Quarterly report pursuant to Section 13 or 15(d)

Fixed Assets

v3.8.0.1
Fixed Assets
 6 Months Ended
Dec. 31, 2017
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment Disclosure [Text Block]
5.
Fixed Assets
 
iBio CDMO is leasing its facility in Bryan, Texas as well as certain equipment from the Second Eastern Affiliate under a 34-year sublease. See Note 8 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):
 
 
 
December 31,
2017
 
June 30,
2017
 
Facility under capital lease
 
$
20,000
 
$
20,000
 
Equipment under capital lease
 
 
6,000
 
 
6,000
 
Facility improvements
 
 
337
 
 
332
 
Construction in process
 
 
240
 
 
-
 
Medical equipment
 
 
944
 
 
905
 
Office equipment and software
 
 
351
 
 
256
 
 
 
 
27,872
 
 
27,493
 
Accumulated depreciation – assets under capital lease
 
 
(2,416)
 
 
(1,805)
 
Accumulated depreciation – other
 
 
(167)
 
 
(99)
 
 
 
 
(2,583)
 
 
(1,904)
 
Net fixed assets
 
$
25,289
 
$
25,589
 
 
Depreciation expense was approximately $340,000 and $326,000 for the three months ended December 31, 2017 and 2016, respectively, and for the six months ended December 31, 2017 and 2016, depreciation expense was approximately $679,000 and $650,000, respectively. Depreciation of the assets under the capital lease amounted to approximately $306,000 and $312,000 for the three months ended December 31, 2017 and 2016, respectively. Depreciation of the assets under the capital lease amounted to approximately $611,000 and $623,000 for the six months ended December 31, 2017 and 2016, respectively.