General form of registration statement for all companies including face-amount certificate companies

ACQUISITION, TECHNOLOGY AND OTHER ASSETS

v3.10.0.1
ACQUISITION, TECHNOLOGY AND OTHER ASSETS
6 Months Ended 12 Months Ended
Sep. 30, 2018
Mar. 31, 2018
Technology And Other Intangible Assets [Abstract]    
Intangible Assets Disclosure [Text Block]
4.
TECHNOLOGY AND OTHER ASSETS
 
The schedule below reflects the intangible assets acquired in the IMT acquisition on April 21, 2016 and the asset amortization period and expense for the six month period ended September 30, 2018 and the year ended March 31, 2018:
 
 
 
 
 
 
 
 
 
Expense March
 
 
Value at March
 
 
Expense Sept.
 
 
Value at Sept.
 
Intangible
 
Amortization
 
 
Value acquired
 
 
31, 2018
 
 
31, 2018
 
 
30, 2018
 
 
30, 2018
 
assets acquired
 
period (years)
 
 
$
 
 
$
 
 
$
 
 
$
 
 
$
 
Patents and exclusive License Agreement
 
 
9.74
 
 
 
1,306,031
 
 
 
134,126
 
 
 
1,045,530
 
 
 
67,045
 
 
 
978,485
 
Trademark
 
 
Indefinite
 
 
 
2,505,907
 
 
 
-
 
 
 
2,505,907
 
 
 
-
 
 
 
2,505,907
 
Customer relationships
 
 
10
 
 
 
1,431,680
 
 
 
143,206
 
 
 
1,153,543
 
 
 
71,584
 
 
 
1,081,959
 
Non-compete agreement
 
 
2
 
 
 
61,366
 
 
 
30,709
 
 
 
1,739
 
 
 
1,739
 
 
 
-
 
Assembled Workforce
 
 
1
 
 
 
275,720
 
 
 
15,864
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
 
5,580,704
 
 
 
323,905
 
 
 
4,706,719
 
 
 
140,368
 
 
 
4,566,351
 
 
Amortization for the six months ended September 30, 2017 was $169,934.
Amortization for three months ended
September 30, 2018
was $
69,315
(
September 30, 2017
- $
76,985).
4.
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 157,667 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 20,000 options of Company Common Stock, of which 6,667 options have an exercise price of $37.50 per share, 6,667 options have an exercise price of $142.50 per share and 6,666 options have an exercise price of $157.50 per share. 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, a 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 (d)     (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 $147.00 per share, 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) Pro forma information has not been presented for IMT as these operations have been consolidated for all days in the year ended March 31, 2017 except 20 days from April 20, 2016. These 20 days are not considered material.
 
(d) 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.
 
(e)   
The schedule below reflects the intangible assets acquired in the IMT acquisition and the assets amortization period and expense for the year ended March 31, 2018:
 
Intangible assets acquired
 
Amortization
period (years)
   
Value
 acquired
   
Expense
March 31, 2017
   
Value at
March 31, 2017
   
Expense
March 31, 2018
   
Value at
March 31, 2018
 
         
$
   
$
   
$
   
$
   
$
 
Patents and exclusive Licence Agreement     9.74 years       1,306,031       126,375       1,179,656       134,126       1,045,530  
Trademark    
Indefinite
      2,505,907       -       2,505,907       -       2,505,907  
Customer relationships     10       1,431,680       134,931       1,296,749       143,206       1,153,543  
Non compete agreement     2       61,366       28,918       32,448       30,709       1,739  
Assembled workforce     1       275,720       259,856       15,864       15,864       -  
             
5,580,704
     
550,080
     
5,030,624
     
323,905
     
4,706,719