
PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) The company reported increased revenue but a wider operating loss, though its cash position significantly improved due to financing activities Condensed Consolidated Balance Sheets Total assets and equity grew substantially due to a significant increase in cash and investments from recent capital raises Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2020 (Unaudited) | June 30, 2020 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $91,252 | $55,112 | | Investments in debt securities | $16,395 | $0 | | Total Current Assets | $110,882 | $61,748 | | Total Assets | $145,406 | $94,189 | | Liabilities & Equity | | | | Total Current Liabilities | $6,102 | $5,236 | | Total Liabilities | $38,085 | $37,582 | | Total Equity | $107,321 | $56,607 | | Total Liabilities and Equity | $145,406 | $94,189 | Condensed Consolidated Statements of Operations and Comprehensive Loss Revenues grew year-over-year, but higher operating expenses led to a larger operating loss of $14.5 million Statement of Operations Summary (in thousands, except per share data) | Metric | Six Months Ended Dec 31, 2020 | Six Months Ended Dec 31, 2019 | | :--- | :--- | :--- | | Revenues | $1,115 | $422 | | Total operating expenses | $15,584 | $7,432 | | Operating loss | $(14,469) | $(7,010) | | Consolidated net loss | $(15,665) | $(8,228) | | Net loss available to iBio, Inc. stockholders | $(15,793) | $(29,916) | | Loss per common share - basic and diluted | $(0.09) | $(1.02) | | Weighted-average common shares outstanding | 175,264 | 29,420 | Condensed Consolidated Statements of Cash Flows Significant cash from financing activities offset cash used in operations and investing, resulting in a net cash increase Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended Dec 31, 2020 | Six Months Ended Dec 31, 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(15,489) | $(5,692) | | Net cash used in investing activities | $(19,556) | $(238) | | Net cash provided by financing activities | $71,185 | $5,146 | | Net increase (decrease) in cash | $36,140 | $(784) | | Cash - beginning of period | $55,112 | $4,421 | | Cash - end of period | $91,252 | $3,637 | Notes to Condensed Consolidated Financial Statements The notes detail a strategic shift to biologics, significant capital raises ensuring liquidity, and segment performance - The company is a biotechnology firm and CDMO, shifting its primary focus to its biologics development programs2223 - Based on cash, cash equivalents, and debt securities of approximately $107.6 million, management believes it has adequate cash to support activities through March 31, 202339 - The biologics development segment had an operating loss of $5.6 million, while the iBio CDMO segment had an operating loss of $8.8 million195196 - In January 2021, the company issued an additional 4.24 million shares of common stock, receiving net proceeds of approximately $4.7 million201 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses its strategic shift, rising expenses, and significantly improved liquidity from recent financing activities Overview and Recent Developments The company advanced its COVID-19 vaccine candidate and secured significant funding through multiple financing agreements - The company selected IBIO-201 as its lead candidate for the prevention of SARS-CoV-2 infection based on preclinical data212 - On October 1, 2020, iBio entered a master services agreement with Safi Biosolutions, Inc and invested $1.5 million in Safi via a convertible promissory note213 - The company raised approximately $32.3 million in net proceeds from an underwritten public offering in December 2020, and an additional $4.7 million in January 2021219201 Results of Operations Revenue increased by $0.7 million, while higher R&D and G&A expenses drove a larger operating loss of $14.5 million Comparison of Results of Operations (in thousands) | Expense Category | Six Months Ended Dec 31, 2020 | Six Months Ended Dec 31, 2019 | Change | | :--- | :--- | :--- | :--- | | Revenue | $1,115 | $422 | +$693 | | Research and Development | $4,206 | $1,865 | +$2,341 | | General and Administrative | $11,378 | $5,567 | +$5,811 | | Total operating expenses | $15,584 | $7,432 | +$8,152 | - The increase in G&A expenses was primarily driven by increases in professional and consulting fees (+$3.4M), facility repairs (+$0.9M), and personnel costs (+$0.5M)233 Liquidity and Capital Resources The company holds a strong liquidity position of $107.6 million, deemed sufficient to fund operations through March 2023 - As of December 31, 2020, the company had cash, cash equivalents, and debt securities of approximately $107.6 million and believes this is sufficient to support operations through March 31, 2023240245 - The company has incurred significant losses since inception, with an accumulated deficit of approximately $166.1 million as of December 31, 2020244 Cash Flow Summary for Six Months Ended Dec 31, 2020 (in thousands) | Activity | Amount | | :--- | :--- | | Net Cash Used in Operating Activities | $(15,489) | | Net Cash Used in Investing Activities | $(19,556) | | Net Cash Provided by Financing Activities | $71,185 | Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, iBio is not required to provide the information for this item - The company is a smaller reporting company and is not required to provide information regarding quantitative and qualitative disclosures about market risk253 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - The Chief Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of December 31, 2020255 - No material changes to the internal control over financial reporting were identified during the quarter ended December 31, 2020256 PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is in ongoing litigation with Fraunhofer USA over technology ownership, with a trial scheduled for March 2021 - The company is engaged in a lawsuit against Fraunhofer USA regarding technology ownership rights, with a trial scheduled for March 1-5, 2021258262 - On September 25, 2020, the Court denied Fraunhofer's motion for summary judgment on several key claims, allowing them to proceed to trial260 Item 1A. Risk Factors Material risks include a history of losses, significant customer concentration, and dependence on key technology licenses - The company has a history of significant losses, with a net loss of $15.7 million for the six months ended December 31, 2020, and an accumulated deficit of $166.1 million270 - For the three months ended December 31, 2020, one customer accounted for 63.8% of total revenue, indicating significant customer concentration risk267 - The company's fibrosis product candidate, IBIO-100, is dependent on a license requiring an IND filing by December 31, 2021268 - The market price of the company's common stock has been and may continue to be volatile281 Item 5. Other Information There is no information to report under this item - None285 Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including agreements, plans, and required certifications Signatures - The report was signed on February 16, 2021, by Thomas F. Isett, Chairman and Chief Executive Officer, and John Delta, Principal Accounting Officer290