Item 1.01 Entry into a Material Definitive Agreement.
Purchase and Sale Agreement
On May 17, 2024, iBio CDMO LLC (“iBio CDMO”), a subsidiary of iBio, Inc. (the “Company”), entered into a purchase and sale agreement, dated as of May 17, 2024 (the “Purchase and Sale Agreement”) with The Board of Regents of the Texas A&M University System (“The Board of Regents”) pursuant to which iBio CDMO agreed to terminate the Ground Lease Agreement with The Board of Regents, dated March 8, 2010, as amended by an Estoppel Certificate and Amendment to Ground Lease Agreement, dated as of December 22, 2015 (collectively, the “Ground Lease”), related to 21.401 acres in Brazos County, Texas (the “Land”) and to sell to The Board of Regents: (i) the buildings, parking areas, improvements, and fixtures situated on the Land (the “Improvements”); (iii) all iBio CDMO’s right, title, and interest in and to furniture, personal property, machinery, apparatus, and equipment owned and currently used in the operation, repair and maintenance of the Land and Improvements and situated thereon (collectively, the “Personal Property”); (iii) all iBio CDMO’s rights under the contracts and agreements relating to the operation or maintenance of the Land, Improvements or Personal Property which extend beyond the closing date (the “Contracts”); and (iv) all iBio CDMO’s rights in intangible assets of any nature relating to any or all of the Land, the Improvements and the Personal Property (the “Intangibles”; and together with the Ground Lease, Improvements and Personal Property, collectively, the “Property”).
The Purchase and Sale Agreement provides that the Property will be sold to The Board of Regents for a purchase price of $8,500,000 (the “Purchase Price”). The closing of the sale of the Property is to occur, with time being of the essence, no later than May 31, 2024, or such other date as mutually agreed. The Purchase and Sale Agreement further provides that The Board of Regents will also be afforded access to the Property to conduct a due diligence review of its condition.
The closing is subject to certain closing conditions, including: (i) The Board of Regents obtaining the approval of the governing board of Texas A&M no later than May 8, 2024; which approval has been obtained and (ii) the delivery at closing of by the title company of a title policy to The Board of Regents in the amount of the Purchase Price.
There can be no assurance that the closing conditions for the sale of the Property will be satisfied.
Woodforest National Bank Credit Agreement Amendment and Settlement Agreement
On May 14, 2024, iBio CDMO and Woodforest National Bank (“Lender”) entered into the Tenth Amendment (the “Tenth Amendment”) to the Credit Agreement, which was entered into on November 1, 2021, as previously amended as of October 11, 2022, February 9, 2023, February 20, 2023, March 24, 2023, May 10, 2023, September 18, 2023, October 4, 2023, December 22, 2023 and March 28, 2024 (the “Credit Agreement”), which amendment among other things, amends the Credit Agreement to: (i) set the maturity date of the term loan to the earlier of (a) May 31, 2024, or (b) the acceleration of maturity of the term loan in accordance with the Credit Agreement. As of May 14, 2024, the current balance of the term loan, including principal, interest, deferred interest and late fees, under the Credit Agreement, is $13,138,008.
On May 17, 2024, iBio CDMO, the Company and Lender also entered into a Settlement Agreement and Mutual Release (the “Settlement Agreement”) which provides that iBio CDMO will pay to Lender the proceeds of the sale of the Property under the Purchase and Sale Agreement when received, determine in consultation with Lender the remaining balance due under the Credit Agreement (the “Indebtedness Deficiency Amount”) and thereafter the Company will issue to Lender (subject to the receipt of NYSE American LLC approval) a pre-funded warrant (“Pre-Funded Warrant”) that expires upon full exercise thereof and is exercisable at a nominal exercise price equal to $0.0001 per share for 1,560,570 shares of the Company’s common stock which equals the $4,499,124.88 Indebtedness Deficiency Amount divided by $2.883 (the greater of the book value or the market value of the Company’s common stock at the time the Settlement Agreement is executed). Pursuant to the Settlement Agreement, upon the closing of the sale of the Property under the Purchase and Sale Agreement, the Lender will purchase the Pre-Funded Warrant in satisfaction of the Indebtedness Deficiency Amount, the Lender will release the Company and iBio CDMO from any and all claims, debts, liabilities or causes of action it may have against them prior to such date, and the Company and iBio CDMO will release Lender and its related parties from any and all claims, debts, liabilities or causes of action it may have against them prior to such date.
The foregoing descriptions of the Pre-Funded Warrant, Purchase and Sale Agreement, Tenth Amendment and Settlement Agreement are qualified in their entirety by reference to the full text of such agreements, copies of which are attached hereto as Exhibits 4.1, 10.1, 10.2 and 10.3, respectively, and each of which is incorporated herein in its entirety by reference.
