Interim Condensed Consolidated Financial Statements
|9 Months Ended
Dec. 31, 2022
|Interim Condensed Consolidated Financial Statements
|Interim Condensed Consolidated Financial Statements
1. Interim Condensed Consolidated Financial Statements
The accompanying unaudited interim condensed consolidated 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 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. (“Bionik” or the “Company”) 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 of December 31, 2022, and its results of operations for the three and nine months ended December 31, 2022 and 2021, and cash flows for the nine months ended December 31, 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 nine months ended December 31, 2022 are not necessarily indicative of the results for the year ending March 31, 2023 or any period thereafter.
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 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 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 as of December 31, 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 recurring items, considered necessary for fair presentation have been included in these consolidated financial statements.
Critical Accounting Policies
The following accounting policies have been updated and adopted in conjunction with the acquisition of the Company’s physical therapy clinic on September 7, 2022 which differ from the accounting policies disclosed in the Company’s Annual report on Form 10-K for the fiscal year ended March 31, 2022, filed with the SEC on June 9, 2022:
Revenues from the operations of the Company’s clinic which is included in Revenue, net in the Condensed Consolidated Statements of Operations are recognized in the period in which services are rendered. Net patient revenue consists of revenue for physical therapy, pre-and post-operative care and treatment for orthopedic-related disorders, sports-related injuries, preventative care, rehabilitation of injured workers and neurological-related injuries. Net patient revenue (patient revenue less estimated contractual adjustments) is recognized at the estimated net realizable amounts from third-party payors, patients and others in exchange for services rendered when obligations under the terms of the contract are satisfied. There is an implied contract between the Company (or its applicable subsidiary) and the patient upon each patient visit. Generally, this occurs as the Company (or its applicable subsidiary) provides physical therapy services, as each service provided is distinct and future services rendered are not dependent on previously rendered services. The Company (or its applicable subsidiary) has agreements with third-party payors that provide for payments to it at amounts different from its established rates.
At December 31, 2022, cash and cash equivalents were $0.7 million. At December 31, 2022, the Company had a working capital surplus of $1.0 million and at March 31, 2022, the Company had a working capital surplus of $3.1 million. At December 31, 2022 and March 31, 2022, the Company has accumulated deficits of $99.0 million and $95.4 million, respectively. The Company has incurred a net loss and comprehensive loss for the three months ended December 31, 2022 and 2021 of $1.1 million and $7.0 million, respectively, and for the nine months ended December 31, 2022 and 2021 of $3.6 million and $8.7 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, as well as the number of, and cost for the, planned acquisitions of physical therapy clinics as part of its new business strategy. 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 to fund its operations and overall growth strategy, and it is currently working on securing this funding through corporate collaborations, public or private equity offerings or debt financings. Sales of additional equity 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 substantially or otherwise curtail operations.
The Company 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 consolidated financial statements do not include any adjustments to reflect the possible future effects on recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.