
PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Unaudited Q3 2022 financial statements reflect a $18.1 million net loss, asset decline, and going concern uncertainty from strategic shifts Condensed Consolidated Balance Sheets The balance sheet as of September 30, 2022, shows total assets at $84.6 million, a decrease driven by reduced cash and assets held for sale Condensed Consolidated Balance Sheet Highlights (in Thousands) | Account | September 30, 2022 (Unaudited) | June 30, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $9,887 | $22,676 | | Current assets held for sale | $38,778 | $3,900 | | Total Current Assets | $63,565 | $45,070 | | Total Assets | $84,564 | $99,406 | | Liabilities & Equity | | | | Total Current Liabilities | $32,199 | $30,436 | | Total Liabilities | $36,196 | $35,921 | | Total iBio, Inc. Stockholders' Equity | $48,368 | $63,485 | | Total Liabilities and Equity | $84,564 | $99,406 | Condensed Consolidated Statements of Operations and Comprehensive Loss Q3 2022 operations show no continuing revenue, an increased operating loss of $7.6 million, and a $10.6 million loss from discontinued operations Statement of Operations Summary (in Thousands, except per share amounts) | Metric | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Revenues (Continuing Ops) | $0 | $84 | | Research and development | $2,548 | $1,134 | | General and administrative | $5,088 | $4,175 | | Operating loss (Continuing Ops) | ($7,636) | ($5,225) | | Loss from discontinued operations | ($10,593) | ($3,751) | | Net loss available to stockholders | ($18,130) | ($9,005) | | Loss per common share - total | ($2.05) | ($1.03) | Condensed Consolidated Statements of Cash Flows Net cash used in Q3 2022 operating activities increased to $14.0 million, leading to a $12.8 million overall decrease in cash and equivalents Cash Flow Summary (in Thousands) | Cash Flow Activity | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($13,959) | ($9,347) | | Net cash provided by (used in) investing activities | $29 | ($5,149) | | Net cash provided by (used in) financing activities | $1,141 | ($88) | | Net decrease in cash, cash equivalents and restricted cash | ($12,789) | ($14,584) | | Cash, cash equivalents and restricted cash - end | $15,883 | $62,820 | Notes to Condensed Consolidated Financial Statements Notes detail the company's transformation into an AI-driven immunotherapy firm, CDMO divestiture, workforce reduction, and going concern uncertainty - The company is now an AI-driven innovator of precision antibody immunotherapies with a pipeline focused on immuno-oncology23 - Substantial doubt exists about the company's ability to continue as a going concern, with cash reserves of $23.5 million as of September 30, 2022, not anticipated to be sufficient to support operations beyond Q3 of Fiscal 202335 - In November 2022, the company announced the divestiture of its CDMO business (iBio CDMO, LLC) and a corresponding 60% workforce reduction to transform into an antibody discovery and development company38 - In September 2022, iBio acquired substantially all assets of RubrYc Therapeutics, including its AI Drug Discovery platform, for approximately $1.34 million plus potential milestone payments30104105 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's strategic shift to AI-driven immunotherapy, operational losses, and critical liquidity challenges raising going concern doubts Overview and Recent Developments Recent developments include the company's repositioning as an AI-driven immunotherapy firm, CDMO divestiture, and a 60% workforce reduction - The company is transforming into an AI-driven antibody discovery and development company by divesting its CDMO business191 - A workforce reduction of approximately 60% (69 positions) was initiated, which is expected to reduce the monthly cash burn rate by about 50% to a range of $2.5-$3.0 million193 - The credit agreement with Woodforest was amended, requiring principal payments and reducing the liquidity covenant from $10 million to $7.5 million, with a potential further reduction to $5.0 million190 Results of Operations Q3 2022 results show no continuing revenue, increased R&D and G&A expenses, and a significant $10.6 million loss from discontinued operations Comparison of Operating Results (in millions) | Expense Category | Q1 FY2023 (ended Sep 30, 2022) | Q1 FY2022 (ended Sep 30, 2021) | Change | | :--- | :--- | :--- | :--- | | Revenue (Continuing Ops) | $0.0 | $0.1 | ($0.1) | | Research & Development | $2.5 | $1.1 | +$1.4 | | General & Administrative | $5.1 | $4.2 | +$0.9 | | Loss from Discontinued Ops | ($10.6) | ($3.8) | ($6.8) | - The increased loss from discontinued operations was primarily due to a $4.1 million write-off of consumables and inventory201 Liquidity and Capital Resources As of September 30, 2022, the company's $23.5 million cash position is insufficient for future operations, raising going concern doubts - Cash, cash equivalents, and debt securities totaled $23.5 million as of September 30, 2022203 - Current cash is not anticipated to be sufficient to support operations beyond Q3 of Fiscal 2023, raising substantial doubt about the company's ability to continue as a going concern204208 - The company plans to fund future operations through cash on hand, proceeds from the CDMO sale, asset out-licensing, and raising additional equity or other securities208 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company is exempt from market risk disclosures due to its status as a smaller reporting company - The company is exempt from this disclosure requirement due to its status as a smaller reporting company214 Item 4. Controls and Procedures Disclosure controls and procedures were effective as of September 30, 2022, with no material changes to internal controls - Management concluded that disclosure controls and procedures were effective as of September 30, 2022217 - No material changes were made to the company's internal control over financial reporting during the quarter ended September 30, 2022218 PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not currently subject to any material legal proceedings - As of the reporting date, the company is not involved in any material legal proceedings219 Item 1A. Risk Factors Significant risks include financial viability concerns, going concern uncertainty, and the critical need for additional funding to sustain operations - The company's cash position of $23.5 million as of September 30, 2022, is not sufficient to support operations for at least 12 months, raising substantial doubt about its ability to continue as a going concern222224 - The company is undertaking a strategic review, including selling its CDMO business and reducing its workforce by 60%, to extend its cash runway, but there is no assurance of success221 - Additional funding is required to execute the long-term business plan; if unable to raise capital, the company may be forced to delay, reduce, or eliminate programs, or cease operations228230 Item 5. Other Information The company granted performance-based RSUs to its CEO, CFO, and CSO in November 2022 as retention incentives - On November 10, 2022, CEO Thomas F. Isett was granted RSUs for 200,000 shares with performance-based vesting conditions tied to IND submission, CDMO disposition, or out-licensing235 - On November 11, 2022, CFO Robert Lutz and CSO Martin Brenner were granted RSUs for 100,057 and 95,348 shares, respectively, as retention incentives to remain with the company through July 1, 2023236237 Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including corporate governance documents and material agreements