iBio Inc
For the period ended Sep 30, 2024. Filed Nov 12, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 12, 2024
IBIO$0.74+1.2%Stored close · as of Nov 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-13.
0001420720-24-000020
Item 1A. Risk FactorsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001420720-24-000054
Item 1A. Risk FactorsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 37 previous paragraphs and 20 current paragraphs.
9 unchanged; 10 reworded; 0 added; 17 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 20 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Removed paragraphs (17)
Previous report
Unless and until we are able to raise sufficient capital, for which there can be no assurance, our lack of cash will continue to constrain our business and subject us to significant risks, including the following. First, we may be unable to make the necessary investment in personnel, equipment or other resources to effectively pursue our business plan. Second, our suppliers, vendors and service providers could slow down or stop supplying components or services or could stop extending credit in connection with commercial transactions, which could curtail our business. Third, we may be subject to lawsuits from claimants relating to past due balances, if we cannot work out or continue to renegotiate payment terms. There is no assurance that we will be able to successfully defend against such claims, and our creditors or claimants may seek to seize our assets or assert other judicial remedies. Ultimately, any or all of the above factors could lead to a possible reduction or suspension of our operations, ultimately forcing us to declare bankruptcy, reorganize or go out of business. Should this occur, the value of any investment in our securities could be adversely affected, and an investor would likely lose all or a significant portion of their investment.
Previous report
Changes in general economic conditions, geopolitical conditions, domestic and foreign trade policies, monetary policies and other factors beyond our control may adversely impact our business and operating results.
Previous report
The uncertain financial markets, disruptions in supply chains, mobility restraints, and changing priorities as well as volatile asset values could impact our business in the future. We and our third-party contract manufacturers, contract research organizations, and any clinical sites that may conduct our clinical trials in the future may also face disruptions in procuring items that are essential to our research and development activities, including, for example, medical and laboratory supplies used in our clinical trials or preclinical studies, in each case, that are sourced from abroad or for which there are shortages because of ongoing efforts to address the outbreak. These minor disruptions have had an immaterial effect on business, which we have been able to address with minimal impact to our business operations to date. Further, although we have not experienced any material adverse effects on our business due to increasing inflation, it has raised operating costs for many businesses and, in the future, could impact demand or pricing manufacturing of our drug candidates or services providers, foreign exchange rates or employee wages. We are actively monitoring the effects these disruptions and increasing inflation could have on our operations.
Previous report
Our operations and performance depend on global, regional and U.S. economic and geopolitical conditions. In addition, the global macroeconomic environment could be negatively affected by, among other things, pandemics or epidemics, instability in global economic markets, increased U.S. trade tariffs and trade disputes with other countries, instability in the global credit markets, supply chain weaknesses, instability in the geopolitical environment as a result of the withdrawal of the United Kingdom from the European Union, the Russian invasion of Ukraine, the war in the Middle East and other political tensions, and foreign governmental debt concerns. Such challenges have caused, and may continue to cause, uncertainty and instability in local economies and in global financial markets.
Previous report
The above factors, including a number of other economic and geopolitical factors both in the U.S. and abroad, could ultimately have material adverse effects on our business, financial condition, results of operations or cash flows, including the following:
Previous report
If the Property is not sold prior to the May 15, 2024 Term Loan maturity date, iBio CDMO will not have sufficient funding to pay the Term Loan with Woodforest for which we are a guarantor and support our operations through the first quarter of Fiscal 2025.
Previous report
Although we have listed the Property for sale, we do not currently have a signed contract to sell the Property near or above the outstanding balance under the Term Loan. On November 7, 2023, we received written notice from Majestic Realty of its election to terminate the Purchase and Sale Agreement, dated as of September 15, 2023, between Majestic Realty and iBio CDMO LLC, pursuant to which iBio CDMO had agreed to sell to Majestic Realty the Property. There can be no assurance that we will complete a sale of the Property in a timely manner. If the Property is not sold prior to the May 15, 2024 maturity date of the Term Loan, we will not have sufficient funds to repay the Term Loan on its maturity date, the outstanding principal balance of which is $12.7 million as of March 31, 2024, and have sufficient funds to continue to support our operations through the first quarter of Fiscal 2025. In addition, if a sale of the Facility is not consummated at a price near or above the outstanding balance under the Term Loan based upon the current terms of the Term Loan, we will be required to pay the shortfall which could, depending upon such sale price, deplete our cash. Our failure to make such payments when due could result in our loss of the Facility. Any action to proceed against our assets would likely have a
Previous report
serious disruptive effect on our business operations, especially if the Facility or our other assets were foreclosed upon or our guarantee were enforced.
Previous report
Failure to sell the Facility could negatively impact our stock price and our future business and financial results.
Previous report
If we do not sell the Facility for any reason, our ongoing business may be materially and adversely affected and we would be subject to a number of risks, including experiencing negative reactions from the financial markets, and negative impacts on the trading price of our common stock, which could affect our ability to secure sufficient financing in the future on attractive terms (or at all). In addition, we could be subject to litigation related to any failure to complete the sale. In addition, if a sale of the Facility is not consummated at a price at or above the outstanding balance under the Term Loan we do not expect to have sufficient funds to repay the Term Loan upon its maturity.
Previous report
The failure to comply with the terms of the Credit Agreement, as amended, could result in a default under the terms of the Credit Agreement, as amended, and, if uncured, it could potentially result in action against our pledged assets.
Previous report
There is no assurance that we will generate sufficient revenue or raise sufficient capital to be able to make the required principal payment under the Term Loan that iBio CDMO entered into with Woodforest and continue our operations as currently planned. The Term Loan with Woodforest is secured by (a) a leasehold deed of trust on our Facility, and (b) a first lien on all assets of iBio CDMO including the Facility. We have also guaranteed the payment of all iBio CDMO’s obligations under the Credit Agreement. The Term Loan matures the earlier of May 15, 2024, or the acceleration of maturity of the Term Loan pursuant to the Credit Agreement. If we or iBio CDMO fail to comply with the terms of the Term Loan and/or the related agreements, including the affirmative and negative covenants contained therein, Woodforest National Bank could declare a default and if the default were to remain uncured, Woodforest National Bank would have the right to proceed against any or all of the collateral securing their Term Loan. Our failure to make such payments when due could result in our loss of the Facility. In addition, we have guaranteed the repayment of the Term Loan and could be responsible for such payment. Any action to proceed against our assets would likely have a serious disruptive effect on our business operations, especially if the Facility or our other assets were foreclosed upon.
Previous report
The Credit Agreement, as amended, requires that we pay a significant amount of cash to the lender. Our ability to generate sufficient cash to make all required payments under the Credit Agreement, as amended, depends on many factors beyond our control.
Previous report
Our ability to make payments on and to refinance the Term Loan, to fund planned capital expenditures and to maintain sufficient working capital depends on our ability to raise capital and generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations or from other sources in an amount sufficient to enable us to service our debt or to fund our other liquidity needs. To date, we have generated minimal revenue and have financed a significant portion our capital needs from sales of our equity and most recently the Term Loan. There can be no assurance that financing options will be available to us when needed to make payments under the Term Loan or if available, that they will be on favorable terms. If our cash flow and capital resources are insufficient to allow us to make payments due under the Term Loan, we may need to seek additional capital or restructure or refinance all or a portion of the Term Loan on or before the maturity thereof, any of which could have a material adverse effect on our business, financial condition or results of operations. Although we plan to explore potential longer-term financing options for our Facility, including, but not limited to, the possible sale of the Facility, we cannot assure you that we will be able to enter consummate the sale prior to the maturity date of the Term Loan or refinance the Term Loan on commercially reasonable terms or at all. If we are unable to generate sufficient cash flow to repay or refinance our debt on favorable terms, it could significantly adversely affect our financial condition. Our ability to restructure or refinance the Term Loan will depend on the condition of the capital markets and our financial condition. Any refinancing of the Term Loan could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. There can be no assurance that we will be able to obtain any financing when needed.
Previous report
Covenant restrictions in the Credit Agreement, as amended, may limit our ability to operate our business.
Previous report
The Credit Agreement contains, and our future indebtedness agreements may contain covenants that restrict our ability to finance future operations or capital needs or to engage in other business activities. The Credit Agreement, as amended, restricts our ability to:
Previous report
As of the date of this filing, iBio is in compliance with this covenant in the Credit Agreement, as amended.
Reworded paragraphs (10)
Previous wording
We are currently evaluating a number of potential options to expand our cash runway, the implementation of which will impact our liquidity. In an effort to improve liquidity and our runway, we have placed our CDMO business and Facility on the market for sale, reduced our work force and ceased operations of our CDMO, thereby reducing annual spend on expenses by approximately 58% and generating cash savings of approximately 46% when comparing the nine months ended March 31, 2024 to the nine moths ended March 31, 2023. Potential options being considered to further increase liquidity include focusing product development on a select number of product candidates, the sale or out-licensing of certain product candidates, raising money from the capital markets, grant revenue or collaborations, or a combination thereof. However, we anticipate that our expenses will increase as we continue our research and development activities and conduct clinical trials.
Current wording
We are currently evaluating a number of potential options to expand our cash runway, the implementation of which will impact our liquidity. In an effort to improve liquidity and our runway, we have consummated the sale of our Facility, reduced our work force, signed a collaboration with AstralBio with to discover and develop novel antibodies for obesity and other cardiometabolic diseases, entered into a securities purchase agreement for a PIPE financing resulting in gross proceeds of approximately $15.0 million. Potential options being considered to further increase liquidity, focusing product development on a select number of product candidates, the sale or out-licensing of certain product candidates, raising money from the capital markets, grant revenue or collaborations, or a combination thereof. However, we anticipate that our expenses will increase as we continue our research and development activities and conduct clinical trials.
Previous wording
Despite the proceeds from the Private Placement, our cash, cash equivalents and restricted cash of $17.9 million as of May 13, 2024, is not anticipated to be sufficient to support our operations beyond the first quarter of Fiscal 2025 unless we sell the Facility for amounts near or above the term note outstanding payable balance or the Term Loan is restructured, we reduce our burn rate further, sublease all or a portion of the San Diego Lease, or raise additional capital. Regardless of whether we are able to reduce our burn rate or sell or out-license certain assets or parts of the business, we will need to raise additional capital in order to fully execute our near and long-term business plans.
Current wording
Despite the proceeds from the PIPE financing, our cash, cash equivalents and restricted cash of $11.3 million as of September 30, 2024, is not anticipated to be sufficient to support our operations beyond the first quarter of fiscal year 2026, unless we reduce our burn rate further, sublease all or a portion of the San Diego Lease, or raise additional capital. Regardless of whether we are able to reduce our burn rate or sell or out-license certain assets or parts of the business, we will need to raise additional capital in order to fully execute our near and long-term business plans.
Previous wording
There can be no assurance that we would be able to sell the Facility or that if we are able to do so that we do so on favorable terms or that we will be able to do so before the maturity date of the Term Loan or that the exploration of potential options will result in any agreements or transactions, or that, if completed, any agreements or transactions will be successful or on attractive terms. If we determine to change our business strategy, our future business, prospects, financial position and operating results could be significantly different than those in historical periods or projected by our management. Because of the significant uncertainty regarding our future plans, we are not able to accurately predict the impact of a potential change in our business strategy and future funding requirements.
Current wording
There can be no assurance that our collaboration with AstralBio will be successful or will entered into agreements for the sale or out-licensing of any of our product candidates on favorable terms or that the exploration of potential options will result in any agreements or transactions, or that, if completed, any agreements or transactions will be successful or on attractive terms. If we determine to change our business strategy, our future business, prospects, financial position and operating results could be significantly different than those in historical periods or projected by our management. Because of the significant uncertainty regarding our future plans, we are not able to accurately predict the impact of a potential change in our business strategy and future funding requirements.
Previous wording
We have incurred net losses and used significant cash in operating activities since inception, and we expect to continue to generate operating losses for the foreseeable future. As of March 31, 2024, we have an accumulated deficit of $306.1 million. As a result of our continued losses, our cash resources have not been sufficient to sustain our operations, and we have continued to depend on financing transactions to generate sufficient cash to stay in operation. During the nine months ended March 31, 2024, we used net cash in operating activities of $13.7 and we are currently incurring negative operating cash flows of approximately $1.5 million per month.
Current wording
We have incurred net losses and used significant cash in operating activities since inception, and we expect to continue to generate operating losses for the foreseeable future. As of September 30, 2024, we have an accumulated deficit of $317.8 million. As a result of our continued losses, our cash resources have not been sufficient to sustain our operations, and we have continued to depend on financing transactions to generate sufficient cash to stay in operation. During the three months ended September 30, 2024, we used net cash in operating activities of $3.7 million and we are currently incurring negative operating cash flows of approximately $1.1 million per month.
Previous wording
We held cash, cash equivalents and restricted cash of $17.9 million as of May 13, 2024. Based on current trends and activities, there is significant doubt that we can continue as a going concern beyond the first quarter of Fiscal 2025 if we do not sell the Facility for amounts near or above its Term Loan or the Term Loan is restructured. We are currently evaluating a number of potential options to expand our cash runway, the implementation of which will impact our liquidity. Potential options being considered to increase liquidity include focusing product development on a select number of product candidates, the possible sale of the Facility, the sale or out-licensing of certain product candidates or parts of the business, raising money from capital markets, grant revenue or collaborations, or a combination thereof. Regardless of whether we are able to reduce our burn rate or sell or out-license certain assets or parts of the business, we will need to raise additional capital in order to fully execute our longer-term business plan and based upon the current terms of the Term Loan, if the Facility is not sold at a price that allows for full or a significant portion of the outstanding Term Loan balance to be repaid, we will need to raise additional capital in order to fully execute our short-term business plan. However, there can be no assurance that we will be successful in implementing any of the options that we are evaluating.
Current wording
We held cash, cash equivalents and restricted cash of $9.4 million as of November 11, 2024. Based on current trends and activities, there is significant doubt that we can continue as a going concern beyond the first quarter of fiscal year 2026. We are currently evaluating a number of potential options to expand our cash runway, the implementation of which will impact our liquidity. Potential options being considered to increase liquidity include focusing product development on a select number of product candidates, the sale or out-licensing of certain product candidates or parts of the business, raising money from capital markets, grant revenue or collaborations, or a
Previous wording
be no assurance that we will be able to sell the Facility or that we will be able to sell the Facility for an amount near or above the outstanding amounts under the Term Loan and not create a deficiency claim. We are evaluating a potential transaction based on current interest in the Facility which would minimize cash outlay and allow us to have a cash runway for at least 12 months from the date of the filing of this Quarterly Report. However, there can be no assurance that the Company will be successful in implementing. The report of our auditors on our financial statements as of and for the year ended June 30, 2023 also included an explanatory paragraph with respect to this uncertainty. If we continue to experience operating losses, and we are not able to generate additional liquidity through a capital raise or other cash infusion, we might need to secure additional sources of funds, which may or may not be available to us. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to further scale back or discontinue the development of our product candidates or other research and development initiatives, or restructure our Company including a further work force reduction.
Current wording
Our condensed consolidated financial statements as of and for the year ended September 30, 2024 have been prepared under the assumption that we will continue as a going concern for the next 12 months. Our management concluded that our recurring losses from operations and the fact that we have not generated significant revenue or positive cash flows from operations raise substantial doubt about our ability to continue as a going concern for the next 12 months after the issuance of out financial statements. Our auditors also included an explanatory paragraph in its report on our financial statements as of and for the year ended June 30, 2024 with respect to this uncertainty. If we continue to experience operating losses, and we are not able to generate additional liquidity through a capital raise or other cash infusion, we might need to secure additional sources of funds, which may or may not be available to us. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to further scale back or discontinue the development of our product candidates or other research and development initiatives or initiate steps to cease operations or liquidate our assets.
Previous wording
Since our 2008 spinoff from Integrated BioPharma, we have incurred operating losses and negative cash flows from operations. Our comprehensive net loss was approximately ($3.2) million and ($7.3) million for the three months ended March 31, 2024 and 2023, respectively. Our comprehensive net loss was approximately ($17.1) million and ($58.8) million for the nine months ended March 31, 2024 and 2023, respectively. Our comprehensive net loss was approximately ($64.8) million and ($50.5) million for the years ended June 30, 2023 and 2022, respectively. As of March 31, 2024, we had an accumulated deficit of approximately ($306.1) million.
Current wording
Since our 2008 spinoff from Integrated BioPharma, we have incurred operating losses and negative cash flows from operations. Our net loss was approximately ($3.9) million and ($5.7) million for the three months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of approximately ($317.8) million.
Previous wording
The exercise of the Series E Warrants to purchase up to 5,287,278 shares of our Common Stock will cause dilution to shareholders.
Current wording
The exercise of the Series E Warrants to purchase up to 5,287,278 shares of our Common Stock and/or raising additional capital will cause dilution to stockholders.
Previous wording
Our stockholders will experience substantial dilution from the issuance of shares of Common Stock upon exercise of the Series E Warrants.
Current wording
Our stockholders will experience substantial dilution from the issuance of shares of up to 5,287,278 Common Stock upon exercise of the outstanding Series E Warrants.
Previous wording
To the extent that we raise additional capital through a public or private offering and sale of equity securities, the ownership interest of shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect rights as a stockholder. The sale of a substantial number of shares of our Common Stock to investors, or anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales.
Current wording
To the extent that we raise additional capital through a public or private offering and sale of equity securities, the ownership interest of stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect rights as a stockholder. The sale of a substantial number of shares of our Common Stock to investors, or anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
combination thereof. Regardless of whether we are able to reduce our burn rate or sell or out-licensing certain assets or parts of the business, we will need to raise additional capital in order to fully execute our longer-term business plan. We believe based on input from expert advisors, that it is likely we will be able to implement one or more options that will extend our cash runway for 12 months or more from the date of the filing of our Annual Report. However, there can be no assurance that we will be successful in implementing any of the options that we are evaluating.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Our condensed consolidated financial statements as of and for the year ended March 31, 2024 have been prepared under the assumption that we will continue as a going concern for the next 12 months. Our management concluded that our recurring losses from operations, the upcoming maturity of the Term Loan, and the fact that we have not generated significant revenue or positive cash flows from operations raise substantial doubt about our ability to continue as a going concern for the next 12 months. The Term Loan with Woodforest, with an outstanding principal balance of which is $12.7 million as of May 13, 2024, matures on May 15, 2024 and unless the Property is sold prior to the Term Loan maturity date at a price near or above the outstanding payable to Woodforest, or the Term Loan is favorably restructured, we will not have sufficient resources to support operations through the first quarter of Fiscal. There can