Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

Subsequent Events
9 Months Ended
Mar. 31, 2020
Subsequent Events  
Subsequent Events

20.   Subsequent Events

Warrant Exercise - Notes Payable

As part of the Warrant Amendment and Exchange Agreement dated February 20, 2020 (see Note 11 – Stockholders' Equity for additional information), the Company issued promissory notes in the aggregate principal amount of $3,300,000.  The notes do not bear interest and are payable in full on the earlier to occur of (i) August 20, 2020, or (ii) the completion of an underwritten offering of securities by the Company resulting in gross proceeds of at least $10 million.  In addition, the Company is required to make payments upon any and all cash exercises of the noteholders' warrants on a dollar for dollar basis for all amounts paid pursuant to such warrant exercises.  At March 31, 2020, notes payable outstanding totaled $1,196,000.  On May 1, 2020, the Company paid off the total balance on the notes payable of $1,196,000.

Related Party Transaction

On April 1, 2020, the Company entered into a consulting agreement with KBI Consulting for business support services provided by a relative of iBio’s Chief Executive Officer. Per the consulting agreement the business support services are billed at $5,800 per month.

CEO Option Agreement

Effective April 21, 2020 the Company entered into an Amended and Restated Executive Employment Agreement (the “Amended Employment Agreement”) with Thomas Isett, the Company’s Chief Executive Officer and Executive Co-Chairman. Mr. Isett had been appointed Company Chief Executive Officer and Executive Co-Chairman on March 10, 2020. The Amended Employment Agreement amends and restates the original employment agreement entered into between the Company and Mr. Isett on March 10, 2020 (the “Original Agreement”).

The Amended Employment Agreement modifies the terms of the option grant contemplated under the Original Agreement. Under the Amended Employment Agreement, the Company is required to issue an option to purchase 975,000 shares of the Company’s common stock (the “Option”) to Mr. Isett pursuant to the Company’s 2018 Omnibus Equity Incentive Plan with an exercise price at the fair market value on the date of grant, as determined by the Company’s Board of Directors. The Option vests ratably over the 36-month period beginning on the date of the Original Agreement (1/36th per month) and will be deemed fully-vested upon any transaction or series of related transactions that constitutes a Change of Control Transaction (as defined in the Amended Employment Agreement). There is no requirement under the Amended Employment Agreement for the Company to exchange the Option with a new option if the trading price of the Company’s securities as measured at specified intervals falls below the exercise price of the Option, as contemplated in the Original Agreement.  The exercise price of $0.8953 per share is based on the closing price of the Company's common stock on April 21, 2020. 

Other than the removal of the requirement to exchange the Option based on a decline in the Company’s share price under specified circumstances, the terms of the Amended Employment Agreement remain unchanged from the Original Agreement.


On April 16, 2020, the Company received $600,000 related to its filing under the Paycheck Protection Program and Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). The payment terms of the note are as follows:


No payments during the deferral period, which is defined as the six-month period beginning on the date of the note, or April 9, 2020.


Commencing one month after the expiration of the deferral period, and continuing on the same day of each month thereafter until the maturity date, the Company shall pay to JPMorgan Chase Bank, N.A. (the "Lender"), monthly payments of principal and interest, each in such equal amount required to fully amortize the principal amount outstanding on the note on the last day of the deferral period by the maturity date (twenty-four months from the date of the note, or April 9, 2022).


On the maturity date, the Company shall pay the Lender any and all unpaid principal plus accrued and unpaid interest plus interest accrued during the deferral period.


If any payment is due on a date for which there is no numerical equivalent in a particular calendar month then it shall be due on the last day of such month. If any payment is due on a day that is not a business day, the payment will be made on the next business day. The term "business day" means a day other than a Saturday, Sunday or any other day on which national banking associations are authorized to be closed.


Payments shall be allocated among principal and interest at the discretion of Lender unless otherwise agreed or required by applicable law. Notwithstanding, in the event the Loan, or any portion thereof, is forgiven pursuant to the Paycheck Protection Program under the federal CARES Act, the amount so forgiven shall be applied to principal.


The Company may prepay this note at any time without payment of any premium.

The Lender is participating in the Paycheck Protection Program to help businesses impacted by the economic impact from COVID-19. Forgiveness of this loan is only available for principal that is used for the limited purposes that qualify for forgiveness under the Small Business Administration’s (the "SBA") requirements, and that to obtain forgiveness, the Company must request it and must provide documentation in accordance with Small Business Administration (the "SBA") requirements, and certify that the amounts the Company is requesting to be forgiven qualify under those requirements. Forgiveness of the loan is dependent upon approval of the SBA and while the Company expects forgiveness of this Loan under the current terms of requirement by the SBA, there can be no assurance or certainty that forgiveness will in fact occur.

Sale of Shares to Lincoln Park Capital Fund, LLC


On May 13, 2020, the Company entered into a purchase agreement, pursuant to which the Company agreed to sell to Lincoln Park and Lincoln Park agreed to purchase 1,000,000 shares of the Company’s common stock at a price of $1.09 per share for an aggregate purchase price of $1,090,000, pursuant to the Company’s effective shelf registration statement on Form S-3 (Registration No. 333-236735), filed with the Securities and Exchange Commission in accordance with the provisions of the Securities Act of 1933, as amended, and declared effective on March 19, 2020, and the prospectus supplement thereto dated May 14, 2020..