Item 1.01. Entry Into a Material Definitive Agreement.
Offering and Underwriting Agreement
On December 6, 2022, iBio, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”). Pursuant to the Underwriting Agreement, the Company agreed to sell to Wainwright, in a firm commitment underwritten offering (the “Offering”) (i) 1,530,769 shares of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”), (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 1,834,616 shares of Common Stock, (iii) Series A Common Stock purchase warrants (the “Series A Warrants”) to purchase up to 3,365,385 shares of Common Stock and (iv) Series B Common Stock purchase warrants (the “Series B Warrants” and together with the Series A Warrants, the “Common Warrants”) to purchase up to 3,365,385 shares of Common Stock.
The combined purchase price of each share of Common Stock and the accompanying Common Stock Warrants is $1.04 and the combined purchase price of each Pre-Funded Warrant and the accompanying Common Stock Warrants is $1.039, which is equal to the combined purchase price per share of Common Stock and accompanying Common Stock Warrants, minus the exercise price of each Pre-Funded Warrant of $0.001. Each share of Common Stock and Pre-Funded Warrant, as applicable, is being sold together with one Series A Warrant to purchase one share of Common Stock and one Series B Warrant to purchase one share of Common Stock. The Series A Warrants and the Series B Warrants have an exercise price of $1.04 per share and are immediately exercisable. The Series A Warrants will expire five (5) years from the date of issuance and the Series B Warrants will expire twenty-four (24) months from the date of issuance. There is not expected to be any trading market for the Pre-Funded Warrants or the Common Stock Warrants issued in the Offering.
Pursuant to the Underwriting Agreement, the Company has granted Wainwright a 30-day option to purchase up to an additional 504,807 shares of Common Stock and/or Common Warrants to purchase up to an additional 1,009,614 shares of Common Stock at the public offering price, less the underwriting discounts and commissions, solely to cover over-allotments. The Company has also agreed to issue to Wainwright, as the representative of the underwriters, warrants (the “Representative’s Warrants”) to purchase a number of shares of Common Stock equal to 6.0% of the aggregate number of shares of Common Stock and Pre-Funded Warrants being offered in the Offering at an exercise price equal to $1.30, which is 125% of the combined public offering price per share of Common Stock and the accompanying Common Stock Warrants, and to reimburse the underwriter for certain Offering-related expenses. The Representative’s Warrants may be exercised on a cashless basis if an effective registration statement is not available and will expire five years after the commencement of sales of the securities in the Offering.
The closing of the Offering is expected to occur on or about December 9, 2022, subject to the satisfaction of customary closing conditions.
The net proceeds from the Offering, after deducting underwriting discounts and commissions and other estimated offering expenses payable by the Company and excluding the net proceeds, if any, from the exercise of the Common Stock Warrants, are approximately $2.9 million (or $3.4 million if Wainwright exercises its option to purchase additional shares of Common Stock and Common Stock Warrants in full). The Company intends to use the net proceeds from the Offering primarily for operating costs, including for research and development and other trial preparation expenses in addition to working capital needs and for other general corporate purposes, which may include retention and severance payments to certain of the Company’s employees or former employees. The Company may also use a portion of the net proceeds to invest in or acquire other products, businesses or technologies, although it has no commitments or agreements with respect to any such investments or acquisitions as of the date hereof. In addition, the Company intends to use a portion of the net proceeds from the Offering to pay principal payments of $250,000 per month in debt amortization on a monthly basis through March 2023 pursuant to the terms of its amended Credit Agreement with Woodforest National Bank.
Wainwright acted as the sole book-running manager for the Offering. The Company paid Wainwright an underwriting discount equal to 7.0% of the gross proceeds of the Offering, and reimbursed Wainwright for the legal fees and certain expenses of the underwriter, in the sum of up to $100,000, in connection with this offering, up to $20,000 for certain clearance fees and settlement expenses and $25,000 for non-accountable expenses.
