NOTE E – SUBSEQUENT EVENT

On January 13, 2012, the Company raised approximately $9,040,000 in net proceeds by issuing 15,385,000 shares of common stock at $0.65 per share and issued warrants to purchase up to 11,538,750 shares of common stock. The common stock and warrants were sold together as units (the “Units”), each Unit consisting of one share of common stock and 0.75 of one warrant to purchase one share of common stock. Each warrant has an exercise price of $0.88 per share and will be exercisable after the first anniversary of issuance and will expire on the second anniversary date of issuance. The Company used its effective registration statement on Form S-3 for this offering.

In connection with warrant agreements from the 2008 equity offering, there is a down round provision that is affected by the January 2012 equity offering. The Company is required to decrease the exercise prices of the 2008 warrants with a corresponding increase in shares issuable under those warrants upon exercise. iBio estimates that additional shares to be issued upon exercise will be 665,365 and 688,074 at exercise prices of $1.82 and $2.34 per share, respectively. Accordingly, the exercise prices of the outstanding warrants at December 31, 2011 are estimated to change from $2.68 to $1.82 per share and from $3.45 to $2.34 per share. After the equity offering, such warrants outstanding are expected to be 2,065,814 at $1.82 per share and 2,136,321 at $2.34 per share. The August 2008 warrants expire in August 2013.