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Item 1.01
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Entry Into a Material
Definitive Agreement.
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On March 19, 2020, iBio,
Inc., a Delaware corporation (the “Company”) entered into a purchase agreement (the “Purchase Agreement”)
with Lincoln Park Capital Fund, LLC, an Illinois limited liability company (“Lincoln Park”), pursuant to which
the Company has the right to sell to Lincoln Park up to an aggregate of $50,000,000 in shares of the Company’s common stock,
$0.001 par value per share (the “Common Stock”) over the 36-month term of the Purchase Agreement, subject to
certain limitations and conditions set forth in the Purchase Agreement.
Concurrently with the execution
of the Purchase Agreement on March 19, 2020, the Company entered into a registration rights agreement (the “Registration
Rights Agreement”) with Lincoln Park pursuant to which the Company agreed, among other things, to file a prospectus supplement
pursuant to Rule 424(b) with the Securities and Exchange Commission (the “SEC”) to register for sale under the
Securities Act of 1933, as amended (the “Act”), the shares of common stock that may be issued and sold to Lincoln
Park from time to time under the Purchase Agreement.
The Purchase Agreement
provides that, from time to time on any trading day the Company selects, the Company has the right, in its sole discretion, subject
to the conditions and limitations in the Purchase Agreement, to direct Lincoln Park to purchase up to 1,000,000 shares of Common
Stock (each such purchase, a “Regular Purchase”) over the 36-month term of the Purchase Agreement. The purchase
price of shares of Common Stock pursuant to the Purchase Agreement will be based on the prevailing market price at the time of
sale as set forth in the Purchase Agreement. There are no trading volume requirements or restrictions under the Purchase Agreement.
Lincoln Park’s obligation under each Regular Purchase shall not exceed $5,000,000. There is no upper limit on the price
per share that Lincoln Park must pay for Common Stock under the Purchase Agreement, but in no event will shares be sold to Lincoln
Park on a day the Company’s closing price is less than the floor price as set forth in the Purchase Agreement.
Both the amount and frequency
of the Regular Purchases can be increased upon the mutual agreement of the Company and Lincoln Park. The Company will control
the timing and amount of any sales of shares of Common Stock to Lincoln Park.
The Company may, in its
sole discretion, direct Lincoln Park to purchase additional amounts as accelerated purchases or additional accelerated purchases
if on the date of a Regular Purchase the closing sale price of the Common Stock is not below the threshold price as set forth
in the Purchase Agreement. The Company and Lincoln Park may mutually agree to increase the amount of Common Stock sold to Lincoln
Park on any accelerated purchase date or additional accelerated purchase date.
There are no restrictions
on future financings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement
or Registration Rights Agreement other than a prohibition on entering into any “Variable Rate Transaction,” as defined
in the Purchase Agreement.
Under applicable rules
of the NYSE American, in no event may we issue or sell to Lincoln Park under the Purchase Agreement more than 19.99% of the shares
of our common stock outstanding immediately prior to the execution of the Purchase Agreement (which is 20,288,840 shares based
on 101,444,205 shares outstanding immediately prior to the execution of the Purchase Agreement) (the “Exchange Cap”),
(i) unless stockholder approval is obtained to issue more than the Exchange Cap or (ii) except to the extent the issuances
and sales of Common Stock pursuant to the Purchase Agreement are deemed to be at a price equal to or in excess of the greater
of book or market value of the Common Stock as calculated in accordance with the applicable rules of the NYSE American.
The Purchase Agreement
also prohibits the Company from directing Lincoln Park to purchase any shares of Common Stock if those shares, when aggregated
with all other shares of Common Stock then beneficially owned by Lincoln Park and its affiliates, would result in Lincoln Park
and its affiliates having beneficial ownership, at any single point in time, of more than 9.99% of the then total outstanding
shares of the Common Stock, as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, and
Rule 13d-3 thereunder.
The Purchase Agreement
and the Registration Rights Agreement contain customary representations, warranties and agreements of the Company and Lincoln
Park, limitations and conditions to completing future sale transactions, indemnification rights and obligations of the parties.
The offering of Common
Stock pursuant to the Purchase Agreement will terminate on the date that all shares offered by the Purchase Agreement have been
sold or, if earlier, the expiration or termination of the Purchase Agreement. The Company has the right to terminate the Purchase
Agreement at any time, without fee, penalty or cost.
The net proceeds
under the Purchase Agreement to us will depend on the frequency and prices at which we sell shares of common stock to Lincoln
Park. Actual sales of shares of Common Stock to Lincoln Park under the Purchase Agreement and the amount of such net proceeds
will depend on a variety of factors to be determined by the Company from time to time, including (among others) market
conditions, the trading price of the Common Stock and determinations by the Company as to other available and appropriate
sources of funding for the Company. The Company intends to use the net proceeds of sales under the Purchase Agreement for
working capital and general corporate purposes. As consideration for Lincoln Park’s commitments under the Purchase
Agreement, we will issue to Lincoln Park 815,827 shares of common stock.
The offer and sale of
shares of Common Stock under the Purchase Agreement was made under the Company’s previously filed and currently effective
Registration Statement on Form S-3 (File No. 333-236735).
The Purchase Agreement
and the Registration Rights Agreement are attached to this Current Report on Form 8-K as Exhibits 10.1 and 4.1, respectively,
and are incorporated herein by reference. The foregoing description of the material terms of the Purchase Agreement and the Registration
Rights Agreement is a summary only and does not purport to be complete and is qualified in its entirety by, and should be read
in conjunction with, the full text of the agreements attached as exhibits hereto.