26.    Subsequent Events

Exploration of Opportunities and Restructuring

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On September 21, 2022, the Company announced that in an effort to focus its resources on the promising new discovery platform and entering the clinic with its lead compounds, iBio has initiated a review of opportunities to accelerate its transformation while extending its cash runway. These include asset sales or licenses, partnerships, portfolio decisions, cost reductions, and non-dilutive efforts to raise additional capital with the goal to extend its cash runway and to focus its resources on its immune-oncology pipeline and AI-driven discovery platform.

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No timetable has been established for the completion of these efforts, and the Company does not expect to disclose developments unless and until there is material information to share or the Board of Directors has concluded that disclosure is appropriate or required.

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On September 16, 2022, we entered into an asset purchase agreement with RubrYc Therapeutics, Inc. (“RubrYc”) described in more detail below:

The Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with RubrYc pursuant to which it acquired substantially all of RubrYc’s assets in consideration of the issuance of 102,354 shares of the Company’s common stock valued at approximately $1,000,000 (the “Closing Shares”) and potential additional payments of up to $5,000,000 upon the achievement of specified developmental milestones on or before the fifth anniversary of the closing date, payable in cash or shares of the Company’s stock, at the Company’s option. The assets acquired include an AI drug discovery platform, all rights with no future milestone payments or royalty obligations, to IBIO-101, and three immuno-oncology candidates plus a partnership-ready PD-1 agonist. The Purchase Agreement contains representations, warranties and covenants of RubrYc Therapeutics and the Company.  The acquisition closed on September 19, 2022 after receipt of approval of the NYSE American.

On September 19, 2022, we entered into a termination agreement with RubrYc described in more detail below:

In connection with the closing of the Purchase Agreement, on September 19, 2022, the Company and RubrYc agreed to terminate the Collaboration, Option and License Agreement, dated August 23, 2021, by and between the Company and RubrYc and the Collaboration and License Agreement, dated August 23, 2021, by and between the Company and RubrYc.

Issuances of stock options during Fiscal 2023 were as follows:

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In Fiscal 2023, the Company granted stock option agreements to certain officers and employees to purchase an aggregate of 303,868 shares of Common Stock at exercise prices ranging between $6.75 and $9.50 per share. The options vest over a period of three years and expire on the tenth anniversary of the grant date.

Issuances of RSUs during Fiscal 2023 were as follows: 

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In Fiscal 2023, the Company issued RSUs to acquire 6,954 shares of common stock to various employees at a market value of $7.00 per share.  The RSU’s vest over a four-year period. The grant-date fair value of the RSUs totaled approximately $49,000.

Vesting of RSUs during Fiscal 2023 were as follows:

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On August 23, 2022, RSUs for 1,057 shares of Common Stock were vested.

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At-the market Facility Use

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Amendment to the Credit Agreement with Woodforest National Bank.

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On October 11, 2022, we and Woodforest amended the Credit Agreement to: (i) include a payment of $5,500,000 of the outstanding principal balance owed under the Credit Agreement on the date of the amendment, (ii) include a payment of $5,100,000 of the outstanding principal balance owed under the Credit Agreement within two (2) business days  upon our receipt of such amount owed to us by Fraunhofer as part of our legal settlement with them (see Item 3 – Legal Proceedings for more information), (iii) include principal payments of $250,000 per month in debt amortization for a 6 month period commencing the date of the amendment through March 2023, (iv) include an amendment fee of $22,375 and all costs and expenses, (v) require delivery of a report detailing cash flow expenditures every two (2) weeks for the period prior to the delivery of the last report and a monthly 12-month forecast (vi) reduce the liquidity covenant in the Guaranty (as defined in the Credit Agreement) from $10 million to $7.5 million with the ability to lower the liquidity covenant to $5.0 million upon the occurrence of a specific milestone in the Credit Agreement, and (vii) change the annual filing requirement solely for the fiscal year ending June 30, 2022, such that the filing is acceptable with or without a “going concern” designation.  In addition, Woodforest cancelled the irrevocable letter of credit issued by JPMorgan Chase Bank upon closing of the amendment. If we fail to successfully extend our cash runway via strategic options or other alternatives as described we would be in violation of the liquidity covenant on December 31, 2022.