AURORA, Ontario (BRAIN) — Three companies have purchased parts of BionX Canada following a three-month search for a buyer. According to court documents, Crescent Commercial, Amego Electric Vehicles and NumberCo purchased some of BionX Canada’s assets, including some tooling, machinery, inventory and other equipment. The sales were approved mid-June.
According to court documents, Amego Electric Vehicles purchased 81 complete BionX kits. NumberCo purchased a parcel of motors, batteries and other parts, and Crescent Commercial, which is an auction house and liquidator, bought assembly line and machine shop equipment and other manufacturing tools. Other miscellaneous parts, inventory, hardware, accessories and components remain and are still up for sale, as are BionX’s patents, trademarks, domains and subsidiary shares.
Sister e-bike company Elby continues to operate out of BionX’s Aurora facility following the sale.
BionX Canada, which has manufactured retrofit e-bike conversion kits since 2003, entered into receivership at the end of February. All business activity was suspended as business and advisory firm Grant Thornton reviewed assets, marketed the company to prospective buyers and completed the sale.
The company employed 80 people full time, who were let go when BionX was placed into receivership. According to court documents, 19 terminated employees were hired as contractors to assist Grant Thornton with limited product assembly and the sale of assets. The assembly of 44 units to satisfy current customer orders used inventory on hand, and all sales were completed on an “as is, where is” basis with no warranties or after-sales services offered.
According to court documents, before the receivership, BionX completed a significant preseason order with numerous retailers totaling nearly 612,000 Canadian dollars ($460,000). This balance was payable in three monthly installments beginning April 1 and ending on June 1. Some dealers were unwilling to pay outstanding debts, saying BionX products were no longer salable because of a lack of warranty. The court documents state that Grant Thornton is still trying to collect from these debtors, and as of early June, just over CA$195,000 had been collected.
BionX Canada operated out of a 58,000 square-foot industrial facility. It was formerly a part of Magna International, a Canadian automotive supplier, but was eventually wholly owned by BionX International Corporation. BionX Canada operated four subsidiaries: BionX America, Inc., was based in Delaware and engaged four contract sales people and has ceased operations. BionX Europe GmbH is incorporated in Austria and has shut down. BionX GmbH is incorporated in Germany and continues to operate.
BionX Canada owed Stronach Consulting Corporation CA$22 million; the company incurred a net loss of approximately CA$48.6 million last year. On December 31, the book value of BionX’s liabilities exceeded the book value of its assets by approximately CA$54.7 million. At that time, the company held $230,514 in cash, and at the beginning of the receivership, company records reported an inventory balance of CA$4,541,983.
In late April, General Motors, one of BionX’s primary customers, and Grant Thornton agreed on the terms of a settlement for $975,000 after GM terminated its contract with BionX in February. BionX had entered into an agreement with GM to design and manufacture a mid-drive system for a folding e-bike. GM paid BionX for the design and engineering of the system and batteries and agreed to purchase 8,000 units in 2018 at approximately $1,000 each.
But BionX defaulted on the purchase contract and did not complete its obligations after projecting that unit cost for production would be $1,400 per unit. Earlier this year, BionX informed GM that it would not be able to start building the kits without significant funding assistance from GM, which the company declined to provide. At the end of April, Grant Thornton agreed to release 38 drive units in exchange for a payment of $279,110, and in May, representatives from GM facilitated the removal of production tooling it owned from BionX’s headquarters in Aurora. In June, GM removed the remaining production parts and assets, and made a payment of CA$445,855 to Grant Thornton.
