Quarterly report pursuant to Section 13 or 15(d)

Fixed Assets

v3.19.1
Fixed Assets
 9 Months Ended
Mar. 31, 2019
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment Disclosure [Text Block]
5.
Fixed Assets
 
iBio CDMO is leasing its facility in Bryan, Texas as well as certain equipment from the Second Eastern Affiliate under a 34-year sublease. See Note 8 for more details of the terms of the sublease.
 
The economic substance of the sublease is that the Company is financing the acquisition of the facility and equipment and, accordingly, the facility and equipment are recorded as assets and the lease is recorded as a liability. As the sublease involves real estate and equipment, the Company separated the equipment component and accounted for the facility and equipment as if each was leased separately.
 
The following table summarizes by category the gross carrying value and accumulated depreciation of fixed assets (in thousands):
 
 
 
March 31,

2019
 
 
June 30,

2018
 
Facility under capital lease
 
$
20,000
 
 
$
20,000
 
Equipment under capital lease
 
 
6,000
 
 
 
6,000
 
Facility improvements
 
 
1,070
 
 
 
982
 
Construction in process
 
 
416
 
 
 
-
 
Medical equipment
 
 
1,260
 
 
 
1,038
 
Office equipment and software
 
 
231
 
 
 
404
 
 
 
 
28,977
 
 
 
28,424
 
Accumulated depreciation – assets under capital lease
 
 
(3,914
)
 
 
(3,027
)
Accumulated depreciation – other
 
 
(422
)
 
 
(245
)
 
 
 
(4,336
)
 
 
(3,272
)
Net fixed assets
 
$
24,641
 
 
$
25,152
 
 
Depreciation expense was approximately $341,000 for both the three months ended March 31, 2019 and 2018, and approximately $1,065,000 and $1,020,000 for the nine months ended March 31, 2019 and 2018, respectively. Depreciation of the assets under the capital lease amounted to approximately $276,000 and $306,000 for the three months ended March 31, 2019 and 2018, respectively, and approximately $887,000 and $917,000 for the nine months ended March 31, 2019 and 2018, respectively.
 
In addition, $179,000 of fixed assets were written off during the quarter ended December 31, 2018 related to items previously capitalized that have subsequently been removed from service.