Annual report pursuant to Section 13 and 15(d)

Fixed Assets

v3.5.0.2
Fixed Assets
 12 Months Ended
Jun. 30, 2016
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment Disclosure [Text Block]
6.
Fixed Assets
 
iBio CMO is leasing its facility in Bryan, Texas as well as certain equipment from the Second Affiliate under a 34-year sublease. See Note 10 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):
 
 
 
June 30,
2016
 
June 30,
2015
 
Facility under capital lease
 
$
20,000
 
$
-
 
Equipment under capital lease
 
 
6,000
 
 
-
 
Facility improvements
 
 
42
 
 
-
 
Office equipment and software
 
 
137
 
 
40
 
 
 
 
26,179
 
 
40
 
Accumulated depreciation – assets under capital lease
 
 
(571)
 
 
-
 
Accumulated depreciation – other
 
 
(34)
 
 
(27)
 
 
 
 
(605)
 
 
(27)
 
Net fixed assets
 
$
25,574
 
$
13
 
 
Depreciation expense was approximately $577,000 and $4,600 in 2016 and 2015, respectively. Depreciation of the assets under the capital lease amounted to approximately $571,000 in 2016.