Annual report pursuant to Section 13 and 15(d)

Subsequent Events

v2.4.0.8
Subsequent Events
 12 Months Ended
Jun. 30, 2013
Subsequent Events [Abstract]  
Subsequent Events [Text Block]
17.
Subsequent Events
 
iBioDefense Biologics LLC
In July 2013, the Company created a wholly-owned subsidiary called iBioDefense Biologics LLC (“iBioDefense”) to explore development and commercialization of defense-specific applications of its proprietary technology. iBioDefense currently has no assets, liabilities, revenues or expenses.
 
Expiration of August 2008 Warrants
In August 2013, approximately 5 million outstanding warrants, comprising those originally issued in August 2008 as part of the spin-off from Integrated BioPharma, Inc. and those issued subsequently in accordance with the anti-dilution provision, expired prior to being exercised.
 
Fraunhofer Settlement Agreement
In September 2013, the Company and Fraunhofer completed the Terms of Settlement for the TTA Seventh Amendment (the “Settlement Agreement”), the significant terms of which are as follows:
 
·
The Company’s liabilities to Fraunhofer in the amount of approximately $2.9 million as of June 30, 2013 were released and terminated;
 
·
The term of the TTA has been extended by one year and will now expire on December 31, 2015;
 
·
The Company’s obligation under the TTA, prior to the Settlement Agreement, to make three $1 million payments to Fraunhofer in April 2013, November 2013, and April 2014 was terminated and replaced with an obligation to engage Fraunhofer to perform at least $3 million of research and development work as directed by iBio prior to December 31, 2015;
 
·
The Company terminated and released Fraunhofer from the obligation to make further financial contributions toward the enhancement, improvement and expansion of iBio’s technology in an amount at least equal to the Guaranteed Annual Payments. In addition, the Company terminated and released Fraunhofer from the obligation to further reimburse iBio for certain past and future patent-related expenses;
 
·
The Company’s obligation to remit to Fraunhofer minimum annual royalty payments in the amount of $200,000 was terminated. Instead the Company will be obligated to remit royalties to Fraunhofer only on technology license revenues that iBio actually receives and on revenues from actual sales by iBio of products derived from the Company’s technology until the later of November 2023 or until such time as the aggregate royalty payments total at least $4 million;
 
·
The rate at which the Company will be obligated to pay royalties to Fraunhofer on iBioLaunch and iBioModulator license revenues received was reduced from 15% to 10%; and
 
·
Any and all other claims of each party to any other amounts due at June 30, 2013 were mutually released.
 
The effect of the Settlement Agreement will be the elimination of approximately $2.9 million of liabilities from the Company’s books, as well as a $1 million reduction in prepaid expenses and an approximately $1.9 million positive impact on earnings resulting from the reversal of expenses accrued by the Company under the terms of the previous agreement, and will be reflected in the Company’s financial statements for the quarter ending September 30, 2013. As of September 2013, the Company has entered into research services agreements with Fraunhofer representing approximately $1.8 million of the $3 million commitment described above. Based on the timelines established between the parties upon signing of the agreements, this work is expected to be completed by late 2014.