivalents are predominantly cash in operating accounts.

Based on our current burn rate, we need to raise additional capital ~~in the short term~~ to fund operations, hire necessary employees we lost as a result of COVID-19 related furloughs and other terminations, and meet expected future liquidity ~~requirements, or we will be required to curtail or terminate some or all of our product lines or our operations.~~requirements. We are ~~seeking~~continuously in discussions to raise ~~up to $14 million through~~additional capital, which may include or be a combination of convertible ~~notes offering,~~or term loans and equity which, if successful, will enable us to continue operations based on our current burn rate, for the next 12 ~~months. Further all of our convertible notes will automatically convert into equity if an upon the successful closing of at least $7 million in such offering. We~~months; however, we cannot give any assurance at this time that we will successfully raise all or some of such capital or any other capital. ~~The Company expects a combination of the foregoing and any other successful financings, if any,~~

There can be no assurance that necessary debt or equity financing will be available, or will be available on terms acceptable to us, in which case we may be unable to meet ~~the Company’s anticipated cash requirements for the next 12 months; however, these~~our obligations or fully implement our business plan, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated ~~interim~~ financial statements do not include any adjustments to reflect the possible future effects on recoverability and ~~reclassification~~classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

Additionally, we will need additional funds to respond to business opportunities including potential acquisitions of complementary technologies, additional purchases of physical therapy clinics to expand our base of specialized neuro-recovery centers, protect our intellectual property, develop new lines of business, and enhance our operating infrastructure. While we may need to seek additional funding for any such purposes, we may not be able to obtain financing on acceptable terms, or at all. In addition, the terms of our financings may be dilutive to, or otherwise adversely affect, holders of our common stock. We will also seek additional funds through arrangements with collaborators or other third parties. However, the recent COVID-19 pandemic has presented unprecedented challenges to businesses and the investing landscape around the world. Therefore, there can be no assurance that our plans will be successful. We may not be able to negotiate any such arrangements on acceptable terms, if at all. If we are unable to obtain additional funding on a timely basis, we may be required to curtail or terminate some or all of our product lines, services, business initiatives or our operations.

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Cash Flows

Net ~~Cash Used in Operating Activities~~

~~During the nine months ended December 31, 2017, we~~cash used ~~cash~~ in operating activities ~~of $(5,215,697) compared to $(5,540,946)~~was $2.1 million for the ~~nine~~six months ended ~~December 31, 2016. The decreased use of~~September 30, 2022 and resulted primarily from $2.5 million in net loss offset by $0.2 million in depreciation, interest expense and stock-based compensation expense for the period. Net changes in working capital items increased cash ~~is mainly attributable~~from operating activities by approximately $0.2 million, primarily related to ~~decreased~~an increase in accounts receivable which was offset by an increase in accrued expenses and a decrease in prepaid expenses and ~~increased accounts payable liability in the nine months ended December 31, 2017 over the nine months ended December 31, 2016.~~

other assets. Net ~~Cash Used in Investing Activities~~

~~During the nine months ended December 31, 2017, net~~ cash used in investing activities for the 2022 period was ~~$(17,182) (December 31, 2016 - ($9,827))~~$0.2 million related to ~~equipment purchases.~~

~~Net Cash Provided by Financing Activities~~

the Tower Aquatic clinic purchase. Net cash provided by financing activities during the three months ended June 30, 2022 was ~~$5,687,890~~$0.8 million, related to proceeds received from the convertible promissory notes.

Net cash used in operating activities was $1.4 million for the ~~nine~~six months ended ~~December 31, 2017 compared~~September 30, 2021, and resulted primarily from $1.7 million in net loss and $0.5 million relating to the extinguishment of the PPP loan offset by approximately $0.5 million in depreciation and amortization, interest expense and stock-based compensation expense for the period. Net changes in working capital items increased cash from operating activities by approximately $0.3 million, primarily related to a decrease in accounts receivable due to cash collection efforts. There was no net cash used in or provided by investing activities for the 2021 period. Net cash provided by financing activities ~~of $749,968 for~~during the ~~nine~~six months ended ~~December 31, 2016. The increase in the nine months ended December 31, 2017 is due~~September 30, 2021 was $5.5 million, related to ~~receipt of an additional $4,699,975 as convertible loans, $400,000 as a short term loan provided by a director of the Company and repaid in January 2018 and $1,125,038~~proceeds received from the ~~Company’s offer~~2021 notes and term loan.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations set forth above are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to ~~amend~~make estimates and ~~exercise its outstanding warrants which closed~~judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate our estimates and judgments, including those described in ~~June 2017, which resulted in 5,001,172 common shares being issued. The Company also paid back $200,000~~our Annual Report on Form 10-K for the year ended March 31, 2022. We base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances. These estimates and assumptions form the basis for making judgments about the carrying values of ~~principal~~assets and ~~$49,505~~liabilities, and the reported amounts of ~~interest~~revenues and expenses, that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Recent Accounting Pronouncements

See Note 11 to ~~a promissory note holder and $208,359 of principal and $79,259 of interest to its demand loan holders.~~

~~Recently Issued Accounting Pronouncements~~

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The accounting standard is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017. Early adoption is not permitted. The impact on theour condensed consolidated interim financial statements ~~of adopting ASU 2014-09 will be assessed by management.~~

In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes,” which requires that deferred tax liabilities and assets be classified on our Consolidated Balance Sheets as noncurrent based on an analysis of each taxpaying component within a jurisdiction. ASU No. 2015-17 is effectiveincluded in this Quarterly Report for the fiscal year commencing after December 15, 2017. The Company does not anticipate that the adoption of ASU No. 2015-17 will have a material effect on the condensed consolidated interim financial position or the consolidated results of operations.

In January 2016, the FASB issued ASU No. 2016-01 Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The updates makes several modifications to Subtopic 825-10, including the elimination of the available-for-sale classification of equity investments, and it requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in operations. The update is effective for fiscal years beginning after December 2017. The Company is still assessing the impact that the adoption of AS 2016-01 will have on the condensed consolidated interim financial position and the consolidated results of operations.

In February 2016, the FASB issued ASU 2016-02, Leases. This update requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The new guidance will also require additional disclosure about the amount, timing and uncertainty of cash flows arising from leases. The provisions of this update are effective for annual and interim periods beginning after December 15, 2018. The Company is still assessing the impact that the adoption of ASU 2016-02 will have on the consolidated financial position and the consolidated results of operations.

In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting”. Several aspects of the accounting for share-based payment award transaction are simplified, including (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The Company has adopted this policy during the period and there was no impact on the condensed consolidated interim financial statements.

~~Management does not believe that any other recently issued, but not yet effective~~information regarding recent accounting pronouncements ~~if adopted, would have a material effect on the accompanying condensed consolidated interim financial statements~~that are of significance or potential significance to us.

~~Off Balance Sheet Arrangements~~

~~We have no off-balance sheet transactions.~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable for smaller reporting companies.

Table of Contents

Item 4. Controls and ~~Procedures~~Procedures.

~~During the nine months ended December 31, 2017, there were no changes in our internal controls over financial reporting (as defined in Rule 13a- 15(f)~~Disclosure Controls and ~~15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.~~

Procedures

We maintain “disclosure controls and procedures” as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

As of the end of the period covered by this Quarterly Report, we carried out an evaluation, under the supervision and with the participation of our ~~chief executive officer~~Chief Executive Officer and ~~chief financial officer,~~our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(b) and 15d-15(b). Based upon this evaluation, our ~~chief executive officer~~Chief Executive Officer and ~~chief financial officer~~Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this Quarterly Report were ~~ineffective due~~effective.

Changes in Internal Control over Financial Reporting

During the three months ended September 30, 2022, there were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to ~~a lack~~materially affect, our internal control over financial reporting.

Table of ~~segregation of duties and as a result of a transition of duties with new management starting as of September 1, 2017.~~Contents

~~PART II -~~

Part II- OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 1A. Risk Factors

Not applicable for smaller reporting companies

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On July 14, 2022, the Company issued 1,048 shares of its common stock upon conversion of a like number of its indirect subsidiary’s Exchangeable Shares. Such shares were issued in a private transaction in reliance upon an exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, as a transaction not involving any public offering.

~~All unregistered issuances of equity securities during the period covered by this quarterly report have been previously disclosed on our Current Reports on Form 8-K.~~

Item 3. Defaults Upon Senior Securities.

None

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

None

Table of Contents

Item 6. Exhibits

The following exhibits, which are numbered in accordance with Item 601 of Regulation S-K, are filed herewith or, as noted, incorporated by reference herein.

Exhibit Number			Description of Exhibits

		E~~xhibit 10.1 –~~ 3.1		Amended and Restated Certificate of Incorporation dated February 10, 2015 (incorporated by reference to the Company’s Current Report on Form 8-K, filed on March 4, 2015)
		3.2		Amended and Restated By-Laws (incorporated by reference to the Company’s Current Report on Form 8-K filed on March 4, 2015)
		3.3		Certificate of Amendment of the Certificate of Incorporation, dated November 8, 2017 (incorporated by reference to the Company’s Current Report on Form 8-K, filed on November 8, 2017).
		3.4		Certificate of Amendment of the Certificate of Incorporation, dated June 11, 2018 (incorporated by reference to the Company’s Current Report on Form 8-K filed on June 13, 2018).
		3.5		Certificate of Amendment of the Certificate of Incorporation, dated October 26, 2018 (incorporated by reference to the Company’s Current Report on Form 8-K filed on October 29, 2018).
		3.6		Certificate of Amendment to Amended and Restated Certificate Of Incorporation, as amended, dated October 6, 2020 (incorporated by reference to the Company’s Current Report on Form 8-K, filed on October 8, 2020)
		4.1		Certificate of Designation of Preferences, Rights and Limitations of Special Voting Preferred Stock of Bionik Laboratories Corp. (incorporated by reference to the Company’s Current Report on Form 8-K, filed on March 4, 2015)
		4.2		Schedule A to Articles of Amendment of Bionik Laboratories Inc., relating to the Exchangeable Shares of Bionik Laboratories Inc. (incorporated by reference to the Company’s Current Report on Form 8-K, filed on March 4, 2015)
		4.3		Form of ~~Subscription~~Warrant (incorporated by reference to the Company’s Annual Report on Form 10-K for the Fiscal Year ended March 31, 2017, filed with the Commission on June 29, 2017)
		E~~xhibit 10.2 –~~ 4.4		Form of Common Stock Purchase Warrant (incorporated by reference to the Company’s Current Report on Form 8-K, filed on September 20, 2017)
		4.5		Allonge to Common Stock Purchase Warrants (incorporated by reference to the Company’s Current Report on Form 8-K, filed on April 3, 2018)
		4.6		Description of the Company’s Securities (incorporated by reference to the Company’s Annual Report on Form 10-K for the Fiscal Year ended March 31, 2020, filed with the Commission on June 29, 2020)
	10.1			Business Asset Purchase Agreement dated August 30, 2022 (incorporated by reference from the Company’s Current Report on Form 8-K filed with the SEC on September 7, 2022)
	10.2			Secured Convertible Promissory Note dated September 2, 2022 (incorporated by reference from the Company’s Current Report on Form 8-K filed with the SEC on September 7, 2022)
	~~Exhibit~~ 10.3			Collateral Pledge Agreement dated September 2, 2022 (incorporated by reference from the Company’s Current Report on Form 8-K filed with the SEC on September 7, 2022)
	10.4			Severance Agreement and Release of All Claims with Loren Wass (incorporated by reference from the Company’s Current Report on Form 8-K filed with the SEC on July 21, 2022)
	10.5			Amendment Agreement with Rich Russo Jr. (incorporated by reference from the Company’s Current Report on Form 8-K filed with the SEC on October 13, 2022)
	10.6			Employment Agreement with Dan Gonsalves (incorporated by reference from the Company’s Current Report on Form 8-K filed with the SEC on October 13, 2022)
	31.1 ~~- Certification~~			Certificate of Chief Executive Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Table of Contents

	~~Exhibit~~ 31.2 ~~- Certification~~			Certificate of Chief Financial Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	~~Exhibit~~ 32.1 -			Certification of Chief Executive Officer as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	~~Exhibit~~ 32.2 -			Certification of Chief Financial Officer as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	~~Exhibit~~ 101.INS -			Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
	~~Exhibit~~ 101.SCH -			Inline XBRL Taxonomy Extension Schema Document
	~~Exhibit~~ 101.CAL -			Inline XBRL Taxonomy Extension Calculation Linkbase Document
	~~Exhibit~~ 101.DEF -			Inline XBRL Taxonomy Extension Definition Linkbase Document
	~~Exhibit~~ 101.LAB -			Inline XBRL Taxonomy Extension Label Linkbase Document
	~~Exhibit~~ 101.PRE -			Inline XBRL Taxonomy Extension Presentation Linkbase Document
	104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this ~~Report~~report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 9, 2022

~~Dated: February 13, 2018~~	~~BIONIK LABORATORIES CORP.~~ Bionik Laboratories Corp.

	By:	/s/ ~~Eric Dusseux~~Rich Russo Jr.
		~~Name: Eric Dusseux~~ Rich Russo Jr.
		Chief Executive Officer ~~(Principal~~
		(Principal Executive Officer)

	~~By:~~	~~/s/ Leslie Markow~~
	By:	~~Name: Leslie Markow~~ /s/ Dan Gonsalves
		Dan Gonsalves
		Executive Vice President & Chief Financial Officer
		(Principal Financial and Accounting Officer)

Delaware		27-1340346
(State or ~~Other Jurisdiction~~other jurisdiction of ~~Incorporation~~ incorporation or ~~Organization)~~organization)		(I.R.S. Employer Identification ~~Number~~No.)

Title of each class	Trading Symbol(s)	Name of Exchange on which registered
N/A
~~483 Bay Street, N105~~ N/A
~~Toronto, Ontario~~	~~M5G 2C9~~
~~(Address of Principal Executive Offices)~~	~~(Zip Code)~~ N/A

Large accelerated filer	¨	~~Non-accelerated~~ ☐	Accelerated filer	¨ ☐
~~Accelerated~~ Non-accelerated filer	¨	☒	Smaller reporting company	x ☒
			Emerging ~~growth company~~Growth Company	¨ ☐

	As at December 31, 2017 (Unaudited) $			As at March 31, 2017 (Note 2) $
Assets
Current
Cash and cash equivalents		998,661			543,650
Accounts receivable, net of allowance for doubtful accounts of $16,349 (March 31, 2017 - $10,000)		306,572			383,903
Prepaid expenses and other receivables (Note 5)		145,044			228,047
Inventories (Note 6)		302,414			228,249
Due from related parties (Note 9(a))		19,374			18,731
Total Current Assets		1,772,065			1,402,580
Equipment (Note 7)		174,997			227,421
Technology and other assets (Note 4)		4,783,704			5,030,624
Goodwill (Note 4)		22,308,275			22,308,275
Total Assets		29,039,041			28,968,900
Liabilities and Shareholders’ Deficiency
Current
Accounts Payable (Notes 9(b))		794,875			784,771
Accrued liabilities (Notes 3, 8 and 9(b))		1,868,225			1,228,657
Customer advances		800			121,562
Demand Notes Payable (Note 8(a))		50,000			330,600
Promissory Notes payable (Note 8(b))		-			236,548
Convertible Loans Payable (Note 8(d), (e) and (f))		7,079,852			2,017,488
Short term loan (Note 8(c))		400,000			-
Deferred revenue		113,801			98,624
Total Current Liabilities		10,307,553			4,818,250
Shareholders’ Equity
Preferred Stock, par value $0.001; Authorized 10,000,000 Special Voting Preferred Stock, par value $0.001; Authorized; Issued and outstanding - 1 (March 31, 2017 – 1)		-			-
Common Shares, par value $0.001; Authorized - 250,000,000 (March 31, 2017 – 150,000,000); Issued and outstanding 55,885,279 and 45,909,336 Exchangeable Shares (March 31, 2017 – 48,885,107 and 47,909,336 Exchangeable Shares) (Note 10)		101,794			96,794
Additional paid in capital		48,081,670			45,088,171
Shares to be issued (Note 10)		60,000			-
Deficit		(29,554,125	)		(21,076,464	)
Accumulated other comprehensive income		42,149			42,149
Total Shareholders’ Equity		18,731,488			24,150,650
Total Liabilities and Shareholders’ Equity		29,039,041			28,968,900

	Three months ended Dec. 31, 2017			Nine months ended Dec. 31, 2017			Three months ended Dec. 31, 2016			Nine months ended Dec. 31, 2016
	$			$			$			$
							(Note 2)			(Note 2)
Sales		260,960			570,327			372,426			553,900
Cost of Sales		88,357			177,482			334,786			405,680
Gross Margin		172,603			392,845			37,640			148,220

Operating expenses
Sales and marketing		432,260			1,313,077			377,046			646,509
Research and development		546,350			1,947,659			571,671			1,803,234
General and administrative		783,784			2,916,917			409,669			2,291,136
Share compensation expense (Note 11)		271,001			1,284,257			227,540			651,630
Convertible debt accretion (Note 8)		216,302			290,375			-			-
Amortization (Note 4)		76,985			246,920			-			-
Depreciation (Note 7)		21,234			69,606			24,028			57,781
Total operating expenses		2,347,916			8,068,811			1,609,954			5,450,290

Other expenses (income)
Foreign Exchange		(11,485	)		102,671			-			-
Interest expense (Note 8)		416,990			657,350			13,808			23,839
Other income		(59	)		649			(4,363	)		(410,877	)
Total other expenses (income)		405,446			760,670			9,445			(387,038	)

Net loss and comprehensive loss for the period		(2,580,759	)		(8,436,636	)		(1,581,759	)		(4,915,032	)

Loss per share – basic		(0.03	)	$	(0.08	)		(0.02	)		(0.05	)
Loss per share – diluted		(0.03	)	$	(0.08	)	$	(0.02	)	$	(0.05	)

Weighted average number of shares outstanding – basic		101,794,615			99,335,514			96,362,541			90,286,864
Weighted average number of shares outstanding – diluted		101,794,615			99,335,514			96,362,541			90,286,864

	Special Voting Preferred Stock				Common Stock (1)				Additional Paid			Shares to be					Comprehensive
	Shares		Amount		Shares		Amount		in Capital			Issued		Deficit			Income		Total
			$		(Note 2)		$ (Note 2)		$ (Note 2)			$		$ (Note 2)			$		$ (Note 2)
Balance, March 31, 2016		1		-		72,591,292		72,591		18,292,173			-		(13,007,062	)		42,149		5,399,851
Shares issued to acquire IMT		-		-		23,650,000		23,650		23,153,350			-		-			-		23,177,000
Share compensation acquired		-		-		-		-		2,582,890			-		-			-		2,582,890
Options exercised		-		-		110,096		110		18,056			-		-			-		18,166
Cashless exercise of warrants		-		-		51,249		51		(51	)		-		-			-		-
Warrants exercised		-		-		174,759		175		40,020			-		-			-		40,195
Share compensation expense		-		-		217,047		217		1,001,733			-		-			-		1,001,950
Net loss for the year		-		-		-		-		-			-		(8,069,402	)		-		(8,069,402	)
Balance, March 31, 2017		1		-		96,794,443		96,794		45,088,171			-		(21,076,464	)		42,149		24,150,650
Warrants exercised		-		-		5,000,172		5,000		1,120,038			-		-			-		1,125,038
Share compensation expense		-		-		-		-		1,284,257			-		-			-		1,284,257
Fair value of warrants on convertible loans		-		-		-		-		548,179			-		-			-		548,179
Warrant down round feature (Note 12)		-		-		-		-		41,025			-		(41,025	)		-		-
Shares to be issued		-		-		-		-		-			60,000		-			-		60,000
Net loss for the period		-		-		-		-		-			-		(8,436,636	)		-		(8,436,636	)
Balance, December 31, 2017		1		-		101,794,615		101,794		48,081,670			60,000		(29,544,125	)		42,149		18,731,488

	Nine months			Nine months
	ended			ended
	December 31,			December 31,
	2017			2016
	$			$
				(Note 2)
Operating activities
Net loss for the period		(8,436,636	)		(4,915,032	)
Adjustment for items not affecting cash
Depreciation		69,606			57,781
Amortization		246,920			-
Interest expense		640,168			23,839
Share based compensation expense		1,284,257			592,130
Convertible debt accretion		290,375			-
Shares issued for services		60,000			59,500
Allowance for doubtful accounts		(16,349	)		-
		(5,861,659	)		(4,181,782	)
Changes in non-cash working capital items
Accounts receivable		93,680			(247,359	)
Prepaid expenses and other receivables		83,003			95,562
Due from related parties		(643	)		532
Inventories		(74,165	)		(120,894	)
Accounts payable		10,104			(720,573	)
Accrued liabilities		639,568			(492,047	)
Customer advances		(120,762	)		28,000
Deferred revenue		15,177			97,615
Net cash used in operating activities		(5,215,697	)		(5,540,946	)
Investing activities
Acquisition of equipment		(17,182	)		(9,827	)
Net cash used in investing activities		(17,182	)		(9,827	)
Financing activities
Proceeds from convertible loans		4,699,975			483,333
Proceeds on exercise of warrants		1,125,038			-
Repayment of Promissory note principal		(200,000	)		-
Repayment of Promissory note interest		(49,505	)		-
Repayment of Demand notes principal		(208,359	)		-
Repayment of Demand notes interest		(79,259	)		-
Proceeds from short term loan		400,000			-
Cash acquired on acquisition		-			266,635
Net cash provided by financing activities		5,687,890			749,968
Net decrease in cash and cash equivalents for the period		455,011			(4,800,805	)
Cash and cash equivalents, beginning of period		543,650			5,381,757
Cash and cash equivalents, end of period		998,661			580,952

Supplemental Information:
Assets acquired and liabilities assumed as at April 21, 2016:
Current assets, including cash of $266,635		478,843
Equipment		59,749
Intangible assets		5,580,704
Goodwill		22,308,275
Accounts payable		(241,299	)
Accrued liabilities		(361,029	)
Customer deposits		(86,487	)
Demand notes payable		(324,894	)
Promissory Notes payable		(217,808	)
Bionik advance		(1,436,164	)
Non-cash consideration		25,759,890

	Three months period ended December									Nine months period ended December
	2016									2016
	As									As
	originally						Effect of			originally						Effect of
	reported			As adjusted			change			reported			As adjusted			change
Sales	$	372,426		$	372,426		$	-		$	553,900		$	553,900		$	-
Cost of Sales		334,786			334,786			-			405,680			405,680			-
Total operating expenses		1,609,954			1,609,954			-			5,450,290			5,450,290			-
Total other expenses		(761,896	)		9,445			(771,341	)		(2,897,426	)		(387,038	)		2,510,388
Net income (loss) and comprehensive loss for the period		(810,418	)		(1,581,759	)		(771,341	)		(2,404,644	)		(4,915,032	)		(2,510,388	)
Net income (loss) per share		(0.01	)		(0.02	)		(0.01	)		(0.03	)		(0.05	)		(0.02	)

	As at March 31, 2017
	As
	originally						Effect of
	reported			As adjusted			change
Current assets	$	1,402,580		$	1,402,580		$	-
Capital assets		227,421			227,421			-
Intangible assets		27,338,899			27,338,899			-
Total assets		28,968,900			28,968,900			-
Warrant derivative liability		959,600			-			(959,600	)
Other current liabilities		4,818,205			4,818,250			45
Total liabilities		5,777,805			4,818,250			(959,555	)
Common stock		96,794			96,794			-
Additional paid in capital		38,640,706			45,088,171			6,447,465
Retained earnings		(15,588,554	)		(21,076,464	)		(5,487,910	)
Accumulated other comprehensive income		42,149			42,149			-
Total shareholders' equity		23,191,095			24,150,650			959,555
Total liabilities and shareholders' equity		28,968,900			29,968,900			-

	As at December 31, 2016
	As originally						Effect of
	reported			As adjusted			change
Net loss for the period	$	(2,404,644	)	$	(4,915,032	)	$	(2,510,388	)
Adjustment for items not affecting cash
Depreciation		57,781			57,781
Interest expense		23,839			23,839
Share-based compensation expense		592,130			592,130
Shares issued for service		59,500			59,500
Change in fair value of warrant derivative liability		(2,510,388	)		-			2,510,388
Change in non-cash working capital items		(1,359,164	)		(1,359,164	)
Net cash used in operating activities		(5,540,946	)		(5,540,946	)		-
Net cash used in investing activities		(9,827	)		(9,827	)		-
Net cash provided by financing activities		749,968			749,968			-
Net decrease in cash and cash equivalents for the period		(4,800,805	)		(4,800,805	)		-
Cash and cash equivalents, beginning of period		5,381,757			5,381,757			-
Cash and cash equivalents, end of period		580,952			580,952			-

	Amortization		Value acquired		Expense March 31, 2017		Value at March 31, 2017		3 Months Expense December 31, 2017		9 Months Expense December 31, 2017		Value at December 31, 2017
Intangible assets acquired	period (years)		$		$		$		$		$		$
Patents and exclusive License Agreement		9.74		1,306,031		126,375		1,179,656		33,522		100,604		1,079,052
Trademark		Indefinite		2,505,907		-		2,505,907		-		-		2,505,907
Customer relationships		10		1,431,680		134,931		1,296,749		35,792		107,414		1,189,335
Non compete agreement		2		61,366		28,918		32,448		7,671		23,038		9,410
Assembled Workforce		1		275,720		259,856		15,864		-		15,864		-
				5,580,704		550,080		5,030,624		76,985		246,920		4,783,704

	December 31, 2017		March 31, 2017
	$		$
Prepaid expenses and sundry receivables		52,221		68,484
Prepaid insurance		70,165		136,896
Sales taxes receivable (i)		22,658		22,667
		145,044		228,047

	December 31, 2017						March 31, 2017
			Accumulated						Accumulated
	Cost		Depreciation		Net		Cost		Depreciation		Net
	$		$		$		$		$		$
Computers and electronics		252,120		219,288		32,832		250,538		204,258		46,280
Furniture and fixtures		36,795		27,598		9,197		36,795		26,096		10,699
Demonstration equipment		200,186		92,539		107,647		184,586		44,420		140,166
Manufacturing equipment		88,742		85,509		3,233		88,742		84,982		3,760
Tools and parts		11,422		5,447		5,975		11,422		4,472		6,950
Assets under capital lease		23,019		6,906		16,113		23,019		3,453		19,566
		612,284		437,287		174,997		595,102		367,681		227,421

Balance, March 31, 2017		330,600
Accrued interest		7,018
Repayment of principal		(208,359	)
Repayment of interest		(79,259	)
Balance, December 31, 2017	$	50,000

Balance, March 31, 2017		2,017,488
Additional principal investment		2,999,975
Fair value of warrants		(548,178	)
Accretion expense		290,375
Accrued Interest		587,699
Balance, December 31, 2017	$	5,347,359

Balance, March 31, 2017		-
Additional principal investment		500,000
Accrued Interest		23,693
Balance, December 31, 2017	$	523,693

Balance, March 31, 2017		-
Additional principal investment		1,200,000
Accrued Interest		8,800
Balance, December 31, 2017	$	1,208,800

	December 31, 2017						March 31, 2017
	Number of						Number of
	shares			$			shares			$
Exchangeable Shares:
Balance beginning of period/year		47,909,336			47,910			50,000,000			50,000
Converted into common shares		(2,000,000	)		(2,000	)		(2,090,664	)		(2,090	)
Balance at the end of period/year		45,909,336			45,910			47,909,336			47,910
Common Shares
Balance at beginning of the period		48,885,107			48,884			22,591,292			22,591
Shares issued on acquisition (Note 3)		-			-			23,650,000			23,650
Shares issued to exchangeable shares		2,000,000			2,000			2,090,664			2,090
Shares issued for services		-			-			217,047			217
Options exercised		-			-			110,096			110
Warrants exercise (a)		5,000,172			5,000			174,759			175
Cashless exercise of warrants		-			-			51,249			51
Balance at end of the period		55,885,279			55,884			48,885,107			48,884
TOTAL COMMON SHARES		101,794,615			101,794			96,794,443			96,794

Exercise Price ($)		Number of Options		Expiry Date	Exercisable Options
	0.165		264,230	April 1, 2021		264,230
	0.23		97,514	June 20, 2021		97,514
	0.23		1,981,728	July 1, 2021		1,981,728
	0.23		204,471	February 17, 2022		204,471
	1.22		400,000	November 24, 2022		266,667
	1.00		2,078,333	December 14, 2022		1,803,333
	0.95		111,937	March 28, 2023		111,937
	1.05		433,027	March 28, 2023		433,027
	1.00		250,000	April 26, 2023		83,333
	1.00		750,000	August 8, 2023		250,000
	0.70		400,000	February 6, 2024		-
	0.68		250,000	February 13, 2024		166,667
	0.95		31,620	March 3, 2024		31,620
	1.05		122,324	March 3, 2024		122,324
	0.95		15,810	March 14, 2024		15,810
	1.05		61,162	March 14, 2024		61,162
	0.95		82,213	September 30, 2024		82,213
	1.05		318,042	September 30, 2024		318,042
	0.95		7,431	June 2, 2025		7,431
	1.05		28,747	June 2, 2025		28,747
	0.25		906,077	July 28, 2025		906,077
	0.95		671,859	July 29, 2025		671,859
	0.25		66,298	December 30, 2025		49,160
	0.95		49,160	December 30, 2025		27,261
	0.21		2,000,000	August 3, 2024		-
	0.161		12,215,354	September 1, 2027		2,035,892
			23,797,337			10,025,505

	Number of Warrants			Weighted- Average Exercise Price ($)
Outstanding and exercisable, March 31, 2015		10,823,450			1.35
Issued		7,225,625			1.35
Exercised		(148,787	)		(0.80	)
Outstanding and exercisable, March 31, 2016		17,900,288			1.35
Exercised		(262,045	)		(0.80	)
Outstanding and exercisable, March 31, 2017		17,638,243			1.35
Exercised		(5,000,172	)		0.25
Dilution warrants issued to $0.80 warrant holders		83,752			0.749
Dilution warrants issued to $1.40 warrant holders		941,191			1.2933
Outstanding at December 31, 2017		13,663,014			1.241

Exercise Price ($)		Number of Warrants		Expiry Date
	1.2933		5,873,289	February 26, 2019
	1.2933		1,229,040	March 27, 2019
	1.2933		328,166	March 31, 2019
	1.2933		2,544,240	April 21, 2019
	1.2933		1,201,164	May 27, 2019
	1.2933		1,173,370	June 30, 2019
	0.7490		1,313,745	February 26, 2019
			13,663,014