Annual report pursuant to Section 13 and 15(d)

Basis of Presentation

Basis of Presentation
12 Months Ended
Jun. 30, 2019
Basis of Presentation  
Basis of Presentation

2.    Basis of Presentation

Going Concern

Since our spin-off from Integrated BioPharma, Inc. in August 2008, we have incurred significant losses and negative cash flows from operations. The Company's net loss was approximately $17.6 million and $16.1 million for the years ended June 30, 2019 and 2018, respectively. As of June 30, 2019, the Company’s accumulated deficit was $105.8 million and it had cash used in operating activities of $14.0 million for the year ended June 30, 2019. As of June 30, 2019, cash on hand totaled approximately $4.4 million which is expected to support the Company’s activities at least through September 30, 2019. In the short-term, we are seeking funding to support our activities beyond such date and have engaged an investment banking firm to assist in this regard. 

The Company has historically financed its activities through the sale of common stock and warrants. Through June 30, 2019, the Company has dedicated most of its financial resources to research and development, including the development and validation of its own technologies and the development of a proprietary therapeutic product against fibrosis based upon those technologies, advancing its intellectual property, the build-out and recommissioning of its CDMO facility, and general and administrative activities.

As of June 30, 2019, the Company has not completed development of or commercialized any vaccine or therapeutic product candidates. As such, the Company expects to continue to incur significant expenses and operating losses for at least the next year. The Company anticipates that its expenses and losses will increase substantially if the Company:


initiates clinical trials of its product candidates;


continues the research and development of its product candidates;


seeks to discover additional product candidates; and


adds operational, financial and management information systems and personnel, including personnel to support its product development and manufacturing efforts.

To become and remain profitable, the Company must succeed in commercializing its technologies, alone or with its licensees, the service offerings provided by its CDMO facility, and in developing and eventually commercializing products that generate significant revenue. In addition, profitability will depend on continuing to attract and retain customers for the development, manufacturing and technology transfer services offered by the Company.

On June 26, 2018, the Company closed on an underwritten public offering with total gross proceeds of approximately $16,000,000, before deducting underwriting discounts, commissions and other offering expenses payable by the Company. The securities offered by the Company consisted of (i) 4,350,000 shares of Common Stock at $0.90 per share, (ii) 6,300 shares of Series A Convertible Preferred Stock, with a stated value of $1,000 per preferred share, and convertible into an aggregate of 7,000,000 shares of Common Stock at $0.90 per share, (iii) 5,785 shares of Series B Convertible Preferred Stock, with a stated value of $1,000 per preferred share, and convertible into an aggregate of 6,427,778 shares of Common Stock at $0.90 per share. The Company granted the underwriters, A.G.P./Alliance Global Partners, a 45‑day option to purchase up to an additional 2,666,666 shares of common stock to cover over-allotments, if any. On July 12, 2018, the Company received approximately $1,350,000, before deducting underwriting discounts, commissions and other offering expenses payable by the Company, from the proceeds of the sale of 1,500,000 over-allotment shares of Common Stock purchased at $0.90 by the underwriter during the 45‑day provision.

In addition, in June 2018, iBio established a strategic commercial relationship with CC-Pharming Ltd. of Beijing, China ("CC-Pharming") for the joint development of products and manufacturing facilities for the Chinese biopharmaceutical market, utilizing iBio's technology. The first product focus selected pursuant to the Master Joint Development Agreement executed between iBio and CC-Pharming is a therapeutic antibody. During the quarter ending September 30, 2018, iBio received prepayments of approximately $2.9 million from CC-Pharming which it recorded as a contract liability on its balance sheet. In 2019, the Company recognized approximately $1.8 million of the contract liability amounts related to CC-Pharming as revenue.

In November 2018, the Company received a capital contribution from the Eastern Affiliate of approximately $2,459,000 for working capital purposes.

The history of significant losses, the negative cash flow from operations, the limited cash resources on hand and the dependence by the Company on its ability – about which there can be no certainty – to obtain additional financing to fund its operations after the current cash resources are exhausted raises substantial doubt about the Company’s ability to continue as a going concern. These financial statements were prepared under the assumption that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.

The Company plans to fund its future business operations using cash on hand, through proceeds from the sale of additional equity or other securities, and through proceeds realized in connection with the commercialization of its technologies and proprietary products, license and collaboration arrangements and the operation of our subsidiary, iBio CDMO.

Reverse Stock Split

On May 23, 2018, the Company’s Board of Directors approved the implementation of a reverse stock split at a ratio of one-for-ten (1:10) shares of the Company’s Common Stock. The reverse stock split was effective as of June 8, 2018. All share and per share amounts of our common stock presented have been retroactively adjusted to reflect the one-for-ten reverse stock split. See Note 11 for more information.