3.   Discontinued Operations

In November 2022, the Company announced it is seeking to divest its contract development and manufacturing organization (iBio CDMO, LLC) in order to complete its transformation into an antibody discovery and development company. In conjunction with the divestment, the Company commenced a workforce reduction of approximately 60% of the current Company staffing levels (a reduction of approximately 69 positions). The Company expects to substantially complete the employee reduction by January 2, 2023. The Company expects it may be able to complete a transaction for the sale of its contract development and manufacturing organization in calendar 2023, although there is no assurance as to when, or for how much, the Company may be able to sell the iBio CDMO, LLC organization, including the 130,000-square-foot cGMP facility location in Bryan, Texas.  The Company expects to incur pre-tax charges of approximately $1.7 million for the employee reduction, most of which is expected to be incurred in the second and third quarter of fiscal year 2023. These charges will be substantially settled in cash and almost entirely consist of severance obligations, continuation of salaries and benefits over a 60-day transitional period during which impacted employees remain employed but are not expected to provide active service, and other customary employee benefit payments in connection with an employee reduction. The transition to a focused AI-Biotech business is expected to reduce the Company’s monthly burn rate by approximately half, with an approximate range of $2.5-3.0 million per month. The Company recorded a charge in discontinued operations for $4.1 million for the three months ended September 30, 2022, due to inventory write offs resulting from the winding down of the CDMO business and depending upon the sale price of the facility, the Company may have to incur additional write offs.

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As such, the results of iBio CDMO's operations are reported as discontinued operations for the three months ended September 30, 2022. The Company has retrospectively recast its consolidated statement of operations for the three months ended September 30, 2021 presented. In addition, those assets and liabilities associated with the discontinued operations of the CDMO that the Company intends to sell have been classified as “held for sale” as of September 30, 2022.  The Company has retrospectively recast its consolidated balance sheet as of June 30, 2022 for assets and liabilities held for sale.  The Company has chosen not to segregate the cash flows of iBio CDMO in the consolidated statement of cash flows.  Supplemental disclosures related to discontinued operations for the statements of cash flows has been provided below. Unless noted otherwise, discussion in the Notes to the Condensed Consolidated Financial Statements refers to the Company's continuing operations.

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The following table presents a reconciliation of the major financial lines constituting the results of operations for discontinued operations to the loss from discontinued operations presented separately in the consolidated statements of operations (in thousands):

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The following table presents net carrying values related to the major classes of assets that were classified as held for sale at September 30, 2022 and June 30, 2022 (in thousands):

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The following table presents the supplemental disclosures related to discontinued operations for the statements of cash flows (in thousands):

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