2.    Basis of Presentation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of iBio Inc. and its subsidiaries. All significant intercompany transactions and accounts have been eliminated in consolidation. Non-controlling interest in the consolidated financial statements represented the share of the loss in iBio CDMO, LLC (“iBio CDMO”) for an affiliate of Eastern Capital Limited (“Eastern Capital”) through November 1, 2021, the date the Company acquired the remaining interest in iBio CDMO. See Note 6 – Significant Transactions.

Going Concern

The history of significant losses, the negative cash flow from operations, the limited cash resources on hand and the dependence by the Company on its ability to obtain additional financing to fund its operations after the current cash resources are exhausted raise substantial doubt about the Company's ability to continue as a going concern. In an effort to remain a going concern and increase cash reserves, the Company completed a public equity offering and at-the-market offerings, reduced its work force by approximately 60% (a reduction of approximately 69 positions) in November 2022, and ceased operations of its CDMO Facility thereby reducing annual spend on expenses. Additionally, the Company has executed the Purchase and Sale Agreement for the sale of the CDMO Facility, which sale if consummated will allow us to pay all outstanding amounts under the Term Loan; however, the consummation of the sale is subject to closing conditions

for which there can be no assurance that they will be met or the closing will occur in a timely manner, if at all. If the closing is not consummated prior to the December 31, 2023 maturity date of the Term Loan it is unlikely that the Company will have sufficient funds the repay the Term Loan on its maturity date, which Term Loan has an outstanding balance of $12.7 million as of September 26, 2023. Additionally, in July 2022, the Company initiated the selling of the CDMO assets and facility, and since then has sold a substantial portion of the CDMO assets. (See Note 3 – Discontinued Operations for more information.)

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The Company’s cash, cash equivalents and restricted cash of approximately $7.6 million as of June 30, 2023, is not anticipated to be sufficient to support operations through the second quarter of Fiscal 2024 unless the Company reduces its burn rate further, sells the CDMO Facility for amounts above its term note payable or increases its capital as described above. Regardless of whether the Company is able to reduce its burn rate or sell or out-license certain assets or parts of the business, the Company will need to raise additional capital in order to fully execute its longer-term business plan. It is the Company’s goal to implement one or more potential options described above to allow the Company to have a cash runway for at least 12 months from the date of the filing of this Annual Report. However, there can be no assurance that the Company will be successful in implementing any of the options that it is evaluating.

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The accompanying consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

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Reverse Stock Split

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On September 22, 2022, the Company's Board of Directors approved the implementation of a reverse stock split at a ratio of one-for-twenty five (1 : 25) shares of the Company's Common Stock. The reverse stock split was effective as of October 7, 2022. All share and per share amounts of our common stock presented have been retroactively adjusted to reflect the one-for-twenty five reverse stock split. See Note 17 – Stockholders’ Equity for more information.

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